Shift by Alberta Innovates

Shift talks with Amos Schwartzfarb, managing director of Techstars Austin about starting a business and "building belief by data."

July 09, 2020 Shift Season 1 Episode 12
Shift by Alberta Innovates
Shift talks with Amos Schwartzfarb, managing director of Techstars Austin about starting a business and "building belief by data."
Chapters
Shift by Alberta Innovates
Shift talks with Amos Schwartzfarb, managing director of Techstars Austin about starting a business and "building belief by data."
Jul 09, 2020 Season 1 Episode 12
Shift

In this episode we talk with Amos Schwartzfarb, managing director of Techstars Austin, and author of Sell More Faster about starting a business and "building belief by data."

We dive into the importance of basing decisions on data, Amos's W3 methodology for increasing the likelihood of repeatability in terms of business success, chat about how rock climbing is a good analogy for starting a business, and how impostor syndrome sometimes creeps in!

Bio 

Amos was born in the Bronx, NY and grew up in Fort Lee NJ. At a young age, Amos started seeking adventure and pushing limits. While attending college at the UMASS, Amos fell in love with rock climbing which brought him to Northern California in 1993 and eventually a job packing boxes for Shoreline Mountain Project. While there Amos helped turn an old school mail-order company into one of the first e-commerce companies which launched his career into the startup world. Shoreline later sold to Mountain Gear.

In 2015, he moved over to the investor side as Managing Director of Techstars in Austin. Now after over 70 seed stage investments including Scalefactor, Chowbotics, Storyfit, VanRobotics, Skipper, Helpberbees, Convey, Docstation and Allstacks, Amos has become one of the more active early stage investors, via Techstars Austin in all of Texas.

Amos is also the author of Sell More Faster - The Ultimate Sales Playbook for Startups. Amos wrote this book using his experience and network to create a guide to help every founder and startup sales leader in their quest to build a big and meaningful business. 

Show Notes Transcript

In this episode we talk with Amos Schwartzfarb, managing director of Techstars Austin, and author of Sell More Faster about starting a business and "building belief by data."

We dive into the importance of basing decisions on data, Amos's W3 methodology for increasing the likelihood of repeatability in terms of business success, chat about how rock climbing is a good analogy for starting a business, and how impostor syndrome sometimes creeps in!

Bio 

Amos was born in the Bronx, NY and grew up in Fort Lee NJ. At a young age, Amos started seeking adventure and pushing limits. While attending college at the UMASS, Amos fell in love with rock climbing which brought him to Northern California in 1993 and eventually a job packing boxes for Shoreline Mountain Project. While there Amos helped turn an old school mail-order company into one of the first e-commerce companies which launched his career into the startup world. Shoreline later sold to Mountain Gear.

In 2015, he moved over to the investor side as Managing Director of Techstars in Austin. Now after over 70 seed stage investments including Scalefactor, Chowbotics, Storyfit, VanRobotics, Skipper, Helpberbees, Convey, Docstation and Allstacks, Amos has become one of the more active early stage investors, via Techstars Austin in all of Texas.

Amos is also the author of Sell More Faster - The Ultimate Sales Playbook for Startups. Amos wrote this book using his experience and network to create a guide to help every founder and startup sales leader in their quest to build a big and meaningful business. 

Unknown Speaker :

Is it possible to get your business's clients to say yes 100% of the time? Sounds far fetched, but our guest today says it is. Join us as we talk with Amos Schwartzfarb from TechStars. Austin, about how to use data to build a long term sustainable business is linked to Alberta, imposter syndrome, and much more. So grab your coffee, notepad and welcome to shift. Welcome to shift I am Katie Dean. And i'm john Hagan. Hot Off the innovation rodeo. Our guest today is Amos Schwartzfarb, Managing Director of text TechStars Austin and author of sell more faster the ultimate sales playbook for startups. Welcome Amos. How was the innovation rodeo? They will firstly they thank you both for having me on today. I'm really excited to continue the conversation and I enjoyed the innovation rodeo so much. I really hope that all of the people listening, learned as much as I feel like I did from the other speakers. And I think that they all felt the same way too. We were sort of chatting about it. I think that the the chat was live, but we were all like, gosh, I can't wait to listen to this recording again. Because each one was like wow, like I want to take something from each one of them and I other than Donald I had never met any of them before and I'm looking forward to to getting to know them all better. And then after that we did the they asked me anything session. And that was really, really fun too. And it went off in a couple of different directions, which I thought were really, you know, just different and fun to talk about and we use the entire time. to, you know, to chat with, you know, whoever we're sort of popping in and out of the room really, really great event. I'm so thankful that Craig invited me to join. Yeah, it was really cool for sure. You know, I one of the things I love about the innovation rodeo and Craig is is that they have really fostered this kind of entrepreneur culture in Alberta. And I just, I really love seeing everybody come together and just share ideas in that way. Totally. Now, a miss, I don't know if you knew this, but our CEO for Alberta innovates. Laura kill crease, she spent a number of years in Austin working in the same kind of space that you're working in. And she speaks highly of the work going on down there and believes Alberta is positioned to kind of be the tech hub of Canada. From your perspective. What makes Austin so so awesome. Well, first I'll say that I I know Laura, I would hope she would remember me. She may not I don't know you You know, we we crossed paths a handful of times when I when I first got to town, I think the world of her and I'm so thrilled that she's up there. And she you know, I think that she is an extremely intelligent and talented person that will, you know, help bring out whatever, you know all the inspiration inside of Alberta. So I think your question was, what makes Austin special? What's your question my own? Yeah. So, um, you know, I've been in Austin for 12 years and you know, I'm not I'm not a native Texan. I'm not I'm from the east coast from the northeast specifically. And you know, sort of just like cycling back you know, a couple of decades if you would have asked me if I would have landed in Austin, or in Texas, I would have said there's no way and that it but it leads me to why I think Austin is really special and in 2000 I was at hotjobs Managing regional offices all over the country, including a new newly opened office in Austin. And that was my first taste of Austin back then in Austin was very, very different 20 years ago than it was it is now. But even back then I was like, there's something really, like just there was like, this weird energy in the town. And I say that when I used to walk downtown from my hotel for blocks to my office, and and the streets would be empty. But you can kind of tell that there was just this really interesting creative energy that that has already existed there. And fast forward that eight years to 12 years ago, my wife and I were living in LA and we were thinking about where, you know, our impetus to leave was we sold a company and we didn't want to raise our kids in LA being both public school kids from New Jersey. We thought were in this country, could we go and we had spent a little bit of time in Austin. I'd spent a lot of time there sort of like every six weeks for about eight years. And we went through For a week trip just to sort of check it out, really not intending to make that our, our, our next place of living, but as sort of like a Hey, let's set a benchmark. And it was on that trip sitting at dinner one night where we looked at each other, like, no, this is clearly the place we have to be. And so the reason that is, and then what I think makes Austin really unique and special. And I think this is probably similar to a lot of places in Canada, and a lot of places sort of in the middle of the states but not on the coast, which is that everyone in Austin really wants the best for Austin. People are really friendly, and really collaborative. And whether you're an artist or a musician, or in a startup person, or a big company person, or a mom or a pet owner, whatever it is, there's this really cool sense of community. And one of the one of the ways that I've described it in the past, you know, as a New Yorker who's lived both in San Francisco and LA, I say, if you're from New York, it's really hard to make friends and meet people. But when you meet people, you have friends for life. When you go to the west coast, it's really really easy to meet people. But you literally could think you're making a best friend. And two days later, you'll never hear from them again. And I think Austin has sort of put those two, the positive of those two things together, it's really easy to meet people. And when you meet someone, they're being very sincere and that they want to, they want to befriend you, they want to help you, they want to, you know, they want to do things that are good for their community. And it's super inspiring. And I think it's one of the reasons why we've continued to just grow and flourish and, and be successful city. So like that southern hospitality is legit. It's a thing. Yeah. As a kid from the Bronx, you know, like I was, I didn't know what that meant. Now, I do and it is very real and very cool. I think that is very similar to Alberta. And john, I don't know if he would agree, but I find Albertans to be very welcoming and very, very proud of their province. So I can definitely see that parallel. Yeah, I agree. And the willingness to help Yeah, yeah. Yeah. And and want to see people succeed for the betterment of the province. Yeah. We've got a really cool startup culture here too, that I think you can see that Read Across the board. So that's, that's great. Can you give us a bit of background on what TechStars is all about and what you offer through TechStars? Sure, what I think I'll do there is let me let me describe what TechStars is today. And then I'll sort of like backup to to our, our Genesis, and I think it'll help give like a really complete picture. Today, what we are really is, is a global organization, with the intent to help entrepreneurs succeed wherever they are in their journey. And that can mean a lot of things, including location, including early stage or later stage. And it could mean whether you're a first time entrepreneur or a serial entrepreneur. And so that manifests itself in in a few different ways. But, you know, the things that are sort of most relevant to, to most most founders is, if you've ever heard of Startup Week or Startup Weekend, and most founders have we that's TechStars organization, part of our business that we run globally, I think we run something like 1000 events in 150 countries annually or something like that. Now, of course, we're running them virtually for the time being. That's sort of like one part of our business. Another part of our business, which is where we were born out of is our accelerators. Our original accelerator was in Boulder, Colorado 12 or 13 years ago, we now have 50, Excel accelerators around the world. You know, some, some of which are horizontal like mine in Austin or Los Angeles. Some are vertical programs, like our our allied space program, our Barclays program, which is FinTech and then the third part of our businesses that we have a venture capital arm, but what's unique about our venture capital arm is that we only fund companies that have been through a TechStars accelerator. And so we created this it's really unique ecosystem, where we're trying to help entrepreneurs succeed and when you're in the ecosystem, we do what we can to sort of help you with the most important things You know, talent, and funding and business operations. And so that's what we are today. And we're really what we were born out of was being an accelerator early on. Okay. Little family of startups that you really fostered for this right? Finish. Yeah. Yeah. Right. Yeah. And so you know, we have some great success stories of start to finish. You know, the one that I think we'd like to talk about the most at the moment, is sendgrid, which went through boulder and I think 2009 or 2010, and IPO earlier, or late last year. So really from idea to IPO and everything in between. But what I'm really intrigued by right now, is you saying TechStars is global. So let's say there's an Alberta company that's positioned to to, you know, look for some support from TechStars. How would that work? How would you see an Alberta company coming through TechStars support? Yeah, so I'll answer that question. And I'll start with that I've been just in my program in Austin, I've had a company from Saskatchewan, and a company from Toronto, I think I've just had two from from Canada. And it really like it was at least for for most of us, we're fairly agnostic as to where you are in the world. I've had companies from Africa, I've had companies from South America. And the value is, you know, it in the past, coming to Austin and building a network out in Austin. So you have your local network in Alberta. And now you have also a network in Austin in the states to help grow your business. You know, and, you know, it's hard to say for sure, I My belief is I'll probably be running virtual in January unless we can get control over COVID. before then. Either way, that network in Austin is still very engaged. And so the way that TechStars is run and the thing that that has always made us very unique is that we are a mentorship driven accelerator. And so what that means Is that as the as the managing director, my biggest job is to be a facilitator of the network. The network is both the local network in Austin and the broader TechStars ecosystem. And so of course, there are things that that you know that I'm I may be one of the better people to to help my companies with, for example, sales is obviously an area that I that I have an expertise in. I'm a pretty good fundraiser. But there's lots of things that I don't know, but our network does. And so again, whether that's local or global on so whether you're in an Alberta, a company from Alberta, and come to Austin, you're coming from Alberta, and we do the program virtually, it doesn't really matter because you're still being introduced and exposed to our local network in Austin. Right okay, so people then should just reach out look up tech stars and yeah, just start the conversation email me at amnesty at Tech stars calm and I answer takes me a little while sometimes, but I answer every email I get, as long as it doesn't look like a spam. What do you look for in a startup that comes from Doris Yeah, so I was I'll start this by saying that every managing director is a little bit different. So my answer is not going to be the same as the my 49 peers, they'll be similar but not exactly the same. For me, the people part of a company, especially when they're pre series A, is the most important part. And so I'm pretty specific on in a checklist. The first check is, do I have belief that the CEO can build a meaningful company and attract great talent? Those are the most important aspects for me, it's 70% of my decision is based on that sort of wrap sort of wrapped up in that two is, are we going to get along right? There are people that can do those things that are just are going to be like oil and water with me. And if we don't get along, that's okay. I'll introduce you to a different Managing Director. But if I have belief in your ability to build a meaningful company, regardless of what it is and attract great talent, that's the biggest hurdle for me. If I can get conviction around that the next most important thing Do I think the founding team is cohesive, and the right teams to be working on whatever it is they're working on? And so and the CEO is obviously included in the founding team. So do I think the team works like a team? Are they a bunch of individuals that are just, you know, showing up together and working towards something. So that's, that's also super important. Because if that breaks down, then you have nothing but at least if you have a strong CEO that can attract great talent, they'll be able to rebuild that team. And then the working on the right thing. They don't have to necessarily have experience in the industry or field that they're doing. But there has to be something uniquely, that makes them uniquely qualified to be doing the thing that they're doing. It could just be passion, but I have to see real passion, not bs passion. And then the third thing, which really only accounts for probably 5% of my decision making maybe 10%. Is, is do I think there's an interesting market. And there's two there's two ways that interesting place here. One part of interesting is do I think there's a potential for a big market to be there. Biggest relative because if I'm looking at a company that I think never needs to raise venture capital, big could be a lot smaller than a company that's going to need to raise hundreds of millions to be successful. And then the other part of the interesting is, is it interesting to me, meaning Am I going to be excited in five, seven years from now to be talking about the thing that the company is working on? Because my expectation is that I'm entering into a 10 year relationship with these with these CEOs and these companies. I love that. So like, what markets do you see the most potential? I I'll try to answer that. But I don't have a specific thesis intentionally around markets. Because I don't think that I don't think anyone is but I especially me, I don't think I'm a good predictor of what that might look like. In that way. The way that I see it is when I hear something and then I try to like connect the dots. So if it's, if it's an area that I have even peripheral knowledge of, and I'm like, how does that thing not exist? Or how does technology not disrupted this thing? That becomes really interesting to me. And that can take a long time. have different forum. I have two robotics companies in my portfolio, one that makes salads, which is crushing it. I mean, they're doing so well. And they've been around for a long time. And, you know, and and then another robotics company that's teaching math to K through third graders. So, you know, they're the, you know, these things are like, you know, they're repeatable, you know, they're, they're sort of rote. How do you create a technology that can, making that process more efficient, right, so I'm using two extreme examples of things that are that are actually quite interesting. Now, now use a less interesting, potentially less interesting example which is I have another company in my portfolio called permits calm and all they have done and I say all but it's actually a really hard problem to solve. They are in the US, if you want to get a residential building permit, you still have to go down to the the, the permitting office to get that done. And they are taking that or they have taken that largely online in the US. We now with COVID, there's actually some more additional acceleration there. So not really like exciting, sexy business, but like, clearly how does that not exist, but it doesn't even so it becomes, you know, a fun problem to solve. Yep, we need that here too. It sounds like you're very like gut instincts kind of person, even when you make, and I am and I would, you know, this is sort of like a whole different tangent of conversation we could have, but I think I lost the ability to trust my gut maybe six years ago or so. And over the past four or five years, I've been very intentional about consciously trusting my gut. And then looking at why and what's the data that I have whether even if it's not obvious to support my gut, but I do You're right. I absolutely have been trying to say like, what is the feeling that makes me feel this way? Like I've been I've seen a lot of stuff. I have a lot of experience. I'm not always right. In fact, I'm probably wrong. More than I write, but, but still, like, there's something that that tingles in my heart that says, pay more attention here. Yeah, I get that it's an experience informs instinct. And then you don't always just want to act on the instinct, like you said, you have to look at the data, and then base your decision off that. But it I think it's a good starting point. And I feel like I'm kind of the same way. Can you tell us about what happened six years ago? Or is that off the table? No, no, there's nothing off the table. Um, you know, I, I actually was talking about this in the live q&a session. I did, um, I've been not including TechStars, which I would call a startup when I joined. I was in I was a part of six startups prior to TechStars, either as a founder or early founding team member, and the first five, all exited we're all positive returns almost a billion I think it was like eight or 50 900 million in total exit value for the companies. That's not what I mean by a long time. Stretch, but, you know, did pretty well and felt sort of invincible. And the six company I started a company with two other serial founders one was the founder of wedding channel comm which a lot of people know was acquired by the not maybe a decade or so ago. And another one had been a serial entrepreneur for like a bunch of service businesses. And the three of us teamed up for something that we were just so sure we were going to just knock it out of the park, we raised a bunch of money without writing a line of code totally on an idea. Because of our reputations. We sold a bunch of early customers like Fox and ESPN and ABC and MTV before writing any code and that company totally failed. And it just made me like for a little while question everything I knew, because I thought I knew everything. realized, you know, I realized oh, yeah, I'm not invincible there. You know, there's still lots and lots I don't know. And then all three of us, not just me, sort of went through this like Oh shit, we can My son here, sorry. Yeah, yeah. And then you know, and then I and then I went to TechStars right after that, and that first year was really challenging. I mean, I always suffer I still continue to suffer from imposter syndrome. But that first year was, was really tough for me. And it was in that year that I realized I had stopped trusting my instincts and, and I, I had actually gone against my instincts with the company we started there were things about it early on, that I was like that something doesn't feel right. But I ignored them because I trusted the people and I believed in myself and I didn't trust my instinct. And so this whole like, circle of things that basically got me to Okay, my instincts aren't that bad. I need to at least listen to them and pay much closer attention. Totally. And I think that we talk on here often and I know we talked with in our Alberta innovates community as you know the concept of failing upwards, right. And with every failure, there's a learning opportunity. And and Melinda Emerson was on john, what would what did she say? She said something like, you know, you either learn or you succeed, but there's no fail. Yeah, I agree I say it a little bit differently. But to me the only failure is not learning. Yeah. Right. But it sounds like you're such a thrill seeker, right, you do rock climbing and mountain biking. So it seems like this is up your your alley? I think i think i think so. I think that's one of the things that has actually attracted me to startups all along. And you know, I talk about this a lot is specifically in tech stars, which is like I've never I've never thought of myself as an entrepreneur and I still really don't although I guess I am after pretty much as as all I've ever done. I but the thing that I really like to do is I like to I like to solve problems that I think are solvable, even if there are especially when they're really hard and you know if you know, I don't know how much you guys know about rock climbing, but there's something there's rock climbing. There's bouldering, which is sort of a subset where you're sort of like not far off the ground and you don't have any ropes, it tends to be much harder. There's actually just a book written that my, my cousin sent me a link to, I'm going to try to pull up while I'm talking. But notion about how problem solving and life is a lot like bouldering, which is that you continually throw yourself at something and you're making these tiny little incremental improvements every time and you don't always even realize that you are making improvements until you have these like minor major breakthroughs. The so the book is called What is it called? It's really out to solve a problem like, that's what it's called, like a rock climber? Yeah. Okay. You know, I think it's a great analogy because you're right, like, it's making those little changes and those little adjustments and sometimes we don't even notice them necessarily. We unconsciously or sometimes instinctually. make those adjustments. And then you hit that point where you, you're now you have a learning curve, you know, you've hit it, you're off to another plateau. So yeah, that's, it's compelling. Now one thing I kind of like to build off that you mentioned something, the imposter syndrome, which I think is is something a number of people have to contend with. And probably a number of entrepreneurs, you know, thinking I you know, I'm fooling everybody I'm, I'm, I've now achieved a modicum of success or something but it's only a matter of time before the you know the the jig is up and people figure out that I'm I'm a fraud so to speak. But the reason I mentioned all this is you you talk about your playbook for entrepreneurs, no, I think there's there steps that people have to go through that you know, from from idea to first customer you know, if you follow these steps, if you if you work through these, you know, like your W your W three framework, people can start to build confidence does that makes sense to you? Can you riff on that a little bit? He will, I think is there's so many things I could riff off there. I'll start with this, which is that like, even today, the books been out for almost a year, I get tremendous amount of positive feedback and as a five star rating on Amazon, and I'm still, like, I'm still freaked out that I'm wrong, and I'm screwing up people's decisis. And I say that but like, I actually also really believe I, you know, I believe in the, in the methodology very, very much. And I, I think, you know, one of the reasons this methodology works so well for me, is because it takes the notion of an idea, and it helps figure out how do you how do you build a case using data, that your idea and your dream is valid? And, and, you know, I think that's there's, it's a thing that a lot of aspiring entrepreneurs and specifically people, I think, who want to pursue entrepreneurship as a career versus being an entrepreneur, as a byproduct of the thing you're pursuing, struggle with, which is that I had this beautiful vision of what the world could be, and you should just believe. Versus like, What? Why do you believe you're right? Right? And it's that it's a building of belief by data that actually helps to build a meaningful long term sustainable business. And to me that's like the, that's really the basis of the entire the entirety of somewhere faster, which is like how do you how do you just build enough data points to prove your right and earn the the right to move to the next step? Build a belief by data? I like that mathematical way of thinking about entrepreneurship. Yeah, isn't it? Yeah, well, I I Oh, I have a book coming out in the in the winter but I have an idea for a third book, which is life is three parts math, one part business, because I, I have the I have this belief that like no I've been very guilty of this myself, which is that, you know, we we all go around doing a lot of storytelling, especially as entrepreneurs, and especially as early stage entrepreneurs like we even TechStars we put a huge emphasis on storytelling and storytelling is important. But what makes up a good story, the math, the math, it's the math. The math makes a good story. If you don't have the math, that's when you have to come up with the Bs, right? Yeah, Amos, you're not helping me out here. I really, really suck at math. Well, I'll tell you, I I don't know that I was I dropped out of math in 10th grade, and I never took another math class. And it's probably my biggest regret if I have any regrets in my life at all. And I'm trying really hard now. To to, to make math central to like everything that I do. And I say math, but you know, think of it as like calculus, right? It's not just it's not just one plus one, or what is your geometry? It's like, what, what is the complex equation, which is just problem solving. So you say you suck at math, but I bet you you don't because you're probably a problem solver and problems. Solving is just math. I love how you spun that it made me feel so much better. So, you know, I'm hoping you might want to dive a little deeper into your whole w three framework. I heard you talking about this in the innovation rodeo. And I think it's it's a real important message for people to wrap their brains around. Yeah, I, you know, I, I'll tell you a little bit about where it sort of came from. And what I would say is, you know, when I wrote some more faster, I think the whole book has value in it for different stages of companies. But I think that there isn't that. I think that the first two chapters which focus on w three, and how to test it are really the most most most most important parts of it, regardless of what business you're in, regardless of who you're serving. And regardless of what your business stages because I don't care if you're a $50 billion business if you don't know who your customer is, what they're buying from you and why you will not be able to stay a $50 billion business and you You know, we've all seen these businesses that, you know, that filed for bankruptcy when really how they, you know, their market caps are so big, but it's because they somehow lost sight of like, who they were serving and why. So, the, you know, the genesis of it was, you know, I was I started work calm, we merged it with business COMM And at the time business comm I forget the exact numbers, because it's been a long time, but 70 million in revenue. And they've been sort of at that stage for a while, and they hadn't really figured out the hockey stick growth and had been around since 98, early 99 This was 2005 so when I moved when we merged the two companies together, I moved over to take over sales. And, you know, I like to basically what, what happened here is we you know, we had the we were fortunate enough that we had some customers, but when I started to sort of like unpack like who the really the three questions who were our customers, what what were they buying from us and why and I didn't know what I was doing at the time. I'm not going to tell you I had some forces But I just kept asking those three questions over and over again, of my team, and my boss and just the organization and there wasn't really a solid, cohesive answer. And so I went out on a quest to find the answer to that, because I believed at the time that if we can answer those questions that we would figure out how to scale this business. What I didn't know and what I look back upon now and realize is that we were just that you know, I say we because I like to pass some of the credit to, specifically to who was my director of sales at the time, Kevin Gaither is now the, the SVP of sales at zip recruiter. You know, the two of us really just run a quest to answer these questions. What we didn't realize was we were building a repeatable framework to scale businesses, and it's literally the thing that he took the zip recruiter and took it from zero to however many hundreds of millions of dollars they're doing. It's a framework that took two black locusts and the frame work that I've, you know, passed on to all of the companies that have gone through TechStars. And so the notion here is that the answer to these three questions that question sounds so simple. And if you ask the average entrepreneur in the street, the answer to these to answer these three questions, they're going to be able to answer with a high level of confidence right away. Their customer is what they're buying and why. But if you start to dig in at all on how do they know they're right, and this is the key, right? What's the data? It falls apart really, really fast? Firstly, if you're early on, you're not right, because you have no customers to prove it. Right. The biggest proof point is you have customers that are buying and say that they love you, and they're and you know exactly how to create a repeatable sales process. And so the thing that I say in the book is in total, you have true repeatability. And you start to have some predictability. You actually have no real proof that you're right, you have data points that are putting you in the right direction. So we hear a lot about product market fit. I like to talk about product market direction Right, like, what are the signposts along the way that we might be headed in the right direction? Right. And so when I saw that, so that's what I think about those three questions. So it's Who is your customer I talked about you really wanted it early on, especially you want the narrowest, narrowest narrowest definition, you really want to feel like when you nail it, you get a yes 100% of the time. And when I tell people that, especially entrepreneurs, like well, no one gets Yes, 100% of the time, like Yeah, because you're, you're, you're too white, your your nets too wide. You want Yes, 100% of the time, doesn't mean that you're your target market forever. It just means that your target market to prove that you can provide value to someone. And when you have when you know, you can provide value to a group of people, you can take, you can now build a list of attributes of that people a really comprehensive list. And then you can start to play with that list of attributes to widen your net to eventually you reach your entire camp. So instead of trying to say I'm going to build the world's biggest net, and I'm going to capture every fish in the world, No, that doesn't mean really work that way, right, you're gonna go to a small pond and you're gonna, you're gonna have the perfect type of bait, you're gonna go in exactly the right time. And you're going to try to catch exactly the, you know, the right fish. And when you nail that, you'll get a bunch of fish. So that's the who the what is, and this is it's so important in such a subtle difference, but what are they buying from, you know, what are you selling to them? And I can't tell you I write that on the screen every time I do this workshop. What are you what are they buying now? What are you selling? And half of the room gets it wrong, even though it says it right there. They'll even answer the question. Well, what we're selling is it's no I didn't ask what you're selling. What are they buying? And right? differences really subtle. It's really important. And I you know, I think I said it I think I'm Sean said it today, and I think that Craig said it too, which is it's the difference between what do you do and what do you do for me? Your customers or prospective customers don't care what you do. They only care what you do for them. They're busy. What do you do for them? How do you make them money or save them time? Right? Even if you're a consumer app, you have to be doing something to make the person's life in Right. Yeah, yeah. Yeah. And then why why does it matter? Having a really deep understanding about why helps you now The what? And why does it matter for the business? And why does it matter for the individual buyer, whether it's a consumer or a b2b buyer? So this is a different why, from like, that wise statement that's been making its way around the internet for the last little while, you know, the, the mission statement for a company it's so it's a different Yeah, it's a it's a different question you're asking. Okay, yeah, so it's really build build belief by data, like you'd said earlier, granular definition of who your customer is. So really right down to this is a new CEO in a company been there less than a year looking to, you know, change their it practices or something new you're looking to really define them in a very narrow fashion like you've described, right you like the more the more attributes that you can add, you know, both demographic psychographic, whatever they may be, the more attributes the things that make you more uncomfortable, the better job your decks. You mentioned an acronym. Moments ago, you said, Tam, what is that? Tam? its total addressable market. So total, sorry, total addressable market. So the idea is like, you know, let's, let's use No, no, let's use Uber, right, Uber probably has a Tam of several trillion dollars, or, you know, they did before COVID. Because theoretically, every person in the world could get rid of their car and only use Uber to get around. But when they started, they served only in San Francisco, only to tech entrepreneurs, only to executives, only limousines. Right? So that's a very specific granular definition of their audience. And I don't know their exact definition at that time. There was no granular than that. But that's, that's the part that I could tease out of it. Ah, okay. That's cool. So listen, let's move on real quick. And you mentioned something here that obviously is on everybody's mind COVID. And when you're talking about when you say the first step is you need people to identify who their market is. People can't just go knock on doors and you know, meet people in face to face networking events. One of the attendees of that innovation rodeo asked you, given the current environment, how do you get out and talk to your customers when you physically can't, and don't have the contact information from any of them? Can you reflect on that for a moment and give us give our listeners your your thoughts on that? Yeah, it was such a good question. And I wish I would have been better prepared to answer it at the time. I you know, here's what I think we're all in the same. We're on the same place right now. Nobody can get out or very few people even want to at this moment, depending on where you are. And I think that because we're all in the same boat. The medium has just changed. So you know, it's a little A bit unfair for me to say this because I'm, I'm no longer in a seller mode, I'm more in a buyer mode, right? So I people coming to me more than I'm going to them versus if I'm building a company and trying to get early sales so so take that caveat away, I don't know that much has changed in the way that you would try to connect with people, you're still going to reach out to your network, you're still going to use LinkedIn, you're still going to use all of the same tools. And actually, there's, there's lots of new types of tools that are popping up, you know, specifically to facilitate this. And if the right ones aren't there, by the way, someone listening, go build it because, you know, solve the problem. But I don't think the, like the ability to connect, I don't think has changed, other than like, I'm finding even, you know, a greater number of people trying to network for network sake versus trying to get into TechStars, which I appreciate. I just think the medium of where you're connecting has changed and so you know, I think like most people that are listening, you know, on on zoom, probably, you know, six to nine hours every single day and somebody says, I don't want to do it anymore. And other days, I'm completely energized by it. And, you know, just take into consideration that the person on the other end, you know, might be on their, you know, 12, the zoom call of the day, and so if they're not deeply engaged with you, it might have nothing to do with you and your product. It might be that they're zoomed out for the moment. Yeah, right. Fair enough. Yeah. So listen, let's, uh, let's wrap it up. Because I'm so used to speaking of zoom, you've been doing this for quite a few hours now, with the innovation rodeo and for sitting in with us here on shift and we really appreciate it. But I want to ask you one last question. And I think this leads into the book, your, your, your writing, you'd mentioned one of the things you think about, you're thinking deeply about us. How do we create businesses that don't require venture capital? Yeah, this has been something I've been thinking about for For a few years, and I think my work at TechStars has inspired a lot of it both directly with the companies that I'm working with. And, and frankly, some of the VCs that I engage with and work with. And, you know, I have this belief that over the last well, over the last decade, decade and a half, there's a couple of things that have happened. One, there's this notion that being an entrepreneur is actually a career path in and of itself. And I don't believe that's true. I think that people can be entrepreneurs. Right. But I believe and I think I've said it before, it's a byproduct of wanting to build the thing that you're super, super passionate about. But if you just you can't go apply for a job as an entrepreneur, that's not a thing, right. So so that's happened and there's this been onslaught of education around how to teach people how to be an entrepreneur, which I think is from an educational stamp. Point is great. But a negative byproduct of that is people thinking that entrepreneurship is a career path. And actually, if you look at it as a career path, it's a really bad one super high failure rate, really painful life. Like I wish I wasn't, I didn't have this affliction, and I could just go get a job at a big company, right, and my life would be so much easier. And so there's that. And then I think the other side that has happened at the same time is that it has become really exciting and sexy and any career path to be a venture capitalist. And, you know, as people from the outside looking into venture capital, I think like, Wow, it sounds like such a good idea. I get to work with all these amazing founders, and I get to, you know, invest in all these people and I get to give people money and help create dreams and, and all this stuff. And I think that has done a little bit to pervert what venture capital means for entrepreneurs. And if you put those two things together, I you know, my belief is what happened is what has happened is there's a lot of companies that are being created that shouldn't be created. There's a lot of money going there's A lot of money to go places that are going to the wrong places. And people are now building businesses. And this has been going on for, you know, a couple of decades now trying to try to businesses off of, you know, off of an idea or very little traction or trying to redefine what traction actually means. And so that's a long way into, I just have this strong belief that that we can, we can have a much more there are some businesses that will always require venture capital by the nature biotech companies, you know, heavy hardware needs, but I but I believe that there is a much better way for entrepreneurs to start and build businesses by focusing on on just some core fundamentals that are data driven and map driven and it is exactly your right it is the book that you know, it's written and we're in the editing and publishing phase now that I wrote my my three co authors, all experts, different aspects of writing that enable you know, the way that What I like to talk about is we're enabling entrepreneurs to control their own destiny. And as soon as you take, as soon as you take outside capital, you no longer are in full control of your own destiny. I don't care what you think or who you are. We Transcribed by https://otter.ai