BoneChat #149 - "From Startup to Exit "- A Therapy Session for Founders.

So thanks a lot, Tiger. We all appreciate you giving us an opportunity to waste a perfectly good hour of your time. So, and we were supposed to be a threesome, which is always more fun, but my friend Dan Hodgman Had to bail at the last minute because his father went into the hospital last night, and he had— he took the train from Boca Raton to Orlando, and now he's at ORMC with his mom. So our prayers and thoughts are out to Dan and his family for today. But we scored because we have an all-star with Dennis McLaughlin here today. I'm going to kick it off by asking Dennis a question. That— what do you think is more important in a race, the horse or the jockey?

Oh, that is so tough. Um, after spending quite a bit of time at Saratoga, you know, I think they're both important.

Okay.

You can't win without a horse that has spirit, but if you don't have the right jockey, they're not going to win at all. That they're— they can't run to win. They need a jockey to get them there. So, I would say the jockey.

I would say the jockey too. I told many a sales force that don't fall in love with the product. I said falling in love with the product is like falling in love with the horse. Every horse will break a leg and you got to shoot it and you're there to win the race. So, the jockey is the most important part. Who knows? So,

it's funny, it's funny you say that. And by the way, I'm sorry that you guys all lost Dan Hodgman. He's much more entertaining and much more insightful than I am. So, I won't be offended if any of you drop off during this call because, you know, it's only me. But I will tell you, like, all in my entire career, everybody would talk to me about products that I sell or something like this. I can honestly tell you, I have the same answer every time. And it's, I learned this very early on. I don't sell a product. I've never sold a product. I have something that I believe in or I don't believe in it. And it, and it, because it can, you know, it can, it can change, it can, you know, morph into other things. So I've never really sold a product. I've sold a concept or a solution. Never, never a product. That's just features and benefits. So it's funny you just brought that up, Mark.

No, I've always said the same thing. I don't know what a salesman is. I know what a storyteller is. And I know how to interrupt people for a living. So if you can tell stories and interrupt people, then you can certainly make a living in this business. So the title of today is A Few Good Stories, Startups to Exit. Dennis, I'm going to let you kick it off by asking, A, how you got in this business, and B, tell me about your first startup.

Okay. So, I'm probably a maverick of anyone here. I had no intention of getting into business at all. It was something I had to do to survive. My very first company, I was in high school, and we started a painting company, and we ended up getting like— I could not even tell you how many people that owned properties, like 20, 30 properties. Okay? So we didn't deal with like individual houses, or we did some of that in some office buildings, but we ended up getting like 5 major real estate developers. And at I wasn't even old enough to drive. I was probably like 14 or 15. We started a company and we painted all year round and we were good. And my first exit was as I was going into college. You know, I felt like, you know, I had accomplished what I wanted to do, which was earn money to go to school. And I just wanted to have my own money. And then we sold that company. And I'll tell you, I thought that was the most amount of money in the world. The fact that we actually had a company that somebody wanted to buy that was an adult was like the most amazing thing. And so that, that really set me up. And then I went to school and I got to be honest, I did not do the greatest job in school. I didn't go to school to learn. I went to school to play sports and have fun. But I got hurt very early on and then I really had to buckle down and find what I really wanted to do. And that eventually was, I realized that sports translates into business very well, you know, the competitiveness, the camaraderie, the practice. So, it was like a kind of a natural thing for me to like gravitate towards business. I never ever thought that I would do that. I always thought I'd end up in coaching or something. And then how I ended up getting in the business is I went to like, of course, I did the one thing that everybody did back in the '80s. I sold copiers for a year, won a couple trips, which was very hard. I mean, I think the biggest thing out of that that I would tell anybody is, you guys all know this, I think there was 232 people hired by that company and only 8 of us survived. And I'll tell you the one thing, the only reason I left was I was selling so much that I went back in to renegotiate my deal. And one of my best friends was working for our competitor. And I said, I'm going to go back in and renegotiate my deal. I want a piece of all the service and supplies. I'm selling the biggest machines. I should be, you know, killing all that and they're getting it all. And I want a part of the service contract. So, he's like, that's a great idea. So, at the same time, we went and did that. And then his company actually gave it to him. Okay? Wow. And all these years later, he's still in copier sales because he's made so much money off of all those contracts and the supplies. My company wouldn't give me a big enough cut, so I left. And then, to be honest, I had no real intention of getting into the healthcare business, but my father was on me about it 24/7. And I just knew so many great people in the business. My brother went into medical device, and then I ended up going into the pharma and biotech space. And that's how I got into the business. I interviewed and out of like, back then, you know, it was competitive. I don't know why they hired me, but I got the job and then I was told that you guys will love this. I'm in the training class. There's like 200 people in this training class. And the guy who's running the sales training class, I'll never forget his name. I send him a card every year. I mentioned his name from stage every year. In front of over 200 people, he said in front of everybody, "I would never make it in this business." He's like, "I can tell you there's one person in this group will never make it, and it's Dennis McLaughlin." And boy, that pissed me off. That's a true story. And then I won like I was like the top rep and then the top manager for like the next eight years. And every year I would thank Steve Shaw for providing the motivation to come out and have a great year every year. So is this boring you guys?

Motivation. Motivation. That's a key, key word. Um, how many other people on this call today, um, have ever been kind of done wrong, uh, by the company they work for, uh, their, you know, their, their, their regional manager, their VP of sales, their president, and then went on from there, used that disappointment and anger to fuel them into extreme motivation like you did? Because I know I did, and it wasn't where I was going to go next. But, uh, in 19— in the early '90s, I had sold a— I had sold a recruiting business, Tiger, in Birmingham, Alabama. I sold the franchise for healthcare recruiters because frankly, I'm a crappy recruiter. And I, I enjoyed the human part of it, but not the, the business part. And plus it was a crappy— buying a franchise is a dumb idea because you're not, you're not independent. So I moved to Atlanta, I joined Biomed EBI, and the only question I asked in the interview was, how much does your number one rep make? And the guy said, $140 grand. I knew I needed to make at least $120, to pay back what I just lost in the recruiting business, plus the IRS. So I said, I'll take the job if you offer it. I went on to become number one salesman. And there's like 60 reps in this company. And I submit a plan to start it kind of a— no, I wouldn't call it a franchise, but turn it into a distributor business. And they turned me down. They turned you down? I found out— okay, I found out within about a week that my regional manager never passed my plan to the president or the VP of sales. He lied to me, and it's basically to keep me where I was because he was making so much money off of me. I called our number one competitor, Orthologic, in Phoenix, and I said, if you're looking for a sales manager, I'm the number one rep. at EBI, and I will eat their lunch. And I did. Well, we, we went from $2.5 million, uh, to $28 million in 3 years. Our stock went from like $6 to $52, and every bit of it came out of EBI's ass. So it was— but, you know, to your point, I was highly, highly motivated. So, uh, so anyway, those are startup— those, those are startups. I have— I— if Danny were here, A key part of any startup is fundraising, raising money. God, it's hard. It sucks. It's demeaning. You gotta— you better be a person that accepts a no pretty fast. But one of our best stories when we were starting eTrauma, we had put all our money in this. Okay. The first year, Smith— we sold Smith& Nephew 2.5% for $1 million. And we thought, oh, we're, we're on our way. This is— we're, we're— we got it made. We made the deal with Smith& Nephew Marketing, not understanding that with a UK company, the marketing people are the smart guys and the sales guys hate them. Okay. Because, because they act like the smart guys. So we took our deal over to the sales team and they said, we're not doing it. So we sat there quarter after quarter bleeding cash while the Smith& Nephew sales team did nothing. Within 3 months, I was banned from Memphis because I was such a jerk. I was just trying to get them to sell something. Okay, so we made it through that. We go to New York, we negotiate our 2.5% back, and we're trying to raise money. One of the leads we got, was a guy named Peter Crisp, who was one of the original Apple investors.

Yeah.

Super, super wealthy guy. And he— we were, we were introduced to him by Dr. David Halfitt, who was the chief of ortho, I think, at HSS at the time. And we go to see Peter, and Danny and I, we're sitting there in New York, we think we're cool. We go in, 15 minutes into our little talk, Peter says, You guys are done. You'll be out of business 3 months. You got no plan, no hopes. This is the worst idea I've ever heard. Thanks for coming by. Get out of here. And then we go, what? So Danny said, well, listen, okay, you're not going to invest. That's cool. Uh, while we're here, at least maybe give us some tips. He says, He said, I'm not gonna waste my time. So next thing we know, we're out on Broadway or whatever, 4th Avenue or whatever it was. We're looking at each other like, what the hell just happened? And so next thing we know, we're in an Irish pub. And of course we go on to— we do successfully raise some money and we, and we go on from there. That was highly motivating in and of itself. So, Dennis, I got to ask you, in a startup, what's the thing that most excited you and what's the thing that most frightened you?

Well, the thing that most excited me. So, my first startup was a company outside of the one we talked about.

Okay.

You know, I was a pretty high-level executive, right? And I was disgusted. I was ready to work for myself. I did not want my— I did not want to be the next vice president of pencil sharpening at some company. That was not what I was interested in. And so I decided to look at the industry and see where the trends were. And at the time, this was back in the early, late '90s, early 2000s. I was in my 30s. I started An outsourcing and consulting company for pharmaceutical and device. And we had very specific niches. Okay? We had niches that nobody else really had or understood at the time. And the reason I knew I could do this was because people from every other company were calling me and how I did it. And other people were saying, hey, would you come here? Would you do this? And I would start saying, well, if I had my own company, would you bring us on to do this for you? And they were like, absolutely. So, I knew there was a business, all right? And that excited me. And the concept of really stepping out on my own and seeing what I was really worth was both scary and exhilarating at the same time. So, I was all in. I figured, why not take a shot? What's my worst-case scenario? I got to go back and get a job. So, I really wasn't afraid of that much. But at the time, I had 4 young kids and everybody was sitting there telling me, what are you doing? You're way up here. You're just going to walk and start a company? You got 4 young kids. You got this going on. And so, if anything, I probably had fear for what it would do to my family. Okay? You know, I was already working long hours. One of the other things that had happened was, I don't know, you all probably don't know this, but I was involved. I was the person who sold one of the biggest deals in injectable history. The first order was $90 million. And so, my commission, and that would have been like a quarterly amount. So, my commission plan on that, they would have had to pay me like $10 million, which we all know they were not going to do. So, I ended up Being out of 60,000 people, I was the number one employee in the company. I got exceptional shares. I got all these things. And I knew at that time that if I could— and I didn't really have any help to do it. I think that's always something that you got to be careful about. Is it the company that you're working with that makes you that good or are you that good? You're going to find out. That's a scary thing. But I knew that I had done all that pretty much on my own. And I knew that if I had product, I could do it again. So, I literally walked out the door and went and did it.

You know, Dennis, my graduate work at USC was in behavioral analysis, assessment, behavioral science, and something I've never used, but I'm a certified activity vector analyst, which means, you know, you analyze personalities. One of the most curious things to me about entrepreneurs, people that start companies and people that sell companies and do it over and over again, are the common traits they share as a person, as a personality. I mean, I think one of those is a certain tolerance for risk, a high degree of resilience. desire for independence and freedom. And then, but there are some things they're not good at. I mean, what are your thoughts on that? When you meet a fellow entrepreneur, how do you size them up whether you think they're going to be successful or not?

Well, I don't think it's really up to me to determine if someone's going to be successful or not.

Yeah.

Because there's so many different ways to do it, right? But I look at, you know, this is one of the things I love about—

But if you're going to invest in them, what would you look for?

Oh, okay. That's a different story. So I look at this BoneChat group. Everybody here is more qualified to be up here talking than I am. I would tell you the one thing that, you know, Mark brought up earlier, I don't know if everybody was on, is, you know, you have to be good at fundraising. I don't actually agree with that. Okay. In the terms of you have to have a good capital plan. Okay. If that includes fundraising, then absolutely you should be good at it. When I first started my first company, I had some people come to me for capital and I decided to bootstrap it and we were cash flowing very quickly. Okay. And there was a number of different ways that I did that. So I'm looking at a new company right now that I'm going to try and do the same thing with. Okay. And what we did was we went and got some early contracts that I, that were really good. And then I was able to get a lot of financing through that that I didn't have to take from any, I didn't, lose any equity from it. Okay. So the one thing that I look for if I'm investing is do the people that are going to run this— I'm not, you know, I'm not going to— obviously, you're all— we're all probably pretty good at evaluating a product or a service and understanding if it's going to work or not. Can they implement it? I only want to know if they can, you know, can they get it through whatever processes they have to get it through? How long is that going to take? And do they actually have the commercial capability to get it to market and actually pull it through? That's all I care about. I mean, because that's where I think the big stumble is. So I don't know if I really answered the question, but it's commercial.

Yeah, you're— actually, I've heard you kind of talk a little bit about this before. You have a very analytical approach to it. You're very organized in your thought patterns there. Later on, when we kind of open this up for questions, one of the things that I always want to know is, um, when you look at your journey, when you look at what you do, what is your why? Why do you do what you do? Did you really choose what you do, or did that, you know, did it choose you? But the main question is, what is your why? Um, I can tell you this, that What appeals to me about being an entrepreneur and working for myself is I do have a high tolerance for risk. I think part of that tolerance came from the fact that, uh, when I was walking through the San Francisco airport at the age of 21 years old after finishing up a year in Vietnam, I just remember thinking that I would be grateful every morning for the rest of my life, no matter how many days I had. And I made myself another promise too, and that was I would never be cynical. I really look for good people that are not pessimistic and sour, and that are optimistic. They really do look for a brighter day. When I— my first day I worked with Dan Hodgman, who's not on the call, I've always kept journals, and I've got one in my pocket right now. I wrote in my journal that day At the end of it, I'm working with a young man today that will be CEO of his own company one day. I think that having owned a couple of recruiting businesses, probably more from an academic study perspective than really trying to be a good recruiter, one of the things that I learned from interviewing hundreds of people, looking at hundreds of resumes, is that top performers always distinguish themselves at an early age. They find a way to start a painting company in high school. They find a way to talk their way onto the Junior Olympic team for rowing or something, or they find their way to get out of Jamaica by being on the bobsled team. It's amazing how, if you dig into their backgrounds, they early on want to be special. for whatever it is that drives them. And I love that about that. So some of those people are really good at listening. I find a lot of entrepreneurs, when I ask them who their top mentors were or their best teachers, it's not uncommon for me to hear that they're just not good listeners. They wish they were. And so sometimes eventually they wish they do become that. But did you have good mentors? In your journey? You think that's important, or do you just have to learn it the hard way?

Uh, I, I've— look, if you can get great mentors, it's so much easier.

Yeah,

right. I did have some great mentors, and for some reason, while one, some— when one person who's like the guy who runs training doesn't see anything in you, I would literally— it, it was like every time I went somewhere, like the CEO or the The president of the organization would literally, within a little, within a short period of time, be like, I want to mentor you. I want to help you. I want to get you involved. I want you to take on more responsibility. So, I've had many of those and I've learned so much from each one of them. They all had different styles. But the one thing I learned from all of them, the good ones, when things were not going well, that's when they thought their clearest. That's when they were like really in the game. They're always in the game, but if something wasn't going well, you know, you're down in the count or whatever, they were the type of people that could really turn that situation into something.

So that's one of the qualities I think I have observed in successful entrepreneurs is a sense of calmness. Uh, especially when, uh, you know, when it hits the fan, so to speak. And I tell you, nowhere did I observe that more than, um, frankly, in the military. Yeah. There are certain people, there are certain people when, uh, things go bad that I swear I think time slows down for them, whereas some of us Time speeds up, our vision narrows, we start to panic, we start to sweat. You get that bad feeling that you don't want, and you can't hear, you can't see. But for other people, they not only does time slow down, they see more, they hear more. And I don't know whether that's a gift or you can learn it, but I've seen that. Let me circle back just real quick. What, what is your why? What drives you?

Oh, mine, I'm not, believe it or not, I'm not actually really that money motivated. I

believe it.

I love people. I love working with these doctors. I love working with entrepreneurs. I love working with salespeople. I enjoy it. It gives, like, I get energy from other people and there's nothing better than helping somebody. I just had a situation where We're going to go away. They're going to pay for me to go away. And I had just somebody pay for me to go to Nashville. I helped them turn their company around and they just recently sold it. And I can remember sitting there going, okay, there's only 3 things we need to do to turn this company around. And it's this, this, and this. And I could just see the doubt and the concern in their eyes. And then when they sold and now they're building all their new big houses and it's very rewarding. But it's also rewarding to help patients. I mean, help people. I mean, you know, I've coached for 30 years. Like, I love it. And then I'm very competitive. I love when— I love a situation where somebody says that can't be done or that's going to be really hard. Like, those are probably my 2 primary motivators.

You mean a challenge?

Oh, I love it.

A challenge and a desire to help people. Those 2 things. Okay, that's cool. Yeah, for me, um, I think, you know, one of my biggest whys, quite frankly, is I'm a pretty shallow, superficial guy, and I only like to do what I want to do. And as an entrepreneur, I get to do what I want to do. So I think that's, that's important to me, that freedom. I think it's why I got out of the Army. I didn't like somebody telling me what to do every day sometimes. When should an entrepreneur begin to plan the exit or is that something that they can plan?

I mean, I think you should always have an idea of what you want to do. You got to start off with the end in mind.

Okay.

That doesn't mean it can't change a year or 2 in the business, but you're constantly thinking about it, right? Because there's a lot of things if you build an organization With the end in mind, your chances of getting there are a lot better. I'll give you an example. You work with all different types of people and you help them, or I've done it myself personally. But when I sold my first company, I really wanted to have as much value in it as I could. It's like I literally could sell it to the guys that were working for me or to another person. And they would be like, oh my God, this was amazing. And the data that you have is huge. That's a huge value. If you do it right, it adds a significant amount of value. If the organization is really good at what they're doing and the buyer would want that as well, that's a huge amount. And then, you know, your true goodwill of what you're doing, like those 3 things, of course, there's the product. I'm not, But if you know what you want to do, you got to build out all those pieces and it's got to be well done. And I'll say, I mean, look, I'm on the phone here with so many successful people, it's ridiculous. I mean, I'm almost embarrassed to be talking right now. But the one thing that I learned from every CEO that I worked with, and they did it different ways, but I was able to like write it. I actually was almost going to write a book about it. They can compartmentalize these things, right? They can think about them independently and see it, but then bring it all back together, right? Whether you're a young entrepreneur or whatever. And in a difficult situation, one of my mentors taught me this very simple thing, and I've used it my entire career and it works every time. He goes, when you're running a business, he goes, break it down into 2 areas. And one is delivery. That is the delivery of the product, getting it to the customer, how it's being delivered to the customer, all the things, everything from manufacturing to inventory to getting it to the customer, how they're going to implant it in the surgery or whatever type of product it might be all the way through. That's all delivery, you know, the service support, everything you need. He goes, just think of everything in that channel as delivery. And then there's development. And that is new products, pipeline, your new business. Okay? They looked at new business as a development pipeline. Okay? So everything on that side is development. It is very difficult to be the one person to do both sides. And I find that that is the biggest challenge that any entrepreneur raising money is development, right? So, all those things are on the development side. And so, if you're the one part, like I did it by myself, right? When I started my company, let me tell you, it was really hard. I mean, you're dropping everything to fix this thing and then this thing's breaking, right? When you get to the point when you can really manage this and start delegating it out a little bit, that was the— The greatest piece of advice I ever got, and it's worked every time.

Say that again simply. The greatest piece of advice, it boils down to one sentence.

Uh, dividing, uh, delivery and development into 2 separate areas was the greatest piece of advice I've ever gotten, and it's worked every time.

Okay, thanks.

Every time.

Yeah. I had a meeting yesterday with a German woman named Kate Junger who lives in San Francisco, who in 2024 sold the first digital healthcare platform in Europe for double-digit millions and millions. She's now in the process of building a sort of a platform of healthcare SaaS companies, and that's why she was interested in my Venox company. Um, but one— she said one thing that I, that I remembered very well because I asked her, I said, what was the hardest part about building TeleClinic? That was the name of it. What was the hardest part about building TeleClinic? She said, literally made every sale myself, literally onboarded every customer myself. That's, you know, that's so true. I've done it. Entrepreneurs have got to be chief cook and bottle washer so often. And I guess that takes a certain amount of resilience. What— another question I wrote down earlier was, what was the biggest surprise after your first exit? Or were you surprised at how you felt or what you wanted to do? Or was it worth it?

Oh, yeah, it was worth it. I mean, it was worth it just to even build a company that somebody would want to buy. I mean, I think that's amazing for anybody. You know, let's forget about how the amount, right? Yeah. But just the fact that you built something that somebody else would want to buy, right? I think is great. And it proved to me that I could do it, right? You know, it proved that, you know, I'm involved in multiple companies now, whether as an advisor or running it. And, you know, once you do that, you know you can do it again. It's duplicatable. I mean, that's the biggest, you know, confidence booster of the whole thing. But I was excited to do it again. I was not ready to stop.

At what point do you stop feeling like you have imposter syndrome?

Probably never. I mean, look, I'm pretty aware.

It's pretty common, isn't it?

I'm pretty aware of my limitations. And like I said, people on this call, like Andrea, Cullen, Raymond, they're all more qualified than I am to be up here. But I think it's just really the imposter syndrome is you got to fake it till you make it. And then, You keep on trying to make it.

Well, I mean, we talked about some of the qualities that people have to have, like risk and independence, initiative, curiosity, resilience. Those things are all important. And Tiger, I do want to take the opportunity to let people raise their hand and kind of jump into this conversation a little bit. It's been awesome with Dennis to Kind of lay it all out there. But, you know, you have to do that, don't you, Dennis? You gotta, you know, especially if it's a problem. If you don't lay it out in the open, it'll never heal. I mean, nothing grows in the dark, you know. It was— I belong to this writers group that meets regularly, mostly all veterans. And the theme in our last meeting was Just reach out, which basically means I just ask for help. And too many people, and I think especially it's an entrepreneurial trait too, don't ask for help enough.

I think they're probably so immersed in just trying to keep things going. It's not that they don't want the help. Number one, they're in the battle, right? It's very difficult to pull yourself out of the battle and say, hey, Hey, you know, here's where I need help. It's a tough thing to do. But I also think some of them, one of the things that I also learned, which is I put on the delivery side, is that, and we all have these, right? We all have our networks, right? But nobody has the perfect network. Nobody has that. I could not tell you how many times, you know, let's say I was on the phone with Raymond or Steven or Tiger, I cannot tell you how many times they introduced me to the person that was the final piece, right? And so your networks, your physician networks, your industry networks, your out-of-industry networks, your finance and venture networks, your engineers, your developers, you know, that's all on the development side. And you really, like, it's a constant workflow. I mean, you constantly have to be on this, making sure that they're strong, making sure you're keeping up on what's going on. So, the one thing I was going to just say that when you talked about that she was out there onboarding every client and everything like that, I think that is great when you're really building the business. But if you can't get to the point where you can pull yourself out of that and develop the people underneath you to do it, you can never scale it. Right.

True. That's why you need 2 different types of people, I think, to really build a company.

Yeah, that's what I mean by building it with the end in mind. You know, you could have a 3-year end and then see where you are and then a 5-year or whatever. It doesn't have to be like you have to get all the way there because that could be a big elephant to chew. But to just be like your plan is that you're the guy and you're so amazing. I'm not that amazing. So, I always try to get great people around me as quickly as I could.

I think it's smart. I mean, I think to win the war, you need a Patton and you need an Eisenhower, and they're 2 different types. Absolutely. So the 3 rules of leadership that I used to talk about at every Eagle Scout ceremony in my Scout troop was— the first one was, um, in any endeavor, leadership is everything. That's number one. Number 2, the only kind of leadership that counts is leadership by example. That's number 2. Number 3, which kind of speaks to what you were just talking about, was the hardest for me because I wasn't a very good listener, is great leaders have to at some point learn to be great followers. And that's tough to do. So this veterans group that the last topic I said was just reach out for help. One of my habits is I write a daily poem. And so I wrote a poem which I sent to them, which they read at the last meeting. And with your permission, I'll read it. It's very short. Mm-hmm. Just reach out. Sounds easy, but if it's so easy, why is the hospice full of silence? Those that sat alone thinking that no one could help, feeling that they were not worth saving. Just waiting for somebody or someone to ask them, not just once, but ask them over and over. Like Robin Williams' character said to Matt Damon in Good Will Hunting, it's not your fault. Yeah, I know, said Matt. It's not your fault. Don't fuck with me, man. It's not your fault. Just reach out. I think that's something that If, you know, more people learned at an earlier age or in their enterprise, they would do better. So I'd like to ask if anybody wants to raise their hand and jump in and share a story or 2. And I'd like to hear a funny story.

I've got a funny— I've got a funny story.

Oh, there's Stephen. Hey, Stephen.

Hello, everybody. Hey, Steve. My first career, my first job out of college, I was selling copiers, which I wouldn't replace that job for anything because it was like, it was like a 2-year school of salesmanship. I learned so much about sales in that, in that job. But one call in particular always sticks with me. And I was sick. I was— my territory was downtown Pittsburgh, high rises. Office buildings. I could spend one day in an entire office building cold calling. I'm sitting in this executive's office and I'm trying to get him to buy my copier, and he looks across the desk at me and he says— and it was about this time of year actually— he says to me, what do my— my nephew is your competitor. What do I tell him at the Thanksgiving table? And I looked at him and I said, tell him to pass the potatoes. And I did not get the order, but I had an ally in that building. And, you know, we, we ended up developing a cordial relationship, um, but it always stuck with me. So I thought that was, that was, uh, incidental. But I do have a question. For the panel. So we're talking about startups. I think everybody recognizes the obstacles and challenges across the board. But as you grow and start to gain success, these obstacles and challenges present a whole new range of problems to overcome. For example, how do you control your growth when you're being successful? By not overcommitting because you're eager to open a new account or place your inventory into a high-profile center or work with a specific surgeon that you know could have a meaningful impact on your business, but you know it's going to create demands on inventory that are going to be a concern. Or it's going to create relationship struggles or issues with other partners. How do you control that growth so that you can continue to grow without having to jeopardize your reputation by overcommitting or jeopardizing business that you can gain elsewhere? By taking advantage of one opportunity over the other?

Man, that's a good question for Dennis.

Well, what about the rest of the group? I mean, let's hear from them first. They've had enough of me. I'll be happy to answer that one, but does anybody else have any input on that?

Well, let me say one thing real quick. Not all customers are the same. And so you, you gotta pick, you have to pick your customers that you want. Some customers are too high maintenance, too low, low margin. So I think not all customers are the same. The next customer may not be right for you. And it's just a thought.

So I was gonna say a similar thing, Tiger. Anybody else before I go? Yeah, Stephen, I think that's really a really good question. And what I try to do is I try to make sure that I have my opportunities tiered. Like, that's part of development, right? That's what I mean, like separating delivery and development, but they're connected, right? Can I deliver this? And what type of a development opportunity or business opportunity is this? How important is it to the organization? Which one's more important than another if they can be done that way? And then which is the one that's going to be the longest lasting, right? Like, which is the one that's going to help you strategically? And even then, you still probably might have a hard time with delivery. So let's assume that we're going to have a hard time meeting this particular doctor's needs. I literally try to— what I've done And it's worked well for me is I try to sit down with them, talk to them about what our challenges are, let them know we want them to be part of the solution, right? And actually come out with a plan as to how we can make sure that they're going to be happy. You know, let's formulate this, let's set these expectations and let's formulate this together. I've had many doctors come back and go, oh, well, if that's the case, I can start off just doing this. Right? And they might do it on a smaller number. It depends on what type of product, right? They might just do it in one procedure, right? Or they could say, oh, you know what? If that's the case, I can start putting my schedule out further, right? Or give you an idea. I do this many of this procedure a month. So let's scale up. Let's do a couple this month. Let's double it the next month or whatever. And I have found, like, especially top doctors that you really want to work with, They're, they're really excited that you would come and tell them that. They feel part of the team. That's been my experience. So I, I try just to be upfront and, and, you know, understand the opportunity and understand what's the best way to work with them. Now, if they're demanding and, and they want this, this, and this, I'm gonna tell 'em, look, you're— and are that important to you? I'm gonna say, look, we're gonna do everything we can to meet these expectations, but we're gonna be, you know, We may break the machine trying to keep up with you. And if you want to go for it, we'll go for it. You know, so obviously both situations are out there. I don't know if I really answered that question, but hopefully it helped.

Yes, you did. Everybody did. I appreciate that.

Oh, Stephen, when you have a challenge like that, do you tend to handle it analytically or more intuitively? How do you make that decision?

Well, I do draw upon experience in, you know, my history in the industry. However, you know, you can't ignore the facts. The facts tell the real story, I think. Um, so I do analyze the situation. I try to gather as much information as possible, but sometimes the decision comes down at the end to make an intuitive call, even when you have all the facts. So, I'd say it's probably a lot of both. And we make mistakes. One of the best quotes I ever read was that if you're not making mistakes, you're not making decisions. So, I agree. So, sometimes you look back, to my point about controlling growth in a responsible manner, you look back and you think, well, I should have taken road A. And I took Road B, you know, but you may not see that for years or, you know, some event down the road.

Stephen, you're obviously— we have a similar background in copiers and stuff like that. I'm probably working with like 10 companies right now that are, you know, younger in their development. We're in fundraising, various fundraising stages, or we're actually launching to market. And in some of those, I actually really go in and do it. Like, I will physically get out there and do it. So, I'm very close to the customer. And then what I tell them, I tell them this all the time, whoever makes the most mistakes the fastest wins. If you're trying to be perfect, you'll never make decisions. Now, I'm not saying you should go out and just make mistakes willy-nilly, but you're better off making a lot of mistakes very quickly, learning from them, than dragging them out and creating this long, painful cycle for Versus a really acute pain cycle. I'm like, give me the real pain and let's just get through it.

Get on with it. Okay.

Yeah.

Well, one thing I've heard, I don't know if anyone knows Tim Ferriss on this call. He's one of the tech bros that has a podcast and he's done some, you know, businesses and he was talking and I think he learned this from someone else, but he was talking about the 20/80 rule. which is 20% in, 80% out. So there's different ways you can look at that. What are your 20% of your clients that give you the 80% of the income, right? So then that, that tells you the 80% that are sort of disposable. Um, you can also look at 20% of the work you're doing, right? Like some clients, maybe they don't give you much, right? There's no income or whatever you're looking for, but they're really easy. Well, while others, they're, you know, a pain. But I, yeah, so I've thought about it. I'm also struggling with this, even as someone who has her own, you know, single entrepreneur, single person in the company, because it's— I think it's, it's like you said, intuition, like it's emotional. There's a lot of things of like letting, letting go of existing clients or existing relationships. And it is a, it can be a small world too. So you wanna make sure that your reputation stays consistent and, and positive. Right.

Mm-hmm. I can tell you that Andrea does superb work. If you ever need somebody with her area of expertise, she's phenomenal and she's fast.

Thank you, Mark.

Speed is a good thing.

I second that.

Thank you.

You know what would be fun would be to make a list of all of those little sayings that people use, like hire slow, fire fast, 80/20, all those different things, and look at them individually and find their origin stories. Because mostly they're true. Uh, the first national sales management job I ever really had, one of my rules was I gave 80% of my resources to the top 20%. And when I asked why, I just said, well, they're the ones that give us 80% of the business, so screw the rest of them. And it actually worked really well.

Yeah, it works.

It doesn't make you popular though, I'll tell you that.

It sends a message to the low performers that you're not going to get instrument trays or whatever if you're not putting up numbers. And it, I think it creates a culture of winning when you— I love that.

It kind of goes to what Stephen was talking about to a certain extent.

And one of the— let me share one of the things I learned at Ellipse was the CEO, Ed Roschak. He says, we make decisions really fast. I don't need all the data. I'm just going to make a decision and I'm going to be right 80% of the time. But there's one-way doors and two-way doors, and that is really important. You can make decisions that are easily reversed. Right. You hire the wrong person, you fire them, right? That's easy. But there's other decisions that have long-term implications for the business. That you— it's a one-way door. You can't get back out again. Maybe financing terms, or I don't know where the physical location you put the company in, you know, things like that are really hard to

reverse. Yeah. The type of studies you do early on.

Great, great example. Yeah. You pick the wrong clinical study with the wrong endpoints and you can't reverse it. Yeah. So what you got to be really cognizant of, one-way doors and two-way doors. I think that's really important when you make a decision.

So if you have a couple of good startups and a couple of good exits, when do you stop?

I think that's up to everybody on the call here. I think everybody's different.

When the hearse takes you away.

All right,

Raymond, I'm with you on that one.

So, that's the answer I was looking for, Raymond.

You know, there isn't a retirement plan. Now, my wife might say something different. And so, work-life balance is important. And also, you know, first off, thank you, thank you, both of you all for the deep and the quality of deep insights and the quality reminds me of I don't know if any of you guys have heard of Ken Fallon. He used to do— he was the president of Zimmer and he would do similar high-level mentoring coaching kinds of discussions which were very rich and very encouraging. So I'm gonna interrupt with the story just because, Mark, that's what you told me sales is all about. You can interrupt and you tell stories. My story was I interviewed at a particular one of the strategics and I didn't get the job. I later learned it's because I wasn't a team player. And at first I thought, okay, that hurts. But over the years, I think it's actually one of those entrepreneurial attributes. What I tended, and perhaps the reputation related to something I did when I worked at Zimmer, Speaking of Zimmer, where I got so frustrated that the bureaucracy was causing a project not to move forward that I just took it in my own hands and got a meeting or I asked for a meeting with the president of the company. You know, I'm just a product development manager and I annoyed a lot of people, but my goodness, we got the product on the market in those 9 months. And so I think the reputation followed me in Warsaw, which was okay because my career then led to a lot of other, uh, cool experiences that I wouldn't have had had I gotten that job and become a cog in the big wheel. So, um, that's my story. The, um, short quote I offer this group is also one that doesn't belong to me. It came out of a uh, coursework called the Oz Principle, like the Wizard of Oz. I don't know if you've heard of that.

Yeah.

But one of the, uh, tenets of that training is the word accountability. The definition they use for accountability is a personal choice to rise above your current situation in order to accomplish the stated results. And so that goes hand in hand with tenacity and your choice, not someone else holding you accountable, but your choice to look at what alternative ways can you still get the job done.

I love that. I love it.

We don't have time for it now, but at some point I have a story that I think all of you would really appreciate. And it's a very difficult one. It's a very difficult one to personally share. We don't have time for it today, but it goes right up that alley. And sometime when we're on a call and we've got some time, I will share it with you. And it was probably the darkest moment in my entire career and what happened to get out of it. And, Ray, you just really kind of reminded me of that when you were talking about that. But But I wanna hear more from you guys. I learned more from others. That sounds delicious.

That sounds delicious. Yeah.

Oh, it's unbelievable. It's unbelievable. And it's totally true.

So I was 2 years outta the Army at J&J, and I invented a product called the Cementrifuge, which I thought was the greatest thing. I set up manufacturing. I took it up to New Jersey. They turned it down. We don't need this. I went back to Birmingham and I sent in my letter of resignation. They flew down the next week and they, they took on the project. They paid me a lot of money. I pissed off everybody between me and the president by doing that. So I may— I won that battle, but I lost that war. You know what I mean? But that's a, that's a, that's a, that's an attribute, Raymond.

Well, that's, that's the common thread with entrepreneurs. It's the, it's the round peg in the square hole, or, you know, it's you don't fit in organized cultures where everybody's got it. Yeah, you—

I can tell that Todd and Sheila both got stories for that just by looking at them.

Really good ones. I have a quick question. Anybody have— and thank you for this. This is fantastic. It's kind of like entrepreneurs organization. It's like a, it's like an entrepreneur, like therapy. So I really, really like this. That's a good way to put it. I like it. How do you get— is anybody at some high level? How do you get founding members to row in the same direction? So I've been part of a couple startups challenges. Like, and over time, the rift gets bigger and bigger and bigger.

Yes.

And one of them broke the company. The other one really hurt it. So, I'm curious if anyone has any pearls of how do you get team members, you know, a lot of it's emotion because we don't operate in facts. We operate in guts, like gut calls, right? We don't have enough data points to say that's the best direction we need to go there. We're like, I think that's better than That direction. So does anyone have any—

You know, Todd, I think it's my first rule of leadership in any endeavor. Leadership is everything. And I think if you do not, in an entrepreneurial group with smart— everybody, everybody in that room is the smartest guy in the room. Just ask them.

Yeah,

but there has to be an alpha.

I think that's perfect. And you could probably put after that leadership is everything in parentheses. So is communication because one of them was a communication challenge. Like person wasn't a good communicator and everyone else was like doing this all the time.

That goes to that poem I read. Just reach out. They have to communicate.

No. Okay. Yeah. Good. All right. Thank you.

Good

question. The other, well, the other one is, and I've, I've actually served as this myself. Sometimes it's good for them to have an outside person or I don't want to say a coach, but helping them develop the business who's there to identify not individual personality traits or anything like that, but the real issues that will prevent the founding partners from moving things forward. And it has to be somebody who has a lot of credibility and somebody who can really address issues like, And not make it confrontational. As an example, you brought up the communication issue, right? So that instead of making it, you know, I've been in a situation where they got rid of a founder because, and they just said it was communication. Like literally that was all they said. And I was like, wait a second, like what does that mean? So they should agree on what are some basic communication methods that they have, you know, like whether it's in writing or they're doing things on a— quarterly or monthly or weekly basis, what are the things that need to be communicated? What are the things that need to be updated? And how often do they need to be done? Right? I mean, just that alone is an agreement that, you know, if somebody's violating it, you know, this is what it takes to be successful as founding members in a company. Right? And if you're not doing it, it's forget it. You guys are just going to go like you said, it's just going to go work if that's the issue, right? There's probably more. But that, that's only going to get worse and worse and worse if you don't address it right away.

Yeah,

you're 100% right about that.

Spot on. No, thank you.

I actually have a call with a company and, um, we're actually helping them raise some money, so I gotta jump. Hopefully this was somewhat helpful for you guys.

Um, this is terrific. Let's do—

I can tell you Dan was a lot better than me.

Well, let's see if we can get Dan next week and do a part 2. Yeah. Yeah, somebody, Mark and Dennis, send me a note if, uh, if he's, you know, things are settled down, and we'll, we'll bring in Dan next week.

Well, hey, thank you for having me. And to all of you, thank you for actually listening.

Thank you.

Thank you.

Thank you

very much.

Appreciate it. Bye-bye.