Innovation Hacks with Josh Linkner

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TSP 185 | Innovation HacksEpisode Summary:

To Josh Linkner, founder and CEO of ePrize, creativity and innovation are the lifeblood of all human progress. As such, he’s spent his career harnessing the power of creative disruption. His journey has been non-traditional at every step, using innovative hacks to topple competitors, fight through adversity, and achieve at the highest levels. In addition to his own startups, Josh has been involved with the launch, growth, or financing of over 100 other companies. Josh shares how he built the largest digital promotions agency in the world, ePrize, serving 74 of the Top 100 brands. He also touches on innovation, creativity, reinvention, and hyper-growth leadership. Josh states that focusing on not only inspiring audiences but also sharing actionable strategies is what drives meaningful outcomes.

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Innovation Hacks with Josh Linkner

My guest is Josh Linkner, who started his career as a jazz guitarist and he personifies innovation, entrepreneurship, and breakthrough disruption. He’s been the Founder and CEO of five tech companies, which sold for a combined value of over $200 million. He’s a New York Times bestselling author not once, but three times. His first book is Disciplined Dreaming and then he went on to write two other books, The Road to Reinvention and Hacking Innovation. I’m interested to have him share with us what hackers do that we can apply to our own way to be more innovative, but in a legal way. He’s also the founding partner of Detroit Venture Partners and he invests in over 100 startups. He’s been named twice the Ernst and Young Entrepreneur of the Year and is President Barack Obama’s Champion of Change Award recipient. He writes for Forbes and Inc. Magazine. He’s a big supporter of Detroit and he gives keynote talks all around the world about innovation and he helps other speakers. He’s someone who gives back and has a passion for making a difference. Josh, welcome to the show.

TSP 185 | Innovation Hacks

Hacking Innovation: The New Growth Model from the Sinister World of Hackers

Thank you so much. I’m delighted to be joining you.

I love your story of origin and I would love to have you share with us how you went from a career as a jazz guitarist into entrepreneurship and then on to this amazing international speaking career.

I grew up in Detroit and I started playing Jazz when I was about eight years old. I’ve been playing for 40 years and I love music. I love the art form, but clearly, it wasn’t the most lucrative career choice. I’ve equally found a love for creating similar types of art, but in business. To me, we can be artists whether we’re playing music or doing a Broadway play or writing code, it doesn’t mean you need to be less artistic. I’ve always taken that same creative approach to anything that I’ve done.

I’ve ultimately moved into entrepreneurship and venture investing. Ironically, your show’s around the pitch. The pitch had a lot to do with it. When we’re Jazz musicians trying to get a gig, you’re constantly pitching yourself. You’re trying to just get someone to hire you. The same works when you’re trying to raise capital, when you’re trying to land customers, when you’re trying to attract talent. To a degree, it’s salesmanship not in a bad way, but in a persuasive and authentic way that ultimately drives progress.

There are a lot of similarities between music and being fluid on stage and entertaining people. Let’s talk a little bit about the talks that you were hired to do and some of the clients you’ve spoken to around innovation. What are some of the secrets to being innovative in your business or an innovative way to pitch?

I’m very lucky I get to speak all around the world. I did 163 keynotes all over the place, mainly for large companies. We can apply the lens of innovation, that’s a core message that I share far beyond product development. We have to think of “innovation” as this big overwhelming word that only applies to CEOs or people wearing lab coats. I like to show this notion of everyday innovation and being innovative whatever we happen to be doing, whether that’s customer service or finance or in this case, pitching. As we think about pitching in a creative way, that could become the difference maker. If you’re pitching in a competitive situation, especially if your product or service is very similar to others, the innovative nature in which you pitch could be the difference maker between winning or losing.

We underestimate the risk of standing still. Click To Tweet

I like to do a few things. First of all, let people know that all of us are creative. Whether you’re good at music or not, doesn’t mean you’re creative. All of us, as human beings, have the creative capacity to solve problems in imaginative ways and use this creative muscle in our daily work. Once we were connected to that, what I like to share are some very practical tools and techniques that allow people to drive innovation into, not only the big stuff but the little stuff.

One thing I like to do is called the Judo Flip. It’s a very simple tool. Let’s say you’re selling life insurance and everyone in the industry sells life insurance the same way. You’re confused with the competition easily because everyone looks, act, sounds and smells the same way. The Judo Flip is simply asking yourself, “What is the exact opposite? What’s the opposite of what I’ve always done? What’s the opposite of what everybody else is doing?” If everybody else pitches in a three-piece suit, maybe you pitch on a black turtleneck. If everybody else come and hawk their wares, maybe you come in with no presentation and you simply engage in a dialogue. It’s a way of forcing yourself to look and list out what everyone else is doing, what you normally do and you’re simply asking the question, “What would happen if you Judo Flip it?” If you Judo Flip the tradition upside down in order to uncover a fresh approach.

That mindset of just because everyone else is doing something in a certain way, it reminds me of lateral thinking, which is that same way of, “How can I think out of the box?” Not just that but do something that’s memorable. That’s where storytelling comes in, whoever tells the best story when you’re pitching becomes memorable. Can you share an example of some of the times you’ve had to pitch yourself versus another speaker and what you’ve done to be Judo Flipping?

First of all, one of the messages of pitching is that it’s about the pitcher but it’s not, it’s about the audience. The first thing you have to do is getting yourself in a mindset that it’s not about you or what you’re trying to sell, it’s more about what you could do to add value and serve the other person. This nontraditional approach has worked for me in all aspects. One of my favorite stories, I had the chance to win some business as I was growing my company from a giant corporation. They were going to single source all of their purchases of our kind of work, we did digital promotions, and give a whole bunch of business to one supplier. A competitive shootout ensues and we made it to the finals.

At this point, there’s me and two other companies left standing. We were desperate it has to be a game changer if we want it. The problem is that the buyer, in this case, was a jerk. He was dragging the process out. He was difficult and abrasive and all that. I bumped into him and his wife at an industry conference. I kept running up to him at the coffee breaks and I’m trying everything I know to close the deal. Nothing worked, he was totally dismissive. What happens next is that I see him at the airport and it turns out that he and his wife were on the same outbound flight that I was. The guy gets an upgrade to first class, he’s a frequent traveler. Being the gentleman that he is, he takes the seat for himself and sends his wife back to coach. If I did that with my wife, that’s got to be it, game over.

TSP 185 | Innovation Hacks

Innovation Hacks: If you’re pitching in a competitive situation, especially if your product or service is very similar to others, the innovative nature in which you pitch could be the difference maker between winning or losing.

 

Next, what unfolds, I also got an upgrade. I walk on the plane and there he is sitting down and I had the seat next to him. All of us that are reading this is pitching like it allowed me in sales of some capacity or another were like, “You’ve got the seat next to your biggest prospect, two hours uninterrupted, sit down and sell.” To me, there’s an opportunity to be creative. It’s an opportunity to explore an unorthodox or a judo flip approach. I said, “I have the seat next to you.” He looks back up at me and he says, “We could chat.” I said, “I’d love that. Here’s the thing, I have much work I’m behind on. I need to catch up on this flight and I also noticed that your wife is sitting at the back. How about we switch seats? You two can enjoy some family time. I’ll get my work done back in coach.” He thanked me and I was a little nervous. Was that the stupidest thing I’ve ever done? I thought, “Let’s try the opposite approach.”

I walked back and present his wife my ticket. I said, “Go sit with your husband, have a great flight.” She gets a little choked up and she’s like, “Thank you so much, I’m so happy to be sitting with my husband.” The flight takes off, I don’t think too much about it. Once we land, all of us we check our mobile device. The first thing I noticed was an email from my office. It said, “Josh, deal signed.” Here’s what happened. The guy later told me, “I was looking for a tiebreaker. All three companies were solid but when you demonstrated some humanity instead of only chasing the bottom line, when you showed me that you could be innovative, that’s who I needed on my team.” Before the flight took off, he texted it to his office. Once we landed, that deal had already been signed. It was a $30 million deal.

It’s a bit of a risk. It is a great example of the Judo Flip. What I love is you’ve now shown us how to be innovative as it relates to the humanity part of it. I don’t think that people think of innovation applying to humanity and that can pay off. I also loved that you didn’t say, “I’m a great guy. I’m going to give your wife my seat.” You said, “I have work to do.” You were equally busy and that there were some things going on in your life, which is always, an important factor that you can’t be too needy or desperate for anything. “That if this doesn’t happen, this is my all or nothing,” world. That sets you apart as well in my mind.

I did it because it was the right thing not only because I’m trying to game it but it all paid off. My experience is that when we go and pitch anything, I raised over $250 million of venture capital through the years, I bought and sold several companies. I spent a lot of time pitching. Also as a venture capitalist, I’ve been on the other side doing 3,000 entrepreneurial pitches. I will say that what I’ve seen the best ones are not the ones that have the straight up the middle pitch. It’s the ones with the curveball. It’s our job to position our offering and to be persuasive in a nontraditional way because that’s going to yield a better result.

I’ve seen many examples of this innovative thinking. Can you give us another one? I watched one of your videos and I was amazed at how you came up with an innovative solution, so you didn’t lose business. It’s one thing to use innovation to get it, but how do you use it to not lose business?

Early on, we won a piece of business in my company from United Airlines and we were excited. I’m a little startup in Detroit and this is a major brand placing their trust with us. My company designs and runs digital promotions. We were part ad agency and part software company. When we run a promotion like sweepstakes, we’re also doing the legal stuff, the rules and regulations. This is a sweepstakes grand prize of $1 million and United flies at different countries. They wanted their customers from all the same countries to be able to enter the $1 million sweepstakes. We take the business, we’re all excited then we got into the legal research. We learned that in Brazil, which had to be an eligible country, a drawing of this nature, according to Brazilian law, must be done on Brazilian soil.

We’re thinking, “We’re going to Rio.” Until we learned that in Australia, which also had to be an eligible country, Australian law declares that prize draws must be done within the physical boundaries of Australia. I was a little tech company. This is not a small problem, this was a massive problem. I didn’t know what to do. I couldn’t give away two prizes. I couldn’t afford an extra million dollars. I’m not about to run an illegal sweepstake and I didn’t want to have to go back to my huge new client and tell them we’re too stupid to take their business. The answer didn’t come from me, as the CEO, I wasn’t smart enough, nor did it come from anyone with the fancy title, it came from an individual team contributor in my legal department.

Here’s what she says to me, “Josh, do the drawing at the Brazilian embassy in Australia.” It’s technically Brazilian soil, technically within the boundaries of Australia, which we did. I’m not kidding, it saved my company. The reason I like sharing this story is that if we want to drive creativity in our organizations, it’s not all about us being the creative wizard, it’s about empowering others. It’s about creating a safe environment where part of their job responsibility is to be creative and to share the crazy wacky ideas. The only thing I did as a leader here is I created an environment where this woman who shared her idea, she wasn’t nervous she was going to get fired. She wasn’t scared she was going to get reprimanded for sharing a crazy idea because we celebrated all ideas, big and small. I would encourage the audience to do the same.

Everyday innovation requires practice. Click To Tweet

The big takeaway is to create a safe environment where people don’t feel embarrassed or scared to share something that they’re going to be ridiculed for because that’s the creative process. That goes back to Jazz, which is a very creative way of improv and creating something new. You’ve heard a lot of pitches as an investor. I would be remiss not to ask you to either share one of your favorite pitches or, beside not doing a traditional pitch, any tips you have for someone who is pitching to you or any investor that you think will make them stand out?

When you listen to pitches, some of them are so bad that we created this funny list of what not to do. Here are a couple more tactical things. One is a great presentation is about discussion, not a monologue, so make sure that you’re listening as much you’re talking. Avoid the buzzwords, name-dropping, big, boastful and outrageous claims. Instead, make sure that your authentic self is coming through and that it’s a conversation. You want them to fall in love with you as much as they fall in love with your idea. What I’d like to see is storytelling and I love to see when people are pitching and focusing in on the problem that they’re solving. If someone comes in to pitch me for capital and they’re like, “Here’s this money I’m going to make.” I feel like they’re focused on the wrong thing. I want them to come in and say, “Here’s this burning problem in the world and it needs to be solved. I’ve committed myself to solve it. Here’s how we’re going to do it in a nontraditional way.” That to me is cool.

Another thing, we have a little venture capital rule called the 10X Rule. If someone comes and says, “I want to start a new auction site and it’s going to be 2% better than eBay.” My response is, “No way.” eBay already has won that and they have too much critical mass for you to compete. Our little simple litmus test was this, if someone pitches us an idea, we say, “Is that idea 10X better than what alternatives are already out there?” If it is, I want to learn more and I want to invest. If not, I’m probably going to pass because if there’s already an incumbent, if there’s already a market, how are you going to solve the problem in a ten times better way?

By the way, it doesn’t have to be your product. You could have a 10X advantage elsewhere. It could be a 10X cost advantage, it could be a 10X people advantage, a 10X brand advantage, 10X safety advantage, whatever. For us, we always say, “Is there a 10X somewhere in the mix? If there is, we’re excited. If not, we’re probably going to pass.” It’s a good way for someone who’s trying to pitch to say, “Can you position your alternative?” Whether you’re selling a product or service, or you raising capital, in some way 10X better than alternative choice. Even if you’re trying to raise don’t profit money. You’re trying to raise money for the American Heart Association, why should someone give money to you versus someone else? Your story better be ten times better.

Those are useful takeaways and in been doing that myself where I pitched my startup that I’m working on, quantmRE. We describe what the problem is when people have equity in their house and if they need to take the money out to remodel or send a kid to college, the only option they have is to refinance it. We’ve completely Judo Flipped that and are now giving people money without having them take on more debt because we buy a small percentage of their house. When that happens, we’re giving people the freedom to get access to money liquid without taking on more debt. That’s a way that is 10X better than people taking on more debt.

When people understand all of that, you can start to get people to say, “I’ve never heard of getting money without debt, tell me more.” That’s what you’re saying. We’re describing how we’re helping people, the problem that people are having when you’re asset rich, but cash poor. If you can solve that problem that intrigues a lot of people to say, “How do you do that? You’ve already done it and now you’re going to put that on the Blockchain on top of it and let people buy real estate without being a landlord. That sounds something that’s pretty revolutionary, I want to know more.” That’s all good pitches in my opinion. Also to intrigue people enough to say, “That’s interesting. I want to know more.”

You’re such a good example there because you’re not just sharing some little teeny feature. What you’re offering is profoundly better and different. Nobody wants another me-too solution. What the world craves are originality and unique and better approaches. When we’re talking about pitches, just a couple of quick things that I’ve learned. We would always ask ourselves when we would get pitches to venture capitalists and I would do this when I was raising capital. Here’s the question, “Are you selling vitamins or Advil?”

Here’s what I mean by that. If it’s 2:00 AM and it’s snowing and you’re in your nice warm bed, no one’s ever going to get up, get in their car, dust off the snow, drive four miles, and go to the all-night drugstore to buy vitamin. It’s not going to happen. If you have a headache and you could barely see straight, you’re going to do whatever it takes, pay whatever it takes, go through whatever extra discomfort it takes to get yourself that Advil. Back to pitching, is your solution something that it’s just nice to have? Vitamins are nice and convenient and you do it when you get a chance. Is it like a burning pain that you’re solving? The more you can position your product or service company as Advil addressing a real burning pain in the world as opposed to vitamins “a nice to have,” you have an easier chance of raising capital and ultimately succeed.

TSP 185 | Innovation Hacks

Innovation Hacks: It’s our job to position our offering and to be persuasive in a nontraditional way because that’s going to yield a better result.

 

I find that useful because we instantly know that one is a preventative and the other one is instant. You must address the “why now” factor when you’re pitching. Why is now urgent that this problem gets solved and the vitamin versus Advil paints that picture in a great way. Let’s jump to your book, Hacking Innovation. This concept of the Frogger is interesting. Can you expound on what all that is?

I grew up playing video games like many people. Back when I was doing that, there was the game of Frogger. For those who don’t remember Frogger, you’re this little frog and you’re trying to cross the street. The way you do that is you hop on moving objects that are flowing in the stream like the back of a lily pad or an alligator or a log. Eventually, you try to get across the street. The thing is that when you take a step and you’re on dry land which now you’re on a log, if you stay on the log, you then fall into the stream because the log is moving in increasingly faster paces. What you have to do is go from a dry surface and then right where you land, jump to the next dry surface and the next one in order to avoid the raging river of death.

I can’t think of a better example for what’s happening now in our business climate because today it’s like a giant game of Frogger. In other words, you have a good quarter. Now you’re on back to the lily pad, but if you stand still, that’s the riskiest thing you can do because you’re going to fall in the river and die. It’s about going from point of success to the next point to the next one. Those factors are increasing today at a rate like none other in history. It’s incumbent on us not to think of success as we’ve cracked the code and you’re going to do the same thing forever, but rather leaping from one point of success to the next and always moving forward because realizing that standing still, connecting to the status quo is probably the riskiest move of all.

That is spot on to my philosophy as well which is there’s no such thing as a comfort zone anymore. You’re Judo Flipping the traditional way of, “Let’s avoid risk.” You’re saying, “Nope, the hackers embrace it.” That’s what you need to be doing in your business in order to not be drowned in the Frogger example.

One thing I’ve learned in 28 years in business is that people tend to overestimate the risk of trying something new, but they underestimate the risk of standing still. That’s exactly what the Frogger thing is all about, is that realizing that we have to go in our careers and companies. From one point of success and then right when we land, it’s about re-imagining what’s next and continuously creating your way forward.

We underestimate the risk of standing still. You are the master at sound bites and giving great takeaways, which leads me to what you’re doing to help other speakers. A lot of people have a passion for speaking, but they don’t have the business model that you are applying from your expertise in the tech world to this. I was fortunate enough to attend this 3 Ring Circus Speaker Bootcamp. First of all, the branding and the tone is spot on for me and is literally magnetic. I’d love to hear you describe what made you do it and what it is.

All of us as human beings have the creative capacity to solve problems in imaginative ways and use this creative muscle in our daily work. Click To Tweet

You and I are very blessed that we get to share ideas with people all over the world. When you give a keynote, you have the opportunity to change lives, move industry, and make the world a better place. It’s a wonderful opportunity. There are so many people out there with fabulous messages. It could be on lots of topics, business, health, relationships, on and on. There’s a wonderful training on how to be a better speaker. There are great speaking coaches and content coaches, but if someone wants to learn the business of public speaking, I’ve found that there are no good high-quality options. As I started doing this more regularly, I realized that most of the stuff out there was pretty cheesy. It was like the zillion dollar speaker or all this stuff that like it was a get rich quick nonsense.

For me, we figured it out. I applied the same rigor that I had when building a software company to the world of public speaking and we developed a systematic approach to build and scale a speaking business, driving both volumes of speech opportunities and fee. When we finally got to that point, I said, “I would love to share this with other people because if we’re able to help them get their messages out there, the world is even a better place and how cool is that?” We started this fun thing called 3 Ring Circus, the site is 3RingCircus.com. It was playful and a bit self-mocking.

TSP 185 | Innovation Hacks

Innovation Hacks: We’re hard-wired to be creative, but unfortunately, most of us were socialized out of it.

 

The idea is, “It’s a circus out there and wouldn’t it be nice to have some people helping you get your circus up and running?” We host a one-day speaker bootcamps and provide some additional coaching services and such to help people with a powerful message that they want to get out in the world and then teach them the business of speaking. They’re able to do so and get paid handsomely and get a lot of opportunities to speak on the biggest stages in the world.

It’s well-produced and you not only teach the business of speaking, but you have a speaking bureau, agents, and founders there who share their insights on how they select which speakers are going to represent. It was one of the best days I’ve ever spent on my career and you’ve been kind enough to offer the audience the ability to enter a code called Pitch 500, which would give them $500 off the cost of this speaker bootcamp. That was very kind of you to do. Do you have any last thoughts you want to share with us about what we can do to stay innovative whether it’s in our career or in our personal life?

Practice micro-innovation as opposed to the breakthroughs. Click To Tweet

If you think of creativity as an everyday habit instead of a once a decade initiative, it’s a healthy way to look at it. I would say practice micro innovation as opposed to the breakthroughs. If you walk your dog, is there a more innovative way to do that? If you answer the phone or send an email, how can I make it a little more creative? If you’re going to send a prospecting email, how could I go jazz that up a little bit? If you think about lots of little acts of creativity rather than waiting around for some change the world type idea, the big stuff will take care of itself if you’re practicing the little stuff. Just do lots of little creative acts. The thing I would encourage people to know is that the research is crystal clear that all of us as human beings have an enormous creative capacity.

I like to say if you’re breathing, you’re creative. We’re hard-wired to be creative, but unfortunately, most of us were socialized out of it. We’re taught not to be great, not to take risks, not to make any mistakes. If we can reconnect to that gift of creativity, amazing things ensue. Human creativity is the one thing that can’t be outsourced or automated. It’s the thing that allows us to be closers instead of second round, all the things that we want can be enabled through human creativity. It’s fascinating when you study the brain chemistry, the difference between you and me and Picasso, brain-wise, is negligible. It’s not that he was endowed with something from God, it’s just that he built those skills up more than perhaps you and I did. All of us can be the Picasso of our field or the Mozart are the Da Vinci. If we give ourselves permission and practice a little bit, we can go on to do incredible things.

What a great message that creativity is like a muscle. If you make it an everyday habit, then you start telling yourself, “I am creative,” and your brain will start finding solutions that it didn’t even think was possible because you believe that you are creative. I love that. Thanks so much for being on the show.

Thank you. It’s absolutely my pleasure. Keep doing great stuff. I appreciate it.

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Tags: creative capacity, creative disruption, Hacking Innovation, innovation, innovation hacks, micro-innovation