The 10 Rules of Business with Karla Nelson

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Be The Boss Nobody Leaves with Scott Love
How to Get 7M in Funding with Mark Sears

TSP 105 | Rules of Business

Episode Summary

TSP 105 | Rules of BusinessToday’s guest on The Successful Pitch is Karla Nelson, who has created ten rules for business based on her five-year-old. It is absolutely adorable, memorable, and actionable. She said, “Startups don’t die from a lack of good ideas. They die from indigestion and giving up.” She said, “Productivity is not activity. You need to be really focused and have a strategy on how to get these relationships with investors to actually pay off. It’s not just about having conversations with people without a strategy in place.” Finally, she said that, “The death of entrepreneurs is solitude. It’s so important to collaborate and get help.” Enjoy the episode.


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The 10 Rules of Business with Karla Nelson


Hello and welcome to The Successful Pitch podcast. We have a return guest that I am ecstatically thrilled to have back. We had Karla Nelson on in March of 2016. She was episode 51. Now we’re in the 100th plus episode. Karla is someone who has so much valuable content. I just had to have her back. We were having lunch in Sacramento where she lives. She is the epicenter of all things Sacramento, whether it’s media, contacts in television, radio, contacts in the startup world. It’s just amazing to see somebody with her pulse on everything going on, not just in Sacramento but literally globally. Karla has done a TedTalk. She really is a people catalyst. I can speak to that firsthand. Karla, welcome back to The Successful Pitch.

Thanks so much for having me.

You have so many exciting things going on. When we were talking about what you’ve created here; you’re going to have your own podcast and a webinar and a book coming out. I’m completely fascinated with this concept that you talked to me about called Child’s Play: The Ten Rules of Business brought to you by a five-year-old. It’s so simple you can remember them, and so effective you’ll want to. That is so intriguing to me because it’s catchy, it’s memorable. Tell me and everyone else listening how you were able to transfer your expertise as an entrepreneur, an investor, an expert trainer into how you came about the ten rules of business.

TSP 105 | Rules of Business

Rules of Business: Always keep your cool.

It’s actually quite a funny story. My four-year-old at that time, the apple doesn’t fall far from the tree, was just approaching her fifth birthday and she said to me, “Mom, when I get older, can you teach me everything there is to know about business?” Of course I chuckled saying, “Darling, nobody has the market cornered in regards to business. But if you’re good and you make good choices, I’ll be glad to teach you everything that I know about business.” It stopped there for maybe a month or two. But I was still keep thinking about it. She kept on asking different entrepreneurial questions in the meantime. There was one day, it was one of her first days of kindergarten, she was very frustrated about something. She was not necessarily melting down but getting extremely upset. I said, “Klaire, rule one of business: Always keep your cool.” Instantly, she transformed into this very calm five-year-old who had just learned this amazing secret about business and entrepreneurship, which is to keep your cool.

That was so effective that a couple of weeks later, she was on her scooter in the backyard. We have a big piece of concrete that they can ride their scooters pretty fast on. She bit the dust and had scrapes all over her legs. She ran inside and she was crying. She had this big old scrape. I said, “Klaire, rule two of business: Get up when you get knocked down.” When she turned around and walked right outside and got right back on her scooter, I thought, “I might be on to something here.”

Not only is it great for entrepreneurship but it’s great for parenting and the combination. Talk about a huge market there. Let’s talk about where you came up with these first two rules yourself because this, ‘Always keep your cool, never let them see your sweat’ concept, it’s so much harder to do sometimes than it looks. If you’re in touch with yourself at all, you get angry, you get frustrated especially when other people do things that just rub you the wrong way, whether it’s your own hot button. Or for me, if I see somebody bullying somebody else, I just see red and it’s very difficult for me to keep my cool when I see that behavior. Any tips on how to do that?

I’m right alongside you in that regard. In my younger years, I would respond way too quickly. The way I’ve really identified when something is pushing my buttons is just to step away. We’re always taught, “You never want to burn a bridge.” Those two are closely related in regards to keeping your cool. But then also, you never know who’s going to be on a team, who you’re going to work a deal with. You just don’t want to get to a point where you’re not thinking logically, but you’re thinking solely emotionally. I always like to say, “People buy with emotion and back it up with logic.” That’s working in a buying scenario. But in a relationship scenario, especially early on where you can get very frustrated and you respond too quickly, what I have found is if you just let it sit there for a couple of days, it’s no longer that raw sense of urgency of something that you have to do now. Anytime you feel like you have to respond or if you feel frustrated or hurt, one of the things you have to realize is ask yourself, “Why is that?” because there’s typically a bigger underlying reason of why that is. Then really look introspectively and just take a little bit of time before you respond. If you have any of that tension in your response, it’s probably not a good time to respond.

Taking that deep breath, sleeping on it, sending an email out, all of that good stuff. Of course getting up when you get knocked down. That’s perseverance 101. You fall off a horse, they always tell you to get back on that horse. It’s true of startups. That’s the whole concept of pivoting, isn’t it?

Absolutely. One of my good buddies, John Kunhart, he ran a $300 million venture firm here in Sacramento. He has a great quote that is, “Startups don’t die from lack of a good idea. They die from indigestion.” It’s just getting back up. The other thing he always says to the different companies that he had looked at for probably ten to twelve years as they were putting the fund together is the fact that where you start is likely not where you’re going to end up. You look at a company like Airbnb, their early days, they were selling air mattresses. Now they’re the largest hotelier because they saw a problem. The way that they initially looked at solving this problem is to tell people, “Use your room. Let people rent them out. By the way, we’ll sell you the mattress to be able to put them on.” Look where they ended up. They ended up having no real estate, no product. Where they started was very different than where they ended up. If you can always continue to come back and get up when you get knocked down, as long as you’re solving a problem that’s large enough, you’ll end up getting there. You might not look at all as when you looked when you first started.

[Tweet “Startups don’t die from lack of ideas, they die from indigestion.”]

When he was saying, “Startups don’t die from the lack of good ideas, they die from indigestion,” the indigestion is basically a metaphor for getting knocked out, right?

Absolutely. They just finally go, “I’m done. I’m sick. I’m tired of whatever it is.” Startups is not an easy world. We’re slightly like gluttons for punishment. You’re constantly having to pivot, constantly having to be innovative, constantly having to jump over these hurdles. The number one thing that you can do is just get back up. I love the Chinese proverb, “Get knocked down seven times, get back up eight.”

Let’s talk about rule number three. How did that come up to being through Klaire?

TSP 105 | Rules of Business

Rules of Business: Relationships are everything.

She was very frustrated with her brother one day and she was saying several things that were not very nice about her brother. I interrupted her as she was talking poorly about her brother. I said, “Klaire, rule three of business: Relationships are everything.” Instantly, she realized that just by saying something negative, she was impacting the value of the relationship with her brother. She responded so quickly on all of these because it was her own learning, I was just using the concepts that we all know are accurate. We all know contextually we can apply these in many different ways, but that, for her, as far as relationships were everything, she just realized that, “It’s more important that we have a good relationship than I complain about all the things that he’s not.”

There’s another little story in there about how she was at an event for a friend and got a little bored.

A good friend of mine, Allen Batten, he’s an international trainer. He’s worked with many of the Fortune 25 companies. He was doing his eighth book launch. Because Klaire was doing so well, I told her she could earn these different meetings. She’s been in pitch meetings with me. This particular one was a book launch that she had earned. I took her to the book launch and this went on a lot longer than I had first anticipated. After an hour and a half of having a five-year-old sit very quietly, the second hour and a half was actually getting a little hard for her. When she was getting antsy, I just leaned over and said, “Klaire, what’s rule three of business?” The next hour and a half, she just sat there paying attention, engaged. Of course there’s probably a hundred adults there and she was the only five-year-old, to say the least. To have her sit there for 30 minutes was pretty impressive. It was her learning. She also sees all these people. She’s looking up to them as mentors. To apply the fact that everyone in that room, relationships are everything, she was just always wanting to rise to the occasion.

This area really is your expertise. You have, as a people catalyst, training. You break relationships down into three categories. Can you go over those for us?

In our training, we identify three different areas in being a people catalyst. Any great CEO understands and knows that in order to be a people catalyst, you have to have a great relationship and dynamic for your team and your strategy, your customer/client strategy, as well as your consumer/channel partner strategy. Those three conversations are extremely different; the team dynamics and what they need and what you need in order to support them, the client strategy and what you need to be able to support them, as well as the promoter/channel partner.

If you don’t know what conversation you’re having, what people tend to do is all they do is talk about benefits. Somebody comes to join your team, “We’re great. We’re great. You want to be a part of the team,” versus purpose versus, “We’re strength based and we leverage your strength in the midst of the team. This is our team. We think you’re a good dynamic.” Even with the client, they lend towards just the benefits. When you take a look at the channel partner/promoter, this happens all the time where people go, “Let’s go get coffee. John, you get to talk about how wonderful and great you are and I get to talk about how wonderful and great I am.” Then you separate ways and nothing ever comes of it because the conversation is not about just how great we are. We have to pull back the layers of potentially what would inhibit us from having a business relationship as well as are we an appropriate fit? If you don’t have that conversation, you can’t push that relationship down the path.

That’s such a key that most people really ignore. They leave and go, “I’m networking. I’m talking to people and nothing’s happening.” You just gave everybody the magic key to open that door, which is the values have to be matching, the brand has to match, all of the quality levels have to be there. There are a lot of things that people have to feel really comfortable before they make intros and referrals, right?

Absolutely. You have to be willing to go there to have that conversation and those relationships. Most of all, it’s difficult to have that even if you’re unconsciously competent at doing that. To become consciously competent and have a process and a strategy around it, you’re just so much more effective because productivity isn’t activity. Just because you’re active, it doesn’t mean you’re being productive and you’re moving that needle forward. Having a very clear strategy, that’s a relationship strategy, just allows you not only to have clarity around the conversation, but also to have metrics around it, to be able to measure. Then you can manage that and then teach and train others to manage it. That’s truly duplicating yourself For instance, if we’re talking the promoter conversation, a sales manager, now you’re duplicating this process and enabling them to be consciously competent at a specific strategy and then put metrics around that strategy so you could manage it.

[Tweet “Productivity is not activity.”]

Rule number four in the world of Klaire, who wanted to go to the mall.

TSP 105 | Rules of Business

Rules of Business: Anything worth doing is worth doing well.

This one has paid its dividends a million times over again, John, because she wanted to go to the mall and play in the little kids’ area. I told Klaire, “That’s fine, but go clean your room.” Up until this point I always had to help her; teach her how to do her bed and whatnot, how to organize and put things away correctly. I said, “Fine. Go clean your room. If you do a great job, I’ll go ahead and take you to the mall.” Five minutes later she runs back downstairs and says, “Sure, Mom. I’m done.” I said, “Did you do a good job?” “Yeah, Mom, I did a great job.” I walk upstairs and I take a look at it. Of course, things were shoved under the bed. It was obviously one of those kid deals where you’re just trying to find any place to put something. I looked at her and said, “Klaire, rule four of business: Anything worth doing is worth doing well.” She’s cleaned her room everyday by herself since that day. She keeps it really neat and tidy. It was pretty amazing. I even have a picture that I took of her room after that first day because I was impressed. I thought, “She’s five years old and she’s really truly so hungry for entrepreneurship that she’s applying these rules.” Of course I was just happy because I thought, “I’m never going to have to clean her room again.”

Then it leads right into rule number five, how do you respond when someone’s trying to teach you something?

This is a big one, John. How many people do we work with, both our clients, ourselves, being trainers, coaches? Klaire, she would respond to her dad and probably myself as well, I would notice her responding to her dad frequently with the two words before he ever completed a sentence, which was, “I know.” He’s trying to teach her and she would just constantly use this. I’d correct her every single time but it wasn’t effective. I actually was upstairs and I was viewing him trying to coach Klaire. I interrupted and said, “Klaire, rule five of business: Always be coachable.” The cutest thing happened right after that, John, is when she said, “What does coachable mean?” Of course she completely understands it now.

I chuckled and I said, “You have to be open that you don’t know everything. If you are not open, we can’t teach you anything.” Believe it or not, this is probably the rule of business that shows up the most for Klaire, is to be open and be coachable and listen when somebody that has been there, done that. Look at your podcast, it’s so valuable. If somebody has 25 years of experience, you have to be open to say, “That’s how you viewed it. That’s how you solved the problem. I don’t need to know everything.” It’s my favorite model, the Henry Ford model. You don’t have to be the smartest person in the room. You just need to be able to go find the smartest person to solve that.

Investors look for that characteristic as one of the most important characteristics in any founder they decide to give money to, because they want to give their money and they want to give their advice. If you’re not open to being coachable, then they’re not going to want to work with you. It’s really important to get that. Let’s take it right into rule six. This story of Klaire on the beanbag playing with an iPad, I love.

The kids these days, they have their electronic equipment. I think she was just getting to first grade, much cooler than kindergarten. She had her iPad and I looked over at her and she had actually responded, when I asked her a question, with that nice little kid head bob to me. I just thought, “They’re five years old. Did I just see a teenager head bob?” Instantly my instincts said, “I’ve got to fix this problem really quickly.” I told Klaire, “Klaire, your attitude determines how far you go.” That one was actually squished pretty quickly with Klaire. That one doesn’t come up too much. It was very interesting to me that when you have a child that has confidence, basically these rules are teaching her more confidence. The whole previous rule of business, ‘Always be coachable,’ it’s just so effective to have her realize that, “If I have a poor attitude, then it’s going to inhibit me from being able to do all those things that I want to do.” That was definitely a cute one. I’m sure we’ll see her head bob come back during the teenage years where I’m going to have to really pour back into those two rules.

Your attitude, you either give up or you focus on how far you’ve come and you keep inspired or you get all frustrated by you not being perfect and you get discouraged and you give up. That attitude is everything, which leads right into one of my favorite rules that you’ve come up with. An investor said, “Don’t try to boil the ocean,” to me once when I was talking to him about what’s important. I thought, “Don’t try to boil the ocean.” I’ve never heard that expression before. Tell us what that means to you.

TSP 105 | Rules of Business

Rules of Business: Focus, focus, focus.

First of all, I love “Don’t try to boil the ocean.” That is just fantastic, especially in a startup because you think of the indigestion part we were talking about and boiling the ocean. Those two are so closely related because if you take on too much, you can’t be effective. I’m an entrepreneur, I have six or seven different ventures I’m working on at any given time and then I also am a mom. In the morning, there’s a very strict timeline. Literally, they have checklists in the morning. Otherwise, it just doesn’t work or we’re not on time or whatnot. Klaire was really trying to get into getting prepared for school. I put a lot of onus in them. They have a lot of checklist items to do and take care of the dogs and things like that. I was constantly having to remind her, “Klaire, your shoes, your this,” just constantly. It’s because she has, very much like me, a little ADD going on where you get pulled in these different directions. You see the dog, what do you want to do? Play with the dog. Go back to go get your shoes.

There’s one morning and after, I swear, the hundredth time of telling her what her next step should be, I said, “Klaire, rule seven of business: Focus, focus, focus.” She literally, in an instant, was staring at me and then she knew the next item on the checklist. She just went and did it. I didn’t even have to say anything. I don’t even know if she said a word. She just went right over. It was probably her shoes because that’s always the one that I’m on top of her. She laced up those shoes and continued on her checklist. I never tell her what the next step is anymore. I just say, “Klaire, what’s rule seven of business?”

Let’s assume people are going, “I’m going to be coachable. I’m going to be focused. I’m going to give investors a great pitch. They’re probably going to ask me questions either during my pitch or after my pitch.” What’s the biggest mistake they can make after they get asked a question?

It’s not to hear the answer. That’s why we ruled right into rule eight of business with Klaire. I was actually telling her about a very important story. There’s two different mistakes I’ve learned when you don’t listen. One is not hearing. What I mean is, not opening up your ears to the point that you are not thinking anything on your side; not how to respond, not that they’re right or wrong. Just being open to hearing those words and empathizing with whatever it is that they’re sending your way. The second one is to actually not do something with the information that you’re given. For Klaire’s, even the one leads to the other, the first leads to the second. For her, when she’s being communicated with, a lot of times she will want to respond or she will want to just not completely see your side. If it’s directions, then she missed a step in the directions or I have to remind her. There’s really two steps of listening and one feeds the other one.

For this particular situation, it was pretty serious. Her grandparents were in a horrible car accident. Her grandma broke pretty much every bone in both of her legs. I was trying to communicate to her this and she kept on interrupting me. Then I told her, “Klaire, rule eight of business: Listen, listen, listen.” After she stood there and did hear it, she was very concerned. It was cute. She went back to rule three of business, ‘Relationships are everything,’ and helped me put a big care box together and drew some cards up for them as well. ‘Listen, listen, listen’ is so critical from the young ages, she was five at the time, all the way to pitching an investor.

So many of these are connected too because think about ‘Always be coachable’ and ‘Listen, listen, listen,’ those two are so closely tied as well because I truly have to hear what somebody is saying to me then to open up and then go, “Okay.” That doesn’t mean you don’t listen from twelve different aspects of entrepreneurship and then come to your own conclusion and move forward. What it means is, when somebody is talking, you give them your undivided, open-minded attention of where they’re coming from and what point they’re trying to make. Otherwise, as entrepreneurs, the very thing that we’re looking to do, which is risk everything in pursuit of some dream, ends up working against us because we don’t see enough pitfalls or challenges. We’re experientially learning instead of just intellectually learning.

Listen to all of your senses, your gut, everything. When an investor asks you a question after your pitch, I always coach people, “Rephrase the question in your own words to make sure you heard the question properly.” The worst thing in the world is to think you heard what the question was and you give them that answer and it wasn’t what they were asking. Then they think you’re avoiding answering them and you’re no longer trustworthy and the deal is off. The real bonus is, after you answer someone’s question, I always tell people, “Go back and say, “Did that answer your question?” Because sometimes it didn’t and you need to get it clarified. Sometimes it did but it generates another question. That’s what you want to have, is collaborative conversation. I really love rule eight. Rule nine is probably my favorite. Why don’t you tell us about the time you were at the gym eating pizza?

TSP 105 | Rules of Business

Rules of Business: Gratitude is always the best policy.

One of our gym actually has a lot of soccer games there and whatnot. Every once in a while after we get done working out, we decide to completely ruin it and go eat pizza. We had taken the kids to get pizza. I had also let them have a very unique treat, chocolate milk. As we were finishing up dinner, my daughter looks over and says, “Mom, I’d really like some chips.” I was basically, “No.” I had already gone over my junk food threshold for the month. I said, “Klaire, rule nine of business: Gratitude is always the best policy.” She wasn’t happy with my no. But immediately I followed it up and I said, “Look. You’ve got pizza. You’ve got chocolate milk. Why don’t we be very thankful for what we have instead of not being satisfied with that.” I just used that one actually yesterday. Anytime they press for more and more, because one of the best things you could ever tell your child is no. How much do we learn from ‘no’ even as adults? Figure out a different way. Be innovative. No doesn’t mean it can’t happen, no just means the timeframe that your expectations are might not be the same.

That’s rejection in general; whether it’s rejection on getting funded or rejection on somebody joining your team.

I always say this, “Disappointment is when you didn’t get what you wanted in the timeframe you wanted it.” If you change that thought process of it and you’re thankful for all the things that you do have, it shifts your energy into, “The answer is yes. It just might not be on the timeframe of yes.” I really try to do that too with Klaire, is to say that, “The answer is yes.” My background used to be in finance, so we did loans, real estate, commercial against businesses, all different combinations of them. Then PPM’s, help raise capital, that kind of thing. I used to tell everybody when they looked at their financing, I said, “The answer is yes.”

Which brings us right to rule number ten.

This one’s a funny one because as I was sitting at the gym, I remember thinking, “I really want to make this one big.” Because I knew I was going to stop with the ten rules. You’ve got to keep some simplicity. I was very aware of everything that was going on. Her brother, Cole, has now been piggybacking the rules now. He’s learning but he was only two when I started. If I said, what’s rule three? Klaire didn’t want to respond, Cole would chime in. Now they hold each other accountable when Dad and I put up the rules of business. Rule ten, I sat there and I was diligently watching them, because I wanted the last one to be really, really good.

As we got done with dinner at the gym, I always ask Klaire to clear the table. She grabbed the big pizza tray and she started piling up all the napkins and paper plates and whatnot on the tray. I noticed she was just about ready to topple over. She had way too many stuff on the tray. I interrupted her and I said, “Klaire, rule ten of business: Never be afraid to ask for help.” She responded right away. It was interesting. She didn’t ask myself or dad for help, she asked her brother for help. She said, “Cole, will you help me throw this stuff away?” Of course he jumped up right away and helped her throw the garbage away. I remember thinking, “I really could use rule ten of business a little bit more.” That was a huge learning for myself. So many of us, we go at it alone.

I know I’ve shared on the previous podcast, I love the quote I got from a good friend of mine, Ernesto Sirolli, “The death of an entrepreneur is solitude.” The thing that makes us strong about being able to risk everything in pursuit of this purpose, passion, idea that we can turn this thought into a thing, ends up working against us because we think we need to be all things. We think we need to do it all. A lot of times we think, “I can do it better than someone else,” all these different entrepreneurial challenges. Truly we’re much better, all the stats show, all the research shows, that we have unique strengths. That’s why the people catalyst aspect of it, the first piece is, “Who are you and what is your strength?” If it’s not your strength, don’t do it. Because what happens is you trade your peak work in all the wonderful brilliance of who you are for weak work that robs us of our enthusiasm and our passion. We’re not good at it, so why try to do it anyway?

[Tweet “Death of Entrepreneurs is Solitude.”]

There’s a whole ecosystem that you have to learn in order to get funded. You have to know what investors want to hear in a pitch. You can try to figure all that out yourself or you can get somebody like Judy Robinett to tell you, “This is what you need to do step by step” and you get there much faster.

Funny you say that, John, because that’s how I referred you guys to so many different entrepreneurs. They come to me, I’m later stage as far as that. What I mean is, I can connect you to investors. But what I can’t do, I can’t prepare your pitch deck. Are you kidding? Number one, that’s not my strength. I always work with somebody else in doing that because it’s a unique problem that you need to solve. Here’s the thing, I could have 500 investors to introduce to entrepreneurs and I still can’t introduce them. Why? Because they’re not prepared. They’re not going in there. The thing is that we can see it from a million miles away. Newbie, it’s all over. What’s funny, John, is how many people that it’s not their first rodeo, they’ve done it over and over and over again, and they know that they can’t even create their own pitch deck. What do they do? They find somebody that that’s what they do and let them solve that problem for them.

Karla, how can people keep up with you on social media? You have a great webinar on how to be a people catalyst. Tell us all the good things that people can get more of you.

If you’d like the free webinar on how to be a people catalyst, then you can go to the website You can just put in your email and get that free webinar and take a look at it. It goes through not only the ten rules of business but also the different areas on how to be a people catalyst. It goes into a little bit more depth around those three different relationships that you need to have, especially as a CEO. Even if you’re a sales manager or whatever area of the business that you’re focused in on, relationships are truly everything. You solve problems with people. The more strength you have in your relationships, not only the happier you’re going to be and the more successful person you’re going to be, but it’s truly the key to business.

It’s Karla, what’s your Twitter handle?

It is @KarlaLNelson.

We’re going to follow you. Thank you for sharing these charming and memorable ten rules of business. You rocked the podcast for the second time out. Congrats on that.

Thanks so much for having me on the show, John.

My pleasure.

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