Navigating the Sea of Entrepreneurial Advice
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There is no shortage of advice out there for founders.
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Just do a quick Google search and you'll find list after list of things every entrepreneur should do or 10 rules of being a founder.
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But what if you know doing things the way everyone else does isn't right for you?
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And how do you decide what is right for you and your company?
Introduction to Guests and Podcast
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To answer that, we're talking with founder Lee Mayer of Havenly and investor Kurt Roberts to bring you both sides of a perfect pitch.
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What is Perfect Pitch?
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It's a podcast from Kickstart that reveals the minds of both investors and entrepreneurs throughout a startup's journey.
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So whether that's uncovering what everyone's really thinking during a startup pitch or learning how entrepreneurs like you have managed their first major roadblock, Perfect Pitch offers an honest, quick, and tactical guide to help you on your startup journey.
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I'm your host, Karen Zelnick.
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Lee and Kurt, thank you so much for being here today.
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Thanks for having us.
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And it's so hard for me not to just jump right into the content because I am so excited about it.
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But I'd be doing our listeners a huge disservice if I didn't introduce you.
Havenly's Mission: Accessible Interior Design
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So Lee, I'll start with you.
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You're the co-founder and CEO of Havenly, an online interior design service.
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And the thing that makes Havenly so unique is that it's really built to make the interior design process accessible, which...
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I personally need because I think I can do it.
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But then you go to do it and you're like, this is so much more nuanced and complicated than I would ever think that it is.
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Well, we are here to help.
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And just because it's fun to know this, you did your undergrad at Columbia and have an MBA from Harvard.
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I don't know that that's super fun, but it's not my top 10 most fun facts about me.
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Although these days, I don't really do that much.
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But I'm a first-time entrepreneur.
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This is my first time going through this, starting a company, certainly my first time fundraising for a company.
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So it's been a blast.
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Lots of ups and downs, but it's been a blast.
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Which means you have a lot of wisdom to share with everyone listening.
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And again, can't wait to dive into it.
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And Kurt, anytime you're part of the discussion, we just know that there are going to be tons of amazing insights.
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So thank you so much.
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I'm excited to have you back today.
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For those who might be listening for the first time, Kurt's one of the partners at Kickstart with an investment focus on consumer products, health tech, marketplaces, and general B2B SaaS and the West.
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Kurt, you sit on Havenly's board, and I'd love to know one thing return listeners don't yet know about you.
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I love McDonald's.
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I absolutely love McDonald's.
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I love McDonald's so much that every year when the Shamrock Shake is released in March, I have the date on my calendar.
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Kurt, I have to know, what's your favorite menu item?
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The Shamrock Shake for a year, for a month.
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And then otherwise I do the Big Mac on a routine basis.
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It's like one of humankind's most amazing inventions, if you ask me.
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We should all get McDonald's after this.
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It's going to be amazing.
Lee Mayer's Venture Capital Journey
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Lee, I want to talk about your fundraising experience.
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So you had no product, no traction, just basically a deck and a dream.
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How did you determine that it was the right time to start raising venture capital?
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The reality is we actually had a product.
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We just didn't have a lot of traction.
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So I stand corrected.
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Wasn't very good because I had coded and built it myself, which was an unfortunate decision, I think in retrospect.
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One of the things that I realized about raising venture capital is I hadn't really spent a lot of time thinking about why I wanted to raise venture capital before I raised venture capital.
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Sometimes there's a little bit of a preordained formula that a lot of us founders subscribe to.
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And we subscribe to it because we don't know exactly how to approach things if we don't subscribe to it.
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And while I continue to believe that taking venture capital dollars was the right thing to do for Havenly, I think I got a little lucky considering I hadn't necessarily put in as much time or thought as I think I would say in my next company.
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And so fundamentally, it was one of these things.
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You start a business, it's starting to get off the ground.
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You need to hire some people.
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I didn't have money.
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So, you know, you start to think about how you can bring in other money.
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I wish I could say there was a lovely thought out process here, but it was a little bit of a process that was as simple as that.
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I needed money and I didn't have it.
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And you mentioned you might do things differently with your next company.
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What would you do differently?
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There are some companies that make sense to be venture-backed.
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And there are some companies where I actually think the right thing to do is to not take on other people's capital and the expectations that come with it if you're unable to meet those things.
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I would totally agree with that.
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I think there are some incredible companies that maybe aren't the right candidates for venture capital money.
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And again, I think we lucked into the right model.
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I do think in this space, it makes sense.
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But everything comes with strings attached.
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There's no free lunch.
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And I think the reality is when you think venture dollars, you're really subscribing to a pattern of growth, the necessity of an exit, a lot of these things that you might not necessarily want attached to your business.
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So I think in some instances, taking on both venture capital and the expectations that come with it can
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a disservice to certain types of companies.
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Yeah, I think that's absolutely true.
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One of the questions we try to ask early when we're hearing a pitch from a company is what the founder's desires and motivations are regarding building the company and ultimately
Aligning Founders and Investors
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And if we hear some indications that the founder may want to do a quick flip in two or three years, or that the person thinks they could see this still running it for 15 to 20 years,
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We try to make clear as early as possible in the conversation that it wouldn't make sense for us to start on that journey together, potentially being misaligned.
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And so it is really important to what you're saying here, Lee, that the founder and their lead investor talk that through and really understand each other right from the beginning.
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And Kurt, just a follow-up to that, are there any other indicators apart from exit strategies that are indicators of whether or not a founder should consider taking venture capital?
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So certainly timeline is a piece of it.
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I do think as well, some founders are very, very sensitive to control over their business.
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And oftentimes early in the conversations, particularly when a draft of documents is circulated, the founder will see provisions that are in those documents that relate to decisions the investor has to either approve or can veto.
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And oftentimes for founders, that raises a number of questions.
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What founders need to understand is that most professional investors are using templates for documents that are completely standard, meaning any company that has raised venture capital funding has crossed exactly the same bridges.
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That said, if they create significant concerns about someone else having a say in the direction of the business or being able to approve certain decisions, that's a possible risk of misalignment from the outset.
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So Lee's been nodding her head.
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Lee, I'd love your thoughts on that.
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The control question has definitely been one that I've heard a lot of founders think about.
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And I took it a different way where, again...
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first-time founder, my perspective has always been bring people around the table that have skin in the game that can help you out.
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And then the flip side of it is, yeah, they also get the chance to advise you on other things.
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And that might mean that you give up a little bit of control.
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But I've actually found that to be pretty helpful.
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So I think the key there is to invest in your company where that equation makes sense.
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where you get the upside of expertise and the downside of giving away control is not risky because you know they're going to make the right decisions for the company.
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You know what I would also say to that, Lee, is that founders that we have backed and ones that I've gotten to know personally because of being on the boards, I don't think I would hear any one of those founders say, if asked the question, do you feel like your investor is controlling you?
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None would say yes.
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It's just not the reality of the experience, except in possible real outlier cases with a possibly dysfunctional investor.
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But I don't know of any founder that would flag this as an issue post-investment.
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I think that's a really great insight and takeaway is that the terms and stuff that you see in the sheet might be a little daunting and might cause you to pause.
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But as you're stating, Kurt and Lee, it's actually a very beneficial, helpful relationship and nothing to be afraid of, which I think is a great takeaway.
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And transitioning a little bit, Kurt, this episode is all about approaching things differently.
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And my understanding is that the situations surrounding you taking a board seat were a little bit different than normal.
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Could you speak to that a little bit?
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Lee's circumstances were unique, let's say.
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She had had a round led by a fund that got into some very turbulent times.
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I was not aware of this at the time, but we started to do due diligence on writing what for us would be a very, very bold check into the company.
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And in the process of doing that,
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discovered that Lee had made the decision based upon some of the dynamics around that relationship to ask that investor to resign from her board.
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While I didn't witness that conversation or hear anything about how it went,
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What for me it did was create a tremendous sense of admiration that somebody who had negotiated the right to a board seat with an investor had the willingness to take on what must have been a very, very hard conversation and make a change that was ultimately positive for the company.
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Lee, tell us about that conversation.
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And just to give you a little bit of background, two things you should know.
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So first, I am a woman.
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My team is majority women and we sell to majority women.
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And I should also let you know, this board member had been accused in 2017 of pretty flagrantly disrespectful things towards women.
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And if you remember, 2017 was sort of the opening of Me Too.
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Well, this was actually right before that had happened.
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So it was, look, it was challenging, but it was actually a very simple decision.
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even disregarding my personal sort of feelings around the subject, it was the right thing to do and the right thing to do for the business and the right thing to do for the team.
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And I was very lucky at the time, Kurt wasn't on our board yet, but I was very lucky that the rest of my board was incredibly supportive of that decision.
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And they really moved heaven and earth to make it happen because extricating someone from the board has a lot of legal implications.
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I was very, very lucky to have a lot of support on my side.
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I think it was really cool that we're able to just have that conversation because a lot of CEOs, a lot of founders are going to deal with situations that they have to make a call where it's not easy, but it's the right thing to do.
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And when you're doing that, and when you're acting on that, you're going to receive support from your investors, from other employees.
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And that's such a good reminder.
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And with that, we're just going to segue into the next topic, which is another mountain that you had to
Educating Consumers on Online Interior Design
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A lot of startups just have to work on modifying consumer behavior.
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But Lee, you had to change and teach consumers a completely new behavior.
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So instead of being like, hey, shop for your furniture online instead of in person, you were teaching them how to design and incorporating that practice into their life.
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So how did you tackle that?
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So we sort of fell into a few tailwinds around this category.
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If you think about HGTV, the zeitgeist around the home and sort of home design did not exist, for example, prior to sort of the ascent of HGTV or even the rise of services like Pinterest or a house.
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frankly, this would have been a category that probably if we had started it a few years before we had, would not have quite gotten to the success or at least the level that we have so far.
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And it's largely because we're drafting off of things that other people have done.
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I think that's a big thing.
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And I definitely want to give credit to what I call is my most powerful co-founder sometimes, and that's luck.
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I think the second thing though is
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When you're creating a category, you have to think a little bit bigger than the competition.
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You have to think about the competition actually not being the immediate companies that sort of exist in your space.
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But the competition is everyone doing it themselves for free.
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And that completely changes how you think about go-to-market.
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It changes your messaging, your branding, how you price, how you explain your service.
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It also changes who you target.
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And I think having that focus on what we're trying to do is create this category.
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Let's forget about sort of the immediate competitors in the space and try and go after the 80 million American households that don't use design has really sort of kept our focus in a very, very good and I think constructive way.
Hiring Talent in Denver
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Okay, Lee, so another, yet another thing you had to tackle differently than a lot of startups is hiring.
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Havenly is headquartered in Denver, not Silicon Valley or another prominent sort of startup hub.
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Although one could argue that Denver is becoming a prominent startup hub, which is so exciting.
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But you're competing against the coasts to bring talent to the Mountain West.
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How do you approach hiring?
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Yeah, great question.
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And it's funny, just when I was fundraising, I had a number of people talking about how they would give me a term sheet if I would commit to moving to the Bay Area.
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And by the way, one of those people is now the most predominant voice for moving out of the Bay Area and is currently, I think, either in Austin or Miami.
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So I find that a little funny.
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That should be one of those where we started, where we ended memes, right?
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That's exactly right.
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I mean, look, the reality is, yes, I do think acquiring talent is difficult.
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Do I think it's more difficult in Denver than in Silicon Valley?
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I've certainly never tried to acquire talent in Silicon Valley.
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But from what I understand, it's pretty darn hard there too.
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And the one thing I will say is I actually think I've been able to acquire outsized talent in Denver, Colorado.
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And the reason for that is fairly simple.
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There aren't that many other competing companies.
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If you want to work for a growth stage consumer company and you want to live in Denver, Colorado...
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There are very few other options.
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And so as a result of that, I have a pretty incredible team.
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So I'm optimistic that the city and its talent will continue to grow with us.
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But yeah, it's a funny thing.
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The community here, as I'm sure it is in a lot of these cities like Denver, very small, very, very tight knit, very supportive.
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And so I actually think Denver has had a lot to contribute to our growth
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And Kurt, you work with a number of companies in Denver and Utah and other areas of the country.
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What's your perspective on this?
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I think there was certainly a time where both investors, certainly investors, were biasing high potential founders and companies to move to where investors were more comfortable doing business.
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I don't see that anymore.
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I don't think it's true in virtually any of the markets in which we put significant focus as an investor, whether we're talking about the greater Salt Lake City area or Denver-Boulder,
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The Phoenix Metro, we see each of these markets as being desirable enough places now for people to live and want to be that, as Lee said, you may not have as deep of a pool to draw from, but those that are there and want to be there will come with enthusiasm.
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All right, Lee, now that we all want to move to Denver, I have one final question
Tackling Imposter Syndrome
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And that is, what's the most effective practice that you've implemented in your personal or professional life that's had the greatest impact on your success?
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I think for me, and I think maybe a lot of your listeners may be feeling this way, but I suffer from what I call imposter syndrome.
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And I suffer from that both professionally and personally.
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And one of the more interesting manifestations of imposter syndrome, at least for me, is that I would be afraid to ask for things.
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Why is that a problem?
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Because as a CEO of a company, that's all you're doing.
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You're asking your people to work a little bit harder or do something.
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You're asking investors to put some more faith in you.
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You're asking partners and sales channels to sell your product.
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And I would always avoid it.
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Not because I didn't think I'd be successful, but because I couldn't even imagine that people would find anything about me of value.
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And by the way, this extends to my personal life as well.
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And what I learned is... So actually, it's a simple practice.
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Every day, if I have something to ask from someone, I do that either first thing in the morning or last thing at night before I get to go off and do other things.
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And the reason for doing it that way is because I just kind of get it out of the way.
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Because otherwise, I put it off until tomorrow.
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And my favorite story about this is I actually was negotiating a line of venture debt with Silicon Valley Bank.
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And I kept putting off the negotiation to the point where I actually went on a honeymoon.
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I got married last year.
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So I went on a honeymoon.
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And as I went on the honeymoon, if you remember what happened in late February, the markets tanked.
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And everyone was pulling terms because no one knew what was going on.
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The market changed by 35% and then we went into lockdown.
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And it was a nice reminder to never put off for tomorrow what you can do today.
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And the reason for that is not because I'm lazy.
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It's actually because I'm scared.
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And I think for me, forcing myself to have that practice has actually been very, very effective, despite some of the blips here and there, including that venture deadline.
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It all worked out, by the way.
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And also congrats on getting married.
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Thank you so much.
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Kurt, I'd love to know what you think about that.
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I completely resonate with what Lee just shared.
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Imposter syndrome has plagued me my entire life.
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I'll never forget even going back to first going to graduate school.
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I was coming straight out of undergraduate.
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And in contrast with going to Princeton, I decided to go to Weber State, significantly better undergraduate school.
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So anyway, I finished there.
00:19:13
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Have the temerity to apply that.
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to go to Harvard Business School, where we also went, and they accepted me straight out of school.
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I'm thinking, okay, mistake.
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So I show up back there assuming it's a mistake.
00:19:29
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And that kind of thought from that point forward through several chapters of my professional career has been something I've had to fight consistently with.
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I don't know that I've been as successful as Lee at putting specific practices in place.
00:19:46
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I think when you've had the kinds of experiences that Lee has had, it's even more problematic because you get these very affirming things that are done for you over the course of your life, you know, where the world is telling you in so many ways, you're good and you're making a difference and you're getting responsibility and opportunity.
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That never seems to matter.
00:20:12
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No matter how much of that happens, it almost makes it worse.
00:20:15
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It almost makes you take a step back and say, boy, I've got them fooled.
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Oh my God, totally.
00:20:21
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I feel like they're going to find out about me.
00:20:25
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Yes, I'm always waiting.
00:20:27
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I'm always convinced like, oh, tomorrow's the day I get fired.
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Tomorrow's the day this happens.
00:20:31
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Like it's happening tomorrow.
00:20:34
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It's a pretty persistent thing, but it is a very common human thing, which does actually make me feel a lot better.
00:20:42
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And that also really resonates with me.
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It's like a daily struggle for me.
00:20:46
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So I actually wrote down Lee's advice.
00:20:48
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Another thing that I'm taking away with me is not shying away from doing the hard things when they're the right things like you did with your board members.
00:20:53
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So really appreciate you sharing that.
00:20:55
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Lee and Kurt, thank you so much for being with us today.
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I've really enjoyed having you on the show.
00:21:00
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I think there've been some amazing insights and I'm immensely grateful.
00:21:03
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Thanks for having us.
00:21:05
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And of course, thank you for listening as we dive deep into what it takes to create the perfect
Episode Wrap-Up and Show Notes
00:21:10
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If you want to learn more about our investor, Kurt Roberts from Kickstart, or our founder, Lee Mayer, and her incredible team at Havenly, we'll have a link to the company and a longer bio in our show notes at kickstartfund.com slash perfect pitch.
00:21:22
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You can listen to more episodes of Perfect Pitch wherever you listen to your podcasts.
00:21:26
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And if you like what you're learning, leave us a review or a rating.
00:21:30
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We'll catch you next time.
Favorite McDonald's Menu Items
00:21:33
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Um, Kirk, by the way, on your McDonald's comment, I am a huge McDonald's fan.
00:21:39
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No, actually, I'm- so I must say Patty's Day birthday.
00:21:43
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I don't think I've ever had the Shamrock Shake, though.
00:21:48
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Is there a Havenly board meeting in March at all?
00:21:50
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Because you gotta get the Shamrock Shake.
00:21:52
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I would actually very much love that.
00:21:54
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My favorite item used to be the Chicken Pijitas, which was on the 99 cent menu.
00:22:02
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Cheers nuggets though.
00:22:04
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Please don't tell me you like the McRib.
00:22:07
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I will lose all respect for you if you tell me you like McRib.
00:22:09
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I was never a McRib person.
00:22:11
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No, no, no, no, no.
00:22:13
Speaker
I'm also, I'm a quarter pounder gal on the regular.
00:22:18
Speaker
Yes, no, we're good.
00:22:19
Speaker
But yeah, the Big Mac was always like, I don't know, it was like a, you know, a little too tall for my mouth.
00:22:25
Speaker
You have to smash it.
00:22:27
Speaker
You do, you have to smash it.
00:22:28
Speaker
You have to kind of, anyway.