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Forbes Books presents the Startup Science Podcast with Gregory Shepherd,
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brought to you by Startupscience dot Io. Greg is an
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entrepreneur who's built and sold twelve businesses, a recipient of
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four Private Equity Awards, featured ted X speaker and Ben
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Bella Publishing and Penguin Random House author Peer's Gregory Sheppard.
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Broth Day is a visionary CEO of Eleve Adventures, the
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most active seed early stage investor in the Great Lakes
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region and a top twenty venture capital firm globally with
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over thirty years of experience. TOF is dedicated to fueling
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innovation driven founders and transforming Indiana into the innovation capital
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of the world. TOF, I am so excited and honored
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to have you on the podcast.
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Oh thank you, Greg, The honors all mine. I'm humbled
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nodded to be here. I'm so excited for this podcast.
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By the way, I'm right in the middle as we
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speak right now, fifty just over fifty percent of the
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way through a seventy two hour fast. I'm doing right
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now as we spake.
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Oh whoa, whoa, that's crazy. Yeah, that's that's all. That's all.
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Are you hanging in there, are you okay?
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You know I do. I feel I feel good. I
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think it's all like mind over matter, right, And I
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I set my brain to it on kind of Sunday afternoon.
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I've been wanting to do it, and I'm like, you
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know what, I'm just going to go for it, and
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I'm going to start tonight. And so I started about
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six thirty on Sunday night, and I just put my
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min my mind to it, and I feel pretty good.
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Oh, we'll good, We'll good. Well, listen, you have co
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founded eight businesses across seven different sectors with multiple exits
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to Fortune five hundred companies. And I'm dying to know
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what drove this entrepreneurial spirit and how did you navigate
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such diverse industries.
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That's a great question, and it wasn't by design. I
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never planned for it growing up. I did plan to
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be an entrepreneur growing up, but I would say, how
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did that happen? I never liked authority too much, probably
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because of how I grew up in a strict German
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Baptist households. Like you got Amash a minnnite in German Baptists,
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so we were German Baptists, you know, hats and bonnets,
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and you know, we did take a horse and buggy
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to church on Sundays. But I was never much for authority,
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uh like kind of you know, i' my own person
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and if like the unless you put your thumb on me,
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the better I'll behave, you know concept. And then I
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think growing up on that farm, and you know, we
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didn't have a TV, I think I was just I
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became very curious about the outside world. Get on school
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buses and you know, so I grew upout an hour
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north of Indianapolis on a smallow farm and we get
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on a school bus and come to the big city,
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going to this place called Connor Prairie, and we'd pass
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these buildings to look at pyramids, and I remember just
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peering out that bus window, like who are those people
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that work in there? Like what if I could work
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in there someday and wear a tie to work, you know.
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Uh.
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And so I think that's that's kind of the roots
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of it.
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It's interesting we share that my uh my family homesteaded,
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so we lived on a piece of property where we
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lived in town while we built our own house and stuff.
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It was. It's it's very interesting. I mean as somebody
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who has been I mean, your background is just astounding,
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rights somebody that's been an IBJ forty under forty A
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top two hundred most influential leaders. What key lessons have
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you learned in leadership that impacted you throughout your career
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and still today.
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I think these are going to sound like lame words,
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probably right, But I think one that really hits home
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with me is listen and so just really trying to
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listen to other people. I've never never felt like I'm
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the smartest person in the world, nor do I want
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to be in nor do I want to be the
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smartest person in the room. And I get real, I
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get really juiced up when I'm hanging out with other
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people who are smarter than me on one hundred different
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things because I learned so much. So I think listening
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is one. And then and then I think being being
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willing to be vulnerable, like to go for it and
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be comfortable that you're going to probably screw some stuff up.
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Probably it's probably what comes to mind.
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I mean, you know, you're you're just You've led companies
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in AI, SaaS, hard tag, broadband, internet and on and
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on and on, and so I'm dying to know how
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you adapt your leadership style to such a variety of
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different sectors because they're different cultures, right, These different articles
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are different cultures.
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I think, you know, giving respect, right, there's the book
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Good to Great too. I always think about is you
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know he went that hearing the author who the author
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of Good to Great? But he went through and looked
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at all those public companies for decades, right, and who
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was the most successful? And then they were about a
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half a dozen of them. I think he looked at
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and went and interviewed and talked to the teams, et cetera.
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And Tractor Supply is one of that pops out. I
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think Walgreens is on that list too, but but tractor
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Supply is one that really popped out. I think that
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was the number one. In the period of time, he
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looked at the highest performing stock and he couldn't find
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anything tangible. And he's sitting there thinking about it for
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days and weeks and months. I'm like, what is the difference,
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you know, between a high performing company and not And
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what he came down to was arrogance. That that the
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the companies where the CEOs were not arrogant and willing
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to give the credit to everybody else. Those were the
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ones that were most successful.
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You know, I one hundred percent agree with that. I
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think I tell people that there's no room for arrogance
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and entrepreneurship, no, right, it's all about being humble and kind, right,
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and learning from other people. And yeah, one hundred percent right.
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And I think it's interesting that you said you're you
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don't want to be the smartest person in the room.
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My mom used to say, if you're the smartest person
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in the room, you're in the wrong room.
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That's what I'm saying, you know, Greg, you also made
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me think of another story, just so, like leadership styles
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and and what shapes you in the different cultures of
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all those different types of in those different types of sectors.
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So my very first actual company was a painting company.
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So I picked up a paintbrush and started painting homes.
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And so I had that in college. I had fourteen
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employees in college at the peak, and at the peak
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were painting two houses a day, making four hundred dollars
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net per house. We had this thing down to a science, right.
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Every painter had their specialty, and you know, you had
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the window guys and the cut in guys and all
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that kind of stuff. You very quickly get to know
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who's good at what. And so one day I went
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to check on another house and I drove up on
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the site and I didn't see the painters on the ladders,
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and uh, I'm like, what the heck's going on. So
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it was like three o'clock or something like that, and
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I walked around the side of the house and they're
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kind of sitting in the bushes drinking beer. And my
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initial reaction was, Oh, my gosh, I've gotta I gotta
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fire this whole crew. And I'm like, guys, what's up.
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And long story short, I expected everyone to put in
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the same number of hours and work as hard as
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I was, and I was just blind to like, just
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like just work, work, work, and all costs productivity right,
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just binging out the house. You know, it doesn't matter
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what to day as lead as we have to period
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to get this house done, so we do the next
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one tomorrow instead of you know, doing a half a
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day at that same house the next day. That's not sustainable.
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And these are like some of my best painters too.
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I love these guys, they were great, loved them personally,
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and you know, professionally, and I called myself before I'm
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like hit the road, I'm like, maybe there's a leadership
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issue here. So that was one of my first big
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moments of self reflection, that that maybe you're not doing
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a good job as a leader.
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What how did you? How do you think about that? Though? Like,
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so you're sitting there and you're saying, okay, there's a
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leadership issue. What do you think was the leadership issue?
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And do you still carry that with you today?
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So the issue was, So I grew up on that
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little farm and we worked sut up till sundown.
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That's what we did.
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And we you know, it was a small farm, but
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we basically, you know, the kids all took care of
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the farm. Right. So at the peak we had two
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hundred hogs and a few cows and a horse, and
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then the rest was tillable. So we had corn and soybeans,
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you know, we rotate those every couple of years. And
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then we got rid of the hogs, and then my
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dad planted that all to garden, five acres of garden.
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And so I've snapped more peas and frozen and canned
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and lord knows what else, all kinds of stuff sold
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at the farmer's market on the roadside, selling melons for
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seventy five cents. All that stuff.
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Work ethic.
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It's like one thing my dad was really good at
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is he taught work ethic and how to think it
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had three steps. Or maybe he wasn't good at teaching
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work ethic, because I'm still I still suffer from this today.
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I struggle with it all the time. I still work.
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It's not shocking for me to work sixteen hour days,
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three four days a week and getting up on Saturday
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morning with coffee at six o'clock and bringing out something
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that I've been wanting to do until eleven. That's really
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not healthy. Probably there's a little thing called balance, and
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I've always struggle with that. I think I'm gonna go
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back and ask the team the next leadership team meeting
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if I'm getting better at expectations. But I don't think.
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I think I've improved a lot to know that, like
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the life I live isn't the life that everybody wants
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to live. And then maybe the life I live I
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shouldn't live, you know, maybe I should get little more
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balance in my life.
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Yeah, I'm with you on that. I get up at
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like four point thirty in the morning. You know, I'm working.
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I do my yoga and my meditations, visualize the day,
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and then boom, I'm at work at five point thirty
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in the morning. And then I work until seven o'clock
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at night. And I do that. I do it seven
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days a week. I get off work at twelve on
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the weekends because my wife will you know, not have it.
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Well, it's because you found what you love right in
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Like what I do now, It's like entrepreneurship, all those businesses,
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what I do now with Elliott Ventures, I love it
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like I it fires and be fiber of my body,
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like yeah or seven, and I just can't wait to
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get roll into the next thing.
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I'm with you on that, brother, Like as soon as
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I get up in the morning, I'm like, I have to.
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I have to pace myself otherwise I will literally get
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up and just go right into the offices.
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Are working exactly like over laptop, Lets bang some stuff,
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Let's get some stuff.
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Nablished, yeah, exactly exactly. So when you think about your
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whole entrepreneurial experience, right, you look at your past and
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all the things you've done, which is just astounding. I
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was reading about you and I was just like, holy smokes,
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this guy is like epic, just absolutely epic. When you
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think about not just being an entrepreneur but investing and
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mentoring and founders today, is there something that stands out
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as something that listeners could look at and say, this
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is the key to success.
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I believe that transparent andcy integrity, you know, honesty, just
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being real. There's an element of entrepreneurship where you got
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to you gotta kind of sell the dream a little bit,
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you know, when you're doing things, but when you make
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a mistake, own up to it. I still make mistakes today,
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but I made some pretty big ones in the first
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few companies. The first, the second company I started with
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a broadband company, and I made about one hundred and
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fifty thousand dollars mistake on on like week four, and
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that was pretty catastrophic when you don't raise a million dollars.
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And I just immediately went to the investors. I'm like,
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I screwed up, this is what happened, and this is
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what we'll do about it. Anything else you want to know.
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They're like, nope, thanks for letting us know. And so
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I just I just don't when you hope your mistakes,
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like the people will be much have much more grace.
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So when you think about sort of like the keys,
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like what I'm trying to understand what makes you so special? Like,
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you know, I think about a handful of things focus, drive, enthusiasm, discipline,
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and optimism, right, and you definitely have all of those things,
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But what is it that makes you stand out so
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much more than everybody else? You've had multiple exits to
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Fortune five hundred companies. What is your advice to founders
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building businesses today?
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Well, I thank you for saying that, Greg, I don't
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feel very special. I feel like just to you know,
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German Baptist kids that grew up on a farm that
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is as far as we know, we live once and
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just I want to just suck every moment out of life.
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I love people and so that's just my personality, I guess.
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So I think of a concept called MELFO. It's kind
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of what we had adopted here at Elevate, but it's
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market entrepreneur, legal, financial, operational, and just breaking stuff down
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into the most simplistic like entrepreneurship so hard right as
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you know, like when you start doing something, you know,
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if I'm gonna make this set of glasses, you know,
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well out of the gate, all of a sudden, I
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want to make bifocals and tryfocals, and I want to
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do you know, bedazzled you know arm bars and whatever. No, no,
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just just start off with this good old set of
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one point five reading glasses. And I think we we
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entrepreneurship is hard enough and when to squirrel right, and
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and you want to do everything in the first you know,
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twelve months. It's just not believable. It's not doable. And
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so just like keep the old kiss, keep it simple, stupid,
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like just narrow deep, what are the basics, one foot
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in front of the other, what's a natural milestone to
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get to next? And focus on that thing, get there
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and then you know, and in you to the next one.
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So it's interesting that it reminds me of something that
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Buddha said. He said, uh, instead of drilling holes shallow
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holes all over the place, drill one hole, real deep,
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real deep. That's right. Yeah, yeah, And when you think
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about elevate ventures. And then we got to talk about
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your confort trends rally because that thing blew my mind.
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So let's talk about how you transitioned into Elevated Ventures.
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So it was formed. It was spun out of by
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Governor Daniels. So what's that two or three governors ago.
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It was spun out of the Indian Economic Development Corporation
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into a separate private entity. It's and so it was
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spun out to be an Evergreen fund. And so I'm
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the third we call Elevate three dot zero. I'm the
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third CEO at Elevate And so ELB been around for
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fifteen years, set up as an Evergreen fund and now
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we manage two hundred and fifty five million dollars. So
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we're both venture development and venture capital. And then we
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invest cross sector, so that software, hard tech, life sciences,
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ag tech, food tech, sports tech, dama tech. We love tech.
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We're in the tech. We don't invest in like peer
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play services or you know, bricks and mortar or oil
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gas insurance, that kind of stuff. And then we invested
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the pre seed seed series A level. And so so
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I I was blessed. I did a big national search
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and I was lucky enough to get a phone call
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and you know, was put into the process and and
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and here I am. But was brought on to modernize
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the entire organization to get it ready for the next
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kind of fifteen twenty years or I think about the
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next fifty years. And so brought into modernize the entire
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organization top to bottom. Uh and then go launch the
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first ever growth fund that will be headquartered in Indiana.
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So we're launching a two hundred million dollar growth fund.
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We're getting ready to go to market here literally in
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the next few days to start raising that fund. And
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our b HAG is to have a billion dollars under
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management here the next ten years.
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Wow. That's that's a that's that is definitely a big, hairy,
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audacious goal for sure. But but you know, you can't
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trust anybody else. But you didn't make that happen. I mean,
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if it's going to happen, you're the guy that's going
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to make that happen. I mean, it's right.
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We have a great team and could do anything without
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without a team.
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I love how humble you are. I mean, you're just
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so humble, you know. I mean, you're this guy who
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has done off his stuff and you're just so humble.
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You're you know, the roots that you came from definitely
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show through. It's like a huge quality. I Mean every
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time I give you a compliment you defer to others,
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and it is just it's just a really neat thing
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to see with somebody at your level. I mean you're
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thinking you're the number one most active early seed pre
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seed seed investor in the whole Lakes region, right. I
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Mean it's just like, and you've done all these startups,
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sold fortune one hundred companies, sold fortune five hundred companies,
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and you have these three pillars, community capital, acceleration. How
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do these pillars work together to create a thriving ecosystem
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in your region?
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Yep, that's a great question. So you want to came in.
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We we kind of took a step back and said,
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you know, what's our vision going to be? Our mission? Like,
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where're we going to focus? I always like to see
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I'm not smart enough to focus on more than three
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things at one time. So, uh so as we up
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back and looked at so our mandate is, uh, you know,
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venture development and venture capital and then you know the
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sectors I mentioned in the stages, and so how will
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we be successful in that? So the venture development piece
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is very much about community, and so when we think
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about community, we think of it in terms of you know,
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inside out right or sort of local, regional, state, national, global.
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So we had historically we we elevates. Their main focus
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is you're headquartered or have a significant presence in Indiana.
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So some of those companies might be headquartered elsewhere, but
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they have a significant presence here in Indiana. And on
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that those rankings. By the way, Pittsbook just came out
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with Q four rankings and we were number one in
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the Great Lakes region and number fifteen I think it
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is in the US.
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Wow.
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Yeah, holy smokes. Yeah, it's pretty crazy.
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Yeah, I mean competing with the Valley you're right up
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there with them, passing them up most of them. Yeah.
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In Q two we outpaced y coom Wow last year.
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Now I don't know if we did in three and
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Q three or Q four or not, but I mean,
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what's that We're pacing right there at like the Ycom level.
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So it's pretty amazing but amazing. But we think about entrepreneurship, right,
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so you need community, you need people. We can't we
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can't do any of this stuff alone, right, and then
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we need capital right to fuel it. And then acceleration
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is all about post investment value AD so not just
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writing you know, the dumb check right, we all know
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the dumb check and the smart check and so and
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so really making sure we write smart checks for the entrepreneur,
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meaning a post investment value ad. So you know, it's
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so hard as an entrepreneur to go find the right talent,
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for example, and if you hire it yourself, you're so busy,
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you're so frantic, you just kind of hire the first
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body or two that comes in the door. Like one
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of one of my favorites is is you know we've
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done founder led sales. Now we're ready for process led sales.
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And so what does every founder want to do? Go
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hire a cro from some big CRM. Well, they forgot
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how to make coffee. You actually haven't perfected your sales pitch,
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you actually don't have product part um fit, but you
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we have false positives, right. So anyway, so from that
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post investment value AD standpoint, the acceleration side, so helping
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people find talent really cost effectively. We have a whole
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tool kit with over fifty partners with pre negotiated discounts
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just to help them accelerate getting to the right partners
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to do the things they got to do. We're looking
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to roll that out with a lot more AI tools
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here in the coming months, network right helping, introduction, introductions
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to customers, to partners. We have over forty five operating
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partners that work with us. They're domain experts in all
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those different sectors. We're launching a research desk. The first
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version of the first artifact will come out here literally
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in a week or two one oh one day, I'm
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getting a signal over here just one day. But the
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but the venture report that we put out, we took
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a big step up. So it's really think about the
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three legs of the stool, like what matters, right, and
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it's those relationships to people, that's the community side. Then
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you've got to have some capital right to be able
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to invest the innovation. And then you've got to be
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able to grow efficiently. And so that's what we really
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focused on, triangliting around that.
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Entrepreneur. Yeah, it's a really big deal. I always tell entrepreneurs,
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I'm like, I call it soft capital, right, it's this
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or shadow capital, right, like that that capital is more
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important than the money itself, you know, it's it's it
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magnifies your company dramatically. I mean, you know, you guys
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are definitely one of the best funds around. I mean
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that says a lot about you in terms of your
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you know, what you can accomplish. I'm interested though when
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you look at your sectors hard tech, life sciences, real estate, oil,
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and god. I mean, you guys are all over the place.
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Why do you decide on certain sectors and different verticals?
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What is the reason? What is your you know, what
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are you looking for? Yep?
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So, so our mandate is to invest in in high potential,
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high growth innovation, innovation driven companies. So I always like
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to use the Kauf Intel of two Entrepreneurs because it's
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a third party definition. It's just easier, so we can
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go read a two page paper. So Kaupin Foundation says,
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there's there's SMEs and IDs. So SMEs your small meedium
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sized enterprises kind of your main street businesses, right the
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restaurants or I used to have trampline parks as one
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of the businesses I had. Those little things are cash cows,
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by the way. But like Elevate, would never invest in
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those trampline parks because the customer base is you know,
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pre tight sixty mile radius. The innovation driven enterprises. You know,
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you have a national, global customer base a five hundred
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million dollars TAM or greater. And so that's our mandate
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is to invest in innovation driven enterprises of any shape,
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size or form.
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Ah okay, okay, So what is your process for identifying
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visionary leaderships and found Like, how do how do you
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identify a really good founder? Because you know, everybody's like, hey,
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it's a great idea. If you don't have a founder
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that can execute it, then it's a bad idea, right,
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So how do you identify them? What's your vetting process?
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I mean, you know, we have a lot of founders
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and investors listening to the show. I think they would
437
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love to hear yes.
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So the first two words that come to mind are
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kind of soft words, but they mean a lot. And
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that's grit and creativity, and so it's you know, not
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all the best widget doesn't always win, and so grit, creativity, perseverance,
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slugging it out, marketing, positioning, timing a lot of times
443
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can have a bigger impact on success or not than
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the best widget. We share a lot with founders, the
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things that vcs don't talk about. So, for example, if
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you have a financial model and you're raising capital out
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a certain value, raising a certain amount of money at
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a certain valuation, and your model for your next raise
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only allows for a one and a half or two
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x step up in valuation, You're going to get a
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lot of silent nose from vcs because they won't tell
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you that they expect that step up to be at
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least three x, if not four x, and so or
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some models I have at B ten x, which is
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not believable either. Honestly, I think at some level vcs
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put unnecessary pressure on companies way too early, and you
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get in these arbitrary you know, things like you got
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to grow at one hundred percent year over year, you
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got to be one hundred and twenty percent in that
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revenue retention. Really that might be putting undue pressure and
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spending undue dollars when things aren't really baked in yet,
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when they really don't have control of the unit economics right,
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It's like, truly, how many phone calls do you make
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to get a return phone call? Or with emails and
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like literally this just tracked right at every single step,
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So I founders don't have control of their data is
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a big one, and know these baseline motions. Not having
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control their data is a big one, and not having
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a believable model is a big one. And then we
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get founders. Sometimes it will say, oh, I'm gonna go
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to market. I've got this PLG strategy and I got
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these channel partners lined up, and we're gonna re co
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over top and sell some enterprise deals along the way.
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No, you're not.
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I've tried two channels at once before, too early, and
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it never works. And so these are very different motions,
477
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very different success metrics, very different unit economics, very different
478
00:24:36.759 --> 00:24:39.519
skill sets. The people to execute those are very different.
479
00:24:40.200 --> 00:24:44.160
And so you know your go to market strategy being
480
00:24:44.240 --> 00:24:47.559
very focused, you know, like PLG for example, Like I
481
00:24:47.559 --> 00:24:50.200
wouldn't recommend going to market with the enterprise SaaS today
482
00:24:50.200 --> 00:24:53.559
to anybody. I think those days are over.
483
00:24:54.200 --> 00:24:56.240
So if you know, the first thing that you said
484
00:24:56.319 --> 00:24:59.680
is the and what you said about false positive stands true. Right.
485
00:24:59.720 --> 00:25:02.640
So you you're a founder and you're trying to keep
486
00:25:02.680 --> 00:25:04.279
track of your data, but you do it too early.
487
00:25:04.319 --> 00:25:06.480
You get false positives and then you act on that
488
00:25:07.039 --> 00:25:09.359
and maybe you shouldn't attract your data until a little
489
00:25:09.400 --> 00:25:11.839
bit longer, until you know that the data is solid,
490
00:25:12.279 --> 00:25:14.519
right and you're getting real numbers, you're acting on real
491
00:25:14.599 --> 00:25:17.720
numbers instead of like, well, you know, somebody sends out
492
00:25:17.759 --> 00:25:20.319
one hundred emails and they get fifty percent conversion rate,
493
00:25:20.400 --> 00:25:22.319
you know, and they're like, oh, yeah, we got fifty
494
00:25:22.359 --> 00:25:24.559
percent conversion rate. Let's act on this now, let's send
495
00:25:24.559 --> 00:25:27.759
ten thousand emails, you know, and that sort of thing.
496
00:25:28.319 --> 00:25:30.559
And the other thing, and so I love, I love
497
00:25:30.640 --> 00:25:33.839
your your concept there about data. And the other thing
498
00:25:33.960 --> 00:25:36.279
is if you're a brand new founder and you're just
499
00:25:36.279 --> 00:25:39.000
getting started and you're trying to do one thousand things, right,
500
00:25:39.079 --> 00:25:41.720
you know, your your morning is filled up with this thing,
501
00:25:41.759 --> 00:25:43.640
your afternoon is filled up with this thing, your evening
502
00:25:43.720 --> 00:25:45.880
is filled up with that thing. How do you make
503
00:25:46.000 --> 00:25:49.279
time and should you make time for data that early
504
00:25:49.920 --> 00:25:52.759
or what is a good time to make time for
505
00:25:53.279 --> 00:25:55.799
you know, aggregating data and looking at analytics.
506
00:25:56.960 --> 00:25:59.880
So my personal opinion is that you should actually track
507
00:26:00.160 --> 00:26:03.200
it from day one, even if that starts on a spreadsheet, right,
508
00:26:03.279 --> 00:26:06.039
But now there's there's tools out there. Probably I'm sure
509
00:26:06.079 --> 00:26:09.880
you even get for free to start using some low
510
00:26:10.000 --> 00:26:12.960
you know, lightweight you know CRM for example or something.
511
00:26:13.559 --> 00:26:15.920
But I think you should track it from day one.
512
00:26:16.839 --> 00:26:18.880
And I've never been good at this. But if you
513
00:26:18.880 --> 00:26:20.680
can track it like in real time, like after a
514
00:26:20.680 --> 00:26:23.240
phone call, like your pop pop, right, you're entering that
515
00:26:23.359 --> 00:26:25.480
whatever happened there, you're in those points of data right
516
00:26:25.519 --> 00:26:27.400
there on the spot. Because you can you can never
517
00:26:27.440 --> 00:26:32.759
go back and recreate it, right, you forget. And I
518
00:26:32.799 --> 00:26:36.720
think it's also we jump from thunder lad cells or
519
00:26:36.720 --> 00:26:40.359
processed lad cells thinking that we have the playbook down,
520
00:26:41.400 --> 00:26:43.720
but we really don't because people might be buying my
521
00:26:43.839 --> 00:26:47.519
passion or they're leaving the dream. They drink the kool aid, right,
522
00:26:47.599 --> 00:26:50.319
they get excited about like, yeah, we'll buy this, right,
523
00:26:50.759 --> 00:26:52.599
And I really haven't set in front those customers and
524
00:26:52.640 --> 00:26:54.400
watch them use my product or you know, there's a
525
00:26:54.440 --> 00:26:56.880
lot of things that probably haven't done yet. And I
526
00:26:56.960 --> 00:27:00.400
wish I could remember who told me this. Unfortunately learned
527
00:27:00.440 --> 00:27:02.640
this about nine months ago or twelve months ago. I
528
00:27:02.680 --> 00:27:05.279
wish I had known this ten years ago, actually twenty
529
00:27:05.279 --> 00:27:07.920
seven years ago. But somebody said, before you hire your
530
00:27:07.920 --> 00:27:13.839
first salesperson, actually hire your sales ops person and tie
531
00:27:13.880 --> 00:27:17.200
them to your hip for at least six months and
532
00:27:17.319 --> 00:27:21.240
shadow every conversation, every move, every question the customer, the
533
00:27:21.319 --> 00:27:25.720
prospect asks, et cetera, like, literally track everything and develop
534
00:27:26.000 --> 00:27:28.440
what that real sales playbook is and what the real
535
00:27:28.480 --> 00:27:32.759
message is that you use and what people really resonate with,
536
00:27:33.319 --> 00:27:36.640
because oftentimes what we think it is as the entrepreneur
537
00:27:37.839 --> 00:27:43.079
isn't really what it is from a institutionalized sales process standpoint.
538
00:27:43.240 --> 00:27:45.400
And so by starting off with that sales OPS person
539
00:27:45.960 --> 00:27:48.400
being glued to your hip every single day will make
540
00:27:48.440 --> 00:27:51.240
your first sales hires that much more successful.
541
00:27:51.920 --> 00:27:54.200
And then how do you handle the investors? Right, So
542
00:27:54.279 --> 00:27:56.839
the investor is sitting there going, we want sales, we
543
00:27:56.839 --> 00:27:59.839
want revenue, we want revenue, we want revenue, And you're like, hey,
544
00:28:00.119 --> 00:28:03.039
going to hire a sales OP person and they're like, no, no, hell,
545
00:28:03.480 --> 00:28:06.960
salespeople marketing people like pump, pump the engine, pump the engine.
546
00:28:07.200 --> 00:28:10.400
How would you how would you help the founder to
547
00:28:10.480 --> 00:28:13.640
have that conversation with the investor and say, hold on,
548
00:28:14.279 --> 00:28:16.400
I got to train my OPS person first, because I
549
00:28:16.440 --> 00:28:19.039
agree with you, there's a big difference between me pitching
550
00:28:19.640 --> 00:28:22.680
and a salesperson pitching. Right, somebody's going to buy for
551
00:28:22.799 --> 00:28:27.640
me because you know, enthusiasm is contagious, right, and they're
552
00:28:27.640 --> 00:28:29.519
going to feel the passion and they're gonna be like, yeah,
553
00:28:29.559 --> 00:28:32.279
these people are really really on board, and a salesperson
554
00:28:32.359 --> 00:28:36.119
is going to be it's not even close, right, So
555
00:28:36.480 --> 00:28:39.880
how would you how would you track data between your
556
00:28:39.880 --> 00:28:42.839
results and somebody else? And then how would you deal
557
00:28:42.880 --> 00:28:46.799
with the investors approach to you know, get salespeople go,
558
00:28:46.799 --> 00:28:49.480
go go, and you're like, hold on, you know, let
559
00:28:49.480 --> 00:28:52.119
me make sure I'm doing the right thing right instead
560
00:28:52.160 --> 00:28:53.319
of the wrong thing right.
561
00:28:54.039 --> 00:28:57.640
This is going to sound crazy, but I think it's
562
00:28:57.640 --> 00:29:00.400
somewhat proliferent. But there's this there's this thing called Google,
563
00:29:01.920 --> 00:29:04.200
and then there's also this thing called chat tbt now
564
00:29:05.039 --> 00:29:08.039
and and what I'm honestly shocked by is the number
565
00:29:08.039 --> 00:29:15.640
of entrepreneurs that that don't research and so like, do
566
00:29:15.839 --> 00:29:22.200
throw research in your space on trends, you know, ratios
567
00:29:22.240 --> 00:29:26.240
of of you know, whether it's SDRs to aes or
568
00:29:27.480 --> 00:29:29.920
and even that probably gonna be careful about. Now you
569
00:29:29.920 --> 00:29:31.839
should be thinking about how to stand up AI agents
570
00:29:31.880 --> 00:29:33.799
and how you send a thousand people into the field,
571
00:29:34.480 --> 00:29:38.000
you know, every split second to bring leads back. So
572
00:29:38.079 --> 00:29:42.359
I think even that is changing radically as we speak.
573
00:29:44.200 --> 00:29:46.599
But what I've found is that for some reason, shockingly,
574
00:29:46.680 --> 00:29:48.799
and I'll give you an example, back when one of
575
00:29:48.799 --> 00:29:52.240
my SaaS companies, I would google about every six months,
576
00:29:52.480 --> 00:29:56.319
you know, what are the best SaaS metrics or what
577
00:29:56.319 --> 00:30:00.359
what SaaS metrics do investors care about h? Or what
578
00:30:00.440 --> 00:30:03.519
are best best in class KPIs for whatever metrics? Right?
579
00:30:04.039 --> 00:30:07.039
And I methodically would re gooogle these things. This before
580
00:30:07.039 --> 00:30:08.680
we had you know, chat met and all that kind
581
00:30:08.680 --> 00:30:10.759
of fun stuff. But I wanted to see if there
582
00:30:10.759 --> 00:30:13.759
are a shifts in thinking and industry trends, et cetera.
583
00:30:14.440 --> 00:30:17.440
And there are a lot of changes year over year.
584
00:30:18.440 --> 00:30:23.160
And I think it's I think it's easy as a
585
00:30:23.160 --> 00:30:28.799
as an entrepreneur to think you have the answer, but
586
00:30:28.880 --> 00:30:31.480
the answer might be five years old or three years
587
00:30:31.519 --> 00:30:37.839
old and nowadays ninety days old. Uh, And so I
588
00:30:37.839 --> 00:30:40.240
think it's really critical to be well researched and when
589
00:30:40.279 --> 00:30:42.799
you're trying to have that conversation with the investor, have
590
00:30:42.880 --> 00:30:49.519
some data slash market information that substantiates your viewpoint. They
591
00:30:49.599 --> 00:30:50.440
helped back it up.
592
00:30:51.000 --> 00:30:54.160
I love that. All right, hang on, Tove, we have
593
00:30:54.240 --> 00:30:56.319
to take a break. But coming up next time with
594
00:30:56.559 --> 00:30:59.720
TOF Day, the CEO of Elevate Ventures, Tope and I
595
00:30:59.759 --> 00:31:02.640
will dig into the rapid pace of change we're all
596
00:31:02.680 --> 00:31:03.279
living through.
597
00:31:04.119 --> 00:31:07.960
If you think about the agricultural revolution took hundreds of years.
598
00:31:07.960 --> 00:31:14.279
That was centuries, lasted centuries, right. The Industrial Revolution lasted decades.
599
00:31:14.960 --> 00:31:21.000
The Digital Revolution lasted years. The AI Revolution is happening
600
00:31:21.279 --> 00:31:23.000
literally in hours minutes.
601
00:31:23.880 --> 00:31:27.480
This Startup Science Podcast with Gregory Shepherd is brought to
602
00:31:27.480 --> 00:31:31.960
you by Startupscience dot Io. Founders can log on to
603
00:31:32.200 --> 00:31:37.200
startupscience dot io and use code Forbes to get free access.
604
00:31:37.480 --> 00:31:40.559
To connect and find out more about greg go to
605
00:31:40.720 --> 00:31:45.400
Gregory Shepherd dot com. The Startup Science Podcast is a
606
00:31:45.440 --> 00:31:47.319
production of Forbes Books.
1
00:00:01.520 --> 00:00:06.120
Forbes Books presents the Startup Science Podcast with Gregory Shepherd,
2
00:00:06.559 --> 00:00:10.519
brought to you by Startupscience dot Io. Greg is an
3
00:00:10.640 --> 00:00:14.800
entrepreneur who's built and sold twelve businesses, a recipient of
4
00:00:14.919 --> 00:00:19.199
four Private Equity Awards, featured ted X speaker and Ben
5
00:00:19.239 --> 00:00:24.719
Bella Publishing and Penguin Random House author Peer's Gregory Sheppard.
6
00:00:24.719 --> 00:00:28.239
Broth Day is a visionary CEO of Eleve Adventures, the
7
00:00:28.239 --> 00:00:31.399
most active seed early stage investor in the Great Lakes
8
00:00:31.440 --> 00:00:35.240
region and a top twenty venture capital firm globally with
9
00:00:35.280 --> 00:00:38.439
over thirty years of experience. TOF is dedicated to fueling
10
00:00:38.679 --> 00:00:43.759
innovation driven founders and transforming Indiana into the innovation capital
11
00:00:43.880 --> 00:00:47.520
of the world. TOF, I am so excited and honored
12
00:00:47.560 --> 00:00:48.759
to have you on the podcast.
13
00:00:49.320 --> 00:00:52.280
Oh thank you, Greg, The honors all mine. I'm humbled
14
00:00:52.320 --> 00:00:55.719
nodded to be here. I'm so excited for this podcast.
15
00:00:55.840 --> 00:00:58.000
By the way, I'm right in the middle as we
16
00:00:58.039 --> 00:01:01.679
speak right now, fifty just over fifty percent of the
17
00:01:01.679 --> 00:01:04.840
way through a seventy two hour fast. I'm doing right
18
00:01:04.879 --> 00:01:05.599
now as we spake.
19
00:01:05.760 --> 00:01:10.040
Oh whoa, whoa, that's crazy. Yeah, that's that's all. That's all.
20
00:01:10.079 --> 00:01:11.719
Are you hanging in there, are you okay?
21
00:01:12.079 --> 00:01:14.319
You know I do. I feel I feel good. I
22
00:01:14.359 --> 00:01:17.799
think it's all like mind over matter, right, And I
23
00:01:17.799 --> 00:01:20.040
I set my brain to it on kind of Sunday afternoon.
24
00:01:20.079 --> 00:01:21.359
I've been wanting to do it, and I'm like, you
25
00:01:21.359 --> 00:01:22.519
know what, I'm just going to go for it, and
26
00:01:22.519 --> 00:01:24.719
I'm going to start tonight. And so I started about
27
00:01:24.719 --> 00:01:27.400
six thirty on Sunday night, and I just put my
28
00:01:27.439 --> 00:01:29.680
min my mind to it, and I feel pretty good.
29
00:01:30.079 --> 00:01:33.000
Oh, we'll good, We'll good. Well, listen, you have co
30
00:01:33.079 --> 00:01:37.519
founded eight businesses across seven different sectors with multiple exits
31
00:01:37.879 --> 00:01:40.920
to Fortune five hundred companies. And I'm dying to know
32
00:01:41.000 --> 00:01:45.120
what drove this entrepreneurial spirit and how did you navigate
33
00:01:45.239 --> 00:01:48.719
such diverse industries.
34
00:01:49.040 --> 00:01:52.439
That's a great question, and it wasn't by design. I
35
00:01:52.519 --> 00:01:54.439
never planned for it growing up. I did plan to
36
00:01:54.439 --> 00:01:57.079
be an entrepreneur growing up, but I would say, how
37
00:01:57.120 --> 00:02:01.359
did that happen? I never liked authority too much, probably
38
00:02:01.359 --> 00:02:04.439
because of how I grew up in a strict German
39
00:02:04.480 --> 00:02:07.439
Baptist households. Like you got Amash a minnnite in German Baptists,
40
00:02:07.640 --> 00:02:09.719
so we were German Baptists, you know, hats and bonnets,
41
00:02:09.759 --> 00:02:11.360
and you know, we did take a horse and buggy
42
00:02:11.400 --> 00:02:14.919
to church on Sundays. But I was never much for authority,
43
00:02:15.199 --> 00:02:17.520
uh like kind of you know, i' my own person
44
00:02:17.560 --> 00:02:20.159
and if like the unless you put your thumb on me,
45
00:02:20.199 --> 00:02:23.039
the better I'll behave, you know concept. And then I
46
00:02:23.039 --> 00:02:25.759
think growing up on that farm, and you know, we
47
00:02:25.800 --> 00:02:28.319
didn't have a TV, I think I was just I
48
00:02:28.400 --> 00:02:31.759
became very curious about the outside world. Get on school
49
00:02:31.800 --> 00:02:33.599
buses and you know, so I grew upout an hour
50
00:02:33.680 --> 00:02:36.199
north of Indianapolis on a smallow farm and we get
51
00:02:36.240 --> 00:02:37.719
on a school bus and come to the big city,
52
00:02:37.719 --> 00:02:39.680
going to this place called Connor Prairie, and we'd pass
53
00:02:39.719 --> 00:02:42.360
these buildings to look at pyramids, and I remember just
54
00:02:42.400 --> 00:02:44.800
peering out that bus window, like who are those people
55
00:02:44.840 --> 00:02:46.960
that work in there? Like what if I could work
56
00:02:46.960 --> 00:02:48.800
in there someday and wear a tie to work, you know.
57
00:02:49.439 --> 00:02:49.840
Uh.
58
00:02:49.879 --> 00:02:51.520
And so I think that's that's kind of the roots
59
00:02:51.560 --> 00:02:52.560
of it.
60
00:02:52.560 --> 00:02:56.479
It's interesting we share that my uh my family homesteaded,
61
00:02:57.159 --> 00:02:59.400
so we lived on a piece of property where we
62
00:02:59.439 --> 00:03:01.840
lived in town while we built our own house and stuff.
63
00:03:01.840 --> 00:03:05.840
It was. It's it's very interesting. I mean as somebody
64
00:03:05.919 --> 00:03:08.840
who has been I mean, your background is just astounding,
65
00:03:08.960 --> 00:03:13.280
rights somebody that's been an IBJ forty under forty A
66
00:03:13.400 --> 00:03:18.319
top two hundred most influential leaders. What key lessons have
67
00:03:18.439 --> 00:03:22.240
you learned in leadership that impacted you throughout your career
68
00:03:22.240 --> 00:03:23.039
and still today.
69
00:03:23.639 --> 00:03:25.800
I think these are going to sound like lame words,
70
00:03:25.800 --> 00:03:29.719
probably right, But I think one that really hits home
71
00:03:29.759 --> 00:03:33.400
with me is listen and so just really trying to
72
00:03:33.400 --> 00:03:37.479
listen to other people. I've never never felt like I'm
73
00:03:37.479 --> 00:03:39.400
the smartest person in the world, nor do I want
74
00:03:39.439 --> 00:03:40.719
to be in nor do I want to be the
75
00:03:40.800 --> 00:03:44.879
smartest person in the room. And I get real, I
76
00:03:44.879 --> 00:03:47.280
get really juiced up when I'm hanging out with other
77
00:03:47.319 --> 00:03:49.840
people who are smarter than me on one hundred different
78
00:03:49.879 --> 00:03:53.479
things because I learned so much. So I think listening
79
00:03:53.599 --> 00:03:57.599
is one. And then and then I think being being
80
00:03:57.639 --> 00:04:01.439
willing to be vulnerable, like to go for it and
81
00:04:01.599 --> 00:04:03.719
be comfortable that you're going to probably screw some stuff up.
82
00:04:06.039 --> 00:04:07.560
Probably it's probably what comes to mind.
83
00:04:08.599 --> 00:04:12.560
I mean, you know, you're you're just You've led companies
84
00:04:12.560 --> 00:04:16.199
in AI, SaaS, hard tag, broadband, internet and on and
85
00:04:16.240 --> 00:04:19.000
on and on, and so I'm dying to know how
86
00:04:19.079 --> 00:04:23.920
you adapt your leadership style to such a variety of
87
00:04:23.959 --> 00:04:27.759
different sectors because they're different cultures, right, These different articles
88
00:04:27.800 --> 00:04:28.680
are different cultures.
89
00:04:28.959 --> 00:04:32.000
I think, you know, giving respect, right, there's the book
90
00:04:32.040 --> 00:04:34.759
Good to Great too. I always think about is you
91
00:04:34.800 --> 00:04:37.199
know he went that hearing the author who the author
92
00:04:37.240 --> 00:04:38.519
of Good to Great? But he went through and looked
93
00:04:38.519 --> 00:04:41.639
at all those public companies for decades, right, and who
94
00:04:41.680 --> 00:04:44.519
was the most successful? And then they were about a
95
00:04:44.560 --> 00:04:46.399
half a dozen of them. I think he looked at
96
00:04:46.480 --> 00:04:48.759
and went and interviewed and talked to the teams, et cetera.
97
00:04:49.639 --> 00:04:51.439
And Tractor Supply is one of that pops out. I
98
00:04:51.439 --> 00:04:53.519
think Walgreens is on that list too, but but tractor
99
00:04:53.519 --> 00:04:55.240
Supply is one that really popped out. I think that
100
00:04:55.360 --> 00:04:57.519
was the number one. In the period of time, he
101
00:04:57.600 --> 00:05:02.079
looked at the highest performing stock and he couldn't find
102
00:05:02.160 --> 00:05:04.839
anything tangible. And he's sitting there thinking about it for
103
00:05:04.920 --> 00:05:07.399
days and weeks and months. I'm like, what is the difference,
104
00:05:07.480 --> 00:05:10.879
you know, between a high performing company and not And
105
00:05:10.920 --> 00:05:15.279
what he came down to was arrogance. That that the
106
00:05:15.279 --> 00:05:19.800
the companies where the CEOs were not arrogant and willing
107
00:05:19.839 --> 00:05:22.160
to give the credit to everybody else. Those were the
108
00:05:22.199 --> 00:05:23.199
ones that were most successful.
109
00:05:24.519 --> 00:05:26.759
You know, I one hundred percent agree with that. I
110
00:05:26.800 --> 00:05:29.279
think I tell people that there's no room for arrogance
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and entrepreneurship, no, right, it's all about being humble and kind, right,
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and learning from other people. And yeah, one hundred percent right.
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And I think it's interesting that you said you're you
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don't want to be the smartest person in the room.
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My mom used to say, if you're the smartest person
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in the room, you're in the wrong room.
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That's what I'm saying, you know, Greg, you also made
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me think of another story, just so, like leadership styles
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and and what shapes you in the different cultures of
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all those different types of in those different types of sectors.
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So my very first actual company was a painting company.
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So I picked up a paintbrush and started painting homes.
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And so I had that in college. I had fourteen
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employees in college at the peak, and at the peak
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were painting two houses a day, making four hundred dollars
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net per house. We had this thing down to a science, right.
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Every painter had their specialty, and you know, you had
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the window guys and the cut in guys and all
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that kind of stuff. You very quickly get to know
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who's good at what. And so one day I went
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to check on another house and I drove up on
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the site and I didn't see the painters on the ladders,
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and uh, I'm like, what the heck's going on. So
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it was like three o'clock or something like that, and
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I walked around the side of the house and they're
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kind of sitting in the bushes drinking beer. And my
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initial reaction was, Oh, my gosh, I've gotta I gotta
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fire this whole crew. And I'm like, guys, what's up.
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And long story short, I expected everyone to put in
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the same number of hours and work as hard as
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I was, and I was just blind to like, just
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like just work, work, work, and all costs productivity right,
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just binging out the house. You know, it doesn't matter
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what to day as lead as we have to period
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to get this house done, so we do the next
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one tomorrow instead of you know, doing a half a
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day at that same house the next day. That's not sustainable.
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And these are like some of my best painters too.
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I love these guys, they were great, loved them personally,
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and you know, professionally, and I called myself before I'm
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like hit the road, I'm like, maybe there's a leadership
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issue here. So that was one of my first big
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moments of self reflection, that that maybe you're not doing
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a good job as a leader.
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What how did you? How do you think about that? Though? Like,
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so you're sitting there and you're saying, okay, there's a
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leadership issue. What do you think was the leadership issue?
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And do you still carry that with you today?
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So the issue was, So I grew up on that
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little farm and we worked sut up till sundown.
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That's what we did.
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And we you know, it was a small farm, but
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we basically, you know, the kids all took care of
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the farm. Right. So at the peak we had two
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hundred hogs and a few cows and a horse, and
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then the rest was tillable. So we had corn and soybeans,
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you know, we rotate those every couple of years. And
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then we got rid of the hogs, and then my
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dad planted that all to garden, five acres of garden.
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And so I've snapped more peas and frozen and canned
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and lord knows what else, all kinds of stuff sold
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at the farmer's market on the roadside, selling melons for
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seventy five cents. All that stuff.
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Work ethic.
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It's like one thing my dad was really good at
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is he taught work ethic and how to think it
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had three steps. Or maybe he wasn't good at teaching
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work ethic, because I'm still I still suffer from this today.
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I struggle with it all the time. I still work.
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It's not shocking for me to work sixteen hour days,
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three four days a week and getting up on Saturday
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morning with coffee at six o'clock and bringing out something
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that I've been wanting to do until eleven. That's really
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not healthy. Probably there's a little thing called balance, and
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I've always struggle with that. I think I'm gonna go
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back and ask the team the next leadership team meeting
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if I'm getting better at expectations. But I don't think.
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I think I've improved a lot to know that, like
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the life I live isn't the life that everybody wants
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to live. And then maybe the life I live I
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shouldn't live, you know, maybe I should get little more
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balance in my life.
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Yeah, I'm with you on that. I get up at
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like four point thirty in the morning. You know, I'm working.
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I do my yoga and my meditations, visualize the day,
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and then boom, I'm at work at five point thirty
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in the morning. And then I work until seven o'clock
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at night. And I do that. I do it seven
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days a week. I get off work at twelve on
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the weekends because my wife will you know, not have it.
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Well, it's because you found what you love right in
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Like what I do now, It's like entrepreneurship, all those businesses,
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what I do now with Elliott Ventures, I love it
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like I it fires and be fiber of my body,
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like yeah or seven, and I just can't wait to
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get roll into the next thing.
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I'm with you on that, brother, Like as soon as
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I get up in the morning, I'm like, I have to.
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I have to pace myself otherwise I will literally get
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up and just go right into the offices.
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Are working exactly like over laptop, Lets bang some stuff,
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Let's get some stuff.
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Nablished, yeah, exactly exactly. So when you think about your
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whole entrepreneurial experience, right, you look at your past and
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all the things you've done, which is just astounding. I
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was reading about you and I was just like, holy smokes,
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this guy is like epic, just absolutely epic. When you
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think about not just being an entrepreneur but investing and
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mentoring and founders today, is there something that stands out
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as something that listeners could look at and say, this
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is the key to success.
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I believe that transparent andcy integrity, you know, honesty, just
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being real. There's an element of entrepreneurship where you got
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to you gotta kind of sell the dream a little bit,
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you know, when you're doing things, but when you make
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a mistake, own up to it. I still make mistakes today,
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but I made some pretty big ones in the first
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few companies. The first, the second company I started with
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a broadband company, and I made about one hundred and
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fifty thousand dollars mistake on on like week four, and
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that was pretty catastrophic when you don't raise a million dollars.
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And I just immediately went to the investors. I'm like,
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I screwed up, this is what happened, and this is
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what we'll do about it. Anything else you want to know.
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They're like, nope, thanks for letting us know. And so
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I just I just don't when you hope your mistakes,
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like the people will be much have much more grace.
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So when you think about sort of like the keys,
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like what I'm trying to understand what makes you so special? Like,
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you know, I think about a handful of things focus, drive, enthusiasm, discipline,
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and optimism, right, and you definitely have all of those things,
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But what is it that makes you stand out so
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much more than everybody else? You've had multiple exits to
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Fortune five hundred companies. What is your advice to founders
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building businesses today?
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Well, I thank you for saying that, Greg, I don't
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feel very special. I feel like just to you know,
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German Baptist kids that grew up on a farm that
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is as far as we know, we live once and
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just I want to just suck every moment out of life.
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I love people and so that's just my personality, I guess.
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So I think of a concept called MELFO. It's kind
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of what we had adopted here at Elevate, but it's
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market entrepreneur, legal, financial, operational, and just breaking stuff down
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into the most simplistic like entrepreneurship so hard right as
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you know, like when you start doing something, you know,
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if I'm gonna make this set of glasses, you know,
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well out of the gate, all of a sudden, I
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want to make bifocals and tryfocals, and I want to
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do you know, bedazzled you know arm bars and whatever. No, no,
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just just start off with this good old set of
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one point five reading glasses. And I think we we
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entrepreneurship is hard enough and when to squirrel right, and
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and you want to do everything in the first you know,
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twelve months. It's just not believable. It's not doable. And
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so just like keep the old kiss, keep it simple, stupid,
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like just narrow deep, what are the basics, one foot
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in front of the other, what's a natural milestone to
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get to next? And focus on that thing, get there
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and then you know, and in you to the next one.
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So it's interesting that it reminds me of something that
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Buddha said. He said, uh, instead of drilling holes shallow
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holes all over the place, drill one hole, real deep,
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real deep. That's right. Yeah, yeah, And when you think
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about elevate ventures. And then we got to talk about
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your confort trends rally because that thing blew my mind.
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So let's talk about how you transitioned into Elevated Ventures.
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So it was formed. It was spun out of by
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Governor Daniels. So what's that two or three governors ago.
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It was spun out of the Indian Economic Development Corporation
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into a separate private entity. It's and so it was
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spun out to be an Evergreen fund. And so I'm
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the third we call Elevate three dot zero. I'm the
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third CEO at Elevate And so ELB been around for
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fifteen years, set up as an Evergreen fund and now
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we manage two hundred and fifty five million dollars. So
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we're both venture development and venture capital. And then we
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invest cross sector, so that software, hard tech, life sciences,
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ag tech, food tech, sports tech, dama tech. We love tech.
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We're in the tech. We don't invest in like peer
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play services or you know, bricks and mortar or oil
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gas insurance, that kind of stuff. And then we invested
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the pre seed seed series A level. And so so
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I I was blessed. I did a big national search
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and I was lucky enough to get a phone call
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and you know, was put into the process and and
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and here I am. But was brought on to modernize
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the entire organization to get it ready for the next
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kind of fifteen twenty years or I think about the
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next fifty years. And so brought into modernize the entire
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organization top to bottom. Uh and then go launch the
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first ever growth fund that will be headquartered in Indiana.
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So we're launching a two hundred million dollar growth fund.
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We're getting ready to go to market here literally in
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the next few days to start raising that fund. And
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our b HAG is to have a billion dollars under
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management here the next ten years.
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Wow. That's that's a that's that is definitely a big, hairy,
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audacious goal for sure. But but you know, you can't
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trust anybody else. But you didn't make that happen. I mean,
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if it's going to happen, you're the guy that's going
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to make that happen. I mean, it's right.
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We have a great team and could do anything without
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without a team.
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I love how humble you are. I mean, you're just
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so humble, you know. I mean, you're this guy who
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has done off his stuff and you're just so humble.
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You're you know, the roots that you came from definitely
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show through. It's like a huge quality. I Mean every
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time I give you a compliment you defer to others,
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and it is just it's just a really neat thing
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to see with somebody at your level. I mean you're
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thinking you're the number one most active early seed pre
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seed seed investor in the whole Lakes region, right. I
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Mean it's just like, and you've done all these startups,
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sold fortune one hundred companies, sold fortune five hundred companies,
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and you have these three pillars, community capital, acceleration. How
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do these pillars work together to create a thriving ecosystem
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in your region?
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Yep, that's a great question. So you want to came in.
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We we kind of took a step back and said,
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you know, what's our vision going to be? Our mission? Like,
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where're we going to focus? I always like to see
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I'm not smart enough to focus on more than three
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things at one time. So, uh so as we up
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back and looked at so our mandate is, uh, you know,
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venture development and venture capital and then you know the
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sectors I mentioned in the stages, and so how will
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we be successful in that? So the venture development piece
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is very much about community, and so when we think
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about community, we think of it in terms of you know,
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inside out right or sort of local, regional, state, national, global.
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So we had historically we we elevates. Their main focus
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is you're headquartered or have a significant presence in Indiana.
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So some of those companies might be headquartered elsewhere, but
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they have a significant presence here in Indiana. And on
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that those rankings. By the way, Pittsbook just came out
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with Q four rankings and we were number one in
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00:17:45.680 --> 00:17:47.839
the Great Lakes region and number fifteen I think it
350
00:17:47.880 --> 00:17:48.839
is in the US.
351
00:17:49.079 --> 00:17:49.599
Wow.
352
00:17:50.039 --> 00:17:52.000
Yeah, holy smokes. Yeah, it's pretty crazy.
353
00:17:52.480 --> 00:17:55.000
Yeah, I mean competing with the Valley you're right up
354
00:17:55.039 --> 00:17:57.400
there with them, passing them up most of them. Yeah.
355
00:17:57.440 --> 00:18:01.119
In Q two we outpaced y coom Wow last year.
356
00:18:01.200 --> 00:18:02.519
Now I don't know if we did in three and
357
00:18:02.599 --> 00:18:04.079
Q three or Q four or not, but I mean,
358
00:18:04.119 --> 00:18:06.960
what's that We're pacing right there at like the Ycom level.
359
00:18:08.400 --> 00:18:13.119
So it's pretty amazing but amazing. But we think about entrepreneurship, right,
360
00:18:13.160 --> 00:18:15.160
so you need community, you need people. We can't we
361
00:18:15.160 --> 00:18:17.400
can't do any of this stuff alone, right, and then
362
00:18:17.400 --> 00:18:21.000
we need capital right to fuel it. And then acceleration
363
00:18:21.079 --> 00:18:23.559
is all about post investment value AD so not just
364
00:18:23.559 --> 00:18:25.359
writing you know, the dumb check right, we all know
365
00:18:25.440 --> 00:18:28.240
the dumb check and the smart check and so and
366
00:18:28.319 --> 00:18:31.640
so really making sure we write smart checks for the entrepreneur,
367
00:18:31.799 --> 00:18:35.480
meaning a post investment value ad. So you know, it's
368
00:18:35.519 --> 00:18:37.559
so hard as an entrepreneur to go find the right talent,
369
00:18:37.599 --> 00:18:41.680
for example, and if you hire it yourself, you're so busy,
370
00:18:41.720 --> 00:18:43.839
you're so frantic, you just kind of hire the first
371
00:18:43.880 --> 00:18:46.079
body or two that comes in the door. Like one
372
00:18:46.119 --> 00:18:49.200
of one of my favorites is is you know we've
373
00:18:49.200 --> 00:18:51.720
done founder led sales. Now we're ready for process led sales.
374
00:18:51.720 --> 00:18:53.160
And so what does every founder want to do? Go
375
00:18:53.240 --> 00:18:58.160
hire a cro from some big CRM. Well, they forgot
376
00:18:58.160 --> 00:19:01.359
how to make coffee. You actually haven't perfected your sales pitch,
377
00:19:01.400 --> 00:19:03.680
you actually don't have product part um fit, but you
378
00:19:03.839 --> 00:19:08.319
we have false positives, right. So anyway, so from that
379
00:19:08.359 --> 00:19:12.559
post investment value AD standpoint, the acceleration side, so helping
380
00:19:12.559 --> 00:19:16.160
people find talent really cost effectively. We have a whole
381
00:19:16.160 --> 00:19:19.359
tool kit with over fifty partners with pre negotiated discounts
382
00:19:19.400 --> 00:19:21.720
just to help them accelerate getting to the right partners
383
00:19:21.759 --> 00:19:24.200
to do the things they got to do. We're looking
384
00:19:24.240 --> 00:19:26.279
to roll that out with a lot more AI tools
385
00:19:26.279 --> 00:19:30.880
here in the coming months, network right helping, introduction, introductions
386
00:19:30.880 --> 00:19:35.759
to customers, to partners. We have over forty five operating
387
00:19:35.759 --> 00:19:38.400
partners that work with us. They're domain experts in all
388
00:19:38.400 --> 00:19:43.319
those different sectors. We're launching a research desk. The first
389
00:19:43.440 --> 00:19:46.359
version of the first artifact will come out here literally
390
00:19:46.400 --> 00:19:49.799
in a week or two one oh one day, I'm
391
00:19:49.839 --> 00:19:52.799
getting a signal over here just one day. But the
392
00:19:53.319 --> 00:19:55.519
but the venture report that we put out, we took
393
00:19:55.519 --> 00:19:57.559
a big step up. So it's really think about the
394
00:19:57.599 --> 00:20:00.079
three legs of the stool, like what matters, right, and
395
00:20:00.079 --> 00:20:02.960
it's those relationships to people, that's the community side. Then
396
00:20:02.960 --> 00:20:05.039
you've got to have some capital right to be able
397
00:20:05.079 --> 00:20:07.519
to invest the innovation. And then you've got to be
398
00:20:07.519 --> 00:20:10.119
able to grow efficiently. And so that's what we really
399
00:20:10.160 --> 00:20:11.519
focused on, triangliting around that.
400
00:20:11.599 --> 00:20:14.799
Entrepreneur. Yeah, it's a really big deal. I always tell entrepreneurs,
401
00:20:14.799 --> 00:20:17.759
I'm like, I call it soft capital, right, it's this
402
00:20:18.000 --> 00:20:22.480
or shadow capital, right, like that that capital is more
403
00:20:22.519 --> 00:20:26.039
important than the money itself, you know, it's it's it
404
00:20:26.240 --> 00:20:29.519
magnifies your company dramatically. I mean, you know, you guys
405
00:20:29.559 --> 00:20:32.359
are definitely one of the best funds around. I mean
406
00:20:32.359 --> 00:20:35.000
that says a lot about you in terms of your
407
00:20:35.599 --> 00:20:39.119
you know, what you can accomplish. I'm interested though when
408
00:20:39.119 --> 00:20:43.000
you look at your sectors hard tech, life sciences, real estate, oil,
409
00:20:43.039 --> 00:20:44.680
and god. I mean, you guys are all over the place.
410
00:20:45.319 --> 00:20:50.000
Why do you decide on certain sectors and different verticals?
411
00:20:50.000 --> 00:20:52.240
What is the reason? What is your you know, what
412
00:20:52.279 --> 00:20:53.640
are you looking for? Yep?
413
00:20:54.240 --> 00:20:58.759
So, so our mandate is to invest in in high potential,
414
00:20:59.000 --> 00:21:05.279
high growth innovation, innovation driven companies. So I always like
415
00:21:05.319 --> 00:21:07.519
to use the Kauf Intel of two Entrepreneurs because it's
416
00:21:07.519 --> 00:21:09.880
a third party definition. It's just easier, so we can
417
00:21:09.920 --> 00:21:13.839
go read a two page paper. So Kaupin Foundation says,
418
00:21:13.880 --> 00:21:17.799
there's there's SMEs and IDs. So SMEs your small meedium
419
00:21:17.839 --> 00:21:20.680
sized enterprises kind of your main street businesses, right the
420
00:21:20.759 --> 00:21:22.799
restaurants or I used to have trampline parks as one
421
00:21:22.799 --> 00:21:25.279
of the businesses I had. Those little things are cash cows,
422
00:21:25.319 --> 00:21:27.359
by the way. But like Elevate, would never invest in
423
00:21:27.359 --> 00:21:30.319
those trampline parks because the customer base is you know,
424
00:21:30.359 --> 00:21:35.720
pre tight sixty mile radius. The innovation driven enterprises. You know,
425
00:21:35.759 --> 00:21:38.160
you have a national, global customer base a five hundred
426
00:21:38.160 --> 00:21:40.799
million dollars TAM or greater. And so that's our mandate
427
00:21:40.839 --> 00:21:43.640
is to invest in innovation driven enterprises of any shape,
428
00:21:43.640 --> 00:21:44.359
size or form.
429
00:21:45.799 --> 00:21:49.319
Ah okay, okay, So what is your process for identifying
430
00:21:50.119 --> 00:21:52.559
visionary leaderships and found Like, how do how do you
431
00:21:52.839 --> 00:21:57.160
identify a really good founder? Because you know, everybody's like, hey,
432
00:21:57.160 --> 00:21:59.000
it's a great idea. If you don't have a founder
433
00:21:59.039 --> 00:22:01.319
that can execute it, then it's a bad idea, right,
434
00:22:01.839 --> 00:22:05.160
So how do you identify them? What's your vetting process?
435
00:22:05.640 --> 00:22:07.119
I mean, you know, we have a lot of founders
436
00:22:07.119 --> 00:22:09.880
and investors listening to the show. I think they would
437
00:22:09.960 --> 00:22:11.440
love to hear yes.
438
00:22:11.960 --> 00:22:13.880
So the first two words that come to mind are
439
00:22:13.960 --> 00:22:16.720
kind of soft words, but they mean a lot. And
440
00:22:17.039 --> 00:22:23.599
that's grit and creativity, and so it's you know, not
441
00:22:23.680 --> 00:22:30.359
all the best widget doesn't always win, and so grit, creativity, perseverance,
442
00:22:31.599 --> 00:22:38.680
slugging it out, marketing, positioning, timing a lot of times
443
00:22:38.759 --> 00:22:41.559
can have a bigger impact on success or not than
444
00:22:41.920 --> 00:22:45.200
the best widget. We share a lot with founders, the
445
00:22:45.440 --> 00:22:49.200
things that vcs don't talk about. So, for example, if
446
00:22:49.200 --> 00:22:51.279
you have a financial model and you're raising capital out
447
00:22:51.319 --> 00:22:53.079
a certain value, raising a certain amount of money at
448
00:22:53.079 --> 00:22:57.279
a certain valuation, and your model for your next raise
449
00:22:58.200 --> 00:23:00.400
only allows for a one and a half or two
450
00:23:00.480 --> 00:23:03.559
x step up in valuation, You're going to get a
451
00:23:03.599 --> 00:23:06.920
lot of silent nose from vcs because they won't tell
452
00:23:06.960 --> 00:23:09.720
you that they expect that step up to be at
453
00:23:09.799 --> 00:23:13.960
least three x, if not four x, and so or
454
00:23:14.039 --> 00:23:16.359
some models I have at B ten x, which is
455
00:23:16.400 --> 00:23:20.279
not believable either. Honestly, I think at some level vcs
456
00:23:20.319 --> 00:23:23.680
put unnecessary pressure on companies way too early, and you
457
00:23:23.759 --> 00:23:26.279
get in these arbitrary you know, things like you got
458
00:23:26.279 --> 00:23:28.359
to grow at one hundred percent year over year, you
459
00:23:28.400 --> 00:23:29.799
got to be one hundred and twenty percent in that
460
00:23:29.920 --> 00:23:35.240
revenue retention. Really that might be putting undue pressure and
461
00:23:36.000 --> 00:23:40.759
spending undue dollars when things aren't really baked in yet,
462
00:23:40.839 --> 00:23:43.839
when they really don't have control of the unit economics right,
463
00:23:43.880 --> 00:23:49.640
It's like, truly, how many phone calls do you make
464
00:23:50.359 --> 00:23:53.039
to get a return phone call? Or with emails and
465
00:23:53.039 --> 00:23:56.480
like literally this just tracked right at every single step,
466
00:23:57.039 --> 00:23:59.319
So I founders don't have control of their data is
467
00:23:59.359 --> 00:24:04.759
a big one, and know these baseline motions. Not having
468
00:24:04.799 --> 00:24:07.359
control their data is a big one, and not having
469
00:24:07.400 --> 00:24:12.559
a believable model is a big one. And then we
470
00:24:12.599 --> 00:24:15.839
get founders. Sometimes it will say, oh, I'm gonna go
471
00:24:15.880 --> 00:24:18.079
to market. I've got this PLG strategy and I got
472
00:24:18.079 --> 00:24:20.599
these channel partners lined up, and we're gonna re co
473
00:24:20.599 --> 00:24:22.799
over top and sell some enterprise deals along the way.
474
00:24:23.599 --> 00:24:24.039
No, you're not.
475
00:24:26.160 --> 00:24:28.160
I've tried two channels at once before, too early, and
476
00:24:28.200 --> 00:24:32.279
it never works. And so these are very different motions,
477
00:24:32.799 --> 00:24:36.720
very different success metrics, very different unit economics, very different
478
00:24:36.759 --> 00:24:39.519
skill sets. The people to execute those are very different.
479
00:24:40.200 --> 00:24:44.160
And so you know your go to market strategy being
480
00:24:44.240 --> 00:24:47.559
very focused, you know, like PLG for example, Like I
481
00:24:47.559 --> 00:24:50.200
wouldn't recommend going to market with the enterprise SaaS today
482
00:24:50.200 --> 00:24:53.559
to anybody. I think those days are over.
483
00:24:54.200 --> 00:24:56.240
So if you know, the first thing that you said
484
00:24:56.319 --> 00:24:59.680
is the and what you said about false positive stands true. Right.
485
00:24:59.720 --> 00:25:02.640
So you you're a founder and you're trying to keep
486
00:25:02.680 --> 00:25:04.279
track of your data, but you do it too early.
487
00:25:04.319 --> 00:25:06.480
You get false positives and then you act on that
488
00:25:07.039 --> 00:25:09.359
and maybe you shouldn't attract your data until a little
489
00:25:09.400 --> 00:25:11.839
bit longer, until you know that the data is solid,
490
00:25:12.279 --> 00:25:14.519
right and you're getting real numbers, you're acting on real
491
00:25:14.599 --> 00:25:17.720
numbers instead of like, well, you know, somebody sends out
492
00:25:17.759 --> 00:25:20.319
one hundred emails and they get fifty percent conversion rate,
493
00:25:20.400 --> 00:25:22.319
you know, and they're like, oh, yeah, we got fifty
494
00:25:22.359 --> 00:25:24.559
percent conversion rate. Let's act on this now, let's send
495
00:25:24.559 --> 00:25:27.759
ten thousand emails, you know, and that sort of thing.
496
00:25:28.319 --> 00:25:30.559
And the other thing, and so I love, I love
497
00:25:30.640 --> 00:25:33.839
your your concept there about data. And the other thing
498
00:25:33.960 --> 00:25:36.279
is if you're a brand new founder and you're just
499
00:25:36.279 --> 00:25:39.000
getting started and you're trying to do one thousand things, right,
500
00:25:39.079 --> 00:25:41.720
you know, your your morning is filled up with this thing,
501
00:25:41.759 --> 00:25:43.640
your afternoon is filled up with this thing, your evening
502
00:25:43.720 --> 00:25:45.880
is filled up with that thing. How do you make
503
00:25:46.000 --> 00:25:49.279
time and should you make time for data that early
504
00:25:49.920 --> 00:25:52.759
or what is a good time to make time for
505
00:25:53.279 --> 00:25:55.799
you know, aggregating data and looking at analytics.
506
00:25:56.960 --> 00:25:59.880
So my personal opinion is that you should actually track
507
00:26:00.160 --> 00:26:03.200
it from day one, even if that starts on a spreadsheet, right,
508
00:26:03.279 --> 00:26:06.039
But now there's there's tools out there. Probably I'm sure
509
00:26:06.079 --> 00:26:09.880
you even get for free to start using some low
510
00:26:10.000 --> 00:26:12.960
you know, lightweight you know CRM for example or something.
511
00:26:13.559 --> 00:26:15.920
But I think you should track it from day one.
512
00:26:16.839 --> 00:26:18.880
And I've never been good at this. But if you
513
00:26:18.880 --> 00:26:20.680
can track it like in real time, like after a
514
00:26:20.680 --> 00:26:23.240
phone call, like your pop pop, right, you're entering that
515
00:26:23.359 --> 00:26:25.480
whatever happened there, you're in those points of data right
516
00:26:25.519 --> 00:26:27.400
there on the spot. Because you can you can never
517
00:26:27.440 --> 00:26:32.759
go back and recreate it, right, you forget. And I
518
00:26:32.799 --> 00:26:36.720
think it's also we jump from thunder lad cells or
519
00:26:36.720 --> 00:26:40.359
processed lad cells thinking that we have the playbook down,
520
00:26:41.400 --> 00:26:43.720
but we really don't because people might be buying my
521
00:26:43.839 --> 00:26:47.519
passion or they're leaving the dream. They drink the kool aid, right,
522
00:26:47.599 --> 00:26:50.319
they get excited about like, yeah, we'll buy this, right,
523
00:26:50.759 --> 00:26:52.599
And I really haven't set in front those customers and
524
00:26:52.640 --> 00:26:54.400
watch them use my product or you know, there's a
525
00:26:54.440 --> 00:26:56.880
lot of things that probably haven't done yet. And I
526
00:26:56.960 --> 00:27:00.400
wish I could remember who told me this. Unfortunately learned
527
00:27:00.440 --> 00:27:02.640
this about nine months ago or twelve months ago. I
528
00:27:02.680 --> 00:27:05.279
wish I had known this ten years ago, actually twenty
529
00:27:05.279 --> 00:27:07.920
seven years ago. But somebody said, before you hire your
530
00:27:07.920 --> 00:27:13.839
first salesperson, actually hire your sales ops person and tie
531
00:27:13.880 --> 00:27:17.200
them to your hip for at least six months and
532
00:27:17.319 --> 00:27:21.240
shadow every conversation, every move, every question the customer, the
533
00:27:21.319 --> 00:27:25.720
prospect asks, et cetera, like, literally track everything and develop
534
00:27:26.000 --> 00:27:28.440
what that real sales playbook is and what the real
535
00:27:28.480 --> 00:27:32.759
message is that you use and what people really resonate with,
536
00:27:33.319 --> 00:27:36.640
because oftentimes what we think it is as the entrepreneur
537
00:27:37.839 --> 00:27:43.079
isn't really what it is from a institutionalized sales process standpoint.
538
00:27:43.240 --> 00:27:45.400
And so by starting off with that sales OPS person
539
00:27:45.960 --> 00:27:48.400
being glued to your hip every single day will make
540
00:27:48.440 --> 00:27:51.240
your first sales hires that much more successful.
541
00:27:51.920 --> 00:27:54.200
And then how do you handle the investors? Right, So
542
00:27:54.279 --> 00:27:56.839
the investor is sitting there going, we want sales, we
543
00:27:56.839 --> 00:27:59.839
want revenue, we want revenue, we want revenue, And you're like, hey,
544
00:28:00.119 --> 00:28:03.039
going to hire a sales OP person and they're like, no, no, hell,
545
00:28:03.480 --> 00:28:06.960
salespeople marketing people like pump, pump the engine, pump the engine.
546
00:28:07.200 --> 00:28:10.400
How would you how would you help the founder to
547
00:28:10.480 --> 00:28:13.640
have that conversation with the investor and say, hold on,
548
00:28:14.279 --> 00:28:16.400
I got to train my OPS person first, because I
549
00:28:16.440 --> 00:28:19.039
agree with you, there's a big difference between me pitching
550
00:28:19.640 --> 00:28:22.680
and a salesperson pitching. Right, somebody's going to buy for
551
00:28:22.799 --> 00:28:27.640
me because you know, enthusiasm is contagious, right, and they're
552
00:28:27.640 --> 00:28:29.519
going to feel the passion and they're gonna be like, yeah,
553
00:28:29.559 --> 00:28:32.279
these people are really really on board, and a salesperson
554
00:28:32.359 --> 00:28:36.119
is going to be it's not even close, right, So
555
00:28:36.480 --> 00:28:39.880
how would you how would you track data between your
556
00:28:39.880 --> 00:28:42.839
results and somebody else? And then how would you deal
557
00:28:42.880 --> 00:28:46.799
with the investors approach to you know, get salespeople go,
558
00:28:46.799 --> 00:28:49.480
go go, and you're like, hold on, you know, let
559
00:28:49.480 --> 00:28:52.119
me make sure I'm doing the right thing right instead
560
00:28:52.160 --> 00:28:53.319
of the wrong thing right.
561
00:28:54.039 --> 00:28:57.640
This is going to sound crazy, but I think it's
562
00:28:57.640 --> 00:29:00.400
somewhat proliferent. But there's this there's this thing called Google,
563
00:29:01.920 --> 00:29:04.200
and then there's also this thing called chat tbt now
564
00:29:05.039 --> 00:29:08.039
and and what I'm honestly shocked by is the number
565
00:29:08.039 --> 00:29:15.640
of entrepreneurs that that don't research and so like, do
566
00:29:15.839 --> 00:29:22.200
throw research in your space on trends, you know, ratios
567
00:29:22.240 --> 00:29:26.240
of of you know, whether it's SDRs to aes or
568
00:29:27.480 --> 00:29:29.920
and even that probably gonna be careful about. Now you
569
00:29:29.920 --> 00:29:31.839
should be thinking about how to stand up AI agents
570
00:29:31.880 --> 00:29:33.799
and how you send a thousand people into the field,
571
00:29:34.480 --> 00:29:38.000
you know, every split second to bring leads back. So
572
00:29:38.079 --> 00:29:42.359
I think even that is changing radically as we speak.
573
00:29:44.200 --> 00:29:46.599
But what I've found is that for some reason, shockingly,
574
00:29:46.680 --> 00:29:48.799
and I'll give you an example, back when one of
575
00:29:48.799 --> 00:29:52.240
my SaaS companies, I would google about every six months,
576
00:29:52.480 --> 00:29:56.319
you know, what are the best SaaS metrics or what
577
00:29:56.319 --> 00:30:00.359
what SaaS metrics do investors care about h? Or what
578
00:30:00.440 --> 00:30:03.519
are best best in class KPIs for whatever metrics? Right?
579
00:30:04.039 --> 00:30:07.039
And I methodically would re gooogle these things. This before
580
00:30:07.039 --> 00:30:08.680
we had you know, chat met and all that kind
581
00:30:08.680 --> 00:30:10.759
of fun stuff. But I wanted to see if there
582
00:30:10.759 --> 00:30:13.759
are a shifts in thinking and industry trends, et cetera.
583
00:30:14.440 --> 00:30:17.440
And there are a lot of changes year over year.
584
00:30:18.440 --> 00:30:23.160
And I think it's I think it's easy as a
585
00:30:23.160 --> 00:30:28.799
as an entrepreneur to think you have the answer, but
586
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the answer might be five years old or three years
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old and nowadays ninety days old. Uh, And so I
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think it's really critical to be well researched and when
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you're trying to have that conversation with the investor, have
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some data slash market information that substantiates your viewpoint. They
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helped back it up.
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I love that. All right, hang on, Tove, we have
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to take a break. But coming up next time with
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TOF Day, the CEO of Elevate Ventures, Tope and I
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will dig into the rapid pace of change we're all
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living through.
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If you think about the agricultural revolution took hundreds of years.
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That was centuries, lasted centuries, right. The Industrial Revolution lasted decades.
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The Digital Revolution lasted years. The AI Revolution is happening
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literally in hours minutes.
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This Startup Science Podcast with Gregory Shepherd is brought to
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00:31:27.480 --> 00:31:31.960
you by Startupscience dot Io. Founders can log on to
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00:31:32.200 --> 00:31:37.200
startupscience dot io and use code Forbes to get free access.
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00:31:37.480 --> 00:31:40.559
To connect and find out more about greg go to
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00:31:40.720 --> 00:31:45.400
Gregory Shepherd dot com. The Startup Science Podcast is a
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00:31:45.440 --> 00:31:47.319
production of Forbes Books.
