When you’ve been managing your business for a while, it’s easy to fall into a routine and stay on the safe side. However, given the climate we’re in, there are defining factors to consider for your business’s long-term success. Some of this you may already know but just haven’t dared to face and act upon. Your host Elliot Begoun is here to give you the tough love conversations you need. He shares the top ten things that founders need to hear when it comes to handling and developing their business. He also details each to give you actionable insights you can start applying to your business/career today. Motivate yourself into action and innovation with these reminders from Elliot by tuning into this episode!

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Ten Tough Love Conversations For Founders On Managing A Business

Our episode is going to be a little bit different. There’s not a live studio audience and it’s going to be me. I wanted to have a conversation with all of you and share some things that are top of mind. Some things that I feel everybody needs to be spending a little bit more headspace or head time with. Before I do that, I’m going to go ahead and do our little founder’s shout-out to get things going. I’m going to do that to Sadie Olsen at Otto’s Naturals. Sadie is a Tardigrade Founder at its core. She’s built an amazing brand, an amazing business that she and her husband, John, have bootstrapped. It continues to go and continues to grow and I’m watching her. She gives me a hard time because sometimes I choose to describe her as fierce but in the best use of that term.

She’s dogged in her pursuit of doing what’s right, doing what’s right for her business, her team and the shoppers that she serves and making sure that in every way that Otto shows up on a shelf, on paper, in meetings, on social media is representing the best version of the brand and is serving the shoppers that she’s committed to serve. Now they’re expanding the line to mixes and other products that are coming out in the innovation pipeline. I’m excited to see what’s next and be a part of the journey with them and in awe of Sadie. I encourage everyone reading to check out Otto’s Naturals. You can find them at Whole Foods and Sprouts and many other retailers but also go to their website.

Check out their Instagram and get to know the brand. It’ll be worth the time for sure. What I want to do is I want to jump into things slightly differently. I don’t know if I want to call it tough love or things I feel like founders need to hear that maybe they’re not hearing because frankly, they’re not the biggest ra-ra or high energy type of messages. Given the situation and climate that we’re in, these are things that could be, in my mind, the difference between long-term success or not. I’m going to give you the list first and then I’m going to dive into each of these a bit deeper.

Number one, innovation doesn’t stop with your product. Number two, change the narrative. Number three, investors deserve to make money. Number four, don’t see the responsibility for sales. Number five, don’t confuse effort with results. Number six, discern the important from the interesting. Number seven, anything short of a restraining order is not a no. Number eight, it’s going to take more time and cost more money. Number nine, invest in yourself. Number ten, the last one I’ll cover because I seem to like ten, progress over perfection. I’m going to go into each of these in a bit of detail and hope that this episode is actionable, useful and if nothing else, can lull you to sleep.

Innovation Doesn’t Stop With Your Product

Innovation doesn’t stop with your product. This is something that I wish more of you would embrace. You didn’t get this far because you weren’t innovators. You’ve created incredibly cool products that are solving real problems or meeting unmet needs. You’ve created brands that are craveable, that your shoppers want, that they connect with emotionally. You’ve done so much by being innovative, by seeing things differently, by taking action but there are certain things that I feel like founders check that innovation at the door, when they try to find a way in to meet with an investor, to meet with a buyer or to court a potential advisor. We get pedestrian and boring. We don’t take on that innovator’s mindset. I don’t know why that is. I don’t know why when somebody says, “Submit your one-pager for our review,” we like lemmings submit a one-pager with review and don’t try to do anything differently to disrupt that.

We’re going to show up in the same way. It’s what the buyer said, we don’t want to ruffle feathers but that’s not what innovators do. Innovators push the limit. Innovators challenge that and do so in a way that is aimed at the common good, which ultimately in the relationship you have with a category manager and yourself is to meet the needs, wants and aspirations of the mutual shopper that both of you are trying to solve for. Same with investors, we show up the same way. We submit a deck. We maybe jump on a Zoom and do a pitch if we’re lucky enough to get a meeting but how are we differentiating? How are we disrupting that interaction and doing things differently? I don’t have exact solutions. It’s different for every brand, every investor but I’m encouraging you all not to check that innovator’s mindset at the door.

If you want to reach somebody, how can you reach them? How can you get them to engage with you? What do you need to be doing differently? How do you need to show up in their inbox, in their mailbox or in their consciousness differently than everybody else? That’s the question you need to be asking. That’s the thing that innovators do. For whatever reason, to belabor a point purposefully, I don’t see enough of that happening. I see way too much running to the middle, trying to do it the same way everybody else does and yet that’s the exact opposite of what has gotten you here and why your product and brand exist in the world. Challenge yourself when you’re facing tough questions. When you’re trying to reach that category manager, investor, advisor or somebody who can influence or change the outcome of your business, how do you do it with an innovator’s mindset?

Change The Narrative

Number two, change the narrative. Here’s something that I’m sure many of you who are pre-seed to seed stage, even up to early series A has faced when meeting with an investor. That is this, you’re too early. Go out and get some traction. We need to see more traction before we can consider you for an investment. Here’s the dilemma, in order to show that traction in your mind or at least common logic, you need to have their money to do it. It’s a chicken and the egg type of thing. I need to demonstrate traction to win investment but I need the investment to go out and demonstrate traction.

As founders, I feel mistakes are made. Don’t let an investor or anybody control, determine or narrate what traction means. You control the narrative. You need to own that. If you know that’s going to be an objection, which it is commonly and quite frankly, is something that should be answered sooner rather than later, then how can you prove it and narrate that story to yourself first and then to investors? For example, let’s just call it 500 stores. Let’s start with brick and mortar. This works just the same for eCommerce but let’s say 500 doors. You recognize that to show traction in 500 doors, you’re going to need a lot of money. Money that you don’t have. What do you do? You go out and try to raise that money. You’re told you’re too early. You spin in this infinite conundrum and in the meantime, philosophies aren’t growing and you’re doing the exact opposite of what you need to be doing to win an investment, which is to get proof points to drive it.

What you can do and how you can shift the narrative is this, let’s say you have $10,000 or $20,000 that you can deploy. To deploy that $10,000 or $20,000 across 500 stores means your efforts are going to be pretty modest in each particular store, unlikely to drive meaningful change on the shelf. Candidly, probably not a smart spend. However, if you took that same money and you decided to focus on five stores or ten stores built in a scalable way then you can go after those stores, build a model, build a program, maybe it’s supporting it with some merchandising, it’s supporting it with IRC, it’s trying to do some off-shelf locations or it’s even direct mail.

Whatever it is, geotargeted social media. You can spend dollars against it knowing that it’s going to be inefficient because you’re only using a few and that you’re going to be sacrificing the many stores for the few stores but at the end of the day, what you can hopefully construct as a narrative. You can take this to the investor and say, “Here’s the reality, I had $10,000 to spend. That’s it.” Before you go into 500 stores, we’re going $10,000, we should have that conversation as well. Rather than run a program that was pretty diffuse across 500 stores, I wanted to prove that I had a model and a means to lift and drive purchase intent.

I embarked on this shopper marketing program and here’s what I did but I only did it in five stores. I spent all this money in five stores but in those five stores, my velocity was 5X compared to the velocity in the remaining 495 stores. If I had your money, if you invest it, I can take those same results in five. I am confident based on exactly the levers that I pulled here. I am confident that I can take them and extrapolate those same results over those 500 stores. Suddenly now you’ve walked into an investor with a totally different narrative. You may still be too early. You may not meet their investment thesis but you’re not going to get dismissed because you haven’t proven traction.

You also have proven it to yourself. You know that you can do this. You know what it’s going to take to win and you can go out and market that. The same holds true for eComm. You can’t necessarily do it everywhere universally but you can pick whether it’s geotargeted whether it’s a specific demographic whether it’s a specific spend. You could do the same things and break this narrative down into smaller chunks where you allocate the available dollars from resources that you do have to execute well with the anticipation and the ability and the eye towards being able to scale it, multiply it when you can win investment. Change the narrative, that’s number two.

Investors Deserve To Make Money

Number three, investors deserve to make money. I know it is scary as hell to think about how much dilution you’re going to face over the run of raising money but the reality is that is likely part of the journey. If you get caught up on your money monetization, your path to ultimate outcome and you don’t share the same hope, aspiration or excitement for your investor then you’re being selfish. Investors are taking on the same risk you’re taking on. Maybe not as big because they’re not doing it full time and they have other tentacles so to speak. They’re choosing to invest in you and your brand versus something else. They deserve to make money and you need to show them what that path looks like. You need to be able to articulate for them how they’re going to make money and how you’re going to celebrate the fact that they’re making money. You should be excited for them when they do make that money.

The marginal dilution that most people face trying to agonize over a value cap or something along those lines in the long term is usually negligible comparative to having the right type of investor support, not only capitalize but in coaching and mentorship and so forth, the door opening to get that money in when you need it. Work on that, work on understanding what’s in it for the investor and celebrate them making money off of this. Help them envision what that money-making opportunity looks like. If you do those things, you’ll likely have a better chance of winning an investment and have a better relationship with the investors who do invest. That’s number three.

Don’t See The Responsibility For Sales

Number four, this one’s a little bit more of a tough-love thing. Don’t see responsibility for sales. I hear this all the time from founders complaining about brokers or complaining about fractional salespeople. Let’s start with brokers. What they do is inherent in their name and that’s where a lot of people misunderstand. A broker’s primary responsibility is to broker the relationship between the manufacturer and the retailer. That’s it. It isn’t to be your strategic sales team or to be the one that’s necessarily the closer but rather to be the connector, to be the bridge, to broker that relationship, to give you the insight that you need to make the best and most compelling offer and to give the category manager and the retailer an understanding of why there’s a need in the marketplace. It shouldn’t be left alone to the category manager and the broker. You should insist on being part of that conversation. You should insert yourself in any conversation that you possibly can that is a buying opportunity.

We need to drive sales. You need to drive sales and own sales. There are a million other things that you’re filling your day with that are not nearly as high value as that activity is. Allow your brokers, your sales agents, your fractionals to do what they’re best at doing, which has helped you get swings at the plate. You need to get the hits and home runs. That needs to be you. That cannot be them because if you leave it to them, you are leaving it to somebody whose passion, understanding, and level of command is not nearly as strong or as powerful as yours. Don’t see the responsibility for sales.

Don’t Confuse Efforts With Results

The next one is not to confuse effort or activity with results. I’ve worked for a guy for seventeen years and this is something he used to beat into my head. Don’t confuse activity with the result. We all did that. It’s that plain and simple. It is a security mechanism when we are sitting in this time when things are moving agonizingly slow and there’s a lot of consternation trepidation. You’re spending a whole lot of time with your two constant companions of fear and doubt. The way we assuage those feelings and emotions is to wrap ourselves in the cloak of busyness. We’re always going. We’re answering every email. We’re worrying about every period and punctuation on a presentation. We’re getting involved in the minutia of our business and we’re doing that to reinforce, to tell ourselves we are doing it all.

We are busy. We are working hard. We are doing all that we can but the truth of the matter is that it doesn’t serve you well for numerous reasons. First of all, it’s depleting. It’s taking your energy. It’s a life for sucking thing to be doing, to be engaged in activity that is just activity. Secondly, it takes the time away from you being able to look downfield, to look at your business more as the visionary that you used to look at it when you first started it, when you first were thinking about starting it. You’re two heads down in the tactical. It’s okay not to be busy. In fact, you should celebrate not being busy or filling every moment with activity.

You should look for time to catch your breath. Something we talk a lot about in Tardigrade traits is resilience and a big part of resilience is making sure that you’ve got that downtime. We’ll talk more about that in Invest Yourself. You have to ask yourself every time you’re engaged, every time you’re sitting around doing an activity, “Is this moving the business forward? Is this the best use of my time? Is this something that I could give to somebody else to do and I can back-burner? Can I focus on something more important or can I just catch my breath for a few minutes?” Don’t confuse effort or activity with results. It’s results that matter, that wins investment, that drive EBITDA and that drive gross profit and revenue.

Discern The Important From The Interesting

Number six, discern the important from the interesting. This is somewhat aligned with number five. It’s why I put them together. All entrepreneurs, we’re squirrels. We are chasing the next nut. It’s easy to be distracted by something. You listen to a podcast. You talk to another founder and they tell you about this new cool website or program and we’re off to the races doing it. What that does is pulls us away from moving the business forward and doing what is critical. The question I want you all to get into the habit of asking is that, “Is this interesting? Is it interesting to research this new influencer marketing program? Is it interesting to see what’s going on in this webinar or is it important?” Meaning it can change the results or the outcome.

“I have limited bandwidth, is this important?” If you could spend more time on doing the things that are important and less time doing the things that are interesting, you are going to be more successful, that simple. It’s a great story. I tell it often. It’s told to me by Lew Jaffe, who’s an entrepreneur and he was also a professor at LMU in their entrepreneurship program. He and his business partner were the early creators of one of the first video conferencing mechanisms. This was back when knowing it yet figured out how to compress both sound and video. Lew was able to secure a meeting with a Sand Hill Road VC. His partner was back in Boston and he showed up at the VC’s office with this big, clunky, cumbersome machine with a television screen and he set it up in the office and a well-meaning associate in the VC firm said, “This is great but the equipment’s ugly. Why don’t we put a little tablecloth or skirt around this and it’ll look a little better.” Lew was appreciative and that’s what they did.

His partner back in Boston, ready to start the meeting and they started. It switches on the units, one in Boston and the one wrapped in a tablecloth skirt in Palo Alto and the conference starts well. What Lew had forgotten is that this big clunky unit put out a ton of bit use of heat. Pretty soon, that little tablecloth started smoldering and within a few seconds, it was starting to catch fire. They had to rip the tablecloth off, stomp it on, burnt the carpet a little bit. Lew was devastated. In the meantime, his partner on the other end, also on the screen, was trying to continue the meeting. The meeting ends and Lew goes out to his car and picks up the big car phone that still has the thing screwed into the side in the receiver in the trunk.

He calls his partner and he says, “I cannot believe we blew this. I can’t believe we almost burned down the VC’s office.” His partner says to him, “Lew, it’s super interesting that we almost burned a VC down to the ground. Great story. We’ll tell it for the rest of our lives. You know now what’s important? We had the first successful bi-coastal video conference. We did it. We were able to do it.” That’s an extreme example but it’s an important one of the differences between discerning what is important and what isn’t interesting.

Anything Short Of A Restraining Order Is Not A No

I’m going to go on to number seven. Anything short of a restraining order is not a no. We get in our own way all the time on this. We’re worried that we’re sending too many emails or making too many phone calls. We’re going to be past all of those things. I promise you, that’s way more our own internal narrative than it is the reality of the recipients. It’s okay to be persistent. There’s a difference between being persistent and being pushy and obnoxious. There’s a difference between being persistent and being annoying but we send an email. How many of you done this, you send an email to a category manager to an investor and you sit there checking your inbox multiple times? They don’t respond within the first 24 hours. They don’t respond in 48 hours.

You start thinking to yourself, “When is the right time to email them back? Maybe I’ll give them to the end of the week. I don’t want to seem pushy. It’s been a busy week. I’ll give them to the end of the week and then maybe if Friday is not good, going into the weekend. Maybe I’ll do it Monday. Monday is busy.” Soon enough, a week’s gone by or more. Let me ask you all if you were being objective about the way you receive emails or voicemails and so forth. If something shows up in my inbox, if I haven’t touched it or triaged it within certainly the first business day of its arrival, it’s almost inevitably going to disappear out of my stream of consciousness.

It’s going to wind up in email purgatory and I’m not going to respond to it. If in a week later I see another email from you, it may or may not trigger that first one but more than likely, it’ll seem to me like plenty of times past. I have to refresh it all and start from square one. If I get an email from you and I don’t do anything and 24, 14, 18 hours later I get another email that says, “Elliot, I know things are crazy busy. Putting us top of mind, keeping it visible.” If I don’t respond, another 12 to 24 hours I get a similar one, “I want to keep this in your awareness. I love to chat. I’ll follow this up with a phone call and then I’ll leave a voicemail.” You’re not being pushy and demanding. You’re not saying, “Why aren’t you responding? If you respond now, I’ll give you a 2-for-1 deal.” You’re not doing any of that. You’re saying, “Top of mind. I know things are crazy. Recognizing the realities. I’m not trying to rush or pressure.” That type of thing. What that eventually does is create a few opportunities for you.

One, it creates this recognition that I can’t continue to ignore these emails because it’s not going to stop them from coming. They’re going to continue to reach out and do it. I should jump in. The second thing that it does is it begins to create a sense of cognitive dissonance. If eventually, you are realizing and recognizing that you are continuously blowing somebody up, most people are going to feel some cognitive distance. They’re going to feel bad about doing so and we’ll take some form of action. The third is it gets you to a no faster. That sounds bad but the truth of the matter is it’s easier to know when you’ve got to know because then you don’t have to waste your effort and time there. You check that one off the list and move on. We talk ourselves out of being persistent because we assign persistent and being viewed as a pastor bothersome the same and it’s not. As long as you approach it the right way and you use empathy in the conversation, it shows a willingness to continue to work.

It’s Going To Take More Time And Cost More Money

I would encourage that. That was anything short of a restraining order is not a no. Number eight is it’s going to take more time and cost more money. This is where the bullshit is got to be cut through. Things are going painfully slow in the marketplace. It’s the reality. There’s so much unknown. There are many things that are out of the norm and uncomfortable labor numbers. When are we? Are we outside? Is this what the new reality is? All of this is leaning towards slower-moving progress. There’s a bit of reluctance to get back into the swing of things or into the cacophony of all of the external pressures that we face and all of these meetings and so forth.

If you’re a founder, you’ve got to build in this resilience and recognition that you cannot base your success on things happening as quickly and at the same cost as you thought they were going to 18 months ago, 2 years ago. It’s not real. You’ve got to build that resilience into the business. You’ve got to question everything about how quickly you’re spending? What’s your burn? What you’re doing? What are things instead of taking 6 months to 12 months or instead of taking 6 months took 18 months? How am I prepared for that? Begin to also change that narrative, going back to number two, focusing on, “I can’t wait and I can’t afford to make these broad changes. How can I build the same compelling story and also prove my growth hypothesis and feel good about my assumptions differently?”

Invest In Yourself

That’s what resilience is all about and being ready for the fact that things are going to take more time and cost more money. If they don’t, hallelujah, awesome, that’s great. That’s not going to cause you any pain but if they do and you’ve prepared for it then you are going to position yourself and your business to be in a much better light long-term. That is number eight. Number nine, invest in yourself. The most important investment you can make is in you. If you don’t show up every day manifesting the best version of yourself, you are hurting your business, your chances of success and your chances of getting an investment.

You have to be at your best and that means that you have to take care of yourself and you have to put yourself first. That means it’s okay to shut down your computer and walk away and take some time off. Do the things that you need to do to recharge, to replenish. That could be a vacation or shutting down for an afternoon and going for a hike, a walk or making a commitment to turn your computer off at a certain time every night or making a keen and not to check emails when you first get up in the morning but to do something for yourself like meditate, exercise or both. It’s easy to talk yourself out of investing in yourself. It’s simple because it feels selfish and self-centered but it’s not. It’s of paramount importance to your business.

If you can’t come to the office or your virtual office and show up and engage with all the stakeholders in your business, your team, your investors, your buyers or your service providers in a way that represents the best of you, you are simply selling your business short and being a disservice to your business and to yourself. Taking that time to recharge, to refresh, to do the things that make sure that you are emboldened, feeling good and healthy is so critical. I say this from not out of somebody who’s got this nailed and perfected but somebody who lost their compass on this for quite some time. Only through COVID has rediscovered that importance and realize the difference of being able to manifest in the best way in every aspect, physically, mentally, emotionally. Invest in yourself.

Progress Over Perfection

The last one is number ten, progress over perfection. I love the mantra of imperfect action. It was taught to me by my business coach. That’s what I’m trying to say here, is that we sometimes think that we need to get the Kroger business lined up, go into Whole Foods or by killing it on eComm or triple our Amazon business. Anything shy of that, we don’t register as progress but it is the small iterative steps that we can make every single day to improve our businesses, ourselves, and our team. Those things in the aggregate are what move businesses forward in the long term. It isn’t the big, sweeping, leapfrogging type things. Those are great but they’re few and far between. It’s the steady, consistent day after day progress. It’s just progression.

Rather than being focused on the big perfect outcome rather than being worried about everything being lined up and set, why don’t you instead focus on making small iterative improvements every possible day that you can? If you do those things, I promise you you’ll see progress and progress is what you need. Those are my ten things that founders should know. My ten tough love conversation.

I hope this episode turns out to be beneficial. I hope this is something that you read and feel like it was time well spent. If not, I apologize. Certainly, it’s cathartic for me because this is the shit that’s been rattling around in my brain for a while and I needed to get it out to all of you. Thanks for reading. Please, share this with your friends in the industry. Do me a favor. I’m a reluctant self-promoter and this has nothing to do with me or with the TIG brand. I want to get the message and the information that we put out here in this blog to as many people in the industry as possible because I’m hoping it’s information that can make a difference and it can open some eyes and change the direction for some business.

If you’ve got a minute, go wherever you find your show, rate us, share this with friends, subscribe. All those things help us to get this message out to more people and hopefully help guide entrepreneurs along on this journey. Thanks for being such supporters. Thanks for taking the time to read. Thanks for putting up with this episode. Be well.

Important Links

• Otto’s Naturals

• Instagram – Otto’s Naturals

• Lew Jaffe

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