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Michelle Seiler Tucker is a #1 bestselling author and leading authority on buying, selling, fixing, and growing businesses. Michelle joined forces on her new book, Exit Rich, with Sharon Lechter, finance expert and co-author of Rich Dad Poor Dad, to create a must-have guide for all business owners – whether they’re gearing up to sell a business now or just starting to build out their company – to sell for huge profits in the future.
We explore tons of solid lessons in buidling and growing a successful business, the reasons the market data you think you know are wrong, and so much that is needed as real truths in business for startups and major organizations everywhere. Thank you Michelle for sharing so much great info!
You can get a preview of the book at https://exitrichbook.com which also gets you the hardcover copy to you when it launches in June. That gets you access to Club CEO and much more as well.
Follow Michell on Twitter here: https://twitter.com/MSeilerTucker
Check out Michelle’s website for more info here: https://seilertucker.com
TRANSCRIPT – Powered by HappyScribe
You’ve brought a lot of great information to the market. You’ve got a recent book called Exit Rich. We got a lot of stuff we’ll talk about. So with that, Michelle, do you want to give yourself a quick a quick bio to folks that are brand new to you? And then we’ll talk about the book and in your background, what brought you to write it?
Sure.
All right, so I’m not sure what you want me to say on my M&A mergers and acquisitions, Michelle Seiler-Tucker been in business for best selling companies a little over 20 years. I personally sell 500 businesses. My team has.
So my myself and my team have sort of a thousand companies and we’ve done thousands upon thousands of valuations. I also specialize in buying, selling, fixing, growing companies. So I’ll buy businesses, flip them. I partner with business owners, investing my time, energy effort and capital and resources to put business owners on a bill to sell program. And like I said, what we really specialize in doing is fixing businesses because eight out of 10 businesses will sell, according to Steve Forbes.
And so we fix businesses, we grow them. We put them on a bill to sell model and we merge businesses and sell businesses.
So that’s what we do at any given time. On five to 10 businesses, I’m actually building to sell.
Now, that obviously has come from you’ve effectively built a strong system around what it is you need to do to be successful in this.
I’m curious, Michelle, what was the background that brought you to to taking this on as a as a task in your first time show? And I forgot to mention, I’m an author of three books.
That’s right. Yeah. Not just one book. Of course, it’s a rich the most is one we’ll talk about, but we’ll talk about the others as well. You’ve got it. You’re very prolific. What brought you into being in the business of buying business and mergers and acquisitions? Michelle.
So I’ve always been an entrepreneur of all many different companies, even from a very young age. And I did go into franchise sales, franchise development and franchise consulting and sold hundreds and hundreds of franchises.
But I kept having lots of buyers ask me for existing businesses and how many existing businesses, because I was selling new franchises and I was actually partners in different franchise laws and equity partner. Then I decided, you know, there’s so many buyers out here for good existing businesses versus new startup franchises that I should start my mergers and acquisitions firm. And that’s really how I got started.
Now, the you talked about being an early entrepreneur, what actually gave you the the entrepreneurial bug? Was it because I’m imagining you? Probably that’s something we we develop, but we learn about often quite early in our lives.
Yeah. I don’t say there’s anything that gave me I didn’t really grow up in a family of entrepreneurs. My dad had a couple of businesses. He wasn’t really I wouldn’t say he was very successful, but he had a few businesses. Other than that, I didn’t really grow up with entrepreneurs.
I just knew from early on that I didn’t like to be told what to do and I want to do my own thing, march to the beat of my own drum. And I just knew I always knew I wanted to be my own boss, I guess.
Yeah. My favorite thing is founders often described themselves as unemployable just because it’s like they they know what they want to achieve and they certainly are. They can’t take direction in order to get to it. So, yeah, I mean, we still got to be employed by our clients, right? Our clients. Employers don’t we don’t listen to our clients and don’t follow our client’s instructions. Sometimes we can become unemployed very easily. So rather, you want to be employed or be told what to do.
Even if you own your own boss, you still are answering to somebody.
Now, when you were working through in the franchise area, you know, which is developed on the idea of using a systematic approach. When did when did you sort of see that as an opportunity to go outside and bring that systematic approach than to, as you said, like existing businesses? And I’m curious that that first one or the first few that you you decided to take on.
What I’m sorry, what systematic approach are you referring to, or just like when do you when did you see how you could take the practices that you had learned from working in the franchise and then bring this that sort of those methodologies to an existing business?
Yeah, so it’s extremely different. And if you’re not familiar with it or most people aren’t, it’s very different. I mean, becoming a partner with a new franchise or a franchise or and doing a franchise sales franchise development, franchise consulting is extremely different than selling existing businesses and fixing and growing and going to sell existing businesses. There’s really very little similarity. The only similarity is maybe in the existing franchises or because existing franchises are really has to operate on what I call the six P’s, the six P’s that we talk about in my book, Exit Reg, if they don’t build a vault, a solid foundation of solid infrastructure on the six PS, they’re not going to they’re not going to be sustainable.
They’re not going to be able to scale. They’re not going to be able to stay in business for very long. So there are some similarities there. As far as the main franchise corporation, as far as selling new franchises, new franchises is completely different than selling existing businesses is really zero similarities because for a new franchise, for new franchise, we’re looking for the franchisee or qualifying the franchisee in a financial capacity and our skill sets. We need to do that with existing businesses.
You qualify buyers on their financial capacity and their skill sets. But with a new franchise, we’re also really strongly looking at demographics and what we should place. This new franchise, you know, where they want strip mall location, we should put it in, you know, and then we’re helping them hire their people and we’re hiring. We’re helping them really based our business and start their business on what I call the Steve six PS with an existing business that we have the location already have the people in place.
Right. They already have and are operating on many of the six figures, maybe not all, but some of them. So there are some similarities, like I said, in a franchise or type of it. But as far as our new franchises, compared to existing businesses, it’s completely different.
When you saw the and the opportunity to affect somebodies growth and, you know, help, as you said, like to build towards sale, you know what what was what’s exciting to you about seeing that? You know, obviously there’s a there’s both a business and a people impact. I mean, I’d love to hear, you know, what what drew you to be able to bring people through that journey to prepare them for sale?
You mean for existing or for different existing? What prepared me, I think it’s already many different companies in many different verticals sitting behind a desk knowing what works, what doesn’t, you know, really figuring out. Doesn’t matter what industry you’re in, the six PS or the six PS and they they you know, it’s a foundation that you really need in every vertical regardless. And I think that’s kind of what prepared me to seeing what works, what doesn’t work.
And, you know, most business owners, a lot of business owners are not sellable. Like I said before, 80 percent of businesses don’t sell. And the reasons for those are all similar. It’s not necessarily make the same mistakes over and over and over again.
And so that’s, you know, spending 20, 20 plus years in the trenches is selling franchises and then selling businesses.
I think all of that is what prepared me, not to mention my own company is that I’ve done I’ve operated.
And that’s the the interesting thing. As you said, a lot of it’s repeatable things that you see.
And but for those business builders and owners, I think the tough part is they’re so they’re they’re very sort of myopic in their view. They can’t see outside of their own set of of running the organization. It’s probably and this is why they need, you know, you to come in and say, look, I’m I’m looking into what you’re doing and I’ve seen this play out and it’s not going to play out well. Right.
What’s the what’s the reception when you begin to consult through that process and have to kind of show people the works of the challenges that they’re facing?
So some are open to change and some are not. I always say you can only grow the business as much as you can grow the owner. I don’t know if you’ve ever watched the show. Marcus Lemonis The profits on CNBC, but he gives them clear instructions of what to do and what to change, and they all push back. I don’t think anybody just takes it and does it. Nobody really follows his lead and his instructions, even though he’s really clearly the expert.
And same thing with me. I’m clearly an expert at what I do, you know. So, yeah, we get a lot of pushback because, again, they’re entrepreneurs. They don’t want to be told what to do. They don’t want to answer to anybody and, you know, like us. And it’s tough because you’re right. I mean, they don’t see things when you’re in your fog, it’s foggy and you really need an outsider’s perspective, you know, to to help really read the warning signs and keep you out of the danger zone.
But business owners have to be willing to listen. They have to be willing to, you know, get advice from experts, somebody who’s been on the road before.
And they have to be willing to to change and make change. And some are. Some aren’t. You know, I’ve I’ve sat in meetings and told business owners, don’t tell your employees that you’re selling your business, and the next thing to do is turn around, tell their employees. And then I wonder why 50 percent of the workforce quit sooner.
So it’s just.
Is it just business owners want to do things their own way, so it’s really our job to to try to get the business owners to understand that this is for your own good. This is for your protection. This is to help protect your company and help maximize your value. And that’s what we do. You know, we we don’t go in and force things. We do it from a educational perspective versus just trying to slam something down their throat.
And luckily, you’ve got the believability because you’ve got proof in execution, right, and I think that will hope that that helps those those founders to at least trust.
But like you said, there’s a there’s the psychology of the founder.
They’re there.
They’re pretty sure they’ve got the right idea in the market.
Just isn’t ready versus.
Yeah, maybe you need to meet in the middle with the markets. Right?
I mean, put yourself in their shoes. You know, if you’re running your business and the day to day doing all this stuff and somebody comes out and says, you’re doing everything wrong, the first thing you’re going to do is push back. That’s right.
So you don’t want to go in there pushing because then you’re going to automatically get pushed back.
So you want to really go in there and and look at all the things that they’re doing. Right. And highlight all the things that they’re doing right. And then come in and bring in the areas of opportunity to where they can really affect change and growth.
When you raised it earlier already, you talked about it like we have to listen to our clients and ultimately our customers, right. And it’s that is something that quite often it’s also it’s a dichotomy of the founder that they have to be very like they have to be aiming towards a vision that strong, you know, a mission that’s that’s big quite often. And it’s a weird thing of like they have to listen to the market, but they also have to create a market sometimes.
So when when you’re working with founders, like, how do you kind of merge the reality of the market that they’re facing and yet help them to make maintain their original vision? Is and or is it possible? I’m just curious in in how that’s played out in some of the examples you’ve gone through.
How do I help? I’m trying to understand your question.
Yeah.
So like when because like a founders vision is often built on like we are preparing the world for what it doesn’t know it needs, like they did when he came back to Apple.
Right. But it’s a tough thing when you have to they have to survive in order to execute that vision. And how do you bring the reality of market economics and survival to still staying on the path to executing those big visions?
Well, you know, I tell you, I don’t know how much research you’ve done on the business landscape in the United States, and I think I’m going to take a few minutes to educate. But when I wrote my very first book, Sell Your Business, for what it’s worth in 2013 and did the research back then. Ninety five percent of all startups from one to five years will go out of business. Right. Right. So when I wrote Exit Rich in twenty nineteen, twenty twenty before the pandemic occurred and did the exact same research, I learned the business landscape has actually flip flopped.
It’s only 30 percent now of startups that will go out of business. Those one to five years are not at great risk anymore. Only 30 percent, which is good news to Startup Nation. However. On a twenty seven point six million companies, those businesses have been in business ten years or longer. Seventy seven zero percent will go out of business.
It used to be, if you’re in business five, 10, 15, 20 years, you’re in business for the long haul. Not anymore.
The longer you’re in business, the more you’re at risk of going out of business. Now, you’ve heard about the big public companies, Toys R US being in business. Seventy five years goes out of business.
Steinmark, been in business forever, goes out of business. Pier one, Montgomery Wards is in trouble. J.C. Penney’s is in trouble. Jeanne-Marie goes out of business. Godiva chocolate closes down fifteen hundred locations. GNC closes down nine hundred locations. You know, Blockbuster went out of business because I saw Netflix. I saw the writing on the wall that opportunity by Netflix. And they did nothing, nothing at all and end up going out of business.
That’s the big public companies.
What you’re not hearing about, all because the media doesn’t talk about it. All the private companies on every street corner, in every town, in every state across our great nation, these business owners are all going out of business. They’re exiting poor, not rich. Like my book says, they’re selling for pennies on the dollar. They’re closing our business and many of them are filing bankruptcy. And they’re losing not just our business assets, but the person wants us to because most business owners pierce that corporate bell.
So why is that? Why is that? Well, I’ll tell you why that is the number one reason why the business landscape has changed and flip flopped before the pandemic is because business owners stopped doing one thing. They stopped doing a lot of things.
But the biggest thing is lack of aim.
Aim is always innovate and market, always innovate and market. And many of these business owners get stuck and their ideas of the way they started their business. And they want to do things the way they’ve always done them. You’re either growing or dying. There is no in between growing or dying like Blockbuster did nothing different. Toys R US did nothing different in seventy five years. So business owners have to continue to innovate. If you don’t innovate, you will die.
If you don’t innovate and market, you will die. So to answer your question, I educate business owners on, OK, this is how you started your business. This is the basis of your innovation, but you haven’t done anything new in 20 years.
And here’s the bottom line.
Consumers don’t purchase products and services the way they used to. Whoever makes it easier for the consumer to do business with is a company that’s going to win.
Amazon is winning because Amazon.
Amazon doesn’t really innovate. Think about it, what does Amazon do they make it so easy for the consumer to purchase products, you can practically buy anything, including a horse, and have it delivered to your house in two days.
So not only do you have to innovate, you have to go back to the consumer and ask the consumer, what do you need? What do you want? How can I make it easier for you to do business with our company? Business owners stop innovating, they stop marketing, and most importantly, they stop asking the customer, the client, the consumer, what do you need? What do you want? Or be preemptive and figure out what they want, what they need, like Steve Jobs did.
Here’s the other thing. If you’ve been in business 20, 30, 40 years, your customers are probably aging out, right? You’ve done nothing new and nothing innovative in which to keep those consumers doing business with you.
But more importantly than that, going after the other generations, Generation X millennials.
Right, yeah, now this is interesting and like the statistics you talked about, like there’s a definite a total inversion and unfortunately people are still hung on the metrics they remember they know the stats of yet 95 percent plus of startups will fail. We still quote those numbers.
So it’s it’s wrong, right?
This is this is the horrifying thing about, you know, in the same way people always say you never get fired for buying IBM. I know 11 people that have been fired for buying IBM. It’s because in the end, the week we take this kind of like withI sort of stat that we can have and it outlives its reality, so. What’s missing, Michelle, because you’re you’re in front of the stuff all the time, like how is the how is the market and definitely the media, you know, not grabbing on to this story and talking about it because it’s a huge opportunity for folks to get started.
And that’s what’s so shocking to me, too. I’ve had this conversation with my publicist. Why isn’t the media talking about this job? And he’s like, because it’s not big news. Toys R US is big news.
Kmart goes out of business.
Big news, Godiva closing everything on location is big news. But the private company now has one location that’s been in business for 20 years. Who cares? Media doesn’t care. It’s not big news for them. And so nobody’s really talking about this stuff. That’s why I wrote Exit Rich. That’s why I wanted to start the conversation.
That’s why I wanted to really help as many people as I can. You know, I’ve been on over to on a podcast in the last month or two so that I can get the message out there that so many businesses are failing. And these are the reasons are valid. I mean, small businesses, the backbone of our economy. There’s thirty point two million businesses in the United States employing over half the US workforce. If we lose small business in the United States, we lose jobs, we lose jobs, lose spending power.
You’re spending power. More businesses shut down. It’s a domino effect. You lose even more jobs.
So if we don’t get behind small business, help small business owners, help entrepreneurs, stay successful, build a sustainable business that’s scalable, that is sellable, one day you’re going to have more and more and more bankruptcies, I mean, over more bankruptcies and twenty nineteen even before the pandemic than in any other year.
Well, and that’s that’s always the the interesting thing, and of course, through the course of the pandemic, the world has been shaken up and and it’s hard for us to measure, you know, when the effects will be felt. But this is an, again, interesting that you brought up. Right. Like the bankruptcy said, ridden, but had risen to incredible levels, pre pandemic. So this was already in play.
And people don’t see that.
They just look and say, oh, well, of course, bankruptcy went up.
We’ve been in a global pandemic like, no, no.
This was the the writing was already on the wall.
Yeah. All these statistics have, according to you, is right before a pandemic is even more gloom and doom now. But I mean, you do have more and more businesses have started up in twenty, twenty than any year before.
And some of these startups are really doing well. And like I said, startups only have a 30 percent risk of going out of business. Now, the big difference between startups now and startups before the pandemic are a lot of these entrepreneurs are solving problems.
And they’re not just opening up another coffee shop on a block where you already got six coffee shops or another ice cream ice cream store on a street when you already got 10 other ice cream stores.
They’re actually solving problems or doing online, you know, open up e-commerce businesses, manufacturing, online businesses.
You know, they’re really solving problems. And that’s what entrepreneurship is all about. It’s not just about over another ice cream store and cannibalize in the marketplace. It’s about going out and figuring out what the problem is and then coming up with a solution. That’s what entrepreneurial ism is all about.
It if you look at today, you know, the the the the needs to build a start up and sort of the the capital impact of so different than than they were when, like a 10 year old business, even especially 20 year old business. Right. To to build a company today is, you know, an online process. And, you know, it’s you know, how exciting is it to like what we’ve got ahead of us right now, Michelle?
Like, you can just you can come up with an idea, you can build a business and you can be online before the day is done. Yeah, it’s so exciting because, you know, when I started, gosh, when an online bubble start, what year was that?
The first one. Right. The two thousand and one dotcom one.
Yeah. Yeah. Nowadays is so much easier to start a business. I was talking to a gentleman in Australia yesterday. I was actually on his podcast and he’s like, oh, it’s so easy to start a business. I think he’s got like one hundred online businesses and it really costs you nothing.
And you don’t necessarily have to have employees or assets or inventory. I mean, you can pretty much start an online business without investing too much and be really successful. Now, turning around and trying to sell that online business might be another thing. If you don’t have the solid infrastructure and you don’t have the business built on what I call the six PS, then you might not be able to maximize value. But anybody really. There’s not anybody. Let me not say anybody any you know, somebody who has that entrepreneurial spirit, really, it’s much easier now to start a business than it’s ever been before.
And I think, you know, again, the bottom line is look around us, figure there’s opportunity everywhere, you know? But unfortunately, there’s also people walking around like zombies that they’re not really, you know, conscious and not really looking at things and and thinking about things about what can I do, how can I solve this problem?
And some of the best entrepreneurs in the world are the ones who solve the biggest problems.
And entrepreneurship breeds entrepreneurship, like, you know, I have a coffee shop store, right leg, an online coffee company that I built on Shopify. So because you.
Yeah, because so because the people who built Shopify solved a problem that needed to be solved. And as a result, it allows me to solve a problem that needs to be solved. Right. And and like I somebody wrote a tweet the other day and it was it’s it was unfortunate the way that the response was. They said, look, you can start a business today for under 500 dollars like that. And it’s a wondrous time to be able to do this.
And a lot of people like replied back in a really negative sort of sense of like, this is not true. You know, I’m like and I I didn’t even want to get in the conversation like, no, I legitimately started a business for seventy dollars and it has immediately become profitable. So it’s and it is totally possible to do this stuff, which is why I’m excited. But I’m curious on your thought, Michelle. Where do we need to bring this, like, is this something that we’re missing in education, like in like getting people to recognize that this is a new way of building society and, like, opportunity?
Yeah, I want to address up to two ways. I’ve had many of these online companies come to me.
One was a coffee company and not yours.
And now they’re not for sale yet.
But the problem is with some of these online, a lot of these online businesses is they don’t have any infrastructure.
They don’t have any people, you know, and if you go to my six PS, which I think we should, that’s in my book and to educate your listeners, you know, the number one is people.
And this this coffee company and people that have subcontractors and they didn’t want to let their subcontractors, independent contractors, I’m sorry, independent contractors go along with the business because I want to keep those independent contractors for the next on line business.
So that’s a problem when you’re building a business, any business, whether it’s online sales, business, brick and mortar, you got to have an infrastructure if you don’t build it with an infrastructure. Number one, how sustainable are you really going to be? And can you scale? And more importantly, can you sell and maximize value?
Yes, maybe you can sell to somebody else who wants an online business and are going to work that business as their job. But you’re never really going to be able to maximize value because you don’t have people you don’t really have the infrastructure of what a business really operates upon. And so you’re really never going to maximize value. So all businesses SACE online, brick and mortar, all businesses need to really follow the infrastructure that I talk about in my book, Rich.
That, to answer your question is where do we educate these people?
I think it starts in school.
You know, it needs to start in school. I’m educating my daughter. You know that you want to make money. You don’t just go work for money. Let’s get creative. Let’s get entrepreneurial. That entrepreneurial spirit. What can you do? Well, you got all these toys sitting in the attic. Why don’t we box up those toys and sell them?
Yeah, we can sell them or, you know, we can donate them. But anyway, we really got to get our kids thinking about entrepreneurship early on. And I’m not sure if I’m answering your question, but, you know, I’m actually interviewing Indoctrinated Cobain later today. And he is president of Lazy Boy, I think Panera Bread Company and about a bunch of other companies. And he’s also president, my high point university. And the Virginia campaign has probably got one of the only schools that I feel really teaches entrepreneurship, has business, has classes where they teach you how to go out there and start a business by business.
You know, what business ownership, what business entrepreneurship is all about how to go out and solve problems. And I think it just starts as our kids are little to start teaching them. Kind of like Richard I bought out by Robert Kazuki, you know, just really teaching our kids to think differently. It’s all about really thinking differently.
Well, and even the the opportunity today, like you talked about before, like this is this is an incredible world that we can do things in a different way, even if we look at some of the sort of the even rich dad, poor dad as example, effectively needs a new addition because the world has adjusted. Right. There’s other folks that are, like we call it, the new rich writers. Yeah, it’s we didn’t hear there was no Bitcoin back there.
That’s right. Russia for Florida was right. And, you know, I’m so fortunate that Sharon Lechter, who coauthored which Jeb fought out with Robert Kiyosaki as my coauthor for my book, Exit Rich, because Sharon Lectors, a New York Times best selling author, five times from a shepherd, plus a CPA financial literacy expert and adviser to many different presidents.
And she teaches financial literacy as well. But, yeah, they need another version because there’s there was no online back then. Know there was no Bitcoin back then.
There there were there were not a lot of things. It’s so much easier now, I believe, to become an entrepreneur than ever before.
And even if we look at it like great books, like Built to Last, which were used as effectively like a tome of describing the potential for for taking on a blue ocean strategy in an opportunity. Well, if you look at almost every one of those stories effectively turned over and they’ve actually shed that portion of the business in order to survive. So that built to last wasn’t built to last because the world adjusted, you know, no offense to course, Jim Collins and the folks that did it, it was at a point in time, if you take the context, it was right.
But we have to adjust context to availability of the world today. Right. Right.
So let’s you talked about the the the peace, right, so having six method people is number one, if you don’t mind, Michel, let’s kind of brush through what the what the six message.
And I spent a little bit of time on people because this is where a lot of e commerce businesses, online companies, are getting it wrong. You know, and you got to you don’t look, you don’t build a business, you build people and people build a business. Right.
If you want a business that’s going to be sustainable, scalable and one day sellable, you do have to have the people in your organization. And a lot of online businesses have independent contractors, but they love their independent contractors, so they want to keep up its makeup. So the next new, you know, business that they’re building.
So you really have to have that people component. You always say that entrepreneurs. And that’s one reason, you know, that that coffee shop, they wanted a lot of money and the coffee business, not coffee shop, coffee business, they wanted a lot of money for it, but they had no solid infrastructure. And it’s only been in business for a few years. So there really wasn’t much history there. Does that make sense? Yeah, no.
We’re talking about how an exit, which is all about business as a sustainable business, as scalable so people is huge. You know, a lot of entrepreneurs, they want to do everything themselves. They want to control everything. And I always say you can’t grow unless you let go of the control. So entrepreneurs really need to focus on their strengths, how the weaknesses. But the biggest thing is put the right people in the right seats. And if you are building a business to sell and not just run your business to pocket as much money as you possibly can, then build that solid infrastructure and then the people you really need to ask the question who you know, who handles customer service, marketing, legal, accounting, manufacturing, distribution, environmental, etc.
. The list goes on and on.
The clue, Eric, is that you should never be next to the WHO because you really want to build the business without you. A lot of these online these online businesses, e-commerce businesses, they don’t have any people, right? They don’t. And that makes it very, very, very difficult. A harder to sell because the buyers who are going to pay the money that these e-commerce businesses want because they want a multiple of their EBITA, which is understandable, but but the buyers are not going to run that business.
So you have to have the people in place that been running the business are going to continue to run the business and you can’t just take your people with you and leave the business people because now you have no business. Does that make sense? Absolutely.
And it’s it’s I’m very close to this as I look at like, how do I build this for scale? And you can see how the trap is easy to fall into of like, look, I can just do more stuff and subcontract it out and I can hire people off up work. I can do whatever. Yeah, but that doesn’t build sustainability and it ultimately doesn’t build long term value in what like measurable, you know, sellable value even as measurable growth value.
It’s it’s it may look like it’s working because the graph seems to be going up into the right. But the moment you break the system, the moment you slow down or change. Everything can go in the wrong direction, right, and then let’s say you have independent contractors and subcontractors, Eric, and you’re paying them this, but then the buyer says, I really like the business. I like what you do, but we need to have employees.
Employees are going to cause this.
So that’s going to automatically subtract from Ebola, which is already differential taxes, depreciation and amortization. And that’s going to lower your sales price immediately because buyers pay a multiple of EBITA. So you really got I don’t care if it’s an online business. I don’t care what kind of business it is. You got to build the infrastructure, you know, and that’s why so many of these e-commerce businesses are not selling. Or if they are selling, we’re not selling for maximum value.
I could sell them for a lot more if I had a solid infrastructure in place.
That makes sense.
Absolutely now and this is a good lesson for folks, and I’m always amazed, too, when you look at the like you look at these different sized companies and different e-commerce businesses, you have to very much use that lens to look at how they grew to the point where they’re at today.
Because, you know, look, Facebook has grown with independent contractors and subcontractors actually giving Google has gone with independent contractors and subcontractors. You know, Facebook does have companies that they contract with that have the employees employ the employees, but they still have people, you know what I mean? And I still have a bunch of subcontractors and independent contractors that come and go. So any of these businesses you look at, they have a foundation, they have an infrastructure.
So people is number one.
Number two, because here’s the bottom line, too. If it’s just the owner, like in this coffee business that really was just the owner, they wanted to take everybody else with them, you know, and buyers and buyers don’t want a job. And so really, that really is a job. And many business owners, instead of creating a business, they’ve created a glorified job and wants to go to work at every day versus a business actually works for them.
So people’s number one product is number two.
So product is your industry, your product. It is your service. You have to ask, is my industry product service on the way up all the way out?
Meaning to. Do you have an Amazon at the prime of your game or do you have a blockbuster and you’re about to go bust? And so product is huge. You know, there’s a lot of industries that were dying before covid that are now crushing and vice versa, those industries before Kova that were killing it and dying.
So I always tell my clients to ask these three transformational questions during product because remember, 70 percent of businesses are going out of business, have to be in business 10 years because they stop innovating. In order to innovate under product, ask yourself these three questions from a one. What business are you in this in the 90s, is that some sense, what business, what we had and I said, what?
Booksellers will fulfill book orders. And then Amazon said, this is a question your own or your listeners, not your owners. Your listeners are asking, what is your core competency? What do we do really, really well, better than everybody else. What is there a USB or unique selling proposition? And Amazon said. We do fulfillment better than everybody else. So then the third obvious question is, what business should we be in? Should an Amazon said we need to be in a government business, not just for selling boats, were selling everything for everybody.
Now, Amazon is not really a huge, innovative company, are they? What have they made? What have they innovated?
It’s it’s there are things, but in effect, they’ve basically they just they took on processes that nobody else wanted to take on, processes that nobody else took took on. They figured out what they were really good at, which was fullfillment. They’re not out there making the widgets. They’re not manufacturing and widgets. They’re not creating, you know, the next the next best cell phone. They’re not out there creating.
They’re out there fulfilling what everybody else creates. Yes or no.
Right. Yeah.
You know, those transformational questions is really what transformed Amazon from a small bookseller to a multibillion dollar worldwide conglomerate that they are today. You know, my good friend Jeff Hoffman was standing in the airport line to try to to get his boarding pass so he could board his plane. This was decades ago. And he said he waited almost two hours to get to the agent to hand in this little, teeny thin piece of paper so he could get on the plane and just said, I just missed my plane, has handed me a piece of paper and Jeff went out and created the airport kiosk.
The kiosks approach your boarding passes so you don’t have to wait in line and miss your plane. That’s innovation. But as in the case of Amazon, you don’t always have to be the creator. You and now Amazon is the creative fulfillment, right, because they do it better than everybody else, but that’s what that’s what the essence is back in the 90s. What do we do so well is that we do that and that’s how they got so big.
So all business owners really should go back and ask themselves three questions. I don’t care what vertical you’re in, e-commerce businesses. You know, ask yourself, what business am I in, what I do really well, better than everybody else on my business, should we be? In some sense?
It does. It does. And then it’s interesting that they’re there. It always sounds simple, but it’s a very difficult, introspective thing for a business owner to do to really evaluate what’s the actual business where we’re in and what’s the thing that we can do. Right. And it really it really is. And a lot of times, Eric, you have to have an outsider’s perspective, because, like I said, when you’re in your fog, it’s foggy.
And a lot of business owners are transactional versus transformational. They’re are working in the business in the day to day, putting out fires constantly that they don’t really have time to sit there and think about what this is. I am what I do really, really well. And did you ever watch your movie, The Founder, based upon the McDonald’s?
Yes. Yeah, yeah. It was Michael. Michael Keaton was the star that we had. Really, really good. Good movie.
You remember when Michael Caine and Ray Kroc was in the bank trying to borrow money? Because he had already taken a mortgage out on his personal house, right?
He wasn’t making any money.
And it makes you like I’m like a legend. More money. He walks out and then a gentleman that followed him out of his name, he said, What business are you in?
And I said, I’m in the restaurant business right now. All right. What business are you? And he finally said, you need to be in the real estate business. You are not in the restaurant business, not in a hamburger business. You have to be in a real estate business. You have to buy the land, build the buildings, listen to the franchisees or franchisees are not compliant. You avoid our franchise agreement and you get another franchisee in there.
And then these franchisees are paying you rent. Those questions right there is what got Ray Kroc to have the leverage over the McDonald brothers to basically take the company away from them. But is the reason why McDonald’s is the largest holding company, real estate holding company in the world? So a lot of times you get a very a very valid point, Eric, is that. It’s hard for a business owner to have the infrastructure to do that themselves. You’ve got to have an outsider’s perspective like Ray Kroc that require would have never figure that out on his own.
And the interesting thing, too, and we look like let’s take the the greater story out of it, but like in general, so the like that business effectively was became what McDonald’s was, not what it was built from because they couldn’t answer those three questions. I don’t think like they they didn’t have the vision to do this bigger thing versus now, Ray, through this also third party help was able to really see what the future of the growing business is, which is and it’s funny, like brothers, the two brothers did not want to let go of the control and will never grow without letting go of the control.
The reason is that they tried to have multiple locations, but they wanted to control everything and then they all fell apart. So they’re like, OK, we’re just going to focus on our one restaurant, but you got to let go of the control. You got to get good people. You got to get good integrators. You go back to the people. You don’t build the business. You know, people may the business right. Got the right people.
Yeah.
I can’t do it all by himself. Right. So the therapy is processes, and I can still use a founder movie based to illustrate processes, you know, because back in the 50s, most business owners get this wrong. Most business owners design the processes around their own agenda, not around the customer experience.
MacDonald brothers back in the 1950s said, We want to build a fast food restaurant. We want our processes to be centered around, be designed with the customer experience in mind. So do you remember when when the McDonald brothers went out to the empty tennis courts? That’s right. Employees to talk through it all on a tennis court. How their employees moving around, bumping into each other. One of the McDonald brothers was on a ladder, really orchestrating how they move and kept redesigning it until they really had a symphony of systems and processes designed with the customer experience in mind.
The customer experience the McDonald’s brothers came up with, as we want our customers to experience great tasting food.
That’s hot, fast, 30 seconds or less. Even of those processes were designed back in the 50s and tweaked along the way, you can eat at a McDonald’s anywhere in the world and really get the same experience. Yeah, right.
Have you ever dealt with a company? We have to talk to three people, four people, 10 people to tell them the exact same story of your problem to try to get some resolve. Banks are notorious for this. Pharmacies, retail, social media companies are notorious for this, that they are not designing the processes with the customer experience in mind. They’re designing customers to alienate US and business. And here’s the bottom line, if you don’t create raving fans, then your competition will.
And you’re not going to create raving fans by having broken processes not designed with the customer experience in mind, so processes must be designed with the customer experience in mind and must be productive, efficient. And they must be well documented policy and procedure menus, McDonald’s can fire somebody on the front line and hire somebody within 30 minutes, have them working because they have S.O.P checklist is easy to follow, understand and implement. So you’ve got to have this policy procedure manuals as a checklist, employee handbooks, non competes, you know, all the documentation.
You never sell the business with all this documentation. Plus you need it to scale. You’ve got to have these processes to scale. So the fafi and this is the highest value driver, Eric, so businesses have it even under a million dollars? Well, typically sell for one the four times multiple. Probably one to three, more like it, just as well over a million dollars in EBITA, which could go for four or five and up. However, the more proprietary assets you have, so the fourth is proprietary, the more proprietary assets you have, synergies you have, the more we can sell your company for a get you a much higher value.
There’s six pillars to proprietary. No one is branding the mobile brand and your company as and what I can sell it for as long as your brand is relevant in the mind of the consumers. Is Blockbuster relevant in the mind of consumers is anybody can pay money for blockbuster brand. Now, because they went bust, raising them, their most valuable brand in the world is, do you know, the biggest brand, the most valuable brand in the world is?
That’s a good question. I mean, it’s funny, I’m looking at a Nike square in the back, there’s an example of someone that jumps to mind. But I mean, they’re not wearing a top 10, but they’re not the most valuable. Yeah. Oh, boy, we’ve mentioned it several times on the show today.
Oh, my, it would be our friends at Amazon.
Apple. Yeah, yeah, yeah, yeah.
I look at a MacBook and an iPhone and they all surrounded by Apple devices. They’re actually such a part of it. I wouldn’t think of going outside, but it’s funny that is that is hugely a brand impact, right?
It is. I mean, the brand alone is worth two hundred fifty five billion dollars billion. That’s just a brand. That’s not the assets. Demitri Cash. Well, real estate receivables, that’s just the brand alone. So build your brand. And then the other thing is trademarks. Trademark your company name. You know, trademark your slogan, your trademarked exit, rich.
Yeah, you know, trademark your podcast.
But here’s the big mistake the business owners make when trademarking. They go and they get a trademark for the state that they’re setting up the business up there in California. They start a business in California and get a California trademark, but then they go to GoDaddy. They make sure they get that dotcom, but they never check the federal database to make sure that that name is available. Right. And I’ve seen clients in business for years and all of a sudden receive assistance, this letter, and they have to stop using that company name.
And, you know, I’ve seen clients hiring attorneys with lots of money and ended up losing. So go spend fifteen hundred to two thousand dollars and protect your proprietary stuff. You know, and even products are not just your name and slogans and what’s unique to you, even products and have clients. His business for selling the 50 to 60 million dollar range. They have 12 different products. Each one has a different federal trademark.
Each one is exclusive to Wal-Mart, exclusive to Target, exclusive to different retail chains. So TJX will pay more money when buyers are five different types of buyers. When buyers look at buying businesses, they look at synergies. What synergies? It’s going to catapult my current business to the next level. They’re buying synergise. Patents are huge, if you’ve ever watched Shark Tank, every single shark always ask. Get a patent on that, do you have a patent pending?
Do you have a utility patent? In fact, offers are contingent upon patterns of business for 18 million dollars. And that business was was not really making money, but they had 18 hands on drugs or another one. That’s really big manufacturing contracts, distribution contracts. There’s another thing about e-commerce business.
It’s online businesses.
They don’t have people. Some of them have processes, it’s iffy. Most of them never, ever have contracts like coffee cup I was selling at a manufacturing company, no contracts as somebody else making their coffee. No contract.
You know, you really need those contracts. So you have protection. And the buyer buying the business knows that this manufacturing relationship can continue on. This distribution company can continue on. Does that make sense?
Drugs are huge. You know, vendor contracts, distribution, manufacturing, any type of exclusive contracts. Franchise owners who have franchise contracts are really valuable. Client contracts are extremely valuable because buyers want to make sure that there’s revenue coming into the business, especially the contracts. And e-commerce businesses are good at this, getting a subscription model for reoccurring revenue. And when you have reoccurring revenue, I will pay a higher multiple for subscription models. Here’s a caveat to contracts.
I have never met a business owner in over 20 years that actually has the transferability language in their contract that says this contract is transferable to the new entity.
Oh, OK.
And about ninety nine and about ninety ninety nine percent of all sales in the United States are asset sales, not stock sales. And so if your buyer refuses to do a stock sell and your and your clients refuse to do consent to transfer, your job can fall apart. So you need to make sure you have that transferability language. The other thing is database’s Facebook page, 19 billion dollars for WhatsApp and WhatsApp was hemorrhaging.
Yeah, they were not they were not profitable on that.
They are not profitable. And they were hemorrhaging, but they had a billion users. So they had a synergy that Facebook wanted to buy. Facebook knew they can monetize in order. Why that investment?
Celebrity endorsements are big. You know, if you look at rooms to go, who’s a celebrity there, Cindy Crawford. Have you ever seen her in any of the furniture company? No. And then we have a client who’s got products endorsed by Oprah. Well, Oprah is like the queen of everything.
So strategics, who have some more products, will pay more money for that Oprah relationship because, you know, it’s all about relationship capital because they want to get their products in front of Oprah. Same thing with radio personalities like Glenn Beck. Know the cake product show.
Yeah, these these celebrities and radio personalities can only endorse one vertical at a time. Otherwise they lose credibility. Jennifer Aniston’s face is all over Aveeno. You don’t see her face on any other skincare line, right? And then e-commerce businesses back to my e-commerce businesses, when they have the top positions on Wayfair, it’s Etsy, Amazon, eBay, Monan that shoots up in price because as prime real estate, the strategics want to get their products and those placements.
That makes sense.
Yeah, the new real estate is placement on page and in research results now instead of just physical location in the town.
Absolutely. Probably even more valuable than physical location in the town. That’s where that’s where consumers are shifting to, because most consumers, you know, because of Amazon, whoever makes it easier for the consumer to do business is it companies is going to want Amazon wins because they make it so easy. But the pandemic has also changed the way consumers purchase products and services now. Wal-Mart and Target did not have a membership in a program where you can order online and to deliver groceries to your doorstep is because Amazon acquired Whole Foods and Whole Foods has that program.
You know, the interesting thing, too, and like you talked about the you know this, every business is now a global business in effect. And what we try to be like those these brands are are no longer like the reach is not limited, but nor is the they have to effectively go beyond their streetcorner. You know, it’s it’s almost a responsibility as a business to be able to go, yeah, there is no limit anymore where you can do business.
The limit is right here in your mind.
FFP, I’m sorry, go ahead.
Yeah, no, sorry, I just realized I, I wanted to double check because I know we talked about so we’re five peas in.
And first of all, like I say, Michel, this is incredible.
Like, this is if anybody hasn’t already started writing this down, number one, they’re going to buy the book. And if they don’t, I’ll buy the bloody book for them. They need to write a fantastic book.
But like you are, you are sharing a ton of really, really strong lessons here. And I want to thank you as we’re going through this, because it’s it’s it’s a rare treat to have somebody that can really be, as you know, informed and share as much, even though, you know, obviously there’s a lot more that’s in the book than just simply listing out what we’re talking about here.
Right. Thank you, Eric. And so the fifth is patrons, patrons is your customer base. And most businesses follow the 80 20 rule where 80 percent of their business comes from 20 percent of their clients.
And you’ve got to be very careful on customer concentration. What you really want is customer diversification and e-commerce businesses get in trouble doing this as well on. Coffee company Dow is talking about ninety nine point nine percent of all the sales came from Amazon. What happens if the relationship with Amazon fails? Then they just lost their entire business, so it’s not just, you know, customers that you have customer concentration and it’s also the marketing channel that you’re using. And if all of your sales are through Amazon now, I know there’s a lot of Amazon sellers out there that only sell on Amazon.
And that’s OK, but it’s risky when I looks at that they’re going to want to mitigate the risk because what happens if Amazon decides? Not to do business with you, right, or Amazon decides to get in the business you’re in and effectively evacuate that channel for you now. Right, exactly.
So you should always be diversified in your client base and how you get clients. So if you’re getting all your clients from Amazon, I’d be very careful. You need to have multiple concurrent resources like your own website, you know, like maybe Etsy or something else. You have to have sufficient resources course being in the grocery store, et cetera. So anyway, this is customer concentration we want. So I’ll just give you a quick case study.
We had a business or manufacturing business we were selling that has 70 percent, 60, 47 percent of the revenue tied up in the BP contract. We appraise this company for nine point eight million.
We had over five hundred and fifty buyers.
We narrowed it down to 12, Alawi’s a lot of intense. Every single letter of intent had a condition in there that if you lose BP, then we’re not paying you. This isn’t this and that’s because we’re going to mitigate the risk.
Yeah.
However, we found a strategic that very similar products and services in a strategic. Didn’t care about the risk because the reward for them was far. Greater on the upside, because they’ve been trying to get their products and services into BP for decades and never could get their feet in Utah, it’s like, oh, this is perfect. We’re in there with this company we just acquired. Now we can get our other products and services in there.
Does that make sense?
Yeah, they were willing to pay 15 million for a company that was a price for nine point eight. Fifty million for 70 percent of the business, which is one hundred and twenty six percent more than that price price for the company for 70 percent. So we can sell a business with customer concentration. It just makes it much more difficult. We have to find a buyer of a needle in a haystack type of situation.
Yeah, that was a real unexpected value, but it’s an important one. It’s it’s hard to match those. But and also as well, like you talked about before, like the the outside view in is the only way in which they will discover that, because if they are simply looking at their own internal channel, that’s all they can be focused on. How do they possibly seek out a buyer who’s looking for a bidirectional access to the channel and sees a greater value than they even realize they’ve got?
So that’s and sometimes it doesn’t always work out. I think we had we had a media marketing company that were selling 10, 15 million range. They have five clients are only five, and they’re in the process. They lost two of the five. And the reason they have five is because of were casinos that cater to casinos and in marketing for the casinos.
It was so such a risky business because casinos will do the math. They bring on a new, you know, a new agent that makes the decisions and they will do the math and say, oh, we can do this in-house cheaper. And the marketing company. So they lost two clients out of the five. The revenues dropped in half or even have dropped in and they were no longer sellable. I ended up having to merge with another media and advertising marketing company.
So it doesn’t always work. How do you want to make sure you have customer diversification? And then the last piece, the most important thing, all entrepreneurs is profits. And I was like, Michelle, where do you put this last? The reason for profits last is because of that lack of profits is never the problem. Lack of profits is never the problem if you’re not making money. Lack of profits is not the problem.
It’s a symptom.
And the operating on one of the other types of clients that come the mail is that much of a profit problem. I’m like, no, you have a people problem or no, you have a process problem. You don’t have lack of profits is not a problem. It’s a symptom.
If you are running your business on all five PS, I can promise you you’re going to make money.
What’s that was a great example of never far from profit, they were as far from profit as you can get while still be considered in a business worth buying. But they had of the other five fees and majority of what was needed to bring value to their buyer. Right. That’s incredible.
That’s the sixth phrase. That’s your infrastructure. And you can see there’s infrastructure on the six fees. I can work for e-commerce businesses, right? Yeah.
Yeah. When it’s and it’s amazing. Like you said, it’s these practices apply to brick and mortar. They apply to e-commerce. They apply to locals to global site there.
It’s that’s right.
The methods play out and the importance is you have to just look at the overall methodology and make sure it all comes together. So like with that, I know, Michelle, we we’re coming up to time. And this has been fantastic. So Exit Rich is I highly recommend people people need to get this. If you’re at all involved in business, even if you’re not thinking today that you’re building towards exit, we have to understand we all are right.
The viability and sustainability is maybe your exit, maybe it’s your own personal exit. Are you creating something that’s sustainable to be worthwhile to the next person that’s going to take it over? Even if it’s not necessarily a sale, it could be the next CEO.
So we’ll have links to get get the book and Eric and I tell everybody the value that they get paid by the state.
Absolutely. That would be fantastic. Yeah.
And I’m sure your listeners want to hear about the extra gold nuggets, extra value we’re offering.
I like this even better.
So it’s so Rich launches in June towards the end of June. And Steve Forbes has endorsed the red state as a gold mine for entrepreneurs, as most entrepreneurs live way too much money on the table when they’re selling their business. Kevin Harington original Shark on Shark Tank wrote the foreword lectures my coauthor. So you don’t have to wait till June to read exit rate. You can go to exit. Which book?
Dotcom now for twenty four dollars and seventy nine cents, which is less than Amazon.
We will email you to digital download so you can start reading today. We will send the hardcover to your doorstep to anybody in the United States for no additional shipping cost.
We will give you a lifetime membership into the book club where there’s video content and made doing transformational questions and talking about strategies and techniques and doing deep dives in all these different things that I teach over the last 20 years, plus documents, documents to run a business necessary business. We have simple employee handbooks, not Kupets or charge licensing procedure manuals. We also have sample letter of intent. Purchase agreements, due diligence, checklist, closing documents, all of these are there not just for review, but you can download the templates and start using them.
If you want your attorney to try to recreate all these documents would cost you over thirty thousand dollars and all available to you just for buying the book at twenty four dollars and 79 cents.
Plus, we’ll give you a 30 day membership into Club CLS, which is an entrepreneur mastermind that we started to really help business owners build that sustainable, scalable and when already sellable business so they too can get rich. And that’s an rich book.
Dotcom, if there’s if you if you got twenty four, seventy nine to spend, which everybody does, then go, go there.
Yeah. Because if you’re going to McDonald’s save you save the burgers by the book.
Save the Quarter Pounder with cheese.
I can probably say I was lucky enough and thank you to your team actually sent a preview and I read it. It’s fantastically written, beautiful lessons. Like you said, you and Sharon did a great job and coauthoring this and like the book alone, well worth the value that that’s attached on that cover price. But the fact that you go far beyond it with what you’re giving and sharing, I really appreciate it. So, yeah, definitely folks do do go there and get the rich book.
This is this is a must have. And like I said, it’s it’s a manual that everybody doesn’t even realize they need until they start to read it. And don’t don’t wait until you’re looking to sell before you start to try and look backwards at what you needed to do along the way. It’s it’s like a manual for success.
So thank you for for bringing this to market.
Thank you. Thank you for having me. Eric has been an absolute pleasure. My main website, if anybody wants to contact me, Michell at SeilerTucker.com and then https://ExitRichBook.com.
Excellent. Yeah, I’ll make sure I got links to the show, notes. Michelle Seiler-Tucker, this has been an absolute pleasure and thank you so much. I appreciate it. And I wish you all the best. With the official launch in June. I’m looking forward to my hard copy cover arriving at my doorstep so I can put it on the bookshelf, but I’ll read it from end to end in the meantime anyways in advance, because it’s it’s an absolute must read for sure.
Thanks very much.
Thank you, Eric. It’s been a pleasure.
Sponsored by the 4-Step Guide to Delivering Extraordinary Software Demos that Win Deals – Click here and because we had such good response we have opened it up to make the eBook, Audiobook, and online course, more accessible by offering it all for only 5$
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Dan Burcaw has founded companies on the forefront of profound technology waves: open source software, the smartphone, and cloud computing. He describes himself first as a serial entrepreneur; a repeat startup founder and CEO with his latest company being Nami ML.
We explore a deep discussion around how leveraging services and systems to let your teams do what matters is both powerful in business and life. We also talk about how Dan has created and operated his companies and some great personal insights into being a leader.
Check out Nami ML here: https://nami.ml
Sponsored by the 4-Step Guide to Delivering Extraordinary Software Demos that Win Deals – Click here and because we had such good response we have opened it up to make the eBook, Audiobook, and online course, more accessible by offering it all for only 5$
Sponsored by our friends at Veeam Software! Make sure to click here and get the latest and greatest data protection platform for everything from containers to your cloud!
Want to ensure your privacy is protected? I sure do. Privacy is a human right and the folks at ExpressVPN make sure of that. Head over to ExpressVPN and sign up today to protect your safety and privacy across any device, anywhere.
Sponsored by Diabolical Coffee. Devilishly good coffee and diabolically awesome clothing
Eden Green Technology is a vertical farming technology company. They build, manage, and license a greenhouse technology platform that increases local access to nutritious produce, and provides a non-interrupted food supply, all through its turnkey urban agricultural model.
Eddy shares the values, outcomes, and vision of why he joined Eden Green and also what drives him to do good as a leader with Eden Green and Buzzshift, his digital strategy agency.
Check out Eden Green Technology here: https://edengreen.com
Follow Eden Green on Twitter: https://twitter.com/EdenGreenTech
Follow Eddy at his website: https://badrina.com
Sponsored by the 4-Step Guide to Delivering Extraordinary Software Demos that Win Deals – Click here and because we had such good response we have opened it up to make the eBook, Audiobook, and online course, more accessible by offering it all for only 5$
Sponsored by our friends at Veeam Software! Make sure to click here and get the latest and greatest data protection platform for everything from containers to your cloud!
Want to ensure your privacy is protected? I sure do. Privacy is a human right and the folks at ExpressVPN make sure of that. Head over to ExpressVPN and sign up today to protect your safety and privacy across any device, anywhere.
Sponsored by Diabolical Coffee. Devilishly good coffee and diabolically awesome clothing
Emily Omier is a Positioning Consultant who helps companies confidently give their product a label and focus their marketing and sales on the types of companies and engineers that will value it most.
Emily’s knowledge and experience in successful positioning and product market fit for open source platforms is something that makes this a real must-listen as we explore so much of the world of product management, product marketing, and much more.
Follow Emily here at her website: https://www.emilyomier.com/
Listen to Emily at the Business of Open Source podcast here: https://www.emilyomier.com/podcast
TRANSCRIPT: Episode 161 – Emily Omier
[00:00:00.780]
Hey, everybody, this is Eric Wright, the host of your podcast, and this is a really, really great episode, talking about the value and business of open source and in fact, it talks about product management.
[00:00:12.420]
Good golly, there’s actually so many incredible lessons in here. So hang tight. But before we get started, I want to make sure I give a big thanks to our fine friends and the sponsors of this episode, which include our Friends at Veeam Software. So everything you need for your data protection and disaster recovery needs to vee.am/discoposse
[00:00:31.440]
They got a really good deal that they’re able to get you set up with. Most importantly, you can actually either just grab it on the spot or get connected with them and let them know that you came from here. They’re longtime friends. So whether it’s your data on premises, whether stays in the cloud, whether it’s virtualization, physical servers and even your cloud native with the Kasten solution, very, very cool.
[00:00:52.840]
Wants to check it out to go get our vee.am/discoposse. All right. Next up.
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Oh, I love coffee. Did I mention that I love coffee? In fact, I love coffee so much that I bought a coffee company. So if you want to go and check out the coffee brand that’s going to take over the coffee world or at least play a major part in it. You can go to diabolical coffee dotcom the sponsors, because, hey, I want to make sure that I share really, really neat stuff for doing so when you actually buy coffee through diabolical coffee, dotcom coffee and we got really cool swag, wicked great T-shirts, they’re devilishly good proceeds from the profits do go to giving back to our community.
[00:01:34.230]
And we’re going to help to create education shares and make sure that people get access to resources that they don’t have today. So please, if you want to support that, go to diabolical coffee dotcom. Also, quick shout out.
[00:01:45.150]
Make sure if you want to learn how to give better software demos, go check out the 4-step guide to delivering extraordinary software demos. You can easily find that at velocity closing dotcom. That’s right. It’s a three sponsor day. And with that, let’s jump in. Emily Omier is going to join me for this.
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Emily is also a podcaster. She’s a consultant. She’s doing something that’s really a tough nut to crack and she’s doing it well.
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So she has the business of Cloud Native podcast, and she’s got a lot more that she’s doing up around speed in the sales and finding might, you know, market category and product market fit, especially in Kubernetes and open source.
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So go check it out. Here’s Emily Omier. Hi, everyone, I’m Emily Omier. I am a positioning consultant who works with companies in the cloud native ecosystem, particularly those built around or related to open source projects. And you are listening to the DiscoPosse podcast.
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Emily, thank you very much for for joining us. I was excited to get connected so I can and for folks that don’t already know, you will get into your intro. But I got to give a big shout out to Chris Psaltis, who connected us together.
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And Chris, he’s so fantastic. I had such a great chat with him. And and so he got to break the video barrier here on the podcast, which was kind of fun. And then immediately after we talked, he says, you’ve got to talk to Emily Omeir. She’s amazing.
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And, you know, so I was like, you had me at a recommendation and here we are.
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So, Emily, if you want to introduce yourself for folks that don’t already know you and we’ll talk about the open source positioning challenge and a lot more, actually.
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Yeah. So the first thing is there’s there’s probably a non-zero number of listeners who are like, I wonder what a positioning consultant is and I wonder what positioning is. So let me start there. Most. People who are non marketers might not have heard of positioning, even marketers often have sort of a distorted idea about what positioning is. Some people think that positioning some marketers, I should say, think about positioning as like a positioning statement that you that you write out and honestly is just kind of like an exercise that doesn’t end up often being super useful.
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But what positioning really is, is about creating the correct assumptions in the mind of everybody. So ultimately, the most important is in the mind of your prospects. But it’s. You don’t want to just think about in the mind of your prospects, because those aren’t the only people that matter. You also care about like what journalists who work in the industry think about your product and how they’re going to write about it. You care, if you get venture funding, you’re going to care what investors think about your company.
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If you have an open source project, you care about what the community thinks about your project, so positioning is about creating the right assumptions and it comes down to how do you describe your product? What market are you targeting? So how how do you segment your market, which is how do you determine what are the characteristics of your ideal customers? And that that’s oh, and then there’s a last thing, which is like what are the the values that the unique value that you provide and that.
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So that’s what I help companies figure out basically is what’s the best way to describe what our product is? That seems sort of basic, but a lot of founders actually find it really challenging. And who who should we market to who’s going to find this most useful?
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Yeah, this is we’re going to get into some of the neat, dirty behind the scenes work, which I often cringe even when I have to use these phrases, because one of the things that that you do particularly well is really create a human connection through the use of words that ties technology to value and human value. And ultimately through human value, we get business value as well.
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And it’s we often forget that that takes a lot of work. Right, as the old ways of the Mark Twain thing.
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Right. If I had a if I had more time, I would have written a shorter letter. We we it’s very easy for us to go on, you know, write about our story. And I’ve often done that. Right. Like, it’s you’re trying to give your elevator pitch. If it takes a hundred and twenty floor building to give you your elevator pitch, then it’s not an elevator pitch.
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You need to really be able to, you know, sort of quickly tell, hey, you know, this is this is a real problem that people have.
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You may have experienced yourself. So actually, what my company does is we solve that in a way that’s that’s actually never been done before, which allows you to be able to do this and this and this. And then as a result, then this is actually now you can get on to doing better things.
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And it’s like it seems so fundamentally simple, but it’s really difficult to do.
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And then on top of that, we then have to bring in.
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I’ll say kind of like mechanized language around it, and even you used a word that makes me gnash my teeth and I use it, I don’t even use it myself because I’ve got an allergy is the word prospekt, because I very much like I know that it’s a it’s a term it’s a sales term.
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We use it and I still fight it.
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And generally I say like prospective customer, because I know if I’ve I’ve actually had folks that are really good technical sellers and they’ll say, hey, I was talking to a prospect to that.
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And I was like, oh, that hurts just here, because I’m now I know I’m a prospect versus like I’ll say like, you know, you should say I was talking to somebody else who’s similar function in a similar role. Is you over another company or like somebody else in the community. And I get them to kind of soften the language.
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But the truth is, behind the scenes, we have to you know, we talk about prospects and and value statements and positive business outcomes and all this stuff like this. But how did you get to do this, Emily?
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Like, this is No one. No one thinks that this is a fun idea to take on, because this is a lesson in an exercise in in frustration building this stuff.
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I’m not sure that’s true that nobody thinks it’s fun to take on. There we go.
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I was just going to say that I was actually writing a blog post this morning. I found myself writing like buya no, I deleted it, but I deleted it.
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And then but it’s like I do think so. I used to be a journalist and aside and I’m also like I’m a language person. I really I also speak a couple of foreign languages. So I really think word choice is very important and. Yeah, to the point about Prospekt versus versus prospective customers versus buyers or whatever, like ultimately there is a difference between saying your buyer and your prospect anyway. So it can be really hard to make sure that you’re using the right the right words, especially when some of them are kind of cringe worthy.
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Yeah, because you have to talk about your EEB, your economic buya, you know, your technical champion. And we like there is at least sort of common phrasing. I always just it it hurts me when leaks out, you know, it’s kind of like when an internal email makes it to the outside world.
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You like, look, we know how that happens behind the scene, but then it becomes like if you’ve ever watched a rather famous bit by Bill Hicks on on marketing and he it’s a fantastic thing to listen to, not if you’re in marketing in our soft at heart, because he kind of rips that all apart. And the whole thing, he’s like, oh, yeah, this is you.
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You’re basically snakes and and demons in what you’re doing.
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But the truth is, in technical marketing and in marketing in general, it is very much about creating a connection between, you know, people value that.
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You can bring them what you can give back to them and ultimately, you know, run a sustainable organization and a business commercially through doing so. And what’s particularly interesting about your ability and your success is in doing it so far and in future, which I’m sure will be a lot of. Is doing this in open source. Very much changes because it’s much it’s a different you know, there’s a different commercial side, there’s a different value side.
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So I guess that’s the real thing, right? Getting into messaging and positioning fantastically, it is enjoyable, as neat and as challenging and then adding this like what we’re going to do to an open source.
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Projects like most would be like, all right, I’m OK, because this is a tough world to be in. Right.
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Well, so the first thing to acknowledge is that most engineers, most developers find themselves really allergic to the word marketing. I think for all of the reasons that you just mentioned, that it sort of sounds slightly dirty, and particularly if we’re talking about open source, like open source, it’s not about making money.
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So what of course, I’ll just put a caveat that that’s not entirely true. I don’t think that all open source is like completely divorced from money, but a primary function of it is not to do it, however, in order to sustain it.
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I know where you’re where you’re at with that one.
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So, yeah, I appreciate that you sort of laid that that caveat there, right?
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Yeah. So, you know, particularly with companies that I work with, they they’re related often to an open source project, but they also have venture funding. They’re also like their end goal is to build a company, not just to be, you know. Technical hippies. But so I think that’s one of the challenges when we talk about marketing but positioning. So first of all, I should actually step back. One of the misconceptions about positioning is actually that it’s part of marketing and it’s really like it’s a higher level business function.
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So, like, if, uh, if a prospect came to me and it was their head of marketing and they said, look, we really need help with positioning, I would say great. Is the CEO on board? Are the founders on board? Are they going to be part of this discussion? And if that marketing person says, no, this is not a project I’m going to take on because it’s going to fail and because positioning is it has implications for your product roadmap.
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It has profound implications for your sales strategy. You might end up changing your price point based on your positioning, because if you’re going to sell something, let’s just say you’re going to sell something for financial services. It should be expensive. And if you have if you’re trying to sell something cheap and you’re selling it to a market that expects things for them to be expensive, that’s a problem. So it has all of these implications throughout the business. It’s really not just marketing.
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Yeah. And it’s in fact, when you say positioning, it’s not just like we’re positioning and it is truly full market positioning.
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And it’s goes, as you said, beyond just like the the thing that does little type head on the website.
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When you go to the homepage and you see a little slider like that, that’s reflective of positioning, but that in itself is not positioning.
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Yes, that is exactly right. I also have some people that will, like, send me a website and they’re like, can you tell me if this company has great positioning? And I’m like, I don’t know. I mean, you can tell. So if yes, you can usually tell by the website if but if the website if you don’t think that there’s great positioning reflected on the website, that could be a website problem. It could be a copywriting problem.
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It’s it could be a positioning problem. But you can’t you can’t really know for sure.
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Yeah. Actually there was somebody I spoke with the other day and it was he was telling me about the story of his company. He’s a single engineer with a with a co-founder.
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And they’re they’re doing really neat stuff. And so I took a look at the website because he sends me the email address. And so we met just through a friend. I was helping him out and to help him with a technical problem. And so I talk with him.
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And I was like, oh, actually, tell me about what your what your platforms do.
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And I’m actually very interested in what the problem is you’re solving.
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And he said something for like in two minutes he gave me this incredibly profound statement of like, you know, how we have this problem that goes on, like we want to make this not suck for people. So we took on this task because we realized there’s a better way to do it.
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And he goes through this thing that was like, Allen, you just totally nailed this. I went to your website.
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No idea that this is what you do. Right. You can you need to connect those two things together, because the story you just told me is incredibly compelling. And it made me say, OK, well, how do you do that? Like, it’s it did all the right things. And it was so funny that there can be this weird like sometimes the market, the marketing of the message in the in the website, like said, can really be good.
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But, you know, what’s the churn rate, what’s the attach rate? What’s the growth rate like?
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There’s other things that you said about positioning is much more than just, oh, that’s really neat. I know what you guys do now. Well, that’s sort of the fundamental, though, about positioning is it’s about making your prospects. Oh, I’m using that word again. That’s all right.
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I know I’m going to make you overthink that every day. I know.
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So it’s about making everybody not even just prospects. So customers, your current customers, you also don’t want them to be confused. So it’s about reducing confusion. And part of the goal is you want you know, when somebody comes to your Web site, they you want them to immediately understand what problem you’re solving. And how you solve it and is is your solution right for them or not? I know you always remind people like you’re you’re not going to boil the ocean.
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You’re a startup with a million dollars or ten million dollars or whatever. You’re you’re not going to you’re not going to be Facebook tomorrow or next quarter. And, you know, you need to focus on some sort of specific market. And so having somebody come to your website and say, oh, I understand what this is and it’s not for me, that is also a good outcome, because now you have not wasted, you know, hours of your marketing and sales team’s time.
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On somebody who is never going to buy your your product, that’s so that’s something that people don’t even realize. It’s not as deep positioning.
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Your your audience is the most important one of the most important things that you can do. And I forget that sometimes, too, and like you need to immediately.
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So when someone gets there, they’re like, yeah, really cool. Not for me. You know, I’m not going to waste this person’s sales cycle time by calling them and saying, hey, I’m curious how this this may work to my use case or whatever. Tell me about the thing you do. And then you spend an hour and they go, yeah, it’s not going to be a fit.
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Yep. It’s saving everybody time, you know, it’s saving the prospect time. It’s saving your sales team time. And so that’s a good outcome. If somebody says, no, this isn’t for me, but you want that to be clear as soon as possible in the in the sales cycle or really in the marketing cycle. So it gives you the ability to to focus a lot more. But it also increases the chances that those people that are a good fit are going to understand that immediately.
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And so then that that makes them more likely to reach out and so you get this at the same time you have those that are not a good fit leaving. That’s great.
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Those that are a good fit, more likely to understand that. Now, this definitely doesn’t come from I think I’m going to be good at this like you, you’ve obviously got some some road time or some, you know, some you’ve got history that allowed you to be able to connect these things together, like there’s certain certain fundamentals of it that are actually based out of like cognitive psychology and behavioral psychology and a lot of neat stuff there.
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But you generally can’t go and read a bunch of that and then come forward and say, all right, perfect, OK, I can nail the story for you.
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So, Emily, how did you come to choose this as a as a path for your own choice?
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That’s a really good question, so I never know where to start in my story yet, but I think I’m going to start sort of way back when, which is, you know, I spent my 20s doing a bunch of random stuff and including starting two companies that never had any any revenue. Like, I think just my mom knew that they existed.
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And, um, and then I went to journalism school and then I was a tech journalist for a while. And then I moved into content marketing, and that was really sort of the catalyst for when I started to think a lot more about positioning because, oh, and I should mention that I was always self-employed, so I was always working as a consultant, freelancer. And so that’s kind of just my personality. But anyway, so you’ve always had skin in the game like you.
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You’ve you’ve always chosen that I am responsible for the the outcome here, which is it’s a brave thing to do right out of the gate.
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Well, you know, I think if somebody when I was in college, when I was like 18, had had told me that I could have a career in sales, I would have changed my life. But it didn’t really even occur to me that, like, there are people that make a living selling stuff. So I enjoy the hustle of of like meeting new clients. And you know that all of the things that are associated with with being a consultant and not having a job I enjoy.
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And including not having a boss. Yeah, I think a lot of people I’ve especially here, of course, I’m lucky enough.
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I talk to amazing folks like yourself all the time who’ve, like, walked these unique paths and on their own.
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And my favorite thing is almost all of them would describe themselves as unemployable because it’s like I am not going to they’re not going to look at the mission on the back of the wall behind the front desk and say, like, this is for me. I’m like, I’ve got my own mission. I got to complete.
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Yeah. I mean, I’m not going to say that I would never, ever take a job, but like I would say that my circumstances would have to be pretty dire in order for that to to happen.
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But I would find even even in doing so, you would become as we called I describe myself as an intrapreneur in that you create you that drive in that methodology is baked into you.
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And so even when you’re in an internal team, you will you will very much go outside the lines as a founder of a function inside a company. So there’s even if you were to go, there would probably be a temporary stint until you got back out again.
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Well, fingers crossed it doesn’t come to that. That’s even better. Even better.
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Yeah, but actually, so the fact that I was that I was working for a lot of different companies and I started to really focus on the cloud native ecosystem. And technology companies, and so the fact that I was working working as a marketing writer for these these companies is really relevant because first of all, marketing is often the first department that feels the pain of bad positioning. And second of all, when you’re outside of a company working as an external consultant, you see it really well.
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Because I think what happens is when you’re when you’re working inside of the company, you can you kind of start drinking the Kool-Aid and it’s like everything kind of makes sense to you because, you know, you’re really like you’re really immersed in everything. And but when you’re looking at it from outside.
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And you’re trying to get some direction on this piece of marketing writing, and you’re like, who are we writing this for?
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And they’re like, well, you know, our audience is sarees and platform engineers and developers and also VPs of development.
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And you’re like, whoa, those people care about very different things, like, how am I going to write this? And so it actually got pretty frustrating because this was so prevalent that people were just not really capable of giving me clear direction, which when it happened, basically meant that my project was not going to be successful and I knew that.
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So that’s when I started to think, you know, I can see that this is a problem. I tend to be actually a really big picture person. I think this is why I didn’t do such a great job when I when I was employed and in my very early 20s. I’m not super detail oriented.
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So and this is the interesting thing.
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And I actually heard a great interview the other day and it talked about the sort of the creative mind and the the process of of being a creative person. They sit.
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And when the fellow said, unfortunately, these creative people tend to make a lot of money for other people and not for themselves until it’s far too late for them to enjoy it.
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And it’s I’ve I suffered the same sort of challenge of, you know, every year it gets to my annual review and they’re like, hey, you know, be great. Like I’ve got I’m a I work in a startup and they give me a lot of autonomy and they’re fantastic team. And so when it comes to interview time, it’s not like when I worked at a big financial company, they’re like, OK, according to this year, the nine box or the seven boxes, they get all these crazy things.
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And then but it would be like every year I’d say, hey, look, it’s that time of year where we say it would be great if you were better at project management and detail oriented, long view, you know, content. I’m like, I’m never going to be that. I’m like, just going to lay that out there right now. I’m never going to be good at this stuff and I’m going to be fantastic what I do. But they’re like, we want to put you in a box.
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And like, I’m like, no, no, I don’t want to be there.
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You know, it actually, I think makes me fit really well with this industry because a lot of engineers are detailed oriented. Yeah. And so what they at the the ability to step back is really what they’re missing. And most of the founders that I work with, they’re they’re engineers and they’ve now founded a company and they’re really good at like making sure their code is not missing a punctuation mark or something like that. And, uh. I would suck at that.
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Yeah, it is a beautiful thing of the merger of those styles because you have you have a technical you understand the technical audience and sort of the buyer audience as well as the consumer audience, you know, or they as they say, you know, the users.
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Another word I often cringe that we say, but the users and the buyers.
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Yeah, but the it is a really good mix that like you want the technical founder to be a technical founder, not a big picture market maker, like you want them to be fantastic.
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What they do and you will be fantastic what you do to allow them to continue to build product and think about what’s next. Yeah, and, you know, honestly, a lot of the founders that I work with, like they they’re not just engineers. They’re very, very good engineers. And these are you know, there are people that have actually and then I’ll go into a caveat sometimes that is also the challenge is that there are very, very good engineers.
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And so and they’ve often worked at companies that are very tech forward. They’re very, very far on maturity curves. And so it can be a big challenge. In fact, I think this is a big challenge for the industry in general.
[00:27:18.190]
Is it sort of connecting to the real world experience of a mediocre engineer who works at a mediocre or works in, you know, a mediocre technology organization and, you know, mediocre? We often use that word to mean, like, look terrible, but I’m more meaning and sort of an average term. Right.
[00:27:41.470]
Radeon a median on a curve, not a mediocre as in they’re not really that good. Which is right. Exactly.
[00:27:48.700]
I mean and the honest truth is like that’s somewhere around the medium is is that’s where most people are going to fall. That’s where most users are going to fall. It’s where most buyers are going to fall. Even if we’re like, you know, directors of development or VPs or whatever. Not every one of those VPs isn’t is an amazing VP at his or her job. And not everyone is inside an organization that’s an amazing technology organization. And that’s OK.
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I’m I don’t think there’s a problem with that. It’s just that that I think the the ecosystem and the the founders of these amazing startups need to sometimes need to do a better job at sort of stepping back and thinking, OK, where where is the market like where is the market actually at?
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Where are the the people that I can help?
[00:28:41.090]
Where are they? How do I meet them, where they are and how do I use terms that are going to resonate with them, and what problems are they actually experiencing? Oh, yeah, sorry, go ahead. Oh, I was going to say and then there’s one other thing, which is like what do they actually perceive as being an alternative to my product? So that’s a big part of positioning is what are the competitive alternatives? And the common thing is you ask somebody, what are your competitors?
[00:29:12.920]
And they will name another company if you actually drill into it and say, what are the competitive alternatives? The competitive alternatives are doing nothing right? So I know it hurts me to say it, because I know it’s it’s it’s an easy answer, but it is true in that, you know, our biggest competitor is status quo.
[00:29:36.800]
You know, it’s so too true. You know, in so many cases, it’s it seems like a like a gimme if you say it. But like, no, it’s most people struggle from just like, hey, this is good enough.
[00:29:48.590]
I mean, it’s it’s both both for business buyers, but also for consumers. I mean, I was looking at cars last month and that if you ask a car company like, what’s your competitor, they’ll talk about some other car. I didn’t buy a car. I’m not going to buy a car. And that’s what probably what like most of the people that enter their funnel, so to speak, are going to end up not buying a car. They’re going to do nothing.
[00:30:12.800]
Yeah, yeah.
[00:30:14.180]
That’s and when it comes to the the technical buyer and the technical economic lead buyer, you know, so like a CIO, CTO, somebody is an organization they’re uniquely challenging to market towards because they are generally, you know, technical.
[00:30:36.830]
So they ask harder questions. Well, to use your car example, your more people are going to go to buy a car because they need to get somewhere and they kind of don’t care what’s inside the car. They just want it to be the right price. They’ve got a certain set of criteria.
[00:30:55.390]
The ineffective alternatives are the bus not having a car.
[00:30:59.570]
There’s it’s but the buyer is most often not technical. And in fact, when we get into the technical marketing piece and technical competence, you know, positioning is the worst case scenario of super technical people.
[00:31:18.880]
They’re like, what does it do here?
[00:31:20.320]
You know, it’s that whole thing of I don’t want to dwell on speeds and feeds, but we’re going to dwell for 45 minutes on speeds and feeds, you know, and all these little, you know, knobs and dials on on what it can do.
[00:31:32.530]
Yeah. So to go back to the car example, that’s actually really good. So when you’re doing technical marketing, one of your biggest competitors is built to build it yourself DIY. So instead of buying your thing, we’re going to build a platform. And ourselves, if you’re buying a car, like quite frankly, I do not think that one of your competitors is like like I wasn’t even thinking like, oh, well, you know, I’ll just build a car myself.
[00:32:01.420]
I say, and I don’t think that that’s like a real realistic competitor for most people. Yeah.
[00:32:09.430]
But it is in the technical marketing that that’s a really big, major competitive alternative. Yeah.
[00:32:18.160]
And we we run into that problem, too, of especially when you’ve got a really good engineering organization and we it’s the problem we call nature not invented here. Right. When you go do you pitch a product then they’re like.
[00:32:31.170]
You know, they just like you can see them sort of squinting as they’re listening to your discussion and they look at the ingenuity and said. Can we do something pretty close to this ourselves, like, oh, no, like that that is a real unfortunate confidence in the ability to throw people at it. And I’m like, if you’ve not heard of the mythical man month, this is going to end poorly for you.
[00:32:54.620]
Yep. And, you know, it’s that’s also the the user user buyer discussion, because sometimes this like whatever it is that you’re selling like that looks like a really interesting problem to solve. And if you’re if you’re targeting the wrong level in an organization, you you know, you’re just going to be giving them an idea and they’re going to think, gosh, I would rather spend the next six months working on replicating your product internally than doing whatever it is that I’m that I’m doing.
[00:33:30.110]
That’s usually when you’re you’re marketing too low, because most likely once you’re once you’re getting to the people that have more of like a more business metrics that they care about. And they’re they’re managing people. They do not want the people on their team building that platform that is not in their best interest, but the people that the engineers themselves. Oh, yeah. That that’s a big problem. They want to spend some time building that.
[00:33:56.000]
It it’s funny. You can you often find out it’s like going to family therapy when you’re in these discussions with folks. And I get I’m lucky to be very close to the customer experience all the time. And it’s like I was a user.
[00:34:08.210]
I sat in the desk as a systems architect for a couple of decades, so I know the pain directly. It’s easier for me to relate it when I talk about product and outcomes and what we get.
[00:34:20.150]
And it’s funny that you can get a lot of folks that are really strong technical champions and they have a genuine day to day problem that maybe their boss doesn’t know about.
[00:34:29.690]
And that gets uncovered like beautifully in the right conversation because and you need that as to do proper positioning and selling and renewing, because if you only give value to the user of the consumer, the product, and they don’t see the KPIs being effective, affected at the top, then they’re like, you know, I don’t I don’t know that I’m getting value from this thing I just saw a renewal for.
[00:34:56.840]
And it’s like you said, positioning isn’t just about prospects, it’s about your existing customers.
[00:35:03.350]
You got to keep reminding them that you’ve got value or even adding more value and more capabilities. And how do you relate those?
[00:35:11.680]
Yeah, and, you know, part of positioning it, some of the things that that we work on narrowing down is who is the right buyer? So, again, when you think of an engineering organization, it’s not like homogenous. There’s going to be the salary teams. We like to talk about breaking down silos. And in reality, there’s still silos in most places. So, you know, unless unless you’re selling to like the CTO who’s responsible for the whole thing, there’s going to be silos.
[00:35:41.200]
And and most of my clients are not going quite that high level. Yeah.
[00:35:46.930]
And and this is the funny part is as much as I see that silo slide on everybody’s sales deck, guilty as charged, we know the truth is that there’s just no way to really break those things down. The reason why we had to start calling it like dev spec ops, they’re like, why do you need to explicitly say second line? Because no one invited security to the party and it wasn’t pervasive to the flow of of code. And they’re like, oh, OK.
[00:36:14.320]
You know, Nelson, someone described the other day, they called it biz dev sec ups. And like, we’ve officially figured it out that we forgot to include the business people in the discussion.
[00:36:25.510]
I have not heard that one yet and I love it.
[00:36:28.330]
So now eventually it’s going to become this like biz dev sec, you know, like there’ll be like three or six trade offs.
[00:36:38.590]
But so, yeah, in practice now this is just like you talked about positioning.
[00:36:48.050]
It’s important to know who not to position for into position the the the unimportant or the the the not valuable prospect.
[00:36:59.000]
In your experience of doing this stuff. Most of your success in knowing what to do probably comes from seeing a lot of what not to do and and seeing metrics that showed that that was the case.
[00:37:12.940]
I’m curious, Emily. When did you start to tie in? How do I measure the effectiveness of positioning and marketing and like where this comes together? Yeah, that’s that’s a really good question of how it’s measured. So the first thing. Yeah. Position is interesting to measure. So you’re not going to feel like you’re not going to improve your positioning and then tomorrow you’re going to fix these things. So often we’re talking about like a fairly fundamental shift in how the company is.
[00:37:49.280]
Talking about itself and operating, so we’re not going to see, like a change tomorrow, but there are there are some things that will change immediately and then there are metrics that you should see improvement on if, in fact, your your positioning has been improved.
[00:38:08.270]
So that the first result is this is a human one, is that I find founders have more confidence because often the pain point that they come to me with is that they don’t know how to talk about their their company. They don’t know how to talk about their product. And it’s frustrating. And they. And they feel like they’re their sales calls are kind of they feel like they’re not going great.
[00:38:38.750]
Basically, they feel like the first 15 minutes, the prospects are confused and and it’s really frustrating. So that does change immediately is there’s there’s often a shift in sort of how the confident the founder or founders feels and sort of having a discussion or or describing. So after positioning, you should be able to describe your your product in like less than a sentence, like five words. Yeah. And so that’s the first change. And then the second thing this gets into, like, what are the signs that you’re positioning kind of sucks.
[00:39:15.170]
And then then obviously if your positioning is better, it’s going to you’re going to see improvement on those metrics. So one of them is high churn at like everywhere on the funnel. And so if you have a lot of people coming to your website, but like every every part of your funnel, there’s it’s just incredibly leaky. That’s probably a positioning issue. If you have a lot of churn in your customers, that’s probably a sign that the customers maybe thought they were going to get something else.
[00:39:51.080]
And then they signed up and they were like, oh, whoops, this is not actually what I was expecting. I don’t actually need it. That’s a positioning problem. Right? You want people to, like, actually get the thing that they thought they were getting. So basically, you should be improving your your conversion rates at all. All spaces on the funnel, the marketing sales funnel, you should see lower customer churn. And those are what I would say, I mean, and ultimately, right, those are going to lead to better revenue numbers, et cetera, but those those are the really bottom line positions and metrics that I would look at.
[00:40:34.520]
And here we have like the sort of problem is that those are marketing metrics and that’s why people think that positioning is a marketing problem. Right. And but right. If you have a high customer churn, maybe your product sucks.
[00:40:52.450]
Oh, yeah.
[00:40:53.870]
It could be a problem or it sucks for the people who actually end up buying it. And so it really isn’t just marketing, it’s really high level. Another thing that I also see with the win positioning projects are really successful is that it’s easier to get. It’s the PR is easier. It’s easier to get it in the press. Because the you know, whether you’re doing PR yourself, whether you’ve hired a team, it’s it’s easier for them to communicate with other people in the industry about what you do and and that that makes it easier for them to write about in the the challenges as people, as humans, especially in technical.
[00:41:35.660]
You know, we’ve got a lot of strong technical founders.
[00:41:39.590]
Like you said.
[00:41:40.190]
It’s it’s a tough it’s not in their brain to like they’re not built to be able to tell the story in. That’s why we always talk about jobs and Bosniac and people get really irked and angry like jobs wasn’t technical and it was just a marketing guy and like, well, it was technical. It didn’t necessarily write the code.
[00:41:59.000]
But, you know, he had the ability to take the technology and relate the story and and he even attributes he says. The ability to do so wasn’t just from fantastic storytelling, which he was particularly good at, but he has this book and I actually have it on my shelf.
[00:42:16.470]
I had to hunt it down around the world called the business value of computers.
[00:42:20.820]
And it was effectively an accounting guide into how to actually measure the effectiveness of using computer systems in large organizations.
[00:42:29.970]
This is like mainframe type of of adoption. But he said if you can’t. Show them that there’s metrics that they’re going to that are going to matter to them and then a human side to that story. Then, you know, technology is going to save you from a bad sales problem, which is which.
[00:42:47.840]
And as technology founders said, so you come in there and do a lot of amazing technologies, probably wouldn’t pass a Turing test.
[00:42:55.700]
There’s nothing wrong with them having an incredible amount of skill. So let’s put somebody beside them who gets why they’re doing it and what they’re doing it, and then can make that a storytelling exercise, which then ultimately becomes. Based on the foundation of positioning, like you said, it’s it has to come from there. This is the the core and then everything should always go back to like, ah, OK, here’s your value drivers or whatever you call them.
[00:43:23.090]
But like, it’s it’s in the founders. There’s a great book actually called The Founders Mentality. And and it’s a it’s actually by being in company, they’re a marketing and advisory firm in in Boston.
[00:43:39.410]
Not to be confused with Bain Capital, which is always funny because I my company, as well as one of one of the Bain Capital companies. But it’s very, very cool that they talk about this idea of like the founder can get frustrated because they see the selling position moving away from what the product was meant to do, and then they lose track of it and then the numbers start to go home.
[00:44:02.420]
And what’s worse is that it doesn’t get felt like you said, you know, you change your positioning and you do it right today. You don’t notice it tomorrow, the metrics are going to play out over time. Yeah, and it can be pretty quick and then the other thing, so there’s there’s a couple comments here.
[00:44:24.580]
It’s a first of all, it can be a pretty quick I mean, if you actually implement your positioning, you can feel it pretty quickly, but it’s not going to Beechboro. And the the other thing is that almost always the the best positioning for your product isn’t necessarily be it the positioning that you had in mind when you created it. And that that is why actually that’s part of why founders have to be involved when we do a positioning exercise, because it can involve almost like shifting, shifting the identity of the company.
[00:45:01.300]
And if it’s that could mean shifting the identity of the founders. And so that’s the most challenging part actually of of positioning is is like having everybody sort of let go of what they thought they were creating and then figuring out like what is the thing that actually is here that was created and how do we highlight its strengths in a way that that that’s that’s going to get customers really excited about it.
[00:45:33.350]
And positioning it can change over time, it’s not something you want to change like every month, but you should sort of check in to check in with it like once a year, once every six months to see if it’s still working. And, you know, one of the the other thing is like if there’s a big market shift. So, for example, covid-19, there was and everyone’s working from home that can present certain challenges to to organizations. And maybe, you know, maybe you want to reposition your thing some maybe the competitive alternative to your product is walking over to your colleagues office.
[00:46:15.260]
Well, that’s not an option anymore. And so you need to be able to to sort of capture that.
[00:46:21.690]
Oh, there’s a last thing I wanted to say, which is that actually Apple is a really good example of good positioning and there’s a lot I can think of a lot of ways. First of all, when in the early days of Apple computers, it was not a general purpose, personal computer. It was for creatives. Right. And this and that ultimately is how Apple computers became like the cool version. Right. Like, if you were an accountant, you got a you didn’t get an apple.
[00:46:54.240]
If you were like a graphic designer, you definitely got an Apple computer. And that had ramifications, obviously, not just for their marketing, but but it was their product was also different. And it had to focus on different types of functionality. And then when the iPhone launched. So think about the name of iPhone. An iPhone is actually not really a phone like it does have phone functionality, but that’s like a tiny little bit of of its functionality.
[00:47:25.260]
But at the time that it launched that like that was what the company and Steve Jobs decided to accentuate, because that was something that that people associated with, like putting in their pocket and taking places.
[00:47:40.770]
Imagine if they had called it like the eye pocket computer or something crappy. Yeah.
[00:47:48.510]
And and in fact, actually, if you watch the iPhone launch video, like. Tobes, does all this like talking about voicemail and like call for, like all this stuff that’s phone functionality that like nobody uses now and probably nobody even used then, but it reinforced this position of this is a phone. And so it makes sense. It makes sense as a product to to me. Yeah.
[00:48:14.010]
It becomes the what’s the what’s the comparative that will make sense to people then they can they can map it over.
[00:48:21.150]
And this I’d love to hear your thoughts on this one. The words and in that we use are interesting. And I get lessons in this all the time.
[00:48:32.910]
So, you know, the founder of my organization, he used to like super technical.
[00:48:39.810]
He’s like really, really able to do incredible things but knows the business, you know, third time founder, like, really, really got a good sense of how things go and people kind of forget how strong is the business side of it.
[00:48:54.090]
And so you get people know, like he’s like this is what we do. And this is, you know, you go through the whole thing.
[00:48:59.520]
But in the end, we as humans try and find differentiating words to make it easier to explain or sell.
[00:49:07.020]
And so people always say, like, we solved this problem in a unique way. And he he stops. He goes and he asks his name was my favorite thing to hear. He goes, Can I ask you? Where did you have a lot of friends when you were a kid and so like, yeah, yeah, I was I was fairly fairly popular, whatever, like, OK, and so high school, you know, throughout changes in your life.
[00:49:30.080]
Yeah.
[00:49:30.380]
OK, what were you unique? And you’re like, what do you mean? He goes, exactly? You were not popular because you were unique, you were not smarter because you were unique, unique isn’t a word that you want to use to describe your problem is a differentiating feature is like it may be unique in the way that it solves the problem, but the product is not unique.
[00:49:55.390]
Like don’t use words like that because they’re going to pull you down a trap and they’ll say everybody says the unique. Everyone says they’re the first to market. Everyone says they’re industry leading. It’s like these are these are not important words when it comes to what we’re actually doing.
[00:50:12.060]
So. Why do we get caught up in those lovely words, Emily, because they sound fine, like it’s easy to go to. Yeah, I think that you’re right, you know, it’s part of it is that we we want to be unique and I think people like to think of their product as being totally unique. And it is it’s usually there’s there’s not something that is exactly like that thing anywhere. Of course, nobody cares if you solve their problem in a unique way.
[00:50:42.070]
They just want it solved. They don’t care how you do it. That’s right.
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And if you solve it in a way that’s totally non-unique, it’s still solved. And the other thing I was going to say, actually, is that this is relevant to the discussion of developer marketing because developers, engineers, they tend to have a lower bullshit tolerance than a lot of other markets. And so I think you’re probably more likely to get that pushback when you’re like we have a you know, we have a unique way of solving this problem. I think there that’s going to sound like bullshit.
[00:51:18.540]
That’s going to pop out as bullshit for I can already hear the person they were going like, you know, like make like shirts, unique, whatever.
[00:51:27.480]
I mean, then they’re going to they’re going to look through the like eight million open source projects on GitHub. And they’re going to say like, no, no, I found this other this project that has like two contributors and it’s actually exactly the same as yours.
[00:51:40.350]
So even patented is a tough one because like, well, it is a very different thing, a very specific thing about the way and you solve the problem, like just saying patented.
[00:51:50.670]
I’ve even found that in competitive.
[00:51:52.200]
It’s like use this like we have 17 patents in as a competitive alternative. Like, you know, the company you’re competing with has 2000 patents. They were like, that is not a that’s not a business differentiator. You know, it shows your longevity. It shows your uniqueness in a way. But like IBM has more patents. And what’s the old joke? Right. Like how many the most patents in the world are for the most trappe go to the hardware store.
[00:52:17.340]
Yeah, most trap’s a piece of wood with a spring on it.
[00:52:20.670]
I don’t care how many patents there are, I just need to catch a bloody mouse, you know?
[00:52:26.550]
And sometimes, like, you know, I think it’s important to keep in mind that you are ultimately selling an outcome. You’re you’re solving the problem. And, you know, if you if you get a taxi and you want to go to your house from you know, your work sets a route that you go all the time, you get a taxi and the taxi driver says, hey, look, I’m going to take you a totally unique way to get to your house.
[00:52:51.780]
You’re going to be like, whoa, that does not sound good.
[00:52:54.240]
Has actually. Now, the other thing that’s important. In what you’ve described in like positioning, and it ultimately is a question for you, you know, it’s choosing your market, attacking a niche that, you know, you can be effective in and you know how to market towards you as well as, you know, really lived strongly in initiative of companies in this cloud native marketplace, which is going to become huge.
[00:53:24.030]
You know, I mean, already is huge. But what drew you to. How that is an effective place for you to be able to market towards and position towards, yeah, this is a great question also because I wanted to talk a little bit about how it’s not just products that are positioned and it’s not even just consultants who are positioned. It’s even if you have a job, you it’s it’s still a good idea to be known for something and to be a specialist in something.
[00:53:53.370]
And even if you are a developer. Right, maybe you’re a specialist in a particular language, maybe you’re a specialist in a particular type of business. So I think that it’s really important for for everybody to to try to specialize to a certain extent. And when I think about what what a consultant or even somebody who’s going to be an employee should or should think should think about as they’re positioning themselves is where the overlap is between things that they are good at, things that they enjoy and things that people are willing to pay money for.
[00:54:37.620]
And the same goes with industry. Right. You could apply that to what you do or you could apply it to the industry that you’re going to work in. And for me, obviously, like I have tons of interests. And either that being a positioning consultant is not the only thing that I think I’m pretty good at.
[00:54:58.920]
But and but there’s this this sort of overlap here where working in this industry and it helps that I started obviously I started as a marketing writer in this industry, there’s sort of an overlap of people that actually need this and are willing to pay money for it and that I’m that I’m good at it in terms of why I think I’ll go back to the discussion of not being very detail oriented. So I was actually interested in like Web development, and I played around with Drupal for a while in my in my 20s.
[00:55:34.740]
I don’t know if you know Drupal, but it’s like we’re spending a little time in that.
[00:55:38.290]
It was it was the the it was the Beda to WordPress VHS. It was technically better, but unfortunately not marketed well enough to to make a big landing. I actually don’t think that’s true, I think one of the most successful open source projects out there in Aquia that was Akwe is that was founded by the open source maintainer. It was sold, I don’t know to who, but for like two billion dollars, like a totally insane amount of money.
[00:56:08.350]
So actually, Drew is an open space, open source success story and a lot of ways because all sides huge community.
[00:56:14.920]
Anyway, my point being, it’s not like an entry level web development platform. It’s quite complicated. It’s very it’s very powerful. But it’s a you really need to be like getting your hands in the code in order to be successful with it. So I like, you know, I taught my self how to do some stuff, but I ultimately like I I’d miss a period somewhere and it wouldn’t work. And I just get really frustrated and yeah. That it just wasn’t for me I couldn’t deal with, like, I, you know, I missed a piece of punctuation and my work is a total failure.
[00:56:50.020]
And I think but I sort of remained interested in this, this sort of the technology field in general and what we can do with with software.
[00:56:59.290]
And and then I think there’s like there’s a little bit of a cultural fit. Even if I’m not I’m not the detail oriented engineer. I think there’s a there’s a cultural fit between the, um, sort of like it’s really hard for me to put my finger on what the cultural fit is.
[00:57:17.920]
Um, let me think about this for a minute.
[00:57:21.490]
I think I just I feel like it’s really easy for me to empathize with the sort of developer problem or the developer personality of, like, liking to work alone consultant, freelancer, being, you know, really interested in like finishing projects, being a little bit type A. And so I think that there was that as well, sort of being interested in the technology and then just feeling like like it’s a cultural fit. Yeah, like when I went to Cube Khan there was Cube Khan and then there was like an accounting conference that was in the same location.
[00:57:55.990]
And I just like you looked at all the accountants and I was like, whoa, those are not my people. I do not know there.
[00:58:03.220]
It’s so funny that I’ve I’ve always enjoyed when you go to especially a conference center and there’s like multiple things and, you know, like, you know, we’re sitting here and we’re making nerd jokes about technology, then, you know, in the room next door, they’re like, so this idiot filled out a ten, twenty nine instead of a four to twenty eight, like, holy moly, where did this guy from Mars, like in totally meaningful, hilarious anecdotal humor over there.
[00:58:28.930]
But it’s like every, every industry, every thing has a community and has its own nuances and isms about it.
[00:58:37.510]
But what actually I want to pull on the string that, you know, you hit something really neat. So my perception in general awareness is that WordPress has been, I’ll say, most known to be successful relative to Drupal.
[00:58:56.860]
And it comes from two factors. One, I didn’t track the growth or ultimately the the the trajectory of Drupal. I knew about it.
[00:59:05.470]
But because I go everywhere and I see WordPress, I have a perceived understanding that it is more successful, even though it may not be in this. I bump into in Carbonetti folks all the time. They’re like, this is incredible. It’s like winning the container war. So that’s well, how big is that war? Right.
[00:59:22.210]
You know, relative to virtualization and cloud and everything else. So. How? How do you deal with that situation when someone says like, no, like this is the the metric that matters to me or this is my opinion of a metric and you’re like. Well, we actually have to look at the real metric that matters. I mean, ultimately, like you do get to decide if so if you’re the CEO of a company and you decide that X metrics matters to you.
[00:59:51.390]
I mean, maybe that’s the most important metric, I mean, maybe I don’t agree with it, maybe your investors don’t agree with it, but that that is one of one of the advantages of being CEO, is you get to focus on the metrics that you think matter to you and does it. But, you know, some some companies might get really hung up on like we have the biggest number of users and GitHub stars, are we?
[01:00:20.820]
We have to get them stars and like those GitHub stars, they’re free. So, you know, what do I think that a company should probably have like some hard dollars as a as a metric? Yeah, definitely. But, um, if if you think, you know, if you are the CEO and you’re getting really hung up on some other metric, like, that’s OK. You know, I think the thing that that people should take out of this this discussion about WordPress and Drupal is.
[01:00:52.790]
That just because you are not necessarily a household name or you’re not like, you know, a household name for four, Technologist’s doesn’t mean that you don’t have a successful company, that you can have a very successful company.
[01:01:09.230]
You can you could go public. You could, you know, have a giant exit or you could just run your very successful company.
[01:01:20.420]
You can make tons of money and people could think, oh, Drupal is just, you know, it’s a a failed competitor to WordPress and ultimately, like, it doesn’t it doesn’t really matter.
[01:01:33.260]
Like, maybe you were never in a position where a Drupal word Drupal made sense. And so you might think that this is why I started using Drupal, because I erroneously thought it would be a good idea for for just a random person setting up a website. It’s not WordPress is the best option for that. If you have a really complicated Web site, that’s where Drupal is appropriate.
[01:01:56.720]
And so that’s why you see like like university Web sites are like big organizations like the U.S. government, Web sites, places like that. Those are the ones that use Drupal. And so and, you know, they have like all this super complex functionality. But that means ultimately that they don’t become a household name because they are only they have a relatively they have a niche, but it’s huge, right?
[01:02:23.700]
It can still let them be acquired for two billion dollars. I think it was two billion dollars. That might be wrong about that. It was huge.
[01:02:30.120]
Yeah, but it’s and it’s interesting, too. Yeah.
[01:02:32.400]
Like you, we I see this positioning in marketing as well as like the careful thing of, you know, what is it if you say it’s for creating websites like you’re going to have a real tough road. You know, if you say it’s it’s an enterprise grade CMW based on the most widely adopted and broad open source ecosystem, we’re like, oh, OK, cool.
[01:02:58.470]
So a legitimate CM’s now I know it’s a different use case and they start to then map the use cases in their mind of like oh versus yeah I want to go set up so I don’t want to go to Wick’s and set up my website, you know, let WordPress looks like it may work for me.
[01:03:13.380]
OK, yeah. Drupal is not the thing that you just like set up on Blue Host and start your personal blog on the thing. But yeah, for the the more complex setups that it is. And so in the startups that I often work out there, they also get really hung up on this. And then you ask like, so how many, how many customers do you want to sign this quarter?
[01:03:34.680]
And they’re like five. And you’re like so far, like, that’s not very many. I mean, you don’t have to go after a huge market in order to to sign five.
[01:03:47.670]
Yeah, this is not time to be buying mailing lists. You’ve you’ve got a fairly niche area. What’s the with the flow is going to be much different.
[01:03:55.860]
Right. And you’ll end up being much more likely to hit that five if you’re going after a market that only has five hundred people in it because you can speak directly to them and they’re going to listen. Whereas if you know you’re going after like a five million people, I mean, how do you even like.
[01:04:15.730]
No, you don’t. You’re not people are going to ignore you.
[01:04:18.960]
That’s that’s when they think that you’re a spammer. But if you speak directly to their their needs and, you know, like.
[01:04:28.580]
Salaries and financial services institutions like you. Oh, OK, yeah, that’s me.
[01:04:35.750]
Now this will be interesting, too, because you’ve got a good background in you. You you came from tech journalism and you’ve you’ve obviously got some really good strength and you’re fantastic writer. By the way, I read a disturbing amount of your content in preparation for our discussion and listening to a lot of your podcasts.
[01:04:53.690]
So I had the easiest job of coming into this hour. I was like, Emily is going to be able to run on anything. This is fantastic.
[01:05:01.790]
But I’m curious on your thought on what the role is of journalism, you know, literally today relative to when you were in it versus like it was very different in like PR went to certain, you know, key journals.
[01:05:17.900]
And then you got I think now it’s I just find so different. I’m curious, as somebody who lived in the inside, what’s your sense of the place of tech journalism today? Right, oh, I was about journalism in general, I was going to say I’m super cynical, as most journalists probably are.
[01:05:37.460]
Yeah, but I’m actually less cynical about tech journalism. So I actually have two degrees in journalism from Columbia, another one from a university in France and a journalist I approached very differently in Europe because I’m talking about sort of general interest journalism, because in general, in the US journalism journalists are encouraged to like claim to be totally neutral on everything, which I happen to think is bogus because we’re all human beings and we all have opinions. Yeah, in Europe, that is not how journalists operate.
[01:06:18.740]
It’s not how news organizations operate. So you would have like a newspaper and this is the newspaper of the left or this is the newspaper of the Catholic Church. And they they don’t pretend that they’re totally neutral.
[01:06:34.190]
So this relates to tech journalism, because I think my my less cynical ness about tech journalism is that in general, I think tech journalists are more like that.
[01:06:47.240]
So they’re more they’re a little bit more open about, you know, where we take money from these companies, for example, these are advertisers.
[01:06:58.310]
It’s it’s very it’s very clear. And I think what I do want to say about about tech journalism in general, and I’m not actually totally out of tech journalism, so I write for the new stack and I do so in a in a journalist capacity.
[01:07:14.390]
And one of the reasons that I do is because it I learn so much.
[01:07:19.910]
And I think the biggest misunderstanding among founders about tech journalism is that that the journalists who cover technology and who who cover particularly like opensource cloud, native stuff like that, they are really knowledgeable and they understand the ecosystem. Honestly, I think that they understand it better than anybody else because this is their their job is to talk to people from everywhere, to talk to end users, to talk to all the different vendors, to talk to the super big guys, to talk to the super little guys, to talk to investors.
[01:07:59.470]
So they are they are really knowledgeable and yeah, speaking of like the no bullshit theme, journalists also tend to be like pretty no bullshit. But definitely when you talk to a tech journalist, like they they’re able to spot the bullshit like really easily. And the not just they might not spot like if you if there’s, like, something in your technology that doesn’t work, like they’re not generally engineers themselves, they won’t get that. But if there’s something about your business or your messaging that doesn’t make sense, they will definitely pick up on that.
[01:08:36.520]
I as somebody who’s had to do the dance of, you know, going into PR and like going out and doing launches and interviews, it’s so funny because I’ve and one fellow I always enjoyed chatting with and it was painful every time Simon Sharwood, he worked for the register or he wrote for the rest of these independents as well.
[01:08:58.120]
And yeah, I remember going to one time and we changed the version number of the product and it was like this.
[01:09:04.240]
It’s like a fairly small thing, but it went from like five nine to six zero.
[01:09:10.690]
And, you know, he says, so why is the six to eight zero? And I didn’t really know the right way to tell them because five, we ran out of numbers and like, this must be what I’m like.
[01:09:23.530]
I knew the implication of a major no change. I was like, oh, Sirene, you’re going to make me say this stuff that it just happened, that we ran out, that we couldn’t be five. But and my engineering team were like, we’ll make it five, ten. And like, you know, that’s five one five one zero five times, not five, ten.
[01:09:41.650]
There’s no five. Ten.
[01:09:44.470]
But that was that, you know, Simon just said it’s he’s like, I’m I want to get right to this. What matters? Why is this a zero? And I was like, oh, cool. You know, so he picked up that as a customer. They’re going to see like, oh, this is a major release. This is going to be a significant change. Tell me why. And it was neat. And Alex and the team from the new stack up and a huge fan of that of the whole organization from the start.
[01:10:09.580]
So it was like a glory day when I went to I presented on Carbonetti at the Open Stack conference in Boston. And and there was a fellow just like chuckling away in the front during my presentation, I was like, all right, I feel like I’m doing good. Like I’m engaging the audience. And then I saw the ad, the article the next day in the new stack and I was in there.
[01:10:30.130]
I’m like, yeah, I feel like I hear that I made the news.
[01:10:33.780]
But Alex has done a fantastic job of going from purely independent writers, talking about technology in an ecosystem that he and his team cared about to be able to cross the chasm to being commercially viable, but maintaining journalistic, you know, integrity. So it’s very clear this is a sponsored post, but maintains that very good content in a sponsored post. He doesn’t let it become a commercial. And I think that’s where, like you said, there’s a no B.S. factor of like I’m not just going to let you come in and say, you know, what would make this drink better if it was built by this company, you know, on this technology, like, there’s no room for that.
[01:11:18.040]
And Alex and his and the new stack are a great example of folks that. Make sure they keep that nice hard line. Yeah, definitely, and you’re right on, I think, you know, tech journalists, they and this is where positioning comes in. I mean, that you really want to, like, tell them what the value is like. Why does this matter? And it’s you know, unfortunately, it’s a thing that I think a lot of companies get wrong because they they’ll send an email.
[01:11:46.200]
We’re releasing a new version and its version, you know, six point one point three point five. And it’s I’m like, I don’t care why I should care.
[01:11:58.540]
And the fun part is, of course, because you have to pass out an hour conversation or a 20 minute conversation and then get it to a few meaningful bytes that matter.
[01:12:06.670]
And I remember it also. It’s fun. Beth Parisotto, she’s also a great writer. And and I talked with her for like an hour on Carbonetti stuff. And we go through this whole thing into the end.
[01:12:16.600]
The quote that comes in the article was like, Carbonetti is on virtual machines is like a gateway drug to Cubanos on bare metal.
[01:12:22.800]
I like you say it almost as a throwaway, but you’ve got to remember when microphones are on, everything’s live and everything’s on the record. And it was it was fine. Like I said it for a reason. It was it wasn’t meant to be like, I hope she doesn’t write this, but every once in a while I’ll say something.
[01:12:38.380]
And then my my PR team, you see their eyes go their eyes wide, not be like, oh, did I just say something that like hopefully they don’t catch that quote in there.
[01:12:49.980]
But in journalism school, when I took classes in radio, they would say, like, you never turn off your mic. You would say, like, OK, we’re done.
[01:12:58.780]
You’d like take off your headphones, but you would keep your mike because people would always say, like the the interesting or sometimes incriminating thing when they erroneously assume that your mic was your recorder was not running.
[01:13:15.850]
Yeah, I tell you, that’s and I’ve always got an incredible respect for the true art of journalism, you know, and in that thing of like, yo, are we off the record?
[01:13:25.720]
And it’s the whole like when I read more and like like delved into how that works and the idea of deep background and how it’s like there’s so much to real journalism that unfortunately is is just shaded by what we call media and that it’s really been broken.
[01:13:48.190]
But the real true journalists, you know, the journalists out there and the principles and practice of it are are fantastic and so necessary.
[01:13:58.450]
But, you know, the world has kind of shifted in a weird way of, you know, it becomes, you know, see the twenty three things that his gym trainer would doesn’t want you to hear about AB exercises or whatever.
[01:14:08.800]
Like it becomes this weird Outbrain articles that are on mainstream media sites and it gets really lost in the power and importance of that journalism.
[01:14:18.520]
And I think possibly another reason why I’m so interested in positioning, actually, is that journalists specialize. And this to an extent that, for example, developers generally don’t like developer developers, I think often make the mistake of thinking I’m a developer and I write software and I could work at any company and it doesn’t matter what industry and whatever.
[01:14:42.790]
So journalists almost always specialize in something. And you want this because their job is to explain, to know what’s important and what isn’t and to really understand, you know, a particular subject. So, yeah. So I have always thought that it’s really important to to really be a specialist and in something and and that applies to products too.
[01:15:07.000]
Yeah. It’s and it’s funny if you look at it, I mean it’s positioning, it’s positioning in every way. Right.
[01:15:15.010]
Are you going to write for illusional or lemonde like which is the one you very distinct audiences, very specific demographics if you’re not aware and then same as developer like sure, you can be a you know, a journey person developer who can do write fantastic code and do all that stuff.
[01:15:32.530]
But if you’re if you want to be specialized, if you want to really succeed, it’s about knowing how to map it to business requirements, how to relate it.
[01:15:41.560]
How do you engage with customers as you’re building features and exploring stuff and user experience?
[01:15:47.650]
There is much more that requires that knowing your customer and you know, it’s effectively positioning of everything.
[01:15:55.390]
Yep, exactly.
[01:15:57.280]
Oh, this is I could talk to you all day and this has been fantastic. And I want to thank you very much.
[01:16:03.430]
And for folks that do want to connect with you through various means, of course, I’ll all have the link to your website. You can go to Emily Omeir dot com and what’s the best way if they want to do engage with you on on social media and also plus, go check out Emily’s podcast and and your blog said.
[01:16:21.560]
Great writer, if you just if you search for Emily Omeir, there’s a wealth of content that comes up on Google because you’re a very prolific creator and it shows in in how well you approach this. You’re everything you do.
[01:16:35.280]
Yeah. So let’s see. So my podcast is called The Business of Collaborative. And the goal is to sort of interrogate why companies use cloud native technology, what end users say, what people in the ecosystem say, etc. And you can go to the business of cloud native dotcom and actually redirect you to my website. But it’s if you have trouble spelling my last name and also my blog positioning open source, you can go to positioning open source dotcom that will send you in the right direction.
[01:17:10.230]
I am pretty active on LinkedIn and unless you send me like a spammy connection request, I will probably accept it. And so, yeah, feel free to connect with me on LinkedIn. One of my goals for this year is to set up and be active on Twitter. I think I have an account, but I am not sure.
[01:17:32.560]
So yeah, but my, my LinkedIn, I always, I always enjoy when somebody because I have an open policy I set up on LinkedIn because I also I use it as a broadcast channel. So a lot of stuff goes out in there. So I’m like, you feel bad. I’m like, hey by the way, I’m accepting your connection, but you just became my audience and but you know somebody you’ll get that inbound.
[01:17:55.200]
And I just look at the like the title or, you know, what the company is. I’m like, guys, I know what’s coming. You hit accept. And then like nine minutes later, you know, hey, thanks for connecting.
[01:18:07.200]
You know, one of the challenges that people face is being able to write good whiteboard videos on their product and we solve that problem.
[01:18:14.280]
And I’m like, OK, I’m going to make a whiteboard video to reply to these people on how to do better prospecting.
[01:18:21.760]
Yeah, a lot of people make the a lot of the spammy types. I think they make the assumption that I, like, work inside a company. And so they’ll talk to me about, like managing my team or something that I might do. This is this is not this is actually not a problem that I have as an expert operating cloud native environments.
[01:18:43.710]
You clearly know. Exactly. Exactly.
[01:18:47.820]
And I know you probably get this thing if you’ve ever seen the movie Boiler Room, it’s it’s one of the scenes this fellows like this crazy, you know, aggressive sales person, he learns these techniques and someone calls from The New York Times like, how can I would you like a subscription to The New York Times?
[01:19:05.550]
And he’s like, No, thanks, I’m good.
[01:19:07.350]
I get the post, whatever. And they’re like, OK, thank you for your day.
[01:19:10.650]
And he goes, well, that’s it. And and he then goes for like twenty minutes, like schooling them. Like you got to go for the clothes, like ask for their business, you got to do this like entice them. What do they really want. Do you want the post. You want this. Do you, what do you want to light up your days like. And the guy gets all fired up. He goes excellent. He goes so it’s like a script, you know.
[01:19:29.220]
But when someone pitches you, you almost want to reply like, OK, do I need to coach you how to do this?
[01:19:36.030]
Like we can. You can do better. I’m disappointed. Yeah.
[01:19:40.770]
So to go on a personal tangent, I’m getting certified to be a foster parent and the as like a marketer or I guess I’m not really a marketer anymore. But anyway, there’s this like it’s a bazillion step process, but I’m always like, oh, you guys need to work on your funnel and no wonder you have no foster parents like, oh my God, it is it’s really wild.
[01:20:07.050]
And and thank you for doing that. That’s a really noble thing.
[01:20:11.220]
You know, it’s something that we it’s a it’s not often understood the impact it can have and and how difficult it is to start the process.
[01:20:21.480]
You know, people just think like, oh, you just, you know, go sign a form and do it like, no, this is not an easy thing. There’s no license to have kids. Fact. It’s it it happens far more accidentally than it does on purpose. And then when you want to go out and specifically, you know, bring a bring a child into a family, you know, it’s it’s not an easy process for many good reasons, of course.
[01:20:43.470]
But it’s at the same time you’re you’re like, what?
[01:20:46.710]
Can I not shorten the cycle on this here? I’m a I’m a good I’m a qualified lead. Right.
[01:20:52.290]
Exactly. Exactly. I do it. That’s exactly what I want to say. Like, hey, I’m a qualified lead. Like, let’s let’s let’s move move through this process a little bit. No, in all seriousness, it is it is quite a process. So they’re coming to my house next week. Well, well, good luck.
[01:21:07.980]
And on that. And I hope it goes as smoothly as it can go. I’ve got a few friends that also foster and it’s yeah. Not not a simple process which shows the intent and how strong it is that. You do have to go out of your way to make this happen, so it’ll, you know, the results will show and what it is. But yeah, here here you go. Was like, okay, look, I’m a qualified lead.
[01:21:30.360]
You’ve got access to the EB. I’m your technical champion.
[01:21:33.240]
I got everything. You know, I am the decision maker.
[01:21:37.860]
We know the required capabilities. We know the ineffective alternatives. We’ve got it all right here.
[01:21:44.550]
But making for Fosters, it’s is something we need. But I hope that people really do learn that there’s so much that’s important in what you do and what we all can do to just understand why this stuff works.
[01:21:57.870]
And it happens at many layers in life and business.
[01:22:01.890]
Absolutely. Well, thank you so much for having me on the podcast. This is a great discussion.
[01:22:06.000]
Yeah, thanks very much. And shout out again to Chris over at mist.io for putting us together. Big shadow to Alex in the new stack and all the folks over there who I’m a longtime fan of their content. And yeah, like I said, people can go to do a quick search for Emily Omeir. You’ll see the new stack pop up and do check it out as well as your blog. Thank you.
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Warren Shaeffer is the CEO and founder of Knowable, the world’s first audio learning platform for the podcast generation. Warren and his team are truly rethinking and reinventing learning with not only how they are delivering content but in how he shares personal and business lessons to help the future entrepreneurs build and succeed.
This was a real enjoyable and in-depth chat on the science of learning, building a startup, and making what Warren perfectly describes as nutritious content for the mind.
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TRANSCRIPT
Hey everybody, welcome to the DiscoPosse podcast. My name is Eric, Wright. I’m going to be your host. And this is a fantastic episode by somebody who I’ve been so lucky to actually connect and then since reconnect with this has been really cool to see a lot of stuff going on in this ecosystem. So we’re going to be here in a second from Warren Schaeffer. But before we get into that, I want to give a huge shout out to our fans, friends and supporters and our sponsors, this podcast, including Veeam software.
I say this because I’m a user of the platform. I really enjoy the team and the way that they approach the challenge and dealing with the way that we have to back up and protect our data.
Now, this includes everything from your on premises, environment, physical servers, virtual servers, up to your apps, out to the cloud, and in fact, even cloud native backups beyond that, actually. What about that SaaS? Don’t forget, if you’ve got seven Office 365 Microsoft teams, it’s not actually protected.
Definitely easy to make a mistake. And in fact, let’s not even talk about ransomware and all the other craziness that can go on. So if you want to find out more about everything you need for your data protection needs, then you want to talk to the folks at VM, go to vee.am/discoposse they’ll take your right to a page and you can actually check it out for yourself again. Go to vee.am/discoposse
Also super happy to see that we’ve had great uptake from the book. This is something that I’ve built and shared out and I got really good peer review feedback and in fact I got lots of customer review feedback. So thank you very much everybody who has downloaded and bought the book. If you want to learn about the four step guide to delivering extraordinary software demos that teaches you how to better connect with people, they make sure you can engage with customers, prospective customers and how to really tell a story and get people emotionally invested in the ability for your platform or product to be able to solve a problem.
This is great for product marketers, for folks that are in technical sales. Definitely something that I’ve been very happy has had a really good response. And if you want to find out more about that, you can easily go to the landing link for that one, which is velocity closing. So we go to velocityclosing.com. It’ll take you right to the four step guide and look for some really cool, neat stuff coming up around rebranding and a neat new thing I’m doing with a company called RapidMatter.
And now let’s jump right into the Good Stuff, which is Warren Shaeffer.
So Warren is the CEO and founder of Knowable, which is an audio learning platform that is really and truly trying to reinvent and rethink the way we do learning through an audio engagement. Really, really cool. So Warren’s just a fantastic human, somebody who had a great conversation with and like I said, I’ve been lucky enough to reengage with him in a couple of other forums and stuff enjoyable on clubhouse as well as Twitter spaces recently.
So Warren is really prolific and he and his whole team are doing some really, really neat stuff. You’re going to want to check out Knowable as well. They’ve got courses from Scott Kelly. They got course from Alexis Ohanian, startup founder of Reddit, an investor. Anyways, so much to talk about it, but check it out. And here is Warren Schaeffer.
Hi, I’m Warren Shaeffer. I’m the co-founder and the CEO of Noble. We’re an audio first learning platform. You’re listening to DiscoPosse.
You’re listening to today’s days, the. And with that, we begin, Warren, thank you very much. This is definitely one of the areas that I really enjoyed being able to get into. I’ve long time it often, obviously, as a podcast or of audio, as an opportunity to get into people’s daily lives.
And when I got winds that you are going to be able to join the show. I was really excited because knowable is really cool.
But before we jump into we’ll talk about knowable. We’ll talk about a lot more. Let’s talk about you. You’ve got such an incredible storied history. But for folks that don’t already know you just give yourself a quick introduction and we’ll we’ll get rolling.
Well, first off, Eric, thanks for having me on the show. Really excited to be here. I will give you the quick background. I grew up in Southern California. I’m a first generation American. My parents immigrated a couple of years before I was born from communist Romania and landed in an Orange County of all places. And I went to Harvard for undergrad. When I was a teenager. I got introduced to audiobooks and I, I think I’d like to say before they were even cool on tape.
And and so that is what led me to eventually want to start knowable, which is an audio first learning company. As I mentioned, the top after Harvard, I spent a few years working in finance. I worked for a big bank in New York, JP Morgan, and then I worked for a private equity firm on the investing side in San Francisco. And I moved back to L.A. to be closer to family, teamed up with my current co-founder, Alex, and we ran two companies together, Nobilis, our third company.
We were a venture backed company. We launched about a year ago. And I’m happy to talk about any of it.
Yeah. And so there’s just little I could do a podcast on any one of the things you just talked about and easily fill a long and good hour, but we’ll kind of cover as much as we can.
So you you talked about your first start and your three time founder. And my guess is that there was probably even a lot more that happened before that.
But let’s talk about knowable and what you and the team are doing there, and then we’ll kind of start to go backwards in time as to what led up to that where you are today. Yeah, so as I mentioned, I’ve been lucky to work with the same co-founder across a few different businesses, and when we exited our last product, Badme, which which got a quarter of a jiffy, we thought about what we long and hard about what we wanted to do next.
And we had this list of one hundred different company ideas from everything from men’s skincare products to vinyl records to you name it.
And at the end of the day, we looked at ourselves and thought, what do we really believe is important to the world today? What’s going to sustain us for at least a decade of arguably some of the best years of our life and some of those productive years of our lives? And Alex, my co-founder, his father was a professor at Caltech. And both of us have seen firsthand how a great teacher can have a huge impact on the trajectory of somebody’s life.
And so we gravitated towards this idea of education. And there’s this great quote by H.G. Wells, who’s a sci fi writer. And in nineteen twenty nearly a century ago, he wrote that history is becoming more and more a race between education and catastrophe. And I think that’s more true than ever today. There’s so much information in the world, but a lot of people aren’t getting access to useful knowledge that they can apply in their life. So we really built we really went into the idea of this venture as what can we do in the education space?
It’s going to be interesting and actionable and helpful to the world at large. So when we looked at the space, though, we saw that pretty much every player was focused on video masterclass due to me, Skillshare, even YouTube. Right. All predicated on this idea that if you want to learn in a structured way, you have to stare at a screen in order to do so. I become a new father and my time was short and I realized I don’t have time to sit down and watch these lengthy video courses.
But I do have a lot of audio time. And same with Alex when we were both listening to a lot of podcasts and there was sort of this aha moment of, well, what if we made an audio first learning platform and we dug deeper and we realized that the number one reason that people say they listen to podcasts is because they want to learn new things. And yet there was no company which had established itself as the place for good for you audio.
So we’re building knowable to be that place.
And it’s it’s such a it’s always interesting when you hear the story and like the most people, the first thing I think is like of course, like it makes sense, but there is very much it’s a it’s a leap to get into an area because like you said, we’ve we have this sort of sensation in society.
That video is the way in which we learn we have to visually and aurally engage. But the truth as it really is, like more and more, that’s what I find.
I mean, especially I live I’ve got two young kids, and so I walk around our four and one and a half and I’ve got a 19 year old and a 17 year old. So I got a whole range.
So I don’t have the older ones. They I listen to podcast because they don’t want to talk with me and then the young ones because they can’t wait to get back.
But the really fun part of it is that I’d be putting my youngest daughter to bed and, you know, just walking around with her and I would just pop on an audio book. And I was listening to book after book over the course of a couple of months.
And and it became a real good way.
And that helped to really influence a lot of my day to day stuff because I was picking up, like you said, it’s like I was picking up lessons. I was learning about how people founded businesses and engage with people.
And it really helped to either reinforce stuff or pick up, you know, new new ways of doing things.
And I look so talk about first of all, the methodology is fantastic, right? They say audio is effectively this Gutenberg revolution now in what we can do around engaging with people.
But you’ve not only said we’re going to do this as a methodology, but you’ve really immediately reached out and got some fantastic people involved as far as the content.
So when I’m curious, sort of when you thought about yours, here’s a method, then we’ve got to think about the technology, then we’ve got to think about what we put in this platform. How did that all kind of come to fruition as you started the design phase?
Like everything, it’s a work in progress and a trial by fire. So take look, we took our best guess and really the the mission statement is let’s go and find really, really enthusiastic teachers and encourage them to share their inside knowledge, the lessons that could really change the trajectory of somebody’s life. So, for instance, we’ve got a course, our pilot course, as launch a startup, and it’s led by Alexis Ohanian, who’s the co-founder of Reddit and has gone on to become an investor at Initialize Capital and now seven, seven, six capital.
And he’s he’s really had a front seat over the past 15 years to some of the most transformative companies that have been built in our in our country and world and. What we did was we really question to say, what’s the stuff that you wish you knew when you were starting out as an entrepreneur? And and so that’s an example of somebody who we’re just so excited to have. We also have a course on speaking with confidence. And that’s led by Celeste Headlee.
She’s an NPR host and she also has one of the top ten TED talks of all time. And it’s on the subject of communication. And so she’s written books on the subject to communications, is truly lived and breathed How to be a Better Communicator. And she shared similar similar things. She shares exactly what she knows and and all the inside things that she learned over a decade plus of expertize in the field. So it’s a little bit manual in the beginning, but we’re we’re kind of slowly and gradually opening up the marketplace to allow other people to share their inside knowledge.
And, you know, the beauty of audio is that you can find an audience that there’s lower production costs. Right.
So somebody who has expertize can with the right tools, I’m sure that knowledge with a lot of people at the right time when you get into it’s funny that I’ve only just recently started to add video to the elements of the podcast purely on the YouTube side, because it’s you know, people have said it’d be kind of neat.
And, you know, I’ve made the choice to give it a whirl.
And for the most part, it’s definitely audio is is the strongest format. And it’s so much easier to do because you can just have a microphone. You don’t worry about a perfect room set up like it’s if I took a picture of the room surrounding me, it probably horrified by how it looks just because it’s I’ve got a dedicated studio, which is right next to my very small children during the day. So clearly a bad place to try and do a very tight recording, especially when you just get knocked on the door going, Daddy, why are you in there as well with young kids?
You know you know, finding time that’s dedicated is a is a challenge unto itself as it is.
Yes, certainly. It should be a noble cause just on that.
Well, and so and the other thing, too, is I I noticed that you also recently did kind of an AMA style where you’re you’re engaging with folks and and I love that you led with this thing of like, well, this could influence ultimately a course on, you know, startup founding.
And so it’s not just that you’re going with, like, pure produced content, but you have a real opportunity in that you can kind of test things out and then, you know, work it into a course from there, which is which is pretty cool. How did that one come to, you know, your mind when you were thinking, all right, let’s just let’s give this a whirl?
Yeah. I’m glad you asked about that, Eric. I actually listen to a course called Branding for Founders. That’s unknowable. And it features a couple of guys who started Robinhood Surtaxes newsletter, and they really had this statement but stuck out, which is people follow people. They don’t follow brands. Right. At the end of the day, Elon Musk has way more followers than Tesla does. And that’s just because we’re all humans.
We we care about the story of the person behind the company and said that that was sort of an aha moment for me where I realized I should really put myself out there more and and be you know, I’m so enthusiastic about what we’re building available. I use the product. I get so much value from it. And so why not share that enthusiasm directly with people? And so so I started to become more active on Twitter over the past few months.
And I’ve just seen so much value from building and learning and teaching in public. And and I think when you. Bring people into your process, they become more invested and excited, and it’s just so much more. Fruitful and and cumulative when multiple people are sharing their input as you build, so, yeah, what you mentioned is yesterday I just said, hey, I’m thinking of doing this course I’m fundraising. I’ve been fortunate to raise over a million dollars from top investors in Silicon Valley.
And I want to share everything I’ve learned in this course. And again, that same premise and what do I wish I knew when I was starting out? But why don’t you join me for a live presentation? It’s going to be a dry run. It’s not going to be flawless and perfectly rehearsed. But that way I can also answer questions live. I can get I can hear what people are curious about, what people are confused about, and that will inform the course.
And also it will help me generate interest from people up top. So I’m a huge fan of this this direction. And I think it’s something we’re going to be doing a lot more of where we talk to people live and then in the process, crystallize what the course should be about.
Yeah, it’s it’s definitely such a it’s the real multimedia approach in that you can have the the structured, you know, formal, you know, like read and edited, you know, ultimate course. But then in the meantime you get the off the cuff stuff with the albums and the Ozz. But it’s a real conversation that you’re effectively being a part of.
And the fact that can be interactive as well is so cool because, you know, and it’s I I did one myself. I just did a small, you know, e-book to talk about how to better engage with people through doing technical demos. So it was a thing I hear every day. I’m Lillian calls all the time.
And I’m like, OK, look, we got a teacher in the box, right? Yeah. And so I said, OK, fine. I said I Wrage wrote the book. I spent like four days just like hammering out content. Yeah.
And then I did it and then I did the audio book for it and then I, I do now I’m actually doing these kind of in that style of like, you know, monthly Amma’s where like just invite people on and because then we can say, OK, let’s actually talk about it, because even the audio book or like the straight course, I don’t want to do a full form chorus until I know what’s actually resonating from the content.
So it’s I love that interactivity and I love that you’ve taken a real choice to to go that route, think they’re like, yeah, I love that phrase.
Wrage wrote, I am looking I, I, I felt so inspired after I did the flight yesterday and I thought, oh I really want to turn this new book and I really want to have this crystallize and have the audio format in the courts from the video format, because there are this multimedia, there’s this realization that just different people want different formats.
And so I think that I’m so curious how you to hear more about the book and where did you publish it?
Oh, yeah, that was a neat thing. So the there’s actually a platform called Sam Kart and it was funny. It was literally like, this is proof that Instagram advertising works.
And it was one of these things where it’s effectively like kind of a one page funnel style of of hosting platform takes care of everything. But they actually had a full, full course on like how to actually build a compelling, you know, the pitch, you know, how to actually build your content.
They have a really, really great course.
So I’m and I said, OK, I’m in, I’ll do this thing, you know?
And it was funny. When you go through it, you realize this methodology is obviously widely used and they’re just one place to go. So I but they actually have the hosting for it. I used a company called Beacon for the publishing, so I just wrote the content self, published their beacon and then publishes a PDF and then hosted on Sam Card. So it’s a fairly low lift.
You know, once I did it because I’ve written stuff before, it was a little easier because I knew what the editing process and what the publishing process was. So for a first timer, it would probably be a little bit more daunting. I was lucky enough to have been through the mill with O’Reilly Media and a few other publishing companies.
So but yes, it was fun because I have said, OK, what’s the what’s the short version? You know, I didn’t want to go through this like super like 200 page manual of of things. I said let’s just hammered out and make it fun.
And that’s why I like I did the audio book, too. I was like, OK, let me just read my own book. It was actually kind of funny to do this. I’m sitting there like looking at my own content, reading it back like, oh, that sounds like it’s me.
And where did that where did that where did you put the audiobook? That’s actually the next one. So I, I definitely did not research well on how to do this is the best way today. I actually just like literally send it directly to subscribers when they buy the book. It’s actually part of the bundle. So I Lilium sending empathy’s around but I’m investigating, you know where to host it because you know I’d rather have a place where they can go and then individually, you know, just grab the audio book and then get the associated PDF so you can kind of come at it whichever way you you wanted to be.
I know where you can put it. You put it unknowable. I think. I know. A good place to go. I was and it was funny, I was actually researching the like how to become a contributor and so I to be able to put my name alongside of the likes of Scott Kelly and Alexis Ohanian, I would be I would be honored to be among this crowd and and you like.
So platform is amazing. What you’re doing is really solid. Like you’re really this is a great way to give back and empower people through a format that’s is just a really great opportunity.
Obviously, you put a lot into this, it’s your third startup, so I’m going to go way back in the Wayback Machine and I’m going to imagine that you were probably a young person and you had an idea long before most people would think that it’s a good time to start a business.
No one’s a three time founder. There are 12 time founder and even venture funded.
So entrepreneurship is part of your in your bloodstream, I’m betting.
That’s right. Yeah. I mean. I as a kid, my first experience with making money was the classic lemonade stand, and we put one there was basically this one artery into this residential neighborhood and we put a lemonade stand on one side and then we realized, oh, we should have a lemonade stand on the other side so we can kick people when they come and when they go. And then we ended up, my friend and I, my friend had a younger sister and we basically employed her to run the rival lemonade stand across the street, across the artery.
And and then we just hired some more of her friends. And that was my first foray into scaling a company. And it was really exciting. And I think I’ve had that itch since since I was a kid.
I really like the Howard Schultz of lemonade stands monopolized by competing quarters. Yeah. How you’re doing. Lemonade stand on every corner. You’ve got to catch them on the driver’s side. You’ve got to catch the side. It’s all well.
And it’s it’s very interesting. And even when you talked about, you know, you’ve effectively got a founding team that that you and your your founding partner work with. And it was neat when you describe that you like we said, OK, we’re ready. I’ve got like 200 ideas. Which one should we go with? So the one thing is, it’s not about what you do. It’s about what you do. You’re always iterating. You’re always like you must always be thinking.
And then how do you actually sift it down to what, you know, needs to can actually potentially do this or to zero to one opportunity or whatever however you want to describe it?
Like, which is where do you put your focus when you have all of these ideas?
It’s a huge question. I don’t think there’s I don’t think I have a super simple answer for it, but I will I’ll take a guess at it, which is I think I’ve had the realization and probably too late in life is that you don’t actually want to focus on your solution. You want to focus on a problem that you’re passionate about solving. To that. To me, that was and that’s really the aha. Moment that for for this business was look, we don’t know exactly what the right format is for education.
The end all be all solution. Right. But we do know that we want we see an opportunity to improve, to unlock learning time for people around the world. Right. And so that problem, this idea of, oh, I want to keep learning, I want nutritious content in my brain, but I don’t have time.
I’m a busy parent. I’m a busy entrepreneur. I’m a busy nurse or doctor. Right. That that’s that feels like a really big, tangible problem. And so starting with the problem that you have and that other people have, I think that’s the truest way to to find clarity on whether it’s an idea that you want to work on. Right. So start with the problem. Don’t start with the solution. You said something really interesting, and I love this phrase, nutritious content for the brain.
That’s probably not the first time you said that. What when you thought about this, what was? Because what was the first thing you thought? This is what I would love to be a host, a platform for.
Yeah, I love there are a lot of podcasts that I love. And I went around the time when, you know, a little was birth. I was listening to a lot of how I built this episode with Guy Raz. He’s a great interviewer and show. Yeah, great show. And he interviews founders with amazing stories. But I realized that that show doesn’t teach anyone how to actually become an entrepreneur. There is no tactical advice on how do you find a co-founder?
How do you select an idea? How do you meet a venture capitalist? How do you hire a lawyer? Which lawyers you hire? There’s none of that. And so what felt missing was this useful knowledge is applicable or actionable knowledge. And that’s that to me felt urgent. And I think it comes down to that problem statement. Look, if you’re busy, you don’t have time to sift through hundreds of episodes of every podcast, even though there might be great and fun to listen to.
You want you want the essence. You want it to be boiled down into what can I take from this that I can go apply to my own life, that can change the trajectory of my life in a positive way. And it’s it’s very interesting. Yeah, and the idea of distilling down, you know, meaningful stuff and it’s in fact, one of the areas I’m looking at right now is like, how do I distill out all of these amazing lessons that have been collected over the years, you know, now in the podcast.
But there’s a lot of really cool conversation wrapped around. It won’t make it into book form, like unless you’re Kevin Smith and you go and you just take the smart cast and you put it into a written form. That’s all well and good.
But I think he had the audience and they effectively would have you know, he could have effectively published most anything and it would have been well received just because he had such a really sort of loving audience that was ready to receive any of the content.
It was great content. And he was, you know, Tim Ferriss have a similar style that let’s just transcribe what we’ve got.
But I love this idea of like founders at work. That was the other one as well, which is a great, great book. And it was effectively long form interviews that were then and the same group of questions were asked. Yeah.
And they were put into and it was that sort of style, like you said, one of it’s not just talk about the success stories, like let’s actually talk about the the ways, the methods, the lessons, like actual actionable things.
Yeah, there’s way too many like oh it just works, you know, or it was really hard to write what was really hard, what worked. I’m not I’m not richer for having listen to this thing.
You just told me that you had a problem. I don’t know how you got through it.
Yeah. Yeah. I think it’s and it’s really common, right. When at the end of the journey, it’s hard to remember all the details and and the practicalities. Right. It gets glossed over and repackaged. And that’s, you know, Hero’s Journey story that doesn’t always mirror the actual nitty gritty of, you know, what was involved. Yeah.
It’s like the Dick Wolf who’s there to the creator of all the Law and order franchises. He says, like, great drama is when you take all the boring bits out and compress the rest down to an hour.
Totally. Right. You don’t see them go to the bathroom or eat a sandwich like that just doesn’t happen. There’s no time for that.
What’s interesting is actually, if you if you watch a law and order which has done far too much of in my life, what if you look at it every time you hear the countdown is a date at the bottom on the screen.
If you actually look at it, it shows that these basically elapsed over like 18 months, which shows you really. But it’s so subdued in like subliminal almost in the way that it’s done.
You think it’s happening all at once? Yeah, like it’s happening over a week, but it’s actually OK like 11 months, right?
Every time it takes too long. Yeah, right.
There may be the first forty eight, but they don’t tell you about the other four thousand nine hundred and twenty two, which is really where the the work happens to get it right.
So the, the other interesting thing too was you ledwith talking about being a first, you know, you know, first time born, you know, in the US and and you talked about your your family’s history and where they came from since that that led the discussion and the way you described yourself.
It must be important in kind of how you see the way you come to the world. Yeah, I I think that’s a good observation. I think founders come in all shapes and forms and all ages and all backgrounds, but there’s a unifying characteristic that I’ve seen great founders have, which is that they had grit. They have this desire to overcome obstacles, and often they’ll see challenges as opportunities. I think that’s really a characteristic. I think a lot of immigrants and first generation and maybe even second Asian-Americans have that sense of grit and still where things you don’t expect things to come easy.
And and so that, I think, has shaped my lens of the world in many ways.
And certainly how I think about building a business do it’s always funny that you hear the amazing stories of our grandparents and parents who, you know, as they came to the country, you always hear these stories of literally you’re getting on a boat with like 12 dollars in their pocket. You know, people would do right now if they had 12 dollars in their pocket.
They got on a boat, they’d go to the Starbucks and they would spend eight of those 12 dollars it.
And yet it’s so it’s so interesting that, you know, when you’re close to it, you see so many of these stories.
But in the broader sense of how many people are, you know, either founders or even more so distill it down to successful founders and are able to go through that facing adversity.
And like, if you’re anybody that tells you, you know, I’ve got this great idea and I’m going to make a business out of it, most people tell you it’s a pretty fundamentally terrible idea.
Like it’s not the ideas bad, but making a business out of it is not going to be. There’s nothing easy about this.
You know, the.
Yeah, I think the that’s also why I like you said, you know, let’s actually go through some of those stories and and get further into where it works, where it doesn’t.
Yeah. So how many lessons when you were thinking entrepreneurial and then you chose you went to Harvard. When you were going to Harvard, this is also one of the other sort of like hero stories we always hear is the, you know, the founder that goes to Harvard and then leaves or whatever, like there’s all sorts of stories about, you know, whether you should or shouldn’t go to university.
You know, how does it inform your future in entrepreneurship?
I’m curious, Warren, as you went, you made the choice to go and then when you came out, you got into investments and venture. What was your mindset on either side of the university experience? I don’t think when I went to college, there was so in vogue to think about not going to college, I think that’s becoming more that’s a more recent topic of discussion. I my parents went through a lot of financial difficulty and actually ended up living with friends for four 1/2 of high school.
And I was fortunate to to win over thirty thousand dollars in scholarships and get really generous financial aid to to go to Harvard. So it was. I hadn’t really entered my mind to not go to college, and I sort of had this road map in mind, which was I knew I wanted to do something entrepreneurial or something creative or both, and but I wanted to drink and have, you know, make some money early in life, be able to invest it and compound it and then take a quote unquote, risk a little bit later.
So I don’t know exactly when that game plan got for me that I think I read a lot of books and I think I probably came across some book that basically showed me the value of compounding money. If you’re 20 versus when you’re 30. Right. You’re going to put some money in the stock market. When you’re 20 versus 30, it can be triple. You know what it’s worth when you want to retire. So that that is how I sort of hedged, I guess, my my life risk and.
It’s telling in the way you described it as well, that you drink before you take on risk, and that’s another successful founders sort of lesson in what I’ve talked to a lot of folks is that most of founding and operating a company is spent in continuously drinking the environment.
That’s right. Yeah. And the faster you can drink, the better. And this is something that it’s so hard. And even for me and my staff to continue learn, this is and this is going back to why build a course in public. Right. You want to get validation super fast. Before I spend six months making a course on raising some money, let me see if anybody even cares if I’m getting free. And it’s like, will anyone join?
And, you know, look, 250 people signed up. And that was a really strong signal to me, like, wow, there’s real demand here for this topic so that the faster you can be risk, the better, whether it’s financially or intellectually. I think that’s a great heuristic to look for. And obviously, you were definitely in the risk and risk business when you got into the investment side coming at a school, so taking on risk at scale, you jumped right in.
You know what? What was that early part of it, you know, as you now could take the successes of what you’re effectively what your family gave you, you know, this this heart to do this thing. And now here you are. You can you can said you won, you worked to get scholarships. You got through this. Now, you know, the side must have been a pretty proud thing, but also a fairly daunting task to take on.
Right. That you are suddenly OK. We did it. Now what what was that like on the other side now when you got into the investment world?
Yeah. So when you say I did it, are you referring to getting a job in finance or what?
Yeah. Yeah, just like that. You literally pushed right through versus you know, you know, you didn’t take a journeyman’s job and then just choose to ride it out until retirement.
You you went right into an area where you you could pretty much affect the outcome, which is again, sort of a bold, you know, choice in that you knew you were taking on risk.
But, you know, you obviously had both sides of it. In your mind.
Are you saying the decision to leave finance, to go work and you and your finances, as did that route, like you got right into the game? Oh, yeah, money.
I mean, I think, you know, I. I really again, it goes back to this idea of drinking to take risk. I really thought, well, this is a great opportunity to learn some hard skills, no matter what finances is the underbelly of any venture. So and coming out of a liberal arts college, I thought it’d be great to have that practical, tangible skill of knowing how to financial model and understand thinking about investing and really what investing is.
It’s maximizing rewards and minimizing risks. And and when you extrapolate that out of finance, you realize that basically every decision is an investment decision. You have a limited amount of time and attention and you have to decide where to invest it. Right. And the people who think about investing their time versus spending their time, those are the people who end up being really successful because those little micro decisions compound. Right. So if you spend time, you’re basically doing something where you’re not learning, you’re not adding value to anyone else.
You’re not really treating yourself your body in a healthy way. That’s time spent. If you’re investing time, you’re there reading or learning. You’re writing, you’re teaching, you’re meeting somebody new. Those are things that accumulate and compound. So, I mean, I think you go back to your question. The risky thing to me, I realized, was. And I got this because I read a lot of books was ending up at the end of life and and wishing I had taken done something else and tried.
And this is such a cliche now, but it’s so important that people know that most people on their death bed, they regret the things they didn’t do, the things that they didn’t try. And so I knew that I would regret not taking a chance and that I would actually be risky not to take a quote unquote risk by going and trying something different. And like that, I like that thought process, it’s it’s tough for us, I think, as humans to look far forward and then regret is such a driver.
You know, you look at all of the work around the heuristics and behavioral economics, and one of the biggest drivers is regret. You know, we will make decisions.
We will do make choices wholly based on our sense of potential regret, more so than the value that we would get at it. But we are much more driven by the wish that we had something, which is why when you make bets and you know, you look at the sort of works of conmen and Tversky, yeah, so much of it was wrapped around this pervasive effect that Regrette has on human decision making.
Yeah, I mean, the whole field of behavioral economics that they pioneered is so powerful. And once you once you become aware of these cognitive limitations, you can work around them. Right. Because I don’t like loss aversion and sunk costs and confirmation bias. I mean, that’s a that’s a great book. Or I mean, I read the Michael Lewis Oh, The Undoing project. That is so good. Yeah. Story.
I wept like a baby at the end of it when when I won’t give the spoiler but is just such a beautiful human story.
Yeah.
Oh yeah.
I’ve, I studied it was a fine as I had studied a lot of of cornerman Tversky and sort of pinker and a lot of I was very deep into that game on self study for a long time. Yeah. I when I got the Michael Lewis book I was like, oh wow, this totally makes sense now.
Such a profound, just emotional story about how they approached it.
And it’s funny that, you know, they were it didn’t make sense that it even happen that the fact that here we are, a behavioral psychologist that would win a Nobel Prize for economics.
And yet we think it’s standard game these days, right?
Totally. Yeah. I was everyone. It was up until then it was, oh, people are rational. Oh, no, no. We’re very far from it.
Fairly far from it. In fact, we’re predictably irrational.
Oh, so funny now. This is interesting as well, you know, there’s a lot of sort of timing that works out and being able to bring a business, you know, and obviously the technology’s there to do this and knowable has such a great opportunity.
So bringing knowledge and, you know, nutritive brain injections effectively in an attention economy, you know, how do you approach things knowing that you are effectively fighting for a cohesive time blocks in somebody’s day? Great question.
Yeah. Our our vision statement, our why the reason for being a company is we want to live in a world. I want to live in a world where daily actionable learning is as addictive as social media is today. And so we know that, look, social media is so addictive. It is it’s weaponized distraction. And we want to push the bounds of of how people spend and invest their time, because it’s so easy for people to spend their time on social media to just end up scrolling.
And, you know, there’s a lot of benefits to the platform, but so many people just get sucked in and end up consuming and and not taking knowledge and applying it and actually improving their lives. So we think a lot about how do we use those behavioral psychology hacks that social media platforms are using to make mobile more addictive. And look, we’re in the early days of our product development, but we think things like streak’s and habits and social pressure, that’s all getting built into the product to really create this atmosphere of, hey, when I go to knowable, I know that I’m doing something good for myself and it’s also fun and feel good.
I get that reward right. You probably read some of the habit books like Atomic Habits are Right. Expect to have a reward is so important to talk to creating a habit. And so that’s something that we’re working on, building more into the product so that you’re not just doing it for them, but for the knowledge sake, but because there is some productize gamification and makes you feel invested and good in the process. Yeah.
And the the the real truth of the they call it the click were like it’s the thing that just gets triggered, you know, of like these are their behavioral things that are baked into us and using it for positive results, which is which is interesting.
Like they said when we describe it, we talk about time spent in social media, how much time you’re spending in social media. No one says how much time are you investing in social media?
They know it is spending purely I mean, look, it’s like any tool, right? You know, a hammer can be used for a nail or it can be used for for for.
More or less the purpose. So it depends how you use it. I mean, I think there are ways to invest time in social media, but I think a lot of people cross over the border pretty fast and pretty far. And so spending their time.
Yeah. What’s interesting, too, is as a student, at least in reading of it, I didn’t actually attend Stanford, but of B.J. Fogg and sort of this whole idea of persuasive computing. I studied that for quite a while. And then, you know, you see the stuff that’s Tristan Harris is doing around human computing and you ethics in A.I. The tough part was that more people will use B.J. Fogg’s material as the wrong side of the hammer then than the right side, which is unfortunate.
You know, especially when you see kids like you’ve got little kids, you see them like I can watch my my youngest son pick up an iPad and just tap know what to do like they built it makes complete sense to him. Yeah.
And then along comes an ad and like so the funny thing is I taught him to skip commercials real quick.
Yeah.
What like the fact that he just sits through it now and it’s like yeah.
How did. I don’t know how this happened.
It used to be a lot of smart people applying that those behavioral. Inefficiencies. Yeah. If only they would build enterprise software that way, then it may actually get adopted. Well, yeah, I think that I think that is happening.
I do think we are kind. Funny you mention that, right? With Noble, we’re seeing a lot of opportunities on the enterprise side where, hey, we can employees. You know, L.A. is really important for four big organizations today. L.A. stands for learning and development and and upskilling. But look, if you ask somebody to sit and watch a training video at their computer that’s competing with their work time, but if you give somebody something that they can listen to when they go for a walk or on their commute, that that opens up a lot of enterprise time.
So. So that’s something that we’re thinking about actively, too, of how do we actually make workforces better? How can we create a diversity and inclusion course that makes you really want to listen and make a difference?
Yeah, and I think using those techniques in any way in the learning development space, especially in the enterprise, like because we all know everybody who’s listening to this, who’s works for a company, and you get that annual it’s like, oh, it’s the compliance training ranty, anti money laundering training. Right.
And there’s like you just horrified with the fact you have a waste like five hours of your day and you’re like fast forwarding as much as you can, and they make it so that you can’t fast forward, you know, but they have to actually make it engaging.
Yeah.
And make it worth their time. And that’s effectively what you’re doing, is you’re giving them a sense of worth. Yeah. For having done it.
That’s right. Yeah. I think there’s certainly room for improvement there. Now, the the things that you. You’re doing it definitely is a very positive spin in so much of what you do, and it’s like it’s natural, even when you tried to describe a bad thing you could do with a hammer, you really got stuck.
And it’s so cool because. You it must be, again, sort of like baked into you that what’s the most positive thing I could do as a result of what I’m about to do? Yeah, I think, you know, it’s funny, I just started reading the autobiography of Benjamin Franklin, and it’s I it’s amazing. This guy just truly the the OG of self-improvement and positive thinking. And I think there’s so much power to it. And it really is just what filter to you apply to the world, because you can see things in many different ways.
And I do think one of the benefits are argument brains is that we have the ability to decide how we react to things. Right. There’s a there is a a control mechanism between stimulus and response. So I think the more we can view things to the positive lens and see problems as opportunities, that the better will all be.
They had tried to get in front of the old amygdala hijack, as they call it, right? Yeah, right. Whether brand useful, sometimes very useful, but oftentimes gets in the way and modern society.
Yeah. And it’s it’s very interesting that I’ve even through my team at work, we’ve gotten we’ve had to make a lot of really heavy decisions lately. And it’s it creates some rather animated group discussions. And I say that like, you know, ten year version ago of me would have said like some really crazy arguments.
But they really, truly are animated discussions. And we’ve become as we age, I think, much better at like recognizing when.
So what I’m hearing you saying is this and when you start to respond to things, it’s very different than, know, 20 year old me would have been like, look and like my favorite thing to be with, say, like if you’re writing an email and it sounds like you’re going to begin with, look, comma, you’re going to want to get up and walk around for a bit before you finish that sentence.
That’s right. Yeah. You don’t send emails when you’re emotional. A hundred percent. I think that I mentioned this course unknowable called Speak with confidence. And Celeste Headlee, one of the other experts in that court is Julian Treasure. This guy has 80 million views across his TED talks on the subject of communication. And he’s written this book basically about how to listen. And there’s this big realization of most people when they’re in a conversation, they’re listening to respond.
They’re not listening to understand. Right, and what you just did, what you said is so great, which is repeat back, kind of paraphrase back what somebody says because it helps you actually understand what they said. It moves it from the one part of the brain to the other. And then it helps them also feel heard, which is fundamentally what most people want. They want to feel heard, appreciated and understood. And so I think improving as a listener is is a huge way to become a better communicator and conversationalist and learner and person and friend and partner.
And that’s something that I still still work on. I’ll give you one take. We have another course that’s led by an improv comedian named Will Hines. He’s part of the Upright Citizens Brigade, which is the Amy Poehler start, as we did, of course, in partnership with them on improv. And and I had the chance to interview him after the course was done. And he shared this great bit of wisdom, which I really liked, which is after somebody finishes talking horse for half a second.
Before you respond, because it gives your brain time to actually think about what they said and then allows you some time to think about how to reply so that you’re not spending the whole time when they’re talking, wondering, OK, let me here’s what I want to add to this. Yes, that’s we most of the time is more like your turn to talk, your turn to talk. My turn to talk to your dog eat dog. It’s like.
It’s like what am I going to say? I can’t wait to tell him about this thing I did was like, would you do improv?
My fear I messed around with with a group of folks and we they they were doing improv stuff and I got to jump in for a while and it was fun. And the whole thing is like, yes. And right now it’s like the whole idea of like carrying this forward. And I would just for fun, just coming to say like, no.
Yeah. Just completely shut it down. It’s funny, but the way in which you effectively pick up the conversation, you have the chance to either. Yes. And carry forward or, you know, and even like you said. When you listen and you want to say something back to somebody, tell them what you heard and because the way in which you say it is important, it’s not just that.
What you’re saying is what I’m hearing you say is, yes, totally.
It sounds like to me it feels like. Right. You’ve put it through your own personal lens. It’s yeah. I found this very helpful for for marital conversations. I have we have three kids under four, and so we’re short on time.
And so we really have to get better at how we talk with each other and really listen, because it’s so easy to just. Try to be understood and not try to understand what’s the default and it’s a continuing thing, like even therapists need therapists, like it’s not like no one’s no one’s perfect that the stuff we’re always trying to figure it out. And it’s harder on some days than others and. Yeah, but I think.
This is where this kind of growth mindset versus fixed mindset, I think it sounds like that’s what you’re alluding to, right, is this idea of, well, it’s a skill that you can get better at. You don’t aligning.
A lot of people approach certain things like relationships as insider works or doesn’t. It’s binary. And don’t take on the idea of, oh, I can improve at this. Right. I can I can learn to manage this relationship better. And that growth mindset, I think, is really powerful. And the more people have it, I think the better our society will be.
Yeah, there’s there’s a lot of things, stuff like journaling, future authoring stuff where you’re effectively envisioning, you know, kind of what’s what’s ahead. And then you it helps you to actually define it, because when you’re working it out in a session, you’re physically writing it out. It does imprint it effectively on your mind that, like, this is a goal.
And it’s it’s kind of neat. And that’s a thought question for you one. Where how do you go from idea to eye?
We’re going to do more with this idea, what’s that process look like as an example?
So as it relates to startups, there’s this common commonly thrown around acronym, which is minimum viable product and the. Basic concept of it is, is that you want to learn as fast as you can whether anyone is going to care about what your idea is, what your solution is. Right. So, again, I’m going to repeat it, start with the problem. Start with a group of people who have a problem and figure out, OK. Is this solution going to solve their problem or are they going to?
Is it sufficiently different or better for them to care? And when they pay me money, or would somebody else pay me money at some point if enough people used this solution that I’m putting up with the world and you want to find that out as soon as possible. So rather than waiting six years and making your perfect dating app that you just tried manually to figure out, OK, can I connect to people and are they going to care? Right.
I’m using my quote unquote algorithm. Can I connect to people. Right. And and so so you really want to do things that in the beginning that don’t necessarily scale and that’s OK. But you’re looking for a signal. You’re looking for a sign that you’ve made something and somebody else cares about it. And the best signal in my mind is. You make something, you give it to somebody. And they share it with somebody else unsolicited, right, that’s such a clear sign of, oh, wow, I made something useful.
That’s that’s what you’re looking for. So you read a book and you give it to one person and they give it to five more people. That’s that’s that signal, yeah.
And take on the reading side of it, and, you know, if I look at what I really love about your platform and your content approach is that when I get an audio book, it’s read by a professional reader, like a professional voice actor, and even you get to know them when you listen to enough of them, like, oh, yeah, I don’t know their names, but I’m like, I remember another book that they read.
Yeah.
So what I love is that when you’re doing a course by Scott Kelly, it’s Scott Kelly.
It’s not Scott Kelly wrote this and then a professional voice actor is hammering out in a in a small, soundproof room. You are you’re getting the real deal. All of your content creators are they create the content. They voice the content.
That’s right. So cool. Right. There’s nothing better than when you get an audio book that’s read by the author, especially when they’re a personality, you know, because, you know, they invested the time to do it.
Yeah. And it feels that feels more like you’re actually sitting in the room with them.
And so I’m so I’m so on the same page. I think we’re not not everyone agrees with us there. I think there are some people who just prefer the professional narrator. And but I am totally in the camp of I want to hear Jerry Seinfeld read Jerry Seinfeld’s book. I want that voice. They don’t want some random person who doesn’t appreciate comedy. Reading that book, you hear professional voice actor.
So what’s the deal with you?
Like, no, it’s got to be his thing, right? Yeah. Yeah, there’s definitely there’s there’s so many nuances that and it’s funny at the end of it to you very much feel a part of their story. Totally.
Yeah. You feel like you just spend time with them. I mean they’ve been in your brain, they’re so intimate. It’s in your ear canal. Right. And they’ve been whispering sweet nothings. You’ve been walking and driving for the world.
Yeah, but what does blow it up, though, is that I’ve definitely gotten to the point where I listen to a lot of books at like one point seven, when you hear somebody talk and they sound like they’re talking very like you don’t sound like that at all.
Like button. Yeah. Yeah.
Because you say yes. So we’re going to to talk about this because you’re just trying to get it in as quickly as possible.
That’s the downside to, you know, that long, really long form book content is that when you see one in, you’re like 17 hours, you’re looking down into this like I’m not ready if I know if I’m ready to take this one on.
But luckily, I think like Netflix opening up the idea of like episodic content, being able to consume in batches or across time, like there’s no right way to consume episodic content.
And then this audio content follows the same format, like in the 70s, later told us that no one will go more than thirty minutes and retain interest in the program.
Right. When our programs was like, I don’t know if this is a good idea. You know, people love Lucille Ball, but I know they’re going to love an hour of her. They do love seventeen straight hours of her. If it truth was all right, if we actually let them try it so, so cool that we can be now.
You can, you can go you can get a knowable you know. Of course underway. Yeah. Take a break.
You can. That’s right. Yeah. Kind of at your at your own pace. And you know there’s certainly been times where I had a long drive and I was so grateful to have a seventeen hour audio book right today. I don’t I’m not commuting so I don’t want but I want the short three version. Yeah.
And this is the interesting thing is you’ve, you know, been, you know, the platform, it’s been been going for a while. Did you see sort of a marked difference in in patterns of utilization as we saw the world kind of shift the way we operated?
Yeah, I think I think it has halted some of the acceleration and audio consumption. Certainly, I know for myself, because I’m not reading and listening to less audio just now, I think a lot of people are in the same boat, but I think that it will come back. I do think that people will also just get screened for TI. And and going back to this idea of how what we really want to inculcate is this idea that noble is something that you can go take on a on a break.
Right. You can go for a walk or a run and put on your headphones and know that you’re going to listen to something that has a potential to a lesson that can change your life for the better that we can. So I think that we’ll see new behaviors and patterns emerge.
And I think that is the. That’s what I love about what you’re doing, and like I said, when it comes out in so much of what you the way you even describe it, you can just tell it’s in there. It’s like we want to know what’s a meaningful, positive impact that I can have as a result of the content. This is it’s going to be fluff.
I mean, good on right, everybody. There’s Harlequin romances for a reason, right? Somebody somebody out there loves that side of the story. Yeah, fantastic.
But, you know, we have such a great opportunity and especially when we’re in this real sort of challenge, detention economy, when we don’t have time away, like you said, that, you know, you realize we all despised commuting, but once we learned how to do things while we were commuting. That was a real opportunity sometimes to learn, to read or even just detach and going for a run. So I’m a cyclist and I love one of my favorite things is that the moment that I put my leg over the crossbar and I clip in my pedals and I start turning the pedals, I’m immediately in a different mindset because I know for the next four hours I have no way that I can type.
I have no way that I listen.
I have no I’m literally it’s me and an introspective mind for four hours, which can be a really dangerous place depending on what your mindset is.
But it’s it’s this beautiful sort of forcing function. Like when I get in a plane, that was my thing. When I get into a plane, people are like, you know, what I hate is that the Internet on planes is really terrible.
I’m like, you know what I, I love, but I’ve never found out because I, I when I’m on a plane. Yeah, it’s me. White noise. I can actually do other things.
Yeah, yeah, yeah. I’m the same, I’m the same way. I think that downtime is really important and it’s just forcing yourself or putting yourself in situations where you, you don’t have the willpower to resist the weapons of mass destruction. That’s right out of the smart, smart way to design environment.
You talked about UCB and I know from reading a bit about you were in that you you took a little time on the microphone yourself on on improv and stand up, OK, talk about minimum viable product and finding a product market fit making material, you know, two minutes on a microphone at an open mic feels like an eternity.
Yeah.
So cool. But it’s like, oh so what what drove you to take a run at that and what was the experience like.
I have always I’ve always been a fan of humor. I think humor is such a great tool in the chest of life and it feels like people have a great sense of humor. They’re able to. Go over the bumps of life so much better and easier and right and so I’ve just always appreciated comedians because my parents are immigrants. I think they let me watch a lot more TV than I probably should have. And I watch. And then when I was a kid.
And so that really. Influenced my my style of humor. I think I know what I think I’m squarely medium funny. Sometimes I can can make someone laugh and most of the time it’s it’s a mess. So I but it was something that scared me. And I really like this idea of doing things that scare me, because often on the other side of that is a sense of growth. And so I agree. I think it’s really scary to go up on stage and just have a microphone and talk to a roomful of strangers and try to get laughter.
But I think it’s also such an exciting format because the feedback is so objective. Right. And a world where there’s a lot of subjective value. Right. You don’t know. Well, how how good am I? Did I do a good job or are people just being nice, having being able to say something and then hear whether or not somebody laughs or not, you know, whether how you perform. And so I think that objective feedback is also exhilarating and exciting.
And a bit of advice I got on standup was talk about the stuff that you’re embarrassed about, because that’s the stuff that it’s honest. And most people will relate to it in some way or at least a certain subset of people relate to it.
And I think that’s humor is usually a byproduct of a sense of relief. Right. This idea of like, oh, you have that, OK, and that’s it. Yeah.
Yeah, it is. Because you effectively you’re just like anything, you know, when you’re you’re laying yourself bare. Right. You are going on a stage to present your you’re going to do stand up your you’re surrendering yourself to the audience for that period of time and hoping that they will carry you through this ride. And it’s very much an interactive experience, which is what’s funny. People always ask me, like it’s like I’ve been lucky enough through the course of my career to do a lot of, like public speaking and getting some large audience.
I used to be in a band years ago, so I was fairly familiar with being on a stage, but it still scares me all the time. And because you don’t know, it’s it’s a dynamic experience.
And I would and I would describe it and I help people with coaching for public speaking.
And I would say I call it listening to five thousand people at a time, because what you’re doing is you’re effectively letting them guide your talk. You may already have some kind of points you want to hit. Right.
But you have to let them steer you. You’re looking in the audience. You’re seeing the person in the front row who’s like leaning back and chuckling.
When you say a joke and you’re looking at the person who’s in the third row, who’s looking down in their phone all like from the moment you start, like, OK, I’m not watching that person for guys because they are not invested in it. Yeah, but it’s the audience themselves, you know, and at standup especially, they’re already invested in a way to the upcoming hour. Right. Five minutes, whatever, because they’ve made a point. I’m in this chair.
Yeah, I’m giving you a chance, kid.
So let’s see what you got.
Totally. I like that listening to find finance some people at the same time. That’s a good way of thinking about it in the end.
Is this as well as well, even the hour like when you see a comedian and they do an hour, what I see is eleven months of somebody doing five minute bits and two minute bits, like just testing it out and working it out and that real like they truly call it working out material.
It’s a gym membership, you know, going every day and trying it out and you’re testing in small rooms and on your family and friends wherever.
Right.
And eventually you glued together stuff that’s in a flow that’s in an hour.
It’s so when you. You know, when you’re a people based business, it sounds to me like that’s been a focus of you, is that you’ve always looked at a personal effect as an outcome of anything that you create. Absolutely, yeah, we are all west of us. So I think keeping that in mind and thinking about how do you want someone to feel, what’s the outcome that you want when they use your your product or service, I think is as a great.
System level way to think about what you’re working on. And sadly, it’s more rare sometimes than than we realize. I mean, I don’t think it truly is like we hear, of course, some of the tough stories and like it. I mean, there’s obviously, like you said, when you get into venture where people say like, oh, yeah, like congratulations on your venture funding, you almost want to say like, no, no, no.
Means to an end. Yeah, yeah. That is a person who’s betting on you to get an outsized return on their investment. And you’ve got the timer is ticking now.
Yes. Yes. It’s definitely a double edged sword, for lack of a better phrase. I think that. Yeah, I think a lot of entrepreneurs confuse raising money with succeeding at a business, and I you know, really the goal is to not have to raise money, right? The goal is you have a business. The people they love so much are paying you and you’re funding through your customers. But, you know, there are certainly advantages to funding.
And I don’t want to I don’t want to dismiss it totally or be ungrateful to work with great investors, which, you know, I certainly am. But but there are there are downsides and it is a calculated risk like anything else.
Yeah. And it’s there definitely is, as you say, sort of this idea of like a revenue funded business is fantastic. But of course, there’s going to be limitations.
There’s going to be advantages, disadvantages. And. Yes.
And, you know, like in your folks that you’ve worked with, you’ve chosen people that have been successful. They’ve got a high bar for their ethics to the way that they approach it, which is important as well. Right.
Because there are a lot of places that people could go to get money that are purely, you know, just accounting driven.
And so I like that in looking through sort of your investors and the folks that you work with in the market, I can appreciate their approach to it because I’ve seen, you know, their impact on the world and is really we are trying to do good things, you know, through technology and such. Yeah, absolutely, I think that in general, finding partners who are playing a long game is so valuable, who are playing multiple rounds because the firm, they care about, the reputation they cared about doing, supporting businesses that are doing good and aren’t just totally bottom line focused.
Right. Because they know that their only funding businesses that hurt people that long term, their value will diminish. So so I think fine people who play the long game, whether it’s a financial partner or a business partner, a life partner. When you chose to start your own venture and get into funding it and such, obviously your I should say I, I shouldn’t say obviously I shouldn’t lead with that.
Like, it would seem to me that your history in finance would have helped you to inform how to approach that part of the business building. How important was it that you had been intimate with the industry of finance as you went to actually raise funding? I think I think it’s helpful to know your customer and whatever situation you’re in, and so when you’re trying to capitalize your business, what you’re effectively doing is you’re selling equity. So it is by definition, you’re doing it.
It’s a sales process. And one of the best things that the best sales people do is they have empathy for their counterparty. And so really putting yourself in the shoes of the investors is helpful because you understand what are their needs and how can I fulfill them. So I did this presentation yesterday. I’m doing this course on fundraising. And my second tip is basically know your customer and know what venture investors want and how their math works. And the way their math works is they’re really trying to find the next Facebook, the next Pinterest and Snapchat, the next multibillion dollar company, because that is what really drives the returns.
There’s a Scott Kapoor is a partner at Andreessen Horowitz, put out a book recently called The Secrets of Sandhill Road. And he has this chart in there which shows that 60 percent of the returns for venture investors come from six percent of the deals. So when you’re pitching to investors, you really want to pitch this idea that you can be one of those six percent companies, that you’re going to be that company that can really drive outsized returns. And knowing that and having empathy for what the investors needs and wants are puts you in a better position to find a partner who you’re going to to jive with.
Yeah, that’s actually such a good read that will scare you out of ever going to where adventure because you realize how much is behind the scenes of the age of the funds, the the percentage of returns that have already come back in.
It is an incredible set of mathematics and and behaviors that will drive how an investor will comment at a particular point in time.
So it’s it is a very, very, very well done. And I love how transparent Scott was as part of the discussion, because it’s not often that people kind of share the math and the process behind the math.
Right. Which is which is pretty wild. I agree.
So for folks that want to find out more and I will make sure they do, I will be we’ll talk beyond here about, you know, how I can help to expand the brand. You know, Noble is just so fantastic. And I appreciate you taking the time with me today. Warren, this is a real pleasure.
And you’re you’re doing good things. And like I said, it’s sadly, it’s is more rare than than it should be. But it’s so nice when you see people that are becoming successful as a result of the good things they’re doing. And it’s well deserved.
Thank you so much for the kind words. I really enjoyed the conversation. It’s nice. It’s really energizing and fun to talk with someone who is so well rounded and so interested in and learning. And I’m sure we get to talk for multiple hours easily. And I look forward to continuing the conversation.
We’ll have to have we’ll do a knowable course on how to have a two way conversation on financing and venture capital. But it is this was really, really cool.
So, again, for folks, if they want to connect with you online, Warren, what’s the best way that they can reach out?
The best way to find me is on Twitter. My handle is at @wwshaef and you can also find knowable at knowable.fyi and the best places to find me and no perfect.
Yeah, I’ll make sure we have links in the show notes as well.
And, and I’ll, I’ll definitely be albe before long before we got to today, I wanted to test her to talk about things, you know, through the course of the discussion. But I’m definitely I’m keen, you know, if it’s valuable, I’d love to contribute content towards the platform. It’s just such a such a great opportunity. So absolutely.
Yeah. Let’s talk more about your book, because I think that’s a really easy way to get started. So we should have an offline conversation about that.
We’re in good shape. Warren, thank you very much for spending the time today. And I’ll say happy twenty, twenty one. We’re we’re we’re we’re around the corner on a lot of things and we’ve got some some good stuff ahead.
And for folks, definitely, if you want to hear great stuff like this, head over to knowable because you get to hear it from the from the creator’s voice, which is in my my view, one of the best ways to learn.
Sponsored by the 4-Step Guide to Delivering Extraordinary Software Demos that Win Deals – Click here and because we had such good response we have opened it up to make the eBook, Audiobook, and online course, more accessible by offering it all for only 5$
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Thomas Graf is the CTO and co-founder of Isovalent as well as a long time open source contributor to numerous projects. Linux kernel, BPF, networking, containers, security. He also previously Linux kernel developer at Red Hat and shares a ton of great info on the challengs of security and networking in Linux and Kubernetes as well as how he and his team have built a business on open source technology.
Check out Isovalent at https://isovalent.com
Get involved with the Cilium project here: https://cilium.io
TRANSCRIPT
Sponsored by the 4-Step Guide to Delivering Extraordinary Software Demos that Win Deals – Click here and because we had such good response we have opened it up to make the eBook, Audiobook, and online course, more accessible by offering it all for only 5$
Sponsored by our friends at Veeam Software! Make sure to click here and get the latest and greatest data protection platform for everything from containers to your cloud!
Want to ensure your privacy is protected? I sure do. Privacy is a human right and the folks at ExpressVPN make sure of that. Head over to ExpressVPN and sign up today to protect your safety and privacy across any device, anywhere.
Gabe Luna-Ostaseski is the co-founder and CRO of Braintrust, the first user-controlled talent network that connects organizations with highly skilled tech talent.
Our conversation explores the power of two-sided marketplaces, how Gabe built his first company, and powerful lessons in growth and leadership which will make this a must-listen for anyone in the startup ecosystem.
Thank you for the very open and dynamic discussion, Gabe!
Photo by Andrea Piacquadio from Pexels
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