22 Jun June 25, 2019 – Sandler Sales Eugene Pope and the Titanic Todd & Kim Saxton
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Eugene Pope – Owner and President of Eugene Pope LLC at Sandler Training – Read interview highlights here
If you see that my services aren’t a fit for you, just say no to me.
This is the most pivotal part of the program, because it sets the agenda. Because if you tell a person are you ok with saying “no,” you can see the wall starting to break down.
Eugene Pope brings over twenty years of experience in sales training and business development to Sandler Training, working with brands such as, Sunglass Hut, Godiva, Best Buy, and many more. Throughout his career, Eugene has been dedicated to helping people grow their business acumen through sales leadership behaviors that teach best practices with applied scientific knowledge. Eugene opened his Sandler Training Center in the Buckhead district of Atlanta, working with business professionals to grow their sales through the Sandler Sales Training methodology. With a passion for public speaking, and teaching people how to grow professionally, Sandler Training offers the perfect platform for Eugene to explore his passions while helping business professionals improve their selling skills.
Dr. Kim Saxton and Dr. Todd Saxton – Authors of The Titanic Effect: Successfully Navigating the Uncertainties that Sink Most Startups – Read interview highlights here
Entrepreneurship is not about creativity and risk. Entrepreneurship
is actually systematically navigating uncertainty in these
Dr. Kim Saxton is a data-driven marketing professor, author and presenter. She’s been helping students improve their marketing prowess since 2004. She came by her interest in data-driven decisions naturally, with a BS in Marketing from MIT, reinforced by an MBA and PhD in Marketing from IU. She’s been recognized with numerous teaching awards. She’s published broadly on new data analysis techniques, effective advertising and the impact of different kinds of promotions. At the same time, she believes data should be practical. Good marketers find a way to blend both art and science to be successful. She hones her skills as a successful marketer by working with local startups to help launch and expand their businesses. Dr. Todd Saxton was a consultant for Fortune 500 firms prior to pursuing his Ph.D. in strategy at Indiana University. In that role, Saxton helped companies develop their corporate strategies for engaging in acquisitions and alliances that brought more focus to their business. In addition to teaching and research in corporate strategy, Saxton has also been an active member of the Indianapolis venture community. He is on the advisory boards of several companies, including CIK/PERQ, Diagnotes LLC, Fight For Life, and the Venture Club of Indiana. Saxton is a three-time winner of the MBA program’s “Best Professor” award. Together, they wrote the Titanic Effect, a book which helps entrepreneurs avoid icebergs that often sink the best-planned young businesses.
Highlights from Eugene’s Interview
You’ve got your traditional approach, which is amazing. How many people follow the traditional approach? And the other question is, why? Why do people follow the traditional approach? Where did it even come from? Honestly, my theory on this is it happened through osmosis, because sales companies put sales people out there, and they’ve got to figure it out on their own. And somebody along the way figured this piece out, it worked. So they started putting it in training manuals. Throughout industry, I worked with companies that had a traditional approach baked into their sales training manual.
I wouldn’t say it inherently doesn’t work. Really, a good question is why does it stay around? It’s because it’s a numbers game. The more people that use it, the more people that are going to actually have some level of success. But there’s a better way.
Here’s traditionally what happens in sales. You got a buyer, and you got a seller. I got something, do you want it? Well, what the sellers are doing, the first thing they usually start doing is asking questions to qualify the prospect. Now, you gotta ask, is that a bad thing or a good thing?
Here is where the pitfall starts to happen. They start qualifying the prospect for themselves, for what they have to sell. They may have the ABC line of product, and what they start doing right off the bat is qualifying that customer into A, B, or C. Another way to look at this, have you ever heard this phrase, good, better, best? Well, I’m a product, and selling good, better, best. Now here’s the dirty little secret about good, better, best when I used to sell it. And I used to train this, I used to train my people to sell up or to sell down. Ever hear that phrase before?
What I would do is, I would try to show you the most expensive item that we had to sell, to get that sticker shock out of the way. Because I got that sticker shock out of the way, that item in the middle may be a more palatable item for you to purchase versus that high ticket item. The dirty little secret is I made more money on the better product than I did on the best product. If I sold you a high dollar item, I’m not making as much margin on that item, because I don’t sell them as often as I do that middle dollar item. I make more margin dollars in the middle than I do at the top.
What I would do in traditional sales–and I taught this for years–in traditional sales, I qualify you for the best product that I have. In other words, what I’m doing is, I’m qualifying you for my interest, not your interest, not what’s right for you. This is what a buyer’s doing. Now, what’s the seller doing? In this scenario, the buyer will be waiting to get screwed. The buyer knows that it’s coming, if they don’t trust the salesperson.
So they’re holding their cards to their chests, and they’re misleading the seller, and outright lie. And you know what, you can’t hold it against them. Because in traditional sales, we have led the buyer to mislead us. We haven’t built any kind of trust, because they know that a seller is just in it for themselves. So you got a seller who’s qualified for themselves, which leads to the buyer misleading online. And there’s a little known joke, I heard this in the Sandler system, a buyer can lie and still go into Heaven, they can lie to a salesperson and still get in, because we caused it.
The next step in the process for the seller is, now they start downloading features or benefits. They’re really good at it, they’ve traded, their company has drilled features and benefits into their head. The next step, once I qualify for the prospect for my needs, now I’m starting to download features and benefits to that prospect. And all they’re doing is, they’re getting free information from me. They hear this from just about every seller that download features and benefits. I’m basically giving away my candy, if you will, you know what we call that is spilling your candy in the lobby of the Sandler way.
So, first you qualify for–this is traditional sales now–qualifying for your benefit, download features and benefits. I used to teach this, and I taught this to thousands of people. Now I started looking for buying signals. I start nodding my eyes, the teachers said nod your head, because when you nod your head, the prospect will start nodding their head. And the next thing you know, everybody’s in agreement. What I taught everybody again, is looking for those buying signals, trying to get that prospect to say yes, by looking at a bicycle. Buying signals could be they’re nodding their head, they’re reaching for their wallet.
But I trained everybody on this, and then they come to me, they say, “Hey, that prospect’s going to buy.”
And I go, “Well, where’s the check? Did they purchase?”
“Well, not yet. They had to think about it.” The dreaded thinking.
And the next thing you know, your prospect’s telling you, “I gotta think it over,” or “Maybe so,” and they’re misleading you again; they’re right in the same place, because they don’t trust you.
They don’t trust traditional salespeople. So now the seller is in the chase mode, and the prospect goes into hiding mode. Every time I explain this to people, I’ll ask them, these people that have been in sales, “Has this ever happened to you?” And without fail, it has happened to everybody. And our prospect who will go into hiding? They’ll go dark on them. They won’t answer emails, they won’t answer phone calls. They’re just gone. And traditional sales has been doing that for years.
I work for a company, they put together a program called Care Contact. The customer asked questions, recommends the product, encourages sale, traditional sales through and through. And what it lacks is a consultative process, an open communication process with your prospect. It leads to them misleading you, and you ultimately chasing. If you’re lucky, they say yes.
Let’s talk about what we do at Sandler. This is what we teach through an ongoing reinforce program. It’s not a one time fix, because what you’re doing is, you’re changing behaviors, attitudes, and employing techniques in this process.
There’s a seven step process that we work with, and it’s the nucleus for everything that we do. It all starts with being disarmingly honest with your prospect, bonding and rapport. People like to buy things from people they like, and people that are like them. So it starts with the bonding and rapport process. You can ask questions of your prospect in this step, just start understanding a lot about your prospect.
There’s no pass or fail on a disc profile. It’s a communication style. There’s no right or wrong. One is understanding your prospect’s communication style, so you can get your communication style to theirs. It all starts in bonding and rapport. We teach this process right off the bat.
How do you understand the other person’s communication style? And guess what, this doesn’t only help you in sales, it helps you in your personal life. My wife and I have totally opposite communication styles, so sometimes when I need to acquiesce, I’ll start communicating in her style. It helps along the process, if you will.
I do cold calls in my model. A lot of people do cold calls. And I’ll sometimes get out numbers of people, and I use this company–I won’t name them–say x.
And people go, “How did you get my number?”
And I’ll say, “Well, I use this company called x, I get it from them.”
“How do they get it?”
“I have no idea.”
It’s absolutely true. So I’m being completely upfront and honest, because people happened to get their phone number. And by putting that out there saying, “Hey, I get it from this company,” it’s true. And it puts people at ease.
One of the beauties of this system is, you’re not just selling for yourself, you’re trying to see how you can actually help the prospect. You’re actually qualifying them. So if you go in with that, with that kind of mindset, you don’t have to put up any kind of front. You don’t have to hide behind whatever kind of deception you put up, you can be brutally honest with your prospects. People appreciate it.
Here’s another way to be brutally honest, and it really goes to the next point, which is setting the agenda. It’s like, “Hey, if I find I can’t help you, or if my product or services is not fit for you, are you okay?” If I say no, you say something like that to a prospect. That’s being brutally honest. Because your role should be to disqualify them.
If they’re not a qualified prospect to a traditional salesman, the salesperson is so eager to close the sale that they lose sight of the process. They’re just focusing on the end result. So I’m up front, honest with people, I say, “Look, I can’t help you.” I’m going to tell you I can’t help you. I’m not going to try to sell somebody something that they don’t need.
All right, number two. That’s the upfront contract, setting the agenda with your prospect. Then I just said, “Hey, I appreciate you taking the time to meet with me. I’m gonna ask you some questions. You’re obviously gonna have some questions for me.”
Typically, what happens is, I may find out I can’t help you. You’re okay with me saying that now. And a few see that my services aren’t a fit for them. If it is yes, that’s number two. It’s probably the most pivotal part of the whole program, because it sets the agenda. Because if you tell them, “Okay, are you okay saying no?” Well, then they’re like, “Yeah, of course I am.” Give them that. Give them that power to say no. And what happens when you do that is you see that walls start to break down. And when you tell the prospect, “I may tell you no,” do you see that wall start to break down even more? So it’s a pivotal, pivotal part in the process; it’s where the communication really starts happening.
The idea that I am going to lie to you, we just all accept that. And if we take a lot of that away, and say, “If you decide you’re not going to buy from me, and I’m wasting your time, please feel free to tell me. The last thing I want you to have to do is avoid my telephone calls or feel bad if I run into you at the club. So go ahead and say it now.”
It’s funny, this step seems really simple, and it’s not a long process to get through. But it’s one that my clients that I work more on than most of the other steps, because when people first start this process, they’re scared. They’re scared to say, “It’s okay if I say no to you,” and, “Are you okay saying no to me?” Because they’re afraid of the no. If you change your mindset, and start chasing a no, well, the sooner you can know is the sooner you get to what? Yes.
Once I get my class to break through that, the rest of it really is an easier process. It’s getting rid of being afraid to hear no, because if it’s a no, they’re going to be a no no matter what. You’re wasting your time, you’re wasting their time going through the whole process.
All right, number three, that will be the pain step. This is strategic questioning. What you’re going to do is, you’re going to ask questions to find out if my products or services really can help you, and if you have pain issues that my services can help solve. If not, then they’re disqualified, you stopped in the pain step. This is where you’re asking strategic questions, get to the root cause of why you’re sitting there in front of that process.
Let’s talk about surface pain, and below the surface pain. Sandler rule is the problem the prospect brings you is not the real problem. For example, let’s say you’re talking to somebody who’s 20% down in sales annually. It’s pretty big chunk of money. That’s the pain. Is that really the problem, that you’re 20% down in sales? No, that’s the cause of it.
The real problem could be that they’ve got a product market problem, they’ve got a leadership problem, they’ve got a culture problem. I think our processing problem that’s uncovering some real time. So if they have a consistent process to communicate, talk to prospects to open up sales, that’s the problem for a lot of companies. And we do, but pain is really the root cause of what a prospect is achieving right now, and what they want to achieve. Somewhere in the middle, that gap is where the pain is. But it’s going to mask the pain, and a lot of people mask that pain until it becomes unbearable.
One of the questions I’ll ask a prospect is, “What happens if you do nothing?” I just asked somebody that yesterday, and he says, “I’ll go out of business.” That’s pain.
Number four is budget. Do they have a budget? Do they have money? And are they willing and able to spend that money on your products and services? If you’ve got pain, you qualified into the next step, which is budget. Now, you got to find out. Do they have any money? If they do, will they spend the money? This is that question nobody likes to get into, because society says we don’t like to talk about money. But it’s an important part. If you don’t have the money, and I continue on, I do my presentations, I’m wasting my time, and I’m wasting your time. So the budget step is uncovering, do they have a budget for this, and are they willing and able to spend money to alleviate this pain?
If you do a good job of the pain steps, in most cases, they’ll find money in their budget. And I’ll tell you a great way to start this. Use this often. It’s like, “My guess is that when you filled out your P&L or created your P&L for this year, you didn’t budget for sales training.” Let’s say we’re talking about that. Now, in a lot of cases, my clients are in a business where they did whatever widget that they’re selling. “Can you tell me what you’ve budgeted for this line item in your P&L? What’s your budget for this?” And in a lot of cases, people with the knowledge say, “I don’t know, I didn’t budget for it.”
So then you got to start talking about “Well, if you did budget for this, can you give me an idea what that would look like?” To walk them through. What would be a budget, how much are they willing to put aside And then the authority question. “Do you have the authority to spend this money?”
You got through pain, they qualified to pain, you got through budget, they qualify to budget, the next step is decision. Now you got to find out, is this the person that can write the check, that has approval to write the check? This is a simple step. A lot of people are uncomfortable about asking this, but it’s as simple as, “Is there anybody else that we need to involve in this conversation?”
And you’ve got to have your antenna up for this one, because I had a prospect one time where in my initial call, he told me about a business partner. And I asked that question up front, I put this piece on the front of it.
“Do we need to involve that person?”
He’s like, “No.”
Then I sat down with him face to face, and we had a conversation, and that business partner, Shane, came up again. And I said once again, “Listen, I’m clear, do we need to involve this person into this conversation?”
One thing you don’t want to do is ask them directly, “Are you the guy? Can you write the check?” Just keep your antenna up listening for it, but ask, “Is anyone else involved in this decision?”
And then know your industry. Does he deal with husband and wives all the time–spouses, partners, and others? If he’s not asking that question, then he’s got a potential minefield, because he’s talking maybe to one of the significant others. If he’s not trying to find out if that significant other needs to be a part of this, then he may have to do his presentation, start this process all over again. And in financial services, in most cases, there’s two parties involved. So once you qualify from decision, that’s where the sale is made.
Number six is fulfillment. Now you’re doing your presentation, you’ve got pain, budget, decision out of the way, they’re all qualified, you now have on your hands a qualified prospect. And now you fulfill how you’re going to provide ease of that pain, how you’re going to deliver your product and services.
I can look, whatever your industry is, whether it’s setting up time and dates and schedules, that’s where fulfillment comes in. Here’s what I’m going to do to help ease your pain. Here’s what we’re going to do now. We’re working together. Once you get to pain, budget, decision, that’s when you go into fulfillment. And the last step is one of the easiest steps. It’s one that’s most productive, because salespeople get really excited. When they get to budget, vision, and they consume it, they tell them how they’re going to fix it. They set it up. They’ve got everything done, and they forget this last step, which could blow up after the meeting. And that’s a post sale. That’s the final step. And that’s so simple.
It’s simply like, I got the pain, we got it going, we got it scheduled, we’re going to exchange the money. The last thing I should be saying is, is there anything that could come up that will prevent us from doing business together? You give them that one last chance to think about whether or not they got to talk to a business partner, a significant other. It’s a given that one last chance, and they’ll say in a lot of cases, “No, I think we’re good.”
And then you go, “If something does come up, would you please be sure to call me?”
And they’ll go, “Yes.” And in most cases, if something comes up, they call. Rather than getting this time bomb ticking and something blows up, you know, because the day after the sale they have remorse. What the post sale does is help you mitigate that buyer’s remorse. That’s the Sandler process.
They can find me and email me at Eugene.Pope@Sandler.com. It’s on my website. Give me a call 678-983-8701. I’m located in Buckhead, Georgia.
Highlights from Kim and Todd’s Interview
We’ve actually been married for 31 years. So I’ve known him for quite a while. We both teach in the evening MBA program at the Kelley School of Business, and we have occasionally had students who would come up to one of us and complain about the other. So we now tell them right away.
When speaking with groups, we do like to clarify in advance that indeed, we are married. I’m not her father, we’re not brother and sister, just in case there’s any confusion about those topics.
I was a university instructor for 10 years at a downtown night university here in Atlanta. And my favorite university story is getting called by an upset parent about a child’s grade.
As we wrote the first version of the book and gave it to some early readers, the feedback we got was, are you aware that some startups succeed, and succeed beautifully, because this book is all about failure? And actually, they could survive. So we did pre-frame it, so that while we are pointing out the things to avoid, we’re doing it by also telling you how to navigate around them. It’s not a failure story.
I’ve had a lot of experience with this, and I view my series of investments not as failures at all, but as learning opportunities for the next thing. So we don’t drop the F word too often. But yes, obviously, if you can learn from those, hopefully you can do things that are at least moderately, if not ultimately, very successful.
I wouldn’t say that we explicitly called an iceberg wasteful spending. But sure, what happens is the wasteful spending happens all over the place, right? So for example, we use the metaphor of the Titanic, icebergs and oceans. And we have a human ocean, a marketing ocean, a technical ocean, and a strategy ocean. And we’ve seen people overpay on the employee side. So at certain stages, you want the right kind of employees. We kind of point out places where you end up wasting money because you make poor choices.
I was going to talk about the technology side. When we get the opportunity to work with technology, entrepreneurs who are more product focused than they should be early on have a tendency to overinvest in developing a product, spending $200,000 to $300,000 on an app that’s fully functional before they ever get something in front of a customer. And we really encourage in the book, but also in the entrepreneurial circles that we work with, try and get some kind of low fidelity example or prototype that you can put in front of a customer to get some feedback before you start investing in your technology platform.
We’ll talk a little bit about the categories and want to step back a little bit. One of the reasons that your whole podcast and show really resonates with us is that theme that entrepreneurship is not about creativity and risk. We spend a fair amount of time in the book setting up that entrepreneurship is not about risk taking, and why that is. But then the flip side of that is, what is it? And we see it as systematically navigating uncertainty in these different domains. So as Kim introduced, and you talked about, you’ve got the human marketing technology or technical ocean, and then the strategy ocean that kind of cuts across. And in the human ocean, for example, we have several categories, what we refer to as seas within the ocean–don’t bring a geologist on here, because they will make fun of us for that extension of the metaphor. But basically, you have these different buckets, if you will, you have the founders, the investors and advisors, and then your early employees that you start to bring on. And each of those introduce separate but related categories of debt.
One of our favorite stories that we talked about is one that’s pretty well known, but Gary Erickson and Cliff Bar, when he was in the process of starting Cliff Bar, it was an extension of an earlier concept called Kelly’s that was a Greek pastry and calzone kind of product. And he brought in a partner to help run that business who continued to run Kelly’s while he had very good success subsequently with Cliff Bar, and you fast forward a bit to a possible exit for $120 million, a number of years later, and that partner who was running Kelly’s, owned 50% of the whole entity, because they had never clearly separated out the legal structures, but also who’s the founder, who owns what, what does that 50% entail. So when he was interested in backing away from the deal, to close on selling Cliff Bar, and decided to keep it independent, she was owed $60 million. That’s a giant iceberg to have to dig out from under from a financial standpoint. I hate when that happens.
We do see that with founders all the time, that dividing up all the equity, never vesting, meaning not allocating adequately over time as it is actually earned based on contribution. So that idea of three founders going out, having coffee, writing something on the back of a napkin, dividing up the whole company three ways. And then two years later, two people are carrying the lion’s share, and one person is sitting there owning 33.3%. So, being careful is one of the big icebergs. We talked about being careful early on with how you allocate that equity, and how you vested over time is a really important iceberg to avoid.
One of the things that we do in the book, and we probably should have started with this, is that we really aim this book at early stage ventures. A lot of the stories that you’re talking about, that we hear about in the news media are going to be more fully fledged ventures that are really scaling.
We identify that there are four stages that we address that you have to think about as a startup, and what is important varies by the stage. So early on, you’ve got this pre-revenue stage, where you have an idea, you’re starting to put some things together, you’re not exactly sure what the product is going to be, you’re still really sorting through what could product market fit begin to look like.
The second stage is the minimally viable product. You now have some sort of a product, the MVP, then you’re going to start getting customers and growing the business and then you move into scaling. So we divide the book up as each of these oceans, looking at issues at each of those different stages.
And what you’re talking about is a fully scaled company, that’s when the money starts flowing from the investors, probably too much money. And that’s when the nature of the founders really come out, and we see these just ludicrous behaviors. But the challenge is that a very small portion of companies get to that stage, it’s something like 70% of startups fail and 50% in the first four years. So we’re really aimed in that first four years of getting them off to the best possible start.
There are two big issues that we point out in the marketing ocean, and the first one is going to sound a bit like a marketing professor here. But you have to pick a bucket of customers. You always hear this, like, “Oh, man, our idea is so great. Everybody can use it.” Well, that could be true. But as a startup, you don’t have the money to reach out to everybody. So instead, you’ve got to figure out who is the group of people that can use this the most. Bucket the customers and pick a bucket that you really want to hone in on.
The second one is the niches. There’s riches in the niches. And it doesn’t even have to be necessarily a niche, but it needs to be definable. And the second thing I always talk about is messaging or positioning. And one of the challenges that we’ve seen with certain movements in the startup world is, say your product has this value stream, and then you discover that that didn’t work so well. So you switch, and now it has a different value stream. And then in another four months, you decided, “Well, wait, now that’s not exactly the value we’re bringing to market.” So you switch again. And every time you switch, you are creating a problem, because the customers that you’ve already attracted, were attracted for a different thing than you’re currently aimed at. So be lean and agile, it just has a downside.
We talked earlier about that low fidelity thing. So put together a duct tape and cardboard version to show to somebody before you invest a lot. But as Kim was talking about, alluding to the different stages, as you start to move to that MVP stage, a big iceberg that we see is founders who go out and offer their MVP for free, and get neither dollars, nor even some kind of Letter of Intent from their customers. A real MVP means it’s the minimally viable set of functionality that someone will pay for. So if you can’t get somebody to write a check for it, you’re probably not viable at that point. And this idea of testing and iterating and experimenting only works so far. At some point, you’ve got to have somebody writing a check. So in that next stage of moving toward launch, from putting our investor’s hat on, we don’t even look at startups that don’t have some kind of indication of confirmed interest. Writing a check, paying for, or at least a letter of intent from a customer with some kind of price range in mind, as a benchmark of what you need to have to move forward beyond that.
We have to put context into play here. Because as university professors, I think I just did a quick back of the napkin, and 1382.5 of those 5000 plus pitches you reference came from a university context where students are pitching. And it’s very, very rare for them to actually have dollars, which is why the average university business plan competition winner has a higher than average failure rate, because they never actually interacted with the marketplace. So it’s a beautiful pitch deck, great financials, wonderful pitch and presentation. And you ask the question, “Have you talked to a customer?”
“Well, that comes after graduation.” And that really shouldn’t be the case. I think a lot of universities are getting wiser about that.
But you’re exactly right, that stage-appropriate communication is so important, and it’s okay for you to be out sharing your idea. If you are pre-revenue, if you haven’t actually gotten a sale, have that $30,000, $40,000, even $10,000 in revenue, but recognize where you are and what you’re asking for. You shouldn’t be raising institutional money. At that point, you should be asking for feedback about the idea, and what is it going to take for you to be interested in investing in me, as opposed to pretending that you are angel investor worthy.
In our beyond the MVP stage, we do suggest an important indicator is that you’ve got to get to the first sale to a stranger. And we still see that as pre-investment money. We’ve heard of some organizations that say the founders have to have five paying customers they personally sold to before they will even talk to them. So there does need to be that signal about product market fit.
It’s so cool when a stranger buys your product. And just as a little side gig, we ran a Kickstarter for the book, because we wanted to see what that was like, and experiment with it, being professors and all that. And we got really excited, because there were strangers that did the Kickstarter. And I don’t know who these people are, but I’m really happy to send them all the materials that we put together. That started from a signed copy of the book all the way up to some consulting time with us. We had a range of things. We’ve got some two by three foot maps and ways that you can track your data that we were trying to develop, and we’re looking to see how many people will be interested in that.
Just to extend that, what we were really looking for with a Kickstarter was some indication of interest beyond the book, because we view the book as a piece of this. But overall, and you see this in spades, I’m sure that entrepreneurs’ founding teams struggle in so many areas. And there are some pieces that really can be delivered by self-education, self-monitoring, if they have the right tools. So we see the book as a framework to help develop some additional tools around it, and build a learning community that can continue to get better at startups. One of the things we really like about entrepreneurship is it’s not a zero sum game. If one entrepreneur wins, it doesn’t mean someone else has necessarily lost, unlike broader economic development places, where once you choose a factory in one state, it means another state lost.
For the book, one of the things we did do is go through some of the startup graveyard. We had our own local stories, but we didn’t want it to be just our local stories. So startup graveyard, startup autopsies. It’s really amazing how objective people get afterwards and share, like, “Don’t do what we did.”
What we always tell people when they raise NDAs, we see students who do it first, right. So they are rookies. When we say knowledge doesn’t indicate that you’re a rookie. But it’s so hard to create a startup, nobody’s going to do your idea, you’re going to do your idea. So share it, and then maybe you’ll get better ideas to make it more likely to occur.
Now in fairness, being in a university context, what I like to say about this issue is that 99% of the time, the entrepreneur is asking for that too early and isn’t sharing enough to get meaningful feedback. But the 1% of the time that they overshare, it can be really disastrous. In a university setting, that’s where you publish a paper with your secret sauce before you’ve done any kind of filing. At that point, the cat literally is out of the bag. Whatever that bag might be, even if it’s chicken gizzard.
We didn’t even talk about the Titanic, because most people think that giant iceberg sunk the Titanic. But we did the research to show how all the inner decisions they made on the human marketing, technical side, even strategy side interacted to make hitting that iceberg so fatal.
You mentioned investors, and you don’t read a lot about investors, and yet, it was two big decisions that White Star Line (that built and operated the Titanic) made. Based on investors, when they changed shipyard space on Gustav Schwab in the 1880s. They changed to Harlan and Wolf, who was his cousin or nephew who ran that, and then subsequently in the early 1900s pivoted when they got another investor, JP Morgan of the bank fame, who came in and architected a new strategy that moved from speed to size and luxury, so you can have investors that mess around with your strategy and lead to giant dead birds.