1617 – Gathering Specialists with Startup Science’s Gregory Shepard

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0:59with us right now Gregory Shepard Gregory you are the founder and CEO of Startup Science you're found on the web at startupscience.io Gregory thank you so much for joining us thanks for having me boy we had a great conversation we were like man we better start recording this stuff because we find like just so many common threads in our backgrounds and experiences. But Gregory, give us an overview of what startup science is. Startup science is a platform that is used to power universities, accelerators, and other startup assistance programs. And it's built specifically to help founders get through the gauntlet of becoming successful.

1:38So it was on the heels of a five-year study on why, when, and how founders fail that started in 2016. And we found out the commonalities and sort of The trends and patterns that show founders are failing, most of them fail for the same reasons over and over and over. So my goal was just to stop them from failing for those reasons. They could fail for other ones, but not those reasons. And that's what we built. Well, you've certainly evoked my curiosity. What are some of the big reasons that founders fail? The number one reason is bad decisions, but that is actually not the real reason. The number one, so if you look at it in a stack, right, there's the top of the tree, which is what everybody sees.

2:18and then there's the roots underneath the ground. The top of the tree says bad decisions. Underneath the ground, that splits off. And the number one reason out of those actually has to do with bad advice. They're making bad decisions because they're getting bad advice. And the bad advice, the number one contributor of bad advice is actually investors. And the number two is mentors. So it's pretty interesting. I wonder what kind of bad advice you hear or have heard of investors sharing, which this is surprising, right? You would think that, you know, someone that's putting their money in is going to be pretty deliberate, you know, and they're going to make sure that they've vetted whatever it is that they're recommending rather than just spouting off opinions that may or may not work.

3:11But what are some common pieces of bad advice that you might hear from an investor? Yeah, it's not that they have the right intentions. Yes. Oh, sure. Yeah. And there's a difference between the view of the world, right? And investors looking through a lens that has to do with their experience working with founders, not being a founder. Almost every one of the investors that we went and did interviews with, which was about 2100 of them, had never been a founder before. So their advice was coming from them being an investor, working with and watching founders, and then relaying that as a third party to the founder.

3:52But every founder has a different journey, and they're going through different things. And if you're an investor, and you're just saying, listen, you need to go raise money, but you don't understand the operations and the details inside of the business, that's bad advice, right? Or the investor, a lot of the times will say, well, we need to raise the valuation. Well, why? If you're working with a PE or venture capital, their business model is 2 % and 20, 2 % of what they raise and 20 % over the hurdle. So 20 % over how much they invested, right? So their profit basically on the cap table. So they're motivated just like any other broker to fund more companies to get their 2 % higher and to make their portfolio look bigger, which is based off valuation.

4:38So the number two problem in that bad decision stack is valuation, overvaluation. So what's the evidence? Well, look at the market right now, right? You have companies that have dropped in valuation by 50%. That's an overvaluation problem, right? So it wasn't the founder that was doing that. In most of the scenarios in the study, it was the investors telling them to do it or telling them take on money, take on money, take on money, which post money raises the valuation. So it's a systemic problem and the investors need to either refrain from giving advice that they don't understand the depth of, or they need to rely on other resources that are willing to dig into the business enough to give them good advice.

5:31That's the big problem. The same thing happens with mentors, right? So you have the one hit wonder, right? Some cat that goes out, does business, is successful. Now I'm a mentor and I'm a successful mentor. I put radio on the internet. Yeah, exactly, right? And then you have the ones who have done it maybe twice. And you don't know, maybe they hit a trend that was coming in. The waves were already coming in. They just happened to be standing there and got pushed to the shore. Or maybe they were out there paddling their ass off too early and waited for the wave to come in. Or maybe they got funded really well.

6:05Or mommy and daddy have money. or you got some special scenario like Facebook where the market just happens to be, all the stars are lined up and you get a win, right? So the advice that people give to founders needs to be catered towards what's going on in the market and what's going on in their business and the combination of understanding the operations of the business. Otherwise, it always leads to disaster. In fact, the numbers say that 51.7 % of the founders fail within a year of leaving an accelerator or startup assistance programs. Those programs are meant to help them. So it makes you ask the question, like, what are they doing with them?

6:47Right. So I studied those things to figure out like what was happening in that process. And that that's what happened. Right. Is them getting bad advice from a series of people. And then maybe the person they're getting advice from is somebody that's a vertical subject matter expert, meaning that VM SME is somebody that understands pharmaceuticals or tech or something like that. Maybe on the other side, you have somebody that understands the vertical, but doesn't understand sales and marketing. So it's a combination of understanding the industry they're in and the functional area that they're in as they go through the life cycle.

7:24So if you're an early stage founder and you have a vision and you're in the vision stage, your needs, in terms of advice are drastically different than somebody that's in a growth stage, a standardization stage, or go to market stage or product or whatever. Does that make sense? Yeah. Yeah. It's almost like that. The way you're describing it too, I'm thinking, my brain's thinking about that. I forget what that fallacy is, alleged certainty or something like that, where it's like the more that someone insists that they have the answer, the more that you should probably take that with a dose of skepticism.

8:00And in fact, You know, it's men of science and women of science who will say, this is our best guess based on the current data, right? And it's just a different tone. And that, to me, evokes so much more confidence because I know that, you know, I feel like it's just more trustworthy, right? And, you know, similarly, I think, you know, another thing I respect from mentors, right, is this idea of, listen, I know this area well. Like for me, like I know one very niche-y narrow thing. And, yeah, I'm probably one of the top 10 on the planet at this one very niche-y narrow thing. 99.999999 % of the stuff, I'm pretty unremarkable.

8:46Yeah, and that's pretty typical for people, right? Right. So what the the model that I suggest mentor or founders use is the same model that you get in medicine. Right. So when you go to a general practitioner, they don't start telling you about spinal stuff or kidney stuff or whatever. They send you to a specialist. Right. So the general the doctors these days are pretty much like project managers. Right. I mean, you're like, I have this going on. OK, go see this place over here. You know, and then that person does the special work that's associated with that particular diagnosis or gives the diagnosis.

9:23And the same thing applies for businesses, right? You can have one person who's an overall generalist, but you need to have somebody that says, I know how to do go to market and not just go to market. I know how to handle email. I know how to handle social, organic and paid across platforms, right? I know how to handle partnerships. Whatever it is, there's a very special, detailed understanding that you have to have in order to give good advice. So it's not that you don't want to give advice. You just want to give it, don't get over your skis on the advice that you do give. Tell me more about how someone can take advantage of the resources at StartupScience.io, or is this primarily just for organizations to connect with and make this available to their members?

10:10In other words, are there business leaders that can somehow partner with or connect with Startup Science to be involved in some way? Yeah, so I have, when I did the original study, I got a book deal with Ben Vela Publishing. So there's a book coming out at the end of the month called Startup Science, actually. And in conjunction with that, I launched a version of the platform on GregoryShepard.com, which is my website, specifically for founders, because I wrote about 5 ,000 pages that I couldn't fit into the book. So the courses that are inside of there are built to help people get around the reasons why founders fail.

10:50In fact, most of the courses start out with this percentage of founders fail for this reason. Here's how you don't fail. And it's watch, listen, read, and experience so they can actually do the work. In addition to that, there are tools. So you can come in and there's a grant finder tool. We have 60 ,000 investors that we use AI to pair the founder up with investors. So it makes it so you don't need as much of the advice that is reoccurring, right? Like if something is done over and over and over again, you don't need a person. You just teach somebody what that thing is. Right. And that's what startup science has a lot.

11:28You can communicate with founders if you're a mentor or whatever, but it's meant to sort of give context for them. So you're taking a course on valuation. You understand how valuation works so you can defend yourself to an investor. But your mentor also understands how you've learned valuation so they can help you out with that journey. We're always looking for people who have suggestions and advice and, you know, mentors, everybody that that is interested in working with founders. So we add them into the into the system and then the founders can choose from who they want to work with. So it's I mean, to your point, anybody that is interested in working with founders, just go to Gregory Shepard dot com, fill out the contact form and I'll work with you or somebody will.

12:17but we'll get it, you know, we're a lot of the stuff that's in there has come from people on the outside saying, Hey, you don't have a course for this, or you don't have a tool for this. Like one of them was the most recent one was the ecosystem. So I preach to people. I'm like, you have to understand your ecosystem, which is made out of customers, partners, competitors, and acquirers. Right. And it's really, really takes months to put together your ecosystem. So we built a tool that does the ecosystem for them in like a half a second. So that's like an example. So I'm into anything and everything that people want to send our way that'll help founders.

12:57The goal being help founders succeed. Yeah. The website again is startupscience.io. What do they click on? Visionaries. Visionaries. Okay, good. Good, good, good. Awesome. Well, listen, it's been a great conversation, Gregory Shepard. I am so grateful that we've crossed paths. Thank you so much for your contribution. I know you have a long and storied background, which we didn't even get into. You and I talked about that before we hit record, but here's what I would recommend. Gregory, you do great LinkedIn. And so I think that if you search Gregory Shepard on LinkedIn, also it should be linked up on the Startup Science.

13:40You'll get there as well. through your company page. By the way, there's a company page for Startup Science and then you'll find you. Yeah, they'll find you. You're a great person to follow on social. You produce, you share great stuff. So, Greg, I just want to say thank you so much for being a guest. And again, a website, startupscience.io. Gregory, thanks for joining us. Thank you, take care.

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