#16: How the Internet Has Changed Business with Greg Zen
Greg Zen is a serial entrepreneur, mentor, and US Navy Veteran with a background in Applied Psychology and over 20 years experience leading multi-disciplinary teams and projects distributed globally.
He’s currently the founder of StartupHeroics, which provides mentoring and advisory to startups around the world, and the founder of ZenCo, a future-driven technology organization dedicated to creating products and services that serve the better good.
What You Learn
- 0:00 – Intro
- 2:17 – Becoming an Entrepreneur
- 13:13 – Business Before the Internet
- 17:53 – Doing Business in the Pre-Internet Era
- 22:21 – The Psychology of Selling
- 28:04 – Dot Com Burst Aftermath
- 31:50 – Accelerators and Venture Capital
- 39:40 – Entrepreneurship in the 2010s
- 42:51 – Entrepreneurship in the Next Decade
- 47:40 – Follow up with Greg
Welcome back to another episode of the We Live to Build podcast. Our guest today is Greg Zen, a serial entrepreneur, mentor, and US Navy veteran with a background in Applied Psychology and over 20 years’ experience leading multi-disciplinary teams and projects distributed globally. He’s currently the founder of Startup Heroics, which provides mentoring advisory to startups around the world, and the founder of Zen Co, the future driven technology organization, dedicated to creating products and services that serve the better good.
I recently got in touch through a request I made on Help a Reporter for people to respond to a question I had. We ended up having a call that went on for nearly two hours, where we discussed all sorts of things like living, traveling, and working abroad, the Psychology of entrepreneurship, mental health awareness, meditation, and much more. Greg is a fascinating guy to talk to because of his wealth of experience and I hope we can capture even a small part of that on today’s episode. It’s inspiring to meet someone who lives in the thick of Silicon Valley and despite all of his success, makes others feel like he’s just another guy doing his thing and putting all his energy into doing it right. I hope more people don’t let success go to their head like that guy who founded WeWork (cough cough).
Today we celebrate Greg’s passion for making sure startups get the help they need rather than taking advantage of their lack of knowledge and experience. So, for that let’s give Greg a warm welcome. Hooyah!
Becoming an Entrepreneur (2:17)
Well, it’s good to have you finally and I know it took us several weeks to make this happen because of the 15-hour time difference, but we’ve done it and, um, I know this is going to be a great episode. Welcome to the show.
Thank you very much Sean, I’m glad to be here and, um, also appreciate the warm intro there, that was really nice. Just a real quick correction though, I am not in Silicon Valley, I am in California but I’m down in southern California, so just everybody knows.
Alright, well, we’ll just pretend that didn’t happen then. So, I know there’s so much that we can talk about. I think in order for us to get to that conversation, we should start with when you realized you wanted to be an entrepreneur, because that helps us to understand your mindset for the, the later conversation.
Sure, in reality I already kind of being an entrepreneur, um, a few times over before I even knew what an entrepreneur was so, and various points in my life I had a taste of being in business for myself even when I was little kid. Eventually, I had just felt the bug of working for myself versus other people and being able to create my own thing and the idea of sort of being able to give myself a raise every day if I wanted to you know, excelled to that level. So, I, I just really wanted to try lots of different things. I fell into starting my first company pretty much because the person I was working for was doing a terrible job and not really appreciating like I was making all the money for the company and like well I suppose I could try to branch off and do this on my own and it, it panned out pretty well. And, from there I had the bug, so I just kept trying one thing after another for many years after that.
I think it’s similar for a lot of people. I know when I first got to China, I started seeing how the people were running their businesses differently than what I would expect in America and I’ve mentioned this on previous episodes before, so I don’t want to say in too detail. But essentially my bug for entrepreneurship was seeing other people make bad business decisions and a lot of the time it’s surrounded around treating their customers poorly or treating their employees poorly and I realized if I could do it better, than I could probably build a better business and whatever it was I wanted to do. So, who is your inspiration for getting started in being an entrepreneur?
My very first inspiration was actually my grandfather ,and to a degree you know I’ve, I’ve thought about this enough that I think that maybe he was kind of leaning in the direction of having something to do that wasn’t going off and trying to surf, um, instead I ended up serving those surfers for a little while. Since he was sort of a polymath, and he had been a bit of an entrepreneur himself until he became a doctor later in life, so I was inspired by him in a lot of ways and he had pointed me in the direction of the idea of creating your own career and so he was probably my original inspiration and then early on I guess in the nineties that’s probably inspired a lot by people like Bill Gates and to some degree Steve Jobs and let you know the other players at that time.
I read some of their material. I remember Business at the Speed of Thought by Bill Gates, it’s a pretty heavy read, he’s not the best writer, at least back then but at the same time it blew my mind what he was talking about, what you can do with technology and in business and how you can automate things in such ways that was just like oh my god this is being done this is future tech and I was so enthralled by the future of technology and I wanted to be a part of it. And it felt to me like I could work with other people on their ideas, but I had plenty of my own, so I was really eager to try and chase some of those ideas.
So, what were some of those first ideas that you had?
They kind of run the gamut, but I think probably one of the more noteworthy ones, after I’d sold my first company, I’d started dabbling in this idea of trying to disrupt the operating system world. My thought was okay computers are fairly expensive, and the reason for that is because the operating system primarily back in those days, and unless you wanted to build your own operating system like a Linux or whatever, um, which most people weren’t into then, you’re gonna end up paying just more money than most people could afford for computing.
So, I thought if I could democratize this a little bit by making software a little bit more accessible, by making it sort of like a pay as you go service, so we’re talking like software as a service before this was a popular notion, but when I ran into was this idea of creating a technologies like, think of like a dongle or something that you keep on your keychain, you can plug in any computer, didn’t matter if it had and operating system, but it would get you online and you will bring you to your hub and that would have the software that you are paying for that you want to use on a daily basis.
So, this idea, it seemed like a really cool thing to do, but number one, the bandwidth wasn’t really there yet most people didn’t have internet in their home if they did, they didn’t have high speed. And then on top of that, when I talked to all the major software companies, they pretty much just laughed at me just like yeah, we’re not going to put forth the resources to make a web version of our software. So, it looks like we’re going to have to build this all pretty much from scratch which meant we were going head-to-head with all of these major companies, Microsoft, Adobe, so on, so forth, just to build this sort of like play store or whatever you know way ahead of time where people could have like an as needed basis subscription to whatever software without having the need to actually own a computer but you can just go up to somebody else’s and have access to your own stuff or whatever.
So, this is like this crazy ambitious thing, one of the perfect examples of like how I think, and often it gets me into trouble as a founder and a product designer. I’m always trying to build something that’s far too big, you know, the scope is enormous. And it’s gone from that all the way to the last startup that I was trying to build before I found out that I was really sick back in 2012, we were trying to build this app that would effectively change or help people change the behavior for how they shop for groceries and hopefully, you know, this would work towards a better nutrition, lifestyle, like kind of guiding people the right way, less waste was the idea, cuz we would help people buy more efficient and smart ways. And we’re trying to tackle the food waste problem from the consumer side of things because the distribution side of things as tends to be owned by foreign companies and it’s kind of a tough nut to crack. So, if you could change how much waste was happening from the supermarket forward maybe that could be helpful to tackling world hunger a little bit.
That means again, kind of a lofty idea, but then once I yeah, found out I was sick, I had to kind of drop that and that’s actually when I switched to mentoring full time, you know, mentoring seemed like the thing to do because I could kind of do it at my leisure. I didn’t have to worry about how I would be feeling that day and.
Well, those are definitely really large goals, and they definitely sound like they’re way ahead of their time. I remember growing up having Prodigy and AOL be the first ways that I got online, and I was like 7, 6 or 7 at the time, this was like 1992, 1993. I mean the idea of a dongle at that point like one there was no such thing as USB yet, even if there was I mean floppies these 3×5 and 5×7 discs only really held several megabytes, so it would have been impossible you know even until like the mid-2000s to make something like that happen, so it’s very, very ahead of your time in the idea of talking about cloud software in the early 90s before the internet was really a thing is, is very interesting, so.
When I was trying to come up with that, um, that particular marketplace it was, um, right around 2000, give or take, 2000, 2001 just to be clear on that, when that happened. And then the last one I was talking about that’s about 2012 when I was when I found out that I was sick and I, I need to switch my direction a little bit just for clarification.
Even in 2000, 2001 smartphones didn’t exist for another 10 years almost and app stores really came like 2010, 2011 and so this idea of software in, in the cloud or software that you can download on demand didn’t come until smartphones and, and their app stores. So, it was. it was really far ahead.
The school of thinking that I come from isn’t where, like today generally speaking we have the luxury and the, the Psychology to build off of that which exists so you’re building solutions off of other platforms, etc. When I got started and even before that I think the mentality was that you had to build the stuff from the ground up and so if you wanted to see this type of technology exist in the world, you really had to you know think forward, and it’s, it was difficult because you don’t have as much of like venture capital floating around and everything, you really had to work hard to impress people with more than just these ideas.
Of course, it was also before you, you didn’t necessarily have to have like huge amounts of traction on some of these ideas. If it’s, if it seemed like something that would change the world sometimes that we get the attention. Unfortunately, the, the first one that like over 2000 era marketplace I was talking about, I realized what that was gonna take was basically having to rebuild all that software on a web, um, capable platform, which didn’t exist at the time and so to get the developers and like the team involved to make that happen was going to be an unheard of kind of Series A, like a $30M+ Series A, which for you know something we don’t have anything yet, back then it was really unheard of, and so that was why I eventually had to kind of walk away from that.
But, yeah in general, I do have that forward, like future tech thinking where I’m not you know trying to necessarily build the next cool thing off of that platform most of the time, I’m trying to come up with how do we really change the world in some form or fashion. Like, I’m really into multi-modal technology as well. And now I’m very interested to see how that changes because of things like COVID. You know touch is obviously less desirable for example I’m kind of going on a tangent there, so.
Something that I’ve been thinking about for a long time you know is that smartphones can’t really get better than they already are. They can maybe get thinner they can maybe twist, or folder, or all of these kinds of insane useless nice to haves, and so I was thinking even 3, 4, 5 years ago, what’s gonna come after that and the only thing I can really think of is something that Google tried with the Glass and failed, is this kind of heads up display you know maybe in the form of glasses or maybe if we wait a few more years, it could potentially be in the form of a contact lens and then possibly you, you know ten years after that, um, you know, maybe , um, Neuralink the company does a great job in implanting everyone’s brains and so we can just connect to the internet and see the stuff on our eyeballs so it’s very fascinating, um, definitely.
Business Before the Internet (13:13)
But I do want to turn the conversation a little bit back towards our original goal because it’s a very fascinating one of discussing kind of what entrepreneurship was like before the internet and what changed when the internet started and kind of go through what it’s like now and kind of this evolution over the last twenty-five years.
I could tell you how I saw it in a way. Being there during the dot com era, it wasn’t sexy to be honest with you. If you were in and around it, like I contracted with a lot of startups during that time before I, I built one of my own, and watching people try to do IPOs or pre-IPOs, it was a disaster. It was really expensive and a nightmare, like I don’t want nothing to do with that. Even though like shortly thereafter, I did actually get into an IPO, but the, the thing that was interesting about my first company was that we weren’t really a dot com. It was a, like a placement service for high level IT, and I just had like a particular niche and an insight that was working well for me.
So, I got gobbled up by a bigger company that saw that I had cornered that niche that they were trying to get at and they didn’t have much success in. So, what was really striking to me was that when I was told originally I could have made ten times as much money on my sale had I been dot com, Velocity was the name of the company, and had I been velocity dot com I could easily gotten an extra zero, but at the time I didn’t really think of myself as a dot com, I had this this idea of what a dot com was, and we weren’t that. I was mostly kind of a one-person team.
I mean I had a person who supported me, but I did all the, the placement and grabbing the contracts and so forth. It just never occurred to me to treat it like a dot com, now keep in mind I was fresh out of the military at the time and I was still you know pretty much a kid, so there was a lot to learn, um, there’s not many things if I could go back in time I would change, but that’s one of them, um, I would go, yeah we’ll just get that dot com and call ourselves a dot com. Say there’s some kind of technology behind this even though there isn’t, because I mean back then if you had a spreadsheet, that was all you needed.
So, at that time, you didn’t have a website at all?
No, I don’t think we did. Yeah, I didn’t feel the need to do it at the time. It wasn’t like we, you know, just a few years later everybody had a website because it was like a form of a business card, and I suppose that’s kind of the evolution you could talk about right there. It took a while for that to catch on in general, even in the Chicago area where I was at. Not everyone was taking it that serious I remember this like famous news anchor interview where the guy’s like, oh yeah there’s dot com, what is this, what’s an email address, and this won’t last and yeah this is silly.
It was a while where people were kind of not jumping on the bandwagon necessarily and there was also the problem before the dot com bubble burst, where the pricing was just outrageous, and so unless you had a huge IT budget, you probably couldn’t even afford a website because it’s not like everyone could build one, especially a professional looking one. Back in those days all you had was HTML. Early, early websites it wasn’t like 80 different languages and approaches like there are now. Visual development hadn’t really caught on yet until like, um, you know maybe, maybe version 3 and 4 of Dreamweaver, and even then, that was a bit of a flop mostly because they were trying to serve two different audiences at the same time with the product it didn’t perfectly work for either one of them. I mean, it by the time it worked really, really well, nobody cared anymore, everybody kind of moved.
I remember trying to use Dreamweaver many years ago before WordPress came out. I was one of the first users of WordPress. I think I first started using them like 2005/2006, so this was before then, and Dreamweaver was a mess. I am not a terribly great visual person, I’m a language person, so Dreamweaver was difficult for me, um, and then WordPress came along and I was like “ahhhh.”
That’s so funny. You know, I’d say that evolution from being able to only do this by hiring somebody or learning how to code, into the visual development side of things was definitely a light switch for a lot of people. This inspired a lot of people to think I can do this on my own, and so a lot more people jumped into the foray, and you, you started getting a lot more independent little startups, um, and that’s when you start seeing a big shift in the amount of startups and also kind of a recovery from the, I think, the dot com bubble burst. That’s when things started moving in the right direction, in my opinion.
Doing Business in the Pre-Internet era (17:53)
Let’s move back a few years just again before we move forward, um, I had wanted to ask you before, when the internet wasn’t really a big thing, and not many people could afford to build a website, and there was no social media, no smartphones, how did your company that helps to provide jobs to I.T. people, placements, how did you find these people, or how did they find you? How did you do the marketing and the sales and the, the placements without any of the support of technology?
Okay, so in that particular case is a little bit out of the ordinary for the time this was me just kind of leveraging my own magic. Previously, and during that time a lot of people would be using things like radio, direct marketing, um, and, and just old school, you know, door-to-door walking, you know, into people’s offices and actually talking to people, I’m telling you, this is like how you did it. And to a degree that’s exactly how I did it, too, but, um, I just didn’t do like the radio, and the banners, and all this kind of stuff.
When I worked for someone else doing that placement, what he wanted to do, he got the idea that he could just hire people to get on the phones, cold call and make these, these deals happen, and he would get a percentage, and this was just a business model that was going to be magic for him. Problem is, he didn’t know anything about it, and he was going about it the wrong way, so when I came in, he was my friend’s dad, and when I came in to help them out and I see that he’s got a room is like six or eight desks and there’s phones and phone books and that’s it. Yeah, I sat down, and I knew how to cold call, I have some sales experience whatever, but I realized that there’s gonna be sometimes I might have to go meet people in person I’m gonna have to do a handshake deal in order to make this happen, because we’re talking huge numbers here.
He didn’t particularly care for that, so eventually we kind of butted heads, and even though I was only one making him any money and he wasn’t doing anything for himself, he just kept giving me grief about the fact that I was out of the office getting these deals done a lot. The first deal I got listed it this way. I did open the phone book and I thought okay, well first what I did is I contacted some people I know in, in the Department of Defense. I’m like, okay, I’m looking for some contracts that are open. Fortunately, I knew the right people and so they were able to put me in touch with some other people that was just like okay here’s a few things if you can find us somebody to fill this role, we’ll use you again, ok great.
What I was strategically going for was six-figure I.T. people partially because I understood that the people that are making $40-50,000, you can have to babysit them a little bit. They’re not gonna show up to work on Monday morning sometimes because they had a bender that weekend, but when you’re talking about you somebody who makes $200,000, they don’t do that sort of thing. You don’t have to babysit them, it’s a sweet deal. What I did is, I, I found a really good one. I’m like, I’m pretty sure I could find a candidate for this, and I, I open up the phone book I called up a couple of hospitals and finally I found myself talking to an I.T. director. The long and the short of it is, I was just like I can double your income tomorrow. He said yes, and then it would one after another from there. I kept making placements for that same firm.
I maintained that contract after I left that company I was with. In fact, the day that I left, I went out there, walked into somebody else’s office based on the description that they had given me over the phone, figured out who they were, walked over to them hard recruited them in their place of work, as I was walking out, their boss caught me and he’s just like, did you just do what I think you didn’t, and I was like yeah. He ended up offered me a job, and I said you know what, I think I’m gonna branch out on my own tomorrow.
The next day I took a day off, the day after that I was signing a space lease.
Nice, congrats! I know it’s, it’s not easy for a lot of people to do that. I love people I love talking to people and it sounds like I would probably be doing something like that, I would just walk into people’s offices and start chatting them up, even if I wasn’t an employee. A very quick small story, when I was a few years old, my parents used to take me to the mall and they said if they didn’t keep their eye on me, sometimes I’d walk off and ask strangers for money, and they would give it to me because I was, you know, this cute little blonde kid. I think that was an indicator of, of, um, who I would be later on. So, I think if I was a bit older, I would have thrived in that market, kinda like my grandfather. He was a door-to-door salesman selling, um, chemical supplies. He was crushing it in the fifties, he was closing a $100,000 USD a year and a salary in the 50s! So, I, I think I just have this seller gene in me like you do.
The Psychology of Selling (22:21)
I can’t, I can’t say that I have a seller gene to be perfectly honest. I got into sales pretty early and I got what I think was a good starter training, and then I pursued a lot on my own. I’m not a voracious reader and gracious learner. When I was 16, I was the youngest person this company Vector Marketing had ever hired. I answered the call for what I thought was just gonna be a regular interview, turns out it was a group interview. There was 22 people, 2 of us got hired, and the guy who hired me was all of maybe 26 or something and he was the manager of this like regional office, real small place. And I remember looking at the board and seeing these numbers and they’re just a really miserable, I’m not sure this is gonna work out or whatever, but then there was like a couple weeks of training and the product pretty much sold itself.
And so, if you have a little charisma and you’re willing to get into people’s houses and talk to them for an hour it was really easy to make a ton of money and next thing you know I mean 9 months later, I had that guy’s job, and so I was making money off of everybody that was working in that office. You know, at this point I’m 17 years old, so I figured out the sales game fairly early and I’m…to be honest with you I don’t particularly like sales. I consider it like psychological combat sport and as much as I am okay with combat sports playing head games of people trying to sell them something they don’t necessarily want to buy isn’t my favorite thing to do. I leave that to the people who like the ultra-competitive side of things and I can train them on how to do it, but I don’t particularly like to do aggressive sales anymore.
Yeah, I’ve never had a, a quote unquote “sales job” because of my background in Psychology as you know, but I love being on the customer service side, on the product side, on building the thing that makes people want to use it, rather than having to find a way to convince them to want to use it, so I don’t like sales myself. But I think it’s the charisma part is that our personality just makes people gravitate towards us because we make them feel whatever it is they feel, I think it’s less about knowledge and more about this, um, intuitive, you know, characteristic that we have.
Yeah, I think charisma is definitely part of just being brave enough to like have those conversations with people sometimes is all it really takes, you know, some people are just like okay well I can trust you now. You’re, you’re strong enough to have this conversation, I must, I must listen our whatever that may be. There’s a lot of different biases that play into the Psychology of how that all works. That was another thing that was probably helpful for me too is, I got very interested in the human condition at a very young age and so Psychology was like the second phase of that for me and I was just super interested in everything that made people tick and how you can apply that and sales is definitely one of the first areas that I found that very useful.
I have found that Psychology has been extremely useful in every aspect of my life, whether its sales or marketing or customer service or product development or, um, you know hiring and training and on boarding teams. And just every single thing that I’ve done in my life I think if I hadn’t had a background in Psychology then it would have been a lot harder to do for sure.
And that’s an interesting thing too, that also involves around the same time which is weird because Psychology has been around for a really long time, but had I known about like the neurosciences in high school that could have easily been my past but neurosciences weren’t really a thing is like a term until like the late 90s or whatever and I remember hearing it as like a radio thing while I was driving one day in that like right after I guess came out of the military and somebody was talking about your, um, neurotheology and I was just like blown away. I was like you gotta be kidding me, the study of like the brain on religion and vice versa, this sounds very interesting this. I mean, that sounds really not interesting to a lot of people but it was very interesting to me because I got my start with theology before Psychology, I again I just want to know what makes people tick. I think it started I was like 14, and I’m just like wow from people of different religions and you know why people fighting over this and so I really just was intrigued I wanted to know everything I could.
Yes I, I heard about the study that was done they put people in an MRI. They showed them pictures of like Apple and Apple’s, um, products and Steve Jobs, and the Apple logo, and as well as images of, um, like Jesus Christ, and the cross, and these kind of religious symbols. And what they found was the people who were fans of Apple then, the, the, the way that their brain lit up was the same. Basically, meaning Apple was like a religion to some people.
There’s some really interesting science behind that, and I’m definitely big on some of the newer stuff coming out now. I don’t know if you follow him at all but like Dr. Andrew Huberman from Stanford has got some amazing data coming out right now. You can literally put some of the stuff into action, whether it’s like about breathing or your autonomic nervous system and it’s, it’s a really interesting I, I actually got my first introduction to him either it was like a Rich Roll podcast from not too long ago and I was just like, oh my god, I think I skateboarded with that guy back in the 90s, holy cow. Now he’s a neuro, I don’t want to mess up his title, but he’s a neuroscientist and he teaches and now he’s, um, he’s got a lab where they’re just doing amazing studies on all kinds of different people including like team guys like Goggins and whatnot, so check it out for sure, you know, you’ll be blown away.
Dot Com Burst Aftermath (28:04)
Let’s go a little bit further towards the, the, the, the burst, right? How did the burst affect entrepreneurship?
You could ask a question like six different ways, how did it affect X, and any of the answers would be wildly different. Entrepreneurship, I don’t know that it was necessarily affected as much, besides the fact that like Venture Capital especially shrank up but, um, you know the markets were really rough there for a little while. But it actually forced more people into entrepreneurship than you might expect, um, because from my observation anyway. Since I had kind of a pulse on the I.T. budgets of a lot of companies at the time, what I saw is everybody shrank up their I.T. budgets, and so hiring immediately just went away and a lot of people are getting laid off.
And so what were those people doing? Now, there is a pretty good mix of what was happening, um, I, I knew people that were six-figure I.T. people that were suddenly serving at Bennigan’s or waiting tables somewhere because they couldn’t find a job anywhere. I was kinda like, hmm, you can’t use your skills some way? Now, it’s not like today where there’s like so much more opportunity, but at the same time, I did see a lot of people at that time go, okay well I just got laid off, but I’m gonna go into business for myself. And some of those people created companies that exist today.
It was definitely a rollercoaster for a lot of people for those first few years and then it only was I think amplified again just as everything started to feel like it was going in the right direction. You know, the turnaround is starting to happen then 9/11 happened, and that affected a lot of people in different ways of course. Most of the money that I got from my first sale was, was tied up the Wall Street, so I got sank, as well obviously a lot of people did much worse than I did. But there was definitely an evolution of how people approached to how you could start a business, and more people were starting to think that this garage approach was, it had potential and it especially when you were laid off or something and you just didn’t have anything else to do.
Well, okay if you had to go back to your parents’ house or you’re in the basement or you’re in the garage or whatever that’s how a lot of these companies got started in the first place. Apple, Microsoft, etc., so there was a lot of that going on. I personally found myself just exploring like a variety of what, what can I do, and obviously for me it was, I was dabbling in trying to figure out what do I want to do, you know to a degree. It was through the form of entrepreneurship but I had all these different opportunities that came across my plate, so my experience is probably a little bit different than a lot of other people but you know it’s like oh Hey , um, I met somebody who was in this particular business and they’re like oh yeah I could easily get you into this business you could try it out for yourself and so I did something like that once.
I started up an agency and then years later I ended up working for another agency. I mean, I kind of went through an up and down period, like I think anyone else did you know I, I did have a couple of jobs in between as well, so it was a matter of I think how, how entrepreneurial spirited you were and how determined you were to stick with it. Some people were, they would catch the bug, they would see something that would get them excited about it, and then they, they would try their hand out and their first failure, they walk away and they go back to work in corporate life or whatever.
I’m just not that kind of person, I don’t care if I fail, I’m just going to bounce back and try another one. Obviously though from now, from then to now I’ve, I’ve stopped dabbling and looking into passions and such, and I found more of a purpose kind of mission-driven approach.
Accelerators & Venture Capital (31:50)
How did 9/11 change the way people start and run businesses?
I’m not sure if it was necessarily a direct correlation from 9/11, that was like a fundamental shift in how people started businesses. I think that there was definitely some, some weariness from the whole IPO aspect because we just gone through, you know, the, the dot com bubble burst and then people getting wiped out because of Wall Street being closed for, I think it was 5 or 6 business days, um, and the rest of the world was still trading. So, there was a lot more, I think, kind of homegrown and we’ll, we’ll stick to it for a while approach for just a minute there and then also there is a fundamental shift because I, I think really the catalyst for it was like when Paul Graham decided to do that experiment.
You know, his wife gave him that idea and the next thing you know Y Combinator came along. And there was a shift in what people expected as Y Combinator grew over the years that became sort of a part of the, the lexicon what people were thinking like oh yeah accelerators, this is part of how you do it. It’s actually I think kind of grown to become a bit of a problem over the years where if you listen to the stories of accelerators that start in other countries, especially, I’ve heard this in like Central America and a little bit South America as well.
You, you build the accelerator and all of a sudden the local government and everybody’s like okay well where are the venture capitalists? Where’s the money? Where’s the people? You know, and, and they expect it all to be like sort of hand in hand, and so over time there’s like this language and these dogmas that have persisted, many of which were kind of originating from the VC themselves, and it’s, it’s grown into this, this mess and this is kind of part of what I’m trying to sort out for founders in general is just that, that mess. Because it can be very hard in the sea of information to get the right information for your particular situation at that very moment you know what I mean?
I understand that accelerators are, well there’s positives and negatives to them but I think their potential partners for my project now, so I do want to talk to them, but I didn’t see them having any value for me personally starting a company.
Yeah I think it’s really important, and I talk about it a lot with a lot of the, the startups that I’m mentoring. You really have to understand that, that is not the only way, and Venture Capital especially is not the only way. I try to make this a little bit more concrete to a lot of people by frequently reminding, if you don’t know this already, less than 5%, in fact the number is supposed to be 5%, but you know, I have a pretty good idea of statistics, I don’t think they’re accounting for all those startups out there. Less than 5% though are getting VC money every year.
That means that the vast majority of them are chasing after something they’re not going to get and you probably don’t really want to go that avenue anyway. I’m a big proponent of finding the founder-fit first, is what I call it. When you examine what the lifestyle is like going through a venture track, um, you may find that it is not at all what you expected it to be, or what you want. Now for some people it works, and if the unicorn part is what you really want to chase after, if you want to be one of the 200 unicorn companies in the world, good luck, you know.
I mean you might as well play the lottery but go for it. If you are a little bit more realistic about it though you know that I think that there’s different safer approaches than going about that. Now, whether or not you go through an accelerator I guess it kind of depends on the accelerator and what they get out of it I know of at least one right now that’s not even taking any equity whatsoever that could be an option for a lot of folks. I personally wouldn’t call at least most of the, like, the well-known ones, I wouldn’t call them a waste of time because you’re definitely gonna learn some stuff.
It used to be you know pre-covid, is that you have this opportunity to network with other people and you never know where those things are gonna go. But at the same time, yeah, if you, how comfortable are you giving away a huge chunk of your company? What’s the quality of education? Because it varies from one accelerator to the next. Some of them you’re going to be a part of like the family forever you know it’s almost like a mafia type of thing. If you’re in Y Combinator, it’s not that you’re guaranteed success, but if you’re not really bone-headed about it, you’re part of that family, they’re gonna help you out.
They want to see you succeed because you are effectively an investment. I just don’t think that accelerators are for everybody, in fact, I think it’s really more important that we kind of figure out how to clean up the, the mess of startup education in an online fashion that is easily accessible to the general public, because I’m a big proponent for seeing everybody be able to do this. I think this has long been predicted and it’s, it’s time has come, especially now where everybody, you know, has this potential. You know, you could have lost your job, or you maybe you’re hearing about the digital nomad world, or actually a big part of the audience that I hope to achieve parity with, is the people that are just getting the first 3 or 4G phones in Africa or India or whatever, and they heard that you can build a business just with that, you know?
That’s all you need, and you just gotta go out there and find the information. Well, that’s true to a degree, but how hard is that? Well, if you’ve built a startup or you’re building one, then you know it’s really, really hard. And yes, an accelerator can make that a little bit easier because you’re going to, you know, to some degrees are grooming the track of education specifically to you, in other cases it’s not at all. So, with like Y Combinator, yeah their content and their approach is applicable because they’re going for billion-dollar companies and so if you are trying to build a ten-million-dollar company podcast or something like that, they don’t have the right education for that, because this is not what they’re trying to get at.
It’s different for different people, for sure, but I think mostly you have to realize that accelerators at least pre-covid were not accessible to most people. Did you have to be around some kind of a hub a major city or whatever? Yeah there was more and more of them every year, but at the same time, if you’re in the middle of the Alaska, Nebraska, or India, it’s just not something you can get to.
Yeah, very true. But now the rise of the Internet has made it really possible. So, I want to recap real fast before we get towards the end of this conversation, the way that companies grew and, and ran before the internet was basically, there is no infrastructure, we have to build it all from scratch. That’s where you get your Netscape Navigator, um, type businesses and your Apple computers and your Windows operating system. Then when the Internet started, people were racing to build websites in order to increase the valuation of their companies, even if mostly what they did was still offline and the website was just kind of a face to what they were doing, which after the bubble kind of made it easier to build websites and easier to do things a little bit more online even though social media didn’t quite exist yet.
And people were hesitant to spend too much on their I.T., which may be why the cost of I.T. went down, and the creation of these tools made it easier to get into being an online-based business, followed by the rise of social media and accelerators making it easier to get access to information and money and to build a support network.
Entrepreneurship in the 2010s (39:40)
What do you think is has been the most important part of entrepreneurship and you know starting and running and growing a business in the last decade? My personal opinion would be open API’s and software as a service, like your dream for business and in the cloud. What would you say is?
Yeah, you know, it’s interesting because I think one of the key components that shifted, and I don’t know that it was necessarily in the last ten years, but it was definitely emphasized in the last ten years, is how many people are willing to put their credit card online? And so, at first people were really hyper nervous about this, and a lot of companies just couldn’t exist unless there was this trust. So, like even eBay at first didn’t have that trust and until they had like, you know, that relationship with PayPal, before they bought out PayPal, etc. people were very leery about this like, “I don’t know if I can trust this,” but eventually got to the point where enough people were using services online regularly long enough that the general public was interested in checking this out.
And now you’ve got it to the point where in the last ten years especially, everybody’s paying for some internet-based service or maybe it’s an app on their phone at a bare minimum. So, the change here is significantly just on the consumer end of it, and I supposed to a degree you can say it’s this way in enterprise as well, but it’s just how many people are willing to spend money on these products and services and, and nowadays people actually budgeting for some of the stuff in ways that was never done before. One, you know, example of this could be just media for example just like, um, you might have back in the day paid for like a cable bill or a newspaper or maybe some magazines or something like that, but that’s expanded now and you’ve got Netflix, Hulu, Patreon, um, you’re paying for a few newsletters and so on and so forth.
People are more willing to do that for a variety of reasons. Some people are doing it because other people are doing it, and some people are doing it because that’s just how people spend their money these days, um, so I think spending habits is a big part of that fundamental shift, the acceptance of the internet economy is something that not only is caused people to open up their wallets to it more. And so, there’s more money to be made, but then of course it makes it more attractive to entrepreneurs, so instead of maybe creating that cupcake shop down the street that you were taking about, you’re like, “well, what if I just come up with a cool website that curates and whatever,” you know, whatever your, your business idea may be.
And I’d like to point out that unfortunately what this has caused is a whole bunch of solution-first thinking, and it’s like everybody wants to build their cool next idea without actually verifying that this is something that people want to buy. So, the number one thing that kills startups is not having a product that people want to buy and usually that’s because you didn’t validate it first, but I digress it’s just me given you know startup advice again.
Entrepreneurship in the Next Decade (42:51)
Let’s end with, what do you think the next ten years of the internet, and the way people interact with the internet, and how businesses do business on the internet? What do you think that looks like?
So, yeah there’s definitely some big question marks here, um, and it’s exciting territory for me I’ve always been very drawn to future tech and, um, I am very interested in seeing how physical interaction and all kinds of interaction with technology changes over the next ten years. I think that’s probably going to be one of the bigger fundamental shifts. There’s a bunch of them that we could talk about, like I think what we were gonna see, and especially over the next couple years we should probably see, is like AI in marketing and, and customer development is going to be a really important factor, because it’s like one of the biggest, hardest problems that people have with businesses is figuring out the customer problem.
But how we interact with technology is, is sort of in its infancy still I think. So, I’m a little curious to see how much things like covid affect touch like touch screens and touch devices. Like for example, there’s an elevator company that realizes very quickly, um, gosh our touch screens are not what people are gonna want to use in an elevator, so they came up with like a pedal system or you could just like tap it with your foot and people were more than happy to use that. And so that’s something that wouldn’t have happened if it weren’t for this particular, you know, pandemic issue.
I don’t know that there’s necessarily a lot more of those kind of catalyst to come, hopefully not but at the same time you never know. So, you also have things like driverless cars if you will. There’s a lot of opportunities in that space, and a lot of things that are similar to that where people, people have gotten to the point that not only do they want things to be pleasant or you know they want us to have something that they can interact with that is beautiful or a nice experience or whatever. But now it’s firmly become, don’t make me think.
That’s kind of like this running motto, the less, um, you make people think, the more successful you’re going to be with your product and that includes a lot of things like voice technology. So, the interaction that we have, I think that’s gonna be something that’s going to grow. If you look at the growth of how many people have the, the personal assistant devices in their houses that they could talk to like the Amazon devices or the Google ones, etc. Growth trajectory suggests a lot, and now we’re at the point where people have multiple of those in their house and they’re connected to all these other devices.
So, I definitely see that as being a part of where we’re headed sort of. I don’t specifically cite, you know, Blade Runner, any these kind of futuristic movies, because they tend to come with, you know, these other feelings associated with it, but if you really want to see where the future is headed with technology, I think as usual you can often find that facts follows fiction and so when you watch shows like the Expanse on Amazon.
They can see some really cool glimpses as to what some of this will look like and at the same time what they’re doing is they’re showing you pioneer times of space so it’s like it’s not supposed to be too, too far in the future. But look at how many pieces of technology came from Star Trek with the personal communicator to the stun gun, and, and people are still pursuing phase technology to, um, you know transport objects…
I want a replicator.
Yeah, see? So yeah, these are the things that you can pretty much expect. If fiction has predicted it, um, there’s a good chance that that’s where it’s gonna go, because frankly a lot of product designers aren’t exactly that imaginative. I shouldn’t say product designers as much as the people who have the vision for some of these products, they don’t necessarily have like the best approach to design, so sometimes you can rely on just looking at science fiction for it and I think even John Ives is a good example of that.
Look at, you know, the iPhone and stuff like that, where that simplicity was kind of stuff that he borrowed from future art, artistic stuff that we’ve seen already for decades. I think we’ll see a lot more of that. Flying cars, that’s happening. I mean I think they just had a really successful test that was published on the internet yesterday the day before. Really cool flying…
Japan’s working really hard on that.
Was it Japan? And I, I got really distracted recently by Japan’s like eighty-foot robot that walks it’s my favorite place outside of the US.
I think they built a life-size Gundam was what it was.
Life-size in the Gundam sense, yeah it’s like a giant robot. It walks.
Follow up with Greg (47:40)
How can people find you online?
The most reliable, easiest way if you want to check me out was just find me on Twitter at https://twitter.com/mrgregzen. You can also check out startupheroics.com. we’re actually about to go through like a very serious overhaul of what that whole experience is like but you can still use the form and contact us that way. We regularly have requests for mentorship or. I’m also on LinkedIn.
That’s okay, we’ll have the links on the website for everybody. Well, it’s been fun talking with you. I really enjoyed this conversation, I wish it could be another hour or two longer, I think we there’s a lot more things we can talk about, so maybe we’ll bring you on another time that sometime next year and we can see how some of those things you predicted are coming.
Sounds great. Well, thank you very much. I appreciate being on your show and wish you the best of luck.