Episode 89 – Alec Stern – Leaders On Leadership
Leaders who manage startup businesses usually have a lot of things on their plate. Just a single mistake and everything can crumble even without getting the business out there. Entrepreneur and speaker Alec Stern aims to help startup business owners achieve success by sharing some effective strategies with Dr. Tracey Jones. Alec talks about keeping a diverse team that can cover different bases at once so leaders can focus on their strengths. He also explains how success can be found even outside the workplace, how to find and screen the most skilled people to add to your team, and effectively pitch your brand without wasting time and money.
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Alec Stern – Leaders On Leadership
Our guest is Alec Stern. Alec is an entrepreneur, speaker, mentor, and investor. He has been a Cofounder or founding team member of 8 startups, 5 exits, 2 IPOs, and 3 acquisitions. One of those was as Cofounder and original top three member of Constant Contact, where he worked with it for eighteen years, and then went through an IPO where he sold it at a valuation of $1.1 billion. You're going to love knowing what Alec has to say about what it took him to pay the price of leadership.
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I am tremendously excited to welcome our guest, the one and only Alec Stern. He has become known as America’s Startup Success Expert for performing hundreds of keynotes in front of audiences worldwide for his active breakout sessions. Also, as a two-time Visionary Award winner at top conferences. He was the primary member of Constant Contact. I'm sure you've all heard of that founding team. Alec was 1 of the original 3 who started the company in an attic. Alec was with the company for eighteen years from startup to IPO to a $1.1 billion acquisition. Alec, we are excited to have you on the show.
Thank you, Tracey. I'm excited to be here.
I know we hear all of these successes and all these things. I can't wait to know about all the joyful successes and triumphs. We're also talking about the price you had to pay to make all those things happen. My father wrote a little booklet in one of his speeches called The Price of Leadership. In it, he listed leadership as one of the most joyful things and also one of the toughest things you're going to have to do. Anything worthwhile is going to be difficult.
The first price that he mentioned was loneliness. We've all heard that phrase, “It’s lonely at the top.” Based on where you are and reflecting back on your journey as a leader, can you share with our leaders reading about what loneliness means to you as a leader, what it shouldn't mean, and maybe reflect on some times that you dealt with it in your career? How would you encourage others if they are in that season of loneliness?
That's an interesting topic. I've always lived by this and in anything that I've been involved with, I make sure that we're all on the same page. The first thing is, I want to be title agnostic. It doesn't matter what your title is. Leaders don't need a title. If you're a leader, you'll lead regardless of what you're called. Some people got hung up on, “I need this title and I don't want anyone above me other than one level, the CEO,” and all this other stuff, which I don't find a place in business with. That being said, you're starting a business. Three in an attic and I wore a lot of hats. As we were evolving, I had to peel off things and give them to somebody else to run them.
Stay in your lane. That's the other thing. My lane is going to market, channels and scale, yet I was overseeing, at times, other areas like sales, marketing, and everything but finance and tech. It becomes lonely when you’re peeling off. It's like letting your baby go off to college. I've had to give up certain areas, which meant also, people that were working for me, were going to go off to someone else. I knew it was the right thing to do. It's that push-pull like, “Bring in a CMO and have the marketing team go,” and let them take it to the next level because that wasn't my lane.
Moments of loneliness happened a lot as I would pass things off. For the company to grow, those are the sacrifices that I had to make. It's not like sitting in the ivory tower, C-Suite office sitting there being lonely because I'm a man of the people. I was always rolling up my sleeves and working closely with everyone. They have their reasons, and that’s why they’re coming to my office except to say hi and check in versus come in from a direct report perspective. That's happened several times in my career.
The last thing I would say is creating opportunity. It would mean that I would give up some of these things to go start something new, build it up, bring some people on, and eventually, give it up to someone else to run it. I had a cycle of loneliness occurring every couple of years with creating these new pockets of opportunity. As they built up with some success, flip them for somebody else to take them and run. This has been through many of the businesses I've been involved in. It's loneliness, but it's also growth. That’s the cost to growth in the examples I've used.
I love how you did tie that to it. It is the cycle of growth. We probably have a lot of entrepreneurs reading. Do you think that that is the market difference between an entrepreneurial leadership mindset versus somebody that's more the corporate type? I've worked in both worlds. You said that you don't need a title, but sometimes, entrepreneurs get hung up on like, “I got to be free to be me.” You bring up this cool tension between, “Yes, you're still creating, but you're all integrated and you need to do a relay. You’ve got to do this handoff at different times.” What's your sense with the entrepreneurial mindset? Do you think you've got to be constantly saying goodbye to certain things and hello to the next?
From the entrepreneurial mindset, if you're building a startup and you want to accelerate growth, you're going to go get money or you're going to raise money. Odds are if it's a big idea, it's going to be big money, and that's venture capital. Oftentimes, when you bring in external money, they want adult supervision. They're going to bring in someone to be in the business to either run it as CEO, a president, COO, or some title going to be part of the team from the board perspective. Right out of the gate, changes are going to occur. I say adult supervision, not as an age perspective, but someone who's seasoned that can come in, who's been there, and done that. If you’re looking for a better chance of a successful outcome, hold hands with some other leadership. There's that point.
The second thing I would say is that if you have a corporate mindset, you know what you're going to expect. You're going to go in, do a job, have your area of responsibility, and focus on your skills. When you're an entrepreneur, you're wearing all the hats. Eventually, you're going to pick your lane and you’ve got to stay in that lane. When I meet startups and I meet new ventures, some of the red flags for me is if there's one founder, if you will, then they can't do it all. If they're going to be doing stuff that's out of their lane, they're going to spend a lot of time learning it, and then doing it and not focusing on what they're good at and what they're best at.
The second scenario is maybe there are three cofounders and they’re co-CEOs. Who ultimately, at the end of the day, is going to be responsible? Who ultimately will be that CEO and have that title? They’re like, “We all.” They can't decide, of the three, who's going to run the business. Both of those are set up for failure. I bring those points up because from the entrepreneurial mindset, we need to be scrappy. You've got to be prepared to do it all, but you also have to look at the cost of doing it all. If you don't stay in your lane, the amount of time you're going to spend trying to do something else is costly.
Startup Businesses: If you don't stay in your lane, the amount of time you're going to spend trying to do something else is costly.
Think about your time value of money. I always look at everything. It’s like, “If I'm worth $100 an hour and I spend 6 to 8 hours over here, so I'm going to spend $600 to $800 of my time to do something.” Can I bring in a virtual assistant, an intern, a low-level employee, a contract person, or someone to do those while I could spend $600 to $800 of my time in my lane? It will ultimately drive to something finishing off the product, making a big sale, finding the right partnership, or whatever it may be. You have to be flexible in the startup scenario because you will be called out to do a lot more than you would if you were just a corporate mindset of taking a job.
Let me ask you also, too, back on the loneliness. How did you get the sense that it was time to send the kids away to college and say, “Job well done. I birth you and I raised you?” How did you get that sense or how did you know that?
Those are decisions that need to be made, sometimes, out of your control, if you will. For example, if there's no money coming in or you didn't get any investment or you haven't made enough sales to then potentially be able to afford hiring a CMO, nothing changes. You're going to stay and keep doing these things. There are some things, factors kick in, where maybe there's a big inflow of venture capital money. It’s like, “Use of proceeds is we're going to amp up marketing. We're going to bring in a CMO and we're going to do these things, or whatever.” A growth scenario versus not cutting it. If there's no one else, you look around and it’s like, “Who's going to run marketing?” You. Eventually, you’ve got to bring in the experts if that's not necessarily your lane if you will. You have to be open to the concept and you also have to know that it's going to come as a positive cost to growth.
Bob Burg was on here and he was talking about that. “When I'm out speaking, then who's back here in the business? Can I hire somebody?” It's this tension going on. You talk a lot about the CMO, the marketing position, and I'm a publisher, too. I always tell people, “Anybody can write a book.” My dogs have written books. It's marketing. You can publish a bestseller on Amazon, but who markets it? When you say marketing and CMO, is that primarily because you're starting up and scaling, that you know this is the one piece you need? Would you say that's everybody, that marketing piece, comes in to scale it and to make it grow?
The original reference point there was that I was overseeing sales, business development, and marketing. My lane was business development and everything else, but eventually, I would strip that off. It's like the analogy of the CTO. On the technical side, they might do product management and other things, but eventually, you’ve got to bring in the team to do that and stay in your lane.
Thank you for clarifying that. I love how you talked about singleness and the entrepreneur. As the creator, you've got to keep creating, but there are things that then are going to have roots and go off on their own, and you're on to the next thing. I love that insight. The next thing he talked about was weariness. You had this vision and you're putting everything in. There are times that you’ve got to know when to hold them and when to fold them. How do you handle doing everything you do? You must run at an intense pace. How do you stay replenished and refreshed? You talked a little bit about realizing the value of your time. Share with me how you overcame some weariness or a time when weariness almost overcame you.
When I hear weariness, I think of obstacles or things that weigh on you and slow you down. One of the things that I've lived by, and this is a learned thing for me, is that you've got to figure out how to tackle those obstacles. We often will walk into the office in the morning and we'll write on the top of a piece of paper the obstacle, and we will put it on a little box next to it. We hope we check it by the end of the day, but we don't. The next day, we write it again. We avoid it. We have to go seek counsel around these obstacles. You're not the first one who's had the obstacle. Many have had it before.
Who succeeded at knocking it down? Who's failed at knocking it down? What did they do to fail doing it? How did someone break it up into smaller pieces to chip away at it? Because you've got to develop the muscle memory to knock down that obstacle because sitting behind it is a bigger one and you've got to knock that one down. Behind that is a bigger one because as you're advancing this business, these things are going to happen and they drag you down. You get deflated or they weigh on you so much. I would say a lot of startups end up failing or they quit and throw in the towel because they couldn't handle the obstacles that were in front of them.
I find humor in everything in life. Sometimes, it's not appropriate like sitting at a funeral and getting everyone laughing. It's important to talk about happy times with someone and laugh it off. The endorphins of laughing will give you the extra energy to tackle it. When there's a weariness period of time, there's an obstacle or there's something weighing on me that would bring me down. I put those together a little bit because that's been from my experience. I became good at knocking down those obstacles so we can move forward instead of being on stuck point or have fear, stress, or other things come into play there. Figure out how to advance.
Not doing anything and just complaining about it is the worst possible thing that you can do.
Many people live there. They just want to talk and complain about it.
One of the other things, Alec, was my dad says, “There are three therapists in life, people, music, and laughter.” He had his heart broken. He was jubilant, but he got you laughing. I remember him doing funerals and having people laughing because he was like, “It's a celebration. What are we going to do? Cry forever?” I lost my mom and that's the last thing she said to me. She's like, “Don't dwell. Get back in there.” I'm like, “You’ve got to keep on going.” You recommend, too, the humor and keeping the big picture, but also chunking it down into things. Would you do that when you listed the obstacle? Would you then tease it out or unpack it as a team?
In seeking counsel, it may be the first time you're experiencing it, but it's not for others. You'll learn from others how they break it down. I've got it down now to where I can figure that out. Initially, I would seek counsel so I could learn from others how they knock it down. Oftentimes, breaking it up into smaller pieces. Learn from others. Don't sit there and think, “Why me? This has only happened to me. Bullying me.” Go ask any other entrepreneur. If anyone's gone all the way through the stages of growth and exit, they've seen them all. You're not the first one and you're not going to be the last one.
Startup Businesses: You have to be flexible in the startup scenario because you will be called out to do a lot more than if you were in just a corporate mindset of taking a job.
People have been through far worse than this. That's why we encourage people to read books because you're going to see. I know it's tough, but what makes it more palatable is that I know people way more successful than me went through much deeper stuff. When you encounter these obstacles, because of your experience, you hone your set of experiences and skills that you know, “I've encountered something that looks like this.” You've got your arsenal resources to start tearing it down.
Know it's coming and laugh it off when it does. It's like, “What do you mean we can’t make payroll Friday? That's funny.”
I love that you said that. We're out here. Whenever somebody complains about the man or whatever, I'm like, “You've never had to make a payroll, have you? It's a whole different world out there.” I don't complain about the man anymore because I know what it's like to be out there trying to make it all come together. The next thing he talked about was abandonment. My father would tell people, “We need to stop thinking about what we like and want to think about in favor of what we need and ought to think about.” He also hit on your part about wise counsel. Finding the people, not the echo chamber or the ones that are going to say, “You're brilliant. You can't find a way out.” Nobody could. Find the people that tell you what you need to hear. What does abandonment mean for you as a startup expert? How would you encourage people out there on what to abandon and get clarity on?
A lot of thoughts come into mind. One of the hard things is the stresses of starting something and growing something. You're in your lane and you're working on that. The challenges don't go away and they get bigger. One of the first things that come to mind is that you should be part of a peer group. Go find some others that are in the same position. Go get 4, 5, 6, or 10, some group that you could be meeting on a regular basis that you could be open and honest with each other. You're not in your work setting with your management and others.
You're going to be with your peers, where you could go through and problem solve, and strategy sessions with others who've either been through it or they're going through it now. Seeking counsel and creating a peer group because it can be lonely. Oftentimes, you can be sitting there thinking, “How am I going to get this done?” The first thing that comes to mind for me is to put a group together of your peers that you could meet on a regular basis and have as a sounding board.
They can speak into you things that you may not be able to see because you're so up close in it.
Step out and look at it from a 10,000-foot perspective. It's hard when you're in the weeds of it. If you go and seek to have this peer group that you can be talking to, then they'll give you perspective and experience.
I was in Vistage for a while, and there are all these CEO groups. Can it be something that's less formalized? Who are yours? Not necessarily names, but do you meet regularly? Are you on an on-call check in every now and then? How do you do it at your level?
Like CEO Space, if you were familiar with, unfortunately, the passing of Berny Dohrmann. He's an amazing man and created an amazing thing out of a network, a membership group that helps each other, and as a group, raising the water level with everyone. I'm on faculty there. I experienced one of their virtual summits for their members. Those groups are great and ones that are interactive. CEO Space does an amazing job of making sure everyone in a summit knows everyone else and they figure out how to help each other.
It's not just showing up and walking around the tables of a ballroom to try to meet people. It's more formal. Those are important and they're great learnings not just from the speakers, but also from the other attendees. There's a potential opportunity that’s formally creating an opportunity for everyone. That’s the aspect of it. From my perspective, I have a peer group that I talk to on a regular basis and I’m the go-to for many as well that will come to me from some of the past experiences that we've had. I spend a fair amount of my time seeking counsel from others and then providing it.
A lot of times, we get in peer groups because you want to network because it's good to support each other with business, but also, I love that you're learning together. That's why people go to conferences not just for good food, but for a great learning opportunity to go together.
The funny thing is most people go and just figure, “If I sit in the seat and I listen to those speakers, I'm going to get my a-ha moment. I'll go back to my day-to-day and all my problems will go away.” I would say that there's a lot more about what a conference provides. I learned this a long time ago. I used to speak at a lot of stages and I would see the other keynotes and stuff. For many years, I've been doing this. I would want to go talk to one of the other keynotes and if I wasn't in the green room with them, you'd never get an opportunity to get whisked away, or they come in, speak, leave, and go fly off to the next event.
If I get asked to keynote, I will be the first one to arrive and the last one to leave. I'll be present for all the other talks because I'd like to hear what other ones are saying, and then I'll weave into my talk some of what I've heard from the prior speakers. Here, I sit in this room for a three-day conference. I'd be introduced from stage to other speakers like, “Alec is here.” Less than 10% of the folks in the room will come up to me. I think, “What a missed opportunity. I'm here, I'm making myself available. I'm here to answer any questions and help you in any way.” Yet, most people don't take advantage of that. It's one thing to show up and it's another to be present and to participate.
Startup Businesses: The challenges don't go away, and they get bigger.
Thank you for being authentic with that because people that are out there, whether they're speakers or teachers or trainers, you can look out and you can see who's engaged and who's not. When you offer, “I'll give stuff. If you read this one book, your whole life will change.” People don't take the opportunity. That's not an indictment on society. That's a reality. I appreciate you saying that because if there are leaders out there growing their business and they may be like, “Maybe I'm supposed to do this because I'm not getting 75% of people engaged and doing a standing ovation.” It's just what part of the population is ready to absorb and apply what they're hearing from you.
The other thing is that you go to the conference and you take all these notes. You've learned a lot and you're inspired, or whatever, and you go back to the hamster wheel of your day-to-day, and it's all out the window. The last part of all of this is taking action. Somebody who's learned all this, and then going back, what are they going to do, stop? Even if it's just four hours a week of an innovation think time, where I'm going to not focus on the day-to-day and I’m going to sit here and think about, “How do we go to the next level? What's the challenge we want to tackle next? What's our vision? Are we leaning into it every day?”
We get caught up in the day-to-day. Leaders need to invest in themselves and participate in a variety of these things. They can get it on their own with podcasts, virtual summits, books, and what have you. They can attend and be present. Get out of the day-to-day. Everyone says, “I don't have time. I got to run this business.” Make the time because a lot of the answers to how to go to the next level are usually going to be found with these other activities, not sitting in your office working every day.
I love that you brought that up. For those of you, if you go to a conference or you're listening online, do send Alec a note because sometimes, people don't realize that yes, sometimes, speakers get whisked in and they whisk right away because of their schedule. For people that hang out, do take advantage of that. Send them a note, an email, and ask them a question because the thing about great leaders is they are always wanting to share their leadership with people that want it.
You were talking about all those questions, answers, and your last one. That's a great sign of that. I was a passive listener growing up as a younger leader, and then I realized, “I need to get in there and be engaged.” It's like sitting in church. You can sit there and zone out but if you give me a bulletin, I'm going to have fifteen pages. Otherwise, why show up if you're not going to engage and be active about it, and then go home and apply it?
The other thing is that I love to see the ones that attend, but they're out in the hallway on the phone or they’re outside of the conference center on the phone. A good leader has people who can run the business when they step away. You hire your replacement. A lot of people don't. You need to be able to stop and invest in yourself and invest in the business strategically and know that someone's going to be able to manage it tactically.
That ties full circle back to abandonment. When you're in there, abandon everything else. Your mind is a vacuum and you’ve got to push everything out that's not supposed to be there to allow leadership teachings from you or whoever else to come into it, or that a-ha moment. If you're juggling all your tactical stuff or worrying about what's going on back at the ranch, it's not going to happen.
How many leaders will go to a three-day conference, sit through all the presentations, and come back and present to the company or to the management their learnings? What were the a-ha moments? What are the takeaways? They just come back and say, “The conference is great. I had a great time. I heard a couple of great speakers. My favorite was this,” but they're not taking advantage of being present, capturing all of this, and then seeing how it applies to their business.
Also, coming back and sharing that. It’s like an undercover boss. The boss goes out into the day-to-day amongst the people seeing, learning, and hearing all these things gets that a-ha moment. Think about all the learnings that you got that you come back and you share that with the management team, or whoever the audience and say, “I look at things from a different perspective and I don't want to share some of those ideas with you.”
As a leader, you're casting your view of a better future. We'll get to the next one, which is vision. Hopefully, at that conference, you got at least something. That's why I tell people, “Read a book. Even if you just get one good thing out of it, it's still one good thing.” He talks about vision, not as some like Nostradamus or Galileo, or whatever, but just seeing what needs to be done, and then doing it because you have to put the integration and execution part of it. What does vision mean for you? How do you, as somebody that goes from a great idea, and then makes it happen, and then goes to the next one? How do you morph or scale? How do you stay on point with your vision, Alec?
If we have a vision conversation, we have to have a mission conversation. The mission and the vision. One is what you're going to be doing day-to-day that's going to drive toward this big vision that's sitting out there? I like thinking big and having this big vision that's sitting out there, but I always challenge, “What is everyone doing today to get us to that vision? What are we celebrating today? Celebrate all the small wins today that are chipping away getting us to that vision. If someone's working on something that's not leaning in toward that vision, then raise your hand and make it so that everybody has a voice.”
If you go around the company, it could be the person who's taking the calls into the company like the administrator or someone working the front desk, or all the way through to all the people on the support calls, sales calls, marketing, development, finance, or whoever it may be. Everyone's working on something. When you set that vision, it has to be a shared vision. It can't be that the management team comes up with a vision and tells everyone, “Here's our vision.” Everyone has to be bought in like working through figuring out what that vision is.
There's a vested interest in wanting to achieve it. To me, that is an important thing in culture to make sure that the mission and the vision is said, and then you take those and you move them down into bite-size, key performance indicators, goals, and measurement. You work through that, and then you celebrate the things that are being achieved that are getting us toward that. We have this thing that set out there for 3 to 5 years and we don't tie back what we're doing now toward it.
Startup Businesses: Leaders need to invest in themselves and participate in a variety of things outside the workplace.
You talked about those obstacles, the barriers, but the celebrations and the bragging is important. We probably have a strong work ethic, but we also need to stop and land on celebrating the success that we are achieving the vision. That's something that I have gotten much better with the age because before I'm like, “I'm not retired yet. We’ve got to keep pressing on every single day.”
If everyone's bought into the vision, whatever the small thing that someone does that is advancing, you got to celebrate. Celebrate the small and large wins. Most of the time, we don't even stop to do that. We just think about, “When we hit this big milestone, then we'll celebrate.” What about all those small ones that got you there?
That helps get buy-in for the mission, too, when people see it all coming together because otherwise, a lot of people are like, “Maybe we'll get there.” Alec, anything else for our leaders, sharing with them leadership lessons on what it took you to pay the price of leadership to get to these successes that you haven't touched on that you would like to share with our readers?
The price of leadership is when I talk about title agnostic and what have you, the willingness to step away. Put pride aside, put ego aside, and put everything aside even in the earliest days when it makes sense. In Constant Contact, 17 to 18 months into it, we brought in an amazing CEO who stayed with us all the way through IPO and acquisition. We make room for the right people to come into those certain positions. When we were starting, we had a conversation, the initial three, and then a few even after that about being title agnostic. What our titles are doesn't matter. We got to all chip in and do whatever it takes to make this thing successful. That's wearing different hats at times.
Sometimes, you can't stay in your lane because so much is needed, but eventually, when you start to fill in with the right people to be in that lane, then you go back to what your core lane should be. The willingness to be able to bring others in. It doesn't matter what levels. It doesn't matter who and where. I've had many conversations with somebody starting things like, “I don't want anyone to come between us. I don't want to report to someone else. I don't want this. I don't want that.” It predicts. Guarantee that you will have. It could be many layers in between.
If this is going to evolve and this is a part of growth, we have to be willing to accept that, and many people are not. Some people want to say they're an entrepreneur. I have some folks in my life that have started something and have yet to bring it to market because they just want to say, “I'm an entrepreneur.” It's around execution. Sometimes, execution requires some things that are uncomfortable, lonely, and all the things we've talked about. You've got to make room for those things for growth.
How long did it take you to find the right people? That's something I know with me in scaling it because I'm an operations person inherently, so I can always figure out the process without the right people. You said you knew when you came in and saw that CEO. How long had you been looking? How did you know?
There are the art and the science of hiring the right people. Sometimes, what you see on the surface is not exactly what you get and things to happen. For the most part, the conversation has to have a culture in the mix. The soul fit the culture at all levels. If I meet someone and they're good people, fun to be around, and there's a casual conversation, and you could tell that they care and that they're passionate about either what we're doing or our target market. There are all these things. You'd say, “There's a good fit here.” Of course, you do the formality stuff to check references and everything else.
Some of these things happen episodically around raising a bunch of money and maybe they’ll want someone to come in at a certain level, or growth requires that we bring in some other key management folks to amp up the stuff we're doing. “With the money we got, we're going to spend it on marketing a new CMO. We need a CTO or we need to bring in a product manager to take that off the plate of the CTO or head of engineering.” Those things happen through the evolution of the business. Finding the right people, in several of the companies, we have multiple people interview them. Some aren't even in the area of responsibility.
Constant Contact asked me to do a lot of interviews. If I was in town, I have people coming in for interviews. I just go in and chat and say, “I have no say on whether you get this job or not. I’ll tell you anything, you want to hear anything about the founding story or talk about anything around the company.” I had a set of questions I want to ask, but I want to see where they would want to bring the conversation.
Oftentimes, I was just looking for a culture fit, and would they be a good person to join the team. Not even in an area I’d touch day-by-day. It’s funny I talked to somebody. Our focus was small business on the main street at Constant Contact, plus a few other companies. I remember I'll ask someone, “What town do you live in? Do you go to the main street and shop?” They're like, “No, I buy everything on Amazon.” I'm like, “Okay.” A little adverse going into small businesses. It doesn’t want us to do locally. That's what we do.
It has to be in the mix of seeing the culture fit. If you go to a networking event or a social event and you meet someone, you're like, “I feel like I've known you forever,” which we're experiencing here. You're like, “It's comfortable and I could spend time with this person and get to know them. Someday, we'll work together,” or whatever it may be. When you feel that, you know it's right. Watch you to pick a box, hire somebody, and feel the pressure. The board wants us to hire somebody. You rush it and you make a mistake. Mistakes are costly.
I want to ask you one other thing because you're the first person that we've had on here that is in the front end, the startup, and the VC. I know how you're going to answer. With what's going on with the world with finances and with everything, can you give us some words as far as how you see the landscape? Has anything changed? Has it gotten better? There are different challenges. Can you share your insights on what you would recommend to leaders out there that are going more the entrepreneurial, pure startup raising capital route?
The larger funds and some are still closed in large rounds, the money is there. This last quarter in Boston or East Coast, or Massachusetts, we had more money going into venture than we did the prior quarter. Everyone's all concerned, but the funds are there. There's no time like the president. If someone is starting something, they should be bringing it forward. People have time to take the meetings. The opportunity is there for someone to take that business to the next level.
Startup Businesses: The boss goes out into the day-to-day amongst the people; seeing, learning, and hearing all these things gets that a-ha moment.
I'm involved in something that we're bringing to market and going out to raise funds, stocks, and IPO. I'm more in tune with that, but that's the same thing. There's no better time to do it. Entrepreneurs intrinsically look at when everybody else says no, that's a good time to say yes. Thank you for echoing that. What do I know? I'm new to the whole thing. I'm a cautious optimist. I do still see a lot of money and a ton of money and stuff being poured in, and that's good to know that that's just not my gut.
There'll be more coming. When we have these issues in market conditions, we come out stronger. Anyone who says, “I don't know if it's a good time,” they're all excuses. If you have an idea and you're bringing it forward, now's the time to be reaching out into your network and running your idea by others who may get involved with you and work with it. Also, go out to your target market. Everyone has a little more time now. Strategic partners, yes. Mentors, yes. Possible investors, yes. Everyone has a little bit more time, so they're willing to take the Zoom call and have a chat.
You have to be smart about when you're going out to raise money because everyone here is like, “I'm a limited partner of a venture fund.” “Can I pitch my idea?” If they haven't done the research to know, am I in the space? Have I done stuff similar? If not me, someone else that's in the firm. You got to do your homework to make sure you're aligned. What happens is someone goes out and just talks to a bunch of people about money, and then they all say, “No. It's not in our sweet spot. That's not my area of expertise,” or whatever the reason.
When you get to someone who ultimately is perfect for you, they'll say, “Have you talked to others?” “Yes, we had 60 venture meetings so far.” You’re like, “Has anyone invested yet?” “No.” They see a red flag. There's a problem. “What's the problem?” The problem is you weren't smart about going to the right people, to begin with. That said, you might have someone who's in a venture who's not necessarily the right fit for an investment. You ask for an informational meeting like, “Could I pitch you and run my idea by you to get feedback?”
Now you haven't put them in the category. “I pitched them for money and they said no. I pitched them to get their feedback.” That’s different. I raised the first round of money with one of my companies going to someone that I asked to go present and get feedback. They said, “I love the idea. We want to give you money.” That wasn't an expectation. I wasn't sure if there was a fit there but I knew they've done well and I wanted to get their input.
I'm glad you said that because somebody called me and was talking about books for their grandkids. They knew my dad and they read books. I said, “What are you doing now?” They said, “We're doing this startup for this.” I'm like, “That sounds fascinating. I want in on that.” We're hosting an investor appearance here in South Central PA. I didn't plan on that, but you don't know. I'm bringing my friends in to see. I love that you said that it doesn't have to be a full-on pitch, but doing your homework to go to your core target audience and asking them. I'm a publisher. People that come with me with a romance novel or werewolves and I’m like, “It’s not what we publish.” Do your homework. Alec, where can people get ahold of you?
The best thing is my website, which is AlecSpeaks.com. Also, there's a blog post on finding the right investor. Some of the stuff I mentioned. There are a few blog posts I've started putting out on Alec Speaks.
Thank you, Alec, for all the insights on what you shared about how you pay the price of leadership. I appreciate your transparency and all the great tips. I know our leaders got and I know I personally got.
I appreciate it, Tracey.
You're welcome. To our readers, thanks for reading. Be sure and hit the subscribe button. Give us the honor of a rating. Reach out to Alec because he wants to hear from you, and have a tremendous day.
Important Links:
Bob Burg - Previous episode on Apple Podcasts
Blog post - The Right Steps to Finding an Investor For Your Startup
About Alex Stern
Alec has more than 25 years of experience as a co founder, mentor, investor and hyper-growth agent for companies across various industries. He is a motivational speaker & innovator with extensive expertise in growing and scaling companies, startup and operational growth, go-to-market strategy, strategic partnerships and more.
As a co founder and primary team member of Constant Contact, Alec was one of the original 3 who started the company in an attic. Alec was with the company for 18 years from startup to IPO, to a $1.1 Billion-Dollar acquisition. Alec has also been a Co-Founder, founding team member, and growth agent for several other successful startups including, VMark (IPO & acquisition), Reacher Grasper Cane, and MOST Cardio amongst others.
Performing hundreds of keynote addresses Worldwide, Alec is a motivational speaker that has become known as “America’s Startup Success Expert” for his popular sessions at Universities including Harvard and MIT and at conferences like Secret Knock, CEO Space International, City Summit, Powerteam International, and Habitude Warrior. Alec was the Keynote speaker at three out of the top five “Inc. Magazine Must Attend Conferences for Startups and Entrepreneurs in 2019.”
Alec was selected to the Influence 100 Authority List by Influence Magazine. Alec was honored with the “2020 City Gala Visionary Award” and the “Habitude Warrior Conference Global Awesome Visionary Award” for all his accomplishments as a co founder and growth agent. He is also honored for speaking before thousands of entrepreneurs and startups each year.
Only a sideman when it comes to music, Alec is an accomplished drummer and has had the honor of sitting in with a number of musicians including Toby Keith’s house band in Vegas.