The Importance of Building Your Network | CEO of Levo, Caroline Ghosn

So, 90% of the work was done up front, and here's what I mean by that. And then 10% of the work was done after. So in the 90% of work that was done up front, it was things like, OK, here's my business model. Here's my business plan. Who is like me? Let me create an Excel spreadsheet of the people that I think are the, like, tier A that I want to go talk to, because one of these people will move the needle and be a leader for the rest. So you start that way. And then you take that list of people, that's very confidential, of course, And you talk to people you trust who are not investors, and you ask them what they think, and you ask them about their experiences. And the network that you're building with fellow entrepreneurs, by the way, like what you guys are doing right now is the most important thing you can do. I have lunches or coffees with fellow entrepreneurs like 2 or 3 times a week, and they're all people who are at either my stage or stages a little bit beyond mine, or people now who are younger in their stage that I can help. But there's this really powerful mentorship energy between entrepreneurs. So you can go to those people and be like, okay, here's my list. What am I getting wrong? And then they're gonna tell you, oh, okay, well, you know, off the record, cross this person off. And on the record, add this person. And I wouldn't put this one in a tier A. And I heard that this person just made an investment in something that's just like yours, which you don't want, right? Because you don't want there to be competing interests. And so you do all of that type of background research, and you end up with this list of people that you know are gonna be, like, the most important movers and shakers and problem solvers for your business. So that when you go and talk to them for the first time and grab coffee, like, they know that you're talking to them for a reason. 'Cause if I'm an investor, I want only entrepreneurs who are being directed about my ability to add value to talk to me. Everybody else is noise. Because if I can't add value to their business, why would I put my money behind it? I have zero ability to add impact. You wouldn't do that if you had money, right, to invest in that way. And so it's being really strategic about who you're talking to and who you're not talking to. And the people you're not talking to, you're not fundraising. They ask you, nope, not fundraising. And so you have to be really, really specific about that and really deliberate about that. Once you do that, then you need to have like 3 or 4 pages that elucidate who you are, what the market opportunity is, why you're different, and who the people are who are gonna make this work. 'Cause if you're talking to someone, they wanna know the answer to 3 questions. What's the problem? Why are you building anything? Like, why don't you go have a 9-to-5 at whatever company? Why are you building this thing? And so you have to convince them about the market opportunity, which is why, back to your question, if you find investors who've already invested in something like yours, you get to kill step 1. It's great. You just saved yourself a whole step. And then step 2 is, yep, I believe that there's nothing out there for millennials in their careers. Great. You got me. What's next? Step 2 is, here's our approach. And then they have to believe that, like, you're smart about the approach. And once they believe that, and only if they believe that, then they want to know, why are you doing this? Great, you convinced me that there's a need for this, that doing X, Y, and Z is the best approach. Why shouldn't I go fund someone else who's doing X, Y, and Z to solve this problem? Why you? And so that's when you have to demonstrate your own commitment, your ability to rally investors, advisors, and really great and smart, passionate team members behind your cause, because then it becomes stickier and stickier for it to be you and not someone else. And you could do that in 4 pages. Yeah. And never email it in advance. Don't email it in advance. Yeah. They have to talk to you if they want to understand what's going on.

Yeah.

How do you know? So you explain everything to an investor, and they go, yeah, sorry, I'm not gonna invest. And then they walk back and they tell their team to get on it right away because it's good. How do you know they're not gonna screw you?

You're a smart person, and you're gonna know before you get to the end how bought in they are. 'Cause all 3 of those steps don't happen in one conversation, right? Like, you're building a relationship with someone. You'd wanna understand how much they understand the market opportunity. And you wanna ask them questions too. Like, oh, really? Do you understand this market opportunity? Okay, great. Who else do you see that's out there that's doing this? And why don't you think that anyone else is doing this? And you're gonna start to understand, like, their level of empathy with it. And you're gonna see red flags if they're saying things like, oh, there's this other company that I was talking to last week that's doing this too. Or this is something that we've thought about building internally, or whatever. You're gonna know that before it gets to the end. Trust yourself. Yeah. How did you negotiate deal?

Were you the leader in that?

Yeah.

Yep. So I'm the CEO, and so the CEO is always the person who's leading the investment, and I'm there's only one person can be responsible for it. I think when I've seen things get go awry in companies that I've advised. Or otherwise just helped in any way. It's when there's more than one person who's responsible, because you need to drive a process and you need to drive it consistently from A to Z. And it's way easier to do that if there's one person who's responsible for owning the puck, because they know and uniquely know, and if it's you, it's you, where people are, what needs to get said when, what data they haven't seen yet. And the most important thing you can do is be consistent. So one person. There's no such thing as 2 people driving fundraising. Don't do that to yourself. It's one person.

So did you try multiple revenue streams, or did you know from the get-go? So how do you decide that this is the one that we're going to stick with, and these are the features that we're going to give out for free?

So run experiments is the first thing. We've run all kinds of B2C and B2B experiments. And look at comps. So understand other companies that have tried those experiments. Again, totally different fields, so that you have an expectation of what a key performance indicator is. And then measure everything. And then you'll start to see what's working more and what's working less.

But sometimes it's like that data is not available. Usually, for example, I look at similar startups. I'm not going to know what features they tried unless— but I can map it.

But then how—

so what I'm trying to ask is that let's say you've ran it for a month, or how do you know what's good enough time to run that? Because you might lose it.

I know you decided through data.

How do you decide, like, this is what we're gonna charge users on, this is what we're gonna give out for free?

Yeah. So we ran— so 2 answers to your question. Number one, a lot of this information is not publicly available, right? So your entrepreneur network is really valuable. Because what I can do, for example, is I can go tap an entrepreneur on the shoulder and say, hey, you guys ran a B2C test on paid boot camps. How much did it cost for your users, and how long did it take you, and how many resources did you spend on that? And unless the person has a relationship with you, they're not gonna give you that information. So it's really important that you build a network where you're giving to other people, and they're gonna give back when you have questions like this. That's number one. You're not gonna find it by Googling. That's the hard reality of it. And then number two, in terms of statistical significance, it's really for the experiment that you're running. For us, it was B2C. We just wanted to see, okay, in 1 week, how many people are gonna convert? 2 weeks, 3 weeks, 4 weeks? And then there's pretty standard metrics out there for what we should be expecting to see At those intervals, so it was relatively easy.