Find Who Else Cares About Your Startup with Laura Wagner
Posted by John Livesay in podcast | 0 comments
Episode Summary
Today’s guest on The Successful Pitch is Laura Wagner, who is the CEO and founder of Digitzs, which is changing the way we are going to pay for things. She assembled an amazing team of people from Apple and PayPal and even Kevin Harrington who was one of the original Shark Tank judges. She said, “Everybody wants to be needed and wanted. If you trust and like and admire these people to get them on your team first, then you show investors who else cares about your idea.” She was able to raise millions of dollars on equity crowdfunding platform, Crowdfunder, by having this amazing team of people who believed in her vision to raise money to get it built and now they’re on their second round of funding and have their first revenue coming in.
Listen To The Episode Here
Find Who Else Cares About Your Startup with Laura Wagner
Today’s guest is Laura Wagner, the founder and CEO of Digitzs, which is all about changing the way we pay for things. Laura has an incredible background in this expertise, she’s assembled a team of people from Visa, PayPal and Apple. Laura, welcome to the show.
Thank you, John. Happy to be here.
One of the things that make you so interesting is that you’ve won so many awards in equity crowdfunding. You have the first female founder to reach number one on the CNBC Crowdfunding 50 Index, and number one for the largest capital raised by a female founded company. Clearly, you know what you’re doing. How did you become such an expert in this?
It’s super new, crowdfunding. It’s odd to be called an expert in something that I’ve got about a year and a half in. That’s the opportunity for other people too. I challenge you to beat us on the number one spot. We started in 2015 around April. I’m so non-technical. I’m a non-technical founder. The story will make you chuckle a little bit. I remember the day we launched with Crowdfunder. We put out a press release and had the video ready. About three or four hours went by and I was totally bumped because there was no activity. I was on my Crowdfunder page. I’m like, “Nothing’s happening.” I called my Crowdfunder person, Katie, who I adore and she’s like, “Laura, hit the other tab. You guys have already raised $500,000 of interest in the first two hours.” I screamed. I was like, “Wow.” I was on the wrong damn tab. It’s funny that you call me an expert. It’s been a long road from there.
We’re always talking about how do you figure out a problem to solve that is big enough to start your own business. Can you share a story of how you had a frustration at McDonald’s in the paying business without having cash?
Who Else Cares: We just interviewed a people who owned McDonald’s to figure out their paying points and packaged it up in a very simple product.
That’s how I actually got in the payment space. I fell into it. I’m from Texas. My first day in LA, I tried to go to McDonald’s while I was moving and they only took cash. They wouldn’t take my Visa Check Card. I had to leave hungry, which totally got my attention. My next stop was ARCO ampm gas station. They had this weird thing I’ve never seen before where you pay with your debit card. You put in your pin number and they added a $0.50 fee. I’ve never seen that before. I called the phone number on the top of the pump and probably it’s just beginner’s luck. I asked the guy who answered the phone at ARCO, “Why don’t you guys do this at McDonald’s?” He said, “You’ll never get McDonald’s.” I’m like, “What if I did? Is there money in it?” He’s like, “There’s tons of money, but you’ll never get McDonald’s.”
I went down there to meet him the next day. I started learning a little bit about what was involved with payments. The money caught my interest, of course. It took about a year to get the exclusive marketing rights from ARCO to bring this into McDonald’s. We went after McDonald’s and we won out over 200 companies. We pitched free equipment, free everything. We pay you $0.50. We charge the customer an extra $0.50. We give you a dime of that. Everybody else, all other $1.99 were pitching equipment cost X, transactions cost Y. We just interviewed a bunch of people who owned McDonald’s to figure out their paying points and packaged it up in a very simple product or service and had tons of success.
We hear how important it is to be persistent. You have a very clever way of doing it, about leaving creative and fun voicemails, for example, as a way to stay in front of someone. Can you share that?
[Tweet “Who Else Cares: Leave creative and fun messages when you follow up.”]
That was how we got into McDonald’s. Once I had the marketing rights from ARCO, I started going after McDonald’s. It was important for that particular business at that time to walk that up first. I had to do that first. Once we had that in the bag, I started calling the West Coast division of McDonald’s. There was a wonderful woman, Rose Nash, who was Head of Technology. Rose was inundated with everybody and their dog trying to sell them credit card processing. I called her 29 times and I would leave crazy voicemails. One time I put my radio to the phone and it’s, “One way or another, I’m going to find you, I’m going to get you, get you, get you, get you.” By the time she answered the phone one day, she knew exactly who I was. I said, “A-ha.” She just started laughing. I said, “Don’t move.”
Actually, I went down there to Irvine, to her office, and we stayed in her office until 10:00 that night. I remember distinctly because they were vacuuming the floor, and we did not speak about business until the last fifteen minutes. We talked about relationships, losing weight, everything.
Swim with the Sharks Without Being Eaten Alive
If people haven’t ever read or listened to Harvey Mackay, Swim With The Sharks Without Being Eaten Alive, I was raised on that book. It talks about getting to know 69 things of the person that you’re pitching; the name of their wife or husband, the names of their kids, are their kids into soccer. It may sound manipulative, but it actually gets you on the opposite end of transaction. So many people these days are so transactional. Rose and I, we’re two human beings and we’re just talking about life. We felt good and secure with each other. That was enough for her to let me in at the ninth hour to pitch McDonald’s, when most people had been in line for a year.
If you want to have a successful pitch, get that relationship connection first because people buy ultimately from people they trust, like and know. If you don’t start the trust factor and the likability factor first, you’re never going to win. Now, speaking of winning, when you’ve launched Digitzs, you had to get amazing people on your team before you could even go on an equity crowdfunding platform like Crowdfunder. You have this great phrase about proving who else cares enough to be on your team. Can you share with us how you started your team at Digitzs?
David Jaques was the first CFO of PayPal. He’s the Chairman of our Board. Linda Perry, she ran Visa seventeen years. Edward Katzin sold his company to American Express and filed numerous patents for Visa. I always tell startup founders, you just have to absolutely get people who are way more important than you are and way more accomplished than you are. Surround yourself with those people. Because, at the first glance, if you have a household name, for instance, Kevin Harrington with Shark Tank was one of our investors. The way you go after those people is the same way, relationships.
I just let those people know how much I wanted and needed them to be part of my company. I think everybody likes to feel needed and wanted. That’s a basic human need. Everybody actually likes to be part of something new that they can be in the wanting with. It’s not that difficult. You just have to seek the right people out with the right expertise. Of course, you have to like them and you have to trust them. You have to admire them. If you have that formula, don’t be shy because you would be surprised. Don’t ask, don’t get.
[Tweet “Find out who else cares about your startup.”]
When you were putting this team together for Digitzs, did you look for people who didn’t have the same expertise that you did? I hear that’s a really important thing, that you can’t have three people that all know marketing.
One thing that’s really, really key is that I’m not a technical founder. The key when you’re not technical is to have a technical cofounder. Stacy Moore is my technical cofounder. She has built our platform from the ground up. I’ve known her 25 years. She’s also from Texas. She happens to live here in LA. She’s definitely a unicorn. She’s a strategist. She’s been a partner in every business I’ve had. She also is hands-on. Finding a technical cofounder is imperative to a non-technical founder.
Also, what’s really important here is investors, whether they’re in equity crowdfunding or Angel or VCs, they love it when the team has worked together before because it shows that you guys get along and that you have experience in the shorthand of communicating.
I have no idea why David Jaques still talks to me. He was involved in Pay Wherever which was a prior company that didn’t work out. He was involved and invested in, by the way. I actually think that’s quite key. Most of the folks on the team are people that I’ve had a relationship with and respect highly.
Would your advice be for someone before they go onto an equity crowdfunding platform, to have your team assembled first before you start asking people to invest in the money? As you said, they need to know who else cares.
Who Else Cares: It’s got to have some cache, because you’ve got to stand out.
Absolutely. It really needs to be somebody with some impact. Like with Kevin Harrington with Shark Tank or David Jaques, the first CFO of PayPal, or Linda Perry, who ran Visa for seventeen years. It’s got to have some cache, because you’ve got to stand out. If you threw a bunch of names out that nobody’s ever heard of and they haven’t done anything significant in their life, that is the instant decision somebody’s going to make about your company, which is unfortunate. Most of the time, people are judged that way.
Can you go back to the first $2 million you raised? Was that your seed round obviously, and you had your pre-revenue?
Pre-product. We were just literally an idea.
You have an idea, but you’ve got this amazing team with amazing backgrounds of big brands. If you raise the $2 million, the product will get built. Then will you get revenue from that seed round or is that just getting the product built?
Just getting the product built and getting a pipeline in place.
Obviously, you achieved those results to be able to have the second round, correct?
We achieved it enough to, yes, be able to move into the second round. We just literally processed our first dollar last week. We started this raise in May. It’s going on nine months ago, this $3 million, series A. The whole time we were doing that, we were pre-revenue but post-product.
Do you have a waiting list of people who want to be in? Because I’m very curious, you have certain reservations? Can you explain to us the reservations versus the round? That would really be interesting for the people.
That’s always really confusing to people. On the CNBC Crowdfinance Index, all they can pool in is reservations which are “interest.” If you stumbled upon our profile and you thought it looked interesting, in order to reach out to us, you’re required to either select a dollar amount that you might be interested in investing or not do that at all and just ask for docs. We have a back-end portal with Crowdfunder that we get a text if somebody makes a “reservation.” It goes into our CRM, which we love. It’s called Close.io which is the best CRM ever on the face of the earth.
Why is that?
It’s so simple. It’s ridiculously simple. Every CRM I’ve ever used in my life is just like, you want to buy a Maserati and they lift up the lid and say, “Look at this carburetor in here.” Who truly gives a shit? Nobody. The other thing that Close does is it integrates your email and it just becomes your inbox. It becomes a second inbox which, I don’t know about you, but everything I do is email-related. I can see who I own email to that stands out outside of my entire Outlook inbox. It just makes things super efficient. I highly recommend that.
Anyway, we then connect with the investor and set up a time for me to chat with them one-on-one, which I do. I’d say one out of four times, somebody’s not accredited, which right now, they have to be an accredited investor, which for those who don’t know, you have to have an income of over $200,000 a year or a net worth of a million dollars excluding your home. We do get a lot of outside of the US investors, which they don’t have to be accredited. I would say that a third of the folks who’ve invested are non-US citizens, which is awesome.
Is that because you’re in series A? Did the people have to be accredited investors to invest in your seed round?
Who Else Cares: The difference is when you start to publicly offer something, we have to get third party accreditation.
Yes, they did, because both are public, so they are 506(c) not B. We did a note round of 100k initially. Then we did a note round of 275k before we got onto Crowdfunder. Those were private 506(b). You still had to be accredited, but you can do a self-assessment. The difference is when you start to publicly offer something, we have to get third party accreditation. A CPA or an attorney has to vet that investor or sign a form, or the investor has to send us their tax returns. We have an obligation if we publicly solicit to make sure that we don’t harm them.
That’s not the case for everybody on other equity crowdfunding platforms or even within Crowdfunder. That’s the whole reason for the new law, is that people don’t have to be accredited investors to invest in some of these companies.
It’s still a pretty small percentage where you don’t have to be accredited. It’s getting better, but in order to do a Reg A raise, there’s Title III. I’m not an expert at this, by the way. There’s Title III and you can only raise up to a million dollars. There’s Reg A and you can go up to $50 million. It’s expensive to prep for either one of those raises. What I find when I’m talking to investors is they’ve assumed all crowdfunding is for everybody because of the JOBS Act. One out of four end up not being accredited, but they thought they could invest when we got on the phone. Two out of four hear the pitch and it’s just not right for them. One out of four ends up putting their money out.
The biggest challenge, if you’re not using equity crowdfunding is getting in the right room. You typically have to talk to a lot more people than one out of four to get a yes.
It’s a heck of a lot nicer experience to have somebody come to you than you going out to somebody. They’re actually interested. They are interested to the degree that they set up a call and hear a pitch. I’ve had a blast. It’s the only way for pre-product, pre-revenue companies to get any money these days candidly, outside of family and friends.
Thank you for explaining all this. $11 million out of $3 million that you’re raising. That’s just letting people know that there’s that much interest, but it hasn’t completed yet. You still have some money available to finish that round.
Whatever people show on these websites as the dollar amount, it’s pretty normal that about 20% or 25% of that gets in the bank.
Let’s hear about what it sounds like when somebody says, “I’m accredited. I’m interested. This is a fit for me. I’d like to hear a pitch.” How do you pitch them? With slides? How long is the pitch?
Never ever with slides. We send them an email with a deck and an FAQ and a very long email with as much as detail as we can. When I get on the phone with them, I’m just talking just like I’m talking to you.
I hear that time and again, Laura. Be a human, have a conversation, as opposed to memorizing a script that you can’t go off of. If somebody asks a question, you get lost because you aren’t able to have a conversation. The pitch deck, if you use them, is supposed to just be a frame of reference.
I had screwed up so many times on having a deck in front of me. Back in the day, I always joke that decks are so 2015, because it’s just a barrier between you and the other person.
You still need one. Obviously, you’re going to send them the deck. Sometimes, they probably have questions from looking at the deck, “I see on your competitions slide XYZ, or how did you come up with this valuation?”
A deck needs to be no more than ten slides and very large font, lots of pictures. These days, we are almost never asked for any other due diligence documentation, which is pretty outstanding when you think about it. It’s just the deck, it’s an FAQ, and me.
Have your financial projections changed dramatically from your seed round to the series A?
Who Else Cares: I think just being completely candid with investors is perfectly okay.
The seed round, we really were pretty clueless about what those projections really could be. But we were always very candid about that. I think just being completely candid with investors is perfectly okay. It’s okay to say you don’t know but you think. It’s like, we think there’s gold under the hills, but we don’t know until we get the money to buy the shovels and get our feet dirty. That was our pitch in the seed round. In this round, our projections, of course, projections always change. In tech, everything takes much longer than you think it will. But we also tell them that. I tell every single person, whether they’re accredited or not, that this is a huge risk and it’s a little step above going to Vegas.
Are you trying to get people to use Digitzs instead of PayPal? Is it like Uber versus Lyft? Can you give us a sense of what the pitch is?
We do not sell to individual merchants. If you drew three circles, left or right, on a piece of paper, on the left is where cards are swiped; liquor store, grocery store. On the far right is the experience you might have checking out of an Amazon shopping cart online. In the middle is everything else. In the middle is about five years old. In the middle are three buckets, since I’m from Texas. The first one is mobile apps like Uber. The second one is market places like Etsy. Third one are what we call platforms.
If you drew ten more circles at the very bottom, those would be the ten largest payment processors in the US. This whole page is about $5 trillion a year. In the US, $5 trillion a year is processed at just three card types: Visa, Mastercard and AmEx. It’s growing at 15% per year. It’s a massive, massive market. The middle is a trillion, the right side is a trillion, and the far left where cards are swiped is $3 trillion. We are sitting squarely in a middle market that’s less than five years old, that very few companies can compete in, just due to all kinds of legacy.
Our competitors are companies like Stripe, Vantiv and WePay. They’ve aligned with one of those ten. We’ve used up half of the ten that could even play in this market on the back-end. That’s one of the reasons why it’s so difficult. That’s my pitch. That’s literally the first minute or two of my pitch, to set the stage.
You painted a picture, which is what I tell people all the time.
I’m very visual.
Having people draw those three circles and they can instantly understand, “I know where I am.”
You’re also getting them kinetically. There’s an old saying, “Tell me and I hear you. Show me and I see you. Involve me and I understand you.” Involving them is drawing the circles. Get a piece of paper out, draw the circles. It’s a small thing but it works.
[Tweet “Who Else Cares: Involve them in your pitch so they understand at a deeper level.”]
Do you get questions or is one of your questions, what’s the exit strategy? Or is that too soon?
Always. They don’t invest unless they feel like there is a viable exit. Our exit strategy is actually to sell back to our processor or one of those ten processors at some point. 47% of the M&A transactions last year in the US were niche FinTech companies being swallowed up. Because companies like Digitzs have created new technology, are serving brand-new niches that are hard to serve based on legacy technology underneath them, it’s almost like we’re the electric cars and everybody else is the old gas model cars. But the gas model car factories have a lot of money and they’re going to want to buy the electric car companies.
Can you talk about your marketing strategy, the business model? People sometimes, “If we only get 1%, we’re going to be rich.” Clearly, that’s not what investors want to hear. They want to hear a bottom up strategy. What is your model? You have your first dollar. Are you targeting certain industries? Are you going after the middle circle Uber?
Platforms are what we target. Are you based in LA?
Yes.
Who Else Cares: We make the platform look like a payment processor. We eliminate the noise of the customer having to go get a merchant account.
If you get a parking ticket today in the City of LA, you’re going to go to CityOfLA.com. You’re going to hit a button that says “Pay Your Ticket Now.” It’s going to take you to another page inside the website. The company that hosts that page is what we call a third party platform. It’s no longer the City of LA. It’s a third-party that the City of LA has contracted with to take a payment on their behalf. It’s those platform that Accenture says are a top five trend for 2016. What happens is the platform guy goes to the City of LA guy, and he says, “Hey, City of LA guy, don’t build an elaborate website where you could take parking ticket payments. We’ve got all that software in the Cloud and we can make it look just like your website by tomorrow morning. By the way, we also charge the person using it $2, so it’s free to the City of LA.” The City of LA guy says, “That’s too good to be true. Where do I sign?” The platform guy says, “I just need you, City of LA, to go get a Visa, Mastercard and Amex account so we can connect all the dots for you, so when somebody pays the parking ticket, they see your name in their bank statement.” Unfortunately, half the time, the platform guy loses that sale.
With our API, when it gets to the point in that sale and the guy says it sounds too good to be true, he says, “Just come to our site, the platform site, enter a few piece of information and you’re ready to go in a second.” We make the platform look like a payment processor, so we eliminate the noise of the customer or the merchant having to go get a merchant account, which it’s never one place you have to go. It’s three places you have to go. Three different contracts they have to sign, a week or two of work. It’s a pretty big problem.
You’re solving a big time problem which also causes sales to be lost. By saving not only time, you’re increasing revenue for the platform, is that right?
We increase revenue a couple of ways. That $2 fee for instance. When the City of LA guys, before Digitzs, they would go and get a merchant account and come back to the platform. The platform would connect all the dots. Somebody pays their ticket for $100 and agrees to a $2 fee. $102 goes on that cardholder’s card and all $102 goes to the City of LA. The platform has to send the City of LA an invoice every month that says, “You did a thousand transactions. You owe us $2,000.” With our API, that $2 gets split off and paid directly to the platform next day. The $100 goes to the City of LA. We’ve eliminated their invoicing, which saves them money, clearly. The other thing is we also pay them a commission on the $2.93 that we charge the City of LA to process cards.
As part of your use of funds that you’re raising, is it all going to tech or are you going to be hiring a sales force?
No sales force. We have a brilliant cofounder on board, Ben Way. Ben has helped to launch 200 different companies. He’s advised the White House when he was a kid from the UK. He’s brilliant. Ben is an artificial intelligence internet marketing expert. We have an in-house expert that generates tremendous leads directly for me to have conversations with CEOs of these platforms.
That’s fantastic because a lot of people need sales people, and you’re doing a B2B play so you don’t.
Who Else Cares: Today, not at all worth it to hire a salesperson. It’s much more important to have leads coming into you.
Ultimately, we may have one person super seasoned out having very high level conversations. At this stage, we’re just still in the middle of product market fit. Hiring a sales person, what a waste of money. I’ve managed and hired sales people my whole life. I can tell you, usually in today’s day and age, not at all worth it. It’s much more important to have leads coming into you. Just like we have Kraft and their leads coming into us for investors. If you don’t have somebody replying to an email, showing there’s a need for what you’ve got, it’s a long road.
What’s your biggest surprise so far? I know we all have obstacles in our startups. What would you say is one of your biggest surprises that you didn’t anticipate that you could share with us that people could be like, “Maybe I should think about that?”
We pitched 50 CEOs of these platforms. They all said, “Sounds fantastic.” 27 of them said, “We’re going to do this. It’s amazing. How did you put this together?” When push came to shove, we found out 26 of them were not PCI-compliant, which is a security level that you need when you’re processing Visa, Mastercard and Amex on behalf of other merchants. We had to quickly regroup and build some tools to help non-compliant platforms use Digitzs. That was not something we expected. It was a big kick in the stomach, if you will. You just get over it and do what you got to do.
Let’s talk a little bit about you’re on the Board of a non-profit, A Sense of Home. How did you pick that charity? How does that relate to what you’re doing, if at all, with Digitzs?
It picked me. About a year ago, I was trying to get rid of a couch in my office, and just literally could not find a place for it. Stacey, my technical cofounder, said, “Why don’t you give it to A Sense of Home?” I had no idea who it was. I called them. They picked up my couch. The next day, I get an email with a family and about twenty people sitting around my couch in a house with a celebration. I was so impressed, I just called them back and I said, “What do you do?” They said, “We make first homes for aged out foster kids in Los Angeles.”
Who Else Cares: Our goal, by the time we leave, is to give them a sense of home.
I didn’t know anything about the foster care system at that time, but families get paid to take in foster kids. When they turn eighteen, they usually kick them to a curb because they’re no longer compensated for keeping them in their house. A good majority of these kids end up on the street or about a third of them end up getting what they call Section 8 Housing. A lot of them live on a mattress in an apartment for a year, until A Sense of Home comes along. What we do every Sunday here in LA is we literally, we did one yesterday, we go in with a truck and usually twenty volunteers and put in all donated furniture; everything from flowers to pictures on the wall, to everything in the bathroom and kitchen. Our goal, by the time we leave, is to give them a sense of home.
A lot of people will say, “How do you find the time to do that and launch this huge startup?” Most people will go, “I can either do one or the other. Or I will do that after my company’s sold.” You’re doing it concurrently, so it’s obviously inspirational. I think that’s the big question people have is, how do you find the time?
It doesn’t take a lot of time. It’s actually what I do for fun. You have to have some break from your work. These days, we’re all so cooped up in our homes or our offices with our computers. We don’t connect with people face-to-face. For me, it’s become a really nice way to hug a bunch of people all at one time on the weekend. It takes a couple of hours. I don’t do it every weekend. They asked me to join the Board, which I was so honored, because, Georgie, who founded A Sense of Home, just was honored to be a top ten CNN Hero just a few months ago. It’s a massive honor. They had a big gala that CNN does and she was on there. Richard Gere actually introduced her. Now, they’re getting tremendous traction. The idea is to duplicate it in multiple markets. It’s really been super amazing to watch.
How can someone follow Digitzs and you on social media? What’s the best way for them to keep track of what you’re doing?
It’s @LauraDigitzs on Twitter. We have a Facebook page. It’s Digitzs.com.
Do you have any books or book that you would like to recommend to a founder or someone who’s thinking about getting into equity crowdfunding?
Certainly, your book. I am going to write a book on our experience in equity crowdfunding just to help founders, because there’s a real formula to success. It’s not a complex formula. I think it’s one that people need to be aware of before they go down this road. It’s not for the faint-hearted.
Laura, thank you so much for sharing your expertise and time. We look forward to watching Digitzs change the way we pay for things.
You rock, John. Thanks a bunch.
Thank you.
Have a good one.
Links Mentioned
- J Robinett Enterprises
- John Livesay Funding Strategist
- Digitzs
- Crowdfunder
- Swim With The Sharks Without Being Eaten Alive
- Close.io
- A Sense of Home
- @LauraDigitzs
Crack The Funding Code!
Register now for the free webinar
Fox 11 News Los Angeles John Livesay The Successful Pitch book
Share The Show
Did you enjoy the show? I’d love it if you subscribed today and left us a 5-star review!
-
- Click this link
- Click on the ‘Subscribe’ button below the artwork
- Go to the ‘Ratings and Reviews’ section
- Click on ‘Write a Review’
Build Relationships and Get an Introduction with Michael O’Neal
Posted by John Livesay in podcast | 0 comments
Episode Summary
Today’s guest on The Successful Pitch is Michael O’Neal, who hosts a podcast called The Solopreneur Hour: Job Security for the Unemployable. He talks about when he creates a podcast episode that’s typically an hour long, he promotes it for four hours. That’s been one of the keys to his success. He’s got this amazing course called The Art of The Interview that I highly recommend you stay tuned and listen to. He really talks about his secrets of getting huge traction. One of them has to do with using social media smartly and the other is relationships, but from a place that you may not expect would be a great place for getting the top relationships and how to do it and get those all-important introductions.
Listen To The Episode Here
Build Relationships and Get an Introduction with Michael O’Neal
Today’s guest is Michael O’Neal, who is a podcast expert. He has his own podcast called The Solopreneur Hour: Job Security for the Unemployable. He also produces a lot of other podcasts such as The Kickass Life and Mechanic to Millionaire. His Solopreneur Hour podcast started back in August of 2013. It already has eight million downloads and he was able to monetize that in six months to six figures. I think that’s some kind of record. He is a big guy into a lot of different things besides podcasting, including music. He’s got this amazing course called The Art of The Interview, which I can’t wait to hear about. Michael, welcome to the show.
John, thanks for having me. That’s very kind of you.
Our mutual friend, Matthew Kimberley, I heard him several times on your show. I know that everything happens through connections. Certainly in the world of investing, investors tell me all the time, “We love to get warm introductions before we hear somebody pitch.” The same is true in the podcasting world, isn’t it?
It really is. I was just having a brunch meeting before this in a co-working session. I was looking at ten new emails in my inbox. Seven out of the ten, “I should totally be on your show.” I can count on one hand in three years the number of times that I have gotten one of those emails and go, “You’re right.” It really requires, at least for me, it requires a heads up from a friend. That third party intro is something I talk about. This course called Conferencetopia, which is free. You go to conferences all the time when you’re in this entrepreneur space. I’ve watched people spend thousands of dollars going to these conferences and then get nothing out of them. Even though they have a great time, they don’t move the needle in their business. I reverse engineered how I had built relationships and built my business from conferences. I made this free course for that.
Build Relationships: One of the major tenets is, “Always get an introduction.”
One of the major tenets is, “Always get an introduction.” If you and I are standing in a crowd and you know your friend knows that person, instead of just walking up to me like, “I’m Michael O’Neal. I have a podcast, blah, blah.” You’d say, “Would you mind introducing me to the mayor?” whoever it is. It’s not only that, but it’s them knowing how to introduce you that makes all the difference in the world.
You’re basically transferring all of the credibility and the trust and integrity that you have with that person when you make that introduction in person or in an email. Don’t you think that’s really what you’re doing there?
I just got introduced to a guy last week and I was at a conference. My buddy, Phil Mershon, who runs Social Media Marketing World, it’s a big conference coming up in March in San Antonio. He says, “Scott, I’d like you to meet my buddy, Michael. Michael has a podcast and talks to other unemployable people like himself.” He says, “He’s also a great drummer. This is Scott, entrepreneur, has an amazing new app. By the way, he was the sax player for Pink Floyd.” There’s context there. It changes how people view each other. It changes how the conversation goes. It really makes a huge difference how people are being introduced. It’s something we don’t consider enough when we go to conferences.
That one thing you talked about, being the sax player for Pink Floyd, that’s the memorable hook, isn’t it? That’s the “Oh my god. There’s a story there.” That’s what I keep telling people when they’re pitching to get their startup funded. Whatever you have that makes you unique and memorable, bring that up to the top when you give a pitch. You have such a great story yourself of how you decided, based on what was going on in your personal life, that you were not going to work for somebody anymore, and figure out a way to overcome your fears. Can you tell us that story and then specifically how you overcame the fear of, “What if this fails?”
To be fair, I never had that fear. That’s something I’ve never really had. I assume it will fail. I just know in the entrepreneur game, we’re going to miss more than we’re going to hit. That a show, in this case, a podcast, has a minute chance that it will be a huge hit. Just like anybody that pitches a new TV show. You file a process and then all the vetting and all that stuff. Then maybe the timing works or the content works, or whatever, somehow, but there’s no guarantee of that. We’ll definitely have more concepts than hits.
With that said, I’m running a pretty solid streak right now. I launched The Kickass Life with David Wood in 2012. That ran until late 2013 or so. That show crushed. It was top ten in health the whole time we did it. Then I launched The Mechanic to Millionaire, which is a buddy, Dave MacArthur, who’s a really successful network marketing dude. That show has been this killer, rabbit-and-hare growth for probably four years now. It just keeps going up and up and up. If I looked a year and a half ago, two years ago, that show was doing 400 or 500 downloads a day or something, which was pretty good even by today’s standards. Now, it’s at 1,500 downloads a day, which is still not Joe Rogan. We’re not getting 90 million a month. But in the grand scheme of things, in our little entrepreneurial podcasting space, that’s a very successful show.
Then I launched this one, and this one was a pretty quick hit. Then I launched The Hines Ward Show. I was the co-host for that one. That has done really well as well. We’ve got two more shows in the hopper.
One being our mutual friend, Matthew Kimberley, is coming up, right?
Yeah. Tipsy Business, which we don’t have a logo or anything yet. Matthew is hilarious. Matthew’s quick, very quick-witted. To me, entertainment always trumps value, if you will, actionable content. I always want to be entertained first. If they can, then those nuggets will fall to the ground because they’re entertained and they’re engaged in the conversation you’re having. Way too few understand that concept. Think about your favorite teacher of all time, they’re entertaining. That’s why you still remember some of their lessons.
[Tweet “Build Relationships: Own a social media platform and be active to get rapid growth.”]
For me, I would go one step further and say the best way for people to become entertaining is to learn how to become a storyteller, because that’s my favorite teacher. He always told great stories about history as opposed to just giving me the facts. Can you tell us an entertaining story of how you were able to get to eight million downloads so quickly? Traction is so important for investors when they’re looking at startups. They want that kind of rapid growth. I’m thinking there’s probably a story there that could be applied to a startup, who’s listening to this and like, “I could use that same skill or strategy or even process to apply to my business to scale fast.”
I think you’ve got to own social in some way. You’ve got to own a platform and really use it. You can pick it, it can be Facebook or Instagram or Twitter, whatever you want to use. You should definitely not be one of those people that’s like, “That’s for the kids.” You need to be active in that conversation. You can’t outsource everything. You’ve got to be the one that responds to these people’s comments. That’s one.
Two, I alluded to it before, which is the relationships that you build at conferences and out in the world are critical to your success. They were a high number of responsibility for the success of my show early on, because I was able to stock those first two or three months with some baller people. Some people that had huge social media followings back in the day in 2013, when you could still get someone to share the show because they hadn’t been on 300 shows by then. That matters. The relationship side really matters. A really diligent head-down promotion is what I did. My show would be an hour. I would spend four promoting each show.
The other thing that I got from Derek Halpern, which I really enjoyed, is you don’t have to be a content creator. You can take that content that you already have and keep repurposing it and keep promoting it. Those episodes I did early on, Matthew Kimberley episode, or you name it, you get really good content from that. So what if it’s three years old? Why shouldn’t I hammer the promotion on that old episode constantly on social media? They go, “That was a really valuable hour I spent. What else do they have?” Then all of a sudden, they’re plunging on your show. I would say the short answer to that question is the relationship-building that you do at events is really what moves the needle for your startup.
If you combine two of the things we’ve already talked about, which is building that relationship up and third party validation, third party introductions with people. You’re having a great conversation at a conference, you see someone that could move the needle in some way for you. ”Would you mind introducing us?” You guys have a great conversation. Before you know it, you’re at dinner and good things happen at dinners at conferences. Things get funded. It sounds cliché but it really, really matters that you can build these relationships and that you take that skill set very seriously in this space.
[Tweet “Repurpose content. Spend 4x time promoting it as you do creating it.”]
I love everything you said there. Own social. Be active, don’t outsource that. Relationships, everyone hears is important, but I like what you say, is the relationship you get started and keep going from conferences as a source=, not networking events, but actual conferences where you all have something in common, and get those introductions as opposed to doing it cold. Those are some amazing takeaways that apply to everything; podcasting, funding, pitching, anything that you want to scale your business.
You should be going to a conference a quarter. That should be the minimum amount. Per quarter is what you should be going to. It not only keeps you connecting, but it keeps you motivated. You see these people that are cranking. You start seeing some of the same faces. Again, that helps relationships get built.
That’s a perfect segue into something else you’re doing that I’m really impressed with and I want to hear more about, which is your mastermind, Sololab. You talk about this great quote that we’ve all heard, “You’re the sum total of the people you spend the most amount of time with.” Tell us what you’re doing in Sololab and who that’s for?
Build Relationships: I don’t think you know what you know until you’re teaching it to somebody else.
My group are people that either have a side hustle going on or they are leaving their 9 to 5, or they’ve been in this thing for a little bit and they’re trying to find their swing, if you will. If you play golf or tennis, you’ll understand that phraseology. I didn’t know that I was going to do it when I started the show. I was just bringing people on that I thought were smart and interesting and had cool stories and we were talking. Every once in a while, I’d get an email that says, “Do you do any coaching?” I say, “No, I don’t, really.” But after the 40th one, “Yeah, I totally do.” I started talking about it on the show.
I don’t think you know what you know until you’re teaching it to somebody else. It’s like as a drummer, I can go back and listen to some of my old music and go, “I don’t even know I knew how to do that.” You just don’t recognize maybe some of the smoothness. I had to talk to Matthew Kimberley a couple of weeks ago in the show. The way he phrases certain things, that is a gorgeously phrased way to sit down and do a sales pitch for someone.
Let’s give an example of that, because I listened to that episode. He’s very smooth with that charming accent, “Would you be interested in having a conversation where I could see if and how I might be able to help you grow your business fast? Is that of interest or not?” Really framing that up fast. Obviously, that sounds very conversational and not robotic, but it’s been thought through and practiced much like a musician practices before they perform.
Like a stand-up, actually. Every word has weight.
It’s a thread that unravels. I tell people when they’re pitching investors, they need to have thought through their opening and their closing just as specific to that rehearsed but not robotic smooth way of inviting someone to join into what you’re offering, and not coming across desperate but really inviting them to join in. It’s the difference between saying at the end of a pitch, “Any questions?” versus having a smooth closing, where you’re asking them to invest and join in the vision.
It would be cool to talk about that initial conversation too. At some point, you want to end up in front of these people and being able to pitch them. But how do you even begin to do that? My buddy, Clay Hebert, got a thing called, “The Six Word Intro.” The idea is, “I help blank do blank.” If someone says, “What do you do?” which you’re going to hear a million times at conferences. You have to be prepared for that answer. You’ve got to know exactly what you’re going to say, and you have to have an idea of what the funnel looks like after that first sentence.
The analogy I can give is Tim Ferriss has this TV show, The Tim Ferriss Show. One of the episodes was that he wanted to learn MMA. He was learning jiu-jitsu. He wanted to learn, they call it rolling, which is moving around and wrestling and trying to get different moves. His whole show was about rapid learning. The instructor said, “There’s too much for you to know. I can’t teach you all of this stuff in three days. But I can teach you one move that you can execute well and I can teach you eight different ways to get into that move.” He taught him a rear naked choke. He taught him six or eight different ways to get into that move in various situations that he would be in while he’s rolling around on the mat with someone.
Picturing that in your head, when you get into a conversation with somebody at a conference, you have your one move. You’ve got to have multiple ways to get into that conversation. That’s not to say that every conversation needs to be a sales pitch or anything like that. It always starts with, “What do you do?” That’s always the first question you’re asked. I can say something like, “I help other unemployable people, like myself, take their hobbies and skill sets and learn to make a business out of them.” That’s how I’m going to answer that question.
[Tweet “Build Relationships: Relationships from conferences are the key to success.”]
It intrigues people, they’ll say, “That’s interesting, tell me more,” which is the whole point of a good pitch.
They’re going to go, “How do you do that?” I can say, “I have a podcast where I’ve interviewed some of the world’s thought leaders over the last three years.” I stop it there and they go, “Tell me more about the podcast.” That develops into a deeper conversation, and then they’re in my Sololab.
You said two things that I really want to underscore for the audience. Number one is, don’t open what you do when you get asked with how you do it, i.e. “I host a podcast.” Instead, open with some statement that makes them intrigued enough to want to know more. Only give them enough to continue to ask more. Don’t do verbal diarrhea on somebody and just go into all the details.
First of all, you haven’t been given permission to tell your story yet. That has not been implicit in the conversation. You can’t start telling it. Two, if you can’t answer those questions in those six words or twelve words or whatever it is, your brand isn’t dialed in enough. You actually have to go back and work on your brand, which could take months. That could really be something that you work on until you can answer that really, really succinctly. That’s the important part.
It took me a long time to get to, “What do you do?” “I’m the Pitch WhispererR. I take people from invisible to investable.” Then I stop. If they want to know more, then I tell them more. “What’s a Pitch WhispererR? How do you go from invisible to investable?” It’s just enough to get people intrigued. The same thing is true in that first 90 seconds when you’re pitching an investor. This has been great. I personally want to ask you for one of your favorite, most entertaining interviews you’ve done on The Solopreneur Hour. You had so many great comedians and musicians. Do you have an entertaining story of somebody that you had on?
I’ve been a life-long musician. I ended up having this conversation with Scott Page a couple of weeks ago at this conference called NAMM, National Association of Music Merchants. Within a minute, I’m fascinated by the dude. I just want to hear about this historic rock and roll guy. He talked about playing in front of 620,000 people in Venice at one show. That’s a lot of humanity right there. He talked about after selling out Wembley Stadium for three nights in a row, having a party in the suite of the hotel that Roger Waters had. In the one suite, at one time, there are 30 people, but it was Paul McCartney, David Bowie, Eric Clapton, Madonna, Sting, and ten other people. It was all musical legends and then ten other people, whoever else happened to be there. That, to me, was actually really difficult to not just totally nerd out. I remember looking at my little Zoom H6 and going, “We’ve been talking music for 47 minutes.”
This amazing course, The Art of The Interview, you’re doing, I want to hear more about that because investors tell me time and again, “When someone comes in to pitch me for funding, I want to have a conversation with that person.” They don’t have to suddenly become this robot or get nervous or hide behind who they are because at the end of the day, they’re investing in them. What can people learn in The Art of the Interview that they can use in their everyday life to get the right people to join their team, to get customers, and ultimately to get funded? It’s all the same skills.
There’s some technical side to it, obviously. I remember having this conversation. I was at a happy hour with a friend of mine. She had brought a friend. My friend had gone off and had a conversation or went to the rest room or whatever. I was there by myself with her friend. It was that awkward, awful small talk that you get in when you’re with a stranger. Somewhere around minute five, I was just sitting there thinking about taking my phone out. I thought, “Wait a second. For a living, people have told me, is a pretty entertaining conversation with a complete stranger every single day. Why am I not doing it?” I mentally flipped the microphone on. I had this great conversation. That’s on me. That’s me not connecting the dots between my actual skill set and how it translates into the real world. That was the subtext of The Art of The Interview.
Build Relationships: People find your show so much more memorable when you’re good at what you do, when you’re a good interviewer.
The other part is, and this is as frank as I can be, most podcasters are awful at podcasting. They’re really, really bad at it. Partially, it’s not their fault. Partially because we’ve had some people that are really successful financially in podcasting that are bad hosts. They’re just not good at the media, the actual broadcast hosting side of being a podcaster. By the way, it’s also not their fault. They never really considered it. They’re more marketers than they were podcasters. When you listen to someone who’s good at it, it’s such a stark contrast in conversational flow, in content, in how the message is delivered. You’ve got people that find your show so much more memorable when you’re good at what you do, when you’re a good interviewer, when you’re good at the show flowing well, when you’re good at introducing people, when you’re good at plugging their stuff.
Here’s a perfect good example. Once you’re interviewed a bunch, you start to see the tendencies of people. You can see where they came up and the schooling they had in the podcast world and who they paid attention to. Think about this, John, how often do you make it to the very end of a podcast? If you listen to other people’s show, percentage wise?
I would say, if it’s a good show, I’ll make it to 90%. More than half of the podcasts that I listen to, I’ll scan the show notes. I’ll be like, “There’s nothing really good until twenty minutes in.” Sometimes you can look at the transcripts.
If you’re listening, you don’t know the show notes, the transcripts, do you listen to 85% all the way through? Are you 75%? Are you 65%?
If it’s somebody really great, like Alec Baldwin, I’m in, because I love it from the start.
All the way to the end? You hear the closing credits?
Yes. It’s because he’s entertaining and he’s himself. He’s a great interviewer and all those things you just mentioned.
Would you say that you don’t do that with others though?
Correct, yes. There’s a definite problem you’re solving.
In my case, I probably don’t make it to the very end. I love podcasts. I live in the podcast world. I probably don’t make it to the ending credits 85% of the time. 15%, I’ll make it to the very end. 85%, I don’t. If you are a current trend of podcast host, you have to understand that you’ve got guests that are coming on your show that are doing you a massive favor. They’re providing great content for your audience. Do we agree on that?
Absolutely, and their time.
They’re giving their time, however they are, however far long they are in the time line. That could be more or less valuable. If you get a Jack Canfield or a Gary Vaynerchuk, you know their time is worth a lot of money. They’re getting a $100,000 for a keynote speech for an hour. With that in mind, as the host of the show who’s getting this massive favor done for you by this guest, the guest hoping, “Maybe I’ll sell a few books. Maybe I’ll get a few new people to my content,” that kind of thing, where do we plug the guest currently?
Towards the end.
Now. At the end.
Yes. Because we don’t want it to be “sales-y” so we have to save that and no one’s listening. Totally understand where you’re going now. I love that.
Number one, we go, “Where can people find you?” As a host of a show, it should have been the first question you ask before you started recording, “Where can people find you so I can help you?” Two, we do it at the very end. That’s one of the things that when you listen to a pro, let’s say anybody comes on Jimmy Kimmel or Jimmy Fallon or Jay Leno, the first thing they do is introduce the guest and say their new movie, blah, blah, blah, is out in theaters on Tuesday. They plug the guest right at the beginning of the show. As a good host, we should be plugging beginning, middle, end. Whenever that guest has a good take, we go, “That was really great. Guys, why don’t you tweet them at,” whatever their Twitter there is. That’s a pro move that 99% of podcasters do not do. That’s the kind of thing that The Art of The Interview talks about.
That leads me to another question, which is one of the things I pride myself on is preparation. If I have somebody on as a guest and they have a book, I do my darnedest to get a hold of it and read it before they get on the show. The same thing with someone like yourself. I did listen to a couple episodes, both of you as a host, both of you as a guest. I know what other things you’re doing. All of that preparation, that’s what I think separates you on any pitch. I’m always telling people, before you get in front of an investor with a pitch or a potential client, you must prepare and not just go in and wing it and expect it’s going to be brilliant without any preparation.
Build Relationships: You’ve got to step up your conversation game. You’ve got to be a little more committed.
You better know that that investor is the coach of their daughter’s softball team. CEO loves dirty jokes on the golf course. That’s how it got done. What I mean by that is there’s enough that happens that’s not “business.” If I walk into somebody’s office and I see a vintage car model sitting up on their desk, we’ll probably talk cars for probably 45 minutes. What that five minutes is going to be a foregone conclusion because we’ve already connected on a deeper level and on a relationship side. Now, you can always do that. Some people that are investors are just those are the guys that flip to the back page. I can’t do much, but then that means you’ve got to step up your conversation game. You’ve got to be a little more committed.
Let’s face it. Most people have a lot of anxiety. Even with an introduction at a conference and going up to someone and starting a conversation. If they can learn those skills, it will totally transform their business. What’s one mistake you see people making in an interview situation? Let’s say, not necessarily as a podcast host, because you’ve gone through those, but just interviewing somebody in a situation at a conference that you’ve been introduced to, you’re trying to get to know them. We’re saying that conversations, when you flip that switch and pretended that it was an interview, then everything went great. I’m guessing you could take some of those skills from your Art of Interview class and apply it to conversations.
I think one that I see happen a lot, and it just happened to me on Tuesday, is non-inclusive body language. I had sat down, there was a girl that sat next to me and knew my friend. It was three chairs in a row, and I was on the end. She just turned her back on me and had this conversation with this person. She could have been the world’s best entrepreneur or business person, I will never do business with her. She just turned her back on me. In fact, in that same scenario, I was speaking with the speaker that was at the event and then another person. We were in a little triangle. I sensed that there’s somebody on my right shoulder, behind me, and I opened up. I welcomed them into the circle and then I made the introduction. You have to do that with people. Even if it’s this deal where you’re lucky enough to get this conversation with Gary Vaynerchuk or something like that, that person, the influencer, will appreciate more, they will recognize what you just did and how selfless it was and how inclusive you were, and that will put you into a different category with them. I’ve seen it happen over and over and over again.
I’ve seen that happen myself where you’re sitting at a round table at a meal and you’re listening to a keynote speaker. Someone will literally turn their chair just to talk to the person to their left and ignore the person on the right. You never know who’s there.
Not good. Bad business.
What final piece of insight or a book you’d like to recommend or a podcast you want to have people listen to, in addition to The Solopreneur Hour, that you think would be helpful for people?
One other addendum to that last thing we just talked about, when you’re in that meeting, be super nice to the underlings. Be really nice to the assistants. Don’t be dismissive. Have a good conversation with the elevator person or the janitor. Believe it or not, they’re major gatekeepers.
I’ve seen that happen many times where you’ll go in to pitch for something and that person walks you out and you get in the elevator, and the receptionist will say, “That guy was great,” or, “That guy was a jerk.” That makes or breaks your deal.
I use an app called Evernote on my phone. I put all the names of all the door guys because it only takes one or two times where you can be like, “Hey, Fred. What’s going on, man? How are you?” Then you never have to wait in line. It happens to me every Wednesday. I play at this club every Wednesday and there’s a line around the block. Do a little handshake and go right in, every single time.
Just from remembering somebody’s name.
It doesn’t take much. Anyway, recommended, if you want to get really good at conversation, I love this show called Off Camera with Sam Jones. Sam does amazing interviews. He’s my favorite on iTunes right now. Plus, he has a Rolodex like you wouldn’t believe. It’s all major celebrity A-listers. What he does is he’s a photographer in Hollywood. He’s worked with a ton of them on a professional level and then started the show. He just has this great super low-key conversational style. He’s very well-researched. It was a common theme that we talked about today.
Follow Michael on Twitter. Your Twitter handle is @SoloHour. The podcast is SolopreneurHour.com on the website. I’ve listened to both. I’ve followed him on Twitter. I highly recommend everyone to do that. Most importantly, I really invite you to sign up for The Art of the Interview. It’s going to change your way that you have more confidence and it’s going to give you the success that Michael has had. Thank you so much for being with me today, Michael.
I should mention the URL. It’s ArtOfTheInterview.co. Thanks, John.
Thank you.
Links Mentioned
- J Robinett Enterprises
- John Livesay Funding Strategist
- The Solopreneur Hour: Job Security for the Unemployable
- Conferencetopia
- Sololab
- @SoloHour
- ArtOfTheInterview.co
Crack The Funding Code!
Register now for the free webinar
Fox 11 News Los Angeles John Livesay The Successful Pitch book
Share The Show
Did you enjoy the show? I’d love it if you subscribed today and left us a 5-star review!
-
- Click this link
- Click on the ‘Subscribe’ button below the artwork
- Go to the ‘Ratings and Reviews’ section
- Click on ‘Write a Review’
Be The Boss Nobody Leaves with Scott Love
Posted by John Livesay in podcast | 0 comments
Episode Summary
Today’s guest on The Successful Pitch is Scott Love who is the author of a great book called Why They Follow and How to Lead with Positive Influence. Scott says he shows managers how to be the boss that nobody will leave. The way he does that is by getting people to think about what’s the noble goal of your company. The more you get people to buy into that, the more they are willing to stay loyal to you. He talks about three things that you need to ask people before you hire them. Then he also talks about the three core areas of success, which are influence, resilience, and achievement. He really gives insights to everybody who’s looking for the way to get the best talent to join your team and stay there. He talks about something called emotional equity that you are going to want to be sure to find out what it is and how to use it. Enjoy the episode.
Listen To The Episode Here
Be The Boss Nobody Leaves with Scott Love
Today’s guest is Scott Love. Scott is an expert on the topic of employee loyalty. As we all know, investors are really interested in who’s on your team and are they loyal to you, especially when times get tough. There’s a lot of research where he shows managers how to be the boss that nobody will leave. He is a successful entrepreneur himself. He is a former Navy leadership trainer, an Annapolis graduate, and he gives managers tactical ways to build employee loyalty so that companies can increase retention, decrease turnover, and of course, attract those all important high achievers.
Scott, welcome to the show.
Thanks, John. I am excited to be here.
You are a published author as well. You have this great book called Why They Follow and How to Lead with Positive Influence. But before we get into that, I would love to have you take us back to the days of what made you decide you want to go to the US Navy Academy?
Why They Follow and How to Lead with Positive Influence
A lot of it was part economic, part, “That’s all I knew.” My dad was a Marine Corps officer and we just didn’t have the funds for an Ivy League school. Here I was, a kid in South Texas in sixth or seventh grade. That’s when I made the decision, “What am I going to do with my life?” All I knew was the military and that’s what I wanted to do. Who wouldn’t want to be GI Joe when they grew up? Worked really hard, kept the grades up, did the sports, Eagle Scout, all the other things, and, how about that? I got in. I am surprised I graduated just because it’s so tough. When you set your mind to something, you can do it. In that school, whoever wants it the most is the one that gets it. It’s more about drive, determination, grit, and guts than talent and smart. If you can’t outsmart them, you can outwork them. That’s where it all started, my voyage in learning about leadership and talking about that as a topic to business people.
What a great topic because the grit, perseverance, and drive that’s needed to be a successful entrepreneurship you learned getting through this intense Navy experience and that’s what it takes to be a successful entrepreneur.
I have a lot of respect for my classmates that were right there with me. I am humbled to be part of that group. There had been days as an entrepreneur when I look back and I’m like, “What are you going to do? Send me underway for six months?” My biggest problems are that I’ve got a slow paying client. It’s not that bad. I’ve got friends of mine they are underway right now on aircraft carriers, in senior leadership roles. I am so grateful that they are working harder than I’ve ever worked at a lot less pay than what you can make as an entrepreneur because that is the service and it is the service. I think it’s something that does have my respect totally for people that made it a career.
I learned about leadership, I learned about getting things done. I was fortunate after I was on my sea tour to earn a spot as a leadership trainer, I was just in the right place at the right time. This was in the early 90s when the Navy had an initiative Total Quality Leadership, which was a derivative of W. Edward Deming’s concepts of Total Quality Management. That is why I really started understanding some progressive leadership concepts and teaching them to thousands of military officers, seniors enlisted, and civil service workers. I was 24 at the time. It was a good spot for me to be in prior to becoming an entrepreneur, prior to being a consultant, to doing the work that we will talk about that I’ve done as a headhunter and really developing this deep, narrow, experiential base on the topic of, why do people leave companies and how can a company keep them and keep them happy?
Are there some trends that you learned when you were recruiting people in about how important the culture fit is to making sure that that’s a good hire?
I think so. Culture is important. What I’ve seen in terms of the advisory work I’ve done with organizations is that everybody’s got a great culture. I own a company called the Attorney Search Group. I recruit partners for international law firms in Washington and New York. Every law firm I meet with, I say, “What’s different about you?” “We’ve got great culture.” Everybody has great culture. “We are collaborative.” Everybody is collaborative. “We’ve got a No Jerk Rule.” Everybody has a No Jerk Rule. I want you to tell me what’s distinct, what’s unique about you that nobody else can say and start with that.
Be The Boss: We have to look at what is that intrinsic motivation that causes people to thrive.
One of the trends that I see is that everybody, and this is what I call the first cardinal rule of human behaviors, that people are going to do what’s in their own best interest. When people come to work every day, they come to work for themselves, not the boss. When people are looking at how can we attract high achievers to our company? We have to look at what is that intrinsic motivation that causes people to thrive. We have to look at what our collective vision is, what’s our purpose, and how can we align that with the intrinsic motivation of those people that are looking to join.
Law firms in particular can be perceived as somewhat of a commodity, especially in the law world. They specialize in different things. If they are all saying the same thing, “No Jerk Policy. We’re collaborative. We got a great culture. You should come work here. There’s going to be a lot of hours.” It can’t be something like startups in Google days, “We’ll do your dry cleaning for free and you get free lunch.” If there’s more to it than that, how do you advise people on how to get this top talent? Because the audience here are probably are startups and maybe they have a cofounder, but when they get funded or maybe even they are going to get somebody else to join the team for low money in exchange for equity, what is it that they need to define? I think it goes into what you said earlier about the vision but I’d love to have you expand on that.
Let’s go back to what most of us have heard; Abraham Maslow’s the Hierarchy of Needs. Maslow, an organizational psychologist in the 1960, he came up with what’s been the most widely adapted model of human need. At the very bottom, we have a need for basic survival needs: food, clothing, water, and shelter. Above that, we have a need to feel safe and secure. Above that, we have a need to be part of a team. We have a need for that affiliation. Above that, our second most important need is recognition, our ego drive to be recognized. Then above that is self-actualization, to be fulfilled in the work that we do.
Now, I would say if you are recruiting people that are low-level administrative, they are thinking more about the bottom two. “I’ll leave for $2 an hour or more,” or they want to work in a place where they feel safe. Most people that are junior level professionals, that are recent college graduates, they might be more interested in that third one. “I want to be a part of a team, but also I want to be part of something that is bigger than myself.” I think an organization has to look especially at those top two needs. Self-actualization, how can you be fulfilled in your purpose and then how can we recognize you for making a contribution to this team?
When I was doing the organizational development consulting and leadership training back when I was 24, young naval officer, I would go around and I would interview civil service workers, people that are working at the government, a lot of them were low-level workers. People who were mechanics, plumbers, people in the trade, joined the government, and stayed there 30 years. What I saw were people that were very loyal. They were very passionate about what they did. They really cared and the harder they worked, the more their pay stayed the same. They weren’t in it for the money. It’s interesting that if we can find out how can we harness their intrinsic motivation as it relates to their recognition, showing them that you’re significant and then also showing them that you, that the work that you do makes a difference, not just for the people around you but for the entire greater good.
Here’s an example. When I was on active duty, I was an operations officer of a very small wooden ship. It was a minesweeper commissioned in 1956. This was in the early 90s. Our sonar wasn’t working and I had to get the sonar up. Petty Officer Shaffer, he had been there every weekend for the last six weekends. I got to get it up. He had little kids at home. I had to get him to spend one more weekend to get the sonar. He had to be working Monday morning. I could have used my authority. I could have used my rank. But I said, “Let me talk with you about this. As you know, the Iraqis have invaded Kuwait. Right now, we’re the most important ship in the United States Navy. We need to get underway Monday. Right now, you’re the most important sailor in the United States Navy. I need you to get that sonar working and stay here this weekend.” “Yes sir.” I was able to show him that his work mattered to help the entire organization’s goals and that he would get that recognition. Sure enough, he gave it one more weekend. Nobody complained.
[Tweet “What is the noble goal of your company?”]
This is another lesson I learned, is that employees talk. There is this invisible range of response, that’s what I call the response ratio, that an employee chooses. It’s on a scale of one to ten. If I lead based on my authority, you’re going to give me a one. You’re going to give me the lowest level of output. But if I lead based on what I just explained, my leadership, being able to tell them, “This is how your work matters. This is why you can drive significant,” and it doesn’t have to be a formalized discussion. It can just be comments that you make over time and people observe that. They make a decision, they choose, “I’m going to give it a ten based on that personal leadership.” I think that’s the one thing I would like managers on your show to really listen to and pay attention to. What is the noble goal that my company has? It’s got to be more than making money. It’s got to be more than profit. It has to be service. It has to be value. You have to start with that and then translate how does this noble goal translate into a personal and an emotional connection with our employees?
What is the noble goal of my company? Because once you communicate with that, if I understand this response ratio properly, when people are engaged and feel that what they’re doing matters as it relates to the noble goal of the company, they give a ten effort as opposed to just saying, “I’m the founder. Do what I say. Don’t ask questions. It’s my company.” Even if you’re the cofounder and all the back and forth arguments over what I want versus what you want, let’s both step back and say, “What’s the noble goal of the company?” and let that be the deciding factor versus our egos.
Absolutely, because it’s not about us. We’d like to think it is, but it ain’t about us.
Let’s talk about this great book of yours. What motivated you to write it?
I think the uniqueness in my career is very rare. I have not built large teams. I don’t have an interest in building a large team. I’ve been in a leadership role in trade associations, leading an all-volunteer force, professionals that don’t have any time to put time into something and get them to be excited about that. That’s a lot harder than leading people that have to be there. I think just some of the articles that I’ve written in the past, some of the blog posts, I chose some of those that I thought could really help people to accelerate the goal. If I could have retitled it, I would have thought, “How Do You Get Your Employees to Work Harder.” That’s what everybody wants.
[Tweet “If you lead, they will stay.”]
The title is, Why They Follow and How to Lead with Positive Influence. If you just remember why they follow. You showed the penguins on the cover, which I just love, that really will stick in people’s minds, the image of penguins. Let’s talk about the cover a little bit too. What is it about penguins and following that made that so relevant?
I was thinking what would be an image that everybody loves? Who doesn’t like penguins? I’ve never met anybody that says, “I hate penguins.” I think we’ve all seen those documentaries and penguins huddled together, they survive, and they take turns shielding each other from the cold. Just like in a wolf pack. There is an alpha in the pack and the alpha has to be a good leader, otherwise he gets killed. I think looking at the pack mentality, surviving together, how can we get people to work harder? “I’ve got to be a good leader. How can I be a good leader? I’m going to find out what causes people to choose to respond at a higher level.” Let me get right to the point of how you can get your people to work harder. You’ve got to find out why they follow and lead to that.
Be The Boss: What’s the most effective way to solve this problem the quickest, the most economically, and have the most fun?
I use game theory a lot in making decisions in business and it really cuts through a lot of the clutter. What’s the most effective way to solve this problem the quickest, the most economically, and have the most fun? Let’s find out why people follow and lead to that. That’s my whole style. Anytime I come in and speak somewhere, let me give a life changing 45-minute presentation, just two or three points that stick, that makes a difference. It’s exciting to see that.
You talked about one of the chapters being the three steps to servant leadership. Is game theory part of that?
I think it is. I used to be a professional card counting Blackjack player years and years ago. Two of the alumni of the MIT Blackjack Team mentored me. I pretty much got pretty good at this game because I liked it because you’re not breaking any laws. You’re not doing anything illegal or immoral. You’re just exploiting the casino and the game legally by understanding the math behind it, because in Blackjack, there is a defect. That’s what I learned. Don’t put money on the felt unless the count is high and don’t do anything unless there is a high likelihood of gaining a favorable outcome.
I use game theory in pretty much anything that I teach, which I think is why it makes sense to most people. I believe in simplicity. What’s the simplest way to get people to change? Giving them bite-sized easy morsels. You’ve seen the book. The chapters are probably two or three pages long. It’s a book that you can read on flight and get right to the point.
What kinds of questions do you have when someone is interviewing someone that you would say, “Is this person a good fit for me and my company?” What are the questions that you recommend a founder or anybody who’s hiring somebody ask in an interview?
Hire With Your Head: Using Performance-Based Hiring to Build Great Teams
First thing I would look at in business more than anything, it’s all about the results. Start with that. Start with the results. Get very clear on what are the performance outcomes. One of the best books I’ve ever read on hiring is Hire With Your Head written by Lou Adler. I always give him credit whenever I talk about this because he’s got some great ideas. What are the three results that you want this person to achieve? Start with that and have them tell you, “How have you achieved this in the past? How are you achieving this currently? What action steps would you take to achieve this in the future?” I would start with that.
Other three things I recommend managers to look at are the three core areas of success. This is just my own concepts, having been a headhunter for over twenty years. As I mentioned, I just sold my recruiter training company. I’ve trained, I’ve been in hundreds of search from over 4,500 recruiting and staffing firms from over 36 countries that have invested in my training programs, of my business I just sold. I taught this a lot to other people. The three core things you want to look at are: influence, resilience, and achievement.
Influence meaning, “How can I build a team of followers?” Or if you are in sales, “How can you talk people into things where they thank you for that at the end the process?” Find examples in the past of someone that has been able to lead or sell. Second thing, resilience. Have them tell you a time where they were able to turn professional adversity into success. If they haven’t learned that now, they’re not going to learn that in the future. The third, achievement. Find people that have been successful early on, “Tell me about the job you had when you were in high school. Tell me about your grades. Tell me about your musical instrument.” I remember sitting next to a young lady once on a flight and she is a professional musician. She played the flute. I was curious about this. Her father was in the Marine Band. She was raised with musicians in her family. I said, “How many hours a day did you practice in high school without your mom telling you?” “At least two hours a day.” “Did your mother ever have to tell you to practice?” “No. I did it on my own.” Two hours every day. That’s achievement.
Look for past tells, past indicators that people have a high likelihood, game theory again, of being successful in the future. Influence, resilience, and achievement. There is one owner of a firm I was consulting to and he said, “I’m so frustrated with the people I’m hiring. They’re not working out. I see so much potential in them.” I told him, I said, “They don’t see it in themselves. You’re hiring projects. You’re hiring people that have never done anything significant in their whole lives before. They’re not going to become successful once they start working for you. They need to already have had that. You don’t need a project.”
That’s the advice I give to people listening to your podcast. What are the three performance outcomes you want them to achieve, have them tell you how they’ve achieved it in the past, how they’re currently doing it, and what action steps they’d take to achieve those three goals in the future. Then also qualify them on influence, resilience, and achievement.
I love the action steps. What did you in the past? What are you currently doing? What would you do if you were to come here? If somebody can answer that for you, let’s just say you’re hiring somebody to do your marketing or your sales, they should have some great stories; what they’ve done, what they’re currently doing, and what they would do that they put some thought into why they want to work for you.
Be The Boss: I think we all have a tendency to hire people that remind us of who we used to be a long time ago.
I think we all have a tendency to hire people that remind us of who we used to be a long time ago. We like to be around people that remind us of ourselves. I think it’s too easy to fall in love with that perfect candidate. I’d recommend, have an unattached business colleague of yours from another company interview people for you. Someone that knows you, knows your business, maybe they’re a frenemy, maybe they are a friendly competitor or whatever, or if you have a professional coach, have them interview people for you and listen to their input. Because you might get all excited about that rock star candidate, but it might be for the wrong reasons.
Regarding this other area of success, what a great filter, because it’s all about storytelling. If you’re pitching an investor, you should be able to tell an investor an example of how you had influence to get your first customer or get somebody to join your team. You should be able to tell a personal story about your own resilience when things were tough at this startup or another one and how you overcame it as opposed to just saying, “I have tenacity and grit.” You need to tell a story. Then third of course, is this whole concept of achievement and being able to prove, “Look, I know how to do this and I’ve got a formula. It’s not by chance. It’s not by accident. I know what it takes to get results.” Investors in particular love to see people who have traction and know how to do it.
One of your amazing quotes is, “I show managers how to be the boss that nobody wants to leave.” You’ve touched on it a lot. First of all, on how to get that right person. Then I really think the answer to that is going back to what you said earlier about the noble goal and showing them why what they do matters, not leading by dictatorship. Is there anything else you want to expand about how to be a boss that nobody leaves?
I think it’s being someone that puts other people’s needs ahead of your own. There’s a conflict because I’ve got mission achievement and then I’ve got to take care of my people. This is something I learned every day at Naval Academy. Take care of your people. Here you are, you are working in business, and you’ve got to accomplish goals. I remember I interviewed General Walt Boomer. He retired as a four-star Marine, a Deputy Commandant of the Marine Corps. This is years ago when he was the CEO of Rogers Corporation. I asked him, I said, “Walt, you’re a Marine and you’re an executive and you have to make a decision. What’s more important: mission accomplishment or taking care of your people?” He said, “That’s a tough question.” Because we know, Marines, it’s all about accomplishing the mission. He said, “Let me think about that.” He said, “It’s taking care of your people. As long as you’ve got the right people in place, they will accomplish the mission.”
[Tweet “How to be the boss nobody leaves.”]
I think that’s the secret. If you don’t have the right people in place, it isn’t going to happen. You get the right people in place. A leader’s job in my opinion is to be invisible. At the end of the day, you want the team to stand up and say, “We did that ourselves.” It’s a concept that I call emotional equity. You want them to have an emotional stake in the success of that business. How do you do that? By asking them questions as a boss, “What do you think we should do? Why do you think we should do that? What’s the worst thing that would happen if we did this? What action steps would you recommend? I want you to do this. Draft up a one page document on the action steps that you would take to accomplish what you told me. Let’s talk about that this afternoon.” Now, it’s their idea. They own it.
[Tweet “Find out what Emotional Equity is and how to use it.”]
When you ask people questions, “What do you think we should do?” One of the most valuable things you could ever do is ask for people’s opinion. I tell people all the time, “If you want money, ask for advice. If you want advice, ask for money with an investor.” It totally dovetails into what you’re saying here. If you ask an investor, “What advice do you have that could make my startup better?” They start collaborating with you. If you ask your employees, “What do you think we should here to fix this problem?” Now they’re part of the solution as opposed to just being dictated what to do. That is a big takeaway. I think we couldn’t leave on a higher note than this concept. I’ve heard of emotional intelligence but I’ve never heard of emotional equity before. How can people follow you on social media? What is your Twitter handle?
It’s @ScottLove on Twitter. My website is ScottLove.com and that’s my speaking site. I don’t do consulting on that. I speak at conferences for right now because I’m so busy with my search practice, but every once in a while l speak at conferences for business and association groups. One thing I wanted to share, just because I have literally tens of thousands of conversations with professionals, trying to recruit them. I’d be the guy that would cold call people, and I still am, and trying to get them to leave. When people say, “I love it here. I don’t care how much more it pays.” I always ask them, “Why is that?” It’s all because of that relationship with the boss one level up. That’s all a company has to do, is help those mid-level, junior level, and senior level managers just get a little bit better with that one-on-one leadership skills. If they do that, you know as well as I do, it’s easier to get a new customer than keep an existing one happy. The same thing with employees. Nobody really thinks of it like that.
The cost of turnover is so high; productivity, time spent interviewing, and everything else. It’s night and day. Scott, I can’t thank you enough for all these words of advice on how to get the top talent, whether you’re startup or a huge company. Most importantly, how to keep them loyal by emotional equity. Thank you so much.
Thank you, John.
Thank you. My pleasure.
Links Mentioned
- J Robinett Enterprises
- John Livesay Funding Strategist
- Scott Love
- Why They Follow and How to Lead with Positive Influence
- @ScottLove
- Hire With Your Head
Crack The Funding Code!
Register now for the free webinar
Fox 11 News Los Angeles John Livesay The Successful Pitch book
Share The Show
Did you enjoy the show? I’d love it if you subscribed today and left us a 5-star review!
-
- Click this link
- Click on the ‘Subscribe’ button below the artwork
- Go to the ‘Ratings and Reviews’ section
- Click on ‘Write a Review’