Episode 04 | Part Two: The Pitch Master

Gregory Shepard, an entrepreneur who's built and sold 12 businesses, a recipient of 4 private equity awards, TEDx speaker, and Forbes author. This is The Boss Podcast with Gregory Shepard.

Thanks for joining me for part 2 of my talk with Oren Klaff, the bestselling author of Pitch Anything and Flip the Script. We left off talking about sales inception. So, Oren, I want to try to break this down. Let me know if I get this right. Sales inception is essentially implanting the idea in somebody else's mind that it's their own idea and then getting the investor to turn around and approach you. Is this correct?

So I think that's right, Greg. When I think about it, I was driving down the road and I was listening to, um, you know, Hidden Brain or one of these shows You know, the radio, if you've ever heard. And they sort of talk about this phenomenon in the human mind. And I always find it's really hard to extrapolate psychology, industrial psychology, you know, Hidden Brain into things that are actionable in business. It's sort of interesting, right? But this particular segment was on drugs, which I know very little or nothing about, though we've done a lot of healthcare deals. And they said it was about cocaine, right? And so a lot of people think that cocaine, as I think, is just gets introduced to the human, you know, brain or biology. You know, people take it and it's just this magical leprechaun substance that makes people's mind go bonkers, right? Because he's never seen it before, right? What is this? I'm gonna go crazy. That's not actually the, the functional reality. The functional reality is the human mind has receptors for the chemicals in cocaine. They're built in. Those receptors get little tastes of chemicals that, that feed those receptors all the time. What cocaine does is it super soaks those receptors. Like, ah, no, we've never seen this before. Like, oh my God, you know, chocolate cake and more chocolate cake and ice cream and a Snickers bar, right?

Yeah.

That's what makes, you know, people go bonkers, is that there are receptors, right? Not that it hasn't seen before. And started thinking about that, like ideas. There's so much friction with entrepreneurs and the ideas that they give. It's so hard to understand what it is they have. It takes so long, an hour, 2 hours, 3 hours, pitch deck, you know, sales book, demo video, PDF, white paper, spreadsheet, customer testimonials.

Oh, yeah.

Fuck me. Okay? It's a lot of stuff for the poor little investor, you know, to absorb, especially as the deal gets smaller.

Yeah, right.

And that's why I'll say, could you just make this simple for me? What do you do? Right? Prewired ideas are, to me, have been the key to inception.

Yeah, I do. I do that all the time. I see a deal and I'm like, oh, there's a third one of these I've seen and I'm already done, right?

Yeah. Yeah. So you feel like you've seen it before and you don't want to do the heavy lifting to understand the nuanced differences between this and the other deal. It doesn't have novelty. And it doesn't plug into your pre-wired receptors.

You know, that's what you mean by the pre-wired receptors. There's no place for that data to have purpose, right? For you to act on because it's new.

If you are an entrepreneur and you haven't read Crossing the Chasm by my colleague Geoffrey Moore, you know, it's a great book to read. Well, maybe it's not a great book.

I think it's great. I think it's fucking awesome.

It's a good book with some really critical insights on some pages. But it's a good book.

Really good. Yeah. I mean, it's not like, you know, I'm not kissing your ass, but your book is fucking way better. But anyway.

Oh, my ex-colleague Geoffrey Moore. But in Crossing the Chasm, the main point he makes is when you're in an early-stage company, there's this huge chasm between you and the customer. You have to be able to look across that divide and do I see a budget? Not could I get somebody to write me a check for value? Do I see a budget at the companies at the other side of the chasm? Am I looking at budget? In some ways, it's the same thing with your idea. Does your idea have mental budget on the other side of the chasm?

Wait, unpack that. What do you mean by mental budget? Like what?

Yeah. So I give a different metaphor. People come to investors and they say, hey, listen, I have this incredible fire engine, whatever, right? Product.

Yeah.

You know, just use fire engine. And the investor goes, great, we invest in fire engines. And they go, great. They put this box up and the investor looks in the box, right? And it's 2,200 Lego pieces, right?

Yeah.

And the investor goes, wait, I thought you said you had a fire engine. You go, yeah, I do. You just put all these pieces together, the white ones and the red ones, and see, and here's a 700-page instruction manual. You just put all this together. And like, wait a second, we're going to have a fire engine. I'm going to have—

As soon as you give me money.

Yes, all the pieces, right? And so there is no desire to put money into the building of 2,000, 4,000 pieces into something. They just want— for example, if you sell accounting software, here's a good example. You sell accounting software, you look across, right? Companies buy accounting software every single day. So you just need a value, you need a price point, you need credibility, and you need a specific problem that you solve. You now sell accounting software. In my world, We create pitch decks. No Fortune 500 company has a budget item, you know, during budgeting where they go, well, how much are we going to spend this year on pitch decks? Zero. The marketing department makes those for us, right? They cost us $35,000 for an infinite number of pitch decks because we have an intern do it.

Yeah.

It might not be good, but they don't have a— they don't set a budget for it. So we don't go to Fortune 500 companies. And even though we're the best in the world at making pitch decks, I will never call a Fortune 500 company and try and sell them a pitch deck. Because they have no budget.

Ah, I see. I see what you mean. Yeah. Is there a home?

Is there a home for your idea? So, I'll try and give you what I think are the key plugins. And I think, you know, you hinted at them.

You call them the big 3 W's. What is— how does that play into this? We can get to that later, but I'm excited to talk about that.

Sure, sure. And list them out for me and I'll run them down for you.

You've got— The why should I care? What's in it for me? Why you?

So we're talking about inception. You want somebody just to say to themselves, I don't know, I want to work with Jim, John, Susan, Mary, whatever, right? And you don't want to have to sell because a lot of entrepreneurs, we don't like to proselytize. We want people to see the value of our company. Yeah, we want people to want to work with us, want to invest in us. We don't like to beg for money. Right? We make one ask and then ask for money.

So, right.

So if you want somebody to say, hey, I love you, I love your product, I love your company, how do I invest? How do I become involved? Will you let me? Inception. In their mind, they come up with the idea that they—

That's what you mean by inception.

That's what inception is.

Putting it in their mind like the movie Inception.

Exactly.

Yeah, right.

So, so you're going, hey, it's a good meeting. Seems like our circles overlap, right? What do you think we should be doing next. And they go, I want to work with you. That you've incepted, right?

I got it. Okay. So that's the planning, the planting of your idea in their brain that happens at that point.

Okay. In order to do that, you have to organize the information in this way. Why should I care? What's in it for me? And why you?

Okay.

Those are the cocaine receptors. Those are the receptors in the investors, in the buyer's mind that makes their mind go, ah, I I gotta do this deal. Why should I care? Right? And the— and why should I care, as you read in the book, is what's changing. The only reason people care about anything is something's changing. Yeah, that's what the human mind cares about— change. When things are the same, as—

It's boring, right?

Well, it's boring, and there already are accounting software systems and databases and storage systems and computer screens and Kiwi. Like, there's, there's one of everything already.

Right. Yeah.

We don't need another one. Why does the world need another you? We don't. Why does the world need another podcast? We don't. Why does the world need podcasts? We don't. Unless things are changing. It's not how people are consuming media anymore. Now media is on the fly. You can stream, you know, you can stream in radio, you know, is a dying medium. Things have changed.

So that's how you trick the crocodile brain, right? The gatekeeper to—

Gatekeeper to the brain.

Right? Yeah, you trick it by saying you don't know this because things have changed. Why should I immediately put question into their head? Right?

Things have changed.

And that's the why should I care?

Yeah.

Right. Okay. Okay.

You want to write a pitch deck? Put these 2 words on the first page. Everything's changed.

Yeah.

There's your first page of your pitch deck. Yeah. What's in it for me?

Right?

I used to have all these complicated things we do with the pitch deck. The buyer's waiting for you to fill this receptor. It's got to be filled in order for him to be incepted, to have desire to work with you. And so what's in it for me? A small improvement? Make a little bit of money? Take on a bunch of risk? You know, work with you, somebody I just met? No, that's not in it for me. Help you achieve achieve your goals. None of that is in it for me, right? So, there has to be a big win contextualized for the buyer and it has to be, you know, it's nuanced. It has to be realistic. You can't just say, hey, you're gonna make a billion dollars with my dating site for grandmas. It has to be what I'm gonna get should be a better than average deal.

Got it. Yeah.

Okay.

That's very helpful. Yeah. That's very helpful.

And then, the third plugin, the low friction thing that makes investors want to work with you Is why you? Because most of the time, investors or buyers are left with the idea that you're going to get a commission, you're going to get a chance of making a lot of money, you're going to ride on their money, on their purchase. Once the purchase is made, once the investment is made, you are not going to be available. Pop Smoke, I can talk to customer service, you know, or legal. And you are being sweet and succulent and amazing, like, you know, like my 6-year-old, you're, you're Really putting on the persuasion. Once the money is in, you're gonna be gone.

So why you?

And there's only one answer: skin in the game. So until I understand how things are changing, the big reward I'm gonna get, and what skin you have in the game, I don't have desire to invest or buy. So if you want to create inception. You got to take care of those elements, and that is what makes people want to do business with you.

So if you're looking— if you're an entrepreneur and you are looking into this concept, so that there are, there are these different points, right? These critical points for an entrepreneur. The first one is that first round. The second one and the third one and the fourth one are the 3 follow-ons typically, right, that happen after the first round, and then the exit of the business. If you are trying, you're doing the first round, I look at these things all the time and they come to me and so, there's these trends. You probably see the same thing lately. It's been, you know, because of COVID it's been, you know, at-home Medicare, medical services, at-home education, everything is, you know, these platforms that allow you to do things from home and interact with the outside.

Sure.

When I see these things, so I've seen probably, I don't know, 6 of these at-home education platforms this month so far and when I see these things and I immediately, I look at the pitch deck and I see it and I figure it out in As soon as I figure it out, as soon as I go, oh, this is another one of those, they've already lost me. How do they prevent that from happening but at the same time explain what their business is? Well, you know, in a deck, you know, because you, you ask for that executive summary ahead of time or whatever.

For me, the way to deal with a Greg is the following: we have solved a really hard problem. Everybody else who's tried to crack This code, doing it this way, provide this— a course that teaches violin at home. Oh, they've done all the right things. So what I'm doing there is I'm admitting that you've seen other ones, that there are other ones. This is a world that exists.

Okay.

Right? You can probably open one of those courses. They plunk, plunk, plunk. They show a video. You do a little piano, do a little violin. They do teach you the basics.

Yeah.

Of music, right? But all of those guys have not solved the number one problem. Music does not come through at the same pitch through Zoom. They have algorithms that remove the highs and the lows, and artificial intelligence and machine learning and Watson— I don't care what kind of math you throw against this thing, Zoom goes, we're We chop the highs, we chop the lows, and ultimately you cannot ever teach a child music in such a way that he can become a musician. So you're gonna have row, row, row your boat ashore, 40 million people who know how to sing that and nothing more. A rock musician, a pianist, or an orchestral conductor— never gonna see one of those kids ever again during COVID Without us. We have solved the impossible.

Okay, I see it. So it's, it's not just— it's like differentiation in addition to things have changed. Things have changed which has caused the opportunity for differentiation which this business fits into, kind of.

There's an obstacle that has stopped everybody, no matter how much money they've spent, no matter how smart they've been, no matter what they've done. You know why? They didn't try hard enough. They gave up. They gave up when it got hard. That's why nobody can get the value and the promise. There's, there's 1,000 websites out there that— Greg, I know what you're thinking. You're typing in violin music at home. There's 1,000 websites that do this, but are there really?

Yeah.

There will never be a child that takes one of those 1,000 courses that goes on to Juilliard. Never.

So, so that's the inception then, right? Is getting them to understand that not only things have changed, but this is different and this is why. And you plant that in their head, right?

So, plant it in their head. You can't say we're different. When you say we're different, you're not.

Yeah, exactly.

Because you know why? Those fuckers over there say they're different. Yeah, those fuckers over there say they're different and my head is exploding.

Yeah. Absolutely.

I can't figure out any of you fuckers.

That's exactly how I feel, actually. You just—

you were intrigued.

Yeah, absolutely.

Yeah, by my problem, right? So, so you— it's got to be intriguing. Everybody else, no matter how smart they are, no matter how much money they spend, they have not been able to conquer this hill. Why? Smartest people in the world who have the most amount of money in multiple different efforts, publicized, have not been able to get where we are today.

Why? Right.

That's what I'm gonna show you.

Okay, I see, I see. And then that leaves that question mark and they're like, tell me more. Tell me what's next. What's next? Like one of those shows where you watch every episode and they just leave you hanging and you're just waiting for the next episode because you're hoping to get the answer that they left.

So, in Flip the Script, I described that formula that those episodes use to create that cliffhanger, makes you, right? So, so they— Inception, they do it to you every single day on Netflix, right? You're watching Ozark season 2, episode 3, right? It's, it's 9 o'clock. You've swore to your wife, to your children, to your dead grandfather, I'm gonna go to bed at 9:03 so I can wake up early and run. Ozark season 3, episode 4! I gotta fucking watch it right now!

Yeah, yeah. They put that in your head. Yeah, that's how I am with Doctor Who. Every single Doctor Who, I'm like, what the fuck? I gotta wait a week for this shit, you know? And then, as soon as it comes out, you get an alert and you watch it that night. So, yeah, I totally understand what you mean. I'm that way with documentaries too. When I— something on physics or whatever, I'm like waiting for the next season to come out so I could learn everything.

So, that doesn't happen by accident. Money does not flow to deals by It is because these formulas are put into place in a specific order. Maybe I can leave with this. If we— so we talked about a lot investors in companies, they want certain information in a certain order with the right amount of detail. Yeah, they want information in the right order.

Yep.

With the right amount of detail in the right amount of time for that meeting. That's why when somebody goes, yeah, you know, I'd be interested to hear about your deal, you know, let's do a quick call. Right, and you can tell me about it. They didn't say, let's get on an hour and 10-minute call and you could tell me about the history of the universe and your company. They said, yeah, yeah, I'd be happy to talk to you and hear about it. They want the 6 things that matter in about 8 to 12 minutes, in the right order, in the right amount of detail, in the right amount of time. I call that the unlock code. I didn't use it in Pitch Anything. I didn't use it in Flip the Script, saving it for this podcast.

Or your next book.

Yeah, the unlock code.

Yeah, yeah. I like the name Inception. That would be— yeah, the book Inception.

Yeah.

Oh man. I mean, I buy everything that you do in a second. I get your emails. I listen to your podcast. I'm a huge fan. So yeah, you know, I wanted to just— I want to just let it— I mean, I could just spend so much time with you, but I think we're just about out of time. But—

Well, let's, let's, let's keep it rolling. You come on my podcast next. Uh, and then here's what'll happen. All right, I'm gonna call you up and say, Greg, you owe me one. Come on my podcast.

All right.

Come on your podcast, right? And then you're on. And then a week later you call me up and you go, Oren, listen, you fucker, you owe me one. I was on your podcast. And okay, Greg, I go on your podcast, right? And then I call you up and go, you owe me one, you owe me one, you owe me one. Now there's 413 podcasts later, the Greg and Oren Show. Nobody knows what it's about. It's just paying a debt. You know, there was a, there's a great commercial They're 2 old guys, Greg and Orin, you know, 92 years old, sitting on a bench, right? And, uh, and the one goes, remember when we were in the war? And then the other guy goes, yeah. And the guy goes, and the war ended. Oh, it was great. Yeah. And the 2 French nurses came by. Ah, they were beautiful. Yeah, they were. And they invited us to Paris. Oh yeah, that was amazing. And then the one old guy goes, We should have gone. So let's not miss the opportunities that are presented.

No, we won't. We won't. I am just so happy that you agreed to be on the show. I just love everything you do. I can't talk about you enough. And it's a real honor and I can't wait to have you. Hopefully you'll agree to come back again. And I really, really appreciate it. Pitch Anything book and then Flip the Script, both are amazing. I think they're all, they're in everything. Right? Amazon, everything.

You can't, yeah. I mean, right, you can't swing a dead cat without hitting—

Without hitting you, really.

And for those hardcore entrepreneurs, you know, the reason we can have fun like this, because we know the finance, we know the pitch, right? We can yell and swear and, and, you know, tell stories because the finance is learnable. It's very straightforward. I was a financial analyst for 15 years. grinding away on spreadsheets, grinding away on pitch decks. I've spent a million hours doing it. That stuff is easy. So, happy to do a show that is pure finance, financial spreadsheets. I don't know how happy, but any problem that your listeners have, let's get on, we'll solve it.

Awesome. Thank you so much. Like, it's amazing. I, again, just so people know, I went into Oren's office and I sat down and 8 hours Years later, I learned enough to grow my sales by 40% and exit and win 4 private equity awards. The dude is legit. I mean, this guy knows his shit. And I mean, really, it's an honor to have you. Thank you so much. I really appreciate it.

Thank you, Greg. I really appreciate it. Thanks for checking out the BOSS Podcast with Gregory Shepard. Get more on Greg's business operating support system, BOSS, at gregoryshepard.com. This has been a production of Forbes Books Radio.