Fearless Branding – Interview with Robert Friedman
Posted by John Livesay in podcast | 0 comments
Listen To The Episode Here
Episode Summary
Robert Friedman is the Owner of Fearless Branding, and has five core questions that help narrow down your focus and get more specific with your brand. When you close many doors, you can keep the right doors open! Find out what his five core questions are on this week’s episode and get started developing the right brand image for your company today!
Fearless Branding – Interview with Robert Friedman
Hello. Welcome to The Successful Pitch. I’m thrilled to have today’s guest, Robert Friedman, who has a background as a brand manager of big names like Kraft and Nestle and worked at big New York agencies before starting Fearless Branding Manifesto almost fifteen years ago. Robert, welcome to the show.
Thank you, John. How are you?
I’m great. I’m really excited to have you here because one of the things that’s so important for the listeners to understand is whether you’re pitching yourself to get funded, pitching to get customers or pitching people to others to join your team, branding is everything. You must have a brand that creates a culture, that attracts the right investors and attracts the right people on your team. You are the ideal guest to have on today. Let’s dive into how did you come up with the name Fearless Branding? I love that.
Thanks. As you mentioned, for the early part of my career, I was a brand manager for some big food companies. In my last assignment, I was working at Nestle, I was working on Coffeemate. I was living in Los Angeles at the time. One Saturday afternoon, I was taking a hike and looking at the Pacific Ocean and saying just, “I don’t want to do this anymore because Coffeemate is just artificial powder. That is not a good use of my life. It’s not a good of my talents. What am I going to do?”
When I thought about it carefully, I was thinking, do I need to become a therapist or a history teacher or something that had more meaning? Do I need to get out of marketing? I started looking around at other businesses and I thought, “I may be working on Coffeemate but somebody else is working at Apple. The guy down the hall may be working on Carnation Instant Breakfast, but somebody else is working at Nike.”
[Tweet “Fearless Branding: Deep resonance requires fearlessness”]
There’s other ways to do marketing. It sparked an idea that was based on this insight that consumers love brands that fearlessly express their unique essence. That they’re not just there to sell stuff, that they’re there to sell really great stuff and deliver a meaningful experience. One of the key elements of this insight was that these great brands, what I ultimately started calling fearless brands, weren’t trying to be all things to all people. If you were not in a segment of the audience that appreciated that meaning, that’s okay. But if you are, then you’re going to have deep resonance.
To answer your question, after I did some deep thinking about what I really believed worked in the world of marketing and in the world of brands, I wrote that sentence. I had a naming session with a bunch of friends and colleagues. One of the guys said, “What was that sentence?” I said, “It’s consumer love brands that fearlessly express their unique essence.” He said, “That’s it, Fearless Branding.” Everybody said, “Yes, that’s right,” and walked out the door. It was done.
[Tweet “Fearless Branding: Consumers love brands that fearlessly express their unique essence”]
Nice.
At first, it was just a name. Over the past fifteen years, it’s become something that I’ve grown into. Everything that I do in my work is built on that fundamental idea about, what does it really mean to be fearless when you are building and developing a brand? What it really means is more precise, more differentiated, narrower rather than broader.
[Tweet “Fearless Branding: Be more precise to differentiate yourself”]
Linda Galindo, who was my client and was on your show a little while ago, said, “The things that you taught me to do are define and limit.” Whether you’re an entrepreneur or whether you’re trying to build and established business, one of the things that is most challenging for leaders to do is to limit. In other words, to close doors.
Usually, when you’re running a business, you want more sales. You’re saying, “All of those people out there, they can be my customers. They can be my investors.” In fact, what I find when you do that, is that you become more generic, you become less relevant to anyone. But when you’re willing to close many doors so that the exact right doors remain open and you know it, “That’s my door. That’s my path. That’s my strategy.”
[Tweet “Fearless Branding: Close many doors so you can keep right doors open”]
When you’re willing to do that, and it takes courage to close all those doors, all those opportunities. You say, “That’s not what I’m going to pursue,” but when you focus on that right one, then that’s when you can create the greatest success.
I love that. It’s so helpful.
It takes fearlessness.
Fearlessness, yes. When you said, “Close many doors so you can keep right doors open,” we’re going to tweet that out. That’s great. That really is a visual, you’re painting a picture for people that who you say no to is just as important as who you say yes to.
That’s exactly right. What’s interesting though is, a lot of times clients ask me that question. Do I have to say no? If somebody comes along and they’re not exactly in my ideal target market or the work is not precisely what I say is my absolute best work, do I have to say no?
Fearless Branding: What’s most important is when you are projecting your message out to the world, that’s when you say no and you are really clear.
The answer to that question is actually no, you don’t have to say no. You can make a tactical decision based on that particular situation. What’s most important is when you are projecting your message out to the world, to the audience, that’s when you say no and you are really clear. Whenever I’m telling you, “Here’s who my ideal client is. Here’s what I do,” I’m very precise.
If somebody else says, “Wow, that sounds great. But I’m not exactly like that, could you possibly help me?” Then you can make a decision, it’s up to you to say yes or no at that moment. I find actually, the clearer you are, the more people resonate. I think, certainly for me, my kind of client, they’re going to resonate with, “Wow, you have the courage to put your stake in the ground and tell me who you are.”
Let’s give listeners an example of that because I couldn’t agree with you more, Robert. For me, I really focus on, I help tech CEO’s craft a compelling pitch to make them irresistible to investors. Now, if someone comes to me and says, “I’m not a tech CEO but I really need help with my pitch and I want to get my startup funded, can you help me?” I will make a decision about whether I think that person is coachable and fundable and if the business is scalable and I can say yes or no. But my real focus is, tech CEOs. Other people sometimes will be attracted to that and commit. Is that what you’re talking about?
That’s exactly what I’m talking about. Each one of us has to make the decision on where we draw the line. For me, the heart of my business is working with service firms. Those are high level firms that need to go out and get clients that they’re providing some intellectually based service.
What I do is I help them really define what that service is, where the value is and who it’s for. In my case, that definition of target market works. I’ve decided not to focus only on lawyers or only on management consultants.
Here’s something else you could tweet out. Branding is a tool that supports your business objectives. There’s many different ways to slice it. It can be based on geography, it can be based on psychographics or what that person believes in their world view, it can be based on vertical type.
[Tweet “Fearless Branding: Branding is a tool that supports your business objectives”]
There’s all sorts of different ways you can slice your market so that you are talking to an audience that is big enough to support your business objectives, whatever they may be, and yet narrow enough that when you’re speaking to them, they really resonate. If you have a national brand, you’re going to need a much wider slice of an audience than if you’re a consultant, like you or me.
For the startups, the more specific they are of who they’re helping or what problem they’re solving and the type of investor they want to join their team, then the investor feels like, “Oh, you don’t just want anybody’s money, you want my money because I’m the perfect fit for your company,” and that makes all the difference.
Fearless Branding: Who is my market, who am I really serving, how do I define that?
That’s exactly right. You just articulated two very important strategic decisions. It’s easy to say it but it’s hard to make those decisions like. Who is my market, who am I really serving, how do I define that? That’s an important decision. What kind of investor? That’s an important decision. That’s why on the manifesto that I showed to you, that’s why I call it making the tough decisions.
The other thing you have in your manifesto, which we’re certainly going to provide a link in the show notes, is this moment of truth. Now, the moment of truth applies to the startups in, who do I hire, which investor do I decide to work with? Expand on us how you help people prepare to triumph in that moment of truth and how they have to position themselves.
I think you were really nailing it earlier. The moment of truth is that moment when you’re sitting down and you’re pitching a client or you’re pitching an investor and we have to figure out, are we a fit or are we just going to part as friends and go our own ways? The way that I do that is through a brand strategy process that focuses on five key questions.
Those questions are: Who are you? What do you do? Who do you do it for? What do they need? Then, what do they get? The first two questions are about you, who are you and what do you do, your brand, your business. The second two questions are about your audience. Who are they and what do they need? Then, the last one, what do they get, is where the connection gets made. That’s basically your benefit.
[Tweet “Fearless Branding: Put up a filter around what category are you playing in”]
What I have found over many years of doing this is that most businesses, as simple as those questions are, most businesses answer those questions too generically. You have to put up a filter around what category are you playing in and then who else can answer those questions in the same way or who else is answering those questions in the same way.
One of the exercises that I do when I’m teaching a branding class is I’ll put up an ad, often I use the brand Tiffany. I’ll put my hand over the logo and say, “You have no idea what’s under my hand. You don’t know the name of this business, can you figure it out?” When you use a brand like Tiffany, everybody can figure it out.
That blue.
Fearless Branding: You have to do something different or make something different that is recognizable.
Exactly. It’s that blue, but it’s also they’re very specific with their imagery. That’s one aspect of branding, which is aesthetic differentiation. But there’s other aspects of branding, which are functional differentiation. You actually have to do something different or make something different that is recognizable. The last aspect of differentiation is emotional differentiation or meaning–based differentiation. All three of those things need to play together.
To get back to that story I was telling you, if you were working with a client and they’re a tech startup and you say, “What we need to do is just take the name of your business out of this. Now, we’re going to look at your nearest competitors and we’re going to substitute their name in that same pitch and we’re going to mock trial it to that investor.” Might it work? Would that investor say, “No, no, no. That’s totally wrong. That doesn’t make sense.” It’s only you that can say that. Or they’re just going to nod their heads when you stick your competitor’s name into your pitch.
A lot of times, what I find is that pitches, whether you’re trying sell a service or pitch an investor, they all sound the same. They use the same buzz words, they use the same phrases. There’s so much generic stuff. It’s challenging to, as we said before, to narrow, define, limit so that you really become the only one who’s telling that story to your specific target market.
[Tweet “Fearless Branding: Narrow, define, limit”]
I know exactly what you’re talking about Robert, because when I worked at Conde Nast, Conde Nast has multiple fashion magazines. It was so important that people would understand the difference between let’s say Vogue and W. You couldn’t just substitute the images or you couldn’t just substitute the pitch of, “We both cover fashion.”
You need to be so specific that only W would cover fashion from an artistic, edgy point of view and Vogue would not do that because they have a more broader, mass appeal audience. It was very specific as to it’s all fashion, but if you’re talking about your nearest competitor … I love that exercise.
Let’s go back and talk about the five questions because they’re so valuable for the listeners to really grasp. I think the Tiffany example would be great to do, if you don’t mind. Who are you? How would you answer that for Tiffany? I can do it, but I’d love to hear you say it.
I would answer that by, “I am love,” or “I am the lover.”
Nice.
One of the main concepts that informs my work is the concept of archetype. Archetype is a concept that was developed by Carl Jung, he was one of the foundational psychologists along with Sigmund Freud. He had this idea that there are energies out there that don’t need to be explained to people because we just get them just because we’re human.
[Tweet “Fearless Branding: It’s about who you are, it’s not what you do.”]
The warrior, the scholar, the caregiver, none of those things are confusing. They’re very, very clear. We just have a picture right away when we see a picture or hear those words. When you can be that precise at an emotional level, it’s about who you are, it’s not what you do.
I love that distinction. You did not answer, “Tiffany, who are you?” “We make jewelry.” That was not your answer at all, which is great. It really showed an example of, “Oh, this is something unique to Tiffany. I am love.” That’s great.
That’s right.
Then you go into, what do you do? Then you might say something like, “We make engagement rings.” Would that be the appropriate place to answer that way?
Yes, absolutely. We make jewelry, in particular, engagement rings. Tiffany’s a great example and engagement rings is a great example because did you know that Tiffany’s invented the concept of a diamond solitaire engagement ring?
Nice.
Fearless Branding: That’s what I mean by functional differentiation, is that you do something that your competitors are not doing.
Further, they developed this unique “Tiffany setting” that lifts the diamond up instead of putting it deeper into the setting of the ring so that everyone can see the beauty of the diamond. They were the ones that created this. That’s what I mean by functional differentiation, is that you do something that your competitors are not doing.
Nice. Now, the third and fourth question you said was all focused on the audience. The third question is something along the lines of who do you help, was that the question?
Right, exactly. Who do you do it for? Who do you help is a totally good substitute. Who do you do it for and what do they need? When you look at that question, who do you do it for, there’s two ways to answer that. One is demographically. Those are all of the factors that you can actually see and touch. Somebody who makes a certain amount of money, has a certain level of education, lives in a certain zip code, those are all demographic ways to describe an audience.
Psychographic is somebody’s world view. What do they believe? What do they value? For example, we all know that Tiffany is a brand. It’s very successful brand. They built their business based on the strength and uniqueness of their brand.
One of the great things from the brand’s perspective that that enables them to do is to charge a premium. It’s a highly profitable business. One of the key takeaways is that when you have a brand that’s meaningful, that has both functional and emotional advantages, your ideal customer will pay more for that. You’re getting that premium price and that translates into profitability.
[Tweet “Fearless Branding: Ideal customers will pay more for a meaningful brand.”]
If you look at the Tiffany customer, their customer … It’s a mass affluent brand. They’re not sheikhs and princesses of the world, but it’s the lawyers and doctors and top 5% people in the United States. That’s demographically who their audience is likely to be.
When I teach a class and I use Tiffany as an example and we say, “How did you know it’s Tiffany?” A lot of people say, “Oh, it’s that box”. Somebody in the audience will always tell the story of, “I gave my wife that present and she just went, ‘Aww.'” It takes your breath away because you’re getting that cool present in that blue box.
Even before they open the box they’re happy.
Exactly. Now, think about that. That box maybe is worth, whatever, fifty cents or a dollar? It’s not the box, but they have imbued that box with meaning. That meaning, as we were talking about, is love. This represents the fact that the person who is giving me this gift really loves me. They bought it at Tiffany.
They went the extra mile. Nothing’s better and nothing’s higher as far an expression of love. Therefore, if you spent anything, it doesn’t have to be a diamond ring, but anything from Tiffany at all, a key chain, whatever, I still feel the love. That extends to all price points within a premium price product.
That’s exactly right. If we look at the heart of what they’re doing, which as we were talking about is something like an engagement ring. What I mean by segmentation and being willing to limit and define, there are going to be some givers and some receivers who buy into that story. That woman is going to say, “Wow, he really loves me because he gave me that present from Tiffany. That means something.” That giver is going to say, “I made the right decision even though maybe I spent 25% more or 50% more,” or whatever the number is.
Fearless Branding: A Tiffany customer is somebody who really believes that a certain gift can be a symbol of love.
There will be other people, whether it’d be the giver or the receiver, who would say, “I don’t buy that crap. They have really good stuff at Costco. We’re going to get something really good. We’re going to be so smart because we’re only going to spend half of what we would spend at Tiffany. We can spend that extra money on a lawn mower or whatever.”
To answer those two questions of who are they and what do they need, that Tiffany customer is somebody who really believes that a certain gift can be a symbol of love. What they need or what they really want at a primal level is more love. They want that connection and they want it in that way. If you are not psychologically wired for that, you’re not going to be in their target market. I think that they’re smart enough to be able to be fearless to say, “That’s okay, because we’re not for everyone.”
Exactly. It goes to the last question is, what’s the big benefit? What do they get from buying the ring at Tiffany is they get validation that the person feels it’s way beyond the value of the ring. You can’t put a price on it, when someone feels that you love them that much.
That’s right. You’re absolutely right. One simple way to answer that is what do they get? They get love. It brings it back full circle.
To who you are. Love it. Let’s connect the dots even one step further for the founders out there who are negotiating valuation. I love what you said Robert, about when you connect the functional with the emotional, which is what I’m constantly teaching people the importance of emotional storytelling when you’re pitching, that that commands a premium price like it does for Tiffany.
When you’re negotiating with your investor on what the valuation of your company should be, when you say, “I need a million dollars for X percent equity,” then that translates into, then you’re saying your company is worth more than it looks like on paper.
If you’ve shown to the investor that you have a functional difference from your competitor and an emotional meaning, and sometimes that emotional meaning can just be, “There’s other investors who are interested in this and willing to pay this. There’s a fear of missing out if you don’t jump in on this.” That’s how you increase the valuation of your company from this branding strategy you have for us.
I am so glad you brought that up. The best example of this is Apple. If you think about Apple and you think about the fact that it’s not just an apple, it’s an apple with a bite taken out of it. That is a very specific apple. It’s from the Bible, it’s from the book of Genesis. Genesis is our creation myth. If Tiffany is love, Apple is creation or creativity.
Fearless Branding: If you think about Apple and you think about the fact that it’s not just an apple, it’s an apple with a bite taken out of it.
If you think about the story of the Apple brand, they have their own Genesis story. Steve Jobs created it but then he went into exile, just like Moses had to go into the desert. They kicked him out. They were almost about to go bankrupt and have to shut the whole thing down. They didn’t want to do it but they brought Steve Jobs back because they had to. They had no other choice, they explored every other strategy. That was the only one left.
He comes back. There’s a video of this on YouTube that you can see, it’s fascinating. The first thing that he does is he focuses on the brand. He hired Chiat\Day and they developed a campaign and it’s the Think Different campaign. It’s this campaign that shows Gandhi and Martin Luther King and Maria Khalis and Einstein.
All of these people are the most creative thinkers of their time. They’re all creating something out of nothing. They’re creating things that have never been seen or heard before. That becomes what the whole brand is about. He leveraged that idea, that emotional connection, to take a company that was basically about to close and being bankrupt to the company that became the most valuable business from a market cap perspective on the planet. He did it in 25 years.
I love this story so much Robert, because when you say, “It’s not just an apple, it’s an apple with the bite, which takes us to the creation myth.” Also for me, part of that whole story of the creation myth was you were breaking the rules in the Garden of Eden when you bite that apple.
Not only does it take it into the Apple branding of creativity, but also we’re going to break the rules and that’s that initial Superbowl commercial against IBM and even this campaign line that you mentioned, Think Different, got a lot of feedback because people said, “That’s not even grammatically correct. It should be think differently.” They’re like, “We don’t care. We’re breaking the rules again. Think different.” It’s all so full circle that you say when a really good brand is in place, there’s so many layers. That’s the big takeaway.
As you said, it’s breaking the rules. What is that? It’s differentiation. It’s being willing. If you think about most people, most people are not fearless, most people do not want to stand out, it makes them profoundly uncomfortable. When you’re right and you’re already successful, then it’s easy.
[Tweet “Fearless Branding: It’s breaking the rules. It’s differentiation.”]
But in those initial stages, when you have to take that first step and you have to say, “Look at all those people,” whoever they are, whatever your category. If it’s Steve Jobs, “Look at IBM, look at Dell, look at Microsoft, they’re all wrong.” You’re talking to Wall Street and the financial community and you’re basically saying all these companies that are so much bigger than you, they’re all wrong. We have another way to do it.
It takes so much courage in the beginning. Now, we look at it, it’s like, of course, he was right. Then you apply that to a startup entrepreneur and they need to have the same level of courage and the same level of conviction.
Absolutely. Uber, “We can do this. Taxis have been ran a certain way for years and we’ve got a whole new idea.” When people started pitching AirBnb, a lot of investors said, “You’re crazy. No one’s going to rent out a room in their home or apartment to a stranger.” It’s all so valuable. I love everything you’ve said so much. I could talk about branding all day long, and you’re the expert. Is there a book that you want to recommend about branding or being fearless to the listeners?
If you’ll indulge me, I’ll recommend two.
Sure.
The Hero and the Outlaw: Building Extraordinary Brands Through the Power of Archetypes
One is called The Hero and The Outlaw. It’s about using archetype to build a strong brand. It’s by Carol Pearson and Margaret Mark. That’s a really good primer for starting to think about it. Another one that I love … Whenever I start an engagement, there’s two things that I focus on. One is meaning, which we’ve talking about. The other is money. It’s all about connecting the two in my opinion.
If we have something that’s meaningful but it’s not grounded in your financials, then your success is really going to be limited. I always start my engagements by getting my clients … It’s the same thing, it’s define and limit. If you have a particular revenue objective, we need to get really granular and dig into the details and figure out how is that really going to happen, let’s build that performa client by client, engagement by engagement, and see what it looks like.
The other book that I would recommend is a book called Let’s Get Real or Let’s Not Play by Mahan Khalsa. It’s about selling and it’s about really being up front, talking about money, putting your cards on the table. It’s a great book because a lot of people are afraid to do it.
I’ve never heard of that one. That’s a great, great title, Let’s Get Real or Let’s Not Play. It applies to business. It applies to dating. It applies to lot of things. It’s great.
That’s right.
Robert, how can people best follow you?
If you go to my website, which is FearlessBranding.com. A couple of suggestions, you can download the Fearless Branding manifesto. It’s there on the homepage of my website. You can download that and then I will follow up with periodic updates. You can find me at Robert Friedman on LinkedIn.
There’s one other thing that I’d like to tell you about. I’m giving a webinar in about a month. It’s sponsored by a company called Breakaway Funding. The webinar is called How to Build a Fearless Brand. It’s on May 26th at 11AM. If you go to BreakAwayFunding.com/Events, what I will be doing is making a presentation with some visuals and it will be a deeper dive into many of the ideas that we talked about this afternoon.
Great. How to Build a Fearless Brand is the name of the webinar, is that right?
That’s right.
If people can’t make that one, will you be doing others in the future?
I will.
Good.
I can let you know when they’re scheduled.
Perfect. Great. I can’t thank you enough Robert, for being on the show and showing us how to be fearless and how to make our brand stand out by defining and limiting who we want to reach, because that’s everything to be successful.
Thank you, John. It was great to talk to you. I really appreciate it.
My pleasure.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
Fearless Branding Website
The Hero and the Outlaw. by Carol Pearson and Margaret Mark
Let’s Get Real Or Let’s Not Play, by Mahan Khalsa
Crack The Funding Code!
Register now for the free webinar
Fox 11 News Los Angeles John Livesay The Successful Pitch book
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What Makes A Good Pitch – Interview with Charlie O’Donnell
Posted by John Livesay in podcast | 0 comments
Listen To The Episode Here
Episode Summary
Charlie O’Donnell is the founder at Brooklyn Bridge Ventures and has been an active member of the New York City startup community for over a decade. As an investor, Charlie looks for New York-based startups that have yet to raise 750k in a previous round. Charlie discusses the key lessons he’s learned from pitching to various companies in his career on this week’s episode.
What Makes A Good Pitch – Interview with Charlie O’Donnell
Hi. Welcome to The Successful Pitch Podcast. Today’s guest is Charlie O’Donnell who is the sole partner and founder at Brooklyn Bridge Ventures. The firm makes seed and pre–seed investments and was the first venture firm located in Brooklyn, where Charlie was born and raised. I love the fact that Charlie says he nebver spends more than three consecutive weeks outside of any of the boroughs in New York City.
He is a hard fast New Yorker, he’s done Ford triathlons. What’s even more impressive is his reputation for being able to spot important companies early in the process. In fact, he’s been identified as an early Twitter investor.
I nudged the early Twitter investor part.
You nudged him.
It didn’t have a fund at the time.
You were able to capture that, yes. Since you were working in venture capitals since 2001, you have apprenticed your way through the asset class with roles on the Union Square venture team and you were involved with General Motors pension fund.
What’s impressive to me Charlie, is you’re only one of a dozen people to be named Business Insider’s 100 Most Influential People in New York Tech five times or more. You’ve served on the board of the New York Tech Meetup and you write a great blog called This is Going To Be Big. You’ve spoken at all kinds of great places. Without any more intro, welcome, welcome.
Thank you. Thanks for having me. I’m beginning to think that maybe I need to … That my bio is a little over the top. It feels a little overwhelming.
When you’ve accomplished that many things, people love to know what that is. Everybody wants to be an influencer and everybody wants to know what it takes to get their pitch funded. Before we get into all of the experience you’ve had, obviously growing up in Brooklyn, can you take us back to when did you decide you wanted to get involved in tech startups?
Brooklyn is not exactly, or at least when I was growing up, not exactly a Silicon Valley East. There are pieces of what I do and how I do it that showed up early on. We were pretty early to having a computer in the house.
My dad came home with an IBM PS2 in 1987, when I was eight. I don’t think we’re totally sure what we are going to use that computer for. I think my parents just felt like we should be a house that has a computer in it. I took to it early and got very comfortable with it.
What makes a good pitch: I think on the investing side, when you grow up in New York, Wall Street looms large.
I think on the investing side, when you grow up in New York, Wall Street looms large. Both of my brothers were in the brokerage industry, my godfather bought me some IBM stock when I was born. I knew what stocks were from a very early age. I used to track them. The nice thing about, even in pre–internet days, having a couple of shares of IBM, is that every night on the local news they would tell you what IBM did because that was one of the biggest companies out there that people were following.
The other thing was being very community oriented. I grew up in a great neighborhood. I grew up in Bensonhurst, which is at the time the largest Italian section in the five boroughs. It was a place where you knew your neighbors and you knew your friend’s grandparents because they lived on the same block or next door to you. Your neighbors are called aunt and uncle.
There was this community feel that I always looked for. If I didn’t find it, strove to create it. When I joined the tech community very early in some of the early days of the New York tech community, where I couldn’t find it, I tried to always put people together because I was used to just knowing the people around me by name and knowing who they were connected to.
All of those things go hand and hand with how I do my job. I’m into tech and on the investing side of tech. But the knowing that venture capital really existed and how it worked, actually I got lucky with a high school internship.
My high school, Ridges High School in New York, is a really fantastic school. They knew better than to keep a bunch of seniors around in the third semester after we applied to our schools. They basically kicked us out. They said, “Either do a community service project or do an internship, but don’t hang around and interrupt everybody else’s learning.”
I wound up at the General Motors Pension Fund from February until June on my senior year of high school, doing some pretty interesting projects. Largely because I knew how to use spreadsheets because we had had a computer in the house for ten years.
What makes a good pitch: I stayed there at that internship for four years. Venture capital happened to be the asset class that had an opening when I graduated.
Because I went to school locally at Fordham, I bounced back and forth during the school year, was able to intern there throughout the summer, part time during the year. I stayed there at that internship for four years. Venture capital happened to be the asset class that had an opening when I graduated.
I could have just as easily wound up in real estate or fixed income or anything, but the venture capital and private equity group had the opening. GM had been invested institutionally in a lot of the top tier funds, excels and cliners and batteries since like the late 70s. No one ever thinks of VCs as having to pitch for their money, but that’s what they did with us in that group. All those funds came to pitch the group I was working in.
That’s interesting. No one’s ever brought that up quite before. I’d like to hear a little bit more about that. Obviously investors like you get lots of pitches, but I’m sure you have a lot of expertise in what makes a good pitch from having to pitch yourself. Can you explain when you were pitching for getting the money for your fund, what you learned and how that’s helped you evaluate?
First of all, knowing who to pitch is half the battle. When you have the right person sitting across from you, it makes things so much easier. One thing I learned early on in my fund raising is figuring out who a small venture partnership that was doing very early stage seed investments was right for. Because most of my network was institutional investors like CalPERS or Canadian pension plans or people who are way too big for the size fund that I have. Then other VCs don’t usually invest in each other’s funds.
[Tweet “What makes a good pitch: Knowing who to pitch to is half the battle”]
I had to build up that limited partner network, that high net worth network from scratch, because that’s one thing I didn’t have in Brooklyn. My dad was a fireman and my mom worked in the school system. We didn’t really have that kind of a network. I didn’t go to an Ivy League school. It was all about leveraging my existing network and leveraging my brand to. Actually a major driver for getting in front of the right people to pitch was actually PR, was having relationships with media.
I got a really fantastic article in Crain’s that announced the launch of Brooklyn Bridge Ventures, which was sufficiently vague as to not worry the SEC. I got a random inbound from a person who was at a pool of partners’ capital from a hedge fund. They said to me, “We’re looking to diversify our assets. This seems like a strategic fit. It’s in our backyard.”
[Tweet “What makes a good pitch: Figuring out what is it that this other person wants”]
It wasn’t pitching them from zero. It was making sure the other person on the table was halfway there. Then figuring out what is it that this other person is wanting. A lot of it is being empathetic, which I think that a lot of people who pitch … Sometimes I’m on the receiving end of pitches where it literally feels like someone has pointed a fire hose at me and just let it go full blast and has not asked any questions about what I’m into or what my concerns are or whatever and crafted the pitch accordingly.
That’s so important. I think that’s where I have excelled and where my fundraising success came from. I’ve identified the right type of individual that my fund was a fit for and I was very authentic about it. I really believe it is. I can list a bunch of reasons why and have a really good conversation around that. It comes from a really authentic place.
There’s so many great takeaways there, Charlie. We’re going to tweet out, “Knowing who to pitch is half the battle.” That’s a great line. This whole concept of when you know who you are and that you’re authentic about your brand, that gets you in front of the right people. That’s a great combination of that. Let me ask you to expand a little bit on this authenticity, because people hear that a lot and I’m not sure everybody gets what that really means.
The thing that makes me so happy to have you on the podcast today is this blog you wrote about the things you believe. To me, that is such a great example of authentic branding. There’s so many of them. I’m just going to read off two or three and ask you to expand upon where did you get that belief and maybe tell us the story.
Sure.
I believe that if you aim for compromise, you will be less successful than if you aim for creativity. That’s good. Let’s talk about that one.
I think compromise is one of those words that people say, “You’re always going to have to compromise.” It, on one side, can ring as two people meeting in the middle, which is better than them fighting it out forever or never coming to agreement. It always struck me as each person getting half. I just never really been comfortable with that. You want one thing, I want the other. We’re both going to have to settle? What if there was some third thing that we could come up with?
That maybe going into this conversation neither one of us had expected or wanted or whatever, but it could make us both feel fulfilled. That’s really what I seek is, is let’s satisfy everybody but let’s keep an open mind that the answer to satisfying everyone may not be something that either one of us are thinking that we want.
[Tweet “What makes a good pitch: Aim for creativity over compromise”]
Sometimes that involves really going in and understanding the other person. “I see you don’t want to take X amount of dilution and I really want to put this much money into the company. Let me ask you, why are you concerned about dilution?” “I’m concerned about dilution because I don’t want to lose control of the company.” “We can accomplish that using the board. The ownership doesn’t necessarily mean control.”
Maybe you just didn’t realize that and I thought it was a push and pull over price but it’s not really about price. It’s this other thing that we didn’t go in and talk about. Trying to come up with creative solutions I think is something that I think is a better thing than always settling and compromising. I don’t want to say that I think people should just dig their heels in and fight it out forever, but I think creativity can solve a lot of problems.
It ties right back in what you said earlier about the importance of empathy and asking questions like, what is your concern here, and getting clarification on that. Let’s dive into one of the other things you talk about since you said, clarifying on a word. I believe that actions speak louder than words but that language has immeasurable impact. Can you give us an example of language having immeasurable impact?
Absolutely. This is a more recent lesson that I’ve learned. A lot of it has to do with these ideas of empathy. For example, there’s a lot of conversation about diversity in the tech community right now. There has been a growing volume of conversation around it over the last couple of years.
[Tweet “What makes a good pitch: Language has immeasurable impact”]
When you ask people how different things make them feel and you explore that and you accept without judgment, your minds opened up to a lot of things about language. For example, somebody was asking me about, how do we get more female founders to come and pitch at our venture? I think they called it battlefield. I just sat there for a second, I was like, “I think I know the problem.”
The word battlefield.
The fact that you’re equating pitching your company with a fight. To totally generalize this, that the level of aggression embedded in that language is going to skew more male or with people who identify as male. You don’t think about that until you talk to somebody who may not identified as male and voice their concern about that. I get that. I never really thought about that, because as a white guy there is a lot of things I don’t really think about.
What makes a good pitch: Language means a lot of different things to a lot of different people. What words you use is very important.
I try and be a little more conscious of that type of thing. Language means a lot of different things to a lot of different people. What words you use is very important. It’s important in things like titles in organizations, it’s important in how you approach people. Some people can’t even identify the word that makes them feel not right. They just get an email and they just say, “I don’t know if this is the type of person I want to work with.” There’s just something in there about word choice or whatever that really makes a difference.
Wow, that’s great. I’m sure you have a big philosophy around the importance of a team when you’re listening to a pitch. You have this quote here, “I believe that if you treat people like you believe they can be better than they are, they will be,” which I think is a perfect platform to jump off about that quote and just your whole philosophy of how important the team is when you invest.
Absolutely. I think you should have high expectations of people. I think you should do everything that you can to get them there. I think sometimes we are very supportive of founders and new ideas and all that sort of stuff. We say that we’re supportive and we think about it as like a pat on the back. Sometimes, we don’t deserve a pat on our back because we didn’t do our best or we didn’t meet our potential.
[Tweet “What makes a good pitch: Treat people like you believe they can be better”]
You can applaud the effort, but sometimes you need a little bit of a dose of reality that say, “Hey, that pitch wasn’t very good, actually. It wasn’t very convincing. Let me tell you why.” I’m not telling you that to put you down. I’m telling you that because I think you’re capable of more. If I didn’t think you were capable of more, I wouldn’t bother giving you any criticism over it because what would be the point? I would just be wasting my breath.
There you go. Nice. Nicely said because the intention behind the feedback makes all the difference in the world, doesn’t it?
Yes.
Let me ask you Charlie, about what is it in your gut instincts that made you say, “Twitter and Foursquare are going to be good investments”?
To put it in a context, I am a portfolio thinker. I am not a deal guy. I got trained at an institutional investor that had fiduciary responsibility over a task, so General Motors Pension Fund, where I kind of grew up as an investor, is big into asset allocation and portfolio risk. These concepts that don’t usually pop up in venture capital. When I think about an individual deal or an individual company, I think about it in the case of this deal is the right amount of risk I should be taking, has the right amount of upside and has the potential to get there.
[Tweet “What makes a good pitch: The right amount of risk and upside.”]
I don’t convince myself that I know that this company versus that company is going to be a winner. You don’t know. There is a heck of a lot of things that could go wrong from Point A to Point B. I think what I look at is this is the type of deal, or if I did this kind of deal 30 times over in a portfolio, we’d be doing fine. I differentiate between good decisions and good outcomes.
There are lots of instances where I think people have invested in companies that shouldn’t have had a good risk profile and made it work anyway. It feels a little bit lucky but I’m pretty sure if they did that 30 times in a portfolio, it wouldn’t work out.
I guess the Twitter reference comes from, there’s a small mention in Nick Bilton’s book, Hatching Twitter, about how as a former Union Square analyst who still had a connection to Fred Wilson. I was at South By Southwest in 2007, which was the kind of Twitter year and the thing that sort of kicked off South By as the place to find the next big thing. That’s when Twitter really took off.
What makes a good pitch: It took off because nearly 80% of the people who were on Twitter were at South By.
It took off because nearly 80% of the people who were on Twitter were at South By. You got this really funny sort of glimpse into the future of like, “This is what it would be like if everyone was on Twitter.” To me, if you were at South By, it was just really obvious. I don’t think of myself as being special.
I would have been really special had I noticed that before I saw that critical mass, because my tenth Tweet that February was, “No one seems to be on Twitter. Am I bored of this already?” Once I got to South By, I was like, “I kind of get this.” What’s fascinating is the parts of it I found interesting, the idea that you could text somebody without giving them your phone number. This layer of identity on top of the phone but not tied to your number was really interesting to me, intellectually interesting.
Not too far after that, we went to a mostly app driven world that had nothing to do with text. That wasn’t the thing that drove Twitter. I also thought that it was a great way to pull a community together, because there was a nice balance of the number of people at South By, the number of texts that came in and all that sort of stuff.
Really, once Twitter got into scale, it became much more of a broadcast mechanism than anything. They largely turned off some of their community features. You can’t see when someone @Messages someone else unless you are following that person too, the reply thing. Some of those early features weren’t necessarily ultimately what made it scalable.
But it was certainly, to me, an interesting enough experiment and certainly an interesting team and a growing mobile market. I was like, “That’s the kind of thing that if you were a high risk, high return kind of player, you should probably be around that.” I can’t say it was any kind of Nostradamus like, “We’ll all be tweeting in the future.” There is this thing like, “You should be doing this kind of thing.” That’s the way I look at that.
I love what you described as Twitter pivoting within what originally started off as and what it actually has it become, because I think so many people forget that. They forget that even the best team and the best idea still makes minor pivots along the way until they really hone in on what people want and how to use it.
Could you imagine at South By Southwest that there used to be a feature called Track that you could pick a phrase like SXSW and have it texted to you every single time anyone mentioned that? That seems like a nightmare today.
Yes. Right. The volume.
At the time, there was not that many people on Twitter and not that many people at South By that it was actually a nice pace. Product decisions that were made then are completely different than the product decisions that we need to get made now. I think that’s a struggle for a lot of companies, especially a lot of consumer companies, where your initial user base may not be the masses and may not be where it scales. Maybe your initial trendsetters and early leaders, you might have to abandon a little bit to take it to the rest of the community, which is hard for a lot of companies.
[Tweet “What makes a good pitch: Product decisions made then are different than now.”]
Is there any type of tech startup now that you specifically are looking to fund or something that you’re working with now that you want to talk about?
Early. That’s basically the category. My rules are very basic. I focus on New York companies. If the company has already raised $750,000 in a previous round, then it is too late for me. I want to be a part of your first million dollar spent. I want to be there from the beginning, helping to put in best practices, helping to figure out what the goal should be with the seed round, work through those early hiring decisions, which you can make a huge impact on.
I’m in a brick and mortar ice cream shop, the number one rated ice cream shop in the country, Ample Hills
Other than that, I could not have a more diverse portfolio. I led the investment in a consumer electronics company called Canary, which is doing extremely well and can be purchased at your local BestBuy and Amazon and all sorts of other places. I’m in a brick and mortar ice cream shop, the number one rated ice cream shop in the country, Ample Hills, which opens up in Disney in May and is absolutely the happiest place on earth per square foot.
It doesn’t have to be tech, it sounds like if it’s an ice cream shop.
No, it doesn’t. To me, it’s more about the aim of the amount of enterprise value you’re trying to grow in this company. Usually, you get up to a certain size and it is mostly tech businesses. If you go back, call it 25 years ago, in venture capital, a good chunk of the venture capital world 30 years ago was retail rollouts. Staples, PF Chang’s, Dick’s Sporting Goods were venture backed companies.
That was a way to get growth. You figured out a store model and a second store model and a third store model and you just keep building stores. You grew some pretty large companies that way. Who wouldn’t have wanted to be an Angel investor in Shake Shack or SoulCycle or any of these types of retail businesses.
In the late 90’s, when all of this sort of eCommerce, dot coms took off, most of those retail investors shifted over to the internet. Retail investors, if you weren’t doing this dot coms and IPO nine months after you invested in them, you kind of missed out. People shifted their focus and they didn’t go back. There hasn’t been a ton of retail investing.
It’s actually come back into favor a little bit now because some of the VCs started doing it as Angels. Their favorite restaurants, their favorite coffee shop. It’s a fun new set of challenges. It’s interesting. It’s all about place making. There’s that but there’s also the realization that just because you don’t have a roof over your head doesn’t mean you have very good economics.
[Tweet “Having a roof over your head doesn’t mean you have good economics.”]
The Blue Aprons of the world still spend a lot of money on customer acquisition, whereas Ample Hills doesn’t have a marketing budget for customer acquisition. We make stores and we put an ice cream shop in the line forms and people pass by it because they like ice cream. We don’t need to spend dollars to acquire customers, we just need to spend dollars on rent.
Interesting. You’ve said some really great things here about what makes a good pitch. Don’t make the investor feel like they got a fire hose coming at them, be authentic, be empathetic. Is there anything else you want to add to that great advice before I let you go as to what makes a good pitch for you?
I think one thing that is important is to listen specifically to what the objections are and make sure your answers really specifically address the objections. If I tell you, “I’m just not sure that this is a venture sized opportunity that can create $250 million of enterprise value.” To respond with, “This is a really big opportunity because a lot of people have this problem.”
[Tweet “What makes a good pitch: listen to objections and answer specifically.”]
That doesn’t really address the problem on two levels. One, is how big is big? Because there could be a big problem that has a $30 million exit as its natural life, which should be plenty great if you could bootstrap it. It’d be pretty good if you could Angel invest. But probably not good enough for a venture firm. Just saying that something is a big problem doesn’t mean there’s a lot of value to be extracted from solving it for customers. There might be an unwillingness to pay or whatever.
I think just making sure you get investors over each of those hurdles very specifically to be able to say, “Each one of my customer is worth X and I have pipeline for Y. If I have this much growth or every salesperson can generate this many dollars. Look, I’m already doing it with two sales people. It only takes $5 million to ramp it up to 30. Here’s what exit multiples are for this business.”
Granted, we know that this is not the way it’s going to pan out, but at least you’re giving me back what I was asking about. Versus these vague, “Big and important.” I don’t know what that means from a sizing perspective.
Language has immeasurable impact like this quote you said earlier. Final question, what kind of book would you recommend listeners to read, either about investing or entrepreneurship or life in general?
I think I will go with the life in general category. I am a big fan of taking thought models from completely other random places and reapplying those, because I think it’s great training for how to approach new problems. There is a book called The 48 Laws of Power. It was a very popular management book. The author of The 48 Laws of Power collaborated with 50 Cent, the rapper, to write this book called The 50th Law.
In The 50th Law, hip hop and pop culture icon 50 Cent (aka Curtis Jackson) joins forces with Robert Greene
It was all about 50 Cent’s career, both legal and illegal, and the principles of management that you could distill out from his success. Now, I’m not saying that you should go out and be a drug dealer and then try and turn that into a rap career. But the idea that you can pattern that across such diverse situations, I think it’s just really good brain training. Go pick some completely other hobby, beekeeping or whatever it is. I think you will find many different facets of the world operate a lot more similarly than you think.
It’s part of the story behind Where Good Ideas Come From, a Steven Johnson book, where it’s all about cross pollination. No pun intended with the bees. Take ideas from one place, turn them slightly a couple of degrees in one direction, bring them to something else. That’s where creativity comes from. Because if all you’re doing is reading startup book after startup book, you’re just going to be thinking the same as everybody else versus somebody who comes at things from a new angle.
I love that. We’ll be sure to put both of those books in the show notes. I’m sure you are able to take a lot of the athletic endeavors that you do and transfer that to being an entrepreneur, as far as stamina and tenacity and all that good stuff too.
I do a lot of thinking on my bike.
People can follow you at Twitter. You have one of the most unique Twitter handlers I’ve ever seen. In fact, when I saw it I thought, “How was that not taken?” But I’m guessing it’s because you were an early Twitter user, is that right?
CEO is actually my initials. Charles Erik O’Donnell, CEO is always a thing even before I wound up in venture. It doesn’t really have much to do with starting companies or being in charge of stuff.
Got it.
CEO NYC was just, that’s who I was. I am CEO and I live here in NYC. Nobody else took that.
The double meaning is fantastic, you have to admit.
Absolutely. I will admit to people tweeting at me, telling me that they have seen my car parked on the street, because I am one of those people that has a custom plate. It’s very easy to spot my car.
Nice. You have consistency in your branding, that’s why you’re so successful.
There you go.
Charlie, it’s been such a pleasure. We’re going to have people follow you @CEONYC. Of course, I want to give a shout out to your incredible blog. Tell people how they can find that. This is Going to be Big is the name of it.
It’s ThisIsGoingToBeBig.com or they can Google my name. I’m usually the first ranked person, either that or the Wheel of Fortune announcer. I’m not that guy.
Fantastic. Thanks again.
No problem.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
This Is Going To Be Big Website
Brooklyn Bridge Venture Website
Charlie on Twitter
Charlie on LinkedIn
The 50th Law by 50 Cent and Robert Greene
The 48 Laws of Power by Robert Greene
Crack The Funding Code!
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What VCs Look for in a Startup – Interview with Vince Thompson
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Episode Summary
Vince Thompson is the Founder of Middle Shift and an advisor for several startup companies such as Contract Cloud and Jukin Media. Early in his career, Vince lead the advertising sales organization for AOL and later went on to serve as Facebook’s first head of national sales in 2005. Learn more about how to find the right advisor for your company and what Vince looks for in his pitch on this week’s episode.
What VCs Look for in a Startup – Interview with Vince Thompson
Hi. Welcome to The Successful Pitch Podcast. I’m thrilled to have Vince Thompson on as our guest today. Vince is a consultant and author, specializing in revenue generation and business creation. Through his LA Consulting firm, Middleshift, he and his partners have helped a variety of companies and highly profile early stage ventures achieve revenue success and scale. Among them, GumGum, TV Guide, Michael Eisner’s Vuguru, I believe is how you pronounce that. We’ll find out for sure if I was right or not.
Prior to Middleshift, Vince was an early executive at AOL and Facebook. He’s the author of a great book that I personally have read called, Ignited. I highly recommend that. Graduated USC Annenberg School and Pepperdine. He’s just an all-around guru and wiz and nice guy. Vince, welcome to the show.
Thank you, John. Fun to be here.
I always like to tell our listeners a little bit more about who the guest is beyond what I just said. Would you mind taking us back to your days at AOL and Facebook? How did you get into that world back in 1998 and 2005?
I’m a sales guy, so starting there. I have been attracted to interesting media opportunities since the earliest days. As a kid, I worked in radio. When I went to USC, I wrote screenplays and I got some things in developments. I went in the TV business at the station level in the pre-internet days. When the internet started happening, I got really excited about it.
I got a line in 1994 … Probably ’92 on Prodigy, but ’94 on AOL. I really started seeing the promise of it with the browser that Netscape had created. It was Mosaic then. I tried to get in the business. I couldn’t get in for a few years, they didn’t know what to do with a local TV ad sales guy who wanted to work in the internet business because the internet was not an ad supported thing.
What VCs look for: I’m a sales guy. I have been attracted to interesting media opportunities since the earliest days.
In 1998, I got a job at a really neat place, Third Age, south of market in San Francisco, just down the street from Wired, back in the days when people were trying to figure out how big ad banner should be, how many pixels and what’s that thing going to look like. We’re all trying to figure it out.
I had written an article for a publication called, at that time, Electronic Media. Today it’s called, Television Week, I believe. It was an article that I wrote as a guest commentary talking about how exciting the internet business was and how great it was and creative. Unlike the television business that as you moved up in the ranks, it became more about math and ratings and numbers. The internet was wide open with creative possibilities for marketers.
I wrote that piece about how excited I was to be in the business. A great guy at AOL, Charlie Warner, who was consulting Bob Pittman in helping build the company, ripped it out. I guess they had talked about it and said, “Hey, here’s a guy who’s super excited about the internet and AOL needs somebody in the West.” It just lead to a great opportunity for me. That’s how I got in.
A great story that is. We talk about now the importance of having a digital footprint and creating your own brand and blogging and posting. But way back then, nobody was doing that. That’s what got you in the door. I love that story.
I often tell people when I’m talking to students, it’s not the things you do during your day job that get you your next opportunity, it’s the things you do after hours. It’s exactly that. It’s having a voice, it’s blogging, it’s showing up at events, it’s hustling around. It’s those extra things that lead to your next opportunity. It certainly did for me in a really big way.
[Tweet “What VCs look for: It’s things you do after hours that gets you opportunities..”]
That’s great. I can’t let you go without talking a little bit, because everyone’s always so fascinated about, what was it like to work at Facebook in 2005?
It was fascinating. You could see the vision that Zuckerberg had then. Just an incredibly brilliant guy, committed to the single vision of connecting the world socially and changing the way that people interact and really facilitating relationships and using software and the internet as a platform to do it. I got involved with the company in 2005. I went for a job interview. Literally, there was about 20 employees, maybe a few less. They literally had a sandwich board out front the office, just off the university in Palo Alto. On it said, “Hiring,” and one of the jobs was VP sales.
A sandwich board instead of online advertising for a position like that.
They may have done that too. Sean Parker had contacted me via LinkedIn and asked me to come in and interview for the position. It was a small company with a big vision. It was a fun experience, it’s fun being there.
Now, has working at AOL and Facebook given you some really key insights as to what you now, as an investor, look for in a startup? Has it helped you be able to say, “Ah, this reminds me of AOL or this reminds of Facebook. I can see that this is the right team to execute this idea.”
I think both of them were formative for me. My tenure at Facebook was very short, but I had come out of a really big company. I’ve been at AOL, which was massive. In the brief time I was at Facebook, I got a deeper insight into the startup culture and how fast things needed to move, how innovations … 24/7. That was informative in that regard.
What VCs look for: I got to see a lot of stuff that, in the first version failed, but we see it successful today.
AOL was a big company and innovative in many, many ways. But it was bureaucratic as well. All of that said, I learned a ton at AOL about building products and companies to meet the needs of a variety of markets. AOL started just by putting people on the internet. But then just building solutions, partnering or you’re building solutions for people to address all of their potential needs online and offline. There was a moment of time where the company was so incredibly hot, it was able to attract all these super talented people.
There are literally hundreds of businesses and I got to look at so many of them when I was there. I got to meet with people who were product managers and internal entrepreneurs on a regular basis, and see how they identified markets, how they’re working to address markets. I got to see some really interesting products being created.
I got to see a lot of stuff that, in the first version failed, but we see it successful today. A lot of these ideas are forged out of many, many, many people trying and trying and trying and trying. At some point, the market timing is right and the resources are in line, and you find yourself in the big success. It’s all hard fought.
[Tweet “What VCs look for: Successful ideas are forged out people trying and trying.”]
Let’s talk about three of the companies that you invested in and are also an adviser on, because I think our listeners would love to hear the story of how those founders found you to be both an investor and an adviser. Does that sound good?
Sure. I don’t what companies you’re going to be mentioned but I’ll do my best.
Let’s start with Contract Cloud, because I know that one specifically. If you wouldn’t mind, tell us what Contract Cloud is, why you were attracted to it. Let’s start with, did they pitch you? I’m assuming they did. I’d love to hear what that sounded like.
Contract Cloud is a really special company that is in the video agreement space. What happened was, I was at an event and I met this smart lawyer, young guy, and he was telling me that he had sat in the courtroom on many occasion and thought to himself, “Oh my god. This is a ridiculous, frivolous lawsuit. If we just had a little video of what happened at the contract signing or we had a little more evidence, we wouldn’t be here today.”
People who had sign mortgages and then later said, “Geez, I didn’t look at all the pages. I’m not responsible,” or “English is my second language and I didn’t understand this.” A variety of things that people will do in litigation. Listen, sometimes the people are right. But if you had some video evidence, we could change that.
What VCs look for: The reason I got excited about that company is you had somebody who had domain expertise.
The idea of Contract Cloud is that, at the end of the mortgage signing, you can confirm on video that, “Yes, I understand I’m getting a 7% loan. Yes, I understand …” or today, a 2.5% loan. “I understand that it’s a non-recourse loan and I understand what I’m signing today. I’ve had enough time to review it.”
What Contract has found since is that there’s lots of very interesting ways to apply video technology and video agreements and help both the consumers and the companies protect themselves and clarify their business relationships. The reason I got excited about that company is you had somebody who had domain expertise.
This guy, he’s a lawyer, Paul Vacquier, he’s a very smart guy and he was very passionate about the solution. It was a real problem. He had relationships with other people who are looking to solve the same problem. That was a fun company to get involved in. One of the first things we did is got Paul introduced to Amplify LA, which is one of LA’s leading venture accelerators. They did a lot to really help his company and take him to the next level. I’m going to see him later today.
[Tweet “What VCs look for: Show passion and why you are domain expert.”]
Fantastic. The big takeaways from what you just said Vince, for the listeners, is investors like you invest in the person that has domain expertise that is solving a real problem. That person’s expertise not just comes with smarts but comes with passion, which I really, really like that. All right, let’s jump into another one. Junkin Media. Am I pronouncing that right?
It’s Jukin Media.
Jukin, sorry.
I’m an adviser to that company. Gosh, this is one of the best cultures I’ve ever seen in a media company. Great leader, Jon Skogmo, the CEO. Lee Essner, the COO and president. These guys had just done a brilliant job. This is a company that is in the video business. They operate several businesses under the tent of Jukin Media.
Their real core business is identifying the most exciting videos online in platforms like YouTube and taking those videos and licensing them oftentimes along with the creators. Then making those videos available to TV morning shows, television productions and clip shows like Ridiculousness or Tosh 2.0, and that were their own very successful show, which is called World’s Funniest Fails on Fox TV.
What VCs look for: Their real core business is identifying the most exciting videos online and taking those videos and licensing them.
It’s just a very neat company that works in lots of ways. They got a television division that produces things and this licensing division. They work with marketers in a very special kind of handcrafted way to take this content and either use it as the messaging in ads. Got a great example, I’ll tell you in a sec. Or to advertise a site.
Here’s a fun example. There’s a viral video of a police officer, a trooper, probably in the northeast somewhere. I’m not exactly sure. Who in a snowstorm had skid it off into a snowbank. A guy came along in a Subaru and threw out a tow rope and pulled the police officer’s car out of the snowbank and back up onto the road. That was a video that Jukin licensed. Later, Subaru wanted to use for a commercial.
Oh, how fantastic.
They literally have tens of thousands of videos.
Right. This whole concept of curation is such a needed thing with the volume of every information that’s coming at us. Can you tell us how the founder found you, and what kind of pitch they gave to you that made you say this is the right team?
I had a relationship with Lee Essner, who’s an accomplished CEO. The guy’s been involved in early stage incubators ventures, he’s a super-talented M&A lawyer. I had been friends with him for several years and wanted to be involved in a project with him. As he had gotten involved in this company and he had needs over there, he asked me to come in and spend some time with them. That just grew into a consulting relationship for me, and a lot of fun also. It’s been a lot of fun for me.
One of the things that investors often ask founders when they’re pitching show people who are on an advisory board is how often is this adviser actually involve? Is it once a year? Is it once a quarter? Is it once a month? What is your typical involvement in these companies on a frequency basis? Or does it vary?
I’m involve. I think there’s really two types of advisers. I think this is very important point. There are advisers that as an entrepreneur, would be really important to have in your company because they establish certain credibility. There’s a marketing or marquee value to their name that’ll help other people in the industry. They’ll give you credibility and will help you in your relationships.
[Tweet “What VCs look for: Some advisors give you credibility and relationships.”]
That might be, if you’re an entrepreneur and you wanted to go disrupt the farm equipment industry and you got the former CEO of Jon Deere to be an adviser, that would be a major coup and you may be willing to give him some equity knowing that given their incredibly big life, that you may only get to talk to them for once a month on the phone and maybe see him twice a year or something like that. That might be a perfectly suitable advisory deal.
I think, when I’m talking to entrepreneurs and we’re building companies, if the fit’s right, you’re really like that person, you can really learn from, and you understand the marquee value of their name is what you’re buying a little bit with your equity. It’s okay to do a couple of those advisory roles. I’ve seen entire companies built on them. I don’t think that’s a very good idea. You have to be very strategic there.
What VCs look for: The other type of adviser is really the working adviser. That somebody that has a specific set of expertise that’s applicable to your company.
The other type of adviser is really the working adviser. That somebody that has a specific set of expertise that’s applicable to your company. I’m working with this really interesting young company, STEEZY Studios, that teaches people how to dance hip hop by introducing them to the hottest choreographers in the business and people can sign up and they can take classes. It’s a young company but really, really neat.
In a situation like that, music and licensing is important and technology is important and subscription marketing is important. With that type of company, I’ll work with the founders and we’ll make a list and say, “What are the things that we really need help on and how can we identify a hands-on adviser who would jump into this and love this company as much as we will,” and so forth. John, I’m not marquee value. I’m just a guy who is …
Oh, you are.
I’m really just a guy who has a lot of experience in the sales world, who really loves it and is delighted to have any of those conversations all the time. Hopefully, the companies that I advise are getting a lot of value from me and taking advantage of the fact that I’m always willing to talk about this stuff.
You said two things that I really want to underline for our listeners. One Vince, is, when you’re looking for an adviser, make sure that they love the company as much as you and the founders do. I think that’s so key. Obviously, when you get someone to invest in your company, you want them to be part of the culture and get excited.
The same is true for the adviser, they have to love it as much as you do so that everyone on the team, whether it’s someone who’s doing that job every day, an adviser or an investor, has the same passion for the vision.
[Tweet “What VCs look for: Look for advisers that love the company as much as you.”]
There’s something, John. You hear me talk about how I love these guys, I love this guy. But not everything’s perfect. I’ve worked with some companies that the founders are more short-sighted and they think creating a business is a little bit like packaging a movie. You get all the right names and somebody exits. It’s all great, super exciting. They try to biz dev the most exciting thing they can and build a lot of hype.
The industry points to some of those things. Industry conferences and some of the people in the industry try to maybe leave you with the impression that gosh, if you could just get these people in this venture funding and this thing, that you’re bound for an exit.
[Tweet “What VCs look for: Companies are hard and they take a long time to build.”]
The truth of the matter is, 99% of the time, these companies are hard and they take a long time to build. There’s a lot of valleys. The people that you get involved in your business, the reason why I say they have to love it is because those people, they’re going to be with you for a long time through a lot of stuff.
In fact, some of it lasts longer than some marriages. It’s ten years and the average marriage is over 7.2, unfortunately.
That’s interesting, but yeah. Gosh. We need an app to fix that.
Exactly, there you go. There’s a solution for every kind of problem. What advice would you have for our listeners on when they are pitching you or any other potential investor, not even an adviser, let’s say just an investor. What is something that you really look for when you hear a pitch?
I think, one of the first part is authenticity. I don’t want to be sold and BS-ed. The minute I think somebody’s overselling, it makes me uncomfortable because it’s a long partnership, it’s a long road we’re going down. I really want somebody to give me an honest assessment and not oversell me. That’s really important.
[Tweet “What VCs look for: Be authentic when you pitch.”]
Honestly, I see entrepreneurs make claims quite often and make me uncomfortable. I think they’re coached, “You got to have this big chart and go way up to the right and then this is what people react to.” If somebody comes to me and puts together a business plan and says, “Geez, we’re pre-revenue but we’re going to make $1.5 million next year and $19 million in the next year.” “I don’t know, man. How did you get there?”
You can’t over-exaggerate your projections. It’s all about, as you said, being authentic. What I think you’re saying is, I want to see someone’s logical thinking and that they have some experience or have some advisers that are giving them good information on, “That doesn’t makes sense to have that kind of growth.” It’s much more realistic, especially with you coming from a background in sales. You can probably spot when somebody’s pushing too hard.
[Tweet “Don’t exaggerate your projections”]
Just to continue the analogy a little bit of dating and marriage and relationships in general, the whole point of a pitch is to get the second date, not to get someone to open up their checkbook.
It’s great. It’s a great point. I’ve never written a check on the spot. I think there are people who do that. For the most part, it’s building a relationship and going down the road a little bit and figuring out what you can do. I think for me, if I want to have exposure to the venture innovation world, I invest as an LP in a couple of funds and that’s the way I get that exposure.
What VCs look for: For the most part, it’s building a relationship and going down the road a little bit and figuring out what you can do.
When I invest directly into a company, it’s because I also believe that I can benefit that company and be involved in a way that’s meaningful for all of us. That’s the way I work. I appreciate it when an entrepreneur says like, “Hey, do you have any interest in medical technology? What do you think about that?” I go, “Geez, I don’t know anything about cancer prevention, but if it was fitness, I might be kind of interested.” Then we can start the conversation there rather than take a whole pitch.
Also for young entrepreneurs, if you want to spend time with somebody, tell them exactly what you want to do. I know these people who want to meet me for coffee, “Hey, I want to pick your brain,” or “Want to come out?” Then I drive across town to go meet with them and then they want money.
It’s okay to want to have me invest but let’s have a really productive meeting. Tell me you’re interested in me investing, send me a copy of your executive summary. Let me tell you if it’s exciting to me at all and we’ll go from there.
Nobody appreciates the bait and switch.
I think sometimes people are uncomfortable to be that forward. It’s more helpful to all of us. By the way, if I’m not the person who’s interested in type of deal, maybe I can send it to somebody who is.
Exactly. That’s the whole key. Is if you build a relationship with somebody, they’re willing to let you into their network and that warm introduction is worth gold in the world. Is there any other company that you wanted to tell us about before, because a half hour just flies by with someone like you, that you’re excited about or want to give a shout out to or have as a great story that you think would be a great thing for our listeners to hear?
I mentioned STEEZY Studios. We’re early there, but that’s an exciting company. If you know anybody who likes dance or hip-hop, that’s totally great. You can go in and get a free account at STEEZY Studio and check that out. There’s some really great choreography there but also a dashboard that gets you into it and teaches dance in a way that you could never learn it on a YouTube or somewhere else. I’m excited about that.
Some of the bigger companies in Los Angeles are really killing it, like GumGum. They’re just doing great and they’ve really pioneered this whole field of in image advertising and they’ve innovated a lot of the advertising technology that’s unique. That’s a very fun company to watch in the future of Los Angeles.
For those YouTube influencers or people that have influence on platforms like Vine or Instagram, there’s opportunity to partner with FanBread.
FanBread, for those YouTube influencers or people that have influence on platforms like Vine or Instagram, there’s opportunity to partner with FanBread. FanBread can help monetize your audience off of those platforms on destination mobile sites with compelling content and commerce opportunities. That’s a new opportunity for those people who have developed audience and are just looking to monetize. That’s a very interesting company.
That’s fantastic. I like both of those a lot. Is there any other book besides Ignited, which we talked about, that you would recommend listeners to buy? Either about life or in the startup world?
The very specific nature of that book is focused on helping people in the middle understand the power they have.
First of all, Ignited is a book that I wrote based on my experience being a mid-level manager in major corporations. There’s a lot of leadership stuff in there. There’s some sales stuff in there. But the very specific nature of that book is focused on helping people in the middle understand the power they have in corporations by connecting the corporate vision to the real actualities of the work at the street level and levering themselves up in their organizations to create true and meaningful change.
That’s what that book’s about. That’s not right for every entrepreneur. It’s fantastic I think for middle managers. You can let me know. That’s the story there. I’m a lifelong learner, I’m always reading. I’m always digesting stuff in the space, sometimes it’s biographies. I recently read Elon Musk’s biography. I thought it was fantastic. I read The Everything Store about Bezos, I just really enjoyed that book. Peter Thiel’s book for startups is a fantastic book.
Those are great.
I’m just piling through the stuff. You pull some things out of each. Listen, one of the best books I ever read in my career is Stephen Covey’s 7 Habits of Highly Effective People. It’s a framework for building good relationships. It’s just good stuff for your life. 20 years later, 25 years later, I think about that book often. Probably really one of the most important books I’ve ever read.
Wow. Imagine leaving that kind of legacy as an author, how great. Vince, how can people follow you? What is your Twitter and all that good stuff?
I’m @VinceThompson at Twitter. I typically post stuff that’s just related to the technology innovation and ad community things. I don’t have a huge personal voice on that account. These things that I think are interesting to share to our folks. That’s it.
Fantastic. Of course, your consulting firm, Middleshift, is another place where people can, Middleshift.com, reach out to you. Vince, thanks again for bringing your enthusiasm and passion. I just can feel the energy coming through, which is so helpful for people to realize, that’s the level you need to be at when you’re talking to potential investors.
Thank you, John. I always love talking to you and look forward to catching up again soon.
My pleasure.
Links Mentioned
J Robinett Enterprises
John Livesay Funding Strategist
Middle Shift Website
Vince on LinkedIn
@vincethompson on Twitter
Ignited by Vince Thompson
Contract Cloud Website
Jukin Media Website
Steezy Website
Fan Bread Website
The 7 Habits of Highly Effective People by Stephen Covey
Crack The Funding Code!
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