Dan Martell - Episode #9 How To Coach & Advise Startups w⧸ Peter Lalonde @ Positive Venture Group

00:00:00.000 Can I come in?

00:00:01.000 Am I allowed to come in?

00:00:02.000 Hey.

00:00:03.000 What is going on?

00:00:04.000 How are you?

00:00:05.000 Yeah.

00:00:06.000 How many founders are in this space right now?

00:00:08.000 Right now there's only probably four founders.

00:00:12.000 How many people in the portfolio?

00:00:14.000 35 companies.

00:00:15.000 Whoa, 35.

00:00:16.000 Yeah.

00:00:17.000 And what's the, if I'm allowed to ask, like average check size?

00:00:20.000 Like what's the investment?

00:00:21.000 We write small checks, right?

00:00:22.000 Okay.

00:00:23.000 So we're 25 to 150.

00:00:24.000 Got it.

00:00:25.000 But the idea is that we're early.

00:00:26.000 Okay.

00:00:27.000 So you're the first money in?

00:00:28.000 First, or right after friends and family, they kind of have a problem-solution fit.

00:00:34.580 And we look at it and say, you know, is this something that we can actually help with?

00:00:38.700 Yeah.

00:00:39.120 Because we want to be value-add.

00:00:40.720 And how does the management team work?

00:00:44.360 Like, how do you guys, you run go-to-market?

00:00:47.080 Correct.

00:00:47.620 And then there's the investment, like, how does, what is all the services that you support companies in?

00:00:52.740 So, on the go-to-market side, all I care about is revenue, right?

00:00:57.220 We care about, is your product going to solve a problem that people want to pay for?

00:01:02.080 We started as a finance group, right?

00:01:04.440 So Jason Burke was the CFO for Cognos through the acquisition with IBM.

00:01:09.020 You know, it was Ottawa's biggest acquisition.

00:01:11.580 So he had a good following.

00:01:13.860 Everybody wanted to work with him, but no one can afford him.

00:01:15.820 So he tried to recreate the Cognos experience and the vibe and the culture,

00:01:21.560 and it's really difficult to do.

00:01:22.760 So he said, I'm going to have to just build it myself.

00:01:25.060 So that's what he did.

00:01:25.640 He brought some of his crew together

00:01:27.260 and started working with other like-minded CFOs

00:01:31.460 and started hiring themselves out at a fractional basis.

00:01:35.140 So, and then your background was building,

00:01:38.400 you've done a couple of companies.

00:01:40.660 Give us the 30 seconds on that.

00:01:42.640 Well, I was an intrapreneur locked within, you know,

00:01:46.340 the big enterprise companies like OpenText and IBM.

00:01:50.480 And bang in my head, trying to change things.

00:01:52.540 And I said, I'm out, I gotta go do it myself.

00:01:55.220 and uh started a few different companies the where i met you in san francisco was i was out

00:02:00.660 pitching uh was that the c100 that was c100 yeah yeah yeah that was a lot of fun the company was

00:02:05.620 called open era yeah yeah and uh and i think we reconnected at startup festival we did yeah

00:02:12.100 and then shortly after was the acquisition it was not too far after that yeah cool so it was a

00:02:18.100 it was a you know your typical startup ride it was up it was down it was and did you raise money

00:02:23.940 for that company uh yeah just a million bucks okay yeah it's funny how you say just a million

00:02:28.580 millions real money i know you know what i mean like in today's world like oh what did you raise

00:02:32.180 65 million well you hear about you know some of the companies raising today how did you raise a

00:02:37.140 million is a million it's a million dollars yeah yeah um yeah it was a million canadian which is

00:02:43.620 actually harder to do way harder so it was uh you know but that whole like experience was

00:02:51.140 phenomenal it's fantastic and uh i've got the bug like i call myself a recovering entrepreneur

00:02:57.540 yeah because i i can't there's a vibe yeah there's a feeling it's it's actually uh definitely

00:03:03.780 there's some people that get addicted to it and it's uh it's super neat um and then since then

00:03:10.160 is this what you did after uh so i went in as the kind of you know coo on demand for a few

00:03:17.800 different companies. One of them was called the Printo out in Fredericton and that was a great

00:03:24.920 technology that I just fell in love with because they were actually monitoring open air for a

00:03:29.800 while and they were doing very similar things to what open air was. What was it called?

00:03:34.040 A Printo and I ended up you know trying to get them to be acquired by box and open text and

00:03:41.320 and got a couple of offers on the table,

00:03:44.900 and it was a really exciting time.

00:03:47.280 But this has happened a few times in these engagements

00:03:52.100 where I'm an enterprise guy, I am unabashedly so,

00:03:56.380 and the company decides to go in a consumer direction,

00:03:59.440 I can add no value to you whatsoever.

00:04:01.960 Dude, I'm a B2B SaaS guy,

00:04:03.640 and if you move outside of that space.

00:04:04.920 Yeah, I'm done.

00:04:05.880 If you want to go marketplace, I can't see it.

00:04:08.040 Even though I built a market,

00:04:08.840 I just, I just, I know the pattern that wins.

00:04:12.020 Yeah.

00:04:12.440 And, and I like that it's, it's, it's revenue.

00:04:15.360 Yeah.

00:04:15.620 Right.

00:04:15.920 It's not like.

00:04:17.320 So the other one that I, that I helped build was Massive, Massive I.O.

00:04:21.760 And we launched that in Amsterdam last year and we validated the product.

00:04:25.900 We went from product ideation to, you know, a brand, a market, a position where we were

00:04:31.980 able to actually take five credit cards on the show floor and build a $1.259 pipeline.

00:04:37.980 it was pretty exciting and validated the product so that's still a going concern that's so um i

00:04:44.380 think originally you emailed uh just you know the last video i put out everything power what can i do

00:04:50.300 to i'm like i want to be as helpful as possible sure what do you want to you know the things that

00:04:56.700 are that i struggle with are being an entrepreneur and like being so passionate and diving in

00:05:02.620 in too deep sometimes with other entrepreneurs

00:05:07.040 and trying to help them sometimes to my detriment.

00:05:10.020 That's a great topic because as somebody that coaches

00:05:12.940 these types of entrepreneurs, it's tough for me

00:05:15.160 because I think there's different types of coaches.

00:05:18.700 There's some that all they do is ask questions

00:05:22.280 and that's called the Socratic coaching method.

00:05:24.460 And I've hired a couple of those coaches in the past

00:05:27.240 and it's great because it's very reflective

00:05:29.580 and you kind of come to your own conclusion.

00:05:31.660 And then I would say on the other spectrums, there are those that are very prescriptive, which I definitely lean more towards that.

00:05:38.840 I've learned to kind of find some middle ground.

00:05:40.960 And the challenge that I've experienced is many times you believe in them more than they believe in themselves.

00:05:51.100 That's actually really, really true.

00:05:53.820 And that's probably the frustration, right?

00:05:55.440 so what happens at that level is the way I think about it is we always have to go back to mindset

00:06:02.300 and what I mean by that is everybody's getting a hundred percent of the mindset that they have

00:06:06.920 today so like I believe that everybody's getting a hundred percent of who they are today okay and

00:06:11.680 but it's the mindset ceiling and what happens is that you have a different view and it could be

00:06:17.240 yes and it could be just around that specific department or strategy and it's frustrating

00:06:22.920 because you're like why don't you see it my way but it's because they have a belief system that

00:06:27.120 won't allow them to very interesting you're right yeah so it's it's kind of like now that i've

00:06:32.320 learned that about my clients then what i do is i try to coach them to change the beliefs

00:06:36.880 not the not sell them on the tactics because that's the part that's missing yeah yeah no

00:06:42.740 absolutely but how do you do that right getting somebody to change their belief system is a long

00:06:48.740 road that's not a it's it's not a half hour it can it can't be yeah right here's here here's an

00:06:54.260 example um one questions are powerful yep so i was coaching one of my clients the other day

00:07:00.580 very successful you know six millionaire sas business and i knew i knew the move they needed

00:07:06.740 to make and uh i could ask them a ton of questions and blah blah blah but the question i asked them

00:07:12.020 that got them there faster was if somebody bought you tomorrow what's the first thing they would do

00:07:16.020 and he oh yeah and he goes they would do this awesome what's the second thing we do they would

00:07:23.080 do this and i go why would they do those two things because of x y and z awesome what stopped

00:07:28.160 you to this point to do one and two yeah oh yeah fantastic they're like oh no they're like oh you're

00:07:35.400 so right and i've known this for three years yeah now they were successful but at the end of the day

00:07:42.240 they want to results and sure they were they were essentially handicapping

00:07:46.680 themselves yeah and I see that every day yeah every single day so you got to ask

00:07:51.960 yourself and I got this as a variation from the guy that wrote high performance

00:07:57.720 output the founder of Dell you remember Andy Grove Andy Grove wrote an incredible

00:08:03.060 book in the 1980s of all things it was it quite possibly could be one of the

00:08:07.920 first few management books really yeah high performance output and uh in it he the question

00:08:14.120 they would ask themselves as a leadership team the executive level was if we hired somebody

00:08:19.060 to come in here to run my if somebody came in if somebody if we were to hire if i were to get fired

00:08:24.420 and somebody would come in to run my job what's the first thing they would do so so it's kind of

00:08:28.860 the same questions but you can yeah you can use it at the executive level so you have a cfo that's

00:08:33.000 not on board great we you got fired somebody else came in what's the first thing that they probably

00:08:36.800 do well they probably do this yeah there you go so so there's so so i think that mindset uh left

00:08:45.860 to its own device or to its own natural progression can be really long and arduous and tough but if you

00:08:52.340 can learn how to craft the questions that get somebody there faster right yeah yeah how do you

00:08:59.920 deal with like and i think i know how i deal with this but how do you deal with entrepreneurs that

00:09:05.500 just they do everything wrong they won't listen they you know you pour in as much effort as you

00:09:12.120 can at the end of the day i gotta walk away like i'm if you're not going to help yourself yeah

00:09:18.400 right if you're not going to allow me to help you yeah and you're going to put up all these road

00:09:22.040 blocks then the unfortunate part about any transformation that's the that's what i

00:09:28.200 describe the work i get to do with my clients is it needs to be invited

00:09:32.900 so then the question really is is how do you get somebody to invite you in for that transformational

00:09:38.400 process and the truth is is you've got to let them and and you know just through my personal

00:09:44.720 story you know kind of stuff i went through as a kid people would say often like you got to hit

00:09:48.460 rock bottom you know after i released that video everything in my power i had dozens of parents

00:09:53.260 reach out to me i don't doubt it and and the challenge for me is you know i'd be talking to

00:09:59.780 a mother and then she said my husband doesn't even believe my son's an addict and i'm like

00:10:03.780 okay after what she had just told me you know he's been in crisis centers for three years he

00:10:08.500 went to the psych ward two weeks prior he crashed his car you know so like at certain point you you

00:10:14.580 know and it's it's it's relevant to everything in life is people need to feel enough pain so

00:10:21.060 bringing this back to the startup world what i do is i say totally cool let's just agree on

00:10:26.340 certain numbers that we think that we should be moving forward and usually by setting the

00:10:31.060 foundation and the targets they'll feel that pain on a weekly basis to the point where they don't

00:10:37.140 get results and then they go how do i do this yeah well there's a there's a there's a line right

00:10:42.440 they either say how do i do this or they get their backup and they don't want because i haven't

00:10:47.920 actually been invited in right well and that's why that's why because they think they know it

00:10:52.640 Yeah, but if they didn't invite, if they didn't really, like, they could say, okay, help me, but not really want that.

00:10:58.800 Yeah.

00:10:59.180 Then the first thing is just, let's just figure out what success looks like.

00:11:03.060 These three things, let's measure them week over week.

00:11:05.640 Yeah.

00:11:05.880 And, like, I'll just call you up and we'll figure out where we're at.

00:11:08.640 Because then that way, it's, you know, it's back to, it's not you, it's them.

00:11:14.000 So, like, it's negotiating with them, like, what needs to be true for success to be real in your world.

00:11:18.360 And you define it, and that's great.

00:11:19.540 And I think those are great metrics.

00:11:21.160 Great.

00:11:21.400 then what do you think we should be doing over the next you know three months and let's just

00:11:24.340 break down on weekly targets and we both agree that if things don't trend in that way then

00:11:29.060 there's a conversation to have and they they usually come to a point where they go this is

00:11:35.160 I'm you're right and if they don't then that's just that's okay too no I mean everybody for us

00:11:41.860 yeah and I'm the way I look at is everybody's on their own journey and I can you know there's

00:11:46.480 there's a I have a few rules that I learned from my buddy Jason about who an

00:11:51.400 ideal customer is one is one of them is they know they have a problem and they

00:11:57.240 believe that you have the solution if they don't know coachable as well

00:12:02.920 there's a ton of stuff right but I mean if you think about just that high level

00:12:06.660 they they know they have a problem so okay I have a problem and they've

00:12:11.100 already bought into your solution for that problem yeah the hardest like if

00:12:15.660 if you can get really clear of who you serve and who you don't and how you serve them and how you

00:12:19.760 don't, then it just makes it less emotional if somebody's not getting a result because

00:12:24.780 ideally you would have not even like started working with them, right? And this is, and that's

00:12:30.200 why I think like SaaS is success as a service, right? It's not actually software because a client

00:12:35.100 invests in your product because they want a result. The mountaintop is that result and they've chosen

00:12:40.240 your solution to be the vehicle to make that journey. And if they're not bought in that that's

00:12:45.340 the vehicle to make the journey than trying to sell them to get in it just for them to fight the

00:12:49.360 whole time they're going up that mountain they'll never get the result they'll they'll cancel they'll

00:12:53.660 turn and honestly it affects your numbers so a lot of founders think they get these like super

00:12:58.400 creative growth hacks as they can convince or you know contrive or you know what i mean like

00:13:02.480 some like sneaky way to get people into the solution only to find out that those are the

00:13:07.660 customers that are quick to cancel quick to clog up your support system like i would rather have

00:13:12.360 have less customers that are higher quality, higher value, better on my team, not abusive.

00:13:16.920 I mean, just some of the stuff that I see.

00:13:19.040 Well, I think, you know, I think in what I do, what you do, often, like, I'm better

00:13:26.120 at identifying my clients' challenges than I am my own.

00:13:30.360 Yeah, as you're looking at the course.

00:13:31.360 You gotta look at a mirror every now and again and say, am I gonna eat my own dog food here?

00:13:35.680 Am I gonna qualify my accounts the way I really should?

00:13:38.880 Oh, that's interesting.

00:13:39.880 Right?

00:13:40.880 this because I get emotionally attached to entrepreneurs because I've been where

00:13:46.220 they are and you've seen it in the community where there's a lot of

00:13:50.180 entrepreneurs who go through tough times and those are the ones that need the

00:13:53.660 most help so am I a sucker for wanting to help them it's in my nature but can't

00:14:00.140 let it drag you down no right no and there's so much of this and it's it's

00:14:06.080 It's really balancing that and having, okay, I gotta be a little more pragmatic here, but these guys are the ones that really need the help right now, and I know I can help them and they're willing, but maybe it's not the right time. Maybe it's not going to pay my bills. Maybe it's not going to meet my-

00:14:26.020 I just think, like, if they're not ready, then it's not even the right time for them to make that investment, time and financially, right?

00:14:37.180 Like, at the end of the day, you know, we can only serve so many people.

00:14:41.400 I don't care what business you are.

00:14:42.700 You can't, like, you could be sales force and you're like, seven billion people tomorrow.

00:14:45.540 You couldn't, like, there's a limit, right?

00:14:47.420 So then you've got to say, okay, what's, and what I love about this, you know, this concept of a check size.

00:14:54.620 Because I think that if you think of business as a whole, it's about moving low value to high value, right?

00:14:59.740 Raw product to finished goods.

00:15:01.780 Software is no different.

00:15:02.880 Like, I mean, pretty much every B2B SaaS business started off with a $19 a month plan.

00:15:09.500 And after seven or eight, nine years of banging their head, they end up way higher, right?

00:15:13.140 Because they realize to themselves that I'd rather have less customers that love me more, that I love to serve more,

00:15:20.440 that generate more profit per unit

00:15:23.060 than having more that just caused me

00:15:27.060 to have to hire 10 times more employees, you know?

00:15:29.640 So I just think that we get,

00:15:34.340 the cool part is we get to decide who we work with.

00:15:37.460 And what's neat is you build a reputation around that.

00:15:40.340 So this is another thing that I feel people don't understand.

00:15:45.180 There's no upside to having 10,000 clients

00:15:49.620 if 85% of them don't get results with you

00:15:52.900 because you are good at selling them

00:15:54.880 and then having 8,500 people running around

00:15:57.780 saying this isn't good.

00:15:59.100 My brand goes away.

00:16:00.200 Isn't that interesting?

00:16:00.940 Oh, yeah, absolutely.

00:16:01.420 Like most people,

00:16:02.320 because I see people do this all the time.

00:16:03.540 They're like,

00:16:03.900 I'm going to do this for free for my buddies.

00:16:06.060 It's like, why?

00:16:08.200 They're not going to take it seriously.

00:16:09.700 They're not going to get a result.

00:16:10.700 And then when somebody says,

00:16:11.680 hey, I heard you work with this person.

00:16:13.200 So like, I just think this is true for software.

00:16:15.400 It's true for anybody that creates services

00:16:18.000 for other people.

00:16:18.900 It's like, you're better off saying, this is the value I create, here's the investment level, and instead of it being like 15% get the results, it's 98% get the results, because at that level of investment, and this is something I find fascinating, when you think of the whole ideal customer, whatever the price point is, even if you call it 100 grand, it's what kind of company, it's not what kind of customer invests 100 grand into this service,

00:16:47.320 it's what kind of person wouldn't

00:16:50.500 and what I've always come to

00:16:52.940 is the person that wouldn't

00:16:54.200 is the person that doesn't believe in themselves

00:16:56.760 their business, their product

00:16:58.260 to get the return

00:16:59.140 and I can't help that person

00:17:01.780 that's the art of disqualification

00:17:03.980 and that's why I think

00:17:06.040 it's a different approach where people are thinking

00:17:08.120 I need to find more of these people who will not write 100k

00:17:10.020 it's like no you need to

00:17:11.400 make sure that you stay away and you repel 1.00

00:17:13.940 the ones that wouldn't feel

00:17:15.980 like they could get the roi because those ones have a deeper challenge which is the mindset i

00:17:21.540 don't believe in my abilities execute or implement and pass you know investments didn't work out or

00:17:26.800 whatever it is right well this is like my first venture into consulting and it's a different beast

00:17:33.940 i am used to hey i've got a sas application it's repeatable i'm gonna go i know who my target

00:17:40.480 customers are i know how to get them yeah and make it profitable here it i'm trying to do the same

00:17:46.560 thing because i'm trying to productize what we do i'm trying to scale it i'm trying to grow it

00:17:52.000 but disqualification is a key part of that is i don't want to work with a lot of people right 0.98

00:17:58.640 a lot like i have a no asshole rule yeah i don't want to work with jerks i don't work with people 0.90

00:18:02.640 that you know aren't right for the business and might be out bashing our name so that disqualification 0.98

00:18:09.280 process is a very difficult one because you don't always know right away in a

00:18:14.800 consulting engagement it might take you three months a month to figure out this

00:18:20.620 isn't gonna go anywhere and when you've got other people selling services your

00:18:25.360 services etc all of a sudden you might be in an engagement and realize this is

00:18:29.620 going to be a disaster I need to now extract myself from this side that's a

00:18:34.900 challenge because it's not a problem right it's a service it's me it's my

00:18:39.460 brand I have to deliver on that brand how do we do that if other people are

00:18:45.940 out there selling me into an engagement and I realized pretty quickly yeah

00:18:53.920 that's a problem how do you deal with that today I haven't been able to do I

00:19:01.120 I've fired the client.

00:19:04.060 I have assigned other people who might be better suited.

00:19:07.740 So sometimes it's just a match, right?

00:19:09.280 Like, no, no, this is a very strong CEO who's very strong-willed and opinionated, who's very combative.

00:19:17.480 Well, I'm not going to be able to help you if you just want to argue all the time.

00:19:21.860 But I know somebody who might be able to match for you.

00:19:24.800 If you want to go beat it out and have arguments all the time, here's the guy for you.

00:19:29.140 but I'm gonna I'm gonna take a step back I'll work in the background if I can

00:19:32.920 but I'm gonna take a step out because at the end of the day it's not worth my

00:19:38.080 mental health if I'm not providing the value that I could for that account when

00:19:42.800 I could be providing value for another yeah it's just really what it is at the

00:19:45.820 end of the day yeah but the people selling you into those accounts they

00:19:49.360 they don't have that filter remember we're founded by a bunch of accountants

00:19:55.360 and CFOs. They have a different

00:19:57.340 idea of what go-to-market

00:19:59.320 and sales and marketing and revenue

00:20:01.480 is, right? So it's

00:20:03.600 not a cookie cutter. And these are things where now

00:20:05.580 we have to eat our own dog food

00:20:07.260 and put ourselves through the same process

00:20:09.800 that we put our clients so we can

00:20:11.560 position ourselves. My practice,

00:20:13.820 got to position it. Got to be able to have

00:20:15.640 a messaging framework so

00:20:17.600 these guys can talk about it. I have to make it very

00:20:19.740 easy for them to be able to

00:20:21.600 sell it to the right people. So

00:20:23.560 we're going through that process now.

00:20:25.360 but you know we're the shoemaker's children yeah it's always going to be a longer process than when

00:20:33.080 we do it for our clients and what does this guy do the cfo dude does he do like reporting on top

00:20:38.240 of net suite or what does he it depends on the client okay so we've got the strategic you know

00:20:44.640 top level cfos who are out helping you know raise series a's uh seed that's driven by the cfo yeah

00:20:50.980 yeah interesting it is but here's where you think about um what our practice does i'm going to go

00:20:57.140 to market side there's a lot of intersections and prior to me joining practice we should see

00:21:03.220 the pitch decks right there just a lot of numbers and words and you know we come in and say okay

00:21:09.700 let's tell a story tell a story and what is this we're trying to get us here um and how do we

00:21:15.220 validate what client are you most proud of that you've worked with uh i'd say quick silk is one

00:21:20.740 of them quick silk silk yeah they're an unknown web content management platform

00:21:25.620 what's their core what problem do they solve uh security and simplicity right so it's not like

00:21:32.740 you know page cloud or uh wix or weebly it's just as easy page cloud out of san francisco now are

00:21:40.200 they no they're still ottawa based okay yeah as far as their bootstrapped right uh no they've got

00:21:45.300 investment yeah there is money yeah um but these guys you know they're they've got a great product

00:21:52.260 when i first saw it i i hated it yeah i didn't like it at all because i was looking at it through

00:21:57.120 the lens of well wix and weebly and page cloud all these guys are way slipper but then my background

00:22:03.240 with open text and web content management at the enterprise level realizing okay wait a second and

00:22:08.760 he walked me through the ceo gary walked me through all of the features and the security

00:22:14.580 requirements and the world bank is one of his accounts and uh i said gary like you're not

00:22:21.400 competing with these guys yeah you've got to be competing over here yeah and you can like

00:22:26.900 documentum space it's it's like uh from wordpress joomla and all those open source solutions which

00:22:34.680 is like a huge percentage of the internet yeah to okay well there's the documentums the open

00:22:40.220 techs of the world, and Oracle and Adobe, all require huge technical investment, implementation

00:22:46.840 time, integration. We used to sell a dollar of services for every dollar of licenses.

00:22:55.040 And he's got something that can bridge that gap. It's not going to compete head to head

00:22:59.180 at the top level yet, but he's got something that can get there. And he can solve the security

00:23:05.160 problem for any company, or government, or organization that has a higher than normal

00:23:12.040 security need.

00:23:13.040 Why?

00:23:14.040 Are they integrated with two-factor better?

00:23:15.660 It's an all-in-one architecture.

00:23:18.300 It's been built for security from the ground up.

00:23:21.620 It's unlike open source, there are very few penetration points.

00:23:26.820 And with one of their partnerships, they're hosted on a platform that guarantees data

00:23:34.280 sovereignty yeah and my other client massive can guarantee data sovereignty in transit okay so all

00:23:43.240 of a sudden you've got a very sophisticated solution that will i was just in an in transit

00:23:48.840 through vpn or through physical pipe it's through private networks really yeah and uh it's really

00:23:55.960 uh a powerful solution if you take these three things together yeah and you bring that over to

00:24:01.240 Europe where the EU regulations are coming in a play. Data sovereignty is key. If you're a European company...

00:24:08.240 You can't deploy on Amazon.

00:24:09.240 No, and if you're Europe, you can't even keep your data in the UK anymore.

00:24:12.240 Really?

00:24:13.240 You've got to bring it back to European soil because of Brexit. 0.95

00:24:16.240 Oh.

00:24:17.240 Yeah.

00:24:18.240 So there's huge opportunity for companies like this. And now that he's repositioned, the market is opening at the price point that he's selling for is significantly higher.

00:24:30.240 So he's no longer competing at $99 a month.

00:24:33.040 No.

00:24:33.900 Now it's like the entry point is $500.

00:24:36.240 And that's like $1,500.

00:24:38.600 And let's now go talk.

00:24:40.120 Now we're talking my language.

00:24:42.940 So talk to me about his, so what's the go, does he have salespeople?

00:24:47.340 No, so here, actually, this is a really interesting one because he's struggling with funding.

00:24:51.780 He's in Canada.

00:24:52.580 And his metrics, he went from becoming primarily a service organization that tried to productize to a consumer like a product, to me going in and saying, stop, you're not going to survive.

00:25:08.360 Let's productize, let's go and become that enterprise solution.

00:25:13.080 And he's been dealt some crappy hands on the funding side.

00:25:17.820 So he's got about $750,000 waiting for him, but he needs...

00:25:22.720 To raise the balance for the...

00:25:24.240 He needs about $150,000 left, and we've already put our check in.

00:25:28.460 So it's just a matter of getting him over that hump.

00:25:32.180 And I hate raising money.

00:25:35.680 I've brought great investors to the table, but it's not something I enjoy doing.

00:25:40.440 I love crafting the story and the positioning,

00:25:42.820 But that's where we need more of the high-level finance support for this.

00:25:50.440 So what is their go-to-market today?

00:25:53.820 Do they have a sales process?

00:25:55.460 They have a sales process.

00:25:56.700 They have very limited marketing.

00:26:00.020 There's no marketing spend.

00:26:01.680 There's no salespeople.

00:26:03.660 Oh, so he's doing all the sales demos?

00:26:05.140 He's doing it all himself.

00:26:06.180 So he's just at like 20K MRR now.

00:26:09.320 And that's going from practically zero about nine months ago.

00:26:13.960 So he was in a great job.

00:26:16.140 But the investment community, I was at a recent angel event,

00:26:20.600 and I saw three pitches, and I was blown away.

00:26:25.040 Like, why are these companies pitching at an angel event?

00:26:29.460 These were Series A-ready companies.

00:26:31.620 But here in Ottawa, I don't know what it's like.

00:26:34.620 East Coast.

00:26:35.300 East Coast.

00:26:35.740 But the bar is, they're looking for 50,000 MRR for an angel group?

00:26:42.980 That doesn't seem to make sense.

00:26:43.780 No, I think the angel groups are confused.

00:26:45.860 They're very confused.

00:26:46.780 Yeah, I don't think they understand what angel really means.

00:26:49.880 I mean, these are Series A, and they're professional investors, not high net worth guys.

00:26:54.460 So what are they raising at?

00:26:56.700 What would that company raise at the angel?

00:26:58.820 Are they trying to do a million and a half at the angel group?

00:27:01.780 No, they're just trying to get, right now, they need 150.

00:27:04.460 No, not this one.

00:27:05.740 The ones that were doing it at the angel group?

00:27:08.440 No, they were raising like $507.50.

00:27:11.240 Really?

00:27:11.740 Yeah, it was.

00:27:12.840 So even they're wasting their time.

00:27:14.340 Big time.

00:27:14.840 It was a big disconnect.

00:27:15.840 I didn't quite understand what was going on.

00:27:17.540 A, you should be raising $4 or $5 million.

00:27:20.040 Yeah.

00:27:20.540 Instead they're doing a dog and pony show.

00:27:22.340 Not only that, I was there, I was invited,

00:27:25.340 and they presented me as this particular angel group success

00:27:30.540 story.

00:27:31.540 I'm like, wait a second.

00:27:33.840 You guys didn't invest in me.

00:27:35.540 How am I a success story?

00:27:37.380 All of a sudden, open air is a success story

00:27:39.260 for a bunch of different groups locally, right?

00:27:40.940 But they weren't investors?

00:27:42.080 They never invested.

00:27:44.360 Just because you're a local example

00:27:45.680 of a company that raised money?

00:27:47.360 I'm in their portfolio.

00:27:48.740 No.

00:27:49.900 Really?

00:27:50.740 Were they an investor in a fund that you raised money from?

00:27:53.660 Nope.

00:27:54.500 Weirdo.

00:27:55.340 One of their members had invested in me separately.

00:27:58.540 But it wasn't through their network.

00:28:00.040 No connection whatsoever.

00:28:01.160 That's so funny.

00:28:02.040 Yeah, it's a game, right?

00:28:04.380 Yeah, we've definitely kind of kiboshed a lot of the angel groups.

00:28:08.700 I mean, there's just, you know, obviously there's a different network.

00:28:12.400 I actually love fundraising, which is weird.

00:28:14.460 Really?

00:28:14.920 Oh, I just love it because honestly, I mean, this is my approach,

00:28:18.760 and it's true for exiting too,

00:28:21.040 is I truly believe that the investors don't have a job unless I raise money.

00:28:27.560 And they would be lucky to have me in their portfolio.

00:28:30.560 So I love telling that story.

00:28:32.220 Absolutely.

00:28:32.520 And that is the mind shift that has to happen with some of these.

00:28:37.460 Entrepreneurs too.

00:28:38.420 Oh, yeah.

00:28:39.020 You know, don't go begging for money.

00:28:40.680 No.

00:28:41.060 Like, come on, man.

00:28:42.020 They need you.

00:28:43.120 Yeah.

00:28:44.000 You know, Shopify, right?

00:28:45.900 Great success story locally.

00:28:47.820 They didn't get any money in Ottawa.

00:28:49.140 Yeah.

00:28:49.580 Right?

00:28:50.380 So, yeah, these are the things that keep me up at night, and I'm not the owner of the company.

00:28:56.020 Yeah.

00:28:56.580 That's not right.

00:28:57.420 but it's that

00:28:59.060 because you see

00:29:00.940 what the entrepreneur

00:29:02.300 and this is I think

00:29:03.160 also part of the role

00:29:04.400 I play here

00:29:05.080 is I'm the only

00:29:06.400 ex-CEO

00:29:07.380 right

00:29:08.220 I'm the guy

00:29:08.900 who founded a company

00:29:10.160 raised money

00:29:11.480 you know

00:29:12.320 put way too much

00:29:14.220 of my personal money

00:29:15.100 into it

00:29:16.080 knew what it felt like

00:29:17.420 to wake up

00:29:17.920 with the cold sweats

00:29:18.680 in the middle of it

00:29:19.140 so I can connect

00:29:20.640 with an entrepreneur

00:29:21.240 at that level

00:29:21.940 and sometimes

00:29:23.200 that's that connection

00:29:24.680 where

00:29:25.140 you're never going to

00:29:27.080 be able to explain that to an angel or somebody else who's never done that before yeah so when

00:29:34.440 i'm working with them this is in the back of my mind it's almost like i'm it's almost like ptsd

00:29:39.480 and i'm like recreating this scenario in my head i'm like i'm going to save you from this

00:29:43.560 and we're going to do something differently but at the end of the day i understand what

00:29:47.640 their pain is and we know how we can address it and we're going to address dress it in a

00:29:52.440 no bullshit way yeah and that goes to one of my commitments to entrepreneurs everywhere which is

00:29:57.820 i'm going to just be brutally honest with you know what i've done in the past and the mistakes that i

00:30:05.120 made um you know i'm not going to play the success theater with these guys i'm going to tell them you

00:30:11.580 know that what it was like selling my company and not having alignment and the depression

00:30:17.340 afterwards and you know seeing your baby get you know mutilated yeah just rebranded into something

00:30:25.840 awful yeah so you see like these are the things that an entrepreneur you know expects me to just

00:30:31.560 talk to them about i had an exhibit it was great it was awesome yeah you should do it too but it's

00:30:37.600 not like that right there's all these ups and downs yeah and what i've found is there's a shift

00:30:43.820 in the community from when i was starting open era in 2011 to today where entrepreneurs seem to be

00:30:52.060 way more in touch with the downside of everything so i think that's a good thing yeah right um and

00:31:00.620 we seem to be more supportive and honest with each other i don't know if you've seen the same thing

00:31:06.860 But, you know, since I, I think we talked at our last lunch, but since I got my tattoo, because my son went through some issues and he struggled with depression and suicide attempts.

00:31:21.860 Since I got the tattoo, it has opened up so many entrepreneurs coming up to me and talking to me about their deepest, darkest times.

00:31:30.580 People I've worked with, people I've worked with in the past.

00:31:33.820 it's coming out of a woodwork and it's just demystifying or taking away the stigma and being

00:31:40.640 able to have that conversation i think it's been very helpful and very powerful because you can

00:31:46.240 have some real conversations oh it's real yeah because there's you know i think back to you know 0.76

00:31:53.500 the bullshit i was spouting when i was you know on the side yeah man i was a big man on campus 0.76

00:32:00.060 for a while there you know and behind the scenes it's a different story but you have to be able to 0.99

00:32:05.980 have those conversations now um because there's there's real real consequences and we've we've

00:32:13.260 seen some of that we've seen entrepreneurs commit suicide right and it's not uh it shouldn't happen

00:32:20.700 there's no way to 100 prevent it but to be able to have those conversations and at least say you're

00:32:27.180 You're not alone, there are other people out here who have gone through this stuff.

00:32:32.020 Let's talk and how can I help?

00:32:34.620 That's all we can do and I definitely see more of that happening.

00:32:39.620 So to me that's a real positive that I'm seeing in the startup community.

00:32:43.660 I don't know if that's everywhere but I definitely see that here in Ottawa.

Dan Martell - February 01, 2018

Episode #9 How To Coach & Advise Startups w⧸ Peter Lalonde @ Positive Venture Group

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