Jeffery: Welcome to the supporters fund asking investor I’m your host Jeffrey Potvin. Let’s please welcome Gregory Sheppard at boss Capital partners as our investor for today. Welcome. Gregory It’s a real pleasure having you join us.

Gregory: Thank you for having me. I appreciate it.

Jeffery: Well, Gregory, I know we chatted multiple times over the years, but I’m really excited about this podcast. Probably the most nervous. I’ve probably been on a podcast because it’s almost like I’m a fanboy. Of all the things that you’ve done in your career, I’ve watched a lot of podcasts and videos. You’ve done an exceptional job on how you actually work in the startup space, and not a lot of people do that, and a lot of people are kind of the surface level we like to help, but you’ve taken this to a whole different level, and so I’m excited to kind of dive into that and learn all the research and the things that you’ve guys done as a business, but also where you’ve come from. And the way we like to start our show off is we want to learn a bit more about you, so maybe you can share all the way back to your first company, all the way through to what you’re doing today. And then one thing about you that nobody would know.

Gregory: Sure. First of all, thank you for the kind words as I’m humbled and I really, really do appreciate it. And I’m a fan of you as well. So it’s it’s samesies, I guess. So. I can tell you, starting back when I was young, I grew up pretty poor. You know, we lived in tents for a couple of years while we built our house. And we we’re family have been foster and adopted siblings and different nationalities. There’s two of us that are biological. My mom was a nun, actually. My dad was a priest. And then they left the church to India to take care of children. And then I have autism, dyslexia, synesthesia and savant syndrome. So I had a lot of problems growing up, you know, just everybody making fun of me, getting beat up on racial faces. But I did start selling Rubik’s Cubes and solving them. And I sold rattlesnakes. I used to catch rattlesnakes and so on as exotic pets and antivenom and I mean a lot of different things as a kid, including breakdancing, which nobody knows about. I used to break down for money in San Francisco, but my first business was actually a nobody knows this because I never talk about it. But you wanted something. So I started a bungee jumping company called Pure Adrenaline, Bungee jumping. And we did like the Mountain Dew commercial, you know, where they go in and come out with a Mountain Dew. We jumped up a Chevrolet off of a bridge one time. Lots of celebrities, things like that. And it losing all my money. It was terrible. First business. Then I went into banking and started a non depository bank. I think I was like 20, 20 years old, maybe 21 years old, called American Federal Lending. We sold that. Then I went into it, applied Environmental Biotechnology, sold that to a public company in Canada. We spoke about that a little bit before then when the Internet came out, then it was like paradise, right? Because you could take vapor and just create things. And it was like for me, it was like the most I couldn’t believe it. So I started coding it very early and then I created a whole bunch of websites and I started to learn about the need for websites. There was just like Gold Rush. Everybody was trying to get websites. So I worked with with an investor and created a Automattic website builder, which then morphed into an advertising agency which then morphed into a advertising compliance company, an affiliate, marketing passports and visas and travel insurance. We started the first travel insurance online, the first agency in the ability marketing space. The first ad compliance based product line that was attached to that, that were. And it just went from there, you know. So I’ve done 12 startups and I’m on 13 right now with, well, 14 actually, if you take the fund and then you two are the, the, you know, most capital partners in startup science and you, there’s, there’s two more there and then I’ve done a bunch of investments, I think somewhere around 14 different investments. And all in all, I only lost twice. One was the bungee jumping company and one was a real estate company during COVID, which I did sell, but we didn’t make money, so I counted as lost because it was a fire sale code. It just destroyed real estate for a little while. There. And during that process, I sold two companies to eBay, one for private equity awards for transactions between 250 and a billion ended up being the chief strategy officer for eBay Enterprise for a while. And then we bought all these companies from eBay and then we I became chief technology officer. And then that company sold a couple times after we sold all the pieces and stuff like that. And then I started going into politics and I was trying to get women and people of color into Congress in the United States. And I found that that was a not a probable outcome as long as people can lie. So instead, what I decided to do was go direct to the source and help with wealth inequality, inclusion and environmental issues and sustainable issues by helping founders, because that’s what I had done. So I started a research project and I put 500 grand into a fund, and then I hired a bunch of people. And then we did this starting in 2016, studying why women and how founders failed. When I learned about that, I found the majority of the founders are failing for the same reasons over and over again. And I was like, okay, well, maybe we can’t solve all the reasons why they’re failing, but maybe we can just work on the ones that are repetitive, you know, the things that are reoccurring, problems that happen over and over again. So then I started a school to teach people about why founders were failing and how not to and all of the different things that they needed know about it. And that became startup science. I which is a SaaS platform that we offer to universities, accelerators, incubators, we call them startup assistance programs, and that’s what I do now. The process has been a, you know, over 30 years of of work and a lot of consequences and a lot of I mean, there’s a lot of things that a lot of trade offs. And you know this because you’re you’re like me, right? I mean, you come up and you just keep grinding, you know? So I think I’m sorry for being so wordy, but that’s that’s pretty much a good summary to start out with.

Jeffery: No, this is great and a great start. It all add in that you’ve also got a podcast YouTube channel, so you guys do a lot of different things. But the underlying piece to this is education. Yeah, it’s taking what you’ve known and turning it into something that can bring value for other people. And I know you talk a lot about it even in your shorts or one minute videos that you have on YouTube. Those are pretty good because they’re just one minute of insightful detail that, hey, maybe you’re not thinking about this today, but I’m going to throw this out there anyways. And I think that a lot of these pieces all come back to that educational side. And when you go back to when you started your first company and even the one that you said failed, there was so much learning you gained just from that one business. And what I think the underlying kind of terminology to everything that you’ve got is that you have no limits. And if you create limits, you prevent yourself from moving forward. Is that fair statement?

Gregory: Yeah. I mean, I think that I mean, my life has been full of failure, but failure is just another word of progress. So, you know, if if you find yourself failing, then you’re progressing. If you find yourself not failing, then you’re standing still, right? If you think about struggle as a positive meaning, if you think about just organically the way the universe works right? Plants grow through concrete. They do really healthy when they’re struggling, People will always tell you, yeah, your plant needs to struggle. Your own body doesn’t go through autophagy, which is where the the the bad cells are digested in and reformed into good cells by the good cells. Unless your body’s in struggle as we’re all this cold shower and fasting and stuff comes from. Right. So struggle is a necessary progress, a process to progress. Right. Like it’s important to I think that I look for it, you know, every year I try to find something that I think is impossible. And then I go do it, you know, to prove that even the what you think is impossible can still be done. I mean, I’ve done every kind of happy damn. You know, I ran a marathon. I swam a marathon last year in the ocean. I didn’t even know how to swim before that. So, you know, and I have asthma. So, like, you have to choose these things. Now, being a founder is the ultimate right. Our founders are the friggin Navy SEALs of business. If you can make it as a founder, you are running circles around anybody else in business despite what people say.

Jeffery: I love that. And the key there is impossible. Every day you’re waking up and you’re fighting that next challenge that’s going to drive you. And I think if you take the analogy that you used is that if you’re not struggling, you’re not actually thinking of ways to reinvent or find growth or find different opportunities. You just get stagnant because you’re just getting accustomed to what’s in front of you. You’re not looking at what different thing can break this so that I can go forward faster. And I find that every great entrepreneur loves to break shit, so they want to break what they have. And if they’re not breaking it, they’re not a they’re not an entrepreneur. I just feel like there’s just there’s the disconnect. They’re just like going through the motions. I need to make this better. You’re already doing 30 million. I need to break this. We got to change it. It would go this way and people may not understand that, but that’s not just due to being set back in your ways. It’s because there’s another layer you haven’t hit yet. And I think that everything you said comes back to impossible. And how do I make my life impossible or do the things that are impossible because that’s what’s going to give me the energy to keep driving forward.

Gregory: As 100%. I mean, you you know, people go to train for a marathon and they run a mile and the next day they have to do two. So they’re constantly doing what they can’t do. Bodybuilders workout, tear the muscle down, the muscle grows, Right? Your whole your whole ecosystem, you and everything around you works in that same thing, right? Like we’re trying to go to Mars right now, right? Elon Musk went on Twitter, broke it. You know, I mean, there’s there’s your point is 100% accurate in that the meaning disruption is to create problems. Those are struggles, right. So the whole idea of entrepreneurship is to create disruption, right? To restart, to to build, redo, to make it better, to break what’s there and make something better in the future. So you nailed that 100%. And that’s why I love it, man, because like, I don’t understand how people can work jobs where they just do the same thing over and over and and they’re not exploring. You know, the reason why I called it startup science, because the process of science is to go and do things that have never been done before, learn from the experiences and constantly break things until you until it’s down to a science, right? Until it’s a chemical process of systems, right? Startup Building a startup is a process. I mean, the idea is an art, you know? But the building, the business is a science. You know, if you study it really intently, it’s a very there’s, there’s a definite process that you go through, you know, But to come up with the idea that’s an art, that’s just pure creativity. And those ideas aren’t just at the initiation of the business, but all throughout building the business, when you’re doing iterations or pivots, when you’re out there and you’re solving a problem, these are creative things that come with founders. So it allows you to have this organized sort of systematic process thinking combined with this creativity. And the two of them together makes a good founder. You know, like if you think about it, there’s two types of founders, right? There are what I call visionaries. And visionaries. Look from the outside in at a problem, and then there’s subject matter experts and subject matter experts look from the inside out, right? So these these different types of founders are like the key to making things happen. But what they all share is they’re all looking for problems.

Jeffery: Greed. I love that. And I think if you take those two analogies and you go back to the first business and I think it’s not your first business that the bungee business, but when you were in the ad space, the media space or MEDCOM space, what were some of the learnings that you gained? Because you quickly built a business, you got into the space and then eventually you ended up selling the company. What are some of the things that you would say that really stuck out and that learning it shaped the way you’ve done everything else going forward? Is there two or three things that you would say Founders look out for these things when you’re building a company? Is it learn to pivot fast? Is it learn to say fail fast, but to me, fail fastest means autocorrect. You’re not failing. Who wants to fail? Something you’ve just been building, but you can autocorrect and start going in a different direction. So what are the things that really stand out that made you who you are today from those earlier businesses?

Gregory: I think one of the things is to and I’ll just do some quick stuff, right. There’s a difference between a pivot and iteration, right? An iteration is small adjustments to an existing plan and a pivot is changing the existing plan. And it’s okay to do. Either one of them pivots is sometimes you don’t know things how to get there, especially when you’re in a new frontier, which founders are always in, right? It’s the space of new frontiers, right? So you’re out there in the wilderness and you know, you break your leg and you’ve got to change something or the weather changes and you got to change something, right? And that’s just the nature of pivots or things that you do along that cycle, right? So, you know, you’re walking along and you’re trying to prevent a sorry a an iteration is something you’re doing along that cycle. So you’re trying to prevent the pivot from happening. So you’re hiking along out in the wilderness and then you find out holy smokes, you know, if I don’t change my socks, I’m going to get a blister. And so you change your socks and then you don’t get a blister preventing the pivot, an unnecessary pivot by doing an iteration. Right. So that’s like one of the that’s one of the ways I look at it. The other thing is to understand that, you know, building a business is like a GPS, right? You have to know where you are and you have to know where you’re going. If you don’t know those two things. I mean, you know, you could be five blocks from your friend’s house that you don’t understand where you are, where you’re going. You’re never going to find your way. And businesses are very similar where where you are is where are you at right now on a on a GPS map. And then where you’re going is your exit strategy. And what I find in the data repeating over and over again is founders failing because they didn’t think about the exit strategy at the very beginning. And I talked to investors and people they always argue, well, it’s too early for that and all that kind of stuff. And I always tell them I go, Look, businesses are buying businesses for only synergy, right? And there’s only two types of synergies. You’re either buying company to make or save money, period. Right. Customers are the same. Customers have synergies. Again, they’re buying your product to either make or save money. Right. So there’s commonality between the two. When you’re building a business to sell to another company, the synergy that most often occurs is the one where they’re making money. So let’s talk about how they make money. Their character LTV is really high. If they buy a product that they can sell to their existing customers, right? Because now they’re growing their lifetime value, but they’ve already absorbed the customer acquisition costs. So when they look for acquisitions, they’re looking for products that they can sell to their existing customers. That’s that form of synergy, right? So now if you think about this on a broader scale, so you say, okay, then your business is just essentially a product to your acquirer. Now let’s pivot back to the customer. Would you ever build a product without having a customer? So then why would you build a business without having an acquirer from the very beginning? If you don’t, you’re going to be and I made this mistake again. It cost me five years and it was a tremendous disaster. Okay, So what I did is I built the company, I had my ICP, but I didn’t have my cut. My and my persona, but I didn’t have my acquirers. ICP And percent or the acquirers, the list of, you know, what you would run in the quote process, right? So what I did is I built all these customers, paid all this money, Did all this go to market, all this sales and all this growth? Turns out 50% of my customers, they didn’t even care about. And they were like, We’ll give you a half the money because we don’t care about this kid. We’re going to throw them away. We only care about the ones that. And so you waste all this time, all this money, all this delusion, everything. And at the end of the day, you found out something years later that’s going to take years to fix. If I had planned that from the very beginning, that would not have happened. So one of the things that founders need to make sure that they do is plan for the end now before right when you get started, because at the end of the day, that’s where you’re going, Right? You know, we talked about where you are and where you’re going. That’s where you’re going, right? You’re selling your business. So you need to think about who’s buying you, just like you’re thinking about who’s buying your product. I think that one is the most fundamental thing. The third one, I would say, and these are like the top three, when I looked at the data, you know, there there’s so there’s stuff out there that says, you know, wrong team and ran out of cash and all these sort of things that are in the traditional graphs that get produced by the by the big players who just don’t go down in the details or throw a bunch of, you know, shit into buckets. Right. But if you go underneath that, it looks like a tree, right? So at the top there’s all the branches and leaves that everybody sees and there’s the ground underneath that is the roots and the real issues are down in the roots. One of the branches of that tree is things that result into bad decisions that mean, you know, we make bad decisions as founders. So then what I wanted to do is I wanted to understand why were these bad decisions happening? Like where was it coming from? The root of that was actually bad advice, right? And so then I was like, okay, well, who’s giving them bad advice? Like, where is this coming from? Where is the bad advice coming from? And number one was investors, which was really crazy. So then I investigated that. I’m like, okay, what? Why? How is this happening? And who’s giving them the advice? So it got all the way down to who were the actual investor profiles that are giving this advice. It turns out those investors had never started a business, never funded a business, never did anything there. Just went to some school and they come down and their deal hunters for some fun. And the people in the fund don’t even care. And they don’t even all they know is numbers, right? So they don’t know what creates the numbers. They only know what the numbers are at the end of the day, which is like driving your car, looking at the rearview mirror. Right. You’re looking at something that was actually started a year ago by looking at the financials. So they were giving advice on something that’s happening today that started a year ago. So no wonder the advice was bad and they were giving advice that was partial to their viewpoint of the of the deal flow that they had, not the founder operators viewpoint, which are totally different. The other piece of bad advice was coming from mentors. This one really upset me because I was like, These people are specifically brought in by accelerators and startup assistance programs to help these people, right? Not to give them bad advice. So then I started saying, Well, who are the mentors? Like, Where is this coming from? And then I found so many of the mentors were actually consultants looking for work, so they would offer their services free and then they would try to convert it. So I was lead generation for them because they’re doing the service for free, right? Other one, you know, lawyers, accountants, consultants of different forms, they all these people trying to fish for deal flow from vulnerable founders that don’t know any better and they think well the the start systems give me this person. They obviously know what they’re doing right. Sometimes they were investors. We already talked about that and sometimes they were one hit wonders right So some some person she gets a business going and she has she just catch the wave at the right time or she, you know, taps into the right thing. It wasn’t it was a coincidence or luck, I would say, more than actual tactical strategic execution on a plan. Right. And so their advice was skewed towards like what you need to do is go get yourself one of these guys, right. And be like, better, That happened for you. That doesn’t happen for everybody, right? It just happened for you. So those were the three layers, right? That was creating this bad advice, that was creating the majority of the failures, you know, And it was coming from people that were meant to help the founders, which made me just it blew my mind. You know, Jeff, I was like, I was like, what the you know, this is insane, you know? And that was one of the motivations I had for creating the curriculum, because now there’s a guide and the founders can learn from themselves and create standards. One of the issues in our industry is that the standards aren’t there, right? So, you know, somebody is like, Well, where are you? I’m not around. Well, there’s a friggin thousand different ways to explain where around is it rounds or something that happens in the lifecycle. They aren’t the lifecycle, right? So you know, it was like this mix of stuff. And so the advice combined with the lack of standardization, you know, created this minefield that these poor founders have to walk through. They don’t even know they’re in a minefield, let alone that they’re about staff on a mine, right? So that was like a lot of the motivation for it. Sorry, I went on a little rant there. I got super excited.

Jeffery: No, that’s this is honestly gold. So what I find fascinating about the areas and we’ll dive more into the the fail side and what the learnings are from it and why. But there was a couple of things that kind of stand out in those pieces that you’re talking about. And the main one obviously is plan for the Exit. And I remember a story when I first started my first company and I was with an investor and he said to me, What’s your exit? And I said, I haven’t even started yet. How am I going to have an exit? And years later, after going through everything and you get advice from everybody and you’ll learn. But the good thing is that as a founder, you should be able to pick the pieces that make the most sense that aligned to your journey and your story and utilize them to help you as a base. And then everything is information. And I was just on a podcast recently and we came up with it was 70, 30, 70% of this is gut, 30% of it is taking information from everybody and using that information to see if it influences your gut, because your gut is what’s in this 100%. It knows the ins and outs, take the learnings, take the advice and then mash that together and have that one go to person where you can kind of share that advice to your your direction and say it for me or disagree with this. And there’s probably a million ways to skin the cat, but we need input. You need to get inputs from somewhere and then you have to make that call. But at the end of the day, it comes back to to your point is that if I haven’t plan to where I’m going to go, I’m never going to get there. I need to have that exit, even if it’s rudimentary. And we all say, Google is going to buy me whatever that look is, you start to shape your business around the company and the problem that they’re having so that you can get your business to that position in the next 5 to 7 years. And if you don’t have that, you can’t shape it around anything. You don’t know what Google is looking for. You don’t know the types of companies they buy unless you really research it and figure it out and you realize in your first early onset is that they will buy me because this is the type of company that they focus on. So you can’t really shape the way you go after customers. And you made a super valuable point is that you were getting everybody as customers. But then when someone went to buy you, they were saying, Hey, I don’t need 50% of your customers because they don’t fit into what I’m looking for. I only need this group. So you end up dropping half of those customers because they really didn’t fit into the instrument that was going to make their business successful and their business wants something that’s going to generate more revenue or more value for their customers as a bolt on or new product. So it’s pretty fascinating that this learning that you’ve gained really does fit into this journey of here’s the steps that I need to take. And if I’m a little bit more precise at the beginning and the planning and the strategy, I’ll have a better outcome in the future.

Gregory: Yeah. I mean everything you said is accurate, right? 100% accurate. I would say that like on some of these I’ll sort of go one layer deeper on some of these things, just not to get too attached to crazy, but I’ll just do one little tiny layer deeper. So one of the things is if you’re looking for advice as a founder, right, you have to realize that there is a there’s a vertical subject matter expert and a there is a functional area subject matter expert, and those are relative to where you are in the lifecycle, right. So who you use for your sales and marketing is a different type of a person than who you will use for product. And so when you’re getting advice, you want to make sure that if you look at I, I write about the four functional areas growth, margin and retention are the valuation drivers and they need to be tied to something. Growth is tied to sales and marketing, retention tied to service and support and margin is tied to operations or shared services and product engineering. Go across all four of them, right? So if you’re building a business and you’re moving out and you need advice, find somebody that is a specialist in that specific thing, not a generalist, right? A specialist. But that doesn’t mean that they have expertise in your industry or your vertical, right? So you need somebody that understands your vertical and you need somebody that understands marketing specific. And even drill down to, you know, demand generation, do somebody or content creation, somebody that specifically understands those things so that you can build a stack of advisors that work for you at the stage. You are on the lifecycle, the functional area that you’re in and the vertical that you’re in. So with advice, that’s how I would position that. With regards to exit strategy, there are in fact in our platform, we’re adding in the ability to find in next month to find your requires inside a platform is good or to find your requires. But the way that that works is like right now you can do this through Crunchbase or Pitchbook or whoever it has data and you can find out what sort of acquisitions they’ve made in the past, how much they paid, what were the multiples. So you can learn what your business would look like if you sold to those acquirers, right? You can say, they’re paying ten x top. So you’re like, okay, right now I got a ten X out possible valuation. So you don’t overvalue your company as you’re doing rounds, right? And then in addition to that, you can say, well, they’ve bought five companies. What is the commonality between these companies? And you will see a pattern. In other words, you’ll see their strategy and you’ll see whether they’ve wrapped up that strategy or if they’re still in the middle of it. Right. So you may see three acquisitions and then you look and you’re like, okay, they’re buying logistics, right? And you’re like, okay, they’ve got this part, They’ve got this, but there’s a miss here, right? That’s my shot. Now, what you have to do is you have to think about what I call the pack pattern. Okay? So what that means is let’s say that there’s five acquirers. They’re all going to buy it. One mess, right? There’s 100 companies shooting for that acquisition. So you have 100 companies competing for one slot with five companies. So you can see how that the bottleneck starts to go through. Right. And whoever doesn’t get that acquisition, they’re done right because whoever made the acquisition is going to eat their lunch, because now it’s it’s owned by a big right. And the big is just going to barbecue everybody else that’s in the stack. So you’re also sort of looking at your timing, right? And you’re saying, okay, I’ve got ten possible acquirers. Each one of them have three or four spots or whatever it is. There’s 100 competitors and they’re all going for those three or four spots. It’s like trying to get into the NFL, right? So or trying to be a movie star or something like that. Right. You have to realize that this is not a time friendly game, right? The fuzes burning and everybody is going after the same homerun. So you have to make sure that you account for that. So doing your strategy upfront allows you to know to see what your field of opportunity looks like, you know, and if your field of opportunity is as big as you think it is, are really narrow. And then you know how fast you need to move to get in there to get that one spot that may be available. So that’s the second layer. On the acquisition side, I talked about starting with the end in mind. I talked about the the mentors and advice and that sort of stuff. And so the the last component of this would be to understand the, the minimum that you need to do to have a premium product. Now, this does not mean and I get into these panels sometimes where I’m talking to some investors, they’re like, Well, then we’re just going to build Z and then offer it to some buyer. No, you won’t, because the buyer is going to know it’s shit. Okay, so that’s a ridiculous argument. You know, they’ve got 100 companies to buy. Believe me, if you build a pile of shit, they’re not going to buy it anyway. So you obviously you have to build something super high quality and super high quality being defined as something they think is high quality, not you think is high quality. So if you’re building a business, your vision is a think of your business or your vision as a really wide lane and think about all of the little details of your vision being modified by the acquirer and the customer. Right? So you don’t build to your vision. Your vision is a direction you build to your customer and your acquirers needs. If you build to your vision, a lot of founders fine. And this is in the data that they build something they think is amazing, but their customers don’t think is amazing and they can’t understand what happened. You know, they’re like, How did I fail? I don’t understand what happened, you know? And then they realize, shit, I didn’t check in with my customers and my acquirers and make sure that this is going to building. So I have a process to fix this. I have all these little processes. So this process is you have an industry advisory board that’s your vertical advisors. You want 5 to 10 of these people and these people understand the industry so they can help you understand who the acquirers are, where the spots are. If you’re going going in the right direction from a broad level that helps you adjust your vision and then you have a user advisory board or customer advisory board. Sometimes you need balls, sometimes you can use one depending on what kind of thing you’re building, and they’re helping you be directionally correct on the details inside of that vision, if that makes any sense at all. Does that make sense? Those are the three like main pieces that I see over and over in the data.

Jeffery: It makes total sense. And what I like about the way that you’ve shaped it is that by looking at where you’re going to go, you can fill the gap that big business is looking for. And if you’re smart about how you’re trying to fill this gap is you’re projecting as well, like where they’re going to be in five years and are they going to want this piece of building, which then means that you as a business has to get into commercialization really quickly or get to a point where you found market fit and keep it super focused. And that focus is what’s going to drive you to be that that pie shape that’s going to fit into the biggie because the big he’s going to look at this and say, we’re missing this gap. These guys are the perfect fit for this gap. Their hit, our premium model that we’re going to have, they’re bringing in a SAS piece of they’re bringing in something that’s going to generate this revenue or this value, and they’re already doing it or they’ve got some IP and some tech that matches up to this. And when you’re adding in these different layers from advisory groups, product groups that are going to allow you to keep shifting and getting that pie tighter and tighter so that they almost cannot say no to wanting to acquire you because you fit so well into that model. And they’re going to solve that problem that nobody else is. And I think that that is so valuable to know because at the beginning you just want to work, you just want to build, build, build. And if 90% of founders are builders and 2% or salespeople, then you’re going to have a rough time figuring out how you’re going to fit into someone else’s model because you’re not looking at how do I sell in? You really need to shift that mindset to being 98% selling and strategy 2% build. Let your product build as you find your market and you find the direction of where you’re trying to achieve.

Gregory: Yeah. And the other thing that boundaries are realize is that so in part of the process that I went through was interviewing accelerators. I interviewed a few thousand accelerators, hundreds of corporate thousands and thousands of founders, thousands of investors, you know, this whole thing to try to understand the details of this. And one of the things that founders, it was surprising how many didn’t do it. I thought it was like normal that everybody did this because what I did and I was and I realized, holy crap, nobody’s doing this right. The the corporates that will buy your business, what I call the bigs. Right. That that will buy your business. These guys, their innovation they don’t own innovation anymore. It’s really rare. Usually startups are their innovation. So I interviewed them and I asked, Why are you interested in startups? Why are you funding accelerators? Why are you sponsoring, Why are you doing all the stuff? And I thought that the number one reason had to do with acquiring the company, but the number one reason had to do with understanding what was going on in the streets. The real data number two was acquisition. Number three was investing in the company as a to use as a product in their current products. At number four was acquisition. So I asked him, I said, So what do you want to know? And they’re like, We want to know what’s going on in anything that’s relevant to our core industry, you know, General Motors, whatever, right? And so what I did all the time is I would call the acquirers, I would straight up column and I would just be like, Hey, I’m building a startup. Here’s what I’m doing. What do you think? Right. And I would keep that conversation going the whole five years, right? And everybody’s like, they’re intimidate. I can call them that. I’m telling you, they pay millions of dollars to get deal flow, right? There are people that are dedicated on payroll to find stuff that you’re building. Call them. They’re going to love it. Right? They’re going to be so excited that you called them. So call them and they’ll guide you down that pathway. The other thing along those lines is that there are a few steps to getting an acquisition, and this is unpacked by two sort of defining factors of a good acquisition. One is culture fit and one is product and financial fit right product and financial fair. The same thing that’s what I was talking about with the synergies. Okay. So if you’re if a company is going to buy another company, they’re trying to see if the puzzles will the puzzle pieces will fit with their business If you try to if you don’t do that along the way and then you just throw it at them, it can take a it could take a year or two years to close a deal. Right. Because they’re doing their diligence just isn’t like standard diligence. Right. They’re trying to see if this is going to work. The corporates have gotten really smart now in that they’ve made a lot of acquisitions and a lot of them didn’t work right. And that had to do with either a product or a product fit didn’t work or a culture fit really big culture fit is the biggest one. So what I do is I start to develop the culture by car and then when it’s early, then you move to a partnership, you move to a partnership, to a round of funding from that, a small round. In that round of funding, you have an option to buy the company for a defined multiple at a certain time in the future. So you already have the hard work of the paper and the terms of the deal outline and you have a round of funding from them tied to it, right? So now when you want to sell and you go to them and you go, Hey, listen, you are on the list of people that have the right to look at this business. We we’re interested in selling them. We have some of the people and they look at the paper and says, it’s ten x top, you know, right now paper’s already done. We’ve been talking you the whole time. Product fit is their culture. If it is there and the acquisition goes much smoother. So a lot of the mistakes that happened at the end of the cycle in, the seventh phase of the life cycle on the exit stage is that they haven’t done anything to build this relationship or share the products or learn about that. It’s like, it’s like, you know, it’s like going on a blind date, right? They’re like, Hold on, let’s have some coffee, you know, then maybe we’ll have some dinner, and then maybe after that we’ll go to a performance and then we’re not going to get married right now. Right? That process can take years with the corporate. So you started early. So by the time you’re ready to sell, the time frame is like six months instead of like two years. So that’s like a big problem that I see over and over and over again. And I always did it just because to me it was just logical, right? It was just like a logical way that you would go about it. And I didn’t have any fear of these people, but a lot of founders, they’re afraid of them. Don’t be afraid. They want to talk to you. They want to talk to you. You’re paying massive amounts of money to try to get people like you on the phone.

Jeffery: I love that. And it’s a vote of confidence that this is the direction you have to take. But what I like about kind of how you broke all this down is that maybe what founders have been doing is they’re just building business. They actually aren’t building to sell. So maybe we have to change the story to say, if you’re interested, to engage with us or within the accelerator, within this environment, you have to be looking at selling and that could be anywhere between two years to seven years. And if that’s the case, you need to tell me who you’re going to be bought by so that you can work your way backwards and use the steps that are going to get you to that acquisition. And you need to start talking to these people. This business that wants to acquire you, even though they don’t know it yet and started staging this through because your model in your business is going to shift as you’re filling their gap because they think a lot of the times people are just building companies, which is great, but then they fail because they’re just chasing dollars to raise instead of building a company. So that like two ways they can either build a company that makes money and I’m happy and everybody’s happy and I pay everybody, or I build a company that fills a gap, which means I’m going to sell it and I have to be prepared to sell this business at any point in time. As long as I’m filling this gap and everybody knows I’m filling this gap, especially the acquirer that I’m going.

Gregory: After, right. So, you know, money is an outcome. It’s not a goal, right? So if you think to yourself, the the goal is to create a really clean company for one of the bigs to buy. Right. That’s your goal that the money that you get from that is an outcome of performing well, right? Just like your financials are an outcome of earlier performance. So that’s one of the things and you’re right, and I brought that up to people in there, I was like, and they always do the same thing. I brought it before. They’re like, we’re we’re just going to build a, you know, an exit. Some, you know, fast food version of a of a business, right? They’re not going to buy that. So you have to build something good in the first place, right? So just make sure that they keep that in mind that, you know, you have to build a good a good business and then you sell it. But ultimately, that is the goal, right? If you’re raising money, they’re they’re looking for their car, they’re looking for their returns, they’re trying to win. Am I going to get my money back and how much am I going to get back? And why is this the better way to invest than other other options that are out there? And you’re like, Well, I’m building a business. I have no way. I don’t know how I’m going to get your money back. I don’t know how many. I mean, you’re like, What kind of investor is going to be like, yeah, let’s go for that one. I mean, you know, think about that, right? And do you want an investor like that on your team in the first place? Right? Like, no objective. Just, just yeah, it’s just and that’s why, you know, you see these a lot of these bonds, they’ll invest in hundreds of companies and it’s just like throwing noodles on the wall. One of them sticks and then that one has to pay for all the ones that lost. And that’s why they have to do these unicorn deals, which we’ve seen fall apart because of overvaluation. Right. So you have that and then you have the combination of the drive of the funds. A lot of the funds, you know, you have a two and 20 model in the funds and the big ones, the big VCs and stuff, not the boutique ones like yours. Yours is like a cool, really trying to help fund right? That like these big ones, these guys, they’re just putting money in because the bankers behind them aren’t the people that are actually running the fund. They’re getting their percent, they’re getting commissions basically on the deal, right? So they’re just trying to raise money because that’s what they’re selling. Right. And they’re making their money. Whether you succeed or the investor succeed. This that’s my bet, actually. You ask me for something that really pisses me off. This. What really pisses me off is even this last thing that just happened, this hiccup that happened happened because of an overvaluation problem, because of greed on the part of the people that were setting up the money, not the founders and not the end investors. It’s the people in the middle right. And those guys.

Jeffery: Everybody’s demanding money, right? Everybody wants to make their money along the chain. And you have to be prepared as a founder to be able to figure out who’s making it when they’re making it, but also how you drive your business along that chain. And you’re right, it’s going to get disrupted by everybody seeing that this is a gangbuster opportunity. It’s super unique and then everybody starts at money at it. But the sales of the business aren’t keeping up with the amount of money that’s being thrown out there. So there can be a million shortcomings that that happened from there. And I’m going to stop you before you jump in your red, because I want this rant to happen. So I’m just going to we’re going to kind of shift into this next piece as well, because we could talk for hours. There’s so much awesome things here, but there’s I’m just going to talk to one quick thing, is that in one of the things that I really enjoyed about a video that you did is that you talked about the seven stages, which is Vision product, go to market standards, standardization, optimization, growth and exit. And I think those seven stages are really what founders need to focus on. And the one that I liked it was the how you really define what standardization, optimization and growth was. And I just add in one point that when you get to the point where you’re at commercialization, that is the opportunity to sell your business or really double down because you found a way to take a six month process down to like 4 hours. And that’s what people want to be able to buy into because that’s what makes money. So I love how you broke that out and said everybody else, I don’t know. You’re talking about here’s how you really have to do this to be efficient. So I just wanted to call that out because I thought it was really, really well shared. But now we’re going to we’re going to kind of shift into our next segment and it’s going to ask a couple quick questions before we get into into the the business questions, Rapidfire and the 62nd round. So one question with the toughest lesson you’ve learned as an investor.

Gregory: I think the toughest lesson that I’ve learned is the the founders being artists are artists at the beginning, right? They have a really good idea. They have a really good solution to a serious problem, what I call inch wide mild the problem. But they don’t have the experience or the knowledge or the wisdom or any of the soft skills to execute on it. Right. I mean, the next book I’m going to write is going to be on execution because it’s the biggest problem that I see. And it’s always overused. Like everybody’s like, it’s all about execution, It’s this and that, It’s execution, execution. But there is there’s something that defines execution and there’s a process you can go through in order to make sure that you’re executing along some sort of a path. Right? So for me, the lack of execution in founders is substantial. And I don’t mean doing things everybody else thinks execution is like doing things on a list that execution is doing things according to a predetermined strategy, which is based on your exit strategy right there all dovetail together. So, you know, you have a strategist as I need to do these things, and then that determines what you’re going to execute on and then use a swot or wargaming or crazy or some other mental model to help you understand how to execute along that path. Right. But most founders have never even heard of these things. They don’t even know what they are. So that’s why we build them into the software, because it’s like it’s like, here’s a problem. Here’s a tool that you can use, that you can use everyday person can use to help understand how to execute against that problem. Right? So it changes the form of the term execution, right? So that now they’re executing towards something instead of just floundering around and busy. And that’s the biggest lesson that I’ve learned is really, you know, not underestimate meeting people’s current understanding of something called execution. Right. I mean, it’s the definition is become I mean, it’s everything.

Jeffery: I love it. It’s executing against your strategy. You’re planning your exit versus just randomly doing a million things in a day and saying you executed If it doesn’t lead to you getting to where your end goal, which was to sell it in five years, you’re just spinning wheels and you’re solving minor problems that don’t do anything and don’t bring any value back to your end goal.

Gregory: Right? And so, Steve Jobs, you know what, some of the things that he said are really meaningful and one of them that he said is everything you choose to do. You’re choosing not to do something else. So if you’re executing, if you’re doing something in your execute, you need to realize whatever you’re doing, you are consciously choosing not to do something else. So you need to make sure whatever you’re doing is the right thing because there’s doing the right thing at the wrong time and there’s doing the wrong thing the right time, right and love it. It’s important to be focused. Know that you’re doing the right thing at the right time. You know.

Jeffery: I like that now. Very well shared. All right. We’re going do the 62nd ranch. You know, we go 60 seconds. You have I put the I wish I could say I’m putting a timer on the screen, but you have 60 seconds. I want you to rant about whatever you think is got the most heat and then I will look at it once and then you finish it off and then we’ll jump into our rapid fire questions. Right or.

Gregory: Wrong, the investor issue is these people that are working for venture capital, private equity, angel groups, whatever it is, right? The people that are the in between that are rustling up the business and pushing towards higher valuations and pushing towards raising more money and trying to raise the valuations of their portfolio looks bigger or trying to raise the amount of money they run. So their management fees are bigger, like those people need to check themselves up against integrity because they have repeatedly. This isn’t the first time, this last little meltdown. It’s not the first time. Right. This happened in 2000. It happened with the SNL crisis. It’s happened over and over. The dot bomb. You know, I mean, this has happened over and over and over again. Those people need to check their their integrity because while they’re doing something from themselves, they’re hurting a whole lot of other people and entire industries and preventing our whole world from evolving. And it pisses me off and that’s why.

Jeffery: I like it. So my rebuttal to that would be we’re live in a capitalistic market and today everybody knows what the value of an asset is. People don’t care. They want to protect themselves and that is all that matters. So how do you change an industry if the industry only cares about themselves and their money? How do we make this happen?

Gregory: I think that the the pivot that we’re starting to see towards, you know, environmental sustainability and inclusion is it is that in that direction? I wrote an article in 2015 for Forbes called Altruistic Capitalism, and the concept of that was using capitalism for altruistic outcomes, which is ESG, right? That’s that’s what it’s all about. Is is and I think that if you move in that direction, you can pivot and benefit from capitalism without taking advantage of people or producing products and services that have no meaning in our society as a population. Moving forward on this little tiny marvel that we’re all trapped on, you know, I mean, whether we all not like it or not, we are attached to each other, right? We what one person does, the other person feels around the world, right? We’ve seen that with environmental issues. So that’s what I would say. But you’re right, which is what you say is correct. And greed for the sake of greed is is a I think, a a flaw in the human design. And I think if people understand that greed can be shaped for a better outcome, and then we have fixed that flaw, you know, so if you’re if you’re greedy about fixing the environment and in the process you’re making money, knock yourself out. So capitalism can be used if it’s pivoted, if you just turn the sales a different direction, right? Same win, just turn the sails a different direction. It’ll still take us where we need to go. That’s that.

Jeffery: And we can do it together. And I think that the analogy that’s beating in my head right now is that when you’re on a plane and they talk about decompression and the masks come out, they say, help the person beside you, put the mask on before you put your eyes on. I think there’s a lot of value in the sense that we don’t help each other around us. We focus on ourselves first and then everybody around. So if we maybe got rid of all the numbers and stopped telling people that I’m worth a billion and I’m worth this, and we start focusing on how we help each other grow, the base grows. So what you accomplish, right?

Gregory: Totally. And the other thing is like, you know, why does nobody live in India, right? No, you don’t see Americans going to India because there’s poor people everywhere and it looks like shit, right? Well, do you want to live like that all over the world? You want to be really rich. And then as soon as you leave your house, everything’s homeless. Tents everywhere. And everybody is depressing, right? It’s not good anywhere, right? Your your house and your compound are your backyard. Is it where you live? That’s where you stay. You live outside of that. So does anybody I mean, isn’t it better for everybody to improve everything around you and expand your the area that you want to roam? You know what I mean?

Jeffery: I’m hitting the green button. I hit the green button. I love it. Yes, 100%.

Gregory: All right.

Jeffery: We’re going to jump in the last part here. We’re going to whip through this. All right. We’re it’s pick one or the other. You’re you’re the investor. So you get to choose rapid fire. Ready.

Gregory: Let’s do it.

Jeffery: All right. Founder or co-founder?

Gregory: Founder,

Jeffery: Unicorn or a four year ten x exit.

Gregory: Not the unicorn. No.

Jeffery: All right. Tech or, CPG.

Gregory: Tech.

Jeffery: Nfts or Web 3.0.

Gregory: Who will One word answer here.

Jeffery: Are blockchain.

Gregory: Blockchain.

Jeffery: First time founder or second third time founder?

Gregory: Third.

Jeffery: I like that. First in first money in or series A.

Gregory: First money.

Jeffery: Angel or VC

Gregory: Angel

Jeffery: Board seat or observer.

Gregory: Observer.

Jeffery: Save for convertible note.

Gregory: Convertible.

Jeffery: Lead or follow

Gregory: lead

Jeffery: Favorite part of investing.

Gregory: Favorite part of It’s our favorite part.

Jeffery: Of investing.

Gregory: founders for me love the.

Jeffery: Number of companies invested for year.

Gregory: For one or quarter.

Jeffery: Verticals.

Gregory: The focus tech and so let’s everything’s tech rights environmental sustainability, inclusion technology firmware hardware or software.

Jeffery: Love it to qualities for a startup to stand out to.

Gregory: You have passion and grit, founder or startup. Sorry.

Jeffery: Yeah, that’s perfect. Yep. Yeah. What is the piece of advice you give founders nine out of ten times.

Gregory: Money is an outcome, not a goal. That’s the one I tell them all the time.

Jeffery: Well said. Who is your hero or mentor and why?

Gregory: I think Einstein. And that’s because Einstein constantly thought passed around what everybody else was thinking. He wasn’t afraid to make bold statements, even if he was wrong, and he was willing to pivot. So, like, one of the things that drives me crazy about politics is you have some politicians out there and then they change their mind because they get new information and then they’re like, they’re flip flopping, you know? And I’m like, that’s not flip flopping. That’s learning. And then responding to what you learned insane. And Einstein was really good at digesting information and changing period.

Jeffery: Love it. Okay. We’re going to bounce into the personal side. Same pick one or the other most famous person that pops in your mind. Steve Jobs first brand that pops in your mind.

Gregory: Apple I would say let me take your first question to Barack Obama and then the second on Apple. Okay.

Jeffery: Okay. Booker movie.

Gregory: The movie

Jeffery: Superman or Batman?

Gregory: Superman. Are you kidding me?

Jeffery: Fortune cookie or birthday cake?

Gregory: Fortune cookie.

Jeffery: 5 minutes with Bezos or Oprah?

Gregory: Bezos

Jeffery: Mountain or Beech.

Gregory: Mountain

Jeffery: Bike or run

Gregory: bike.

Jeffery: Big Mac or Chicken McNuggets?

Gregory: Chicken McNuggets

Jeffery: Trophy or money.

Gregory: interesting. Wow. That’s a good one, Jeffrey. That’s interesting. I would say money because I can use it for good. Yeah.

Jeffery: Beer or wine?

Gregory: Would you say.

Jeffery: Beer or wine or.

Gregory: Beer or wine? I don’t drink. I just smoke weed.

Jeffery: Perfect. Ted Talker, book reading.

Gregory: TED Talk.

Jeffery: Tech Talker. Instagram.

Gregory: Instagram.

Jeffery: Facebook. LinkedIn.

Gregory: LinkedIn.

Jeffery: Favorite movie and what character would you play?

Gregory: I don’t, man. Forrest Gump and I would be forest and forest.

Jeffery: No, that’s good. Favorite book?

Gregory: Getting to yes, I thought was pretty intense. Yeah. Okay.

Jeffery: Favorite sports team?

Gregory: Bodybuilding. And Ronnie Coleman.

Jeffery: he’s good.

Gregory: Yeah.

Jeffery: All right. What is your. What is your favorite investment you’ve made?

Gregory: The probably a company called Dell Rock. It was a transit company that we sold to cubic transportation. It was like 40 times taller. It was. I love it. Yeah, it was a massive. When? Yeah.

Jeffery: Perfect. I was there. Last two questions. What is the meaning of success to you.

Gregory: Being about being able to benefit the planet and everything’s on.

Jeffery: Like it. And last question. What is your superpower patterns?

Gregory: Well, that’s according to my diagnosis with my savant thing. Pattern recognition.

Jeffery: I love it. Well, Gregory, I want to say thank you very much for everything you shared. We’re going to have to do a version, too, because there’s so many more things I wanted to ask it is so much knowledge. It’s in your mind that I want to get out, but I know it’s been a pleasure. Thank you for spending your time with us. The way we like to wrap things up is we want to give you the last word. So anything you want to say to the investor community, to the startups, I turn it over to you. Please share how people can get a hold of you. But again, thank you very much for sharing.

Gregory: Sure. My website is Gregory Shepard dot com. If you’re a founder, click on Visionaries. You can access it for free. You can go and take courses and see everything for its it’s totally free. So knock yourself out. You can also get a hold of me there and LinkedIn. I would say that the the thing that I would like to say to investors is, you know, put your moral compass down and understand the impact that you’re making on the environment. The founders, their families and everybody they come in contact with in the chain of other vendors that are relying on them in this little ecosystem is like you’re you have a the ability to send somebody off to the left or off to the right. You need to be aware of that responsibility. As a founder, I would say you are the Navy SEALs of business. You are very exceptional and it’s really important that you just don’t give up, that you just keep moving, even if you make mistakes, find you make mistakes, just keep going. Don’t stop in the middle. If you’re going through hell while scared.

Jeffery: I love it. Keep going. You’re going to take over the Nike symbol and make it keep going. A brilliant. I love that. Thank you, Gregory. Pleasure.

Gregory: Thank you very much.

Jeffery: Okay. I don’t know where to start because there’s so many great insights that Gregory shared from, you know, the seven pieces to starting up seven stages to start your business from the podcast side that he has. You know, I love it when he talked about execution, that it’s not about just doing things to get them out the door. It’s about executing to your strategy, to your exit plan to get where you need to be and really hyper focused on that exit plan right at the get go. When you build that company, figure out who’s going to buy you, why you’re going to get bought, what piece are you filling, what’s the gap you’re filling in? That business makes such a huge difference to think that way right at the beginning. So and then you know, to even to the end to his comments when it was investors have a responsibility of providing the right insight and information to founders and being able to build governance that is so key. And then the last one, of course, founders are the Navy SEALs. And that is so true that what they’re doing is extravagant. It’s different, it’s hard. And, you know, they really have to hone in on that business model and be the best. And then, you know, even though you’re going to have bumps in the road, just keep going forward, keep going. I love that line. Keep going. Just do it. Keep going. But yeah, well, shared lots of good insights. And again, you know, just endless opportunities when you get into this space. But the group has really put together a lot of opportunities to dive into their reference material and podcast and everything that the boss groups put together. So I highly recommend you jump in there and watch a lot of their videos and learn from all the learnings they’ve taken over the years in building and exiting companies. And as is mentioned, he’s on his 14th company, so well done. So thank you for joining us today. If you’ve enjoyed this conversation, please feel free to share with your friends. Subscribe to our YouTube channel and or please follow us on Spotify, Google and or Apple. Feel free to share an audio clip or video clip around the show and we may include it in one of our future podcasts. You can find us on social platforms, including LinkedIn, its supporters fund. Your support and comments are truly appreciated. Please visit us at SUPPORTERSFUND.COM or startup events at OPENPEOPLENETWORK.COM. Thank you and have a fantastic day.