Sean Sheppard is the founder of GrowthX. Brian Ardinger, Inside Outside Innovation Founder, and Sean discuss the impact of COVID on the startup and investment environment, Silicon Valley, and elsewhere, trends we’re seeing in the world of no code, and ways that startups can generate revenue and adapt in this challenging environment.
Inside Outside Innovation is the podcast that brings you the best and the brightest in the world of startups and innovation. I’m your host, Brian Ardinger, founder of InsideOutside.io, a provider of research, events, and consulting services that help innovators and entrepreneurs build better products, launch new ideas, and compete in a world of change and disruption. Each week, we’ll give you a front row seat to the latest thinking tools, tactics, and trends in collaborative innovation. Let’s get started.
Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I’m your host, Brian Ardinger, and as always, we have another amazing guest. Today we have Sean Sheppard. He is the founder of GrowthX. And for long time listeners, you may have heard and met Sean before. He was actually on Episode 14, I believe, back in 2016 so welcome back, Sean.
Sean Sheppard: Hey, thanks Brian. I had no idea. I was so early.
Brian Ardinger: We’re recording this in April, and this is our birthday week for Inside Outside, and we’re five years into this podcasting scene, so it’s been kind of crazy, but it’s been fun to do all these shows.
Sean Sheppard: Thanks. I can’t believe it’s been five years since I came there to do that talk and sat in your studio. Right?
Brian Ardinger: That’s one of the reasons why I wanted to have you back on. Probably a lot has changed with GrowthX and we want to talk about that. Also want to talk about now that we’re in the Corona virus disruption, I wanted to get your insights into what’s going on in the Valley, what’s going on in startups and get some feedback there. Maybe we start by telling the audience more about what GrowthX is and where you are in the scene.
Sean Sheppard: We started about seven years ago as a group of serial entrepreneurs turned investors, turned frustrated investors, because our companies weren’t succeeding, not because they couldn’t build products, but because they didn’t know how to build markets. And we set about trying to solve that problem for ourselves, and we built a proprietary framework for helping our companies find product market fit. It was exclusive only to the companies that we invested in, but it became quite successful and very popular. And so we started to share it with the rest of the world.
And now we licensed that, and I spend most of my time when I’m not in quarantine, traveling the world, working with governments and companies and countries and incubators and accelerators, on how to incorporate product market fit thinking and programming and execution into their support systems for their startup communities.
Brian Ardinger: Let’s talk about how the world has changed in the last four, five, six weeks, specifically around what you’re seeing in the startup scene. Even what you’re seeing from corporate innovators that you work with. What’s the general consensus of what’s happening? Where the holes that we need to be plugging, that kind of stuff.
Sean Sheppard: Obviously, it’s an unprecedented and interesting time for anybody who’s in our generation and certainly in our lives. I’ve been through many economic crashes. I go back to 87′. Remember that one? I remember the dot com boom and bust, 9/11 certainly, and then the 2008 crash. This one feels much more like the 9/11 experience.
And by that, I mean it certainly does feel much more like war time, you know, we do have this enemy that we’re, we’re dealing with. Obviously, it’s not one we can see, but it’s there and I think it’s going to change behaviors on a global scale. The degree to which those behaviors will change and the permanence of that change and when that change starts to normalize is yet to be determined.
You can watch the news all day long. Watch people predict the future. But like a smart man once told me, if you want to know the relevance of the news, just watch seven-day old news, and you’ll find out just how unimportant it is. But the point is that we don’t know, but we don’t know yet about that. I do believe that there is going to be some measure of behavioral change.
Like the way we have security measures post 9/11 that aren’t going away, and over time have been relaxed, but they’re there to stay. I think we’re going to have similar security measures, for our health, that will be here to stay, and then there will be certain things and behaviors that we will all change, whether it’s less people shaking hands and hugging, which to me is very sad because I think the need to connect basic human need that we all want, need, and desire. I think just for our own physical and mental and spiritual health. But other things like working from home. The digital transformation that everybody has been talking about that’s been coming for years and years and years. I think it’s going to be dramatically accelerated.
Brian Ardinger: Well, I think you’re right. It’s not that it wasn’t seen or a lot of it wasn’t seen disrupting education, disrupting healthcare, disrupting all these industries that we’ve talked about, but a lot of us, what we talked about in the past, it’s focused on like the technology being that core driver. And I think the virus just expediated that conversation and forced a lot of those folks to change faster than they even were going to have to, given the circumstances going around. So, I’m not sure that necessarily we would have been facing these things in the future, just this virus has accelerated the impact.
Sean Sheppard: Yeah. So, a big part of GrowthX family of companies is our corporate business, which works on helping corporations commercialize new innovations, bring great startup technology into their environments, invest in the startup community, things like that. And when I’m having conversations with our corporate community, and partners, they’re all number one in triage mode right now. Period. End of story. They’re just trying to deal with the current situation.
That’s number one and number two is those that are starting to actually see some stabilization around that are starting to recognize that there is more productivity than they thought, in their distributed workforce, than they thought would be there. In fact, two of the world’s largest banks. I have very good friends and partners in the community that are at the C suite. Have gone through this triage mode, are trying to manage the mindset and mental wellbeing of their workforce, while creating this distributed work from home environment. And they’re seeing that productivity isn’t waining. So now they’re rethinking their whole footprint. Like, why do I need some super expensive tower in Manhattan or San Francisco or Chicago or London when most of the people that I’m talking to are out meeting with customers half the time. They’re 50% travel anyway.
Do I need all this space? What does that future look like for them? We’re already seeing security concerns with Zoom. But they’re having those conversations about, all right, now that we’ve sort of standardized at least sketch a patchwork version of what our world’s going to look like. You know, how do we improve and optimize on that? So, there’s going to be a lot of opportunity there. And I think what you’re going to see is they’re not going to get rid of this infrastructure that’s working whole infrastructure. I think they’re going to use it as an augmentation to some degree. And it feels like, to me, the new normal will be about 70% of what it is today.
Brian Ardinger: Right. Well you look at higher education, you and I both have kids, and we were talking earlier before we got on the recording about how the world of schools changed. And I think about the universities that are out there, private and public, and the number of them that might not come back to class in the fall. And how’s that going to impact it when you’ve got a lot of infrastructure built on buildings and that, and people are finding out quickly that all the world’s knowledge is at your fingertips in a variety of different formats. How does that play out as well?
Industry after industry is going to be completely changed it in both good and bad ways. You know, you’re talking about remote working, and I’ve heard two sides of the conversation. It’s like, well, this is a great thing for remote working because now everybody’s going to have a chance to be a part of it and actually experience it. And on the flip side, it’s like kind of the worst way to actually introduce people to remote working because it’s under duress and it’s under stress and all this other stuff. It’ll be interesting to see how we come out on that side when it comes to, is remote working good or bad?
Sean Sheppard: On the education front. I think you already know my worldview on institutional education, which is why I started a university to begin with, GrowthX Academy, as a way to disrupt and combat the things that are missing from big education. I’ve been making the joke, that whatever it is, 90% of the world’s children aren’t in school right now. Maybe they will finally start learning something. But yes, they’re going to get disrupted tremendously. It’s already happening. I can tell you that I’ve got three college-aged kids taking their online classes in my house right now and have been for the last three weeks, and then my son is four weeks into online high school.
Being here in the Bay area, we went into lockdown much earlier than many, and it’s working by the way. We flattened the curve and the number of cases is reducing. It’s not increasing. So stay home people. Work from home being introduced in such a shocking way, I have tremendous faith in the human condition and our ability to adapt, to change. I mean, Darwin said it best, right? Adapt or die. We’re going to figure this out. It will change the way we communicate, how we work to some degree, like we said, the degree to which we don’t know yet. But I do believe that people will learn how to cope with this and then there will be much more long-term strategic discussions about what’s our future look like in terms of how are we going to operate going forward.
Do we need to have all this in-person interactivity, but like I said, not a hundred percent one way or the other. You don’t necessarily have to go to one extreme or another. We’re all working from home now, right? Does it mean we all need to go back to work 100% of the time? There can be a blend, there can be a mix, and it can be an intelligent mix, and I think this is going to open up people’s eyes to that.
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Brian Ardinger: The other trend I want to talk about, and we scheduled to talk before all this stuff happened. So one of the things that was on my agenda to talk about is this trend that we’re seeing moving towards no code tools and the ability for the general founder, the nontechnical founder, or even a person within a corporation to access and tap into productivity suites and tools that never were possible before.
So, I see coronavirus and everything else impacting that where people are given a chance to explore and do things and build and create. It’s almost like the democratization of innovation is coming. I’d like to get your insights on like this no code movement with Zapier and Air Table and all these other tools that are out there that are making it easier for nontechnical folks to create technical products.
Sean Sheppard: Yeah, I think it’s all wonderful. Look, I have two views of this right. Software as a service or SaaS is a movement that should improve human performance. If you’re somebody who doesn’t know how to code, but you want to build a product and there’s a way for you to do that and solve a real problem with it, I hope, without having to spend money on someone that you don’t communicate well with, who does work that you don’t understand and therefore puts your capital at risk, then great. Knock yourself out. I can’t tell you how many times I’ve seen non-tech founders get in trouble. I’m not going to assume intent on the product development teams, right? They’re not intentionally trying to screw people over, but you’ve seen it as many times, if not more than I have Brian, over the years.
You’ve got great product people who really have a good sound business and market acumen, understand deeply the problem they want to solve, and how they want to solve it. Then they can’t communicate that to the binary brains of the coders near shore, offshore, or otherwise. And they never actually can get the problem is solved the way they want to get it solved and they burn through, whatever resources they have to do it. If we can eliminate that, I’m all for it.
We have a portfolio company that does just that called Bos Framework, BOSframework.com. They automate 60 to 70% of the repeatable integration tasks associated with building most software. And they’re cutting the time and costs associated with getting these products to market by automating all of the ancillary tasks that take up the most time. So, you can focus on core development. And I’ve seen it work with enterprise product management teams all the way down to non-tech founders. That gets these people what they want faster and cheaper, by focusing on the core stuff. That gives me a lot of hope. Is there risk with that, sure. Yes. Does that mean that coding is a commodity? Yes. I do believe that. I think coding by itself is a commodity.
What separates yourself in the innovation economy from the robots and the AI is your, EI. Your emotional intelligence, your creativity, your ability to collaborate and solve problems and come up with new ideas that set you apart from all of that automation. I’m watching guys use Air Table in all walks of different industries as a way to quickly work their way through problems.
Brian Ardinger: Yeah, build out prototypes. Exactly.
Sean Sheppard: Yeah, and they’re having a great time doing it. And these are people that aren’t coders. Of course. They tend to be a little bit more technical, however, just generally might be maybe more of a traditional engineering mindset than a software engineering mindset, but they’re crushing it. They’re doing great things with Air Table, answering questions faster than they could have before. And what I love about all of that ultimately is it that empowers people to help themselves, those who want to.
Brian Ardinger: Let’s talk about startups. You work with, have a portfolio of a number of different startups. Wanted to get some insights into what are you telling your portfolio companies to do? What kind of help are you seeing out there? How can I generate revenue? What are some things that you’re seeing, as far as advice, that our startup listeners out there might be looking for right now?
Sean Sheppard: Broadly, the community at large, those who have investible capital are still making investments. It’s their fiduciary responsibility to deploy capital in alignment with their fund thesis, in a responsible way. So, people are asking, is there still money out there? Are there still going to be deals to be had? The answer is absolutely yes. Some of you may have seen, there’s some memes running around in the tech community about some of the biggest unicorns that we know of today were started during the last recession.
Brian Ardinger: Absolutely, yep.
Sean Sheppard: Yeah. Dropbox, Zen Desk, Groupon, Venmo, Uber, Instagram, Black, WhatsApp, Square. Cloudera, Pinterest all started in 2008 basically or shortly following that. So you need to go from this mindset right now of thriving into the mindset of surviving, frankly. But you need to do it positively. Yeah. A lot of people talk about only the strong survive. I talk about only the resourceful survive, especially now, and you’ve got to pack your way into figuring out how to stay on the field long enough to learn, whether that’s pivoting off of what you’re doing in the short term so that you can stay alive in the long term. Whether that’s going after this government cheese from the paycheck protection program, many startups do qualify whether they believe it or not, especially if they have employees and they have rent. They need to look into it.
Or whether it’s getting more focused and narrow about who your ideal investor or customer profile are to keep you going right now. So I did a live virtual chat last week for startups all over the globe. That, it was basically a Q & A with a conversation around. You know, what are the things you can do right now to generate revenue now, because everybody’s in the same, very precarious spot. Thought about it. I sat down and spent some time and I came up with these six tactics.
The first one is orient yourself around the problem and the person, not the product in the market. Right now is a really good opportunity for you to individualize your offering. Personalize it to the person who has a tremendous need right now because we’re in a time where people are only going to invest in needs, not wants. And then maintaining an open mindset to be creative around that, to create a conversation with people at the bottom of your funnel about what’s really going on with them and how can you be helpful and do that from a services mindset, not just a product mindset. Most successful SaaS portfolio companies all start as service companies first, and then they build automation once they validate that there’s a problem to be solved.
Brian Ardinger: You may have to go back to those things that don’t scale, that you might’ve done at the early stages of your company when you were trying to figure out what worked and what didn’t. You may have to go back to that stage to try things that don’t necessarily scale or not as profitable or whatever, but you’re trying to move the ball forward, learn faster, and understand the new dynamic.
Sean Sheppard: That’s right, and then focus on a very small group of individuals that you think you can help right now. Especially if you’re a small startup team, you can only help so many people and talk to some people anyway. Get really narrow and focus. Maybe there’s only a half a dozen people that fit this criteria. That’s fine. Let’s see if you can help them first and then leverage your own knowledge, experience, and insights to solve their problem. Don’t necessarily worry about whether or not the product is there. And then think about it from a jobs perspective.
Bob Moesta, Jobs-to-be-Done framework is really helpful here, which is what’s the job your customer is hiring you to do? How well do you solve that job? How well do you do that job and how do you know that you’re doing it well? In other words, how would you measure it? What claims can you make and focus on that.
Then the fourth tactic is to build a value hypothesis around this idea at 25 words or less. Tell me why you are the person that I should be hiring to do this job for me? What’s the use case and how do you measure it, and then how would you charge for that? You don’t necessarily have to charge a recurring revenue model SaaS or product based or cost of goods sold based pricing model or even your traditional way of charging.
You can do a labor-based approach, time and materials. People know how to pay for that. Think of yourself as a consultant in these instances. You’re not looking for the ideal visionary customer long term. You’re looking for whoever needs your help right now. And then finally you need to build a campaign around that, and that campaign needs to be something that you can do, hopefully very high touch in terms of live interaction, over the phone, through a zoom in synchronous way.
When I say high touch, I don’t mean slobbering and coughing and sneezing all over each other in the age of COVID. Pick up the damn phone. Call these folks. Have a conversation. Pitch them your value hypothesis. Look, I think I can help you in this way. What are your thoughts around that? Or what are the major major needs you have right now where you think I could be helpful? Because I know you’re going through triage mode. I know you’re scared. I know you’re like everybody else and we can have that conversation too. But let’s talk deeply about those things and see if there’s a way we can work together.
Brian Ardinger: Great advice and it will be interesting to see how…which companies thrive in this new environment in which ones have to go away. It’s always interesting to see what happens in times of crisis, and I’m personally optimistic long term. I think there’s a lot of challenges ahead for us, but I am optimistic we will get through this as we have done in the past. Any final thoughts or concerns or questions that are coming up that you want to talk about.
Sean Sheppard: Yeah. I just think once again, I just want to play on your point there. Be positive right now. Stay strong, be resourceful. This will pass. We’ve been through difficult situations before. We will get through this one. Economically speaking, why I feel so bullish about our future is that this was a self-imposed economic challenge. This was not market-based. We had sound fundamentals coming into this.
Yes, it’s going to be difficult for some things to restart and the way things happen are going to change, but every challenge creates a new set of problems that need to be solved. And for those that have the right mindset going into this, they can find those opportunities. I think we’ll be normalizing again by late spring, early summer, and I think we’ll be back to some measure of stable normalcy as a society, economically speaking, commercially speaking by Fall without a doubt.
Brian Ardinger: Well, I think that’s a great way to end it, Sean, on a nice, upbeat note, we have to get back together before five years again, so thank you again for coming on Inside Outside Innovation to tell us a little bit about what’s going on with yourself and the world around you. If people want to find out more about yourself or GrowthX, what’s the best way to do that?
Brian Ardinger: Excellent. Sean, thanks again for being on the show and we’ll look forward to talking with you again.
Sean Sheppard: You’re welcome. Talk to you soon bud.
Brian Ardinger: That’s it for another episode of Inside Outside Innovation. If you want to learn more about our team, our content, our services, check out InsideOutside.io or follow us on Twitter @theIOpodcast or @Ardinger. Until next time, go out and innovate.
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