Episode 26 | Part Two: OPN

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 checking out the conclusion of my conversation with Jeffrey Potvin, the founder and CEO of Open People Network. OPN is a group of entrepreneurs and business pros who help startups with business fundamentals, technical and tactical outcomes that help build future leaders. Jeffrey, we've seen an incredible growth in the diversity of startups like space, AI, fintech, robotics, etc. Are you involved in any of these verticals specifically?

Well, currently right now on our fund side, we're very open-ended to all verticals in all areas of business because we are trying to offer value. But in the last iteration of our program and change, and the last closing of our second fund, our focus really shifted to deep tech, fintech, and CPG, which is my background. So it kind of makes a lot more value for us to be able to focus in on what we're good at and what we can be quick at in order to make investments. But I think in the sector in general, when you're looking at what areas are kind of really keen, I think that investors are going to start to go into, you're seeing a huge change right now in impact investing, of course, So anything that's going to reduce carbon and reduce emissions, packaging, all these types of things are really shifting a lot. And I think they should. So I think a lot of investors are really leaning towards investing in companies that are taking this approach. It might not be 100% of a full impact and a full change today, but they're going to get to that stage in the next 3 to 5 years. And then other hot areas, I think robotics in the next 3 to 5 years is going to be huge. And that's across all sectors. I really feel that it's only touching the surface right now. Like, you do see in the US where over the last 10 years they've lost a million jobs in manufacturing to robots, but they've also increased jobs in other sectors to pick up the slack for having the robots. So I don't think there's a loss of real skill set, but what you're going to see is a lot more of that change and a lot more people diving into and learning more on the coding side and other things to start supporting these areas. I think fintech is another one that is really taking off in the last couple of years. There's massive amount of groups around the world that are building up around fintechs, and rightfully so. I think that the decentralizing of business in banking is huge, and I see that there's a lot more to go. So, you're going to see a lot more changes in that space as well. And I don't know if that means the banks are going to come up and start buying everybody, But I do see that there is a lot of change happening from, you know, of course, from your Robinhoods all the way down to Clearbanks or Clearco now, and these types of companies that are being able to fund businesses faster, but also being able to transact quicker.

Let's change gears a little bit. And let me ask you this question. A lot of these startups, I always think about the horse and the jockey, you know, horse being the business, jockey being the entrepreneur, and the jockey never having ridden a horse before. They can have the fastest horse and still fall off. And so my question to you is, because a lot of these startups have leaders that have never led before and they're first-time leaders, what advice would you give to them when they're walking into a leadership position for the first time?

I love the question. And the reason being is that you're really focused on the founder and the CEO. And like us, when we do, we really do focus on that person because we feel that that is the real meat and potatoes of how any business is going to build and be structured. And one of the things that we like to share, or at least guide our founders on, is that when they first start off in a business, that because they are green, they don't have that type of experience, they're not going to build their company and have a few million dollars running through the business in the first 12 months. Hopefully they do, but it's not as common. So they're going to be in build mode, they're going to be building up that business. So one of the things we recommend they do is they go out, they find somebody that has, you know, 10, 20, 30 years experience in the area or in the vertical that they are going to be infiltrating in with their business. And the reason being is that they need to get that senior-level executive experience. And that information is going to come by socializing and working with those types of individuals. So, we always recommend to go and find a mentor or a coach, somebody that does have that real in-depth knowledge. You know, I think a lot of founders may think that they know more Or there's no way somebody is going to understand what I'm trying to do in this space. And it's not so much about always having somebody that understands you 100%. But what it is, is it's having somebody that understands the vertical and the space you're in so that when you are out talking, they can help you better navigate. They can make introductions, but they can also coach you along the way so that you can learn about the environment that you're going to be going into. And I think that makes a big difference from a learning experience. You kind of get that on-ground, you know, crawl, walk, run. You're going to be running a lot faster if you can get in there and crawl first with a few either ex-founders or CEOs or senior-level executives that are in the area that you work in.

One of the things I— when I was doing research on you, one of the things that I read about was you talking about loosening the belt at the lower end of the funnel. What is that? And when it comes to changing the startup investing ecosystem, what do you, what do you mean by that? And what advice do you have?

Well, this kind of has 2 sides to it. And it really starts with when it is very early on, you're getting into prototyping stages, there's a lot of dollars that are needed to set this up. And one thing that I found over the years of working with early-stage companies is that A lot of this cost is obviously put on the founders to figure out how to navigate, and a lot of them will spend and waste a lot of time trying to find $10,000, $20,000, $30,000 just so that they can go in and do some prototyping or get in and access certain systems. So what I mean by loosening the belt is that there has to be possibly in the future some government intervention where the governments are able to come in validate quickly ideas and ideation stages. And maybe they do this better through the accelerators, and they start to push dollars into those accelerators that are feeding the dollars into these early-stage companies. And it's non-dilutive. It's a way of getting this entrepreneurship and business off the ground. And this is huge, huge for any country. And you're starting to see this change happening in a lot of countries right now, from Mexico, Chile, Canada. What they're doing is they're, they're trying to bring dollars in, they're bringing startups in, they're giving them funding, they're saying, hey, come build your company in our country, we'll give you $50,000 of non-dilutive funding. And they're bringing startups are going in there. So there's been the last couple of years, startups are chasing dollars in countries because countries want those entrepreneurs to start building businesses in their country. And that to me is what entrepreneurship is about. It's about figuring out How can I build something, keep as much of it in my pocket as I can, have some non-dilutive dollars that the government's going to put in, allow me to create jobs? And the more jobs you create, that builds an environment and that gets more people interested to want to build companies. And really, when you're looking at the numbers, I think it was something like 96-97% of Canadian economy is built off of startups, which are less than 3 people. So you're already looking at how do I feed that engine and help those people survive and help those people build big companies or mid-sized companies. And that all has to come by loosening the belt and allowing the governments to come in and open up and start spreading some dollars into those accelerators to get those companies off the ground. And then aside from that, providing tax breaks to investors. They're trying to ensure that the investor doesn't make any money off of this, yet they're the ones putting in this early capital in some instances, and it's really small. I think in North America, the angel investors only make up about 7 to 15% of total dollars invested into an early-stage company. So I think there's got to be a way to keep more dollars flowing in. And by giving tax incentives, which some countries do, some provinces do more than others, that's another way of opening this up to ensure that startups have the potential to succeed. because they actually are getting some dollars to help them grow. Not everybody's sitting with a silver spoon in their mouth thinking that they can build a company off of the family money. So I think there's got to be different ways to bring dollars into those companies that can help create more jobs. And at the end of the day, that's what every government wants.

I think that's great. Yeah, the UK has one of those programs. I think it's, I think it's fantastic. How do you think about performance when you're monitoring the performance of the entrepreneur and the business? in your portfolio companies as they are in the accelerator and then post-accelerator. How do you think about that and how do you understand what they're doing and make sure that they understand what they're doing?

From an entrepreneurial standpoint, it comes down to a certain point, it does come down to metrics. It comes down to the data and how that data resides and is it proving that they're solving a problem. When the company is starting to work with us, if it's month 3 or 12th month in. I think a lot of it is really trying to understand, are they solving a problem? Do they have an audience? Have they built a community? And with all of those components tied in, are they able to scale this business? Are they able to keep moving forward and generate the revenues that they're expecting? And does that bring back a value back to the business? So we're always doing check-ins. If it's not, again, every 2 weeks or monthly or every quarter, those The whole goal is that we want to make sure that we're— they're aligning to their problem that they're solving, and we're aligning to making sure that they're getting to the stage where they can get to that Series A to be able to be scaled by getting in larger dollars. And in order to get to that point, they really have to start proving and showing a lot of metrics that are going to get them to that stage. So the metrics again can vary if they're all about revenue or if they're just about users and generating the revenue later. Again, it depends on the scaling type of business it is. But we try to look at as many avenues as we can. And if we see that there's flagging problems, then we want to be able to offer that input and insight. And again, while at the same time bringing the right people in to have those conversations with them as well, so that these founders can continue growing and pivoting as they need.

I really appreciate your time and all the knowledge that you're dropping on the listeners very, very much.

Super appreciated. From everything that I've read, seen, and watched, keep up the amazing job, man. You're doing an awesome Awesome, awesome feat for helping early-stage companies and businesses in general to succeed. And all the content and data you guys are providing is just purely gold. So thank you for having me.

Thanks so much, man. I really enjoyed it. And I appreciate everything so much. I really do. And what you're doing for entrepreneurs and stuff. I mean, you know, we're— there's people out here like us that are really trying to make a positive change.

No, I appreciate that, man. Yeah, no, I'm a big fan. I used to say I was People be like, why do you try to help them so much? I'm like, I'm like their cheerleader. I just a big fan of what it takes, and we've all had to go through it. And in life, everybody needs a little bit of help. But in the startup world, back in the day, as I'm sure you're familiar with, every time you try to go in and pitch a company, they're like, oh, you're a startup. I don't have time for you. I'm too big business. And you're like, what the hell, man? Your company needs this, and you're too shallow to see this. And they'd be like, no, you're gonna fail next week. I'm like, yeah, because you won't sell me. That's why.

So true.

Yeah, but today, today things are a bit better. People are more open-minded, which is great. So, but it's come a long way. And I think it's— there's a lot of good people out there, and you just got to find them. But the startups are really what create environment for business, man. Without it, you know, the governments wouldn't be able to tax the way they do. And so it makes a— it makes a big difference on an economy. So the more that these governments and everybody else can get behind it, it's huge.

Absolutely. I couldn't agree more. His name is Jeffrey Potvin. And to find out more about the Open People Network, check out opn.ninja. And that's it for another episode of the Boss Podcast. If you enjoy the show, make sure you take a second to subscribe so you automatically get updates on new shows when they drop. Also, if you have a minute, I'd love it if you left us a review so more folks like you can discover the show. Thanks for listening, and namaste, my friends.

Learn more about the Boss Business Operating Support system at bossstartupsience.com, or you can reach Gregory Shepard at gregoryshepard.com. This has been a production of Forbes Books.