Welcome to Powderkeg igniting startups episode 22 with David oak. Now my conversation with David is pretty awesome because he is the co founder of shopkeep, which is a point of sale software company that’s raised over $100 million in capital. But more recently, David started a company called vorrei, which is a marketplace for building more authentic business relationships. Now, don’t worry, we’ll explain what that means later. But for right now, what you need to know is I am your host, Matt Hunckler. And I’m the founder and CEO of verge, which is the network of local communities with global reach for tech entrepreneurs, investors, and top talent. And as my team and I have grown verge over the past seven years, we’ve hosted more than 1000 entrepreneurs at our events around the world. Those founders have gone on to raise more than $500 million in capital collectively, they’re disrupting industries creating wealth and changing the world. And they’re doing it in areas outside of Silicon Valley. That’s right. We are unapologetically unvalued here at powder keg, and that’s why we started this podcast. Each guest has their own powder keg full of raw skills and talents that have ignited their startups and fueled their growth. These are their stories, you can find me on Twitter and on Instagram at Hunckler. And that’s Hu NCKLE are and what I want you to do is let me know how verge powder keg and I can help you with your entrepreneurial journey. In the meantime, please make sure you subscribe to The powderkeg podcast wherever you listen to your shows. We are on SoundCloud, Stitcher, all the major podcast outlets, including of course, iTunes, and you can find all of those links to subscribe at our website. powderkeg.com. Yes, we now have the.com, which makes us also official, and that’s powderkeg, all one word.com. You can also find all of the transcriptions the show notes, all the links to everything we talked about in each and every episode, including this one. And of course, you can subscribe to make sure you don’t miss a single thing. Thank you to all of you powderkeg guests out there who have already left us a review in iTunes. It’s your feedback, and the sharing that helps us reach more people and grow this community. We’re reaching 1000s of people every month, and I’m so excited about that. This week’s episode of Powder Keg is brought to you by developer town. These guys have been friends of ours for years, they’ve helped so many startups take their ideas to market gain traction, and build and grow and meet customer needs. But something you might not know about developer town is that they actually help enterprise companies move like a startup. Corporate innovators often work with developer talent to explore software solutions that support their business needs. And now the cool thing is developer town leverages all of their years, you’re working with startups, and they can help companies better understand the viability of potential software solutions, apps, products that they’re doing digitally, and quickly bring them to market. Developer towns created this proven sprint to market process so that large enterprises can move like a startup, you can find out more about developer town read up on them at developer town.com/powderkeg. That’s developer town all one word powderkeg. All one word. Again, that’s developer town.com/powderkeg. Developer town, start something. Okay, our guest today is serial entrepreneur, David oak, who kept it real when we connect into Manhattan during my last visit to New York. As I mentioned previously, he founded and built shopkeep, which is a point of sale software, you know, they took this whole point of sale process, put it in the cloud made everything seamless and easy to use, which is why they were able to grow the company from the original two co founders to now nearly 300 people. While David was there, he has sourced and close over $100 million of outside capital. He knows a ton about developing strategic partnerships, building teams, and anything you would need to know to go from zero to 100. With a startup. Now he sits on the board and does work with an immensely talented executive team that continues to lead shopkeep that’s opened up his time to start a company called vorrei, which fosters authentic networks and they’re really trying to help people succeed in the business world, whether you’re an entrepreneur or a leader in your field, they’re really trying to build this important community at vorrei and try to solve some big problems. Now the cool thing is David meets a ton of entrepreneurs through the work he does at Vare as well as some of the other things like mentoring at TechStars. You know, huge global accelerator network. It’s gonna get really real with David. Okay, so I hope you’re ready for this. Let’s set this thing off. Tell me what you’re doing right now it for it.

So Florida is a platform that helps people come together with curated using overused words, curated. It’s an ecosystem to so so actually, at the end of day worry just put together small dinners of like minded people that are vetted interesting to each other and the These events are powered by somebody who wants to meet those people and is relevant to them. So what makes them a little bit differentiated is that we’re able to put together really big groups of people because we have this concept of a host right now. And the host is somebody who invites their friends to dinner based on some filters we give them. And people come because that person invited them. So for instance, if, if you invited me to dinner, we’re boys now, right? My absolutely, yeah, you were boys. Now you invited me to dinner, my reaction is not going to be who else is coming? Right? My reaction is going to be out. Thanks for inviting me, my shoulder early. I’m gonna stay late. I’m delighted. You invited me to join your friends. But if if a public accounting firm or some enterprise SAS product invites me to dinner, my reaction is Yeah, you should be invited me, right. I think I think very highly of myself, I have a massive ego. You know, I spent $2 million on your audit. So you should be inviting and Michelle blade and it’ll leave early. You know, there are people that would sponsor this conversation right there. So there’s something a little bit more natural to put small groups of people together and then watch them go build things. So that what, that’s what we’ve done, we’ve created a platform that very small dinners, and we’re doing dinners just because breaking bread is an interesting. It’s an interesting mechanism to get people to know each other.

Is there a particular format to the dinners that you found works really well?

Yeah, I mean, we’ve done a few 100 of these over the last few months. We do almost in the last few months, we’ve done hundreds Yeah, we do over we do about 20 a month. Can you scale to that? It’s really easy, frankly, because you make venue relationships that just become turnkey, you have a back end, front end team that is just very good at putting on dinners. And then you kind of get into a cadence of what works just based on some simple best practices and the best practices for our events. They’re not formal events. We’re not loading people up with here, you what, here’s what we do. But before every dinner, we sit down with the person hosting it, who’s invited their friends, and the person powering it, and basically tell them, hey, here’s what we’ve learned. Here’s what the data shows, do the following things show up at 615. It starts at 630. Ask everyone to introduce themselves in less than a minute. There’s rarely a venture capitalist that can that can introduce themselves in less than three minutes. So get people to say just one minute, right? Like a stopwatch. No, but some some of our hosts are better than others, they get kind of cute with it, right? Like, and they love to just like, you know, use it as an opportunity to promote themselves. That’s why they’re doing it in the first place. So people who host our dinners, they have a platform of some sort anyway, they’re either influencers, that somebody in the group, or they genuinely rely on us to take all the drudgery out of planning. So what makes someone an influencer? Do what makes somebody an influencer? If other people follow their ideas, and try to prescribe to their beliefs and learn what they have to say, influencers can also be confrontational, right? They could be polarizing. Yeah, that still makes them an influencer?

Have you studied any of those characteristics that make people want to follow them? Like what what are some of those?

I haven’t? I mean, I’m not I’m not really I am not interested in Influencer Marketing. Marketing I have some friends are. What most inspires me is just having, you know, powering people providing them the ability to get a group of their friends together. Yeah, right now, I mean, because you know, what led to this was I, you know, my last business got pretty sizable. Right? About that. Yeah, sure. So before for a, I started a company here in New York called shopkeep. shopkeep is a cloud based point of sale system. I don’t know how much you know, about point of sale, but it’s a place

more than I ever wanted. Yeah,

I mean, point of sale, generally,

just because I’m not in commerce.

storefront, I mean, even today, point of sale is generally a place where technology goes to die. And the user interface is from like, 1945. Most of these organizations have this big disgusting box on their countertop, and they have a server in the basement, and you’re gonna wind up having some delivery boy surfing porn, that gets a virus onto the server. And next thing you know, you’re closed for business, because you can’t transact. And good luck getting the consultant that you paid 20 grand to install the server into the store on a Friday night, right? You’re basically closed for business. So what’s fine? Yeah, so what shocky did is we took that whole thing and we put it on the cloud, he made it a lot more affordable, easy to use, easy to get going. And that business grew from me and my co founder, who was a retailer, you know, grew from two of us in a room to nearly 300 people. We have 30,000 merchants, we’ve raised, you know, close to $100 million, and it’s a big business now. Yeah. And what happened with that business actually was it got too big? I ran the business day to day. It was really interesting, because I’m probably a good zero to 100 guy. Yeah. And I really understand my I think one of the reasons we were successful is because I always looked at my role as hiring inspiring. In retaining and never running out of capital, and I did minus person 100 employees? Well, it just in general. And I think what the reason why shopkeep was successful or is successful is because I think the founders did a really good job, most of the time of hiring functional area experts, pulling ourselves out of the day to day setting goals and making sure the strategy is aligned. And my job, a lot of my job became primarily managing the board. And as the business got more successful, that was like, 80% of my job. Yeah, and I wasn’t very good at it, because I’m a batshit, crazy founder, and I tell everybody what’s on my mind. So you know, it just managing the board was never something that I was very good at, even to this day. So but but then the business, you know, when my first child was born, and I was literally pitching, one of our investors on a pro rata for this series, see from the recovery room, have my first son being born, and it will, and it was the only time we can do that began, because this is when our global partnership gets together. And if you can, please just as to check the box for us. But you have to take them through the deck, you’re the only one that could do it. And you’re an entrepreneur, this is what you live and breathe and it’s fine, right? You know that you’ll do anything for your business. And I was literally in the recovery room. And my wife, Isaiah, my son is probably like five hours old, and my wife is looking at me like you have an actual child now. Right? You have an actual child, like my wife is a former banker, and she’s very commercial. But so she proceeds to tell me, you know, you’re actually, you’re actually doing yourself a financial disservice by continuing to work at this company, right? Like, why don’t you hire a CEO to run this company? Like you’re fully vested like, you have no idea what you’re doing. Everybody blows smoke up your ass all day, you’re not happy 80% Of Your time is working with these people go do something else. And I looked at her like, she was insane. Like, nobody could run this business by me. It’s gonna be a tire fire. If I’m not here, are you out of your mind. And then like, three months later, I was probably something happened. And I just like my own little inner work in that in the office at 2am. And I’m like, why am I still here. And then I went to the board with great trepidation and the other management and I was kind of like, Hey, I’m thinking about leaving, you know, I’ll stay on as the head of talent. I’ll be the co founder, whatever you wanna do, I’ll help you with the good with the capital raises. But I think it’s time that, you know, you know, I left thinking that they would flip out. But they were like that. So great idea. As a matter of fact, that guy, that guy’s coming in right now, you know, there’s very mature of you, David’s everybody was happy. And now the guy who runs the business makes me feel really good and really bad about myself, right? We’re really good because the business is growing, and it’s getting so much value. And I’m the largest common shareholder, but really bad, because he’s just like, so much better at running the business. And

I so often hear that there’s almost like three different CEOs, right? There’s like the zero to 100 CEO. There’s like the 100 to maybe 500,000 CRM. There’s like the IPO CEO, if that’s, you know, if that’s a stage company’s lifecycle? Look,

I think Steve Blank talks a lot about those things in the Lean LaunchPad. And I think it’s almost scientific, that different things happen to businesses and different people need to be engaged at different times. And I failed. So I failed forward so many times in my career, not just with shopkeep, that it gets to the point now where you’re turning 40 You’ve been through it, and you kind of identify what you enjoy what you’re passionate about, and you get comfortable in your own skin. You no longer need the ego. You don’t really want anything from anybody. And you know, for me, I genuinely like putting people together and watching what happens. Like that’s, that’s what I enjoy. I love helping people. I love being an advocate, because I, you know, most of my life, I was this egomaniac with a big chip on my shoulder that wanted to, you know, grow all these businesses and be better than everybody now. And at this point in my life, where it’s fantastic to watch what happens when you help people build relationships, the CEO or the varying types of people of different organizations that you brought up. It’s clear. I mean, there’s different people that should be at different companies that should be in companies at different time.

Absolutely. Well, it’s interesting that you had such a good relationship with your wife, that she’s able to have that outside perspective. Well, my

wife got the short end of the stick, because when she met me, I was I had this really nice job. I was the director of mergers and acquisitions at IAC. But I you know, I worked for the, you know, this large organization that had all these consumer facing Internet businesses. And we had $8 billion, sorry, about $4 billion of cash to deploy on consumer facing Internet businesses in 2008. So like, you know, I’ll get back to my wife, but you know, at IAC is a perfect example of the difference between, you know, growing up, and then like becoming an entrepreneur. And, you know, at IAC, we had just levered up for businesses, declared a dividend to ourselves and spun them off to the public. One of them was Ticketmaster the home shopping network lending tree In a fractional ownership business called into real travel, my job as director of m&a was to help deploy that capital on consumer facing Internet businesses. And in 2008, it was an interesting time because, yeah, I mean, you were like, right, all of the venture capital funds were recycling capital, because their LP investors were pulling money out of the fund a little bit earlier on in their lifecycle. So you had, you know, CalPERS and Yale even pulling money out of gold slated, you know, VCs, like some of the large ones on Sandhill Road, so they were all exiting businesses earlier on in their lifecycle. And in my role, as you know, m&a guy, I met every single person in venture very quickly, they’d come up and say, you know, what do you want to buy? I got an E commerce business, I got an ad network, you know, Newsweek, like, what’s interesting, and I met everyone in venture very quickly, which really helped me become an entrepreneur. Because Oh, for one reason network, well, not only was it the network, but my Washington, my college roommate, was it to Elaine was Perry Chen, who started Kickstarter. And Perry, you know, one of my closest friends always much cooler than me. I always wanted to hang out with Perry, if he would hang out with me. But

I’m pretty cool. I mean, you’re a pretty cool guy.

But, you know, Perry, you know, we went to plenty together, we were, you know, we live together. And he had been talking about Kickstarter for quite some time, it was always in his head in different ways. And when I was at IAC, and I met everyone in venture, Perry was like, hey, you know, you can, can you can you help with Kickstarter, you know, all these people. And it was still just a kernel of an idea for him. And I immediately told him that I want nothing to do with his little internet business. I’m a big finance douchebag. But I’ll help you. Alright, I’ll help you.

So, of course, your your wife probably appreciated that level of stability.

Well, that I mean, that’s why we started talking about it because my wife so I literally became the first board member of Kickstarter. My you know, we we raised some capital from a friendly hedge fund investor. And then eventually, Fred Well, I introduced him to Fred Wilson, Andy Wiseman, when he was at beta works. And they eventually did a series a and it was, what was inspiring was for me to be a part of something like that. Right? So Kickstarter was very inspiring for me to go from like this kind of m&a corporate guy into Who’s afraid of failure to watch Perry, who’s the one of those most brilliant people I’ve ever met. And it’s very inspiring for me. And then I spent like the next two years coming to Perry with harebrained ideas, like, what do you think of this? And he would be like, Would you ever use that product, right? But my wife when we met, it was funny, because I had this big job, I had all my hair I went to, you know, I made money, and I went to the gym every day. And then one day, I woke up, and I’m like, Hey, Sarah, we’re going to be broke. And by the way, you’re not gonna see me for like, eight years, and I’m gonna lose on my hair and gain 50 pounds, right? How does that go on? And it was, but that’s kind of what happened. So now that we started this new business, Sarah’s like, why are you doing this? Again? Like? It’s a compulsion. It’s a compulsion.

Does it feel like a compulsion to you starting company,

it feels like a compulsion for me. Because there’s, when you know, I don’t think I start companies, I think I’m very good at hiring, inspiring, retaining, and never running out of capital. So I think I’m very good at identifying what I’m good at finding people who will, for whatever diluted reason, work with me on it. And then as a team, kind of building things and identifying what everybody excels at. So I think I’ve gotten pretty good at understanding the cadence of what it takes to start a business. And it’s also inspiring to be a part of something I really enjoy creating things, building things, especially if they help other people. shopkeep was not my vision, it was Jason Richardson’s vision, I knew I could certainly be helpful in installing it. I didn’t know anything about point of sale. But I was really inspired by helping small and medium businesses make better decisions, you know, helping bring Main Street back for vorrei. I’m very inspired by helping people build professional relationships, Kickstarter. I mean, Harry always says, I mean, they’re literally saving lives, you know, in some strange way, by helping the creative class and the way they do Oh, absolutely. So you know, I know what I’m good at. And, you know, in the end, it’s always for me, from a pure financial perspective, I feel like I’m the type of person that could always make money working for somebody. You know, again, I’m probably unemployable. Right? But I feel like if I needed to feed my children, I could always go make money. I really enjoy creating equity value for myself, my investors and the people who join the companies I work at, because if you learn how to do it, effectively, take all the emotion out of the room. It’s actually fun to build a business, you know, when anything is work. Yeah, right. I mean, if I was still working at PricewaterhouseCoopers right now, I’d probably be working just as hard.

And just, well, I don’t want to get back to the sheriff building equity. That’s an that’s an interesting concept. But you mentioned that transition from being an employee, you know, high powered all VCs want to know you. Was it difficult to make that decision? Or make that transition from that role to?

Well, not really, because I don’t think I was very good at my job. And what I mean by that is, you know, I grew up in public accounting, I was a, I was in the mergers and acquisitions group at PWC. So I was a CPA, I worked for a very large accounting firm, I was very linear. I graduated Tulane with an accounting degree. And I was delighted to make $40,000.19 98. And one day make partner if I killed myself for 15 years, and I was always chasing that carrot. And my job when I was doing this was primarily to help private equity funds, buy businesses. So I was in the m&a group, but it was more of a kind of audit function in some ways. So if Warburg Pincus or Apollo was going to buy your business, I would be sent there to give you a commercial and financial enema. And if you’re ever selling, if you ever selling isn’t Yeah, like if you’re ever selling your business for private equity fund, I would be the last guy you’d want to meet. My job was to destroy as much value as possible. So it and then somehow I got this job at IAC. And I always wanted to be a real deal guy. And I had a lot of friends that worked in private equity, and Goldman Sachs and I was an accountant who thought I was a deal person. And somehow I elbowed my way into this role at IAC, working for two of the most sophisticated deal people I’ve ever met. One is Karen Norton, who’s at upfront ventures. Podcast, right? So Kara is extraordinarily sophisticated. And she hired me and somehow inherited me. And she worked for Jason Rapp, who was also in LA. And so two of the most, you know, sophisticated dealmakers I’ve ever met. And I joined this group that I see and three weeks into the job, Kara announces that she’s pregnant, and she’s going with her first child. And that’s when she moved back out west and joint City Search. But I’m going to report into Jason, mind you, I have no idea what I’m doing. I have no idea how to really do deals, like I’ll be. And then I and then Jason leaves to go be I think the CEO of mahalo after being the CEO of gifts. And I’m literally in this job now for a month and a half. reporting directly into Barry and Victor in some strange way who were running IAC. Before they brought on different management. But that took a very long time. And we were doing deals. And I had literally anybody who was at IAC would tell you I probably wasn’t the best deal guy. But I tried hard. Right. And there were a lot of people at IAC that are just fantastic. Yeah, so when I saw the opportunity, but want but you know, meeting Perry, getting really involved in entrepreneurship, seeing the fantastic brands that we had IAC had a lot of entrepreneurs, it was inspiring for me to watch these people building equity value building things. And I said to myself, maybe and again, linear, afraid of failure. Interesting. I said to myself, Wow, maybe there’s some skills that are transferable for me, if I just started doing something, and I had no wife, no kid, no mortgage, I’m in a job that has a very, you know, very good job that I can leverage to other things. But you know, you only live once. So it’s not a dress rehearsal. Let me just try to just take this shot, and see if I have skills that I can add to something different. And I can tell you, I am so much better at being an entrepreneur, than I am at working at a large company or doing m&a work for so many reasons.

Oh, when you were working in an m&a space, I’d actually learned a lot. Whether it was by figuring it out and failing or whether it was watching other people and do it right. What did you learn about building business value in that role? And what sorts of things drive to your point? Increased equity?

Yeah, I mean, it depends on what stage the company is, right? Let’s talk about early stage. I mean, early stage companies building equity value really, is somewhat determined by your ability to generate traction for it. Right for whatever you’re doing. If you’re developing a new if you’re developing a new podcast, getting listeners if you’re developing a enterprise software company, generating revenue. So these are the things you have to do startups generating revenue. Well, if you’re an actually It’s funny, when we started shopkeep you know, I realized now that you know, enterprise software companies, if you have revenue, a lot of your problems go away, right? Yeah, no, I know, you’re gonna be hard. But you know, I guess, you know, as far as like generating value for those early stage business Since I think, from being an m&a and looking at those businesses from the outside in, I realized a couple of things I’ve realized, you know, first, you know, every business from a founders perspective, you kind of have, you know, this concept of players on the field. And then people in the stands, and the players are the operators and founders of the company. And I feel that way for any company I’ve been on. And you know, we’re training hard when it’s not game day, and we’re trying to hit a single every now and then you hit a home run, sometimes you have to take the picture out, but and a lot of times, you’re committing errors. But what you’re going to have is this dynamic of people in the stands, and the people in the stands have paid their entry price, they’re going to be sitting right behind home plate right behind home plate and yelling onto the field, David raanta, first take the pitcher out, nine times out of 10. And none of them could even play the game, right. But they’ve paid their entry price, they feel like they have the ability to yell onto the field. And sometimes, sometimes you hear them and sometimes they say really interesting things. Yeah, maybe I should move up in the batter’s box a little bit. But they’re going to talk about you on Monday. And success for an early stage business really depends on your ability to play the game well, while listening to what people are playing and saying in the stands, putting on a good show for them. But doing your best to hit a homerun and becoming a great player. Because nine times out of 10, those people can’t play the game. You want somebody who’s in the owners box very far away. And every now and then just calls the bullpen because they have something really meaningful to say. And when that phone rings, you answer it. But there’s always going to be people with an opinion. And when you’re on the field, it’s really all about no retreat, no surrender, the game is very, very long. Just keep training and keep trying to hit singles. And if you do that, you get to the point where all of a sudden, you know, you’re bad and clean up and people were cheering you on. So I believe that a lot of early stage businesses get distracted. They get distracted by the wrong things. They you know, and a lot of that shows up in fundraising. Actually, I see a lot of early stage businesses that think the first thing they need to do is put together wireframes and go pitch the business. Sure. Right. And I would sexy thing, right? I mean, let’s go talk to investors. Right, right. Yeah. And investors in early stage businesses, even though most of them are war, Knights deploying other people’s capital, and they haven’t built and they haven’t been well, and they haven’t built their own business on their own. A lot of them have are seeing a lot of opportunities. They’re seeing a lot of early stage businesses, and they’re very, very sophisticated, and very, very smart. And they will understand your business very quickly, if you explain it to them. So for that reason, you don’t really have to always be explaining people what you’re doing, you have to build it, and give somebody an opportunity to understand what you’re doing very quickly, without having to explain it to them all the time. And I think too many early stage businesses get distracted. They’re not focused. And they don’t just start building their product, doing a ton of user discovery, and getting to the building in very iterative forms. And it’s all about focus with early stage businesses. And if you’re building a software, business software is just a tool, right? prioritize what you should be building first, based on what users are telling you, and then go raise capital. And you

mentioned the baseball analogy, which I love in terms of the fans in the stands and the players on the field. Talk to me about that with respect to hitting bass heads versus hitting homeruns. Well,

I mean, I think a good analogy is perhaps something like large strategic partnerships, right, they always sound fantastic, they typically get board members very excited, they typically get other team members very excited. And if you have a, you know, if you have an E commerce business, and or if you have some type of consumer product, just to use an example, and Walmart is really interested in selling your product, that sounds fantastic. But I can tell you nine times out of 10, it’s going to take you two years to do that deal, right? And it’s gonna be very distracting until you do it. And then just signing that relationship is going to be a lot easier than actually executing on it. And I see a lot of early stage businesses try to go for these large channel partnerships. And when you’re swinging for the fences, right, and that’s okay, you should try to build large strategic partnerships, and you should certainly embrace them and cultivate them. But certainly what happens with a lot of early stage startups is they went into the business thinking, Oh, I have a friend that this large company who’s an advisor to my to this new, you know, fetus I’m putting together and they’re going to help me grow it into into an adult. But but normally what happens is, it’s just a very long lifecycle. This happens in FinTech especially, that’s what makes sense. That’s what makes FinTech hard, right, because there’s a few very large financial services. As organizations that are FinTech customers, they’re typically run by their compliance organizations. And when you build a FinTech product, the hardest thing is getting these people to use that product. And it takes two years. And then they finally signed a deal with you. But it’s been two years. And now you just have to execute on that deal. So if you’re, if you’re building a business that has a direct sales organization, while you’re also managing these large strategic partnerships, it’s a lot easier to be successful. And you’ll always almost have to parallel paths the path, then I’m a big fan of hitting singles. But hiring that cleanup hitter, you know, to manage the big strategic partnerships, and make sure it doesn’t distract the business, the engineering team, the product team, or the sales organization,

while you get enough signals, you’re gonna eventually score homerun, tiny, and that’s that’s the concept,

right? And but then you also learn how to do things well. So you can do them at scale.

What happens when you add in? Maybe I’m beating this metaphor to death? But how do you handle those hiccups along the way, you know, you’ve got someone on third base, but then you get a third out?

It’s a good question. I mean, like I said, it’s a marathon. Building a business is no retreat, surrender, no retreat, no surrender, I find that as an entrepreneur, as a founder, as anybody that’s part of an early stage team in business at any level, part of your job is taking the emotion out of the room, right, and working strategically with other people in a collaborative fashion, making database decisions. So there’s no guesswork. There’s always a lot of personalities involved in early stage businesses. That’s why people are doing it in the first place, you typically have a lot of charismatic people that are maybe somewhat coin operated potentially unemployable, for whatever reason, getting together to try to bring to life a big idea. With that is going to come a lot of mistakes, a lot of sophistication without experience, and the potential to make a lot of mistakes. But mistakes happen. But what’s inexcusable to me, and at some of the learnings I’ve had is ego, emotion, taking yourself too seriously, and not thinking of the point that you’re building a business together. It’s a commercial enterprise. And it’s not about you, it’s about your customers, or users or what you’re trying to build. And that’s where that’s where a lot of companies stumble, they stumble with the emotion, they stumble with leadership that just takes themselves well, way too seriously. Can’t pull themselves out of things. Yeah. Right. And you see that all the time. You know, like, the tech space is a good place to talk about that you don’t have, you know, fantastically successful founders who take themselves very seriously, that really haven’t done anything yet. Yeah, you know, I see that all the time. Like, especially for our dinners. Like, it’s okay, you don’t have the competence just to dinner. Right. Like, you know, it’s like, you know, but if you commit to something show up, right, you know, so we, one of the things I like about our dinners is that people show up on time. And I think were coming back to a place in our society where people care about each other want to are hungry for real direct interaction, and respect for each other and making commitments and doing business the way it used to be done, which is in person. Yeah, right. And that’s something that’s exciting for me, I feel like people are hungry for that was modeled after anything. Yeah. Well, Ray is probably modeled after my co founder, Mark Carson’s Shabbat dinners. You know, one of the best times of my week, and we’re not, I’m not religious, I am Jewish. But we one of the best times of my week has been experiencing Shabbat at Marc’s house. Because he always brings together people, he invites them to his house and for Shabbat dinner, all different types of people, not just Jewish with their children, you sit down on Friday, and turn everything else off, except being with your family and a group of people that are usually pretty interesting. And from that, I have built more meaningful relationships from anything else, which is really what led to vorrei in that I was sitting in there already throwing events. And what I mean by that is, when I when I had left shopkeep I was basically for the first time in my life, not working. It was the first time I was not working an 80 hour week, and it was great. At first I had never been on the proverbial Beach, my wife would go off to work. The kids would leave with the nanny, and I’d be sitting there scratching out the walls after three weeks. There’s only so much I mean, there’s only so much you can watch you know, binge watch justified and like, you know, make omelets in her underwear at 11am. It was just like really boring. Right.

How did that feel three weeks. It was

35:04
it was tough to be honest, I’d be sitting there on a Wednesday like watching TV, you know, earning a living pretty well. Right, but not working. And I would sometimes say to myself, is this what Jack Welch would be doing on a Wednesday when he was my age? You know, probably not. So I started getting hungry to getting involved in things. And this is actually what led to foray combined with what Mark is doing in that, in that a lot of my friends and venture started sending me to their companies. Even though I was a little bit hungover from shopkeep, they all knew that I was available. So I would have large venture fund here in New York sent me to some founder, because I can be helpful. And I would sit down with somebody. And I was like, complete cliche, right, some guy who started a big company who’s not there anymore, keeping a blog and advising people, right. But what I would sit down with some of these truly amazing founders, great innovators and much smarter than me, but I would sit down with them, and they raised like $20 million. And I would say something like, You should hire a head of sales. And they would be like, Whoa, that’s the best idea you ever had. That’s amazing. What else can you tell me? And I’d say, Well, what’s your next board meeting? Well, Thursday, let me see the board deck board deck datapack. Oh, I don’t know what that is. So I just, you know, of course, I’m exaggerating. But I started like advising people on just what I’ve experienced from seeing the movie was there

one thing in particular, that more often, you were getting called in to help with?

I think I think I was getting called in for when that founder had hit like 25 to 30 people, and was really struggling to pull themselves out of things. And I would sit down with that founder and just talk about my experiences, talk about out of working in the business and more working right, like a good example is, is a Salesforce just using a quick example. A sales organization for a product that is sellable, is typically transformational for any business at any level. But founders for whatever reason, especially if they haven’t managed businesses in the past, like to hire sales reps, and then work with them to sell the product. Right? What I always try to tell anybody I work with, especially if it’s an enterprise sales business, and or SAS company is, don’t hire sales reps, hire a player, mentor, coach, who can train sales reps, and develop processes and help you build that sales machine. And this is somebody certainly you can sell. But this is somebody you are selling to scale an organization and build a sales machine. I never want to see somebody hiring sales reps for a business that’s working and has not a founder, not a founder, that that has a great LTV to CAC ratio, that’s a really determined has unit economics. And it could be a business, if people are buying it. I’d like to see them exploring how to build a sales organization. So I would say these types of things to founders. Yeah. Right. And then what happened was, I really enjoyed putting them together, right? So I started putting all these founders together. And then he would go off and do something you remember the first time you did that? Sure. I remember, like I did it like the first eight times, I wound up on a few venture back boards, with really fantastic founders. And one of them said to me one day, hey, you should have a happy hour. It was actually Evan Hamer, from SmartPost. And Evan said to me, you should have a happy hour every time you introduce me to somebody, it’s just it’s fantastic. It helps me so much. We you should just put everyone together. That’s it. Okay, I’ll do it. So I put everybody together for drinks. And I had like maybe 20 people, I paid the bar bill. And then it was the next day, they were like, You should do this every eight weeks. And then it just snowballed. Right, the next event, I invited more people that I knew in the tech community. And I also invited some some engineers, because everybody’s always looking for engineers. And I have a lot of friends that are engineers. And then I invited product people. And then I invited early stage tech investors, and I invited late stage tech investors, but it was all very well curated. Yeah. And it got to the point where I had 200 People coming to David’s tech drinks, like people would call me how do I get to your texture, I’m like, it’s just a Google calendar invite here come, but But then what happened was, it was getting expensive. And my wife and I was always paying for it. I never, and I didn’t want to get a sponsor. I didn’t want to be one of those guys going to one of the big bang saying, hey, you know, want to sponsor this. Right? And I didn’t want to kill the vibe, and I just didn’t want to spam like my friends. And but it got to the point where my wife who manages all the finances in the house, probably so she can run away at any time. Was was looking at the credit card bill saying, you know, what the fuck are you doing? Right? Like, first of all, you can’t be spending money like the second of all, you got to get a job. Like Like, I know you’re unemployable. But this is ridiculous. You’re supposed to build something else, you know, you’re 38 years old. And and that’s what Yeah, and that’s what let the Moray actually and that, you know, she was like, you can’t do these drinks anymore. Like you No more drink, so you gotta get a sponsor. And then finally, I was like, Alright, let me go get a sponsor for this thing. And I got a good business Sherpa there. Yeah. Oh, well, Sarah Yeah. Yeah, she’ll never listen to this, my mother will listen to Sarah. Sarah’s fantastic. Yeah, she’s, you know, I think any business needs partners, whether it’s in life, or whether it’s the business itself. And that’s why I always tell people, if you’re going to choose a co founder, make sure that person has actually good relationships in their personal life with other people, you know, don’t never have a co founder who has a very tough time building relationships as divorced eight times, you know, and it’s incapable of having partnerships. All right, same thing with investors, or anybody else, like I tried to surround in on that doesn’t mean there’s anything wrong with those people. I’m just saying, you know, if you’re gonna have partnerships, have partnerships with people that are capable, and proven that they can apart

is building relationships, something that you have studied and taken a step back and maybe written about or thought about how how relationships get put together, is that something you’ve always done naturally,

it’s not something I’ve studied, it’s really just something I enjoy. I like being an advocate. I mean, that’s something I have found, it really appeals to me. And what I mean by advocates is, I’m the type of person who is extraordinarily happy if I help somebody succeed. And I am going to find the time in my day to help an early stage business, find capital, if that’s tough for them, because I have the ability to do it. And if I am aligned with a business, and I know investors who trust me, whether they’re deluded or not, like if I know investors who are going to respond to an email, I send them about a business. And I think that business is fundable. There’s nothing better I can do than help that company get funded. And it’s not because of a quid pro quo. And I do believe in give and take, don’t get me wrong, but I think there’s a proper way to practice it. Most of the businesses who have provided me equity in their business, to advise them or sit on their boards. It’s because they genuinely feel like I’m valuable. It’s not because I said to them, yeah, I’ll introduce you to Union Square Ventures that I need 25 pips, right, like, like, I’m going to go out of my way to be an advocate for somebody. But there’s, at the same time, you have to practice essentialism, right, you have to practice, you know, picking your battles, you can’t do a lot of things badly, right. So it is a balance. But I do find just naturally, I am happiest if I’m creating value for other people. But there’s different from studying networking a little bit since I’ve been doing this business. I came across some a friend of mine named Michael Roderick, he told me that, and I definitely believe in this. There’s really four types of people in your network. There’s and they’re actually the ABC and these and this is not, by the way, this is Michael’s philosophy, not mine. But and it’s something interesting, if you ever want to speak to him about it, here. Yeah, I mean, like so AES, AES are your advocates, right? Advocates are people who, they’re always there to help you no matter what you’re doing, no matter what, no matter how hard you try, you can’t do anything for them. They don’t want anything return. And if you’ve tried to do something in return from them, it’s really hard. Like, like, two good examples are my partner in this business markers. And he started Gerson Lehrman group, he’s one of the most fantastic people you’ve ever met in your life. He’s very charitable. All I want to do is create value for him in this business, because there’s no way I can return what he does for other people. So what I do is I have known them, I buy him nice cigars. It’s like the only thing I can do for him and that whole except, but Mark doesn’t want presents. He doesn’t. He just, he just wants people to be successful in his network. The partner I worked for, for 10 years at PricewaterhouseCoopers. Like his name is Brian Lee. He was the best man at my wedding. I work for this guy for 10 years. We’re starting shopkeep. And it’s going okay, right? He calls me out of the blue. And he’s like, how’s it going? Retail is hard. I’m like, we’re not doing retail. He’s like, but he’s inspired, that I’m trying to start some business. And he’s like, Do you need money? I was like, Are you gonna make payroll? And I’m like, you know, it’s, it’s, you know, he just wires me like $200,000 Without any agreements without anything. He’s like, here. Just take this. It’ll be helpful. All right. Yeah. And but that’s an advocate. And there are a lot of advocates like that, and then you have the boomerangs. The moorings are people and that’s the be, you know, and Michael says that boomerangs are people who they could only operate on a quid pro quo basis. They’re not comfortable with anything else. It doesn’t mean that they’re bad people. But that’s that part of your network transactional, very transactional people, I find that my friends who are in finance are transactional, or, you know, there are a lot of inspirational venture funds out there and a lot of my friends are in venture, but if I’m not one of their portfolio companies, it’s harder to really get them to support me because they only have so larger network and that’s for their portfolios and I’ll see it boomerang back to them well, and the reason they’re boomerangs is because if you ever need something from a boomerang, you have to be pretty ready to give something in return. But you know if, if you ever help a boomerang, right? Like, I’m not comfortable with doing something because I want something in return. So if I ever help a boomerang, I try to stay out of the way, when they try to do something for me, I’ll say, oh, you know, don’t, oh, how can you help me Don’t help me help carry anything from you. Like, but but this person over there, they need help. And then there’s a sees the sees or celebrities and celebrity from the context of when people know, you know that person in whatever vertical you’re in, they tend to treat you differently. So celebrities are good to have, right? They’re good to have in your network. But it’s also good to realize that people treat you differently, because you have that celebrity in your network. Interesting. And then there’s the DS, the Ds are the drains. The drains are people in your life where no matter how much you help them, they always feel like they’re entitled to your help, for whatever reason, you always feel like you have to help them. And they can never do anything with it. And they kind of drain you of energy. So you know, I tend to spend my time with the a’s and the C’s, I recognize the Bs, and I avoid these. And then how do you avoid these? You avoid the ds by saying no. Right? One thing direct. There’s there’s two eloquent ways of saying

no, what are what are some of the eloquent ways you you have employed? I’d really love to

help you I understand is truly important to you. But I’m really focused on this right now. As well rehearsed, right? No, I mean, I’ve learned to do that over time. But there’s ways to one thing that I’m not good at is saying no, I’m just not.

Yeah, yeah. 100% can feel your pain on that one.

Yeah. And because of that, and one book that I read that recently that’s helped me with that is called essentialism, a discipline, the pursuit for doing less. Right. And, and truly, it, you know, definitely resonated with me, because I’m always involved in a lot of different things. And you wind up doing a lot of things badly. But people respect you if you learn how to say no properly, right? I remember. I remember. I sent an email. You know, maybe a year ago, when I was starting for a somebody asked me if I can invite Mike Lazar out to a dinner. All right, and Mike’s a fantastic entrepreneur, extraordinarily successful. I haven’t met him too many times. But we have a lot of friends in common. We’ve been in the same room many times. So I reached out to Mike and I was kind of like, wow, this is somebody I would love to get to know better. And I reached out to him, and asked him if he wanted to have a cup of coffee, which is a normal invite that I get numerous times. And Michael wrote back. It wasn’t nasty. It wasn’t arrogant, it was pretty well stated that, you know, he basically didn’t have time for that right now. He respects me, but, and he would love to maybe do it one day, but right now he’s really focused on what he’s doing. And when I got that email, I was kinda like, Man, I wish I can be more like that. Right? And I didn’t think any worse of him, I actually thought more positively of him. Sure. So there’s a way to say no to people that makes them not unhappy about not having the time. But you actually do yourself a disservice, your family a disservice or shareholders a disservice. And that person a disservice if you spread yourself too thin, because then you can’t help them. And maybe you signed up to do it in the first place. Right? So I like

that a lot. I have a friend who is an author that said his personal mantra has been say yes, less. Which I think is a positive way of framing say no, say no more.

I mean, look, I think if you’re in venture, you’re learning how to do that. Because you say no, for living. Sure. Right? You see so many things. Most of the people I know, we’re very good at saying no, but making you feel good about it. Or my friends that are in ventured, I think they’re typically very, very eloquent to doing it. I haven’t figured out how to do that. Because while everything when you’re running a networking, business, everything sounds important, right? But also, I genuinely like people, you know, I want to, I want to meet people, I like learning and I’m curious and seeing what other people are doing. So it is a balance. But it’s so important. When you’re starting a business, your earlier point, you have to you have to focus. You can’t get distracted, you can’t chase shiny objects. You can meet everyone under the sun.

How are you staying focused? Networking oriented business, I’m not staying

focused. My wife hates me right now. She’s gonna I’m just kidding. But like, how are you staying focus? I mean, one of the things to do is get help. Right? I mean, I have a lot of airhelp or, well, you could call it higher or you can call it you know, inspire people to join you. Yeah, who believe in what you’re doing. So we’ve done a better job doing that now. I don’t you know, not being the face of it. Right like vorrei I don’t want it to be David and marks you know, networking Dinner business. That’s not what this is about, right. And I think if you create an effective brand, you scale it properly, and you really add value to people. That’s how we got to where we are today. And where we are today is, a lot of people don’t even know who’s behind the jewelry, they just recognize, wow, this is consistently a very good, intimate event they should attend. This is just a good event. And the first time you get an invite to a vorrei, you have no idea what it is, you know, even if it got sent to you by one of your friends, like well, I don’t know if this is our open rate is probably less than 20% that we have to follow up directly. But after somebody has been to a vorrei, there’s 100% open rate. And then the nature and voice of our business is like us. It’s not a group of people taking themselves too seriously. Yeah, you know, it’s funny, it’s like, hey, just come join us. It’s just a dinner, you’re gonna learn something and meet great people. So being focused that that is the hardest thing. It’s like, how do you not come across as a dinner person? Right? How do you come across as somebody who’s like really just trying to help you meet other people to advance your career?

It’s a tough challenge, you know, the the nature of curation, and your brand, your network, your knowledge of who’s gonna jive with who, who should be sitting at the neck, the right table together? That’s a lot of the value of the experience. And it sounds like you’re helping scale that a little bit with with sort of the host concept. How do you see this scaling beyond $20? a month? Or do you?

I think I do, I think for a couple of reasons. At first, I realized that there was a great opportunity in a trend for people to want to get together. LinkedIn as an example, or even, you know, LinkedIn is a good example. I mean, LinkedIn is a fantastic platform. It’s a great CRM tool. But from a networking and business development perspective. Right now it is Svetlana with a hot picture in Croatia trying to sling me a developer through the way, messenger tool, right? It’s not. Yeah, she contacts you all the time. I know she does. And it’s a little spammy. And it’s not fantastic for business development by any means. But it’s a great CRM, it’s a great CRM, right? If I, if I want to find who’s the CMO of Bloomberg, I can find Jennifer. But if if you’re connected, I can sit there and you know, I could say, Hey, can you introduce me to Jennifer nine times out of 10, you’re like, I have no idea how I know this person. So it’s really good for jobs. It’s a really good database, but it’s not so effective for, you know, connectivity. And it’s almost like they should change the title of it to connecting with people for no reason at all right. So what we’re trying to catch that’s not scattered. So what we’re trying to do it for a is just use events to help people build connections that they’ve actually met in person. So at first, I wasn’t sure if that was possible. So it became a software enabled dinner set up company, and you know, the blocking and tackling of sending out the invites, and seeing who’s there before the dinner. But what started happening is that people started enjoying it so much that they would come back to the platform after and connect with each other. So we built messaging tools, we build private rooms, we built sandboxes, for the event to continue to live on after the fact

how’s the engagement going on on that, oh,

it’s terrific. Every single person that attends one of our events comes back to the platform to interact with everybody else. Interesting because you’re you’re at this event, you only business cards are automatically connected, and you’ve actually met in person. So you’re connected with everyone that you’ve been to have already with. And there’s people who have been dependable raise hosted to sponsored or powered one. And they have a social graph on variety that they continue interact with. It’s fascinating to me. It’s also fascinating that sometimes we do these events, and real senior leaders talk to each other on this platform, because they see it as private. And it is, and that’s nice to watch. But how is it scalable? I think it’s scalable, because you create a trusted brand, where people believe that they’re a part of something that’s always going to be good, right? So you know what the way the way it scales is not only can we do you know, 100 events and four markets, five markets pretty easily, pretty quickly. But I think there’s a real opportunity to give people value back for being a part of a professional social graph. For instance. You can you know, you if you want to have a leadership talk with people who have developed podcasts, right to learn about best practices in scaling your podcast initiative. Well as a vorrei community member, we tag everybody that’s been through our events pretty well. There’s a really robust taxonomy. So you can just click I want to meet people in media who have podcasts or have been around distribution of it. And the title is going to be podcast distribution, best practices. And you can easily invite those 30 people. They know what vorrei is, they’re part of the community, they get the invite the return the conversions very high. And next thing you know, you have a group of people that are like minded that you can meet, because you’re part of this. So that’s really, I think, what makes it work your question about curation, it happens naturally. It happens naturally, by the host, by the person powering the event. And by for age four, as an account manager, it’s not that hard to do. This is an E, this is a, you know, this is a dinner of E commerce professionals that run digital brands and retailers, right. So if you’re not that person, you’re not going to be invited to the event, and you’re surely not going to be suggested for it or cleared from the waitlist.

Right. So it’s so it’s for a headquarters that curated this dinner, and you get an invite, because the theme is

it’s it’s somebody is somebody is putting together this dinner, it’s not for a somebody in the vortex. They raise their

hand on the host on the host or

I’m a I’d want to pay for the meet these people. But here’s the people I want to meet. And here’s an interesting topic. And then they kick off the process, and our community sees it or is invited to it. And then it comes together pretty quickly. And how

are you monetizing that everyone more aid pays a membership or no?

Right? I mean, that’s one of the things I like about it the most is that nobody pays to attend the events except somebody, one person who has a relevant product for the people in the room as an example. I mean, a good example of this is, you know, way up, way up is an early stage business here in New York, that is transforming the way people think about hiring undergraduates. Alright, it’s a fantastic business way up as a business really wants to get their message across to see HR rows of certain types of companies. Putting together 18 CHR OHS who want to come to dinner, weigh up is delighted to power that dinner, right? We’ll take a fee from way up for putting it together, which they’re happy to pay. Everybody who attends realizes it’s not about way up, they’re actually pretty irrelevant. I want to hear what they’re doing. Right. Or another example is putting together 18 of my friends who have just raised a series B and have children, if you’ve raised your series B and have children, and you don’t do estate planning, you’re basically lighting your money on fire. A lot of my friends and technology just don’t follow those dynamics, because estate planning is an innocuous piece of tax and law, but inviting my estate planner to that dinner and teaching him and not to spam everybody that they all run businesses they don’t want to be marketed to by but you can attend this dinner, you know, you normally he walks out of there with 12 new clients, right? Because everybody needs his services. And and you know, so I think there’s an opportunity to help our channel partners or partners who pay for these dinners, to find, you know, offline targeted ROI marketing, that doesn’t exist. I can’t tell you how many conferences I paid for at shopkeep, where my cmo would say, Wow, that was really great. And we’d all be standing around saying yeah, what’s, what’s the customer acquisition cost. They’re like how many customers we get out of that. And I think CMOs are hungry for new channels that showed demonstrable ROI. And the average vorrei generates, you know, 50x return for the person that pays for him. Because they build all these authentic relationships. It’s six to 12 months of coffee. It’s not about them. They’re in the room. They’re not spamming everybody, but they’re there to do business development the way it used to be. So most of our customers have I call them customers who pay for our events. They do pretty well. And half the time and it’s just so softly sponsored and balanced. That it’s like every sponsored dinner you ever go to anyway, it’s just well run, right? I mean, I’ve been to 1000s like you have pretty crappy networking dinners. That’s paid for by some bank sometimes. Yeah, right. And there’s no format and I don’t really know who’s there and kind of like how I wind up here, you know, so I just want to do that better, but help the people who are paying for it at the same time.

That sounds really cool. It is cool. I’m really I really appreciate you sharing your journey and the things that you’re learning along the way because we’ve we’ve been doing unofficial founder dinners in our network through urgent powderkeg for six, seven years, and it’s cool to hear how you’re tackling scaling it. It’d be cool to see Uh, you know, if there are ways to collaborate in the future Yeah, you should you should host the board would love to, we can make it into a podcast. Cool. Thank you so much for taking the time. Where can people find you online if they want to follow your musings? Well, well, I

am at okie on Twitter olk I II. And I have a blog, David ohlc.com, which I think four or five people read. And you can

find out a little bit of it.

Yeah, and you can find you can find all of our events on vorrei.com v ORAY os.com. Calm, and people should sign up for for a check it out, check out our events, it takes two seconds to sign up. And you’ll see all the events that we’re doing and feel free to, you know, waitlist or try or invite yourself to one of them. It’s free, and it’s for free. Great. Cool,

cool. Thanks for taking time. And we’ll link all that up in the show notes and people will check it all out. Terrific. Thanks for taking the time. Great. Hey, it’s your buddy Matt Hunckler. Here again. That’s it for an interview with David oak. But of course the conversation should not stop there. Please, let’s continue the learning. Hit me up on Twitter, Instagram, let me know what you learned from this particular podcast. And make sure you hit up our guest on Twitter as well. He’s just okie, which is olk i e on Twitter. Let him know you listen to the show what you enjoyed the most if you have further questions, he’s super engaged, super passionate about helping entrepreneurs. So I hope you reach out to him there. I want to remind you that Powder Keg is presented by a verge, which is a network of local communities. With global reach for tech entrepreneurs, investors, and top talent growing companies. Beyond Silicon Valley, we’ve got a ton of free resources for starting and growing your business, all at our website, verge hq.com. We also host several events every month around the country. So check us out to see where we are, maybe we could link up in person I would love to meet you get your feedback on the podcast, get your feedback on where your business is at and where we might be able to help. Again, that’s just verge hq.com. Of course, you can always find me on Twitter that’s at Hunckler Hu NCKLE. Our Instagram, I’m on the same place I love to share a lot of the behind the scenes of what we do on this podcast, as well as some of the sketch notes and sort of sketches that I do in my notebook, inspired by the guests that we have here on powderkeg. Again, you can find the show notes@powderkeg.com I hope you subscribe in all the places and leave us great reviews. I already know you’ve done that. I love you for that. And I appreciate you. I appreciate you for bringing your brain to these earbuds or to your speakers, or to your car wherever you’re listening to this every single week because we really try to up our game with every episode we do. If you haven’t dug into some of the archives of some of the great interviews we’ve done in the past with people like Karen nortman from upfront ventures, or Jay Baer from convincing convert. I hope you go back and listen to some of those. We also have some really great ones coming up with serial entrepreneur and investor Jeff Leventhal so I hope you’ll tune in for that as well. Until then keep building keep growing, keep learning and keep making an impact in your communities. Thanks so much.