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#02 – Dom Einhorn
11 Plays4 years ago
A conversation with Dom Einhorn, A serial entrepreneur with multiple startup exits under his belt, Dom created the first online art auction back in March 1996, which was acquired by one of the largest auction sites in the world five months later.Dom constantly scours the world for the next breakout startups in his fields of predilection: fintech, digital media, augmented and virtual reality, artificial intelligence, cleantech, edtech, health tech and food tech.More recently, Dom founded the Startup Supercup, a leading tech conference that unites 1000 carefully vetted angel investors, VCs, private equity funds, technology startups and leading media outlets from around the world.
Website: https://jimboparis.com/
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Transcript
Introductions and Backgrounds
00:00:05
Speaker
Hi, I'm Jumbo Parris and you are listening to the Jumbo Parris Show. How are you? Quite well, quite well. So Dom, could you give us a brief introduction about who you are as a person? Sure. My name is Dom Einhorn. I'm calling in from France.
00:00:29
Speaker
I am a digital media entrepreneur. I lived in the US for 25 years, but originally I'm half French, half German.
Early Entrepreneurial Journey
00:00:37
Speaker
I decided to come back to France 2018 to launch Unicorn, which is today probably the largest incubator and accelerator of startups in a rural setting. Right, right. And could you kind of give a brief summary of how you kind of began this whole journey? So where did you start off before you made it to this huge point in your life?
00:00:59
Speaker
Well, it's a very humbling experience. You couldn't have fallen any lower. Going back to 1993, when I actually left France, moved to the US with the idea of launching a digital media startup at a time where nobody knew what that actually meant. At the time where the predominant search engine, there was one called Yahoo.
00:01:24
Speaker
way ahead of Google, which wasn't actually even a search engine, it was a human curated directory of internet links. And from there on, had many ups and downs, more failures than successes, but fortunately, the successes made up for the failures. Right. Very early on, we focused on digital acquisition of new customers, which we still do today primarily on the marketing
Bridging the Entrepreneur-Investor Gap
00:01:50
Speaker
side. But I was an entrepreneur for the
00:01:53
Speaker
Large majority of my professional career until about six, seven, eight years ago, when I kind of turned the table and started wearing the angel investor hat a little bit more. And the friction that we uncovered in the marketplace, which a lot of people are aware of, but few seem to do something about is that there is a huge gap between startup entrepreneurs and investors. I call it the expectation gap.
00:02:22
Speaker
where typically startup entrepreneurs broadcast on FM, but investors listen to AM, so they don't understand each other. And part of what we do in a day-to-day basis is trying to resolve that gap and build a bridge for the two to understand each other, which is challenging, but we've proven that on a one-off basis, we can succeed, and now we intend to do that at scale.
00:02:52
Speaker
So did some of your struggles as an entrepreneur sort of help you with this understanding of the misunderstandings between startup entrepreneurs and investors? I would say unequivocally yes. So, you know, case in point, when I started the first time actually pitched an investor, I was very excited and a little scared at the same time because there was a group of investors that came out of nowhere and showed interest in what we had built. And
00:03:23
Speaker
I was, again, broadcasting on FM. They were listening to AM. So I was giving him my terminology. My link was a startup entrepreneur. They looked at me like I came from Mars. And then they started talking and they asked me, so what are you raising? Pre-seed, seed, Series A type of financing. And I was like, what are these guys talking about? Eventually, the deal actually did happen, strangely enough. But there were many misunderstandings leading to that deal.
00:03:53
Speaker
I would say today very little has changed. If I listen into a pitch from 25 years ago in the tech scene versus today, I still see a lot of these friction points where the two parties just don't understand each other and the two need to understand each other because ultimately, what we're building here is an ecosystem very much like an Uber or an Airbnb. Take the case of Uber, for example, if you have only riders,
00:04:23
Speaker
and no drivers, it's not going to work. If you only have drivers and no riders, it's not going to work. In our ecosystem, if you have only investors and no deals, well, there's nothing to invest in. If you have only deals and no investors, you cannot get them financed. You're actually building a holistic ecosystem where the two need to be balanced out, otherwise it just doesn't work.
Inspiration and Mentorship
00:04:47
Speaker
That's a really interesting way of looking at it.
00:04:51
Speaker
What kind of drove in this passion that you had of creating this sort of network of entrepreneurs and investors that can sort of understand each other? I think at the very onset, at a very early age, I was growing up in France, so I started
00:05:14
Speaker
as a voracious reader at the age of four or five. Fortunately, I had a grandmother who was kind of my mentor, and I don't remember when I knew how to read, but I was very, very young. Just interesting. What did you read a lot of? So today, it's dramatically different from what I read back then, but at a very early age, the US pronunciation is Jules Verne, Jules Verne in French. I read probably by the age of seven or eight. I had read every single book he had written. I was fascinated
00:05:43
Speaker
by this visionary writer who basically devised a submarine way before anybody else, the rocket to the moon way before anybody else. For those of you who have read 20,000 Leagues Under the Sea or The Voyage of the Center of the Universe, et cetera, et cetera. And basically I was very young when I realized that everything was possible if you set your mind to it, right? So I think that gave me the vision
00:06:08
Speaker
uh, of an entrepreneur, it basically told me that, look, if you actually work hard enough, you're disciplined enough. If you have the right ideas, you can make him, you know, come to fruition. And that's what we're looking to do as an entrepreneur today, because I'm a lot busier today than at 50 than when I was, when I was five years old. I think my reading has somewhat been condensed because it's so difficult just to keep up with our own industry.
00:06:37
Speaker
I still voraciously read whenever I can. I multitask just to keep up with my reading. I'm not reading while I'm talking to you, by the way, but typically if I'm on a conference, this is what I would do. I would chime in every once in a while while at the same time catching up on my reading.
00:06:54
Speaker
And it's purely revolves around what it is we're trying to achieve as a team, which is to actually help other entrepreneurs succeed, which is extremely exciting. Because if I look back at all of the issues that I faced as a startup entrepreneur through my ventures, I wish I would have had an
00:07:17
Speaker
a person like me, more mature or older, they could actually help me overcome some of those obstacles. And, you know, this is kind of like my dream come true today, I can actually be that person. And along with my team, lend a helping hand to struggling entrepreneurs, which are very much like struggling artists, right? And it's very easy to identify some of the challenges that are facing, be it
00:07:45
Speaker
the challenge of raising money, acquiring new customers, building a brand and defending that brand, you name it. All of those items require dedicated skill sets, dedicated resources in order to make them work and ultimately make them flourish.
Modern Entrepreneurship Challenges
00:08:07
Speaker
Startup entrepreneurs is a very broad group. When you first started this business, did you niche down at the start to a specific type of group? Like entrepreneurs in Europe probably have a different experience. I'm assuming than the ones here in America or any other area. So was your niche more in Europe or could you elaborate on that? It's a good question. Yeah. So early on, certainly I was a generalist, not a specialist because the internet was in its infancy.
00:08:35
Speaker
And very early on in nine, I'm talking about 1994, uh, what we were doing in our initial company, digital marketing space, we were actually calling on businesses, selling them websites in a time where people said. Website. What is that? Right. Oh, I've heard, I've heard of this internet thing. It's nothing but a fad. In fact, in 1993, 1994, few people called it the internet. They called it the information superhighway.
00:09:05
Speaker
That's what it was called, right? It became the internet around 1995, 1996, when Marc Andreessen and Netscape 1.0 developed the first browser, right? Internet browser. Now, fast forward 27, 28 years, it's changed dramatically. Today, you have no choice but to be a specialist or you're no one. Being a journalist gets you nowhere, right?
00:09:32
Speaker
Because what's happened as a result of this dramatic explosion of content in particular is that a niche market is defined by a million people or more, right? So I'm taking the crazy example, but let's say you're interested in fly fishing in Montana out of all things, you will find a million people who are interested in that topic and you can quickly and easily target them either using Facebook ads, Google ads, or you name it, right?
Tech Startups and Connectivity
00:09:59
Speaker
And that's a niche market.
00:10:01
Speaker
A large market is now defined by 100 million people or more. And I think we still have barely scratched that surface because over the next 18 months, we will be onboarding the great digital divide that 2 billion people who are still disconnected around the world will be coming online. So imagine off the internet as this massive brain, right? The cloud consisting of millions and billions of brains, and we're just going to be adding within a period
00:10:30
Speaker
of 18 months, an additional two brains to the cloud to turn it into a mega brain. These people right now in remote locations in Africa, South America, Asia, Southeast Asia, et cetera, et cetera, will be contributing to this thing we call the internet that will start producing content, right? It's not like a bunch of couch sitting TV viewers, right? They're interacting
00:10:55
Speaker
with this medium and actually adding value to that medium by creating all sorts of content that we can't even imagine yet at the time where other technologies are becoming ubiquitous, such as augmented reality, virtual reality, that are quickly merging with 5G and artificial intelligence and becoming one technology. So imagine the leaps
00:11:19
Speaker
as a humankind that we will make once these still relatively disconnected brains will actually join that big cloud that we call the internet. Right and a lot of these disconnected brains I'm assuming that these are generally tech startups or are there other types of businesses as well that you work with?
00:11:40
Speaker
We specialize, going back to your first initial question, we only work with technology startups in very defined fields such as artificial intelligence, cyber security, fintech, financial technologies, health tech, educational technologies, digital media, etc. So anything that
00:12:04
Speaker
closely touches to tech. So, for example, we may take agriculture. We wouldn't take an agricultural deal. However, if it's an agri-tech, if it's an enhanced agricultural deal that uses technology as a leverage to do something that hasn't been done before or to make agriculture more efficient, we may be interested,
Investor-Startup Dynamics
00:12:23
Speaker
right? But it needs to have tech technology in its DNA.
00:12:29
Speaker
Okay. And another thing, a question that's been going through my head a lot is how do you actually interact with these other businesses? Do you act more as a consultant, more as a coach, more of as an angel investor? I'm trying to think of the dynamics of this relationship that you have with your clients. It's pretty much all of the above because when you do invest, whether it's cash or other resources,
00:12:55
Speaker
You have to, at one point in time, make a decision that is half intellectual, half emotional. You have to decide, does this make sense intellectually for me to take part in this venture? And am I emotionally ready to invest my emotions into this venture? Right? And then you have some ground rules that I live by, some very simple ones.
00:13:22
Speaker
Because you have to work with either a startup founder who may be a solo entrepreneur at the beginning. That's not sustainable if you intend to build a scale up, a large business, because once you're scaling up, clearly you need to build a team. Because by definitions, unlike technology, humans are not scalable, right? But some of the ground rules that we set is like the first question I ask myself when I meet either a team or an individual is, would I go fishing with that person? Sounds crazy.
00:13:50
Speaker
But basically what that means, it's a test, whatever it is, would I go on a vacation with that person for a week and be secluded in a resort and we're gonna be right. Because you're joined at the hip once you're in. So better to ask yourself that question early on and make a decision as to whether or not you can actually live with that decision further down the road. Do you get along? And is that getting along sustainable over a long period of time?
00:14:18
Speaker
knowing that the startup, assuming the startup survives, that you will be working with, until there is an exit, some sort of a merger or an acquisition, or go to public market strategy, you will be tied at the hip for five to seven years on average. So it's a fundamental question that you need to ask yourself, either as an angel investor,
00:14:40
Speaker
as a consultant who is engaging with a company and you may get paid by either cash or stock in that company. Sometimes you get a hybrid remuneration between the two, but don't underestimate the emotional requirement to participate in this venture aside from anything financial.
00:15:06
Speaker
The emotional side is definitely not the first thing that people think about. They think more of the logical money transactional system. But why is the emotional side so important? I think what you say is absolutely true. I think, first of all, the reason why it's primarily a financial decision is because we tend to lead in by rationalizing everything that we do in life.
00:15:32
Speaker
So we will look at brass tax. Am I going to lose my money in this deal? I'm going to break even, I'm going to make any money. And then because it's kind of like a trade-off between opportunity and fear at that level. I want to make sure that I'm not losing my money or if I'm losing it, I need to know that I can live with that loss. But then
00:16:00
Speaker
Let's assume you get involved and you invest. It never stops there, right? Because if you're an investor, if you're just a passive investor, it may stop, but that only happens on rare occasions. The right angel investor brings more than money to the venture. He will bring his rolodex of contacts. He will become, in the ideal scenario, a spokesperson for the company by default, a brand ambassador.
00:16:26
Speaker
Look, this is a deal I got involved in, you should check them out at the very least. Or if you help that investor solve a problem in the ideal case, he loves your product or service, you solved one of his pain points, he decided to invest. Now you get full buy-in because now he's completely convinced that what you did for him actually works and he will become a mouthpiece preaching your product or service to everybody else.
00:16:55
Speaker
So at that point in time, that person becomes a lot more invested in your project emotionally and tired of the hip. And you should never underestimate that and the value that that provides. Because ultimately you can only pitch so many people, but if you do right by the people you're working with, you will actually create a wave, a network effect,
00:17:22
Speaker
of people will just come to you by way of osmosis with doing the right thing for the right people. And this network effect, it took a while to hit this point, correct? I think we all have our network. So think of it as our own individual networks. I think you could look at something like your Facebook profile, your LinkedIn profile, your circle of influence. We all have that, right?
00:17:48
Speaker
In my case, yes, it took me 25 years to actually build it. And a lot, again, here, a lot of people underestimate the value that that represents. And if you actually look at other investors that have huge networks, you should, if you're looking to raise money
Innovative Strategies in Corporations
00:18:07
Speaker
for your startup, no matter what your startup is, you should really look at that, at the value that provides, more so than the money. Because if you actually have a marketable product or service,
00:18:18
Speaker
Do you really care whether you raise money from an investor or whether you actually sell your product or service to the right people? In the second scenario, in the latter, you have no dilution. You keep all of your equity. It's always better to sell your product or service with your margin than to go out and raise money and dilute yourself and give away a piece of your company. That's the bottom line.
00:18:45
Speaker
Because a lot of these bigger businesses, they tend to try and do something more like intrapreneurship. I think I've heard of that before. You build a business within the business itself. And what do you think of that system? Because that's sort of a way of taking a piece of a company or bringing it in or building a new piece of a company. Do you have any problems with that?
00:19:09
Speaker
I think what you're seeing today are a lot of large companies that, uh, in an attempt to act like, like a startup and become leaner. Uh, and it's a very smart move actually they, because if you take a company, a large company like Procter and Gamble in the US, right? Large conglomerate with tens of thousands of products, et cetera, et cetera. Once you become that large, you tend to move slow, slower or not at all.
00:19:38
Speaker
that's dangerous for any company. You don't want to be in that situation ever. So what you see a lot of companies do is either break up that large monster into small businesses that are easier to manage and where they actually act independently from each other and the sum of all these parts forms the whole. So you have a lot of
00:20:02
Speaker
the startup spirit that's being injected into those companies because they understand that if they don't do that, there will be the next Google, there will be the next Facebook, there will be the next Twitter, Uber, Airbnb, et cetera, that will take them over in their field.
Startups Solving Big Company Problems
00:20:17
Speaker
And that's the biggest fear of being disrupted. The same way Netflix disrupted Blockbuster, for those of you old enough who are listening in. All right.
00:20:29
Speaker
I mean, I was in the US during the blockbuster years and the actual terminology that we use wasn't blockbuster, but it was blocked with an F in there because you get bent over by not returning your rental and you'd pay ultimately more. I remember returning one tape at one point in time and I had late charges and it cost me $45 when the tape was worth, the videotape was worth 15, right? So that created a lot of backlash with the consumers.
00:20:59
Speaker
Netflix at one point in time was pitching Blockbuster for investment and Blockbuster laughed them out the door and five years later Netflix ate their lunch, right? So that's the perfect scenario of a company that was the incumbent and that basically thought, look, we're so big, we're too big to fail, we're so strong, nobody can disrupt us. And that's been proven wrong over and over and over. So today,
00:21:27
Speaker
Most of these large businesses are very much aware that if they don't iterate, if they don't act like a startup in some fashion, their day is accounted. Yeah. Speaking of that blockbuster, I actually did a project on that. It was quite interesting because the thing that really went wrong with them is that they were hiring a lot of higher ups that were working more in things like retail.
00:21:54
Speaker
So it was causing a lot of issues because they needed to digitize. And they refused to digitize. Most importantly, they, to a large extent, obviously, at one point in time, they were the only kid on the block, no pun intended, where no one could really compete against them. And people would just put up with the friction points such as paying for extravagant late fees and
00:22:25
Speaker
bad customer service, lack of choice. Even the average Blockbuster could carry 15,000 titles in a store when Netflix had hundreds of thousands. So keep in mind that initially, Netflix disrupted Blockbuster using almost the same delivery method, the US mail service versus actually you going to the stores from beginning up. But it was a physical delivery.
00:22:54
Speaker
for those of you who are old enough, right? Because it goes very, very fast, way before the ability of instantly downloading your movie or streaming it, right? So what that proves is that it's not necessarily the technology that disrupted Blockbuster, but more so the customer service. Because prior to the ability of streaming a movie or a show, Netflix demonstrated that using a brick and mortar system of actually having you order
00:23:24
Speaker
three DVDs in the mail and returning to, you know, you actually could disrupt Blockbuster, which they did very, very successfully way before they started streaming movies. And speaking of that situation, did you ever
00:23:40
Speaker
find any other businesses that you are working with specifically? I think we've talked a lot about your general experiences with businesses, but more of a one-on-one thing. What specifics and artists have you seen where a big business or a business you've been working with has made an issue and you've kind of fixed it before they ended up similar to Blockbuster? It's a very interesting question because
00:24:06
Speaker
you actually have an entire cottage industry of businesses trying to do that, right? And sometimes it works, sometimes it fails. So for example, you have a lot of startups today that are focusing on a problem that they see a big company being affected by and trying to build that solution with ultimately the intent of selling the company to them as that solution, right? It's a little risky.
00:24:35
Speaker
venture in my opinion because what happens is that usually the entrepreneurs that set themselves out to do that tend to underestimate the fact that most of these big companies are trying to do the same thing concurrently internally. Don't assume that they are not aware of those problems because they're deeply aware of those problems.
00:25:01
Speaker
sell your concept to them if it solves a critical pain point?
Building Effective Teams
00:25:05
Speaker
Absolutely. Under the condition that, number one, you can demonstrate today that the problem can be solved, at which point in time they'll pay an exorbitant fee just to get rid of the problem rather than trying to re-engineer it internally. But it all depends on market timing as well.
00:25:23
Speaker
you may be behind, you may say today I'm gonna build this and the company has already been working on it for six months, 12 months, two years before you even get started. And by the time you bring it to market, they may have already solved the problem internally or purchased another startup that was ahead of the game. Yes, and that must be a stressful thing for entrepreneurs because with tech you kind of have to get out things before other people do or you're gonna have to do your own type of twist on it
00:25:53
Speaker
And did you ever have entrepreneurs that are more like crazy hustlers? They were just trying to rush things out and you had to slow them down at times. You definitely do have that. That definitely exists. And I've had more of the opposite kind of the entrepreneurs that don't understand the value of hustle or underestimate the value of hustle, which is a critical component, critical ingredient to start up entrepreneur success.
00:26:23
Speaker
So the easiest way to say it is that, look, I'd rather invest in a deal that is an okay idea but with great and crazy execution than the best idea since sliced bread with poor execution. The former will always outperform the latter. And
00:26:43
Speaker
You have to have an element of hustle inside your organization. If it's not you, if you're an engineer and you're not a hustler, find a hustler to work with you. You need to have a complimentary team. If you're a pure hustler, find an engineer, right? You have to understand that great teams are not teams of generalists, they're teams of specialists. When you're building a team, you're building a puzzle. Let's say that puzzle has a hundred pieces. The last person I need on that board
00:27:10
Speaker
is another me, I have no room to place that piece, I'm already there. On the right hand side of a gaping hole, the gaping hole may be marketing, maybe finance, maybe sales, and sales and hustle obviously go hand in hand, right? I need to fill in that blank in order to build my puzzle. And that's what you have to do on a day to day basis as a startup entrepreneur. Again, you know, that's a really seasoned outlook because I think most people would prefer to hire new people, they're a lot like themselves.
00:27:40
Speaker
because they'll think they'll do the job just as well. Big mistake, right? Because the last person that you need on your team is someone who taps you in your back and say, good job. You need to be constantly challenged. And for example, at Unicorn, we're roughly 30 people right now from 18 different nationalities and actually more women than men, which is almost unheard of in the tech scene, right? And no one told us that we needed to have that, right? We have Argentinians, we got
00:28:09
Speaker
Brits, we got the Vietnamese, we got French, we got Australians, Americans, et cetera, et cetera, right on our team. I think when we're all looking at this loosely term, this loosely used defined term called diversity, the last thing we need to be told is what diversity should look like. If you're building your right team, if you're doing the right thing, if you're looking for the best talent, you will discover for yourself
00:28:39
Speaker
that while your internal team may be strong, there's always someone smarter on the outside. A lot of companies are finding that out, right? It could be the kid in Cameroon. It could be another kid in Indonesia, a girl in Mongolia, you name it, right? I'm just making this up, but that's exactly how it works, right? So what we're trying to do, what the politicians are trying to do is like, oh, you have to be a good boy. You have to behave a certain way and trying to dictate, okay, you need to have this ratio of men versus women, et cetera, et cetera.
00:29:09
Speaker
Well, that just doesn't work, right? It is anything that's imposed on us, number one, we're not going to respect, we're human beings, right? But actually, if you're playing the cards right, if you iterate, if you're a true entrepreneur, you will discover that is exactly what will happen without anybody having to tell you to do so. That's exactly what we discovered internally, right?
Authenticity in Entrepreneurship
00:29:31
Speaker
If you want to have a great team, by definition, you're going to have a nice ratio of men versus women, and they're going to be coming from all over the place.
00:29:39
Speaker
Once we colonize Mars, they'll probably bring in two or three Martians as well. And that's just the lay of the land. That's how it works. Yeah, because when you impose things, you create requirements and you're not filling in necessities a lot of the times. 100%. Right.
00:29:57
Speaker
How did you, so was reading really the main way you found out all these different concepts or was it also the experience as well that you had? I think my experience was first theoretical, first and foremost, coming by way of reading and very practical because I had a very strong mentor in my life, my maternal grandmother who
00:30:26
Speaker
was extremely strong, World War II resistant, had lived through a horrendous war, losing most all of our siblings, eight out of 11 siblings. And that marked me at a very, very early time in my formative years.
00:30:45
Speaker
because my parents were working and she was always around me telling what not to do, what to do, how disciplined I need to be, how I should never give up doing this and this and that. And that for me was an amazing gift growing up as a child. So other entrepreneurs, is it in the best interest for you to tell your story in order to connect more with them emotionally or
00:31:15
Speaker
Would you always come at them from a more logical perspective first? Or would you go with showing your credibility more? Like I'm trying to understand how you would draw in an entrepreneur that's been hustling, that's kind of in their own mental trance, because I sort of know a few entrepreneurs and they kind of are always in this state where they're always lost in their own mission. How do you kind of pull them out of that kind of world that they're in?
00:31:44
Speaker
I think the easiest, excellent question, by the way, the easiest way to handle this situation is not by trying to figure out who you should be. Don't act, but try to be authentic. Find your inner voice and define it, whatever that inner voice may be. Because every time you try to deviate from your core, from your true core, you're going to fail.
00:32:13
Speaker
because it's just not sustainable and we're all different, right? So first of all, ask yourself at the deepest inner level, who am I? Why am I here? What do I want to do with my life? Try to encapsulate that. Try to take a third party view of yourself. Imagine an out of body experience. You actually see yourself in your chair or on your desk asking yourself that question, but you see yourself as a third party, another person looking at you.
00:32:43
Speaker
What does that third party see? How would they define you? What is your DNA? May take some time because a lot of people were too busy doing all sorts of things. We never ask ourselves that question. It took me years to find that out. But once you really know who you are at the deepest core, write it down, and then basically build your own life mantra. I know who I am right now.
00:33:12
Speaker
which basically will make you feel extremely secure versus insecure because you're not trying to be someone else, you're not trying to act, you are yourself. And once you get to that point, you will see how the barriers will break down, how quickly, because that personal integrity, that humility will transcend every obstacle you've ever met in your life. You will break through to people a lot easier,
00:33:40
Speaker
Whoever they may be, an investor, a media person, an older person that you're helping across the street, et cetera, et cetera, because again, you're not playing a game. You are who you are, and that reverberates to everybody around you. And now people want to be associated with that because people are looking for sincerity. People are looking for uniqueness, and we're all unique as individuals. So you have to clearly define that and get that across to the people you want to engage with.
00:34:11
Speaker
And how do you think entrepreneurs convey sincerity? Because from the looks of it, a lot of entrepreneurs have problems being themselves. Do you think you have to work more as almost a coach or a life coach in a way to help them with their other issues, and then you bring them to the entrepreneurship world? Because that sounds very difficult. Yeah, I think what you said is 100% right. So in most cases, entrepreneurs try to act.
00:34:40
Speaker
But it's a loser's game, because if you're trying to act in front of an astute investor, it's going to read right through you sooner rather than later. It's going to be like a house. You're building a house of cards that's not defensible. Right. So what you're seeing very often from young entrepreneurs is that it will come in and just say, make a crazy statement like,
00:35:02
Speaker
we're breaking into a hundred billion dollar industry. And over the next three years, we intend to grab a 5% market share of 5 billion out of thin air, right? You're done with any investor, right? Because you're not authentic. You don't show, you actually, it's disrespectful because you actually believe that that investor will eat what you just delivered to him, which will never happen. You're insulting the intelligence.
00:35:29
Speaker
That's exactly what's happening. And that happens every single day. I mean, look, I get on LinkedIn alone between 50 and 80 pitches on average a day. And I can tell you right now, 60 to 70% of them are exactly like that. Hit delete before I even look any further. Done. Over with, right? So again, once going back to what we discussed earlier, once you've actually figured out who you are and who you want to be and how you want to impact this world, encapsulate that in a mantra.
00:35:59
Speaker
Right? And then work on your hook points. Now it's time, now that you know who you truly are, your authentic self, how do you communicate that to others so they actually will work with you knowing that the right, the person who actually reads your mantra because it's your true self is perfectly aligned with you if they agree to work with you.
00:36:23
Speaker
You don't have to play any games anymore. Now everything is aligned. You're telling the person exactly who you are, what drives you, right? Why you started that business, what impact and legacy you want to leave on that world. And you feel it emotionally, right? That will translate much more so than anything else that you could possibly make up. And that will bring the right people into your circle, into your network.
00:36:49
Speaker
The thing is, you said sincerity. I think, you know, sincerity may be the biggest one because how I see it is a lot of these entrepreneurs know that they're not in a good position and they feel like they need to play themselves up in a way in order to get your attention.
00:37:05
Speaker
Because at the end of the day, if you're an investor and you're a guy that gives money, people already know you're all the way up here. So they feel like they need to bring themselves up here when in reality, they need to develop trust because that's really what's unique. There's nothing more sincere you could tell a potential investor or potential partner or even a potential client than being humble enough to recognize your shortcomings. Because that's what actually creates buy-in.
00:37:34
Speaker
tell them what you're strong at, tell them what you're weak at. Because in most cases, that investor has resources, aside from money, where it can actually fill in the blanks. So rather than saying, look, we're good at everything, which is me to turn off, you know, tell them, look, this is exactly where we are
Embracing Failure and Customer Needs
00:37:53
Speaker
today. Let's look at the facts. We're excellent at this. We're doing so, so on this. And right now we suck at that, right? And the investor may come back into you. He said, well, first of all, thank you very much.
00:38:04
Speaker
for being brutally honest, I might be able to help you with your weaknesses. I know this and this and this person. And if you didn't do that, you would have never gotten that tip. And it's so contradictory now that I really think about it, because if your business is doing so well, why are you even talking to an investor in the first place? If you could validate the fact that you're going to grab 5% market share in a $100 billion industry, you're done.
00:38:33
Speaker
Go to the bank, they'll write you a blank check, if you've proven it. Don't talk to an investor, you're already done. Take that to the bank, but we all know you're lying, so it's not sustainable. We talked about the sincerity part of it, but what about the uniqueness now?
00:38:56
Speaker
What, what type of uniqueness do you actually look for in an entrepreneur? Because I think, you know, uniqueness is really general and I can't really seem to hit on what specifically is needed for them in your eyes. I think, I think you could probably define, uh, the DNA of an entrepreneur as someone who is not afraid to fail. Okay. Beyond that, someone who realizes that failure is a stepping stone to success. And that's demonstrated by science.
00:39:25
Speaker
In my own life, in my early days, as I was mentioning to you earlier, when we used to sell websites to businesses in 1994, I had the rule of 36 over one. And that rule meant that I had to call 36 people actually physically speak to them before I would sell one website. But if you drill down deeper, what that means is I had to go through 35 failures before having one success. But the motivation behind it, once you actually realize the math,
00:39:55
Speaker
you want to go as quickly as possible through the failures to get to that success. So I wanted to dial more and more and more, and ultimately what happened, I would make more and more sales because I would basically eliminate the people who would not want to work with me. So you have to not only not be afraid to fail, you actually have to embrace failure, knowing that it is the painful way
00:40:24
Speaker
that will lead you ultimately to success. One of the famous quote was Thomas Edison when the media asked him, how did you succeed where so many others have failed with the light bulb? His answer was, I finally ran out of things that did not work. Again, what that means is that look, I failed thousands of times. Eventually I ran out of things I could possibly fail on that had no choice but to succeed.
00:40:52
Speaker
Similar quotes, I'm going to misquote them right now, Michael Jordan, when he said, look, the majority of the shots that I took in my career were failures I missed. Yet people look at me as the best basketball player ever. In baseball, your batting average, man, you're missing a lot more than you're hitting, right?
00:41:12
Speaker
and the Babe Ruth of the world and whatnot, the best batters ever. I'm not a baseball specialist, but you know, if you bet above .30, you're one of the top, you know, batters in the world. So you're failing seven times out of 10, yet your success. But most people, so the number one trade of an entrepreneur is zero fear of failure. And beyond that, the ability to embrace failure because he knows
00:41:41
Speaker
I need to iterate, I need to fail as quickly as possible because those are the cheapest failures, right? The worst thing you want to do is fail consistently and not realize you're failing because you can't pivot, right? And in today, especially in the tech industry, we have so many tools that will quickly tell us whether we're on the right track or not. Let's say we're selling a product of service via an e-commerce website. It's all driven by metrics.
00:42:08
Speaker
and we want to buy traffic, be it by way of Facebook ads, Google ads, Twitter, you name it, whatever the source is, we can instantly track conversion rates, customer acquisition costs, et cetera. If you're just buying blindly traffic from multiple sources and you're not tracking the conversion rate, it's like driving a car over the ice cupboard, right? You're going to crash.
00:42:33
Speaker
But if you're doing it right and you measure everything, you can quickly iterate what doesn't work. You tune it out. That was a mini failure. You recognized it instantly and you shut it off. If you let it run, it's going to burn a hole in your pocket, right? That's what we're talking about here. It's quickly iterating. I'm not saying that failure is a great thing. I'm just saying that failure is a necessary stepping stone that will lead you success. As long as you realize it is a failure, you can isolate it and get rid of it.
00:43:04
Speaker
failure than response. So damage control in a sense. Why do you think there is a fear of failure a lot in many entrepreneurs? You know, it goes back to our caveman days, right? Where fear is a very powerful element in the human psyche and it's hard coded in our DNA. But we were cavemen and there was this
00:43:31
Speaker
crazy wolf behind us who was very hungry. He stared us down, but we're down by the lake getting water. Flight, right? Immediate. It's a reflex, right? To show you the mind games, the tricks the human mind can play in ourselves, let's assume this. Let's assume we're sitting in a cafe and all of a sudden your armed gunman covered. They come in with a shotgun. They hold that shotgun.
00:44:01
Speaker
against our heads. Our adrenaline is pumping, we're gonna fear for our life, we're gonna think we're gonna die. Logical, right? Now, they take the hoodie off, and it's a plastic gun, and it's your buddy playing a nasty trick on you, and there's not even any bullets. We didn't react differently. What that means is that the human mind sometimes has a hard time differentiating between reality and fiction. If that weren't true, we wouldn't be drawn into movies. Because we know movies are fake,
00:44:31
Speaker
Yet we live what the characters live, ever more so it becomes very vivid, or our dreams. How many times do we wake up and say that's just a dream or are we somehow between reality and fiction? But the thing is the human mind cannot make the difference sometimes between reality and fiction. We don't know what's real and what is not.
00:44:57
Speaker
You know and what you just said there was a really interesting thing because a lot of entrepreneurs do live in almost a dreamlike state because they're always constantly looking into the future
00:45:09
Speaker
maybe seeing their success in the future and maybe they'll over exaggerate or they'll look at failures in the future and they also over exaggerate that too. How do you help entrepreneurs balance between being realistic and doing the work and responding and reacting to failures while at the same time looking forward with a good mindset but not one that's going too far into the dream world?
00:45:35
Speaker
Yeah. This is, I mean, this is a very, very interesting question because I think the easiest way to answer that is that if you're building a product or service, clearly you're a hundred percent right. You have to be a visionary number one and you're projecting yourself to some point in the future where you will launch that product, launch that service.
Collaboration and Knowledge Sharing
00:45:58
Speaker
So you kind of like have to visualize what that will look like.
00:46:02
Speaker
But I think that the fact, the way you anchor yourself into reality is by telling yourself, no matter how far in the future I'm protecting myself with my product or service, the people who will be using that product or service will use it in their present at that time. Right. So you could do that in hindsight, in fact, and say, okay, we are here today. Sometime in the past, let's, let's say I'm, I'm going back in the past now versus going into the future. Right.
00:46:30
Speaker
But with hindsight, what products are we using today and who conceived them and what iterations did they go through in the past to get to where we are today? So leverage history, what has worked, what has not worked, even though past performance is never indicative of future performance. Let's not forget that we're not just starting as human beings, devising products and services today. It's been going on for centuries, right?
00:46:58
Speaker
But the bottom line is, no matter how much of a visionary you are, the people who will be buying your products or services will buy those products or services in their present. So never lose, lose touch with presence and look at what we have today and compare it to, you know, the crazy entrepreneurs, the crazies that Steve Jobs calls them, right? Who had that vision of devising those products and apply that towards your journey. And
00:47:28
Speaker
Do you ever use other entrepreneurs as examples to the other ones? So would you ever get an entrepreneur that you've worked with a lot to help another entrepreneur? All the time. So you're kind of, okay. Yeah. All the time. I mean, this is the, you know, this scarcity thinking addresses and working, especially in the tech business anymore, right? Uh, open source has proven how powerful it can be to including solving diseases like, like COVID.
00:47:59
Speaker
Think of what COVID would have done 50 years ago. Think of how quickly we're able to come up with a vaccine. That only was possible because there was massive communication between the brightest scientific minds around the world. Yes, some of them are still clustered working for one company versus the other. But even in that case, there were tens of thousands of scientists just working tirelessly day and night
00:48:25
Speaker
you know, putting their research on the table for everybody else to use, open sourcing their research, open sourcing their findings, right? Thanks to the Internet. And if we, before the Internet, think about how slow this information was moving. How quickly do we attach a document right now, a video, do a screen share to show exactly what we're working on? Think about the leap in productivity that this has produced for mankind.
00:48:54
Speaker
What you just mentioned there is really interesting because I'm thinking now, what type of methods of coaching do you actually implement? Is it more one-on-one or more group coaching where you bring in somebody and kind of have them work with each other? Which one is more effective in your eyes for making the best entrepreneur to represent your business? I think that for teams, it's definitely group coaching.
00:49:20
Speaker
where you're trying to identify some friction points in a team, issues that affect them that are slowing them down in terms of workflow, in terms of efficiency. There you would actually talk to a team or bring in another team that's actually already resolved that same situation they were in to actually share that experience and how they overcame it. And then I think something that's very, very powerful when you're a team leader
00:49:50
Speaker
is to identify, let's say you have this forest, you're a team leader, so you're basically orchestrating this forest. And you have, on the left-hand side, a tree that may be dying. Find out why, right? Find out how you can nurture that tree along. That would be one of your employees to bring it back up to speed with everything else, because you're building an ecosystem where everybody's working together, et cetera, et cetera.
00:50:16
Speaker
no employee should be left behind unless he really wants out, at which point in time, you just gotta let him go because you can't let cancer metastasize either. But what I find works best, which we're doing internally, is just checking in with everybody. Give him a fist bump every single day. Hey, how's it going? Are you struggling with anything? Let me know if you have any problem. Boom, boom, boom. Do this early in the morning, quick pep talk, 30, 60 seconds, and the entire DNA changes.
00:50:43
Speaker
Make sure that you have an open door policy. There is any question that they have. They can always come to you. Be open.
Future of AI and Sustainable Business Models
00:50:51
Speaker
Promote discussions amongst your team members, et cetera, et cetera. Make sure they don't get too clustered. Move them around a little bit, different tables, right? Make them work. Teams are not accustomed to working with each other. Make them work with each other and your productivity will shoot through the roof.
00:51:11
Speaker
Productivity, that's another one. So hustling is important, but productivity as well. How do you make a business maximize their productivity? Depends what business you're in, right? Obviously, if you're running a bigger shop, it's going to be different than if you're running an AI venture, right? But I think at the onset, it all goes down to two things. It comes down to humans. Yeah.
00:51:40
Speaker
machines, whether that machine is a bagel maker, there's such a thing. I'm not a bagel specialist. I like to eat them, but I don't know how to make them. Or whether that is a piece of software for a technology company, right? AI is a perfect example. A lot of people are afraid of artificial intelligence and not knowing that actually us humans are designing this artificial intelligence. And then you've heard, most of you have heard of the term runaway AI.
00:52:10
Speaker
where the artificial intelligence gets so powerful that it will run its own course and leave us humans behind, which in my opinion is a fallacy, because it assumes, wrongly assumes that we will not integrate with artificial intelligence, and that's already the case. If you're wearing a pacemaker today, you have artificial intelligence inside your body.
00:52:37
Speaker
we're being augmented by a number of means and we'll continue to do so. At one point in time, humankind will have to make a decision. How augmented do we want to be? Do we want to remain purely biological beings? Or will we decide to become bionic? And that's a question we have to ask ourselves in the next 10 to 15 years, right? Transhumanism. Yeah, absolutely. So you either embrace it or you don't. But at the end of the day,
00:53:06
Speaker
If you don't, you will be left behind. That's the bottom line. It's everybody's prerogative. Some people will opt out, but there will be the new couch potatoes with much smarter bionic human beings walking around who have Google built in, have Wikipedia built in, and whatever else has not been, you know, devised today will be built in. We will be connected to the cloud. We will have direct access to the entire sum of human intelligence since the very first man walked the earth, right?
00:53:36
Speaker
I personally would like to see that. I would personally like to live with it and live through it, but I can completely understand someone opting out and saying, I want no part of this. I just don't want that person to tell me what I should be doing or not. Now, what are some, uh, I know we're reaching the end of our talk here, but what are some lasting things that you think will be important for all entrepreneurs to know?
00:54:03
Speaker
You're asking some good questions there. I really like this. I think that a big mistake that many entrepreneurs are doing is trying to grab a crystal ball and as you mentioned, predict the future, which to a certain extent we all have to do. We don't have to predict it, but at least we have to anticipate it. But there is also a fallacy in the sense where you don't always have to chase a trend, be a trend chaser in order to
00:54:32
Speaker
build a great startup and build a great business. And Jeff Bezos recently said that at Amazon, they're not trying to chase the next big thing. What they're really working on is on things that do not change the mainstays. People will wake up tomorrow. They're going to be hungry. They want to get food. They want to get clothing. They want to get shelter. They like to interact with other humans in a safe manner.
00:55:01
Speaker
in an enjoyable manner. They like to entertain themselves. When they're buying a product or service, ideally they'd like to have good customer service versus bad. Think about catering to what's not changing and identify some friction points.
00:55:19
Speaker
Clearly, the experience that we have today with Netflix is quite a bit more pleasant than having returning a movie late at Blockbuster and paying $45 for returning it late, which is an insult to anyone's intelligence. Think about how you can actually build businesses that satisfy people because as human beings, we want to live
00:55:42
Speaker
enjoyable lives. We don't like to break our legs. If we do, we like to have someone who can help us fix it quickly and efficiently. So if you're working in that space, right, or in the biotech space, think along those lines. But I would focus on things that do not change. And that's where sustainability and durability comes in instead of disrupting yourself because you project yourself too much in the future.
00:56:09
Speaker
Again, no one has a crystal ball. I don't have one either. It's very hard to predict something that hasn't happened yet, but it's very easy to predict something that's been happening for sometimes hundreds of years and that will continue to be here today. On that, you can build.
Closing and Contact Information
00:56:28
Speaker
That was a very good answer. I would like to thank you for just being on this show right now. It was definitely a privilege
00:56:37
Speaker
You've taught, I think a lot of people around here and also me, a lot about what it means to be an entrepreneur, especially in the tech industry. And yeah, thank you. Do you have any other final things to say? Thank you for the opportunity. For those people who want to find me, LinkedIn is easy. I'm Dom Einhorn, D-O-M, as in Mary. Einhorn, E-I-N-H-O-R-N. In fact, Einhorn in German means unicorn.
00:57:02
Speaker
Hence the name of the incubator. Unicornincubator.com. That's the website with a Q. That's the play on words. And my personal email if you want to get a hold of me is dom at unicornincubator.com. All right, thank you. And this is the Jimbo Parish Show. Thank you for listening to the Jimbo Parish Show.