TSP008 | Scott McGregor – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:

Today’s guest on The Successful Pitch is Scott McGregor. Scott has a fascinating childhood where he was literally, it was his duty to the world to make a difference and he’s been doing that his entire life. That concept of focusing on making a different as oppose as focusing on making a lot of money is what brings you satisfaction and gives you the passion that investors are looking for when they want to fund your startup.

Be sure to listen to Scott’s interview today, because he has an incredible story about a rocket that cost 10 billion dollars, yes, billion with a b, and wouldn’t be ready for ten years and hear how he was part of this incredible concept of getting this funded. Talk about a story of evaluation and getting a return on investment. He’s able to take that whole story telling concept of how that happened for a rocket and show how to make it even for an app where traction is sometimes more important than even having commitment, because you have traction, the commitment is probably already there as oppose to just having commitment without traction. Enjoy the incredible interview with Scott McGregor.

Hi and welcome back to The Successful Pitch podcast. Today’s guest is Scott McGregor. Scott is an adviser, co-founder, and consultant to tech startups based in Silicon Valley where a lot of great ideas and companies come out of. Scott, welcome to the show.

Scott McGregor:

Thank you. It’s great to be here.

John:

Scott, you have such a wide variety of experience where you advise startups on things that they need to know and do in order to be successful and you’ve lead teams doing things that seem impossible and coming up with innovations. I would just love to have you tell our listeners a little bit about your background. How does someone get to be you, basically? How did you get interested in text startups and what was your journey that took you from where you were to where you are now?

Scott:

Wow. Well, my journey probably started really early. I think it started basically when I was, you know, under the age of ten. About the age of eight, my maternal grandfather told me, he was very interested in science and technology, and he told me that with my last night, that I was part of what he called the Scott’s American inventive imperative. That’s a big phrase for an eight year old, but it fired me up and he said, you know, you have a duty to the world to go up and create. These Scott Americans have this tradition that creating new solutions that change our world and make it better and don’t mess it up!

John:

No pressure.

Scott:

So, I just always kind of lived into that and then when I was in my, when I was 16 I got involved into computers, so that was back in the early 70s, so I’m sort of the same generation as Bill Gates, Steve Jobs, and Steve Wozniak, a lot of other people that were kind of the founders. There wasn’t a lot of stuff preventing us from doing stuff, because none of it had been done. So, I’ve always sort of lived into the future at each step.

John:

I just love the fact that you were told at such a young age a sense of your identity and a sense of duty to the world to make a difference and clearly you’ve done that, but it’s such a key element for our listeners to take away. If they weren’t as fortunate as you have been to had somebody instill that in you, you can still put it in yourself and instill that in yourself the sense of who you are, so grounded and so focused that sense of purpose is really, I think, one of the key elements that makes a startup successful, would you agree/?

 

Scott:

I would agree. In fact, I would say the, one of the myths that it would be good for the media to dispel is the myth of the entrepreneur who is in it to make a lot of money. It’s a hell of a lot of work for low probability of making a lot of money, but there’s a lot of satisfaction. One of the things for me is I’m a co-inventor of web conferences and what we’re doing right now is, you know, an outgrowth of some of that technology that we did in the 90s and on the tenth anniversary of web conferencing, I read an article somewhere, I don’t recall where it was anymore. I wish I had a copy of it, but the author estimated that about one billion people had used some form of web conferencing in those ten years and that is one out of every six to one out of every seven people in the world. That’s a huge number and that’s in keeping with what my grandfather asked me to do.

John:

Yes, make an impact in the world.

Scott:

Now, interestingly enough, because of when we needed to raise money and the dot com bust and various different factors, I didn’t make very much money from that, but I have the satisfaction in knowing that a lot of people are doing business with other people around the world without having to get on airplanes to do it.

John:

Exactly.

Scott:

Their doing business with people they would never have done business with before and that’s amazing when we can go out and change the world in that kind of way.

John:

I love that story. Speaking of stories, you mentioned to me early before we started the show that you have this amazing story involving lots of money and a rocket. Can you tell us our listeners that story?

Scott:

Sure. I worked for a guy named Rick Giarrusso back in the early 2000s and prior to founding the company that I joined, he had been the CFO for a company called Rotary Rocket, which was founded in the mid 90s and at that point of time there was this expectation, Motorola had this plan for iridium that was going to be this ring of satellites and provide this all satellites telephone communication and there was this huge expectation that there was going to be high demand for telecommunications satellites in low earth orbits so we would all have satellite phones.

Now, as we can see now that’s not the way the future actually panned out and we wound up with cellphones rather than satellite phones, but of course, no body knew that then, but his task was, he had this idea for re-usable rocket and in fact most of the stuff that Rotary Rocket did is now wound up in the SpaceX type designs. The companies that have come together to put together the SpaceX rocket or the successors to Rotary Rocket, but his task was we need 10 billion dollars to go out and build this rocket and it’s going to take us ten years, you know, before it’s available.

John:

Talk about evaluation and taking a long time to get an ROI

Scott:

That’s right. So, you know, one of the questions is how do you do that? Well, the way you don’t do it is go out and raise ten billion dollars and build the rocket and then see if you make money. You gotta go out and have the, you can’t build the rocket first. With that much money, you’re going to have to raise money, so he did some really interesting things and everything that I’m about to talk about is clear in the context of the rocket situation, but it’s true for everybody that wants to raise money, even if all they have is a little app that they put in the app store. So, if you still need to raise money, this is a great way to think about it. So, the first thing he said is he said, in order to raise this money, I have to prove to our investors that we’re actually going to be able to sell it.

John:

Right.

Scott:

And that’s ten years into the future, so how do I do that? So, what he did was he looked at the numbers and they expected that by making this re-usable rocket, they’d be able to reduce the price of one pound of satellites in orbit by a factor of ten. So, it costs one tenth as much to put up a satellite as it does today. That’s a huge advantage, so everybody would like to have that, but that’s not today, that’s when the rocket is ready, but he went to – there were seven companies at that point of time that were creating telecommunication satellites and he said, look, I know you guys are paying NASA or other companies to go out and put your satellites in orbit.

I’d like you to sign a contract to buy space on my rockets that will put your satellites in orbit at a tenth of a price that you currently pay and I’d like you to do it so that when this is ready, you know, we have this contract, and I need to go out and get a billion dollars worth of contract to go out and do this and he went around to each one of these and they said, well, this all sounds great, you know, if this was available today, we’d certainty, we’d happily to give you all this business, but, of course, it’s not now. It’s ten years and a lot of things can happen in ten years, including competitors can raise that we don’t know about and other changes in demand.

So, we can’t commit ourselves to that. He said, well, that’s okay, here’s what I’d like you to do. I’d like you to sign a contract that says you’ll do this and you will have the right to cancel this contract any time up until the rocket ready. So, when the rocket is ready, you know, if you haven’t already canceled it by that point of time, you’d agree to do it at this price. One tenth of what you’re paying today.

John:

Well, that sounds, let’s stop there for just a second, because it’s so interesting. There’s a couple of things that you’re saying that are so valuable for everybody as you said, no matter where they are in the process. Number one is, really having a clear explanation of what problem you’re solving, even if it’s ten years from now and secondly, getting some traction and being able to show investors there’s a signed letter of intent here even if it’s for ten years from now. I love that.

Scott:

That is the amazing part of this. So, he got letters of intent from all seven companies. So, that’s 100% of the market, okay, but so then he took that money and if you’re trying to raise a billion dollars, that’s too much for Silicon Valley VCs.

John:

Sure.

Scott:

So, he went to Wall Street, to the Wall Street bankers and private equity markets and they said, he said, look, I’ve got a billion dollars worth of contracts here. I would like to factor these contracts and get my money, you know, get 80% of this price up front and they said, well, that’s all really nice and good, but they can cancel this contract. So, we can’t give you this money, give 80% on this money because what if they cancel it all, we’ll never get our money back. And he said, no, no, I get that. Here’s what I’d like you to do. I’d like you to go out and write up the loan and you agree now that you will give me this loan if I come back with contracts in which there’s cancellations insurance. If I can get cancellation insurance on this, you’d get paid anyways. So, that should satisfy you, right? But, I need you to go out and say that you’ll do this.

John:

Again, let me pause there for a second, because you’re giving such valuable insights and I just want to recap it for the listeners. Not taking the first no as the final no and going on, you know, actually listening to the objection and then having a prepared answer for that objection. I can’t emphasis that enough is to anticipate what the objection might be and then have a response to it that still makes sense for the investor to say yes. That preparation and that mindset is brilliant.

Scott:

There’s another thing I think is worth pointing out, not only has he done this twice where he’s got the note and then said, well, what can I get you to say yes to, but he’s actually got them to agree to something. It’s contingent, but it’s an agreement.

John:

Yeah.

Scott:

So, he got this agreement that if he could do that, but they all said like, yeah, but where are you going to go get cancellation insurance on a billion dollars? And he said, well that’s my problem, right? And they said, sure.

So, he went away and he went to (#14:12?) and he went and talked to the name and said, (#14:15?), and he said, I have got, look, I’ve got these contract, I’ve got all seven companies signed up to buy this stuff. I’ve got the loans already ready to go that will allow me to have the money to build this rocket and to satisfy these contracts, but I can only close these loans if I have cancellation insurances. Would you guys write this cancellation insurance. Wow, this is, you know, ten billions of dollars to do this, we would need a billion dollars policy and he said, okay, well, I can do a billion dollar policy, because I’m going to do it from this loan.

Now, I’ve already got this loan, that’s contingent on you saying that you’ll write me this insurance, so you know I can pay it, because here it is right now. So, he got the billion dollar insurance, he went back to the banks, said, you know, give me eight billion dollars on this ten billion thing, took a billion of that and put it to pay off the cancellation insurance that left them with a billion dollars for RND.

John:

Well, the joke is when you’re doing something that’s not that complicated, somebody says, well, c’mon, it doesn’t take a rocket scientist to make this happen.

Scott:

Exactly, exactly right.

John:

In this case it did take a rocket scientist to put this deal together almost as complicated as building a rocket except what I love is how global it is that you live Silicon Valley, you get what you need from Silicon Valley, the letters of intent, then you go to New York, to Wall Street, to get the investors, and then you go to London, literally, to get the insurance. So, it really does take a global effort to pull something like this off, so that kind of tenacity, perseverance, big picture thinking, that’s for sure, is what it requires whether you’re starting up with a rocket or you’re starting up with a mobile app.

Scott:

Right, so let’s come back and talk about the mobile app for a second. One of the things that people come to me and ask me be an advisor or a board member, work with them in some capacity or another, I frequently get people who are technologist, that’s not surprising being here in Silicon Valley, so our software developers and they say, I want to build this app and I need this much money so I can pay my developers and then in a year I’m going to have or half a year or something, I will have this app and we’ll put it on Napster and I’m sure we’ll make a lot of money. Okay, but I can’t start it, I can’t quit my job, I can’t do any of these things until I have, I can’t build this thing, until I have that money.

They want to go and talk to angels and VCs here in Silicon Valley and when they do they’re usually frustrated, because pretty much right now if you got a mobile app, most angels and VCs that I know that you could go to will say, well, that sounds pretty cool, it’s cheaper to development software these days. A number of people do it for free in their dorm rooms and stuff. You find someway to finance the building app and you put it on the app store and if you get 1000 people in the first 30 days, come to me, then I got a solution, because what I know at that point in time is that you got something people like, it’s just that only if you people know about it and one thing we do know is with money, we can buy advertising and create awareness and if it’s a great thing, so we can help you scale your company, but you gotta get us that far and then they go, oh, well, I still need the money to develop this or whatever.

Now, there’s another option today and this is the Rotary Rocket option and people don’t realize that and it’s KickStarter. Think of it, KickStarter is the same thing. You go to your customers first and you get them to agree to pay you before you build it, okay. So, this same model is a model I recommend to basically everyone. A lot of people get hurt building products and then they get take them to market and they don’t take off as easily as they think they were going to take off and they’ve used all the money that they’ve got and they’re not able to go out and raise the next money, because they don’t have the success they had. If they could go get the letters of intent first.

John:

From potential customers in this case.

Scott:

Of potential customers, okay, either collect money in advance the way you do with KickStarter or just get letters of intent and stuff. This will carry you so much further. You’ll already be having a relationship with your customer before the products built and you’re going to come to question starting building where the developers are going to say, well, we could go left or we could we go right here, what should we do? If you have no customers, you just make a choice, and you find out later. If you have a customer, you can go out and check with that customer and then you can use the fact that the customer said this and that’s what you did. Again, as more proof of traction and more market alignment, and that’s again going to make your investors, you know, potential investors much happier.

John:

You know, there are so many road blocks to getting an investor to say yes and you’ve identified a big one which is if you don’t know your customers or have any sense of traction or any kind of movement at all and just have an idea, there’s so many great ideas out there and it’s not enough.

Scott:

You’re right and well, it’s, I know in one of your previous podcasts, there’s a big discussion about how really ideas don’t really matter and it largely true that’s it’s all about execution and a lot of people think they got this idea and the value is in the idea and they undervalue that the value is actually in them. Their ability to execute and one of the things that leads to is, oh, I can’t tell anybody about this, because the value is in the idea. Well, if you can’t tell any about it, you can’t get anybody to help you.

John:

You’re the first person to say that. I love it so much. Let me just reiterate that, Scott, thank you for saying that. So many people are so paranoid that if someone takes my intellectual property, my idea, and duplicates it, then where am I? Right? What you really said to everybody is, you know what, you’re the value, not the idea. The concept of Uber versus Lyft and who got funded first and who gets to market first and all that stuff had really nothing to do with the concept as much as it did with who executed it first and I know there’s some proprietary stuff that everybody has, but if it could just reduce some of that paranoia by ten degrees, it would really help the stress level of the entrepreneurs realizing that the value is in them, that people like to bet on the jockey, not the horse, right?

Scott:

That’s right and again, I’ll tie this back to where will you get the best reassurance about that. It’s going to be from your potential customer.

John:

Yes.

Scott:

Right and the customers actually don’t know what the all the ideas are out there. They may not even know whether somebody else has the same idea. It doesn’t really matter. It matters that you’re in front of them right now and you can solve your problem or you can’t.

John:

Right, let me ask you something else. I was curious when you were talking about this scenario where somebody hasn’t quit their job and they’re going to an investor to build something. A lot of investors that I’ve talked to have said, look, if you’re not willing to put yourself into this 100%, put your own money into it, we’re certainty not going to put money into it. Is that your observation and insight as well?

Scott:

So, what I will say is this, I think that’s a story that sometimes people say because there’s really uncertainty about whether the person that or team can carry it off and has commitment.

John:

Commitment, yeah.

Scott:

And if you had traction, people stop carrying about it.

John:

Got it, right. It’s when you don’t have commitment or traction that’s…

Scott:

If you don’t have it then it’s like, let me come up with all the reasons why I’m worried you’ll never get traction.

John:

Got it.

Scott:

You’re going to take my money and you’ll never get there. Again, if you got that letter of intent earlier, but the other thing that happens is you have those letters of intent and you have those customers and stuff, that creates an incentive to you and you’re already feeling like I got commitments to my customers to these people, right? And that will create that, your willingness to go in and go deeper and stuff. So, I think that it’s almost, it’s almost backwards that it’s not that I need you to be committed so that you’re going to do this, but if you were that commitment, I wouldn’t have this question. I would know that because you would already be in this deep with your customers or with something.

John:

That’s such helpful information. So, it’s no longer the chicken and egg story so much as a parallel story. If you have the traction, you have the commitment, and if you don’t have the commitment, you probably don’t have the traction, basically, is what I’m hearing you say.

Scott:

In fact, another thing to think about when we talked about ideas and stuff. Another way to sort of think about this is that, let’s say, you are not an idea person. You’re a person just deep pockets. What would you think that you’d want to put money? Would you want to put money on some place where you could see that the players that are already out there are making money and you could back onto them or would you like to go out and put with somebody that’s never done anything.

John:

Yes, goes back to the team, right.

Scott:

Right. So, again, this is sort of where the idea that the funny things is until you make a lot of money, no body is actually interested in stealing your idea. Okay. They either smart enough to have ideas of their own and then they want to do it because it’s there idea. That might be similar, but they are driven by an internal thing or if they’re just really out steal somebody else’s idea, they want to steal one that they know works in the market place. Why should they take risk? What they’re thinking is, what is going to make me win is I can throw this money and we can out spend the other player, right.

John:

Yes, well, that leaves us with the whole concept of competition and how you view and just being aware of it, but I love what you said, until you’re making a lot of money, no one’s really interested in stealing what you have or your idea. It’s great.

Scott:

In fact, look at what Elon Musk has done. He has this idea for the hyperloop. He didn’t go out and say, this is such a cool idea. This idea of a pneumatic tube transportation system between San Francisco and LA. I’m not going to tell anybody about it. No, he goes and publishes detailed technical documents and advertises on his blog and tells everybody about and gives it to the world. What happens is a bunch of people around the country find this interesting, bunch of engineers and say, well, let’s go out and build a little prototype and then when they’ve done that, they say, oh, we don’t wanna go out and have Elon involved at all. No, they call Elon and say, hey, look, we loved your idea, we ran with it and stuff, we want you to be part of our team.

John:

Nice.

Scott:

So, if you really have a great idea, go out, preach it to the world, and get all the followers that are going to make it happen.

John:

That’s a great, great, that’s a great place to end. I mean, half hour goes so fast with people who have so many great stories and insights like you. Thank you for sharing that. I love that analogy.

Scott:

Welcome.

John:

In our closing comments to the listeners, is there any particular book that you really resonate with lately that you’ve, oh, that was really inspiriting or gave me some new insights that you would like to recommend?

Scott:

Yeah, one of my favorite books to recommend for entrepreneurs is a book called The Goal. I don’t have the book in front of me right now or the author’s name. The second author is Jeff Cox.

John:

We’ll find it and put it in the transcript notes. The Goal.

Scott:

And Jeff has also written probably my second most recommended one for entrepreneurs, which is called Selling the Wheel and Selling the Wheel is all about this issue that we talked about we’ve got this great technology, how do we get it from something that never existed in the world to something is, you know, in dispensable like web conferences.

John:

Love it.

Scott:

But in The Goal, he talks about using constraint management and the insider here is, if there were no constraints on your business, you would be instantly, you would be instantly and infinitely profitable, okay, you’re not, so there must be something that’s constraining your growth. When you understand what their techniques to go out and figure out what those constraints are and when you know what they are, you can do one of two things.

If it is a constraint you can remove, you can remove it. You can maybe get another machine or get another thing or get a replacement, move to a different technology. All of those things will allow your company to grow again. There’s some things you can’t remove. You can think for example sometimes regulations and sometimes there’s just laws of physics.

Then what you need to do is find a way to be as efficient as possible within those constraints and I find in startups that a lot of times people that I advise are thinking about, well, I want to work on this problem and this problem and this problem, but there are none of the problems that are currently constraining them. What that means is that they’re spending time and money, but they’re not going to get any benefit from it yet. So, this can really focus you.

John:

That’s so great. If you’re working on the wrong problem, you’re not making any traction. So, that’s a very important distinction. Make sure you’re spending your resources and your times and creativity first in defining what your obstacle is that’s constraining you. I love that. Thank you, Scott. Scott, how can people keep in touch with you. Should they follow you on LinkedIn, you have some blogs up I know.

Scott:

Yep, follow me on LinkedIn is a great way to keep up with me. I do post things there. I do share a lot of other materials that I get access to. I am open to people reaching out to me if they are looking for an advisor or board member or something.

John:

Great and I see you have your own website. Do you want to give that to our listeners?

Scott:

Sure, I actually have two websites. One is http://www.smcgregor.com/. You’ll learn about lots of things that I’ve done in the past and then there’s my consulting business which is SwiftDesignGroup.com and for companies that actually have product and technology and they are looking to expand outside of the US, I work with a couple called PointGreen.biz. They are interesting. We are a company that basically, we act as consultants to large companies in Europe and the Middle East. Sometimes they are telcos and mobile service providers and IT providers that can act as a distribution challenge for technology, but also have access to governments and hospitality and banking and many other kinds of industrial, you know, B to B type and customers. We’re looking for new technology. So, we help them find the technology they need and we help the technology companies find these customers.

John:

It sounds like you help people cut through red tape.

Scott:

We do.

John:

Yeah, that’s great. Scott, thank you so much for being on the show. You’ve been an incredible guest and I know our audience have gotten incredible takeaways and we look forward to following you and watching you continue to make an impact as you have so much and continuing in that duty to the world that you were told to do and we want to thank you for all the contributions that have made and will continue to make/

Scott:

Thanks so much. It’s been a lot of fun. Maybe there will be another time we can do this again.

John:

I love it. Thanks Scott.

TSP001 | Charlene Miller – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John Livesay:
Hey everybody and welcome back to The Successful Pitch. This is your host John Livesay. Today’s guest is Charlene Miller and she’s got tons of energy and great insights about the importance of building the right team to get investors to say yes to your offer as she said, “It’s not about the horse, it’s about the jockey.” So, if the horse is the idea, you don’t want to bet on the horse, you want to bet on the jockey, because the horse can change, the idea can change, but you need a good jockey who can take a great idea and get it across the finish line and if you or people on your team have serial entrepreneur in your background, investors love that because it shows you know how to pivot, you have perseverance, and most importantly, you have passion.

So, we’re going to do that in today’s talk. I was on the phone today with a client and we were talking about the importance of his team and how they’ve worked together before and how we need to bring that passion and perseverance to the front of the pitch so that investors know who they’re investing with. That’s really a key source to getting investors to say yes to you. At the end of the podcast, I’ll give you a link that you can get my three mistakes to avoid while you’re pitching PDF absolutely free. Thanks and enjoy the talk.

Thank you for joining us today on The Successful Pitch. This is John Livesay your host, today we’re thrilled to have Charlene Miller who is the Managing Director of Global Directors, LLC. She has an amazing story to talk about, not only does she raise money, but she raises it faster than anyone else I have ever heard of or met in my life. She is such an interesting person that there’s a book being made on her life. She told me that she’s only one email away from 80% of anybody in the world. So, she has connections like no body’s business. She can find CEOs, board of directors, and money, so I know our audience is going to love hearing from Charlene Miller. Welcome!

Charlene Miller:
Yes, thank you. Nice to meet you John and I love the fact that you live in Hancock Park, because one day we will meet. I have the greatest story from Hancock Park. I’m in Greenwich, Connecticut. I have an office, I work for (#2:30?). I’m a member of the Metropolitan Club, one of the first female members ever, so I used the Metropolitan Club throughout the world and I guess you know my background. I’m the member of the committee of 200 women. I’m no longer YPO, because at 49 they kick you out, so I’m now a member of World Presidents’ Organization, also I was a member of the US Counsel on Competitiveness, which is one of the most important organizations in the world. It’s out of Washington, DC. Www.compete.org will get you to Deborah Wince-Smith. I have some very good bio-tech, nano-tech also lawyer geniuses who needed to get front of the department of defense in 10 days with new technology and she arranged it.

John:
Wow. That’s impressive. Can you tell us a little about your background and how did you get to be so successful and what motivated you to get involved with technology?

Charlene:
Well, first of all, let me tell you I am a few months away from 69.

John:
What?!

Charlene:
Yes!

John:
Amazing. I love it. You got your pulse on the zeitgeist.

Charlene:
So, I’ve had a lot of experience. I have been commuting to Asia from the age of 23 on. I was the gross margin queen for a company called (#3:50?) and Company, which I was a Bloomingdales and (#3:54?) and Company and it was probably one of the highest quality stores in the world. So, at age 23 they gave (#4:01?) shot and put me on a first class ticket on Pan Am and Pan Am, we used to get off in Anchorage and get coffee while they refueled. I actually have spent more time in Narita than most people have ever spent. So, I remember passing my Christmas cards to someone I met at Narita as I was going to Hong Kong and they were going back to New York. Anyway, as a buyer for (#4:30?), I traveled to six countries twice a year in Europe and Asia, so I have spent globally a tremoudmos amount of time throughout the world whether it be Tunis, Tunisia, Egypt, my best friend, one of my best friends took 26 of her most dysfunctional family and friends to Egypt for a holiday at Christmas and Misty is brilliant. She is one that got in front of the defense department in 10 days and she rented the entire Cairo Museum for the 26 of us one evening.

John:
Wow, that’s an exclusive experience.

Charlene:
Yes, her husband actually reads hieroglyphics, he’s brilliant. So, we’ve been there many, many times and the trip was a riot. Wendy Richards who is a dear friend of mine in Sausalito, one of the top five or, let’s see, five or 50 women in London, in England, have lost her husband, and she came on the trip with me and she was on crutches and she did better than I did going to all these private tombs that we were brought to and the women I know are, let me give you an example, Wendy went to Stanford graduate school, her mother went to Stanford graduate school, and her grandmother went to Stanford graduate school.

John:
Wow. That’s a lot of legacy.

Charlene:
Right, right. So, we’re dear friends. Let’s talk about how to raise a million dollars in 90 days.

John:
Yes, people definitely want to know about that.

Charlene:
That’s the easy part. I can actually raise it faster today. That was about 10 years ago. Two bioinformatics gene sequencing scientists approached me, I was coming in from New Hampshire, going to Boston to connect and a Tom Tang sat next to me and he was discussing the issue with his search engine because when you search, when you – bioinformatic gene sequencing spends a lot of time searching and they came up with a new search technology with the prototype. The only reason I took it on was because Tom Tang worked for Lewis Gruber, the guy who reads hieroglyphics and is brilliant.

John:
Got it. Let me just stop you right there, because I think what you have described is such an important point for our listeners, which is developing your network is such a key to success in raising money. Would you agree?

Charlene:
Since I know everybody, yes. I can raise it very quickly.

John:
Right, but one of the reasons you can raise money so fast is you have this incredible life experience and this ability to connect with people and be warm and I think so many tech CEOs isolate themselves and I’m constantly advising people that you must get out and network and connect with people, because you never know who you’re going to meet and how they’re going to help you. Is that your experience?

Charlene:
What happens is people get hyper focused on what their doing and they don’t look at the big picture.

John:
Yes.

Charlene:
I have a very difficult, Joe Shu, he’s in Kyoto and his brother is Dr. Shu and Greenwich, Connecticut,. He’s an acupuncturist. He wants Joe to sign an agreement and have me raise money for them and put board of advisers, board of directors, but Dr. Shu in Kyoto is so stubborn, he is a brilliant CTO, he has been the chief engineer for Nintendo for years, subsequently their 52 billion or something, I don’t remember what he said, he also manages the Foxconn factory. He has no concept of business. He’s the most difficult man I have ever come a crossed because people have called him from all over the world to tell him that they should retain me or just even buy me a ticket to meet with him. This is the most difficult man, he’s brilliant sometimes and he surrounds himself with all these scientists. He knows his business plan is horrible. I have senator Larry Pressler look at it and say, “Oh my God, look at this business plan.” I’ve got lots of people around the people who want to invest, but he’s so stubborn, he wants to hear from somebody I’m going to invest before he retains me. That’s illegal as Misty, who’s Lewis Gruber’s wife would say, “There’s good money and there’s bad money.”

John:
Tell us what that means.

Charlene:
Well, there’s bad money. There’s a lot of people who come in and put money in your company and basically screw you. That’s the nicest word I could use.

John:
Right.

Charlene:
It’s bad money because they come in and take over your technology and before you know it, you’re gone.

John:
That’s such an important point Charlene. I just want to take a minute for the listeners to digest that because you have to be very discerning about who you invite into your world, into your company and your culture, and it’s not just the money, it’s are they a fit with you, so you’re selling yourself and you’re as much deciding whether – they’re selling you as much as you are selling yourself. So, it’s a mutual thing. It’s not a one-way street where you’re just asking for money from anybody. It has to be the right fit. Would you agree?

Charlene:
Absolutely and what I do is – I’m highly analytical and very strategic and I put good money. Let’s in case talk about this Dr. Shu 3G United, which is a company that has a horrible business plan. They have ten million that the Chinese government has given them, so they’re all about technology, but what they need is advisers, four advisers with marketing, who some of the top marketing people in the world, top sales, people that can actually participate as advisers and take the roles of the senior leaders, so in the company that I raised a million dollars for in 90 days, I had Karen Riley and I had all these terrific people who understood what this guy would hoped to find in five years and this accelerated their growth.

John:
So, can you give us an example of one of the keys to getting investors to say is they understand easily what they’re investing in?

Charlene;
No body will invest in a company that doesn’t have management and knows what they’re doing. You’ve got so many scientists floating around with great ideas, patented or unpatented, it doesn’t matter, they’re all ideas, they need desperately to understand that there’s quality. Forget the idea. It has nothing to do with the idea. Great ideas, forget it.

John:
Dime a dozen.

Charlene:
Oh, there’s a million great ideas. People have got to understand I mortgaged my house for a $100,000. When I started the first private label clothing company in America.

John:
That’s commitment.

Charlene:
Well, it’s not very much, is it? I made a million dollars in 18 months.

John:
And how did you do that?

Charlene:
If you don’t have a commitment to your business and if you take no risk, then you should not even try to be in business. Go back to doing whatever you want to do in your life.

John:
That’s so valuable information. If you don’t have a commitment to yourself, how can you possibly ask anybody else to commit to you, is that it?

Charlene:
Exactly and if you can’t retain me and pay me – what I do with young companies is I put it over 12 months, 24 months. I work with them so I understand their cash flow better than they do. So, I understand, you know, I’ve built a very successful company. I understand P&L, I understand everything financially about a young company. I’ve done a number of young companies myself and in fact you need to have some risk. If you don’t believe in your company and take some risk, why would you ask other people to put money in?

John:
Exactly. You must put your own sweat equity and your own money in before you can ask anybody else to put money in.

Charlene:
If you’re Chinese, the wife holds the strings and absolutely, the answer is the wife. They hold the strings and if people aren’t willing, if they’ve got a great idea and they’re not with Tom Tang and Infoville, I made them put $50,000, which was not easy to get, in a bank account, Bank of America, and as I said in 90 days I raised a million dollars, but in 18 months or 14 months, I brought in 8 million dollars.

John:
So, let me just recap that. You were able to raise a million dollars for this company in 90 days and then from there it got such traction and growth that you were able to get another 8 million in less than 14 months.

Charlene:
Correct.

John:
That’s an incredible story. What do you attribute that incredible amount of money coming in so fast? Was it traction, was it the right theme? Did you go back to the original investors?

Charlene:
No, what I did was the very first board of directors I did was a company called Digital Insight. I put in four directors. The first one I put in Mike Hallman. Mike was the former president of Microsoft. He said no three times and one hellscalabasas. So, I met him on the airport, he was on the board of Fujitsu, had just come in from San Francisco. My son was a BASIC securities, so I started sending him all and they thought John Dorman walked on water, so did the Chairman of Oracle.

John:
Oh yeah, Ellison?

Charlene:
Yes and he lives in Santa Barbara so I knew him quite well. So, net net end of the story with John Dorman is that not only once I had Mike Hallman from Microsoft I knew I could get anybody I wanted. Mike Splinter who was sent at Intel went on to become Chairman of Applied Materials. We actually asked him to step off of the board because he couldn’t attend the meetings because with Intel he was traveling too much and he left Intel because he knew he would never be CEO and of course now he’s Chairman of Intel. So, then I put on a couple of other people and in 18 months they had an exit, this was a 100 million dollar company. John Jarve had just stepped off the board, Menlo Ventures, what do you think the company was acquired by intuit? Who do you think sat on the intuit board?

John:
That would be someone you placed is my guess.

Charlene:
Mike Hallman, the former president of Microsoft.

John:
Right.

Charlene:
1.4 billion dollars. So, it’s all about strategy. Marketing is strategy and I knew of course that he sat on the Intuit board.

John:
So, let’s just recap. You were able to get all that money that fast because A) you had amazing connects. B) you had a strategy and C) you had not just a vision, but a road map to get there and you basically acted like the producer to get all this traction going. Is that an accurate description of your success story?

Charlene:
That’s an accurate decision and if you ever seen Grey Gardens.

John:
I have.

Charlene:
Oh, my nephew, Michael Sucsy wrote and directed it and lived with me while he was writing it.

John:
Wow, what an amazing story that was. Alright, now, I want to ask you a few more questions while we’re fortunate enough to have you as a guest on the show. What advice would you give a startup that’s creating a pitch deck, so they can make sure they can cover everything that as an investor or the investors that you know would want to see.

Charlene:
Okay, let me back up one second. Okay, when I built (#17:05?), I first put the four board of advisers and the board of directors simultaneously. I do everything very fast. Now, I operated out of Ellen Hancock’s 12 million dollar house in Los Altos Hill, because these Chinese guys absolutely, you know they worked in a place we’re not going to raise money, then I switched, we hired Pillsbury Winthrop and Mike Halloran, we started using his offices, his conference rooms and they did the patent work and Mike said that was the fastest money he’s ever seen raised.

So, when I did Infoville after Digital Insight and I don’t remember how many years, the president by the way of the new CEO of Digital Insight was a gentlemen who was the former president of America Express and his name will come to me and I went down to see him and asked him if I could do more work, he said this is very best board of directors I ever had. Now, this was my first board of directors, so everybody exited with millions who was on that board. So, when I started the Infoville deep dive company with the two Chinese bio-tech guys, John Dorman said, “You know, I don’t do early stage things,” came down he said, “Would you do me a favor, could I invest half a million dollars? And I would like to be Chairman.” He subsequently Greg (#18:36?) invested two million, John invested at least two million, and then all that other money came in.

John:
Wow.

Charlene:
He said, “Do me a favor, I would like to invest $500,000.” It was a new search technology. So, I came out of the clothing industry, I never knew anything about search, but I will tell you that when I interviewed the head of Oracle’s search department, he said, “You know a lot about search.”

John:
It’s interesting isn’t it to get someone’s perspective. We don’t think we know something and then we all know more than we think we do, I think.

Charlene:
Right, I always say, excuse me, I’m really not – He said, “You would floor me!” It was very, very funny. As far as young companies are concerned and their pitch, don’t do a pitch without talking to me.

John:
Got it. Yes.

Charlene:
Let me, retain me in some form, because I legal can not go out and raise money and put in management without – it would be bad money. As I said, I can raise money so fast and this poor company 3G United, I probably have three million dollars of people wanting to invest and this guy, Mr. Dr. Shu will not sign the agreement. I even have the president and founder of YPO-WPO in Tokyo call him and speak to him.

John:
So, what I’m hearing you say is that one of the key things before you go pitch is the need to collaborate with experts like you.

Charlene:
Absolutely.

John:
To make sure that you’re not making mistakes and that you’re not making bad money and that you have the right people on your board, is that accurate?

Charlene:
Yeah. The pitch doesn’t matter because people don’t look at the technology, they look at who’s associated with the company.

John:
Right, so the pitch itself probably matters but the content of what you’re focusing on is who’s on your team is more important than the idea, that’s what I hear you’re saying.

Charlene:
Absolutely. People invest in people, they don’t invest in ideas.

John:
That’s your tag line right there. People invest in people, they don’t invest in ideas and so many tech CEOs that I work with they want to explain to somebody how something works instead of what problem it solves in the market place.

Charlene:
Exactly.

John:
And it’s a great quote, “No body cares about what you have to say until they know you care about them.” Right?

Charlene:
Other thing I do is I run, I haven’t done it for the last year, because I have been very busy, but I am back into running and it can be done virtually throughout the world, meetings, physical and virtual, with young CEOs and put them all in the same room and let them share ideas. So, the gentleman who is currently the CEO of Match.com, he was in our group. We had so many fabulous guys. A lot of them from Silicon Valley and commute in, but I put people together. When you put people together, they share ideas, now, I charged to run that, but it’s not very much.

John:
It’s a mastermind, right? It sounds like.

Charlene:
Absolutely and I will understand. It doesn’t matter what business you’re in, I can do neuroscience, I can do health care, I can do technology, I can do retailing. It doesn’t matter what the area is. It takes me about an hour to understand nuclear physics.

John:
For you maybe.

Charlene:
Yeah, no, honestly.

John:
But again, we have to be able to explain something complicated like neurophysics in a simple easy way that investors who aren’t neurophysicists can understand the potential and that seems to me to be your sweet spot and one of your areas of your expertise and that what makes you so value.

Charlene:
Legal bio-tech nano-tech. Health care, Ellen sits on the, has been on the Aetna board for a 100 years. She’s on the Colgate board, she makes more money at Colgate and there isn’t a university. You’ve got kids in China whose parents want these kids to come to America and pay a fortune and I can do that. I have, whether it’s Cambridge, Jim Rogers..

John:
Tell us a little bit about Jim Rogers. Tell the listeners who that is with the bow tie and a little bit about Jim Rogers, because it’s such a common name.

Charlene:
So, well, Jim Rogers is very famous. He originally was a partner in the Quantum Fund. He hates George Soros. He retired at age 30. He came from a relatively poor family, so he went to Yale on a full scholarship, Cambridge on a full scholarship. He holds a cup Henley, he was the guy who yelled at everybody, that would be Jimmy Short. I walked in a room somewhere and he fell in love with me, because I’m short. I recently as I said, I just, he paid for a week, it was like $3,000-4,000 for me to stay there for a week so that he could see me, professing that I was his first love.

Anyway, he’s now married to Paige and he’s got two girls and he moved from New York to Singapore because he saw the destruction and demise of America. A lot of people, a lot of wealthy people that I know, democrat or republicans, have moved assets abroad. Jim said the dollar will be strong until June and then you want all your money in Rupees if you want to make a lot of money. He’s never been wrong. He’s been early, but he’s never been wrong. Do you want me to show you a picture of him? I’ve got a book.

John:
I saw him online, the bow tie, I just wanted our listeners to have a framework of how interesting he is and his success story. Before I let you go, would you mind sharing with us, because China is such a big market for everything now, right, the potential is huge there for obviously if you’re selling something to get consumers in China to use it, but I am interested for our listeners to know maybe think the only source of investors are here in the US. If someone wanted to work with you to get investors from China to invest in their company, what are the Chinese investors looking for that’s different than the US investors, if at all different?

Charlene:
Really not that different. The Chinese investors have lots of money. You gotta be careful again. The Chinese are not to be trusted. I’m sorry. Got to understand that they will take every nickle from you. I am almost 69. I’ve been commuting to China since the age of 23, you do the math.

John:
That’s a lot of years.

Charlene:
So, I was the first Gweilo on the first to havel and dove into Peking, excuse me, Canton. The first trade festival and I remember going there and the only thing that were tires, there were industrial things, and I stated Chairman Chiang Kai-Shek’s home and we had frogs in our showers. In life you have to have a sense of humor.

John:
Absolutely.

Charlene:
If you don’t have a sense of humor, then check out early, because I dealt with things you would never believe.

John:
That’s great advice for the startup entrepreneurs is they have to be able to roll with the punches and you’re going to come with some bumps in the road and how you deal with that is the key to whether you make it or not, right?

Charlene:
Absolutely and you got to have, if you can’t laugh at yourself and at things, when everything goes wrong, have a brownie and relax.

John:
Would you say that humor is the secret to weapon to being able to persevere?

Charlene:
I think humor and good sex.

John:
Oh, great, nice. That’s a great formula. I love that. Well, I can’t imagine with that kind of advice that you’re not fully booked all the time, because who doesn’t want those two things? Is there any books that you would recommend for startups to read?

Charlene:
Well, I’m just looking at all the signed books I have. Jim Rogers’s Street Smarts. Misty’s new book that’s been a best seller, Geekonomics. NO, I think they should contact me.

John:
Contact you, okay. Do you have a blog or what’s the best way for our listeners to contact you?

Charlene:
Well, Brooke (#27:22?) is my marketing director. LinkedIn.

John:
Charlene Miller on LinkedIn.

Charlene:
Yeah, www.globaldirectors.com

John:
Got it and what would be your ideal client? Who do you like to work with? What should they have ready? Should they have an idea, should they have a team, should they have a prototype? What’s the best stage?

Charlene:
It helps us if they have a prototype, but in all due respect the Infoville/deep dive company had a prototype, but it wasn’t working. It doesn’t matter what stage. I do great with companies that 500 million dollars. I do great with companies, well, let me tell you about Betfair of London. Do you know what Betfair is?

John:
I don’t.

Charlene:
The largest gaming company. They’re the bookie and they went public and they were worth, I can’t tell you how much, but I moved Mathias Entenmann, they needed a GM and I moved him and his wife from Palo Alto, she’s a psychiatrists, he had twins, and moved them to London and he ended up with a million dollars cash com and he’s German and the thing that held up his taking the job as he would not accept British healthcare. He wanted German and he finally got it and I placed a number of people at Betfair and the company was outrageously successful. As a matter of fact I think there is a, if you look at my testimonials on my website, you will see the testimonials from some of these people, I couldn’t get everyone, because we actually only started the website on December 1st.

John:
Of last year?

Charlene:
Of this year.

John:
Okay, three months ago.

Charlene:
Yep and so, because I stopped and I was in the antique business and now I went back to this. I did the MamaBear/PapaBear app.

John:
Tell us what that is.

Charlene:
MamaBear/PapaBear app it’s an app on your phone where it actually manages all your children’s connectivity as far as how fast they drive and also what they’re watching, everything to do with an app for your child.

John:
Got it.

Charlene:
You know, what they’re watching. Anything they’re doing on the web so that’s MamaBear. Not only did I find her in three months, 90 days, but they wrote her a check for two million dollars immediately afterwards. She came with a full team and these guys were blown away.

John:
So, they were impressed with her product, her team, and there wasn’t a need in the market place.

Charlene:
Her team and that’s the first..

John:
It’s all about the team.

Charlene:
And everyone was, she walked in with a full team and this was the first real CEO job. She was CEO divisions. I mean, you could look her up, Suzanne Horton and I have still only met her once. Met Tom Cardy once and met Steve, who’s Chairman of the company, once, because everybody is too busy.

John:
Well, that’s the other big takeaway is that investors are so busy, you need to have as many things checked off that they need to see starting with the right team, the right concept, and a vision with the road map to get there and someone like you to take them so that they – and the connections to people who are looking for good money.

Charlene:
They might not have the right road map and they might not have the right strategy. If it’s very early they normally do not.

John:
Right.

Charlene:
But, they think they do.

John:
Sure, but you can help them not only refine that strategy, but put them in touch with the right people who would be good money versus bad money.
Charlene:
I release people, I surround them once they sign a letter that we agree to go forward, I take a small and depending upon the stage, I can take anywhere from $100,000 to $10,000 and I’ve even taken $5,000 as a retainer and then every month they pay me. It depends upon the company. I have money throughout the world. Hussein Nasreddin is a good friend of mine. His palace in Tangier is larger than Steve Forbes, who I know quite well.

John:
Wow, well clearly Charlene you have an amazing amount of experience, contacts, and a proven tract record that is up there with anyone I ever read about or met, so it’s been a huge honor to have you on the show today The Successful Pitch. Again, for those people who are savvy enough to want to reach out to Charlene, you can go to Charlene Miller on LinkedIn, you can go to her company’s website GlobalDirectors.com to connect with her and find out more about what she does, how she can help you with your strategy and of course the ultimate, how can she raise money for you, the good money, and how she can do it fast. Charlene it’s been a pleasure. Thank you so much for joining us.

Charlene:
Thank you. It’s been a pleasure. I hope to meet you soon.

John:
Thank you.

Charlene:
Take care.