Shownotes
Ben Wiener
Bio
Ben Wiener is a venture capitalist and managing partner at Jumpspeed Ventures. He has invested in dozens of startups and is a lecturer on startup presentation and strategy. Author of fiction thriller Murder at First Principles, Ben brings business strategy concepts and principles to life through storytelling and makes investment education both enlightening and entertaining. Learn more at https://www.benwiener.net.
Intro
Ben Wiener elucidates the transformative framework he developed, known as the H E A R T methodology, which serves as an essential guide for crafting compelling startup pitches. This episode chronicles Ben's remarkable journey from his initial, disastrous pitching experiences to establishing a successful venture capital fund in Jerusalem, yielding substantial returns for investors. Throughout our conversation, we examine the significance of effectively communicating a startup’s vision by beginning with a belief statement and addressing potential objections upfront. Ben's insights not only underscore the importance of structure in presentations but also highlight how desperation can fuel innovation and resilience. We invite all founders to absorb these invaluable lessons that could significantly enhance their pitching prowess and entrepreneurial journey.
Conversation
The conversation with Ben Wiener offers a profound exploration of the intricacies involved in startup pitching and the essential components that contribute to a successful pitch. Ben, an established venture capitalist, recounts the formative experiences that led him to develop the H E A R T framework, a structured approach to pitching that has garnered acclaim within the entrepreneurial community. The episode commences with Wiener sharing a particularly humiliating experience during an investor pitch, which served as a critical turning point in his career. This revelation sets the stage for a broader discussion on the psychology behind effective communication and the narrative techniques that resonate with investors.
Through the lens of the H E A R T framework, Wiener delineates the five pivotal elements that every pitch should encompass: beginning with a hypothesis or belief statement, articulating the stakes involved, outlining the inadequacies of existing alternatives, presenting a radically different solution, and concluding with an emphasis on the team's credentials. Each of these components is meticulously examined, providing listeners with a comprehensive understanding of how to craft a compelling narrative that not only captures attention but also addresses the inherent skepticism of potential investors. Wiener’s insights are not merely theoretical; they are grounded in real-world experience and designed to empower entrepreneurs to refine their pitch strategies.
The dialogue further delves into the importance of calling out objections early in the pitch process, a tactic that Wiener discovered through his own missteps. By proactively addressing potential concerns, founders can build credibility and foster a collaborative atmosphere that encourages investor engagement. The episode culminates in a discussion about the resilience required in the face of failure, emphasizing that the lessons learned from adversity can often lead to significant breakthroughs in both personal and professional domains. Wiener’s narrative is one of transformation, illustrating the journey from initial setbacks to the establishment of a successful venture capital firm, highlighting the essential qualities of grit and perseverance that define successful entrepreneurs.
Takeaways
- The H E A R T method serves as a strategic framework for presenting startup pitches effectively, aligning information with the cognitive patterns of investors.
- Ben Wiener's journey illustrates that early failures in pitching can lead to significant successes when one learns to address objections and refine communication strategies.
- Understanding the importance of starting with a belief statement rather than a description of the company can significantly enhance the impact of a pitch.
- Desperation can act as a catalyst for innovation and resilience, propelling entrepreneurs to pursue their visions even in challenging circumstances.
Companies
- Harvard Business School
- Johns Hopkins
- Web Spective
- Fidelity
- Ink to me
- Jump Speed Ventures
- Breezometer
Links
- Who Says You Can't Startup | Full Bundle | Incorrigible Entrepreneur - The online course for startup founders
- Books by Ben Wiener
- Jothy's TEDx talk - On why those with disabilities tend to overachieve
- Our YouTube channel
- Tech Startup Toolkit book
- Please leave us a review
Transcripts
Hello.
Speaker A:Please meet today's guest, Ben Wiener.
Speaker B:So what I'm saying is to founders, pitch your startup using this H e a R t method.
Speaker B:Because my brain and I think many other people like me are interpreting that information.
Speaker B:What, whatever you, whatever you're giving us, we're trying to re fit that into a framework that fits with our neurons and the way we process new information.
Speaker B:So, so one is just a mirror image of the other.
Speaker B:And when I'm evaluating hundreds of startups in a year, I'm looking for that, I'm looking through that H e a r t lens.
Speaker B:Regardless of how they're presenting the information, I'm trying to fit it into those five buckets and say, does it tick the boxes of the H, the E, the A, the R and the T?
Speaker A:Picture this, you're in a coffee shop pitching your startup to an investor when suddenly they stand up, look down at you and say, your pitch is ridiculous.
Speaker A:Nobody's going to give you money.
Speaker A:Go get a job.
Speaker A:That's exactly what happened to today's guest, Ben Wiener.
Speaker A:And it was the best thing that could have happened to him.
Speaker A:Ben went from being cursed out and humiliated during investor pitches to creating a venture capital fund in Jerusalem that's delivered millions in returns to investors.
Speaker A:He's also the bestselling author who cracked the code on startup pitching with his heart Methodology, a five part framework that's now being taught at Harvard Business School and Johns Hopkins.
Speaker A:But here's the kicker.
Speaker A:Ben turned his early pitching disasters into a 270 page thriller novel about a startup founder who literally needs to pitch his company to save his life from the mafia.
Speaker A:Today you'll discover the exact framework that transformed Ben's failures into success.
Speaker A:Why most startup pitches are organized completely wrong, and how desperation became his greatest asset.
Speaker A:The this is one conversation every founder needs to hear.
Speaker A:Ben Wiener, welcome to the show.
Speaker A:So glad to have you here.
Speaker B:Thank you so much for having me.
Speaker B:It's a privilege and a pleasure.
Speaker A:I always start off with this question, which is where are you originally from and where do you live now?
Speaker B:I grew up in Allentown, Pennsylvania.
Speaker B:Lifetime Philly sports fan.
Speaker B:I currently live very far away in Jerusalem, Israel, where we've lived for the last 27 years.
Speaker B:That's where I practice venture capital and invest in local startups.
Speaker A:I've lived in Boston for 27 years and it's far away from where we came from, which was Silicon Valley.
Speaker A:That's another story.
Speaker A:It's not as far away as you are.
Speaker A:Okay, so what I wanted to know is Your sort of primary professional activity is as an investor, which I'd like to talk a little bit more about in a second.
Speaker A:But first, before that, did you build any startups yourself?
Speaker B:Yes, I did.
Speaker B:My, I was trained as a lawyer.
Speaker B:I have a law degree from Columbia Law School in New York.
Speaker B:I was pretty sure that I wanted to go into business.
Speaker B:I wanted to use transactional law as a springboard into business.
Speaker B:And a year, the year after I graduated law school, I was accepted to clerk on the Israeli Supreme Court here in Israel.
Speaker B:So we got to live here for a year and I got to get plugged into a bunch of young people in town who are all working in startups and high tech in those days.
Speaker B:And I realized that's that was my calling.
Speaker B:That's what I wanted to do with my life.
Speaker B:I wanted to build stuff rather than do other people's deals.
Speaker B: went into my first startup in: Speaker B:And I loved it.
Speaker B:I thought that's what I would do for the rest of my life.
Speaker B:I would just be what we call, you know, business development.
Speaker B:I would be the deal maker within these technology companies until something hit, you know, the jackpot and then I'd become rich.
Speaker B:It didn't exactly work out that way.
Speaker B:I learned much more from the failures than from the successes.
Speaker B:But I learned a ton about myself and about technology and about deal making in a couple of startups that I joined.
Speaker B:And then years later I switched sides of the table and became an investor investing in early stage startups.
Speaker B:So I've had experience from both sides of the table.
Speaker A: So that: Speaker A:Did it benefit you at all?
Speaker B:No, we went up and down with it.
Speaker B:The technology that I was working with wasn't my idea.
Speaker B:It was other people's idea.
Speaker B:I was just the person doing the deals.
Speaker B:But it was a highly desirable piece of technology that was servicing the dot com industry.
Speaker B:So we had real technology.
Speaker B:We weren't pets.com or webvan or something like that, if people still remember those names.
Speaker B:We were a core piece of technology that was desired by some of these bigger companies.
Speaker B:But things just got crazy quickly and a lot of our customers, potential customers, just evaporated and disappeared.
Speaker B: artup and then another one in: Speaker B:Before the bubble burst, I was involved in two companies, both of which were servicing.com related companies with technology.
Speaker B:Those companies went Under So our businesses, our startups went under.
Speaker B:It was a lesson in primary risk and tertiary risk where we had done everything right and built what we were supposed to build.
Speaker B:But our customers evaporated and the money dried up.
Speaker B:So we had to unfortunately shut down.
Speaker A:So I had one that was started this exact same time.
Speaker A: parallels as we talk, but in: Speaker A:It was called Web Spective.
Speaker A:We did get to take advantage because our customers were huge companies that were going to use the web for doing transactions.
Speaker A:The primary one was Fidelity and they became an investor, the lead investor and a customer.
Speaker A:And it was, we were the first to build load balancing for the web and so on.
Speaker A:2 million in revenue.
Speaker A:After two years, we sold it for 106 million.
Speaker B:Amazing.
Speaker A:To a company that even you might not remember.
Speaker A:We sold it to Ink to me.
Speaker B:I remember them very well.
Speaker A:Oh, you do?
Speaker B:Well, of course.
Speaker A:Yeah, yeah.
Speaker A:They were a super high flyer and they crashed.
Speaker A:So at one point their stock was I think worth 450 bucks a share and within three months it was worth 16 cents a share.
Speaker B:Yeah.
Speaker A:And then Yahoo bought them and they became the search engine for Yahoo.
Speaker A:What a story.
Speaker A:But we got out before the downward slope.
Speaker B:It's all about when you get out.
Speaker A:Okay, so then you built this jump speed.
Speaker B:Exactly.
Speaker B:There is a jump start venture.
Speaker B:Yeah, it was a bad choice of names.
Speaker A:And you're the founder, right?
Speaker B:Yeah, I'm the only.
Speaker B:I'm the founder, I'm the general partner, I'm the head deal flow, I'm the head accountant, I'm the floor washer, window scrubber, coffee server.
Speaker B:It's a hyperlocal venture capital fund that invests in the early stage startups of One city, which is the city where I live, where I felt that there was an underserved market for entrepreneurs about a decade plus ago.
Speaker B:I got the timing.
Speaker B:Luckily I got the timing exactly right.
Speaker B:Our ecosystem was going through, had gone through a fall and then was starting to experience a rebirth.
Speaker B:And I was one of the first people to spot it and was able to scrape together a little bit of capital and turn it into a very focused venture capital fund.
Speaker B:And thankfully I was able to spot a couple incredible opportunities that were undiscovered by the broader investor market.
Speaker B:And some of those have taken off to incredible success.
Speaker B:They don't all work, but a couple of them have worked exceptionally well and that enabled me to keep going.
Speaker A:Investing in the early stage is two things.
Speaker A:At least two things, but two things that Jump out at me.
Speaker A:One very needed because most investors want to move upstream as fast as they can.
Speaker A:So even if they start doing seed, they eventually say I need to do Series A and beyond.
Speaker A:But have you stayed at the early stage?
Speaker B:Absolutely, yeah.
Speaker B:A, I'm solving a problem.
Speaker B:I didn't create a venture capital fund to become a venture capitalist.
Speaker B:I became a venture capitalist because I wanted to solve a specific problem, which was first check day zero capital in my city.
Speaker B:Once I get a good company, those companies are able to raise money afterwards.
Speaker B:And so I don't feel that I have a competitive advantage in later stages.
Speaker B:My competitive advantage is sourcing and finding a couple incredible opportunities that are undiscovered and those happen at the earliest stage.
Speaker B:So that's where my strength is.
Speaker B:And over the last decade plus I've also, I believe that I've somewhat.
Speaker B:I don't, I don't want to try to be humble, but I think that if I know anything in this world, it's something about spotting, you know, room of a hundred startups with two people, a dog and an idea.
Speaker B:I can spot like the two or three that have the better chance of success and weed out the 97 or 98 that don't.
Speaker B:Obviously again, I don't get it right every time, but I have a good record of being able to pick.
Speaker B:So I'd rather stay true to where my strengths are and not try to move upstream and do something that I'm not good at.
Speaker A:Well, I said I thought there were two things about doing the early stage and the second is that, and I know a little bit about it because I did a couple years of a very early stage where I would take, I would go meet all the tech transfer officers at universities in the northeast of the U.S. so the second thing is that I saw and the later stage investors really take advantage of and treat very poorly the investors that came in before them.
Speaker A:Have you experienced that or are you somehow avoiding that?
Speaker B:Both.
Speaker B:I've experienced it and I've been able to largely avoid it.
Speaker B:When I experience it, it's something that I understand happens out there and I remember names and I will not send deals back to those people.
Speaker B:But thankfully, most of my experiences with downstream investors have been exceptionally positive.
Speaker B:We're very privileged and fortunate to have some wonderful later VCs and investors in our portfolio companies that have succeeded.
Speaker B:And generally speaking, my experiences have been excellent with bigger funds that come in after me into companies.
Speaker B:So I really don't want to put anybody, throw anybody under the bus except for maybe One or two people who shall remain nameless who behave poorly.
Speaker B:And frankly, they won't be getting referrals from from Jump Speed Ventures in the future.
Speaker B:It definitely happens.
Speaker A:That's the smart thing that the downstream investors should be looking at.
Speaker A:They should say this guy is a huge asset because he's gotten them this whatever the startup, the team through some of the early wickets that where the people could fail.
Speaker B:That is absolutely logically correct.
Speaker B:And it's amazing in this world how people do not always act according to logic and reason.
Speaker B:You know, Charlie Munger always says, show me the incentives and I'll show you the result.
Speaker B:Unfortunately, venture capitalists are so sought after that their incentive is not necessarily to behave incredibly well.
Speaker B:They can get by for years and not behave properly.
Speaker B:And again, I'm not calling out anybody specifically, but there's just a lack of accountability and that that is acceptable in venture capital, that would not be acceptable in other realms.
Speaker B:And it requires a lot of self discipline to say I'm going to try to behave properly even though nobody's checking me.
Speaker B:But that's probably a off topic and maybe that would be an interesting podcast for another time.
Speaker B:But I would probably do that with a mask on and incognito because I wouldn't want to shame or embarrass anybody.
Speaker B:But I'm proud of the fact that in our portfolio we've been able to bring in mostly other venture capitalists and other funds into our companies who are incredible and have really added a lot of value to our portfolio companies.
Speaker B:So it often does work extremely well and there are some amazing people in this field and I'm proud to work with them.
Speaker A:So do you also save some dry powder so that you're participating in the next round?
Speaker B:Absolutely.
Speaker B:That's a big part of my strategy.
Speaker B:Every venture capital fund has a different strategy, but I have a clear strategy for investing some upfront, keeping some for reserves and being able to back up the truck and support a company when it is taking off and succeeding.
Speaker B:It's double up.
Speaker B:It's not doubling down because you're paying more later on, but it's heavily de risked.
Speaker B:So that's a trade that you do want to make and I've thankfully been able to do that many times in our successful companies.
Speaker B:It's a big part of what we do.
Speaker A:So is it mostly you do it one time or do you actually do it multiple times with the same tools?
Speaker A:Yeah.
Speaker B:So I was the first Jump street, was the first investor in a company called Breezometer, which is on Your phone.
Speaker B:It's the Breezometer was.
Speaker B:Is the leading company in air quality data, and they were acquired by Google a couple years ago for hundreds of millions of dollars.
Speaker B:We were privileged to be the first investor in that company, and we got a really nice payout at the end, not just because we had invested first, but because we kept investing in subsequent rounds.
Speaker B:So by the time the company was acquired, we had a pretty nice position.
Speaker B:And we're able.
Speaker B:I was able to distribute many millions of dollars to my fund's investors, and it was partially in no small part because we had continued to invest after that initial piece that we put in.
Speaker B:So it is a big part of the strategy.
Speaker A:So one of the things that you've been doing when you're not investing is writing a novel or write.
Speaker A:You've written two books?
Speaker B:Yes.
Speaker A:Are they.
Speaker A:Are they both novels?
Speaker B:They're both novels.
Speaker B:They're unrelated, meaning the stories are completely different.
Speaker B:One is a murder mystery that's set in Silicon Valley, and the other one is a mafia startup thriller that happens in New Jersey.
Speaker B:They're both trying to teach something through story.
Speaker B:So I'm using fiction to educate.
Speaker B:But I tried to write novels that could stand up on their own and be fun, not only for an entrepreneur, but for that entrepreneur's partner or family members or co workers, even if they weren't specifically learning the lessons that were directed at the founder, him or herself.
Speaker B:The first novel is a book called Murder at First Principles, which is teaching Hamilton Helmer's iconic seven powers strategy book, which is cult classic in the venture capital space, but a little bit difficult to understand.
Speaker B:So I wanted to distill his seven theories of competitive advantage, which would sound very dry, and put them into a murder mystery where the investigators need to understand, because of the way the plot works, need to understand his corporate strategies in order to try to figure out who might be next, who the killer might be.
Speaker B:That was a fun.
Speaker B:It was a Trojan horse to teach Helmer.
Speaker B:And it was fun because I got to meet Helmer and connect with him and after I wrote the book and we become pen pals or whatever you want to call it.
Speaker B:The second novel, Fever Pitch, which got a lot of attention over the last couple months, hit number one on Amazon in its three nonfiction categories, is a novel about the framework for the optimal startup pitch.
Speaker B:So it's a story about a startup founder who can't pitch a startup to save his life until he actually needs to pitch a startup to save his life.
Speaker B:And it follows his journey from pretty bad failure to.
Speaker B:To learning what he needs to learn.
Speaker B:And without spoiling the ending, it's clearly teaching a certain framework of a five part framework, what I call the H E A R T. The heart of the perfect pitch.
Speaker B:It reveals that framework to the protagonist.
Speaker B:Then the drama is just going to be is he going to have enough time to get out of jail and get his life back in order and get things back on the rails and save his life from the mafiosos that are chasing him, et cetera.
Speaker B:So it was a very fun way to teach a very serious topic which took me years to research and develop.
Speaker B:And that framework works extremely well both in our portfolio of companies.
Speaker B:I teach that framework in accelerator programs in business schools.
Speaker B:It's even being taught up near you at Harvard Business School.
Speaker B:Our friend Jeff Bustang is using it in his entrepreneurship course at Harvard.
Speaker B:Johns Hopkins is using it.
Speaker B:Some other pretty prestigious places are using this framework to teach young entrepreneurs an optimal way to organize their startup pitch into a framework that will be more likely to resonate with people like me who are making investment decisions.
Speaker B:That was a lot of fun.
Speaker B:Like I said, that book hit number one on Amazon, has some great endorsements.
Speaker B:Guy Kawasaki wrote the foreword to the book, which was incredible to get to interact with him and have him graciously contribute the forward.
Speaker B:It's been an incredible experience to develop that book and promote it and really evangelize the five part framework to entrepreneurs really all over the world.
Speaker B:And I'm happy to share it and go into more detail about it if you want.
Speaker A:And I saw the endorsements on it, Bus Gang and Kawasaki and others.
Speaker A:That's.
Speaker A:That's quite a feat.
Speaker A:Yeah.
Speaker B:Roald Hoffman.
Speaker B:The book is a lot.
Speaker B:The entrepreneur is a microchemist.
Speaker B:I am not a chemist.
Speaker B:So I had to learn a lot about chemistry for the purpose of the book.
Speaker B:And some of it I made up because it's fun.
Speaker B:But I couldn't believe that I got a Nobel Prize winner in chemistry to endorse the book.
Speaker B:When my last chemistry class, I think it was in ninth grade in high school.
Speaker B: on the chemistry that I got a: Speaker B:I actually got a connection to him and he wrote an endorsement to the book, even though his character in the book I kill off within the first six chapters.
Speaker B:So I wrote Lawrence Williams, who's a great guy, who's the Head of the chemistry department at Rutgers.
Speaker B:When I first was introduced to him, I'm like, I really apologize in advance when you read the manuscript.
Speaker B:Your character drops dead pretty early.
Speaker B:I hope you're not insulted by that.
Speaker B:He had a great sense of humor about it and he really enjoyed it.
Speaker B:So we just had a lot of fun developing it and I think people have had a lot of fun reading it.
Speaker A:It is really rewarding.
Speaker A:It's a huge amount of work, but it is really rewarding to write a book.
Speaker A:And another thing that we have in common is the desire to teach entrepreneurs startup founders.
Speaker A:You've got several things there going on.
Speaker A:You're actually part of that here right now because I decided to create this three legged stool.
Speaker A:The first is the book which came out almost exactly a year ago called Tech Startup Toolkit.
Speaker A:And it's.
Speaker A:You said something earlier about wanting to talk about your failures because people learn really well from failures.
Speaker A:We all learn our ourselves from our failures.
Speaker A:But that's what that book is about.
Speaker A:Because I started nine startups since in 37 years and made an incredible number of mistakes along the way.
Speaker A:And that's what's in there.
Speaker A:What I realized is okay, that's just my stories.
Speaker A:Now the podcast is you and everyone else is telling their stories.
Speaker A:So we have to hear about a failure of yours in a second.
Speaker A:But then the third is that I decided the problem with the book really is that they the publisher is a traditional publishing house called Manning and they said Your limit is 250 pages and it's black and white.
Speaker A:Too bad, sorry.
Speaker A:Then I realized there's so much more I wanted to say to startup founders.
Speaker A:So I've created this online course and it's four courses actually.
Speaker A:Each one has 15 lessons with a video me talking, lots of visuals, lots of downloadable resources like here's a really good pitch deck outline, here's a really good term sheet.
Speaker A:Learn everything in this term sheet.
Speaker A:Here's 46 questions that if you answer all of these questions you will be ready for due diligence, etc.
Speaker A:That kind of thing.
Speaker A:So I've got three fourths of that done the last quarter I'm working on.
Speaker A:When you talked about a room full of 200 startup pitchers and you said one of your knacks is finding the good one, are you finding the good idea?
Speaker A:The good way in which they present or the person is what you're looking at yes.
Speaker B:The answer is yes, all the above.
Speaker B:There's a long standing debate in venture capital like what's more important The Market or the product or the team.
Speaker B:And I always laugh and say, why do I have to choose?
Speaker B:I want all three.
Speaker B:I get to invest, so I get to pick and wait for that hanging curveball.
Speaker B:Because it's going to come.
Speaker B:It's going to come two or three times a year.
Speaker B:There's going to be that hanging curveball.
Speaker B:I believe I may be wrong, but I believe I've seen, I see all three.
Speaker B:Amazing market, amazing product, amazing team.
Speaker B:I'll wait till I see something that scores high on, on all three, on all three vectors.
Speaker B:And really what I'm looking for is the mirror image of my pitch framework.
Speaker B:So what I'm saying is to founders, pitch your startup using this H E a R T method, because my brain and I think many other people like me are interpreting that information, what, whatever you're giving us, we're trying to refit that into a framework that fits with our neurons and the way we process new information.
Speaker B:So one is just a mirror image of the other.
Speaker B:And when I'm evaluating hundreds of startups in a year, I'm looking for that.
Speaker B:I'm looking through that H e R T lens.
Speaker B:Regardless of how they're presenting the information, I'm trying to fit it into those five buckets and say, does it tick the boxes of the H, the E, the A, the R and the T?
Speaker B:We can go through those quickly, what those are, in that order.
Speaker B:And if it sounds like it hits high on all five things, then I'm gonna drill deeper, meet them again.
Speaker B:I've heard pitches in that context.
Speaker B:I was at a pitch event a couple years ago, 55 startups, one minute each, a minute to pitch it, and each founder had 59.9 seconds to tell it, which is way too short.
Speaker B:And there was one founder, a woman who was a neuroscientist, had never started a company before in her life.
Speaker B:And she was just so incredibly in control of her information and so incredibly articulate about what she was doing, that in 59.9 seconds, she completely captivated me.
Speaker B:I did not know the details, but I understood that there was something very important that she was working on and that she was very capable of tackling it, and that there was a lot at stake.
Speaker B:And that one minute pitch turned into a number of subsequent meetings and an investment and an incredibly successful company today.
Speaker B:So it can be done, it can be done incredibly quickly, can be done incredibly succinctly to, to engage that investor and cause him or her to take further action.
Speaker B:And that's really all we're trying to get the founders to do with this methodology.
Speaker B:The short answer is yes.
Speaker B:I know what I'm looking for.
Speaker B:I'm looking for these five things.
Speaker B:I'm looking to check the boxes, and I'm encouraging the founders to pitch to us investors that same way so that it can make it easier for us to fit it into the models or the pattern recognition that we're looking for when we look at them.
Speaker A:Okay, well, I and everyone listening is ready to hear what the five what are.
Speaker B:Right.
Speaker B:What is the heart of the purple?
Speaker B:The H, E, a R T. So the E a R T were easy.
Speaker B:I had to wedge in the H. You'll see what I mean in a second.
Speaker B:H is hypothesis.
Speaker B:What I'm really trying to say is start with Y.
Speaker B:It really should have been a W, but W E a R T didn't spell anything.
Speaker B:So start with why the famous Simon Sinek TED Talk.
Speaker B:If anybody listening to this hasn't seen it, after this episode is over, immediately go to TED and watch the Simon Sinek Golden Circle TED Talk.
Speaker B:It spawned his famous book called Start with why.
Speaker B:And his thesis is, every great company, every great political movement, every great revolution, every great leader engaged with his or her audience by focusing on why they were doing what they were doing, not what or how they were doing it.
Speaker B:And so a startup pitch needs to start off with not a mission statement, not a value statement, but with what I call a belief statement.
Speaker B:Sinek, in his TED Talk, which is like 13 minutes long, uses the word belief or believe over 30 times.
Speaker B:It's very powerful, it's very true.
Speaker B:So at XYZ Company, we believe that.
Speaker B:Or I'm Ben Weiner.
Speaker B:I believe that the startup pitch is broken, and therefore I wrote a book about it.
Speaker B:I believe in something, and I'm challenging you to either believe what I believe or to be ready to believe what I believe after I make a convincing argument.
Speaker B:So, number one, H hypothesis.
Speaker B:Start with why.
Speaker B:Start with a belief.
Speaker B:Even if an investor like me asks you, oh, cool, what does your company do?
Speaker B:You don't answer with what your company does.
Speaker B:You answer first with, we believe that something about the future, about our market, and then go into what you do and how you do it.
Speaker B:So number one is H hypothesis.
Speaker B:Start with Y.
Speaker B:Number two, E. And by the way, listen to when we introduce the solution, it's very late.
Speaker B:We're setting it up to hit you with our solution.
Speaker B:We don't start with what you think we're going to start with, which is what we do.
Speaker B:We're leaving that Till later, we're setting you up.
Speaker B:H what we believe.
Speaker B:Start with Y. E Enormous stakes.
Speaker B:There's a lot at stake.
Speaker B:So I believe that there's something about the future or the present that needs to be fixed.
Speaker B:And there's a lot at stake.
Speaker B:Human life, human suffering, dollars and cents, cost, revenue, something.
Speaker B:There's a big outcome if we can get this right.
Speaker B:So E. Enormous stakes.
Speaker B:The third part is A.
Speaker B:The alternatives are terrible.
Speaker B:So there's a huge problem or a huge opportunity.
Speaker B:There's a lot at stake and the current state of play is messed up.
Speaker B:It's either if it's an opportunity, nobody's capitalizing on this opportunity even close to adequately.
Speaker B:If it's a pain or a problem, which we like better as investors, nobody's addressing this pain or problem even close to adequately.
Speaker B:The more we can highlight how messed up and how inadequate the current solutions are, the more we've set the stage for our hero galloping in on her or his white horse that we're going to introduce in a second.
Speaker B:So we believe that something is broken or that there's an opportunity that's not being addressed.
Speaker B:We believe that there's a lot at stake.
Speaker B:We can prove it.
Speaker B:The alternatives are these.
Speaker B:And they're terrible because.
Speaker B:Grossly inadequate because.
Speaker B:And now number four are radically differentiated.
Speaker B:Game changing, paradigm shifting order of magnitude.
Speaker B:Incredibly, 10x different heroic solution comes riding in on the white horse to save the day.
Speaker B:That's a perfect setup.
Speaker B:Those are the first four of five elements to lead the investor or the customer to basically be begging for a solution that we're now going to present.
Speaker B:And if we've done it, we've highlighted what we believe, that there's a lot at stake, the alternatives are terrible.
Speaker B:And our solution is so differentiated from those terrible alternatives that it's almost like a no brainer that you got to listen to us and find out more.
Speaker B:And then finally the T is the traits and skills of the team, the credibility and the ability of the people that claim that they're going to build and sell this thing.
Speaker B:So do we have the people on board?
Speaker B:Is it.
Speaker B:Maybe it's just me, maybe it's one person, but do I have the Personas to design, build and sell this new technology or new product?
Speaker B:Or preferably, do I have a bunch of partners where we've divided the roles, where we have the people who are going to design, build and sell this new thing and we have the passion and the other subjective characteristics or the credit or the background or the some other proof that we're the right people for this crazy job.
Speaker B:That is a perfectly packaged startup pitch.
Speaker B:It can be done in, like I said, 59.9 seconds.
Speaker B:It can be done in 5 minutes, it can be done in 20 minutes and expand it.
Speaker B:It expands out and in like an accordion.
Speaker B:And pretty much everything else is gravy.
Speaker B:That's what I believe, that that's what most investors are listening for when they hear a startup pitch.
Speaker B:And most pitches are not delivered in that order.
Speaker B:Most of them are out of order.
Speaker B:And a pitch delivered out of order, even if it ticks those boxes by being out of order, causes a friction or like a, a, like a dissonance in the investor's head.
Speaker A:Dissonance?
Speaker A:I was going to say.
Speaker A:Yeah, right.
Speaker B:Because you have this like buzzing in your head.
Speaker B:It's like we surveyed investors a couple years ago.
Speaker B:Before I wrote the book, I did some research and blind survey, anonymous survey of other VCs like myself.
Speaker B:Over 82% said that in their practice of investing, on average, the pitches they receive are poorly organized.
Speaker B:Not that they don't like the pitches, but just that the organization of the information is off.
Speaker B:So that's like what it said to me was it's like the judges of a singing contest saying that five out of six contestants are singing out of tune.
Speaker B:Like, it's incredibly frustrating as a judge to have that experience over and over again.
Speaker B:So I'm just trying to give a gift back to the entrepreneurship community, saying, take the same information that you're presenting.
Speaker B:Don't change your company.
Speaker B:Just reorder the information and set it up this way.
Speaker B:And you're going to feel more empowered.
Speaker B:And then you have a better chance of engaging with a bozo like me who sees a ton of these things and hears this buzzing in my head all the time.
Speaker B:I'm going to have a better chance of engaging with your information.
Speaker A:Hi.
Speaker A:The podcast you are listening to is a companion to my recent book, Tech Startup Toolkit, how to Launch Strong and Exit Big.
Speaker A:This is the book I wish I'd had as I was founding and running eight startups over 35 years.
Speaker A:I tell the unvarnished truth about what went right and especially about what went wrong.
Speaker A:You could get it from all the usual booksellers.
Speaker A:I hope you like it.
Speaker A:It's a true labor of love.
Speaker A:Now back to the show.
Speaker A:Have you used that when you've pitched to your LPs?
Speaker B:Absolutely.
Speaker B:So you talk.
Speaker B:You asked me about failures.
Speaker B:Let's get into Ben Weeder's hall of Fame failures.
Speaker B:When I started My venture capital fund.
Speaker B:I wasn't this smart about pitching.
Speaker B:And I'm a very honest, very sincere, very well educated.
Speaker B:I've never stolen money from anybody in my life.
Speaker B:Of course people are going to have some mercy on me and give me some money.
Speaker B:So I started to pitch this venture capital idea to a bunch of wealthy families and people that I knew, and they threw me out.
Speaker B:In fact, one of my friends actually called timeout in a coffee shop.
Speaker B:His family's very wealthy.
Speaker B:And he was so upset by my pitch, it was so bad that he called time out of the coffee shop, stood up, looked down at me, literally looked down at me and said, ben, your pitch is ridiculous.
Speaker B:This is completely ridiculous.
Speaker B:We're not going to give you money.
Speaker B:Nobody's going to give you money.
Speaker B:You're a good guy.
Speaker B:Go get a job.
Speaker B:You're going to completely fail.
Speaker B:You're never going to raise a penny for this thing.
Speaker B:The pitch is completely ridiculous.
Speaker B:So Ben Wiener, bestselling author of a book on pitching about a decade and a half ago, was laughed at in a coffee shop about my pitch that set me on a journey to try to understand.
Speaker B:I devoutly believed in what I was pitching, but clearly I wasn't communicating it properly.
Speaker B:In fact, shortly after that, two other investors actually cursed me out during a pitch, which is pretty crazy in a business setting.
Speaker B:Two different investors used vulgarity to put me down.
Speaker B:They said, one of them said, you are full of Schlitz and I don't mean the beer.
Speaker B:And you didn't say Schlitz.
Speaker B:And one of them told me I was an effing idiot for proposing what I was proposing.
Speaker B:And you start to think I'm a serious person.
Speaker B:I'm not joking around.
Speaker A:How do you not cry?
Speaker B:How do you not?
Speaker B:Maybe I'm not going to say whether I cried or not, but you're completely crushed.
Speaker B:And then you have to start thinking, what in the world about what I said caused these people to react this way?
Speaker B:And the cool thing is what the first step that occurred to me was.
Speaker B:The best ideas in the world are non consensus, but right.
Speaker B:This is Howard Marks famous matrix of investment opportunity where he says, if you're wrong, we lose money.
Speaker B:But even if you're right, if it's already consensus, we're not going to make a lot of money.
Speaker B:So therefore I, he says, as an investor, only look in the quadrant of non consensus.
Speaker B:But where I think it's right in the non consensus quadrant.
Speaker B:By definition, people generally don't agree with what you're pitching.
Speaker B:That's fine, as long as you can back it up with evidence pretty quickly, you have a chance of resonating with an investor who's looking for that kind of thing.
Speaker B:What I was doing wrong was I was non consensus but right.
Speaker B:It turned out years later, when I look back, I was dead on right.
Speaker B:But I was taking it for granted that people would trust me because I was a good guy and I was smart.
Speaker B:They would say, oh, come on, you must be right.
Speaker B:No, what they were saying was, we don't believe you.
Speaker B:We don't believe that this can possibly be true.
Speaker B:Get the heck out of here.
Speaker B:And so I needed to reorder.
Speaker B:It was the same information, but I needed to anticipate what their concerns and objections would be and reorder my information not in terms of what I wanted to tell them breathlessly, but where their brains were going to try to catch me and then neutralize those objections in order.
Speaker B:And that led me to the HERT methodology.
Speaker B:What.
Speaker A:What really helped you get there?
Speaker A:Did you get some advice?
Speaker A:Did you?
Speaker A:What was the aha?
Speaker B:The aha was that friend in the coffee shop.
Speaker B:I might be sort of tell yourself a story.
Speaker B:After a bunch of years.
Speaker B:I believe that if it didn't happen exactly like this, it was very close to this.
Speaker B:Okay, My friend got up in the coffee shop and he said something to me along the following lines.
Speaker B:Your pitch is ridiculous.
Speaker B:What you're basically saying is, hi, my name is Ben.
Speaker B:I have no track record.
Speaker B:Because I wasn't talking about my track record.
Speaker B:I was asking them for money to invest, but I was just ignoring the fact that I had no track record.
Speaker B:So the first button that was going off in their brain was this guy had no track record.
Speaker B:Then I was saying, I want to take your money and invest it in this city where nothing has happened in 12 years.
Speaker B:I thought that was pretty cool.
Speaker B:Hey, I found this cool new opportunity.
Speaker B:But what they were thinking was, this guy's an idiot.
Speaker B:Nothing's happened here in 12 years.
Speaker B:Why does he think things are changing?
Speaker B:So my friend got up and he said, ben, your pitch is ridiculous.
Speaker B:What you're basically saying is, hi, my name is Ben, I have no track record.
Speaker B:I've never done this before.
Speaker B:I want you to give me some of your hard earned money, which I'm going to invest in one city in the world, which is my city, where nothing good has happened in 12 years.
Speaker B:And then he walked out of the coffee shop.
Speaker B:And I said, oh, my God, bingo, that's my pitch.
Speaker B:And from then on, I would start off Meeting wealthy people.
Speaker B:They were taking the meeting with me because I was a nice guy or they knew me.
Speaker B:But I realized that they were walking into the meeting incredibly skeptical and just ready to shoot me down.
Speaker B:So I just called out their objections on the spot.
Speaker B:I would walk in and say, hi, my name is Ben.
Speaker B:I know what you're thinking.
Speaker B:I have no track record.
Speaker B:I want you to give me some of your money to invest in this one city where nothing good has happened in 12 years.
Speaker B:And they would smile because that's exactly what they were thinking.
Speaker B:And then I would say, okay, I got you.
Speaker B:But now let me give you the evidence of what is actually happening here and why I think I have a methodology and why I think it could work.
Speaker B:And I had already, just by reordering it and by calling out their objections early, I had gotten their attention.
Speaker B:So it was something like.
Speaker B:That was a simple hook to recalibrate the same pitch, but get me in line with them so that we could.
Speaker B:The metaphor I use is when the train leaves the station, the entrepreneur's on the train and the investor's still back in the station, like, wondering all these questions.
Speaker B:So I was now on the train with them because I had called out their questions and said, okay, we're going to address these questions one by one in the next five minutes or 10 minutes and just stay with me.
Speaker B:And I think by the end of 10 minutes, you might be more convinced that I'm onto something.
Speaker B:So that was the seed of the H E A R T method.
Speaker B:I then had to do a lot more research to put words around it and to give it a framework, but, boy, did I get my leap handed to me, and I had to learn the hard way how to reorder my pitch.
Speaker B:So I think I have credibility in talking about pitch structure because I really screwed it up in the beginning and thankfully was able to turn it around and make it a very successful, compelling pitch.
Speaker B:Just by restructuring what I was trying to say.
Speaker A:You lead me right into the perfect setup for how I like to close these discussions, which is, okay, so you just proved to everyone you have a hell of a lot of grit.
Speaker A:You also talk.
Speaker A:Told us the story of startups that you tried.
Speaker A:Didn't necessarily succeed.
Speaker A:You've.
Speaker A:You have a startup right now.
Speaker A:It's not exactly a startup anymore, but your.
Speaker A:Your firm is a startup.
Speaker B:I call it a startup.
Speaker B:Yeah, I think it is a startup.
Speaker A:So where does your grit come from?
Speaker A:What is your source of grit?
Speaker B:Desperation.
Speaker B:Desperation and just a completely passionate belief that I had seen something that other people hadn't seen and that I had an explanation as to why I was the bozo that got to see it before everybody else.
Speaker B:When you see, when you think you're onto something new, you have to ask yourself like nine times over and over again, like, why am I the bozo who gets to see this first?
Speaker B:Like, surely there are other smart people that probably saw this before.
Speaker B:And I'm probably missing something in my particular situation because I had been living in my city for 20, almost 20 years at that point.
Speaker B:I had a pretty good sense of the lay of the land and I had a pretty good sense of why I thought that I might have been lucky enough to stumble into it first.
Speaker B:But I was incredibly, a combination of insanely passionate about it and just desperate.
Speaker B:I had, did not have another option.
Speaker B:I had been, I had been left by a prior job, let's just say, and I was looking for something new to do.
Speaker B:And this was by far the best thing that I had on the table.
Speaker B:And I bet the farm, I bet the farm on myself.
Speaker B:My first partner was my wife.
Speaker B:I had to sit her down and say, honey, I think this is the best thing I've ever seen.
Speaker B:I think this is my best opportunity.
Speaker B:We don't have another really amazing option.
Speaker B:I need to throw myself full bore into this thing and make it work.
Speaker B:And thankfully it did.
Speaker B:So I think desperate.
Speaker A:She supported that.
Speaker B:She definitely supported it.
Speaker B:And she is incredibly skeptical.
Speaker B:And she's one of my best, definitely my best critic.
Speaker B:Like, she, she does not just take whatever I say for granted.
Speaker B:She will ask a million questions.
Speaker B:So she was a great sounding board initially to try to convince that I was onto something.
Speaker B:But again, my pitch to her was a little bit different than my pitch to investors.
Speaker B:And it worked with her first and then with the investors second.
Speaker A:We may have to do some follow ups here and I would love to talk to you about the H E R T. If there's a way I could integrate that into my online course and maybe have you, like, do it because you do it so eloquently.
Speaker B:I do it all over the world.
Speaker B:I'm happy to do it.
Speaker B:It's available for free.
Speaker B:I'd love for people to buy the book, but I'm giving the proceeds away to charity.
Speaker B:It's not, this is not how I'm making my living.
Speaker B:I'm a little bit different than a lot of other authors.
Speaker B:I'm really trying to give this gift to the entrepreneurial community.
Speaker B:And the Hart Method is available online.
Speaker B:You can.
Speaker B:I even created A really nice online playbook with the slides for a startup pitch.
Speaker B:So you can, it's interactive.
Speaker B:You can actually get the 10 slides you need for your startup pitch.
Speaker B:There's a pitch generator at the end where you can craft your own startup pitch again for free.
Speaker B:It's not.
Speaker B:This is not a moneymaker.
Speaker B:This is a gift.
Speaker B:This industry has been amazing to me and I'm happy to give this one thing that I think I figured out back to the industry.
Speaker B:So I'm happy to promote it in your course.
Speaker B:Happy to have you share the, the links and the resources with other people.
Speaker B:It's really just something that I want to.
Speaker A:I'll put the, I'll get the link from you and I'll put it in the show notes so that everybody can get it.
Speaker B:Yeah.
Speaker B:The website is feverpitchbook.com and it's not just about the book.
Speaker B:That's the website where@FeverPitchBook.com you can see the playbook and the pitch generator and the book and whatever other resources you want to figure out the H A R T of your perfect pitch.
Speaker A:Fantastic.
Speaker A:Thank you so much for this, Ben.
Speaker B:Thanks for having me.
Speaker A:Thrilled to have had you.
Speaker A:Here's your toolkit takeaways.
Speaker A:Number one, use the heart method for your pitch.
Speaker A:Don't start with what your company does.
Speaker A:Start with why.
Speaker A:Begin with your hypothesis or belief statement.
Speaker A:Show the enormous stakes, prove the alternatives are terrible.
Speaker A:Present your radically different solution and close with your team's credibility.
Speaker A:This order matches how investors brains actually process information.
Speaker A:Number two, call out objections early.
Speaker A:Like Ben learned in that brutal coffee shop meeting.
Speaker A:Anticipate what skeptical thoughts are already in your audience's head and address them up front.
Speaker A:Don't ignore the elephant in the room.
Speaker A:Acknowledge it and then systematically prove why those concerns are wrong.
Speaker A:And number three, embrace desperation as fuel.
Speaker A:Ben's biggest failures led to his biggest breakthroughs.
Speaker A:When you have no other options and.
Speaker B:You'Re betting the farm on your vision.
Speaker A:That desperation can become your greatest source of grit and innovation.
Speaker A:Don't fear the pressure.
Speaker A:Use it to push through when others would quit.
Speaker A:And that is our show with Ben.
Speaker A:The show notes contain useful resources and links.
Speaker A:Please follow and rate us@podchaser.com designing successful startups.
Speaker A:Also, please share and like us on your social media channels.
Speaker A:This is Jothi Rosenberg saying TTFN Tata for now.
