How To Pitch To An Investor With Minnie Ingersoll
Posted by John Livesay in podcast | 0 comments
In the world of entrepreneurship, investing in people is crucial. Today, John Livesay interviews Minnie Ingersoll, the Co-founder of Shift Technologies Inc., host of LA Venture Podcast, and a Partner at TenOneTen Ventures. Minnie had an amazing career at Google and now works for a venture capital company in Los Angeles. She reveals how she looks at things and decide on which startup she’s going to fund. She also shares some insights on how you can keep going even in times when you don’t feel like it. Learn more about how you can pitch your ideas to an investor in this fascinating episode.
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Listen to the podcast here
How To Pitch To An Investor With Minnie Ingersoll
Our guest is Minnie Ingersoll, who’s a partner at TenOneTen Ventures and the COO and Co-Founder of Shift. She’s also the host of her podcast called La Venture. Shift is an online marketplace for used cars. Minnie started her career as an early product manager at Google, where she founded the access team across functional product, policy, and engineering team that spun off Google Fiber. After more than a decade, she made her exit from Google to begin her entrepreneurial journey with Shift, a company she co-founded and scaled to over $100 million. She is a longtime Silicon Valley product leader and operations executive with experience building and scaling impact through elegant technical solutions and great teams. She’s moved back to Los Angeles after twenty-plus years in the Bay Area and we couldn’t be happier to have her on the show and in Southern California. Minnie, welcome to the show.
Thanks, John.
I would love you to tell us your own story of origin. You can go back to childhood, college, wherever you want, where you started thinking, “I like technology,” “I want to get into the startup world,” or when Google got on your radar. How did that happen?
I grew up in Southern California. I grew up in Pasadena. My parents are both academics and I was a nerdy kid but it was before it was cool to be nerdy. It was nerdy to be nerdy. I went to Stanford thinking I had studied math, but this is in the ‘90s. There was much going on in the computer science department. It was at the forefront of society and the changes that were happening. I studied computer science, which was a good move. In retrospect, I’m glad I did that. I joined a company in the IPO in March of 2000. Right before everything burst, so went to business school. We IPOed but weren’t profitable. That was a challenge.
I went to business school and I wanted to go back to startup life. I was sure after business school that I was not meant to be in the banking world or something. I was looking for a small startup. I ended up joining Google when they were 500 people. I thought it was huge at the time, but I joined when it was 500 and I stayed for several years. I stayed from 500 to 60,000 people. It was a crazy ride. The quick version of it is that’s how I got deep in Silicon Valley. It seems like a straight trajectory from Stanford computer science, but to me, it felt like a bumpy journey, but that’s how I got going before I started my own company.
What lessons did you learn watching Google grow from 500 to 60,000 to help people who want to scale like that? You’ve got growing pains, obviously.
I’ll give you the formula and you too can go to a $60,000 trillion company. There were many lessons. It sometimes depends when I zoom out and zoom in. The macro thing that a lot about is what our company’s role in society. That’s a challenge you have on your 60,000 or 100,000 people. I’m increasingly a believer that you have to build something that’s good in the world and you have to think about what’s best for the user. It’s become a trite expression but I do think that’s how you build things with long-term impact. It’s also one of the things that I look for now that I’m a VC.
[bctt tweet=”Are we making something good in society?” username=”John_Livesay”]
Fast-forwarding a bit, one of the things I look for is, “Are we building something good in society?” On the more practical side of things, I learned all sorts about operationally how do you hire well? How do you do 360-reviews well? How do you set up your HR department or OKRs? All of those things were valuable when I started my own company. I said, “I’m not going to try to think about how we should do OKRs, write snippets or do 360 reviews. Google had a whole infrastructure of people who analyze this and we’re going to copy from them.” That was on the tactical side, useful.
What are some of your insights? I know, as an investor, you’re always looking at the team. You got to see the importance of building a good team at Google scale and they have an in-depth process. I read once that it’s harder to get in Google than it is and Harvard, there are many people wanting to go in. Do you have any big picture tips for founders where they’re building a team or what you look for in a team?
I spend a ton of my time interviewing people both at Google and at Shift. Unfortunately, the biggest thing that I take away from that is that it takes a ton of time. Everyone says they want to build great teams and you should. It’s worth the investment, but realize that building great teams might be a third of your time or something. Think about that. It’s not an hour a day. It’s multiple hours every day to do it right. The other thing I believe is there’s no way of shortcutting the time but the time also needs to be spent upfront. There are times when you’re hiring twenty people like software developers and it’s all the same role but a lot of times, especially at a startup, you’re hiring twenty people into twenty different roles. Each role is a different role.
Having all of that alignment on what you’re looking for upfront and spending a lot of time more than you think identifying what success looks like in the role, and therefore what are the qualities that someone would have that would lead them to be successful in the role. Now, you know the qualities. You know what success looks like and thinking about what are the personas and going after identifying those people. A lot of times, in a startup, you’re being proactive, you’re not sorting through the resumes that come to you but you’re proactively seeking out the best engineering director for a company that meets your criteria. It’s someone who’s gone through hyper-growth that has a similar stage startup. It’s those things and going after those people proactively and relentlessly. There’s a lot of that that is all the upfront stuff.
I spoke at the Coca-Cola CMO Summit, which was connected to Google and Silicon Valley, who did the summit. The next day we went to Google because Google and Coca-Cola are extremely close and partnered together. One of the things that impressed me is the culture of Google. They said that they had someone come to speak about the importance of food and the quality of the food. “You feed the people you love,” was a line that was stuck with me. I thought, “What a great culture to create that you’re caring about the people enough to not only feed them free food, but we feed them quality food. The amount of time and effort that goes into feeding all those people around the world with different cultures and different needs.” That’s an interesting insight that it’s no longer a perk, but also part of a cultural mindset. Since we have you with your expertise there. Everyone’s heard KPI, Key Performance Indicators and OKR, Objective Key Results that Google uses. Are they the same or are there some differences for people to have in their heads?
I can’t say I’m the expert here. When I think about KPIs, I’m thinking about what are the key performance indicators that I need to measure on an hourly, daily, weekly, monthly, quarterly, or yearly basis. There are different things and they’re usually measurable metrics. They might be things that you do want to measure on a daily basis but there may be things you want to measure on a monthly basis, but you don’t want to measure on a daily basis. Figuring all of that out is an amazing skill but you don’t want to measure things too much at times.
You don’t want to measure things too little, but you also don’t want to measure things too much and figuring out all of that structure. The KPI doesn’t encapsulate the objective. The key thing about an OKR, which is an objective and key results is it’s about tying those OKRs, the key results back to an objective. The objective might improve our users’ happiness or something. I don’t know if that’s a great example, but figuring out what the key results are to tie back there. That’s usually done on a quarterly basis. Whereas your KPIs might have KPI dashboards that are measuring things on an hourly basis.
Since you now have your own investment company, what is it that you look for? Are there specific industries that you’d to invest in? What are you looking for within those industries besides a great team and making as we said something good in the world?
Hiring The Right People: One of the goals in having a first meeting is to get to a second meeting.
Google stuff is interesting. For every VC, the thing that I have heard the most is you look for people to invest in people, product and markets. We’re no different from that. It’s interesting to dig deeper into all of those and think about what do those mean. When I’m looking at people for me, there are a variety of different things. The meta thing that runs throughout it is I want people to think for themselves. I’m going to tell you what I’m looking for but what I care about is people who are thinking for themselves and not trying to reverse engineer the VC.
I’ll tell you what I’m looking for. When people come to me and tell me, “Here’s my TAM SAM SOM slide.” The little bubbles. There’s a bubble here a bubble there. I can’t remember what SOM stands for. The Total Addressable Market I know is the TAM. If they come to me because they’ve been told that that’s what they’re expected to do and they put that slide up front, I want someone who looks me in the eye and explains to me why this is an amazing opportunity. What this is a big opportunity. That’s what the TAM SAM SOM is supposed to be. This is a big opportunity. Explaining to me how big the industries are in a way that’s educating me, that’s interesting like putting it on a bubble that’s not.
You’re singing my song. Tell a story that turns the numbers into a story.
For me, I’m interested when I’m being educated that engages me. I’m a little less of an entertain me storyteller as much as educate me. That’s interesting to me if you’re educating me but be authentic. Figure out what it is that is authentically why you believe this is a big market and tell me that story. Make me believe this is a big market but don’t put it on some TAM bubble because someone has told you to. That’s one of the big things. One of your goals of having a meeting is to have me want to have a second meeting. That’s not necessarily educating me on everything you’re doing.
There’s a personal connection. I sit on panels all the time and people come up. They’re eager and they stand in line and they have 1 to 2 minutes to make some elevator pitch. They try to cram everything it is about their businesses as if I’m going to remember it in 2 minutes. Their goal should be finding another time to sit down and discuss things. It’s making that personal connection. There are times that I’m not all that interested in the investment but I want to make an investment in the person. I genuinely want to be helpful.
Introductions are everything. It reminds me of someone asking somebody to marry them on a coffee date. You don’t jump in like that.
In terms of the people side of things, I’ll use an example, I’ve got three kids and they all go to the same daycare and I can see that the daycare doesn’t have any technology that’s serving them in terms of their CRM or their marketing tools. I’m a developer, I know how I can build a better system for the daycare versus someone who tells me, “I run ten daycare franchises. I built up my software myself for my own business. I know exactly what is needed. I’ve been creating this for myself and this is what I’m going to do with the rest of my life whether or not you give me money.”
There’s a subtle difference there or maybe not that subtle. I’m looking for someone who deeply knows the business that they are building and not only came up with the idea of observing the world. They had one poor experience and they decided to solve it but this is their life work. They run ten daycares. They’re going to be continuing to build software for daycares because that’s what they’re going to be doing, regardless of whether this venture gets funded. They’re going to keep at it for the rest of their lives because this is their business and their thing.
[bctt tweet=”Investors want someone who looks them in the eye and explains to them why investing in them is an amazing opportunity.” username=”John_Livesay”]
What you said reminds me of the difference between casually looking at something and going, “Maybe I can fix that,” versus, “I’m immersed in this. It’s my life and I’m on the inside. I’m working with lots of different people and this isn’t a casual observation but more of an immersive experience. My perspective is different as a founder from that difference.”
We like big markets but we were looking for someone who’s spent their career in that market and had a unique insight. Sometimes in terms of a pitch, it’s less a pitch and more of maybe it’s educating us on the market. I don’t mean that to be exploitative, “I’m taking the meeting so I can be educated.”
I look at anybody who’s invested trying to get an investor like you and one of the things I always tell people is, “Do your homework. Look at the other companies that this venture capitalist has invested in to try and see some through-line,” I’m going to take a stab, I would say, “It’s not rocket science but, company’s name, data science and Interviewing.io. I would imagine that you like to invest in things and not only have a big market but also have a lot of technology behind it from looking at your portfolio.” Would that be accurate?
Yes. I was giving you a piece of generic advice about how I like to think about a pitch. At TenOneTen we tend to invest in engineers turned entrepreneurs or companies with deep engineering DNA to them. Software and data being our focus as opposed to hardware. There are other difficult things. I also host a podcast where I interview VCs and I asked one of my VC friends what he likes to invest in and he said, “A company that he feels that he could run.” I thought that was an interesting lens. That probably takes it further. I don’t feel that I could run someone else’s company. I’m investing in early-stage so into seed-stage companies. Most of them don’t have them fully built out executive teams. A lot of times there’s gaps and things they’re still looking for advice on. I want to invest in companies that I feel that I have some expertise in. For us at TenOneTen, I have two partners. We all have built software and data companies and gone through that hyper-growth of building software companies. That’s what tends to be what we look for where we feel kindred.
What a fascination that you and your partners you’re immersed in this. You know this business you’ve and you’ve been in the trenches. As a speaker, when I can speak to an audience, which is typically salespeople whether they’re tech salespeople or whatever it is they happen to be selling. I’ve been in their shoes and I know what they’re going through, whether healthcare or technology. That sales, mindset and objections. That gives you completely different credibility than, “We would imagine what it would to be in your shoes as a software person or a data person.” You’re like, “All three of us have done it.” Which I find completely fascinating.
To your point also, one of the reasons I do a podcast, one of the things I love about your show is there is something about doing your homework, which is what you’re saying. When you listen or when you read people’s blog posts, it’s a much easier way to improve approach someone intelligently if you’ve done your homework on what their investment theses are. Things like podcasts and reading their Twitter wherever someone is active. Read all of that allows you to do a much better pitch.
The customization or comment on the posts you make all that good stuff, you also have wonderful insights into what it’s like to scale an idea and turn it into a series D company. For those who may not be familiar with that alphabet dollar amount, would you share with us? People who have a sense of seed may be up to a million and series A is $3 million to $4 million. People don’t hear that much about series D. What is D? Let’s answer that first and talk about what it takes to scale an idea to get to that level.
I’ve been located in the Bay Area and seed, A, and everything’s gotten bigger. TenOneTen we’re in LA, we invest across the country, but are the typical size round that we’re investing into as a $2 million seed. As are more 10 on 40 or something, meaning a $10 million raise on a $40 million pre-money valuation. At Shift we raised $3.2 million seed, we raised a $20 million A, a $50 million B, a $30 million C and $120 million, depends how you counted something D. It’s something like that. I’m not sure I did exactly right.
Hiring The Right People: Podcasting is an easier way to approach someone intelligently.
That’s helpful. Thank you.
I left after we’d raised about $100 million. It was after our seed. Hopefully, my math there adds up approximately correctly. Since then we raised this other $100 million-plus D. It’s the grand total of about $200 million raised.
The biggest difference is seed because you don’t have any real revenue. By the time you get to a series A, you’ve got revenue coming in the pitch is quite different. It’s no longer, “We think this will work, we have some proof of concept, but not a lot.” As they go up in dollar value, do the pitches change dramatically once you’ve got revenue coming in between A and B? Does it stay fairly consistent in terms of more and more proof?
It definitely changes. It’s different things that different investors will be looking at. Even now that most people are doing a pre-seed, even at seed, most of the companies we invest in have revenue. Even at seed. There are still different lenses. Do you know what the rule of 40 is? If I get it correctly, but it’s a balancing act between your speed of growth and your profitability. To some degree, later-stage investors will be looking for that balance. If you’re not profitable, that’s okay because there’s a story that can be why you’re not profitable because you are launching many new markets and expanding so quickly. Each market takes you eighteen months to get to profitability but there’s a repeatable model. People will be looking at different things. It doesn’t have to be profits, but it has to be rocket ship growth. There are a lot of people who are sophisticated about what metrics to expect in different industries in different models.
You talked about when you were with Google and other companies the importance of spending time getting the right team and interviewing them. Now as a venture capitalist, you’re competing with other venture capitalists because everyone has their brand like a company does, to get the right deals as opposed to necessarily to get the right, “Team,” is still connected to a team. Are there certain strategies and tactics that entrepreneurs can use and learn that you’re doing as a venture capitalist to get your name aware and get to be people’s first stop, if you will?
It’s challenging because I want entrepreneurs who are not spending their time necessarily only going to conferences, meetups and having their name known. There is some of that but I want people who are building businesses. It’s the same thing with VC. I want to be building my business and helping my companies. Doing a raise is a tricky thing where you want to be hot as it when you’re raising. Some of that does have to do with timing. You want people to be aware of you, but you don’t want them to be aware that you’re raising and that you get stale. Build a great business and everyone will want to invest is the answer. I do see people who have been raising for 6 and 8 months.
They get a stale feeling and I don’t necessarily think that’s a good thing but I do think that investors will start to question, “You’ve been raising for six months and no one else has invested. Am I the sucker who’s investing after everyone else has passed?” I hope we can maintain our independent thought and deals on the face of them. If an entrepreneur can go out and say, “Let me get you excited about what I’m building but I’m not raising it.” You can’t get in now. Here I am I’m not raising money but I’m building something incredible and I can get excited but I still have to be patient. Be patient for three months and get excited to be like, “I hope he comes back to me and wants to raise money from us.” It starts to be a little too much. Let’s play the game too hard but there’s some reality to it.
It’s almost like selling a house and getting multiple offers versus a house that’s been on the market a long time and no one’s making an offer. It’s either priced too high, not in a great location and there’s something wrong. I like this concept of starting relationships before you start to raise and not being in such a needy place. That’s where it all comes down to. I’m also curious to ask your perception of being a woman in a traditionally male world. How do you navigate that? How can anybody who might feel an outsider for one reason or another that doesn’t fit this traditional, we went to Stanford, but you’re not a man. There are lots of different variations on not being that. Whether it is race, religion, different schools, sexuality choices, all those different diversity things all have a commonality. How did you navigate that? How can that maybe help us?
[bctt tweet=”Build a great business and everyone will want to invest. ” username=”John_Livesay”]
It’s a tricky one. I have an insider background in terms of computer science. I wear hoodies myself. I do. There’s one aspect which is I can’t say enough, which is the thing for yourself aspect which is I don’t want people to feel that they have to know the system, figure out the system and worry, “I don’t know exactly what it is you want to hear from me because I wasn’t part of the system,” or something. Therefore, they try to be someone they’re not. There are people who think that if you’re not part of the system, you feel that you’re missing the secret formula to how to build the slide deck that gets you a million dollars versus building something incredible that you know is the incredible thing that you were meant to build. It’s an easy thing for me to say, which is, I have two pet peeves. I have many, but one is people who tell me I’m not technical enough. I don’t have a degree in computer science. My degree in computer science was before the internet existed. It was. We didn’t have email. There was no client-server interaction. We were building programs in Pascal that ran on computers not on the internet.
I remember those cards you had to type.
I wasn’t typing cards, but my point is there are no aspects of what I learned in school now. There were no blockchains, product management, and daily stand-ups. To be relevant in tech, you have to be constantly reinventing yourself and learning what’s new. Don’t feel that because you didn’t have a degree in computer science, you can’t understand someone said, “I don’t know what an API is?” You can figure it out. There are inputs and outputs. Similarly, I went to business school, so I can say this with people who told me, “I can’t build a forecast. I don’t know what a model is.” I didn’t go to business school or learn this. Let’s say you’re some smart technical person who can figure out what an Excel spreadsheet does it. Don’t feel that you’re missing something because you’re not.
We have to be empowered that you may not have this specific training but get somebody on your team who does or figure it out yourself.
I’ll go one step further. I didn’t learn that much in either of those schools so you miss out on that.
Are there any last thoughts, quotes or a book you want to leave us with?
I have all these quotes that all come from my mother.
Besides, “Clean your room?”
She would say, “Chop wood, carry water.” Chop wood, carry water comes back to another one of hers which is, “Show up, tell the truth, and hope for the best.” Both of those come from the aspects of you don’t always have to enjoy doing the thing that you’re doing and many times you don’t enjoy it. From the outside have this lovely career and people are like, “Isn’t Google the greatest place to work?” The truth is it sucked at times. At times, I didn’t want to get out of bed. In multiple times my life, I’ve not felt like it. Now, I love what I’m doing. I love where I am but that has come from having to get up and put one foot in front of the other. It’s eighteen different expressions all in one but there are times you have to keep going because it is better on the other side at times. I like to remind people you have to do the thing and tell the truth and hope for the best.
What a great way to end. Thanks to your mom for that great wisdom that gets passed down, which is what we all hope for in some shape or form is some legacy. Thanks for being a great guest.
Important Links
- Minnie Ingersoll
- Shift
- La Venture – Minnie Ingersoll Podcast
- Interviewing.io
- Better Selling Through Storytelling Method Online Course
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Hiring Smart People To Get Funding – Interview with Dan Weinfurter
Posted by John Livesay in podcast | 0 comments
Listen To The Episode Here
Episode Summary
Dan Weinfurter is a serial entrepreneur and the author of Second Stage Entrepreneurship. He is the founder of GrowthPlay, a company that helps drive profitable revenue growth by improving overall sales effectiveness. Dan dives into the hiring process and believes it’s better to hire no one than hire the wrong one. After all, hiring the right person is often a multi-million dollar decision. So, how can an entrepreneur hire the right person? Listen in to today’s interview for more information.
Hiring Smart People To Get Funding – Interview with Dan Weinfurter
Hi and welcome to The Successful Pitch Podcast. Today’s guest is Dan Weinfurter, the author of Second Stage Entrepreneurship. He’s also the founder and CEO of GrowthPlay, which is a sales effectiveness business consulting firm. Dan consults with many organizations, developing and implementing sales and leadership effectiveness, strategies that drive profitable growth.
Second Stage Entrepreneurship: Ten Proven Strategies for Driving Aggressive Growth
In his 25 years of being a serial entrepreneur, he’s built three, not just one, but three successful companies including Parson Group, his first start-up that landed number one on the coveted Inc 500. In addition to consulting, speaking and interim management, he guest lectures at leading business schools and was a mentor for the Clinton Foundation’s Institute for Entrepreneurial Excellence. Dan, welcome to the show.
John, pleasure to be here.
What a great background that you have and what great experience you have, especially for a podcast like this, one called The Successful Pitch. You obviously know how to sell and pitch. Can you take us back to your early career of selling and your first start up, and how did you know that that’s what you wanted to do?
It’s probably a two-part question so I’ll try to answer succinctly and then we can go from there. Right out of college, I was hired by General Electric and I went through their sales training program. That was back in the day where a company would hire a 22 year old and put him through a year of training with the hope that the 23 year old would be able to sell sophisticated services to executives in big companies. Those days are somewhat gone where companies spend that amount of time and effort bringing young people up to speed.
For me, it was really fortunate and has got me started in a career. Really, even the businesses I’ve started, the common denominator has been the buildup and deployment of an effective sales organization. My GE career lasted eight years. Subsequent to GE I’ve now done, this is my fourth actually that I’m working are now, all in business services, trying to help companies do one thing or another.
Let’s talk about the Parson Group. Did you have to raise outside funding for that, and how did you come up with the idea?
I resigned, wrote a business plan and raised essentially $4 million on a PowerPoint. I was hiring smart people in Chicago in July 1995.
The idea for Parson Group actually came from a business that I was involved with previous to starting Parson Group. It was an information technology staffing business. We watched ourselves grow and we completely and continuously outran our operational capability, which included finance and accounting. We turned to the outside staffing temporary service providers for help. As we watch what these firms did, we saw that they frankly were terrible and violated all of the things that we thought were responsible for our group at the firm that I was at.
The notion was hatched, “What if you took our business model and applied it to the finance and accounting vertical and you had capital and you built it correctly, what could you do?” After ARC, which was the firm I was at, went public, I resigned, wrote a business plan and raised essentially $4 million on a PowerPoint. We used that to hire five people in Chicago in July 1995. Six years later we had a $90 million business, all organic growth.
Amazing. I bet those investors were happy.
We needed to go back to them a couple other times.
Which is fine. That’s expected.
Which is fine.
You hit the milestones. You need more money to grow, yeah.
We did. They were very happy. It worked well for all parties involved.
Great. Let’s talk about this great book of yours. I’ve had the pleasure of reading it cover to cover. It’s just fantastic. How did you come up with the title, Second Stage Entrepreneurship?
The original title was How Hard Could It Be, which was not meant to be serious, but that was part of the problem. The editor that I was working with didn’t think that that title was right and thought it might offend people. As we were working with the publisher, which is Palgrave Macmillan, we kicked around a bunch of different ideas. Frankly, the editor at Macmillan gets credit for this. She thought that there was this void between how do you start a business and then how do you get it to the next level. Plenty of books on startups, plenty of books on sales.
But this whole, what we call second stage growth, she thought that there was a void in the market. We reshaped it a bit through the editorial process and made it far more broad-based. Instead of just talking about sales, we talked about all of the things that tend to be important in growing a business from an early stage to what we call the second stage, which is a much bigger business, obviously.
The process of hiring smart people, while it is the most important part of the growth journey for any company, ironically, my view is that it’s the least disciplined.
One of the key things that’s over and over important is hiring smart people, which you talked about in this great book. I know that investors look to that when you’re pitching for money, who’s on your team. Even as you continue to be successful and need higher and higher rounds, one investor told me that the quality of your team has to equally go up. The CEO can’t be the CFO anymore. Can you speak to some of the things you talked about, about the process of hiring smart people? In specific, I love what you wrote when you said intellectual curiosity. Tell me what that means.
So, two parts. Ironically, I think that the process of hiring smart people, while it is the most important part of the growth journey for any company, ironically, my view is that it’s the least disciplined. You think about what’s involved in hiring smart people. In most cases, it’s a million dollar and up decision that somebody is making. Seldom is the rigor applied for that level of decision making. A salesperson, for example. Seems fairly routine. It’s at least a million dollar decision. I tell people, I’ve made it wrong enough times to know that my numbers are right.
That’s great.
In a manager, so if you’re starting a new geography, that’s at least a $15 million decision. I could say the same thing there. I’ve made a mistake enough to know that that number is correct. First, I try ground people in the fact that these numbers are real. If you get the right person, great things happen. If you get the wrong person, bad things happen. The trick is that every role for every company at every stage of growth is different. You can’t just take what you’ve done in the past and apply it to the business that you’re a part of today. It might or might not work. It’s a flip of the coin.
[Tweet “Every role for every company at every stage of growth is different.”]
I teach a class at Kellogg and I was guest lecturing in this class called Digital Innovation. One of the things that the professor teaching that class pointed out, which is true, is that in the technology space, and it’s probably no different anywhere else, the founder hires his or her number two 70% of the time without defining the role and without talking to more than one person.
Really? I can understand that to finding the role because you’re going to do anything. But not talking to more than one person fascinates me.
That would be a lack of intellectual curiosity, would it not?
It would. There we go. We’ve got it defined, and you’ve brought it full circle. I love it.
It’s funny, you talk to people, and this is one of my favorite tricks, is after an interview is almost done, you ask a person, “What are you reading today?” It’s amazing to me how often you get an answer, “I don’t have time to read. Too busy. I don’t really read. I look at some magazines and newspapers but I don’t read any books.” It’s hard for me to imagine how anybody can get the information that they need to do their job correctly without reading. Furthermore, just if you’re curious about life, you ought to be picking up things, even if they’re not business related in reading. Pick up a novel, pick up a political, non-fiction book. Read something.
[Tweet “If you’re curious about life, read something.”]
Right. I couldn’t agree with you more. It’s like what you’re putting into your body for food, what are you putting into your brain through reading to keep yourself growing. One of the things you say in Second Stage Entrepreneurship is, “The cost of hiring the wrong person is higher than leaving the position unfilled.” We’re going to tweet that line out. Can you give us a story around that and around only hiring smart people?
[Tweet “Cost of hiring the wrong person is higher than not hiring a person.”]
One of the things that I learned the hard way again is it’s better to have no one in the role than the wrong person. The theory there is if you have no one, you do something about it. If you just hope that it’s going to get better, guess what? It doesn’t. I encourage all people, if you have somebody who’s not correct in the role, move that person along and then go about finding the new person. You’re going to be far better served, even in the short run.
Dan, how long do you give somebody in a new position to prove themselves? Three months? Six months? A year?
I’d give you the classic consulting answer, it depends.
Let’s say if it’s a new salesperson. Let’s say I’m a founder of a startup. I’ve got somebody who obviously needs some training and come up to speed. How much time do I give them to prove themselves, before I know it’s a wrong choice?
If you’re paying attention, it shouldn’t take very long. Again, you have to be paying attention. It’s not so much that you manage it by numbers per se, because specific numbers can be wildly good or wildly bad based on just luck and timing. But if you’re paying attention and you’re working with that person, you can see the quality of interaction they’re having with others. You can see if they’re doing the right things that are likely to make it work over time. Be a little bit lax in terms of the specific empirical outputs, but be really rigorous about the quality of the interactions and the qualitative aspects that you know will dictate success for that role over time. That’s the critical thing.
[Tweet “Hiring smart people: be really rigorous about the quality, not the numbers.”]
That’s incredibly valuable.
It could be a week, it could be a month, it could be six months. You just have to be paying attention.
I love that, because so many people just look at the numbers. If you don’t meet your quota by this time, boom, you’re out. Like you said, there’s a lot of other circumstances. If the person’s got a good work ethic and is a good culture fit, and like you said, doing what it takes, the number of sales calls, phone calls, emails, whatever it is, to be successful, then focus on that.
Now, let’s dive into this whole section you have in Second Stage Entrepreneurship about the power pitch. I love your whole philosophy that if you ask five sales people to describe what the company does, five other people who are in sales, and then five trusted customers to describe what the company does, sadly, you would probably get a lot of different answers.
You will, and it’s so fundamental and so basic.
You keep talking about the need to be targeted and consistent with your branding.
Think about it. Everybody should be able to answer these questions with complete clarity. What do you do for your customers? What do you do that’s different? What do you do that’s better? And be able to demonstrate or prove it. You should be able to do that in very short periods of time. You might only have, literally, 20 seconds to answer the question on what do you do, you might have 15. They think it’s easy and so they just wing it.
[Tweet “How are you different and better?”]
But to get that nailed down with the level of clarity and rigor that’s necessary, it actually involves a lot of practice and a fair amount of what I call preparation so that you have different versions of that for different audiences. If you’re talking to somebody at a cocktail party, it’s probably different than if you’re talking to a CEO or you have a prearranged meeting and you have that actually ready to go.
Most people think they can just wing it and they are so afraid of sounding robotic or they don’t want to memorize anything. I constantly teach people, Tiger Woods doesn’t wing it. Meryl Streep doesn’t wing it. Everybody who is a professional prepares.
They prepare. The only way that I’ve ever gotten people to take it serious is to film them and then actually show them how bad they are at it.
Yes, you really hear the stumbling and how hard it is to follow what they’re trying to say and how few people really understood what they said and all that stuff.
I go back to my GE days. We did this every day for my entire first year of training. You do these role plays and if you did it badly, they play it back three or four times until everybody in the room was laughing. It was all in good fun. We were with all these people for a year. You actually get it nailed down. This stuff all is hard and it takes practice. That’s where all this started from and it’s how it’s become part of what I use to be a critical path for business success.
Since you’re an expert in sales and managing sales teams and hiring smart people and the right team, one of the things I’d love to have you share with us is how do you get sales people who are so competitive, not only outside of the company but within the company, to start sharing best practices with each other so that the whole company can benefit?
Sales people, they’re competitive with each other but they also like to be part of the gang.
It’s a simple question but probably a complicated answer. Sales people, they’re competitive with each other but they also like to be part of the gang. There’s a fair amount of camaraderie. If everybody hates you and you’re a salesperson, that doesn’t work very well because no one will hang out with you. Effective sales teams that I’ve been part of, while they are competitive, they’re certainly more than willing to talk to their peers about what they do. Many times, they will have the point of view of, “You probably can’t do it as well as I do so I have no risk in telling you what I’m up to.”
I think the sales manager who’s doing his or her job correctly is drawing from the entire group all of the things that can be done that tend to move the meter in work in that particular business. Then bringing the team together so that those best practices are shared amongst the group in a way that they’re digestible or consumable. Most people that I’ve worked with are more than willing to be part of that process.
That’s great. Whether you’re pitching an investor for money or pitching for a new client, it’s all the same, where you have to be able to describe, as you said, what do you do that’s different and better and be able to prove it. The best way I know is through stories. You write about this is Second Stage Entrepreneurship a lot. Where you have a whole process of tell a story about a problem another client had, and be sure to name that client, and how they tried it without success, without your help. Then how you came up with the solution.
Then most importantly, which I think most people forget in these kinds of stories, is what kind of ongoing success does the client have from working with you. Can you tell us how you developed such a smart strategic way to tell a story that helps drive sales?
What’s Your Story
Actually, I read a book. This is called What’s Your Story. It’s written by a University of Chicago Business School professor by the name of Craig Wortmann, called What’s Your Story. Some of that goes back before that. My GE days, one of the things that we would do is we would build stories about where we had done this work for others in the startup world and it became a far bigger necessity for success.
If you have a company that doesn’t have a name brand and you’re trying to sell to a Fortune 500 client, you have to build credibility and trust. You can do a little bit of that by how you behave. In their heart to hearts, they want to also know, who else do you this for and how do I know that I’m not making a career limiting decision by bringing you into my firm?
The stories are a great way to build that credibility and trust, especially if you can make them personal. You name the person that you were working with and you talk about the impact that it had, not just on their business, but on them personally. Because in the end, almost everybody makes a business decision based on the impact to them personally, and then they back into the business rationale for that decision. It’s not always that way, but it almost always is that way. It’s very predictable human nature.
[Tweet “Build credibility and trust through storytelling.”]
I love that. Everyone thinks if we just do the job you’re asking us to do and there’s RFP, we’ll get the business. If you tell a story of somebody else hiring you over a competitor and that person looking so good to their boss that they got promoted, that’s an example of a personal impact.
In fact, throw the RFP away. You’re not going to win it. Unless you helped to write it, it’s a waste of time and effort. Spinning your wheels.
In reading your book, I came across that we have a mutual friend, Paul Rand, who runs his wonderful social media agency in the Midwest in Chicago, my hometown. He said, “Your brand is not what you say about yourself, it’s what your customers say about you.”
[Tweet “Your brand is what your customers say about you.”]
Exactly.
I’d love to have you speak to that, about not just your brand that you’re working for and how important it is to sell the brand of whatever company you’re working for. This whole concept of having a personal brand, I think is really essential as a salesperson. Don’t you?
It’s not only essential as a salesperson but for any role in life. Think of the politicians that are on the news right now. They all have their personal brands, which in some cases is helping them and then some cases it’s not. The other part of this is it takes a lifetime to build a reputation and not very much time at all to wreck it. What Paul talks about, and I’ll actually see him on Friday, is you should live your life as though every day is part of the building of your own personal brand.
[Tweet “It’s not so much what you say. People watch what you do.”]
Again, it’s not so much what you say. It’s people watch what you do. Just living a life where you’re true to your word and if you say you’re going to do something, you do it. If you’re building a business or you’re part of a business, make sure the business behaves in a very similar way. If you say you’re going to get back to somebody on Tuesday morning, get back to them on Tuesday morning. Not Tuesday afternoon.
Dan, you’re singing my song. That lack of integrity drives me crazy. Sometimes, you can set the bar just by doing what you say you’re going to do. If you say you’re going to follow up, follow up. That’s automatically sets you on the top, I don’t know, 10%, sadly, of salespeople who don’t follow up, the 90% that don’t.
It’s probably higher than that.
One of the things you talk about is this written monthly review. A lot of people hate reviews, a lot of people love them if they get good ones. I like this whole concept of doing it monthly instead of quarterly or twice a year. Some of the questions that you think people should be is asking is, how do you feel about last month?
I think that’s really fascinating, is to tap into people’s, do you feel proud, do you feel embarrassed, do you feel frustrated? Then, what didn’t happen that you want? This for me is the number one thing that made me successful is, what are your top ten accounts and your top ten opportunities? If you just focus on that, I think you will, the 80-20 rule kicks in, don’t you agree?
The important part is that the people who are doing really well get really good reinforcement and get the help that they need to do even better.
I would agree, because the ones that are on that top list are probably not going to get done. You think about any executive, it’s similar that they can only really act on the top five things on their list of objectives at any given point and time. If you’re trying to get to them with something that’s not on the list, good luck getting … They might listen but they’re not actually going to take action on it. Same is true with driving sales activity. When I was first told I had to this, this is one of the stories I tell on the book, I said, “You got to be kidding me. Monthly? Seriously?” I pushed back on it and I thought it was just going to be a time consuming bureaucratic process.
But it’s just the opposite. The people have to come in with the knowledge of what they did in the prior months, what they’re going to do in the current months. Probably the important part is that the people who are doing really well get really good reinforcement and get the help that they need to do even better. Sometimes those conversations just don’t happen with the people that are doing well. The people that aren’t doing well is a paper trail that’s built up over time. “Let’s see talked about last month. We’re having the same conversation again. This doesn’t really feel very good to me.
It’s groundhog’s day.
Deja vu all over again, as the saying goes. It doesn’t take very long before you realize that this is not going to work. At that point, then you don’t have to go through the charade of a performance plan. You can just move on the person because the trail is already built. The most important thing is it helps the good people do better because it reinforces the behaviors that they have put in place, that are responsible for their success.
The review forces a conversation that, “Where do you need help?” One of the big jobs of a sales manager is to really help the team, help the individuals that are part of the team be successful. It’s not to manage and control. That’s what people think. That’s not it. It’s being helpful.
One of the things you have on your GrowthPlay website is how to not only find great talent, but keep them. Can you speak to what your secret sauce is there?
It’s probably not changed in 30 years. Really, there’s two things that I think are critically important. One’s the culture of the business. Does the culture and the mission resonate with the people that are part of the team? If they’re engaged in a business that they don’t really like, good luck keeping that person over the long haul. That’s one. Then related to that is who they work for.
Probably the most important person is their direct supervisor. If it’s corrupt or bad at the top, that will engender cynicism and it will end up rotting from the top eventually. Ppeople who won’t put up with that over the long haul. The truth is when people quit, they quit their boss or their bosses first and foremost, and everything else follows.
[Tweet “When people quit, they quit their boss first and foremost.”]
It’s not for the extra X percent of money, is it? It’s about not feeling appreciated a lot.
Or you just work for a jerk. There was a study in HBR, I just read a few weeks ago, was done by some Gallup researchers. This is almost hard to believe. I think it ran last year. They pointed out that American businesses hire the wrong person in the first line managerial role 82% of the time.
Wow. Do you think part of that is if you’re a great sales person, then you get promoted, and suddenly you’re sales manager and it’s a completely different skill set?
Absolutely. In fact, the better the salesperson you are, the more likely it is that you’re not going to be a good sales manager. In fact, we have the science behind this, only 10% of successful sales people have the innate behavioral DNA to be successful sales leaders.
What’s the solution? Should they go through some training if they want to do that? Or is it just not in their DNA? Doesn’t a sales manager need to have been a sales person to understand what’s required?
As a salesperson, it’s all about yourself. As a sales leader, it’s all about the team.
That is true. In fact, you have to have been a somewhat successful salesperson to be a successful sales leader. But you have to go find the people in your sales organization or who exist elsewhere who both could sell and can lead people. It’s a narrow pool of people you’re looking at, but you got to find them or it’s not going to work. Think about it. As a salesperson, it’s all about yourself. As a sales leader, it’s all about the team. As a sales leader, the job is to facilitate an outcome through collaboration. As a salesperson, you just take charge and get it done. Much like if you think about an athlete versus a coach. It’s the same analogy.
Yes. Got it. Terrific.
If you’re really good, you don’t even realize what you’re doing. You just do it naturally. Can you train other people to do that? Maybe. Some can.
Yes. Or, do you have the patience to train them? That’s the other thing you have to realize. Just because you’re on a certain level of expertise, the junior salespeople probably aren’t. They’re going to need some hand-holding and some patience.
Very true.
Dan, how can people follow you on social media? Obviously, GrowthPlay.com. Tell us the best way to keep track of what you’re doing and how to engage with you.
I’m on Twitter at @danweinfurter. I’m on LinkedIn. I think it’s DanielWeinfurter. I have a personal website, DanWeinfurter.com. We obviously have a company website, GrowthPlay.com. All of those tend to work and work pretty well.
Fantastic. Obviously, besides the Second Stage Entrepreneurship, which we’re going to put the link in the show notes for people to buy, you also mentioned that great book, What Is Your Story. We’ll put both of those in there. Dan, any last words or thoughts to leave with the listeners about how to pitch or how to sell?
Probably the last thing, sales, in my view, is one of the last great frontiers that’s still not viewed as a discipline, like finance or marketing or engineering. Yet half the people that come out of college end up in a sales role and any white collared professional spends a significant portion of his or her time in their occupation of selling.
I think it pays everybody dividends to actually do what you would do with any discipline, which is to study and get good at it, and not just think that you can wing it. There are definite activities and processes that are proven to work in sales, just as they work in other disciplines, and give sales its due and its day in court, because it’s deserving of it.
[Tweet “Give sales its due and its day in court, because it’s deserving of it.”]
Fantastic. Dan, thanks again for being on the show and for talking about hiring smart people. You’ve been a great guest, and everybody, go get this great book, Second Stage Entrepreneurship.
John, thanks for having me on the show. I appreciate it.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
Dan Weinfurter Website
Growth Play Website
Dan on Twitter
Dan on LinkedIn
Second Stage Entrepreneurship by Daniel J. Weinfurter
Crack The Funding Code!
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