Curiosity is like a never-ending journey that can lead you to surprising ventures and fulfilling careers. In this episode, host, Dr. Diane Hamilton, talks to self-taught, serial entrepreneur, Marcus Whitney. Marcus talks about finding the creative angle in every industry he has delved in, from his programming startups, healthcare work, soccer, music, and venture capital work – without any formal training or education. He touches on the role of curiosity for an entrepreneur, dealing with pain and failure and the mastery of startups.
How can a CEO operate in a realm of creativity when he has to worry about 10,000 other things? CEO of Taylor Insurance Services and Founding Partner of Ascend Partners, Trey Taylor shares the experience of being one of the first employees at Web MD, going full circle in his career to coming home and taking over the family business. He reveals the key to freeing a CEO and allowing him executive headspace to flex his curiosity and bring about brilliant business solutions.
I’m so glad you joined us because we have Marcus Whitney and Trey Taylor here. Marcus is the CEO and Founder of Health:Further. He’s also the Founding Partner of Jumpstart Health Investors. Trey is the Managing Director of Trinity Blue Consulting. These gentlemen do a lot of interesting things. They have a lot of business background and VC experience. It’s going to be a fascinating show.
Listen to the podcast here:
Living A Creative, Purposeful Life With Marcus Whitney
I am here with Marcus Whitney, who is the CEO and Founder of Health:Further, a strategic advisory firm working with leading healthcare organizations to navigate disruptive change for their benefit. He’s the founding partner of Jumpstart Health Investors, a new venture capital firm focused on innovative healthcare companies. He’s also the author of Create and Orchestrate, a book for entrepreneurs about living a creative, purposeful life, breaking through boundaries and overcoming adversity. It’s nice to have you here, Marcus.
Thanks for having me, Diane.
You’re welcome. You’re doing a lot of different things. You’re a busy guy. You’re the Co-Founder and Co-Owner of the Nashville Soccer Club too.
I am. I enjoy the creative bounding process of things and helping to find great leaders that will build great teams to grow those things.
Give me a little background that led to your interest in doing all these different things. You’ve got to have a fascinating group of things that you work on.
My adult professional story starts in Nashville, Tennessee. In the year 2000, I moved here from Atlanta and I had a small family. At that time, I have one child and one on the way. Prior to that, I had dropped out of college and I was trying to be a musician. I didn’t have any real career established. As my family was starting to grow, it was clear that I needed to do something besides waiting tables. I started to teach myself how to program. I taught myself software development by buying books and working outside of the many shifts that I was doing as a waiter. Eventually, I got myself into the software development industry in 2001. I had a company called HealthStream where I was designing electronic courseware for nurses.
That started this process of falling in love with creating new things. Software is a creative but also structured a process. I enjoyed that. What I didn’t enjoy so much was working in a large company. I was not good at office politics at all. Many times, in my zealousness to try to make things better, I was breaking boundaries and doing things that I shouldn’t have been doing. I started to learn pretty quickly that I needed to be in environments where I had more autonomy. That’s where the shift led me into the startup world.
I started in 2003 as the Director of Technology with an email marketing startup called Emma. Emma grew over the course of the four years that I was there, from 5 to 50 people and a multimillion-dollar company. It’s now owned by Campaign Monitor so it’s a large company now. During that time, I learned about startups. I fell in love with startups, creating on the fly, learning all about businesses, customers and how to compete. In 2007, at the end of that four-year run, I started my venture into the entrepreneurial world. Ever since, I’ve been learning by doing how to be a creative entrepreneur.
That’s a quick rise to go from the year 2000 to be a director in 2003. That’s been pretty impressive. What’s interesting is you picked developing software because programming’s hard. What led to that? I can remember programming my calculus homework and basic in 100 years ago and getting stuck in nested loops. It’s not exactly the easiest thing to pick up. What led to your interest in that?
When I was a child, my uncle worked for IBM. He was a programmer. One Christmas, I received an IBM PCjr. This was in the ‘80s. Back then, computers couldn’t do anything on their own. They had those floppy disks with Oregon Trail and a couple of other games. For the most part, if you wanted the computer to do anything, you had to program it. At a young age, I was doing basic programming. I had gone through junior high and high school and not programmed for a long time. This was one of those things where you learn something as a young child and the basic concepts of it stick with you. When I reproached it as a 23 or 24-year-old trying to teach myself, those basic concepts were still there.
There was a lot that had changed. There was a long gap between the IBM PCjr and the internet. There were still so many things I needed to learn about servers, browsers, HTML versus processing code. It was still pretty tough. For the three years that I was learning and working at HealthStream before I’ve got to Emma, it was a lot of trial by fire and making a ton of mistakes in real environments but working incredibly hard for 12 to 14-hour days until things started to click. With programming, it’s like that. It takes a long time to get the concept. Once you get the concept, that’s it. You got it and you never lose it.Startups are canvas for creating. Click To Tweet
I always wonder about getting a degree in programming because everything changes. The minute you learn something, you have to keep up with it. It’s not the kind of thing that you can have learned twenty years ago and go, “I learned that.” It’s ever-changing. HealthStream is interesting when you’re talking about nursing and having courseware for that. I’ve always liked creating some of the courses and I’ve taught thousands of online courses. I’m curious about what LMS learning management system you used for that.
We’re talking about 2001. At that time, there weren’t standard ones. HealthStream had built their own and it was that one of my big jobs. I had to manage the system that built the courses to comply with the in-house LMS. SCORM had emerged as the standard and we were building these courses that were SCORM-compliant. HealthStream had built their own LMS because it wasn’t like there were these big software and service companies around yet.
How did you get involved in healthcare in general? With HealthFurther, you’re an advisory firm working with healthcare organizations. What was the initial thing that led you to healthcare in general?
That’s a Nashville story. When I moved here in the year 2000 from Atlanta, I only knew of Nashville as a country music town. I was born and raised in Brooklyn. Most people from outside of Nashville, that’s what they think about. We have a TV show about country music and it’s the brand of the city. It’s a music city. When you move, live here and you work here, what you find out pretty quickly is Nashville is a healthcare city. Fifty plus years ago, a hospital corporation of America, HCA, was founded here by a family called the Frist Family and also a gentleman named Jack Massey.
HCA is basically the organization that invented for-profit healthcare. They are the largest health system in the country. They care for about 5% of the population of the United States. A way to think about that is 1 in every 20 babies in America is born in an HCA facility. That’s a way to picture the breadth that they have. Over the last 50 years, HCA not only became this huge company but also spawned lots of other companies as executives that went through the ranks there.
They would leave and start new companies. Now, the Nashville healthcare ecosystem is about 500 to 600 companies strong and HealthStream is one of those companies. The CEO and founder of HealthStream is a gentleman named Bobby Frist. He is from the first family that originally founded HDA. When I’ve got the job at HealthStream, I didn’t know at the time that I was working for a member of the Frist Family. I didn’t know that I was working in the largest industry in healthcare. Over time, I quickly got the memo.
I don’t think I knew that about that area of the woods in Nashville. I worked for AstraZeneca for many years. I was in pharmaceuticals and my husband’s a doctor so I have a lot of medical background. My sister’s a nursing recruiter. It seems that we have plenty to talk about. A lot of what you do ties into what I do with creating courseware and everything that I don’t program, I have to admit. You have this crossover though. What I like to discuss is your success, wellbeing, and business. They all tie in together. That all go together in my mind. I’m trying to figure out how soccer got in there.
My wife likes to say that I can’t have a hobby and soccer started as a hobby. Meaning, I was working all the time and I needed something to take my mind off of work. I started along with my sons watching soccer. We started watching Premier League Soccer. It was interesting, we had to learn about all the different teams that were in England and the way that Premier League works versus any American sport. For example, there are no playoffs in the premier league. It’s a ranking system. There are twenty teams in the league and it’s 1 through 20. There’s a winner and everyone else is a loser. It’s all based on who wins the most games and scores the most points and things like that.
It started as a hobby. There was an upstart here in Nashville called Nashville Football Club that was a community initiative started by a gentleman named Chris Jones. I threw in $75 to become a member of this nonprofit soccer team. In a short period of time that group grew from a couple of people on Twitter to a fourth division team playing in the National Premier Soccer League that was getting 1,000 to 2,000 people coming onto the matches. When that started to happen, Chris Jones and I started having some conversations about what this could be and could I help with my entrepreneurial background.
I ended up joining the nonprofit as the chairman. Hence, it’s no longer a hobby now it’s a thing that I do. An incredible turn of events that happened over a period of four years, that nonprofit group decided and voted to attempt to become a professional team. I built an investment group that decided to back it. We’ve got a franchise in the second division in the United Soccer League and another group of investors and community leaders sought to create a bid for major league soccer expansion. We partnered with them and made it one collective bid. In December of 2017, we were awarded a Major League Soccer franchise and we’ll be playing our first season in major league soccer in March of 2020.
Those are serious fans too.
It’s been absolutely crazy.
That’s going to be amazing. You were listed in Upstart 100 by Upstart Business Journal, Power 100 by Nashville Business Journal, featured in Techcrunch, Fast Company, The Atlantic, you name it. Is it for your work with soccer or your health work? I’m trying to figure out what you’re most known for.
It’s funny because over different periods of my life, I’ve been known for different things. From 2000 to 2010, I was known as a tech guy. I was deep in the programming world. I did a podcast in the PHP programming world, I would speak at PHP, the programming language, and PHP conferences around the country even in Canada. In 2009 and 2010, I made that shift into entrepreneurship. It’s for the reason that it’s hard to keep up with the technology. I had to make a decision. I loved creating and innovating but did I want to continue to focus on learning all the new technology?
Keep in mind, the iPhone came out in 2007 so that changed everything. Did I want to spend my energy doing that or did I want to shift into the entrepreneurial world? I made the decision to shift into entrepreneurship and still keeping that creative angle. Everything from 2010 now had been entrepreneurial. If you look at the healthcare work, soccer work or venture capital work, that’s all been part of my entrepreneurial journey. We have different media coverage has been for different initiatives. It’s been fun.
You’re also a producer and host of Marcus Whitney’s Video Universe, which is a video channel on YouTube. You also have a Marcus Whitney’s Audio Universe, a podcast. You’re also a member of the board of the Country Music Hall of Fame. How do you get into the Country Music Hall of Fame? I don’t know if I caught that part of the story.
That’s been incredible. Another thing that Nashville is known for when you live here is its incredible support of the nonprofit sector. This city has an incredible civic lens. It’s difficult to be successful in business and not be engaged in civic life here because so many important connections and relationships are developed on boards. The country music hall of fame is interesting because it is this intersection of the keepers of the country music genre and the most important museum in Nashville. It generates more revenue than any other museum in Nashville. It’s been around longer, it’s more credited, etc. In its role as a museum, it has to serve the community.
People don’t know about the things that the country music hall of fame does for Metro Nashville Public School students in terms of the access that they have for free to the museum or the many programs that they’ve created to teach students how to be songwriters and things of that nature. The board is split along those lines. It’s about half of country music executives and half national civic leaders. I earned my seat as a Nashville civic leader. It’s been an incredible honor to serve on that board. It’s a great organization, mission people, and team.
I’m a big country music fan. Can you live in Nashville and not be?
If you stay here long enough, even if you weren’t when you started, you ended up becoming one. What’s so cool about that is, in Nashville a lot of country music stars and industry executives live here but Nashville does not have any paparazzi. In fact, one of the things that happened was TMZ tried to open an office in Nashville and they had to close it up because they couldn’t get any leads. Nobody would give them any leads on stories or information about celebrities. They’re our neighbors and we treat them with respect and understand that they treasure their privacy. We don’t want them to leave town because they’re all involved in civic life as well. They donate their time, treasure and so many other things. Once you live here and you see how the country music industry is integrated into the city in so many positive ways, you’ll see it differently. You don’t see it as music. You see the people behind it.
What could you teach Hollywood about the paparazzi?
I feel bad for them. It’s a different world between Nashville and Hollywood.One of the most universal human traits is to create things. Click To Tweet
You said that you fell in love with startups. I’m curious, what is it that you like about it? What do you think is good about it? What do you find challenging? What’s your next startup?
It took me a long time to be able to come up with a good answer for that. I used to say that I love business, but it’s more of startups being my canvas for creating. I like to create. I used to be a musician. I love art and creativity. It’s one of the universal human traits to create things. If you look at everything that we use, take advantage of and enjoy, it was created by somebody. Businesses are a creative endeavor and I enjoy them because of their systems. They serve purposes, they’re difficult to put together and there is also a lot of fun to figure out like a puzzle. That’s why I love startups.
The other thing is, startups can work in so many industries. If you’re someone who likes to learn, like I do, as long as you master the art of the startup, you can learn about many different industries and apply your knowledge and your expertise in starting new things to different industries. That’s why I’ve been able to have great experience and success in the sports industry. Now in the healthcare industry and previously the digital marketing industry, I’m open to other things in the future that I could get involved in. The fundamentals of starting a company are the same no matter what industry you are in. There are obviously some differences but, but a lot of the fundamentals are the same.
How do you master the art of startup? If somebody reading this, what’s the best way?
I would say it’s no different than mastering a martial art. You have to have experience. There’s no way to master it by reading a book. It takes lots of practice, error, and failure. It’s like martial arts. Sometimes the best way to learn is through the pain. You’re like, “Now I get how that move works.” Startups are the same. There are a ton of lessons that someone could tell you but until you experience them yourself, it’s difficult to learn them. I’m years into living as a startup entrepreneur. That’s how I’ve developed mastery. It’s through years of experience, more than anything. I’ve read a bunch, I’ve listened to a bunch of podcasts, I’ve gone to a bunch of conferences, but it’s the doing where all the mastery takes place.
Do you talk about or write about that at all in Create and Orchestrate, your book for entrepreneurs? What advice do you give in that book?
That book is my field notes as an entrepreneur because I didn’t graduate college, I didn’t go to business school so I wasn’t formally trained. I used my experience as a self-taught software engineer to figure out how business works. A lot of it was reverse engineering. It was looking at things and as at the end state and figuring out, “What did it take to make that thing work?” The book, Create and Orchestra, is a lot of narratives about things that I experienced and the lessons in the philosophies that came out of that. That is a lot of what I write about. I write about what I know, which is what I’ve experienced. That’s been able to create philosophies and ways of looking at things and frameworks that I use whenever I approached the startup world. Anyone can create their own. I hate to make the analogy to martial arts again, but there’s not one martial art.
There’s so many and there are a spectrum and a rainbow of different martial arts out there. Once you become a master, you get the ability to innovate on the art itself. Startups are the same way. The way that we’d go about doing business is changing. New great iconic entrepreneurs come into the business world and they changed the way we do business. People like Steve Jobs, Jeff Bezos, and Sarah Blakely. These are people who have created completely new ways of doing business that we didn’t have before. That what I love about it. It’s not only innovating in the business but innovating on the art of how business is done is fun.
You have a couple of kids and it takes a lot of risks to go through failures at that time. Do you handle failure well? Do you handle risk well?
I’m getting better at it. The key is expectation setting. The expectations you have determine the level of disappointment that you will experience. Over time, I’ve learned to set my expectations lower which feels like sandbagging but it’s more an acknowledgment that there are so many variables to success that are not in my control. The things that I can control are my focus, hard work, effort, ethics, integrity, and intention. Those are all the things I can control.
There are a million other things I can’t control. For all the things that I can’t control, that absolutely can have an impact on the business, I can’t get that worked up about them. It’s taken me a while to understand that through experience. Having lived through enough of those and have been able to connect the dots between the expectations that I’ve had and the disappointments, pain and grieving that I’ve experienced as a result of, “Failures.” I now see my role in that and I’m trying to be more conscious about not doing that.
You’re self-taught and reverse engineering. That all ties into the research I do with curiosity. You are a curious person. What advice would you give somebody who needs to develop their sense of curiosity? How did you get it?
You have to stay in your own head a little bit. That’s one thing I’ve noticed about myself as I’ve gotten older. You have to work on it because there are times where you want to be an active listener and you need to pay attention to people. I have a fantastic conversation going on in my head all the time. It’s not a conversation where I’m beating myself up. It’s a curious conversation. It’s one where I’m exploring possibilities, different ideas and setting up my subconscious to do some great work while I’m sleeping. That’s a thing. You can’t let other people get into your head and stop you from being curious.
You have to maintain that fun childlike conversation in your own head. I was an only child so a lot of times when I was growing up, I had to play both roles. It had to be my friend and me. It’s like, “What, what does the imaginary friend do?” If I have two different action figures or toys, how do they interact with each other? I had to play both parts. I’ve continued that throughout my entire life. Over time, I’ve developed a good relationship with myself and understanding that curiosity in that conversation is a part of what makes me happy.
I could see why you’d be so creative. Your book is for entrepreneurs about living a creative and purposeful life. It’s called a Create an Orchestrate. A lot of people would learn a lot from you. I mentioned a lot of different things you’re doing so I don’t know if there’s the best way to reach you or some link you’d like to share for people.
It’s because I do so much stuff, I realized that the best place for people to engage with me is at my website, MarcusWhitney.com. If they sign up for my email list, I send a personal email every week on Monday morning, it’s called The Grind. Through that email, I keep in touch with people and I also share things that are going on in my world, which is often business-related stuff. The newsletter is personal in nature and it’s my way of journaling. It’s the easiest way for anyone who wants to know what’s going on with me and to engage. I hope that your readers will check it out.
Marcus, this was so much fun. Thank you so much. I could talk to you all day. You have many different things you work with. I hope we’ve touched on all the major things and I hope everybody takes some time to check out your site. Thank you.
Thank you for having me.
Finding Your Executive Headspace With Trey Taylor
I am here with Trey Taylor, who is the managing director of Trinity Blue Consulting. He advises and coaches C-suite members and he’s got a unique proprietary strategy model. I’m looking forward to chatting with him about that. Welcome to the show, Trey.
Dr. Diane, thanks for having me. It’s a great thrill to be here with you.
This is going to be fun and please call me Diane. I am interested in what you do. Tina Greenbaum was nice enough to introduce us. She said that you had a unique approach to working with the C-suite. I know you’re in The Hero Club, Jeff Hayzlett’s group and all that. I’ve met a lot of interesting people from that group. I wanted to get a little background on you. I know that you were at Healthyon, WebMD and you’ve done a lot of different things but can you give us your background so we can learn more about you?It takes a while and a lot of experiences to understand the connection between expectations and disappointments and to handle failure well. Click To Tweet
I spent a career doing financially backed strategy plays in various different companies. I was one of the first employees at WebMD. I joined the corporate development office there where we did a lot of mergers and acquisitions, strategy work and trying to crack the code of how do we put an internet company together when we had no model of how to do that back in those days. That was interesting. I called on the law degree that I have and business degrees and those kinds of things to answer those questions. I moved from that position into the venture capital space for many years. I ran a small venture capital fund in Atlanta that did well until 9/11 of 2001 when a lot of VCs went to look for jobs, me among them. I ran a corporate development did some business development for EarthLink and ultimately AOL Time Warner before returning home to take over my family business.
Those are some pretty impressive companies. I know that you’ve got quite a background. I was looking at some of your degrees. You’ve got your JD, but you’ve been to Tulane, St. Peter’s College, the Kellogg School of Management and Georgia Institute of Tech. You’ve got quite a background. What was it like to go out on your own and have to come back? That’s got to be hard.
It was interesting. Not only did I retire from a large company function, but I also lived overseas. I lived in New Orleans, Atlanta, and big cities and took over the family business, which I did years ago. I had to come down, downsize the town and my whole life. While I took over a family business, I revamped it, put it back on its legs and it still runs as a part of our family office. I do other things in consulting, some angel investing and that thing as well. The culture shock for me was never going to live overseas for a few months or something of that nature. The culture shock was coming back to my hometown which was a smaller, more conservative and slower-paced place. It took me quite a while to shift into that proper gear and to make that work for me and not drive everyone around me crazy.
Is it Valdosta? I’ve never heard about Valdosta.
Valdosta is about 3 hours south of Atlanta, about 15 miles north of the Florida/Georgia line. It’s a nice old conservative town. We have a record of the winningest high school football program in the country here. A couple of years ago, ESPN decided to award one city in America, a title called Winnersville. It was for whatever city had the most titles through their history. Everyone thought it would be Green Bay or some of these powerhouse professional sports town. Valdosta had three times more titles across all sports and endeavors than any other town in the world or in the country. That’s our claim to fame. We are Winnersville now.
I had never heard of that but I saw that you made it into Georgia’s Trend Magazine’s Forty under Forty and other things in Georgia. I have been to Atlanta but now I’ve got to look up Valdosta. I had not heard of that. You have this background that fascinates me. First of all, I want to see what you got from your experiences that you use now in your C-suite training. Working at Web MD, EarthLink and AOL Time Warner, what did that teach you? What does that help you when you’re working with the C-suite to help, coach and advise them?
It’s interesting that the people at the pinnacle of these massive companies, we have a certain opinion of how they run their day and their lives and how they accomplish their business goals. When you are a young man, like I was during those days, you’re allowed to be in the room but not expected to speak up much. You’re much in the observation and execution side of the equation. It was interesting to me to find out that most of the great CEOs were winging it. Sometimes they hit the ball out of the park but way more times they don’t. The lack of discipline follow-up and focus were the three things that I took note of that I always said to myself, “When I’m a CEO, I will not fall trap into those things.” That’s one of the things that I work with the C-suite. It’s to get a disciplined approach to doing those things which matter and not touching those things which don’t.
How do you determine what matters and what doesn’t? It’s interesting because I wrote a book about curiosity and developing the curiosity to improve engagement and innovation and all the things that matter. I was surprised that nobody had focused on the importance of curiosity. Is there something that people are overlooking when you’re talking about focus, discipline, follow-up and the things you deal with? It seems intuitive that everybody knows but it’s obvious that people are almost overlooking it.
The greatest consultants are the ones that tell you what you already know but show you why you aren’t doing what you already know to be true. When I go in and engage with the C-suite, primarily the CEO, I do a lot of work with CEOs. A little bit of work with CFOs and a couple of COOs as clients and former clients. Most of my work is dedicated to the CEO. The CEO, the mythology that surrounds that position is, “The buck stops here.” “I have to have my fingers in every single pie.” It’s those kinds of things. Those are all self-defeating beliefs that a CEO can carry into the day.
The more focus to CEO is and the better he delegates and holds accountable, those around him who are responsible for executing his vision and assignment, the better the success of the organization turns out to be. This is true from a five-person company all the way up to a 3,500 or 35,000 life company as well. After years of observations and research and that thing, it boils down to a CEO’s job has three parts. He supposed to focus on the culture of the company, the people who carry out the vision and the numbers and hold accountable everyone in the organization against those three legs of the stool. When I can work with executives and get them visioning correctly at the right horizons of focus, we start at the runway level and go all the way up to the 50,000-foot level in those three silos. They are forced to delegate certain tasks that they were probably doing for no good reason beforehand.
They’re also forced to change their management styles so that when someone brings them a problem, they don’t take the monkey off the employees back and put it on their own. They keep it where it’s properly done. Sometimes that means that the team around them has to change as well, emotionally but sometimes physically too. That’s the whole process that we go through. We only sign one-year engagements to deep dive on that and it takes 1 to 3 years to get through, perfect and reinvent the organization depending on how big an organization we’re talking about.
That’s an interesting perspective because I deal with a lot of people lately on the show who’ve been talking about boards. As you were talking about culture people and numbers being the main focus, what surprised me is how many of the board of directors are focused on numbers. They don’t have culture and people experts as much. Whenever I look at ads and we’re looking for a person to serve on the boards, they’re always looking for the number-crunching type of people. Do you think that we were overlooking a key area and the board of directors?
The board work that I have done, I’m usually okay with them being focused on final results. You do see a lot of executive SEN go on with the board as well. The executive SEN is doing a job that you’re not tasked to do and you don’t have responsibility or authority to do it. You do see some overreaching by boards. If we are running companies correctly, the board should know across the line what our goals are and hold us accountable as executives for achieving those goals. The setting of the goals should be done in a great depth of conversation between the executives, the C-suite, and the board so they know.
Often, we will set goals with regard to culture, people and numbers. Why do boards focus highly on numbers? It’s because it’s the easiest thing to measure and deduce against. “Did we make it or did we not?” Sometimes it’s hard to do, “How do you set a cultural goal?” I get asked that question all the time. We have ways that we do that with our clients that we show them part of the culture and the goals that we set show up and employee engagement. That is something that you can measure, report against and share and delegate. Those are the kinds of things that we get into.
What you’re talking about is important because I get asked similar questions in terms of, “How can you determine how much curiosity and impacts the overall?” I can measure what stops curiosity so you can get that data and figure out if they’re moving forward. What’s important is you can measure the engagement and this is leading to innovation. You look at all the different factors when you have problems with culture and people, you’re having turnover, communication and all that stuff you can measure. A lot of people forget to tie it all together. What you’re saying is so important. You need to tie that all in and it becomes quantitative.
What I love about the Curiosity Code that your book is about and I’ve read the book on audible, which is wonderful. What I like about it is, it provides, what I call executive headspace. If an executive is freed up enough not to be focused on what coffee we’re serving in the break rooms, which is an actual story from one of my clients. They were 5 minutes late for a call with me because they had to have a meeting about what kind of coffee to serve in the break room. It was absolutely ridiculous. The answer to that question doesn’t matter to anyone except the person that doesn’t like the options in the coffee room. It’s silly.
If we free executives from that, we give them the executive headspace where they can operate in the creative realm where they can exercise and flex their curiosity muscle, go out and crack that Curiosity Code and bring some great creative solutions to problems that you would never have found before. I don’t know if you know the Play Dough. Have you ever heard the story of how Play Dough became the number one toy in the world?
I did go to but go on and tell me again.
Play Dough started its life as a putty that you would apply to a wallpaper to pull coal soot off the wallpaper. I didn’t know that it was a problem that we ever had. As a society transitioned away from the heating of our homes with coal, fire, and wood, the need for cleaning, wallpaper declined. The company was seriously in trouble. Someone who was not involved in the company, it was the sister-in-law of the family running it was a preschool teacher. She took some of the dough and putty to class and let the kids play with it.
It was nontoxic. It was a great creativity spur for the kids. At some family luncheon, she announced that she thought this was a great way to take the company forward. They did that and eventually sold the company for lots of money to Hasbro, and Hasbro has taken it international. It’s the highest-selling toy of all time. Three billion little jars of Play Dough have been sold at that time. If she wasn’t curious and if she didn’t have the executive headspaces the term that we would use, she never would have had the ability to flex her creativity muscle and come back and say, “This is an option.” In other words, the executives were too close to the problem and they were doing too many things that they couldn’t be curious about what other things you could do.
I gave a lot of examples in the book about stuff like that, Velcro and different things. When your dog comes back with burrs on it and you look under the microscope, it’s got a hook and eye, “Let’s make Velcro,” and things that you don’t think of what people would do to come up with these great ideas. It must be fascinating for you to help people explore what they could be doing. I am curious since you worked with the AOL. I saw Steve Case speak at a Forbes event once, and he’s an interesting guy. What did you learn positive or negative from what they did at AOL?
The AOL story is quite abbreviated. They hired me out of EarthLink because they needed to do divestitures. They had bought all of these companies. It was an acquisition mill for many years. Most of them were still siloed or they were a feature set or something like that. The portfolio that my boss and I were given was to go free up $1 billion in assets. Go take and sell off $1 billion in assets. I joined the team that was doing the deep dive that was moonlighting for AOL while working my time out with EarthLink.Sometimes the best way to learn is through pain. Click To Tweet
Transitioning out of that role, a family emergency hit at that point. While we were working on the Huffington Post divestiture, that was the first deal that we were working on there, my father passed away and that’s how I found myself back to run the family business. My time there was extremely abbreviated, probably less than 30 days. I still took the learning from it and the learning was, people get rewarded for what they get an incentive to do. The incentive there was for Steve Case and his team, and he had a broad team.
They got paid to go buy a whole bunch of companies to keep people interested in subscribing to AOL’s internet service. No one ever checked if anybody used the things that they had bought or not. For somebody to come in and say, “Your job is to raise $1 billion selling off stuff that we think is worth it but nobody uses it.” That was a big learning for me. Even running my own businesses and consulting with the C-suite, everybody gets enamored of an M&A deal.
It’s always fun, sexy and glamorous to go buy something. I always say this to my wife when she wants the latest in a purse or jewelry or whatever, it’s always the belief that it’s going to change my whole life. I won’t speak for my wife. It’s never the case in corporate America that, that happens. That was good learning for me that I was able to take back into my own company. We do selective M&A for our own host to companies here, but also with our clients. We often play the role of pulling back and making sure that people don’t run after the shiny object.
When you’re looking at companies and now you’ve learned all of this, you do angel investing. As an Angel investor, what are you looking for?
You look for the person who has the idea and you have to form a gut judgment on whether that person is one of these people who can come over Michael Gerber’s E-Myth hurdle or not. This is only a hobby for them or are they somebody who can run a business at 4 or 5 orders of magnitude larger than a startup. The old hackneyed phrase in venture investing is, “Bet the jockey, not the horse.” The horse can die but the jockey can ride another day. A lot of what we do is evaluate executive personality. It’s no surprise that the first three things that I want to know from an executive are, “What is your view on the culture of the company that you’re trying to build?” “How are you going to staff it with the right people to make it happen?” “What numbers are you going to hit and how are you going to hit the?” That’s it. That’s what we look for.
It is an interesting challenge because everybody sounds like they’ve got the next unicorn. They all have the passion and great decks that look amazing. I don’t know how you filter through it. Is it only your conversation you have with them or how much does the deck play into it? I remember talking to Guy Kawasaki on the show about the deck. If they had a certain font was too big, too small or whatever, it drove him crazy.
Guy does tend to be a perfectionist on that. He’s one of my heroes in the venture space for sure, because of what he did at Garage. He’s put out for years like, “Here’s the deck that you should write.” I’ve heard him say, he may have said it on your show, I’ve heard him say, “It drives me nuts when I put that out on the internet for many years and people show up without ever having seen that and handle all that stuff.”
They say they’re fans.
Exactly. With these folks, it is always a value judgment. Many VCs want to convince you that they have some black box process and that kind of thing. It’s a gut feeling. It’s simply, “Can this person take an idea and turn it into a business?” I’ll give you an example. We had a company in Atlanta several years ago that we invested in. This young man came in with an absolutely great idea in the marketing space. I’ll plug this company for you. It’s AgencySpotter.com. It’s Match.com for big brands, ad agencies, and marketing agencies. He came in and he said, “Here’s how I want to get to $10,000 a month in recurring revenue.” He showed us the plan. He executed the plan. He came back when he had hit the $10,000 a month. He said, “Now I’m ready to fund growth and I want to take the $10,000 to a $100,000 a month. Here’s how I’m going to do that.” He has kept us involved. We did a syndicated angel round for him for $250,000. We broke that up between 3 or 4 investors and he has hit that in a beautiful way.
He came back to us and said, “I need a little bit of extra money because I can take this product, flip it on its side and sell it as an enterprise product to the big brands to manage all of these relationships, partner management portals and those kinds of things. The average price tag on that is $1 million a year.” We said, “Let’s grab the money to do that.” He has done that. Now he has a company that is the fastest Fortune 500 sales I’d ever seen. He’s sold four Fortune 500 brands in four months at $1 million a year.
That’s quite a success story. I’m curious what the biggest mistake you see other than the fonts being too small. If you have a good feeling that they’re passionate about their ideas and stuff, what do you think the biggest mistake that they’re doing?
The biggest mistake is being too passionate about the product and not the business. It is a real art form to find someone. When you build something from the ground up it is your baby and entrepreneurs are hyper-focus on the product. They always think, “If I add one more feature, if I skin it one way, if I do one more thing to it, the world will come and find it.” That is never the truth. You have to have a CEO who can build a product but also sell it effectively. This young man that we were talking about at Agency Spotters is a great example of that.
He’s the only sales guy in the company. He’s doing those kinds of results. Most of the time, what you see is someone says, “I’m going to build a better mousetrap and the world will beat a path to my door.” It never happens that way. You commiserate with them because you say. “You did build a superior product.” If you can’t convince people that it’s good enough to pay for, it isn’t worth building it in the first place.
What advice do you give them to make it that it does seem it’s worth paying for?
We do that a lot. A lot of times under some difficult and challenging conversations, we have to take the CEO and put them in a more product-focused position and usually replace them as CEOs. We have to build out a sales team around them. If the product is good enough as they claim that it is, it is sellable. It’s probably not that person who can sell it. I have to say that’s a 50/50 proposition sometimes. They want to make that move because they want the business to be good.
Sometimes they don’t want to make a move because they want to be the CEO no matter what. That’s something that you hope you figure out early on. That’s part of our due diligence when we make investments is to say, “What will you do when you’re doing $5 million a year in revenue and you’re pulled in a bunch of different directions? Who’s going to run the product? Who’s going to run sales?” We try to get to the bottom of that as early as we can but that’s crystal ball gazing a lot of times.
It’s challenging. I imagine you have a lot of tech startups who want to be the next unicorn. How much are you seeing them faking it until they make it? What do you say to them?
There’s a ton of that. We’ve looked at a lot of AI deals because that’s the hot flavor. Companies are being advised and I’ve seen an email that I wasn’t supposed to see from an advisor to one of those companies that said, “Don’t tell anybody that the AI doesn’t work. It’s the hot investing term. Put it on there.” Thankfully, the founder did not represent that to us so good credit to him. We see a lot of AI that is only linked to processes and there’s no brain power or computational brainpower behind it or something like that.
We’re looking because we’re interested in the power of what AI can transform in the world but we’re not finding enough of it that’s real. Mostly, because the deal sizes that angels do are small. We do not see any $750,000 to $2 million per round probably. That may be even rich for some of them. We have an interest in starting an angel fund. We’re in discussions with some folks to see if they’d be interested in partnering with us on that. That fund is premised on about a $750,000 initial engagement and follow on of about $500,000 and we have to take our hands off, let the larger funds come in, manage the capital allocation stand and that thing after that. We grow them up to a good series A and series B and let them go out of the nest at that point.
That’s interesting. I attended the Blitzscaling event with Reid Hoffman where they’re doing more of something pass the series B and C stage. You tend to get out that by that point.
The value that we bring early on is a good network. You mentioned Hayzlett, I know you’ve had Nathan Kievman on and people like Tina Greenbaum. We have those folks in the network that we can come and say, “A chief marketing officer needs to see this product help us in sales,” or, “We keep swinging at this but we’re missing it. Help us in the product development cycle.” We can bring those things in early in addition to enough capital to make the idea go but not overfunded and purchase stupid decisions.
We’re disciplined about not giving a company too much money. It’s difficult in our world because there’s so much money seeking good deals out there. There are many good deals out there because of it. The creativity that comes with unending capital is amazing. We’re seeing segments of the economy being reinvented. I don’t tell you anything you don’t know. Uber, Airbnb and all of those kinds of unicorns, they’re reinventing spaces but that’s happening in the micro spaces as well. We looked at a deal that we fell in love with. These guys fabricate a hurricane-resistant structure. They have a profitable and cashflow rich business. They want to expand that into building additional factories, manufacturing and distribution centers around the country. That has the potential of completely reinventing the world after the hurricane hits.Why do boards focus so highly on numbers? It's because it's the easiest thing to measure and then deduce against. Click To Tweet
There are tons of good stuff out there like that. We passed on that deal because it was a little rich for us. The pricing was a little rich for us. We thought that they were going to need a lot more than the $2 million to $3 million that we thought we could syndicate up for them. We thought they needed about $20 million to do those things correctly. We shared that candidly with them and I don’t think they disagree.
I’m sure you get to see some amazing proposals and decks of what people think they can bring out with new products and ideas. That’s going to be exciting to deal with every day but dealing with that and also helping the C-suite with advising and coaching them into the next stage of their success has got to be an interesting job. A lot of people reading this probably find this fascinating and probably need your help. If they do, I wanted to see if you could share some kind of link or site that they can reach you.
The best way to reach us is at www.Trinity-Blue.com. That’s our consulting company where we do a lot of the executive training and strategic action planning process is detailed there as well. That’s the best way to get us. We wrote a book about it.
Do you have a title?
It’s called A CEO Only Does Three Things. Guess what those three things are? Culture, people, and numbers.
I know but I need to know in more detail though. The book sounds amazing. It was nice to have you on the show, Trey. This was interesting. Thank you.
Thank you, Diane. I appreciate your interest, professionalism and good questions.
I’d like to thank Marcus and Trey for being my guest. We get many great guests. Please go to DrDianeHamilton.com. If you’ve missed any past episodes, you can find out everything at the site. I hope you join us for the next episode of Take The Lead Radio.
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About Marcus Whitney
Marcus Whitney is CEO and Founder of Health:Further, a strategic advisory firm working with leading healthcare organizations to navigate disruptive change for their benefit; as well as Founding Partner of Jumpstart Health Investors, a new kind of venture capital firm focused on innovative, healthcare companies.
Marcus is also co-founder and co-owner of Nashville Soccer Club, the city’s professional soccer club debuting in Major League Soccer in 2020. Marcus has been listed in the Upstart 100 by Upstart Business Journal, Power 100 by Nashville Business Journal, and has been featured in Techcrunch, Fast Company and The Atlantic.
About Trey Taylor
Trey Taylor is the Managing Director of Trinity Blue Consulting and Founding Partner of Ascend Partners. He holds a Bachelor’s degree in History from Emory University in Atlanta, a Juris Doctor degree in Tax and Corporate Transactions from Tulane University School of Law in New Orleans, and has completed additional coursework at St Peter’s College, Oxford University in the UK, the Kellogg School of Management at Northwestern University and the Georgia Institute of Technology.
In 2013, Trey was named one of Georgia Trend Magazine’s 40 Under 40. Additionally, Trey received the Cheers for Peers MVP, Cheers for Peers MVP Giver, Employee Recognition Award and Happiest Company Award in 2014 from TinyHR. Frequently featured as Keynote speaker, he has addressed attendees at the Human Capital Insitute, the Ascend Conference, and many other engagements.
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