Episode 09 | Part Two: The AI Guy

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.

Welcome back to the second part of my chat with Gary Fowler, CEO and co-founder of GSD Venture Studios. He's a serial entrepreneur with dozens of startups and an IPO. I've been reading up on you, Gary, and I found this quote from the CEO of CrowdTools, and he calls you one of the best execution CEOs. What did he mean by that?

I don't even know. I've never seen that, but I appreciate it. It's like—

I found things you didn't even know.

Oh my God, it's unbelievable. Thank you very much. I'm humbled, but it's okay. So I started my first company when I was right out of graduate school. I went to graduate school for clinical psychology and I started a construction company and I figured out new ways to make construction more efficient. And I was really lucky 'cause I bought the right kind of lots, I found the right kind of partner, and I designed the houses too, up to 8,000 square feet. So what happened is I learned how to execute 'cause, you know, you can't go down through and build a house if you don't have the footer in. You know, you can't build the block wall, the foundation. You can't put in the, you know, close the walls up if you didn't put the cable in the wall or you didn't put in the, uh, the telephone, you know. So there was a lot of things electrical properly. So yeah, I learned how to stage to get stuff done, and it's a project, right? So you got to do this in order to do this. And so—

Oh my God, you know, I do this all the time. I use, uh, building a house as a comparison for people overbuilding a house or underbuilding a house or Doing it in the wrong order or halfway through a project saying, you know what, I want a double sliding glass door right here, and then having to go back through and change the engineering and all that when you're looking at product design. So I find it fascinating that you use the same example. It seems to work really well for people.

Exactly. And then, you know, there's this book, this guy John Cale wrote a book, and the book is Innovation Nation. And he talks about knowledge. as an upside-down pyramid. So that knowledge that, you know, we just talked about building a house, well, that helps you in building a company because you learn what steps you need to take in order to make it successful. So once I learned how to do project management, then you understand how to build a company, right? Because a company, okay, I need to have sales, I need to have this infrastructure set up, I need to have the right kind of lawyers, I need to have the right CPAs, I need to have all these things done. And I need to make sure the customers really want to buy the product, right? Or is it just BS or is it something real? And once I found that, it's really a 360-degree view. A lot of it's sequential and some of it's in parallel. So, you can actually, you know, go down through and look for insurances, go out and find investors. You can do many things in parallel, but the steps of building a company with a strong foundation You've racked up 16 startups in your career.

I mean, 2 unicorns. I mean, this is just epic success. If you could name 3 things that help you succeed for entrepreneurs that are out there getting started and 3 things that you think make it so that entrepreneurs fail, what would be those 3 things?

There's 3 components I believe are critically important today. You need to have intergenerational teams. So it's not just the smart young It's also having people that have experience, contacts, trust, and ideas to be able to help you out. So you need that. That's one pillar. The second pillar is I strongly believe in multicultural diversity because I wanna have different ideas. I wanna have different viewpoints. We're not always right. And I wanna make sure that we have multicultural diversity in the team. And then today, it's decentralization is really important. Having teams spread out. For instance, if I wanna build an incredible AI tool, I find developers in places like Ukraine, Russia, Eastern Europe, Belarus that have deep, deep expertise in that particular area. In that case, I use the US and Silicon Valley to be able to build the operational expertise because the US has some of the most incredible operational expertise in the world.

What do you think in terms of entrepreneurs failing? I mean, the failure rate is like 80, 90%. What would you say to the entrepreneurs out there listening about what to watch out for? Like, why are these people failing?

So there's one thing about starting a company, and I call that Startup 1.0, and that's acceleration, getting it to a point, the ideation. You've got something you think is interesting, you're taking it out to the market. That's Startup 1.0. Going to Startup 2.0, which is regional dominance. the people in my particular region, geographical region, really interested in that particular product or service? So do I test that and can I make revenue? That's the customer development part.

Okay.

And then the next level, which is another challenge, is going global. How do I take a company and take it and dominate the world market? Now, a lot of it's, as you know, Greg, is about connections and trust, right? If you're gonna raise money, it's about people that trust you. If you're going to have partnerships about people that you work with before that trust you or people that, you know, can do introductions, etc. So, that's really where the last phase of it. I think in terms of taking it from Startup 1.0 to 2.0 to 3.0, it's important you recognize that these stages exist. It's important that you build a diverse team to be able to go through each of those goals and especially in Startup 3.0, It's a great time from my standpoint of technology company. Come to Silicon Valley. Silicon Valley is a great place. It's a port to the rest of the world. And I'd say keep an open mind. I had one entrepreneur say to me, you know, I'm the CEO of my company. It's my company. I'm not going to make any changes to the company. Well, that person went out of business, right?

Every time.

Every time.

And the thing is, you gotta understand, listen, we all have different skill sets. I like to launch companies. I like to get them to a certain level, but I want to bring people that are smarter in, smarter than me in different areas to be able to run the companies, to be able to take them.

Yeah, I agree. We do that too. Subject matter expertise is extremely, and vertical subject matter expertise is extremely important to success. I 100% agree with you.

I mean, that's it. It's like, you know, this isn't rocket scientist, but The reason 90% of the entrepreneurs fail is because they don't go down through and follow the model. Keep an open mind, go down through. Revenue's critically important 'cause investors like ourselves don't wanna invest in companies that don't have some inkling that they got product-market fit and people want it. What kind of revenue do you have, right?

Yeah.

If you don't go global, it's great to be regionally dominant and maybe you're like a lifestyle company, but the key is, can you really have an impact on the entire planet in some kind of way. And that's really where GSD, that's where we come in. With GSD Venture Studios, we look at the going global part because I think it's underserved and overlooked. And that's— and it's really time to push that model forward, especially with the crisis today and digital transformation.

Yeah, I see that that is absolutely directionally correct. It's definitely moving in that direction. There's a landslide going that way. If you were to go back to a young Gary Fowler, and you were to sit there and you were to say, okay, here's the advice I would give you to a young you, what would that advice be?

I would go back. My first startup was extremely successful. The construction tech company was successful, but I was a single founder of the company and I didn't have anybody except my college professor to bounce ideas off, a friend, a mentor. So what I would've done differently is I would've brought in other founders that had different opinions. And I would have had them become part of my company, and I would have been more customer development oriented. The problem is, if you don't do customer development— direct example, I built an 8,700-square-foot house. I put dark blue carpeting in it. The house was a modular house, so I actually had it, part of it built in a factory that I designed, and 6 boxes. Set them on top of each other. Then I put some, you know, additional space in the house. The craziest thing, I put blue carpet in the house, dark blue, which I thought was royal and beautiful, and nobody liked it. The women thought it was disgusting. I had to pull all the carpet out of the house and put new carpeting in the house because I was an idiot and didn't listen to the customers. I should have done my customer development. It took me 3 years And that construction tech project to sell that house because I screwed up. And once people saw it had blue carpet, it took away the sales momentum. People just didn't want to buy it. It took me 3 years to turn it around. So I would do your customer development and do it before you invest a lot of money, because if you don't, you could go out of business.

That's a lesson I've learned many times, building a product for a customer that you don't know. You know, you've talked about Silicon Valley a lot, and, you know, I cut my teeth up there, right? So I spent the majority of my adult business career in Silicon Valley, right in the Shark Tank with all that stuff. And I know how difficult it is to get involved and get in touch with the connections and creating an ecosystem that you're inside of. And I wanted to know if you could give the young entrepreneurs listening some advice on how they get into that ecosystem?

So the way to get into the ecosystem, one is they want to listen to podcasts just like yours. They want to get that advice. They need that advice. The other thing is they want to make sure they have really good advisors. For instance, one of our advisors is the former chief security officer at Apple, Rick Orlauf. He was Apple, eBay. You know, security and privacy are going to come up with most companies today. that are in tech. Make sure you have somebody like that. Then you want to have a domain expert that has domain expertise. So we have Don Swan, the former chief operating officer of Walmart, is involved in as an advisor to our company, regional COO of Walmart. You just stack the deck. I mean, it's like, again, it's a KISS principle. You know, security is going to come up. You want somebody that's a vertical expert and then you want somebody has recognition today. So you find somebody that's hot. In that particular vertical market today, a company that, you know, maybe you just sold, find the former CEO of that company, bring them on board. And that's one of the ways to do it to give you the credibility. Building the narrative, Greg, is critically important. You got to make your story so it makes sense. I don't pay for any PR. I do this stuff myself, right? I get out there. I want to talk to people like yourself. I love it. So get out there and and spread the message. Go to events, listen to pitching competitions, listen to what the customers have to say, listen to potential customers, listen to what the competitors are doing, and make sure that, you know, you're not the last one coming into a market and an idea. So knowledge is power. Go out and attend as many events as you can to listen.

You know, it's interesting. I've talked to you before, and when I invited you to go on the podcast, I was just like, I was just fascinated by your character. You just seem like a really cool, down-to-earth guy, extremely successful, and you seem like you care about what you're doing, about entrepreneurs and the businesses they build and how it makes the world a better place. And I want to know what drives you, what motivates you to keep going after you have, as they say, arrived.

You know, the situation is I'm not sure if you ever arrive, Greg. I mean, from my standpoint, I'm like a kid. My wife was asking me that. I'm curious. I like to find things out. It's like the journey hasn't stopped. It's just another chapter in the book. I'm curious. I want to know things. How does this work? How can that benefit humanity? Does it help for sustainability? I just, I'm curious like yourself. You know, every day I wake up and it's like, you know, my eyes are open. I'm trying to figure something out that's interesting. And happiness is the most important thing.

Yeah. Yeah. I find that too. I always like to do things that make me happy. I find myself motivated to work when I'm doing things that I enjoy doing in the first place. I wanted to ask you too, you know, if there's entrepreneurs out there that are in the AI industry, how do they get ahold of you if they have a good business that they feel like is worthy of showing you?

Absolutely. I mean, they can write me directly, gary@gsdvs.com. They can look at my LinkedIn profile, Gary Fowler. I'm out there, so there's a lot of ways to connect with me, but LinkedIn and my email are the best. I'd love to talk to them and, and share ideas and see how I might be able to help because there's incredible amount of startups out there that can do something that never get discovered. Our job is to go out and find them and turn them into unicorns.

I really, really wanted to thank you for your time. It's really— this is fantastic. You have great energy, great advice, obviously extremely successful. And from all of the entrepreneurs to you, And from me, thank you so much.

I'm humbled, Greg. Thank you so much for inviting me to your show. 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.