Gregory Shepard

Bio

Gregory Shepard, known as The Startup Architect., is a Fulbright Scholar, co-founder of the Fulbright Entrepreneurship Initiative, speaker at the United Nations, and one of MSN’s top 10 Visionaries in Entrepreneurship. Greg has built and sold 12 tech companies and won 4 Private Equity awards for transactions between $250 million and $1 billion. He is the founder of StartupScience.io — a platform serving more than 100,000 founders worldwide — and the published writer of The Startup Lifecycle.

Intro

Gregory Shepard's extensive research reveals that nearly half of all founders fail within the first 18 months, predominantly due to avoidable errors made in this critical period. In this engaging discussion, we explore the pivotal factors that contribute to such failures and the necessity for founders to conduct thorough market research before embarking on their entrepreneurial journey. Gregory, known as the "Startup Architect," shares insights from his experience of interviewing thousands of founders to identify the underlying reasons for startup failure. He emphasizes that the trajectory of a startup is often dictated by decisions made at the outset, reinforcing the importance of intentional planning and strategic exits. Ultimately, our conversation delves into the essence of resilience and the vital attributes necessary for enduring success in the tumultuous world of entrepreneurship.

Conversation

In this engaging podcast episode, Gregory Shepherd, a distinguished figure in the startup ecosystem, shares his profound insights on the critical factors that lead to the success or failure of new ventures. The episode opens with a striking statistic: 47.1% of startup founders face failure within the first 18 months, a period Shepherd identifies as crucial for establishing a viable business. Drawing from his extensive five-year research project—which involved interviewing thousands of founders—he elucidates that many failures are preventable, primarily due to avoidable errors made in the initial stages. This sets the groundwork for a rich exploration of the entrepreneurial landscape, where the focus is not only on survival but on crafting a sustainable business model from day one.

Shepherd’s narrative is punctuated by his personal journey, which includes overcoming significant challenges during his youth, such as homesteading without modern conveniences and selling rattlesnakes. These formative experiences have equipped him with a remarkable resilience, which he attributes to his neurodivergence. He argues that embracing one’s unique cognitive differences can serve as a formidable advantage in the entrepreneurial sphere. Throughout the discussion, Shepherd emphasizes the importance of thorough market research and the necessity of designing an exit strategy from the outset, highlighting that understanding potential buyers and their needs is vital for future success.

As the conversation progresses, listeners glean actionable insights that can inform their entrepreneurial endeavors. The episode concludes with key takeaways, such as the imperative to invest time in understanding the market and customers during the early stages, the significance of planning for exits, and the cultivation of essential traits—focus, drive, enthusiasm, discipline, and optimism—that can empower founders to navigate the complexities of startup life. Shepherd's insights not only illuminate the path to success but also inspire resilience amidst the inevitable challenges of entrepreneurship.

Takeaways

• The crucial first 18 months of a startup represent a significant determinant of its eventual success or failure, with a staggering 47.1% of founders facing failure within this timeframe.
• Research indicates that many founders fail due to avoidable mistakes made during their initial stages, underscoring the importance of thorough market analysis and product validation.
• It is imperative for founders to design their exit strategy from day one, identifying potential buyers who can leverage existing customer bases to enhance the value of the startup.
• Fostering a mindset characterized by focus, drive, enthusiasm, discipline, and optimism is essential for any aspiring entrepreneur, as these qualities significantly influence their likelihood of success.
• The tendency of founders to overlook the necessity of an exit strategy can lead to dangerous overvaluation and ultimately hinder their ability to attract investment or achieve a successful sale.
• The journey of entrepreneurship is fraught with challenges, yet those who cultivate resilience and adaptability, often borne from personal hardship, are more equipped to navigate the complexities of startup life.

Useful links:

• Startup Lessons for Founders │ Jothy Rosenberg’s Founder Playbook and Podcast
• Startup Science: Unifying the Startup Ecosystem in One Platform
• Gregory's website
• Jothy's TEDx talk - On why those with disabilities tend to overachieve
• The Who Says I Can't Foundation - Jothy's non-profit that helps disabled kids get back into a sport they love to restore their self-esteem
• Our YouTube channel
• Designing Successful Startups — Jothy Rosenberg | Author | Speaker | Podcaster - Site with all podcasts
• Tech Startup Toolkit book
• Please leave us a review

Hello. Please meet today's guest, Gregory Shepherd.

47.1% Of founders fail in the first 18 months. And over the following five years, most of them fail for things they did in the first 18 months. That early stage is the most critical.

My guest today caught and sold rattlesnakes as a kid, homesteaded for two years with no power, no running water, and a bucket for a bathroom, and started his first company at 19. Today, Gregory shepherd has 13 startups behind him, an exit to ebay, and a nickname that stuck, the startup Architect.

But here's what makes him worth your hour. Gregory spent five years and half a million dollars interviewing thousands of founders to answer one question. Why do startups really fail?

What he found will make you rethink your own plan, because nearly half of all founders fail in their first 18 months, most of them for reasons that were completely avoidable. We get into grit neurodivergence as a superpower. Why? Your exit starts on day one and a whole lot more. Buckle up. This one's a ride.

And Gregory shepherd, thank you for being here. Welcome to the show.

Thank you so much for having me. I appreciate it.

I love your background there. I'm a big fan of that gentleman who's going like this, I think, to a spear.

Steve Jobs.

Yeah.

Yeah, he's. Yeah, he's. My son painted that picture, actually.

Oh, it's a good. It's a good likeness.

Thank you.

To start things off with the simplest thing we could think of, can you tell us all where you're originally from and where do you live now?

I'm from the Bay Area, and I lived there for a while, but I kept getting beat up as a kid.

So my parents moved us to Northern California, and we actually homesteaded on property without any power or water or electricity or anything for like two years while we built our own house. Then I moved back to the Bay Area, and I've done most of my startups in the Bay Area except for one, and now I'm in San Diego.

When you moved further north, because one of my sons lives in Arcata. How far up did you.

Did you go all the way up to near Tahoe? Lake Tahoe. So way up in the mountains, it was like. There was like nobody. There was nobody or anything anywhere.

Long dirt road, you know, it was very out there.

Well, I'm sure. I'm sure it was beautiful, though.

Oh, so beautiful. Yeah, Hard beautiful.

The other thing that you said that's interesting is because I'm actually from California. I'm from a little town Born in a little town really close to Sacramento called Marysville.

I know where Marysville. So you know where Grass Valley is? Yeah, that's where. That's where we were. Grass Valley. So about, what, about 40 minutes north of Sac.

Okay. And then we went away when I was tiny and I moved back to do my first startup in Sunnyvale. And we lived up in the mountains above.

Up Highway 17, just above Santa Cruz, and. And I commuted over that. Any listeners who know the Bay Area or live in the Bay Area are going to know Highway 17.

Oh, yeah.

And we lived right on Highway 17. And it was. It was kind of a wicked commute, let me tell you. It was a wicked commute.

Terrible. We called it the Hill. I lived in Santa Cruz for nine years. I built the company.

I sold to ebay in Santa Cruz, and so I'm very familiar with driving the 17. That thing is a nightmare.

Yeah. So, well, just up from Santa Cruz, technically, we lived in Scotts Valley. That was.

Got it. Okay. Yeah. So my office was in the Borland building. You know, the old Borland building in Scotts Valley.

Well, I worked for. I worked for Borland.

No way. Oh, that's crazy. Wow. Small world, huh?

I worked in the old building, and then we. We. You know, Philippe Kahn, in his infinite wisdom, decided to build this amazing Shangri La in the old Santa's Village spot.

And I. I did most of my time at. At Borland there, and Borland is the reason I'm in Boston now.

They've moved me to Boston because we did an acquisition across the country, and it was key to my division, and. And I knew that we were bad at acquisition, so I figured I better go there and be there in person, so.

Fascinating.

Okay, now here's where I want to go with you. Before your first startup, where.

What sort of places were you working and what experiences did you have that kind of led you up to that first startup?

It's a good question. I mean, I started my first startup when I was 19. I was almost 19. 18. 19.

So I was a kid, and before that, I was selling Rubik's Cubes and I was selling rattlesnakes that I would go catch. I tried to join Navy.

They kicked me out because I have asthma, and I lied to them about asthma because I was trying to get out of the little town, you know, and I was trying to get started. I got out of the Navy here in San Diego, and then I got four jobs, and then I started my first business, and, you know, I'm on my 13th.

Now you got me beat. I'm only on nine and I'm not doing any more after this one.

I keep saying that, I keep saying that over and over and my wife thinks there's something wrong with me. I keep doing it again.

Well, other than the one that when you were 19. I kind of want to. That first one and, and you're so young. Let's sort of move, move to the one when you were, you know, past the Navy experience and.

Yeah, and, and how did that one come about?

I was. So basically I. The first startup I did was a, was a lender, a non depository bank. I was working for Chase bank, it's now Chase bank.

It was called something else at the time. And they showed me how to get lines of credit. So I went out and got a line of credit, started my own lender and sold that to another company.

It was called American Federal Lending. And then I did biotechnology.

And the cool thing was is I was just researching environmental solutions, like different kinds of things because back then I thought it was going to be a bigger deal back then now would be a good time to do it. But I started this company that sold bacteria that ate hydrocarbons.

So these are naturally occurring bacteria, but you just put more of them on something because they need more. And then, you know, you, you, you. It remediates whatever the oil is, whatever the hydrocarbon could be. Oil or any form of oil.

So this is for like oil spills.

Yeah, oil spills, gas stations, remediation, wastewater treatment plants that have massive amounts of oil that clog everything up.

And the uniqueness was, is that the bacteria, before that you couldn't transport it because you had to put it in water and the water was really heavy. So this guy named Dr. Howard Warren, this genius scientist figured out how to get the bacteria to jump on wheat germ.

So it was really light to move them around. And that's when the thing sort of broke through. He passed away and gave me the license because he liked me.

And then I built a company and sold it to a Canadian company, a public Canadian traded company.

Wow. Well, did he have an estate that was hoping to get something for the, for the trouble?

He didn't want anything. He had a lot of patents already and his grandchildren and his children inherited a lot. And he, he liked me for some reason.

You know, I was just this young, rambunctious, really motivated kid, you know, and.

He liked lots of reasons to like somebody. Those are good reasons.

He was just like, if there's anybody that's going to do something with this. It's going to be you. And then he, when he passed away, I got this thing in the mail and I was so surprised, you know, I couldn't even believe it.

He signed it over to me. I was like, this is incredible.

Oh, that's amazing. Luck just shined down on you at that moment.

Yeah. And we built. So I built this company. We sold.

We sold it to shrimp farms, fish farms, wastewater treatment plants, remediation sites like the Exxon Valdez oil spill, gas stations, you know, that were remediating the few, you know, because normally they'd have to dig up all the soil and then redo the soil, but this, they stick these rods in and pump the bacteria in and seeps through because it's, you know, it's tiny and it'll seep through the particles of dirt and then eat up all the hydrocarbons without them having to take all the dirt out and clean it and replace it and stuff.

My impression is it's so rare for there to be something. There's no known side effect. There's no known negativity to this.

Yeah, I mean, they're naturally occurring and they double in numbers until they run out of food and then they eat each other and the last one dies of starvation. So, you know, it's innocuous.

That one. What, you sold it?

Yeah, I sold it to Epicor in Canada. And then after that I started a company in the. In the Internet space because that's when the Internet first started to come out.

So I built the first online travel insurance company and was selling travel insurance online. And then I sold passports and visas and I sold foreign currency exchange and luggage.

And I ended up sending these customers around all my different sites. And then I got. I started going out and doing partnerships and I got a partnership with a cruise line. And then that was the beginning of affiliate.

So you know what's now affiliate marketing, performance advertising. And somebody would buy a cruise and then they would say, add on travel insurance. And they would add on travel insurance.

Oh, add on foreign currency, Add on, do you need a visa or a passport? Do you need luggage? And that's how that thing ended up taking off. Sold that one, sold all, all of those separately to different buyers.

I was trying to sell them all to one buyer, but the travel insurance company that bought Travelex, that bought the travel insurance piece of it, didn't want anything else. So I ended up having to sell off the little pieces. But that led me into a online advertising business. That led me into affiliate.

And then I created the first affiliate agency, the first one to go global and the first one to be acquired and that got bought by ebay, Enterprise Marketing Solutions, you know. And so my career has just been one sort of thing that dovetailed into the next.

And that's wonderful if that can happen because a lot of mine were very, I would say disjointed. You know, one would have an outcome, maybe a good one, maybe not a good one.

And that did not necessarily lead into, you know, a couple times it, it was a dovetail like you, like you described. Somewhere along the way you got to be known as the startup Architect. What's that about?

I did a five year research project on founder success and failure. Thousands of interviews, five people cost me 500 grand.

And I started to understand that the, the, the failure rate that's associated with founders, associated with a unarchitected space, meaning every single founder goes through the first, the experience as if it's their first time. Instead of there being a, a breadcrumb trail left behind that makes it easier. Every founder that comes through gets better and better and better.

And so what I started to do was try to figure out how I could architect a structure, a life cycle that told founders where they were going, where they are, what to expect, what to look out for, and all the things that happened during the journey of a founder. Most people think that a founder's journey is dictated by the round of funding.

So they'll say, oh, I'm at my pre seed round, I'm at my seed round or my series seed round or my series A or whatever it is. Those are things that happen during the journey, but that's not the journey itself. There are things that are more important.

Fundraising and going after money is the outcome of something else. And that something else is what I focused on. And that's where I picked up the Startup Architect, the name.

So did, did that come from other people who, who nicknamed you that? Or, or was that the name of your, of your research project? Or, or did, did you name yourself that?

No, they named people, named the publisher, named me that. They, it, it was.

The first one was the entrepreneur's entrepreneur and then somebody else came in with the startup Architect and then, you know, that's the one that they ended up giving me. So I kind of just stuck.

I have, I got a nickname. People said to me after I had already started five startups, you know, you've got to stop calling yourself a serial entrepreneur.

You're an incorrigible entrepreneur. Which, which they say with sort of a little bit of a, you know, negative vibe.

We have a similar kind of outlook because I've created This set of 60 online lessons, video lessons, that are about all the various steps in the life cycle I've basically been trying to apply to the next generation of startup founders. My experiences being very honest about the mistakes I made and can I help people avoid those same mistakes or, you know, related mistakes?

Startup Science, my startup that I'm doing now is a platform that pulls together the whole startup ecosystem. It's like the startup economy in one system and we have like a hundred thousand thousand startups in there and they take classes and courses.

We should talk about that because we could put your courses in there.

I would love that. Let's, let's, let's, let's do that and we'll put what we're talking about, we'll put in the show notes of this podcast. Cool.

So, but this Startup Science IO, that's its URL, because you mentioned it to me in something that you wrote that, that seems worthy of maybe a little bit more discussion than just, you know, 100,000 startups. Maybe you, you know, how did you get, get going in that and, and, and, and what, what are you doing with it right now? Those sorts of things?

Yeah, I mean, I did the research initially and then I wrote the books and then I was like, that's not enough. I need to do something. I need to fix the problem, not just talk about it. So I started working on it in about five years ago.

I've invested like two and a half million dollars in the project. And we power accelerators and incubators and chambers of commerce and hackathons and startup studios and all kinds of stuff.

We also have products for investors.

The system pulls together the five players in the ecosystem, which are the providers, the investors, the founders, the mentors and advisors, and then obviously the founders themselves.

They all sort of have their own login, depending on what their needs are, and they have their own products, but it's all connected through a universal core. And each what we call eso, or entrepreneur Support organization gets their own platform.

And then they can configure it however they want and turn different features on and off and private label it, et cetera. And that's the, that's the premise of the whole thing.

And the idea was, is to pull together the fragmented, broken ecosystem into a single platform and consolidate all these, what I call point solutions, all these little things that are all over the place into one system to make it easier for all of the people that are working in the ecosystem.

It sounds fantastic.

I definitely want to see if, if I could support you and what you're doing, and if, if, if this is, if this is new material that fits and not overlapping completely, that would be really great. I have a, and this will probably ring true to you. So as a startup founder, of course I create grandiose goals. We all do.

Right?

And, and the statistic, I always do that. I, I, I swallow the beginning of that word. The statistic that has been plaguing startup world forever is that 8 out of 10 fail.

Mm.

And, and you mentioned, you alluded to that. You didn't use that number, but you alluded to that a few minutes ago. My goal, grandiose one, is that I'm working on three things.

It's the book, which is my first person accounting of how the, the nine startups went and, and what went wrong and why.

And, and then the second piece is this podcast, because this is a chance for me to help someone else tell their story and not necessarily write their own book. And we've got 116 founder stories so far in the podcast. And the online course is the third leg of the stool, if you will.

Oh, cool.

And, and, and so it's, we're, we're, you know, we're operating in parallel paths and we need to, you know, merge those paths.

Yeah, I would love that. Yeah. I mean, we're both trying to help. I mean, I'll tell you that in my research, you know, 47.1% of founders fail in the first 18 months.

And over the following five years, most of them fail for things they did in the first 18 months. So that early stage is the most critical stage for any founder. You know, you, I believe it's really difficult to fix things after they're solidified.

It's like concrete, right? So if you're a founder and you have a. You didn't do the necessary research up front, and you start building your product.

The more you build your product, the more you raise money, the more you get customers, the more the walls start to close in on you. And it solidifies what you are. So it makes it very difficult to pivot or change because you've sort of locked in everything.

Your investors expect a certain thing. You've already got customers, you've already built product and invested money in those products.

So that first stage, that the vision phase of building a company, doing the research to make sure that you understand the market, the customer, you know, all the, the standard things is critical to your survival.

Like a lot of founders don't realize that you should be spending more time in the, in the first year on making sure that you've done the necessary research to understand what you're doing and for who and what problem you're fixing and that the market actually wants the problem fixed, et cetera, than a lot of the other stuff. Right.

It's, it's so critical because what you do in that first year is develops your product, your go to market strategy, your exit strategy, Everything comes from what you do in that very first year. So I tried to build a platform that helps at the very start.

That's why we power the accelerators, because this is where the founders typically will start. So it's like the earliest stage I could get, try to try to get the founders to correct or offset the reasons why I discovered they were failing.

Well, it rings true to me. And, and I'm, I've certainly lived it. I've, I'm guilty. I'm guilty as charged.

I mean all of us are. You know, everybody's made that mistake. That's why I tried to write about it because I was like, this is, it's 47.1%, almost half of them. Right.

That's a lot of failed startups that didn't necessarily need to fail.

You've done a lot and you haven't told me everything, but just clearly you've done a lot. Therefore you must be a very productive person. How do you explain that? How come your so productive?

Maybe more productive than the vast majority of people. How, how come?

Yeah, I think. Well one thing is, is I'm incredibly focused. Um, I'm super organized and I work really long hours.

I mean I started 4:30 in the morning and I stop at 6. So I, it's, it has to do with a lot of like a lot of hours and hard work.

Highly optimized, based on the organization I do and how I switch from thing to thing and where I spend my time. I do, you know, five hours on Saturday, five hours on Sunday and you know, real focus time.

That's when I usually do like writing books and articles and things like that, research, et cetera. But I think it has a lot to do with really refined organization. You know, like, because organization leads to effective time management.

Do you remember a book called the Mythical Man Month?

No. No I don't.

It's a great book. The author is a guy named Fred Brooks. He was the project manager on the first operating system for the IBM 360.

Wow.

And he wrote about that experience, trying to explain, if you're behind schedule and you double the team, you do not cut the time to completion in half. Just like you can't get two women to create a baby in four and a half months instead of nine.

So true.

That's the mythical man month that he talks about. The reason I mention it is that I was fortunate enough as a grad student to have him on my PhD committee.

He did something with respect to time management. See, I'm getting back to this topic that was unbelievably cool and low tech.

He had a board that had six alarm clocks on it, and every Monday morning he would set them all to 12 o'. Clock. And below the, the board, the board is a button, and there's a button below each clock. I mean, and.

And he had labels for the clocks, which he only would change the labels every once every semester, because then his assignments would change.

But one of them would be meeting with students, and one of them would be, you know, doing his faculty assignments, and one would be research and, you know, something else.

Anyway, when he changed from one, when somebody walked in his office like a grad student and he's now working on their issues and their time, he would hit the button that said graduate student advising, and it would shut off the other clocks and just activate that one. And at the end of every day, he would look at the clocks and he would say, am I behind in any area or are they all tracking?

And I'm spending roughly the same amount of time in all those things, which might not necessarily be how everyone operates. You might say, look, I want to spend four hours in this area, a week and 12 in this.

But anyway, he wanted it even, and it worked amazingly well for him.

I wrote a prompt for my AI and I put in there at the beginning of the day, it says, here's what you shot for yesterday, here's what you, what are rollovers for today? And then I put in my, my day, my calendar, and says, you've done this, this, this, this, here's how much time you spent on each thing.

And then the next day I try to optimize that time, so I use an AI prompt and I just feed it all my data. And then at the end of the day, I get a retrospective, and then I use the retrospective to optimize my time for the following day.

Sorry for the interruption, but in addition to the podcast, you might also be interested in the online program I've created for startup founders called who Says you can't start up in it. I've tried to capture everything I've learned in the course of founding and running nine startups over 37 years.

It's four courses each one about 15 video lessons plus over 130 downloadable resources across all four courses. Each course individually is only $375. The QR code will take you where you can learn more. Now back to the podcast. Which AI do you choose to use?

Claude.

I selected Claude quite a while ago.

Yeah, I mean, like Claude is, is. Is really, really good because of the production quality of what it gives you.

But if you're, If I'm trying to move really fast, just with text or an image or something really fast, then I'll use chat or Perplexity. I mean, I use like four different AIs, one each depending on what it is that I'm doing.

Because cloud will take a little while to get to that production quality. It's, it's takes longer if you're just trying to really move through content. Then I find Chat GTP to be the.

The end result is just looks horrible and stuff. But you can always take what I build there, put it into Claude and then create something production ready.

I also like the philosophies that Anthropic has and lines they won't cross. I like that a lot.

Yeah, I think that's great. I think they're producing some tools that are just shutting down entire industries right now. Like their CFO tool as an example.

Anybody that was doing forecasts and projections and all those companies are, they're done. You know, now that, you know, Claude came out with that, it's. It's going to be interesting to see what happens with AI and our culture.

Yes, indeed. Have you told us everything? I wanted to make sure I covered how you went about the research for startup success and failure.

I know you described how you did it. This was not that recent, so you didn't have the AI to help you, right?

Because you can go back and do it again now.

Yeah, yeah, I did. I went back and did it again and then produced another book.

But originally it was like I would do these interviews, have the interviews transcribed, and then I would pull out keywords and then I'd put them in columns. So I would say founders failed for this reason in this category, this category, this category. And I would put the transcriptions in those categories.

And then I would go into those categories and find commonalities between all of the founders that had failed or succeeded in each category. Investors that had given me information, mentors, invest, corporates.

I interviewed all of them, thousands, and put them into those categories and then research those categories to find the commonalities that created the little algorithms that I wrote to figure out what was actually happening.

And then I went back and gave all the data to AI and it did it in, you know, I think it took me like two days, but the original one took me four years. So.

Well, I'm so I'm pretty sure that the development of the course courses that I mentioned to you, you know, it's 60 lessons, video lessons, and 158 downloadable resources that took me about 16 months to develop. When I was pretty much working on that almost full time. Almost full time, I was using Claude to help me every step of the way.

You know, I, I basically would start with a chapter from my book and say, here's the, here's the, you know, the, the way in which I was constrained by the publisher kept things, you know, quite compressed.

Yeah, they do they limit you to like 250 pages?

Well, that's exactly the number they said to me.

Yeah, that's what they told me too. Yeah.

So. But I would say to Claude, okay, those shackles are off.

We can do things in, in color and, and, and also on everything that I was talking about, I could not only have a diagram, but I could have an animated diagram. And that would really be much more helpful to people to see, especially, you know, think about the current generation.

Just, you know, Gen Zers are starting to do startups and they like things moving. They don't like static content.

Yeah. And they don't like to read. They like to watch.

Well, they're watching you right now on a, on a YouTube. Okay. All right. Hello? Yeah, he, he dramatically sped me up. I also think that he helped me make sure I covered things that I might have, you know, not.

I felt constrained, like I said, and there were things that I probably would have talked about if I'd had more room. And then Claude would say, well, we really should talk about X, Y, Z, you know, to add to your chapter.

And then I would say, okay, great, let's go through some of that material. And, and it was very nice and back and forth. It was really fun to, to work with Claude in that way.

And then when I needed a diagram, Claude is basically one of the strongest things, you know, in his you know, in his quiver is programming.

And.

And I discovered that Claude is best at creating. Helping to create a diagram by having him program it in svg.

So simple vector graphics is a, you know, a form of XML that he would, you know, just spit out like. Like crazy. And it was, you know, fantastic. And then I have an editor that can directly edit svg. So I would go in and.

And some of the labels would be wrong and, you know, but the basic concept would be there. It's like I would describe what I want and I'm not a super artistic type person and.

And Claude would make it pretty, but it would have a few little glitches and I would fix those manually.

Yeah, I mean, it's a lot of fun.

It's a lot of fun to play with something that gets rid of the frustrations, you know, the surface noise, it, like clears everything up, you know, like I had something like 5,800 pages on the research and it was. I was able to load it in. You know, it took me a long time to get it all in there.

But once I got all in there and loaded in, I could start asking questions. You know, I could go in and say, hey, what, what. What is the reason why founders are failing at the top of the.

At the top of the failure stack and what's the reason at the bottom? You know, so cause and effect, right? What was the leading indicator and the lagging indicator to the failure ultimately, you know, and it was crazy.

Some of the stuff that came up, you know, common knowledge. If you go out there and you look at the research, they'll say, oh, well, ran out of money. Well, that's a question, that's not an answer. Right? Why?

So did they run out of money or bad team? Why was the team bad? Like, what happened? Those things were. I found that that was just completely unhelpful. That was.

I think it was Crunchbase or Pitchbook or one of them did that research and it just left. Everything there was. I was just left with questions. So when I. The real, the real data is you can tell why they wouldn't put it out there.

Because one of the major reasons is because of bad advice from investors, bad advice from mentors, bad advice from accelerators. So that is like one of the major reasons why they fail is because of bad advice.

I don't blame those companies that did the research because they would have pissed everybody off that's buying their research. But that was really what came out of it. A lot of it was bad advice. Some of it Was that the walls close in.

Things solidify before you have a chance to. You can't pivot once you, once you start going down that road. Another reason is because of the overvaluation issues.

So the founders, you know, didn't think about the exit before they started. So they didn't know who was going to acquire and what their appetite was for their valuation.

So they would overvalue their company and then not be able to get investment or not be able to sell the company. Not having an exit strategy when they started, meaning companies buy companies because of synergies.

And the biggest synergy is to make money versus the other one is to save money. And the way they do that is because the buyer already has the customers.

If you have a product they can sell to their existing customers, it grows their ltv, therefore increases their CAC to LTV over the long term. So thereafter buying products that their customers will buy.

Well, if you're building a startup and you don't think about the buyer and their customer and you don't have a match, then you don't have a buyer, right? So now you're out there all by yourself trying to figure out who wants to buy your company instead of planning for the exit in the first place.

So a lot of these things were things that, you know, when you look at the data after really getting into it, you're like, well, that's pretty obvious, but it's not right. These are things that you get from experience. And if you're a new founder, you don't know these things when you start.

You definitely don't. Gregory, you have obviously, like any startup founder, but you maybe in a larger measure than, than anyone I've ever met, have a lot of grit.

We all, we talk, I love to talk about grit because for a variety of reasons, I have a grit story that usually makes most people, makes their toes curl. So I, but I want to hear your grit story. Where does it come from? You know, you started a first startup when you were 19.

You've been blazing through them. You've been, you know, trying to figure out how to help the next generation. You've, you've, you've got 13 startups under your belt.

You're, you're not slowing down anytime soon at the peers. And so when, you know, when you think about grit as being, you know, resilience and determination, stick to itiveness and most of all, courage.

Where does yours come from?

I mean, I think I'm neurodivergent, right?

I have autism and dyslexia So I think growing up with that and being an outsider and getting picked on and, you know, learning on my own, like teaching myself.

I taught myself physics and mathematics and philosophy and religion and all these things because I know how to teach myself, but nobody else knew how to teach me.

I think that that creates an incredible amount of resilience, you know, and you, you learn that if you want to do something you have, you have to do it, that nobody's going to help you and nobody's going to do it for you. And I think in a lot of other scenarios, people have, they don't have the challenges and those challenges equal.

Failures and failures equals evolution. Right? I mean, evolution is the process of failure and recreation.

So I think that my resilience and grit comes from just having a really hard life, especially when I was younger, just incredibly difficult, and then just constantly fighting and scrapping for everything that I can make happen. You know, I mean, we lived in, you know, we, we, we homesteaded for two years. We had no running water, we had no electricity.

You know, we went to the bathroom in a bucket, took a shower from bagging, and from a tree, built our own house. You know, I mean, it, this is at a young age. You know, I started working when I was 13 on a ranch, hard labor.

So I think that if you grow up that way, you just, you, you, you don't realize that you're developing grit, but, you know, it layers one layer on top of another, on top of another, and pretty soon you just, that's who you are and you don't know any better. You just, you just don't. It, that's normal for you, and anything else is not normal.

You know, I'm with you. I'm with you 100%. I, I have my own story that comes to the same conclusion. The exact same conclusion.

Yeah, I feel sometimes the younger generations that haven't had as hard of a time, I worry about that. I worry about their ability to get beat up and stand up, to fail and then succeed, to understand that failure is just a stepping stone to success.

You know, to pick yourself up when you don't want to do anything. I have this term, I call it a handful. You need a handful of things. Five things, one for each finger.

Focus, drive, enthusiasm, discipline, and optimism. And if you can have those things, you can make things happen.

Any one of those things that's missing, you're not going to be able to make things happen.

My TED talk was about why people with disabilities tend to be so much more successful at life than their sort of able bodied. And I'm, I'm talking about a physical one now. Okay, but, but the same thing applies to what you're, what you have and had to deal with.

And, and the three things that, that I talk about is insecurity. And second is exceptionalism. And I'll come back to it in a second. And discipline.

And those three combined together is what I believe is why people with a physical disability, like Franklin Roosevelt, like Alan Alda, like Jack Nicholas, like, you know, it goes on and on. And I'm just gonna put my words for my TED Talk into what you just said because it's so similar.

What you learn is you're on your own and you've got to work really hard at what you want to do.

And in my case as a youngster, that was really sports because I, I discovered pretty quickly that if I could do really well at a sport, which I could do if I focused hard on it, even though I only have one leg, I could, I could excel beyond what other people who have two legs were able to do. And so the, the combination of insecurity and starting to feel exceptional created drive.

You wanted to do more, but you, you never lose that insecurity and it's constantly there to almost create this irritant that keeps you going.

Yeah, that's so true. It's, it's like it's poking you all the time.

And the third thing is discipline. And discipline is something that again, if you have a disability, you have to have a lot of discipline.

And so those three things carried forward for me all the way until, you know, I, I didn't do my first startup until I was 32. 32. I did my first. So you did your first at 19? I did my first at, at 32.

Yeah.

I think that I, there's something interesting, you know, like you were talking about with the prosthetic and your leg, is that your other leg starts to adapt and your brain adapts to the fact that you're, that you're walking on your knee or whatever it is that, you know, you have there in, in the brain. I had a, a brain scan on my brain. Neurodivergent people versus neurotypical people. And we had this like there was. The scan is crazy.

It shows that my brain uses different areas than a neurotypical person. So it's very similar. Right, in that your body will just figure out how it's going to accomplish what you're asking of it.

So the trick is, what are you asking of it. And are you helping your body adjust to this new way of thinking? You know, it's, it's really fascinating.

But, you know, I tell everybody, I'm like, your disability is your advantage because that disability gives you a different perspective and a different perspective than everybody else is an advantage.

I want to thank you, Gregory, because we are at a stopping point for today, and I think this is going to be a fun episode of the podcast for people to watch or listen to. I think you're a fascinating guy. Thank you. And thank you for sharing with us here today.

Thank you so much. And thank you for having me. And thank you for all the kind words. I appreciate that.

Now for your toolkit takeaways. First, the first 18 months are the whole game.

Gregory's research found that nearly half of founders fail in that window, most of them for avoidable reasons. Before you build a raise, do the unglamorous work. Know your market, your customer, and the real problem you're solving.

Once the walls set like concrete, you can't pivot. Second, design your exit. On day one, companies acquire for synergy, a buyer who can sell your product to customers they already have.

If you don't know who that buyer is and why they'd want you, you don't have an exit. You have a hope. Build toward a buyer from the start. Third, carry a handful. Gregory's formula is five things, one for each finger.

Focus, drive, enthusiasm, discipline, and optimism. Have all five and you can make almost anything happen. Miss even one and you'll feel it.

Now go name the one most likely to acquire you someday and write down why they'd want you. If you can't answer that yet, you just found your most important homework. And that is our show today with Gregory.

The show notes contain useful resources and links. Please follow and rate [email protected] designing successful startups. Also, please share and like us on your social media channels.

This is Jothy Rosenberg saying TTFN Ta-Ta For Now