Sean Sheppard, Sales Influencer and the Founder and CEO of GrowthX, joins me again on this episode of #Accelerate!
It’s time to Accelerate!
Hi, friends. This is Andy.
Welcome to episode 734 of Accelerate! That’s episode 734 of Accelerate! The sales podcast of record.
I have another excellent episode lined up for you today coming back and joining me for a second time on the show is Sean Sheppard. Sean is the founder and CEO of GrowthX. GrowthX is a Silicon Valley based venture capital partnership with an accelerator focused on sales.
And in this week’s episode. I’ll be talking to Sean about what he calls The Lasting-Mover Advantage. And we’ve all heard of the First-Mover Advantage. Well in our conversation today, Sean and I got to talk about why it pays to go slow upfront in order to grow faster? Later.
In this conversation, Sean and I dove into the three things you need to own as the sales team to establish that Lasting-Mover Advantage.
- We’ll talk about why it starts with owning a customer use case. We’ll dig into that.
- After that, once you own the customer use case, what must you do to own their thoughts and actions that they take around it and also get into how to design an organization around the knowledge, skills and behaviors that you need to keep owning the use case as it invariably evolves.
- And let’s get into why it’s so important for companies to have a learning mindset to maintain the lasting mover advantage.
Let’s Meet Sean Sheppard
Okay, let’s jump in today’s episode.
Sean, welcome to the show.
Thanks, Andy. I’m glad to be here.
Oh, it’s a pleasure to have you back. I know it’s an audio show, but if I can just use my words for a few seconds to describe your backdrop. I’m looking at this beautiful backyard, are in California, and all this lush greenery. Very nice as opposed to my industrial background where I’m at.
Thank you. This is my happy place. This is my Zen garden away from the madness of the world.
Oh, nice. Do you actually meditate in your Zen garden?
I try every morning. I try to do a couple of minutes.
So do you use one of the apps like Calm?
No, I’ve learned from a lot of those things. To me, meditation is a very personal thing. And I’ve just learned over the years what works for me, which is really just to take in my surroundings and try to be fully aware of the sights and sounds of nature and use that to start the day with a very common focused way.
It’s been a while since you’ve been on the show. May we refresh the listeners a little bit about GrowthX. You’re the founder CEO of GrowthX. So tell people about that.
Sure. GrowthX is a Silicon Valley based venture capital partnership that also has an accelerator that’s focused on sales, not product. And it has an academy that trains people not just in sales, but in marketing, design thinking and data science. All the things that move the needle on a market development side of the business.
The reason is that we found a serial entrepreneurs turned investors, turned frustrated investors because their companies weren’t succeeding. We found out that they weren’t succeeding because of sales and behaviors, not because of product and technology.
We built our entire program and our core focus in what we call a Market Acceleration Program, which everything is built out of, all focused on developing markets and making money, not developing products and raising money.
And so when you think about things through that lens, it changes very much what you prioritize and in what you contribute back to your companies and to the talent, and to the investor community, to the entrepreneurial community and to the talent that wants to work with them.
We’re going to talk about a topic which I think is really interesting because there’s a lot of sales implications for, is this whole idea of you emphasize not first mover advantage, but last mover advantage or lasting mover advantage?
Let’s dig into that because I remember here is the first mover advantage. You’re saying, hey, that’s not always where you want to be.
Yes, I just had one of these one of these moments where I was able to stand back and look at the last 40+ years of my life growing up in Silicon Valley where this has obviously been a hotbed of tech and and the movement of tech.
And I start to observe, what really inspired through the do the normal course of doing business in a markets development cycle, because when you’re playing in the seed stage venture business, like I play in, we’re dealing with early product, early market, early customers, early revenue opportunities.
And I find myself having this constantly educate and remind my portfolio companies and just found a community on the whole at large, to go slow in order to be able to go faster later.
Not to think about scale yet. They raise money based on the idea of this massive market that they can get a percent and then they go to market thinking that that’s just going to happen and then the behaviors just go right down the tube. And they never actually stop and go back.
For example, not what’s my best customer, but who’s my first customer. And what did they look like? Approached them and we call it, The Initial Customer Profile. Who’s our Mr. Right now? Not our Mr. Right as I like to joke.
They Were Never The First
And so through the course of that, I just started to have to go back and think about, in my life and you too, Andy, knowing you spent so many of your formal years here in the valley as well. If you look at the five most valuable companies today, none of them were first in what they were doing.
Apple did not create that GUI interface. Xerox did PARC. There were very successful. We can go back to Tandy. We could go to these companies that were very strong in the personal computer business that many people are going to be listening to our podcast, never heard of.
And we can also go to Google, was not by any stretch, the first search engine. A successful one. We used Dogpile and we used AltaVista. I mean, there were so many coming through back then.
There’s just a wide variety of those examples. Obviously Netflix is crushing it right now. Blockbuster was around doing that stuff long beforehand.
I’m just reading an article yesterday, a story about when Netflix met with Blockbuster. Blockbuster offered to buy them for 50 million dollars. Reed Hastings and the co-founders never agree. It’s actually written by his co-founder , laughed and said, yeah, no. I’ll see you guys later.
You’re absolutely right. And I’m not going to share any information but I just came back from a big conference in Amsterdam with one of our portfolio companies where we had a very similar experience. And we believe that if things go the way they’re going to go, we have a multi-billion dollar opportunity to start on our hands, and a several million dollar opportunity, and we have the courage of our convictions to go down that path.
Because of those kinds of experiences in the past that have informed us into here’s where the market is going. The folks that want to buy us, I want to say various, but they certainly don’t know how to typically integrate these acquisitions very well into their organization that capitalize them.
So at any point, at any rate, the point is that if you look at Amazon, they were not the first e-commerce player by any stretch for doing what you’re doing. And you just pick it. If you can look around you and rarely do you see something that was first to market that was able to sustain their position in the market over time.
And so I found myself just wanting to try and take my learning and just apply it to our framework for helping our companies find product. Market fit as we like to say.
And then just get very clear about three things. That you need to go after in order to build a lasting mover advantage. And there are three things that I noticed that in the most successful lasting companies come back over and over and over again.
Lasting -Mover Advantage: Owning a Use Case
And so the first one I think is most important is owning a use case. And I talk about ownership when I talk about these three things, because I think there’s an intent. I don’t want to be an arrogance of ownership. I wanted to be an earned ownership. I want our mindset and our attitude to be that, my job is to earn the right through sweat equity.
You own a piece of this use case of this particular customer in a particular market and make the bet that if I can solve it deeply and correctly and create real value through the course of that, with this one customer, with these two, with these three, with these four but the same use case that there are many, many others like them in the marketplace
And then for my risk becomes execution risk, not product and technology risk. And so if I’m focused on that, that starts by clearly defining the problem, which most of us so lost over and we don’t have clarity around. And then mutually working with that initial customer profile to clearly deeply define the problem. Like Einstein used to say, “If you can’t explain it, you don’t understand it well enough.”
I think that by the same token, though, it’s not that a first mover can’t do that. But it’s interesting, oftentimes they don’t.
They died of it and they stop doing it.
Well, they assume they’re right just because they got the first one. And I think that’s where oftentimes the downfall comes as they get the arrogance of saying, oh, yeah, I’ve got these logos that this is the right thing, but it’s a moving target. They got complacent.
That’s right. And I think complacency is an example of it. You and I were talking off the air just beforehand about future-proofing. And just generally about the innovation economy, how quickly things change and move.
And you and I talked about also use the term ambiguity as opportunity. And I talk of raising ambiguity. And so we share a similar vision there.
I think the point is when change is introduced of any sort, it creates new problems and opportunities.
So if we are concerned that 40% of the workforce is going to be out of jobs because of robots and automation in the next 30 to 40 years, yes, they may be out of the current jobs, but every new innovation creates a whole new set of problems and challenges, which therefore means bringing this all back into focus, is that the use case is constantly changing. And it’s changing faster now at a faster rate today than it ever has before.
We know the statistics around things like the average tenure on the S&P 500 in 1970 was 75 years, today it’s about 10 to 12 years. We know that Jeff Bezos even had the courage in the last quarterly shareholders meeting, or maybe it was one prior to say, I’m worried about whether or not Amazon’s going to be around in 2035, which is just a shocking thing for the marketer or anyone to really hear. But it’s the truth.
Yes, there’s this assumption of invulnerability with these big players. And I remember back in the 90s putting together this portfolio for my IRA, which on the advice of an advisor as well, we need stock or some core companies that just aren’t going to go away. And so those companies you could price predict, like AT&T, Motorola, Texas Instruments says it’s good on the list. It was like, yes, all of them, either gone away. The name may still exist, but completely separate company. I mean, all these things that happen on a matter of ten years.
You’re absolutely right. So the point is, the use cases is never static for an extended period of time. It’s constantly changing but you do need to find that hook as my friend, Nir Eyal, the author of the book, Hooked: How to Build Habit-Forming Products, has said,
You have to find that one thing. What is that one singular use case that I can through sweat equity, learn, understand and have shared ownership alongside of my early customers to ensure that I survive long enough to get to the next opportunity, but never change that mindset that use case is constantly moving.
And I don’t know if we’ve talked about this before, Andy, but my father was an officer at Intel Corporation and I was fortunate enough growing up to be in dining rooms with Andy Grove and Bob Noyce and Gordon Moore and Craig Barrett and Paul Otellini and Mike Splinter and all these guys that all subscribe to The Only Paranoid Survive.
Andy Grove talked about constantly. It was still one of the all time great books. Don’t know what the term paranoid scare you away. It was a positive and productive paranoia that came from an engineering mindset and a Hungarian immigrant who didn’t even speak English when he came to this country. That said, we constantly have to be standing out in front of everyone and everything and all at all times.
And so that is to me, the mindset of the leadership and then the people that they put in place to execute against that, has to be, we need to clearly define a use case right now, let’s try to truly, deeply, deeply, deeply solve it for all user types and all scenarios and don’t focus on anything but that.
Like we tell our company sometimes, one of my partner Andrew Goldner loves to do this with other founders, he says, I want you to take me through an entire day of your life, minute by minute. And I want you to tell me what you’re doing during those minutes. And then I want you to ask yourself. It’s very simple Yes or No question. Is that thing focused on getting somebody to transfer money from their bank account to yours?
That simple, right? So getting really focused in order to do that, you have to begin in the shared connection of, yes, there’s a frickin problem here. And here’s what the problem is. How do we solve it? And then be focused wholly and exclusively on solving that problem.
Then once you do, it creates those challenges, those learnings, those insights and those opportunities to change any number of things. Which brings us into that second thing, which is, okay, now that you’ve figured out how to develop an environment where you can only use case with your customer, how do you now own their thoughts and actions around it?
Because we now live in this time where how we think is just as important as what we think. And the more I do this and the more time I spend with smart, successful people, the more they focus on how people think and comment around it as opposed to just what they think. And so you get to a point where, Okay, now that I’ve owned this use case, we’ve learned the following things based on that. What do we do about it?
And who’s responsible for that? You and I were talking a little bit offline just about you coming back from this Gardner event where people are trying to figure out that the next thing is. Okay. How do I make good decisions with all this awesome information at my fingertips? That’s how to think thing, right? That’s a work thing.
So now there’s thoughts and actions that have to be performed by everybody involved, the customer and yourself. And you have an opportunity as the person who helped define the problem and develop a solution within that use case to also come to the table with, here’s how I’m thinking about what we do next. Based on what we did yesterday and what we’ve learned and not be afraid to do that.
And if you’ve developed enough credibility through the course of solutioning against that problem with your customer. They’re going whether they say it or not, out loud, explicitly, they’re implying that you need to do this part next.
Like, where’s the data? Show me how it works. Like new technology solution always has reporting come last. There’s a reason for that. We don’t know what the hell is happening until we actually start doing it. And then if you’re really good at it the information you generate off of the use case solution is more valuable than the solution itself.
So now, how do I come in and analyze and create an opportunity to change the way this use case is viewed and how it’s dealt with and what we can do next based on that. So those are the opportunities that come up from solving that problem.
And oftentimes we get static and weak because we want to think about everything at scale and we’re back to the total addressable market. It’s like, okay, if I can do this in this way that generates this much revenue over this period of time with a compound annual growth rate back. And here’s my cash LTV. And it’s infinitely scalable and blah. And meanwhile, we’re not focused on making sure that as the use case evolves our approach towards owning it evolves with it. And therefore the thoughts and actions come from there.
Well that’s the interesting question from a sales perspective about owning that use case as the use case evolves. It has implications for the nature and the structure of your team. And so once you dig into that a little bit, because I think this is a part that I see the failure point oftentimes for smaller companies as they’re not as nimble, as agile with their team makeup compared to the evolving use cases.
That’s right. That’s you’re very much right about that. Sales organizations are wholly focused largely on acquisition. As we like the modern term, close the deal, get the deal in the door.
And because we’re so invested in that, we invest in marketing at the top of the funnel. We invest in sales development beneath that, we invest in account executives there, we might even invest in technical support and help us through a complex sale environment or a highly technical one.
And then we forget about customer implementation, onboarding, adoption, retention and growth. And then we’re late for the party on trying to solve for that. And we end up with churn and all those issues associated with that.
The key here is to do what we call create a functional learning organization out of the team responsible for owning that use case.
So you have to, as you say, design an organization around the individual roles and responsibilities that you hypothesize are necessary that the knowledge, skills and behaviors necessary to get through learning about that use case, defining it, solving for it, owning it.
Lasting-Mover Advantage: Owning Customer’s Thoughts and Action
And then when you get into step two, which is, owning the customer’s thoughts and actions. You better have the right skill set there. It’s not necessary the sales guy or girl who’s going to be able to do that.
You might need to bring in a data scientist. You may need to bring in a digital analyst. You might need to bring in a subject matter expert. That’s a voice of the customer. You might need to bring in all three. You might need to bring in certainly in early stage. You have to bring in product development, product management heavily into that process.
And everybody has to be working through what we call a functional data-driven learning loop, where there’s somebody responsible for driving that loop but they’re bringing in people from different areas of both sides of the organization to prioritize that.
Functional Data-Driven Learning Loop
So who typically drives that functional learning loop?
Well, in our companies, it’s always the person who’s responsible for market development, whether that is the founder or co-founder on the business side. It’s the first sales hire, but it’s that person is responsible for identifying and resourcing to build that functional learning organization in a loop that’s associated with it.
If it’s a first sales hire, then it’s not necessary. You’re running of individual contributor. That’s gonna be correct. There’s a set of characteristics and attributes that we that we look for in the person who’s responsible for taking something to some place you knew, for identifying, initializing that customer use case.
And if we execute that hypothesis that we think we can help people with this problem in this way and they can generate these kinds of results from that. It’s just who we are talking about people who know how to embrace ambiguity. They have a strong acumen for learning, as you call it.
Continuous active learners, embrace ambiguity, who have a strong business acumen. That understand how that problem affects and impacts that company’s business, that person’s business, her job, know how to articulate that with strong communication skills. They also have to speak to engineers and humans, as I like to joke.
So this person, the term that’s when used in the past, sort of the Renaissance type.
Right. Exactly. Mark Leslie’s term and Charles Holloway’s term of the Renaissance Rep. And in large corporations we are trying to innovate, we call it the role of the commercialization leader. And it’s actually a role that GrowthX Corporate. And we have a big innovation practice now where we manage venture capital for corporations.
We also help them create open innovation business models where they can run their own industry led accelerators. Great technology and talent from outside their community to help them work on disruptive and adjacent innovations. But more importantly, our true differentiator is, is we teach them how to commercialize new innovations.
And it starts with this whole same framework that we use to help our startups take a product to market and use that Renaissance rep role. And it evolves it into what we call the commercialization leader. And now we’re starting to put that out into the world and tell the story better.
Yes. Because they don’t exist in these companies, Andy. And you know as well as I do, the people that are running these big organizations are not the ones that started them and have a very different mindset to begin with.
And they hire somebody who is part product, part market, part business, embraces ambiguity, has an entrepreneurial spirit, and talk to humans and engineers, and drive this learning loop and have enough exposure to every aspect of the business to know how to pull all that together.
Well. Right. And that’s the critical point. I think as people look at initial sales hires where they make so many big mistakes. Is this is a person that has those attributes to talk about? They still need to close business. It’s great to do all these other things and they have to. But the critical thing that sometimes companies forget is either they hire some that wants to be a manager because you sort of describe something that is a managerial role with that sort of acumen and insight and ability to sort of take it to the next level.
And they’re player coach. They want to play too.
They got to play. They got to bring the business in. And I remember one company I was with that’s hard to start a division. You have a CEO, so what’s the charter, where should I start, company have no products, that technology. Is that anywhere you want as long as the customer pays for the development of the product. Go sell him what he wants. But that type of thing we had to define everything, but to bring the customers in.
And so when you’re told that, does that send a tingle up your spine is complete excitement. I can’t wait to share this. Does it make your heart fall into your stomach, like it does with a lot of people? And that right there, how you react in that moment tells me who you are.
It doesn’t mean you’re a bad person, that you’re not staged relevant. We call it stage relevant. It’s about finding somebody who stays relevant. And it’s about that dynamic of taking something someplace new in a matter of it’s in a big because it’s not about the stage of the company, it’s about the stage of the product in a market.
And that’s why it’s working so well in those corporate environments where we’ve applied it. And oftentimes, look, we’ve been able to find successfully, we’ve been able to find internal hypos, high potentials, large organizations that raise their hand and want to do this.
And then when they’re properly vetted and screened and then they’re sitting two in a box with one of the GrowthX commercialization leaders learning this process over six months to a year. They’re doing great.
Now it’s becoming a known role and function inside business units of different organizations. It doesn’t just sit in R and D or an emerging technology or any of those areas. It actually sits in these areas.
But they sit successfully inside of business units and they’re tied to the PNL and supporting the digital transformation, as we call it, a business model transformation. They’re launching technology products or they’re changing business models in a way that that have never been done before.
So I’ll dig into this issue of stage relevance, because again we’re talking about a little bit earlier before we start recording about one of my daily email notes, I’d send about future-proofing and stage relevance really relates to that.
Because people have to understand that companies evolve, as use cases evolve, and so on. It’s okay. You may not evolve with that. You may have an area of expertise within the sales profession but even that is going to evolve too. The way that we do things where you reach out to customers,while we talk to them, and so on. That continue to evolve even on that stage that you might be a specialist in.
So you need to keep improving, keep learning. I learned that lesson in my career. It’s okay, you’re not always the best at everything, even though you want to be the best at everything. Decision has to be made as a manager of the companies say,who’s the most relevant person to put on this?
Who’s most suited for taking something, someplace with. And then who’s most suited for leading and driving that either the proactive changed in getting up front or responding to it very quickly.
And if you want to last, you’re going to have to do that a lot more now than you did 15, 20, 30, 40, 50 years ago. Because the rate of change and the pace at which things change now has never been faster. And it will continue to accelerate. And so you have to be prepared for that.
I think this is again let’s talk about this. The way that you prepare yourself for that as you have to keep learning. If you’re selling at a market, I sort of use the analogy sometimes is that I work with customers. I’m sure you see this all the time is simply puts together a business plan and the rate of growth of projecting their business plan is less than the rate of growth of the business or the industry they’re in.
And you’re saying, well how is this gonna work? You know this is not sustainable if you’re growing slower than your market. Well, if you’re a salesperson, same thing is true. If you’re evolving less rapidly, if you’re growing less rapidly than the way the markets you’re serving are growing, then it’s inevitable.
Eventually you’re going to fall too far behind and you have to change. Look for a change of profession or whatever, and that’s your choice you want to make, but it doesn’t have to be that way. I mean, it’s never been easier to learn. And this is the big hurdle, the interest to get your advice on what you’d get people.
This is the big hurdle these days for people in sales, people in every profession. We’re not talking about sales here today, because it’s not purely a sales issue. But how are you evolving? How are you learning? What are you committing? Because it’s not you can’t count on your company to do it for you. It doesn’t matter how big a company you’re in. You can’t count on them to keep you current. This is something you have to yourself.
Absolutely. So I’ve always been my fundamental philosophy in sales generally has always been the same. There’s no distinction between personal development and professional development. If you develop the person, you’ll develop their profession. I don’t think there’s been a time in history where that’s been more prevalent and more necessary and more critical than it is today.
And so at the same time, like you said, it’s also never been easier to learn. So this is just simply about changing some habits. And you only have to do this at scale. You can do this these changes very simply.
For example, I don’t listen to music in the car or a talk radio. I listen to you. I listen to podcast. I listened to books. I read Blinkist.
That’s a book summary for people that don’t know about Blinkist.
Those of us who’ve been book summary junkies forever, because I was on the old Soundview and the executive summary things back in the day. I’ve been a Blinkist users. And I only wish I could have had an opportunity to invest in them early on.
They’re out in Germany. Didn’t know they existed until I found them too late. But an incredible place because 90% of the books are fillers designed by publishers to set to sell at a higher price.
What are the 10% key takeaways from every book that you can absolutely implement? That’s what Blinkist does. It distills down to that. I was never a voracious reader in the traditional sense. Like, I don’t read fiction.
I only read the biography. I read history. I read self and personal development. Those are the things I love. I’m constantly interested in learning more about why I do what I do. I’m just not conscious. So there’s a lot of different ways for all of you to digest information and constantly learn from it.
But you have to have that initial mindset that says, I’m doing this for the carrot, not for the stick. Not doing this out of fear. I’m doing this out of this opportunity to learn and grow and be better. And then I think you’ll see instantly if you have the awareness to pay attention to it, how your life will just slowly start to change in a very positive way.
It has to be a deliberate commitment, and the example I use, turn off The Bachelor, The Real Housewives or whatever. And record a football game and watch it later with no commercials. And you you’ve created time for reading.
There’s a lot of ways to do it now. And that’s the point is it’s never been easier to get access to that information and the time to do it. And it’s not just sales related content, although that is where you should start. That drives what it is to be human and how you can improve yourself.
So that’s the response that you get from the rest of the world is better and more valuable for you, your family and your community.
Wrapping Up The Episode
So, we’re going to end on that note then.
So for people that want to learn more and talk about the new sort of self serve GrowthX that people can get access to as well.
Yes. GrowthX.com and then Gxacademy.com And you can learn whether you are an entrepreneur or you are a seller. You are a corporation. You’re a government. We do a lot of civic innovation work these days as well. There’s a lot of different ways that you can take advantage of this. But we’ve just opened sourced our core Market Acceleration Programing Content, #GXMXP. You can find it on Twitter there or you can just go to grabx.com and subscribe.
And every Wednesday or Thursday in your inbox, you’re going to get a sequential piece of content that talks about the next step in market development, how you can apply that and what you’re currently doing and then any and all the relevant tools and documents to go with it.
Yes, and there’s a little bit backlog. I think you’re like on number 14. I signed up.
Yes. Our intention is to do 50 of these and we’ve got 50 in the can and we’ll do one in week and we will continue to update it. It’s designed to be evergreen content based on what we learned today. Will update and make some changes as we go. But this is the preview. We call it our blog, the book series, because eventually this will become our book.
That’s how you do it. As someone who’s done that twice with books, it’s the way to do it.
Yes. I think I remember somebody very smart on the other end of this call telling me that nine years ago.
So. That’s all right with the purpose in mind. Well, Sean, as always, fantastic talk with you and look forward to doing it again soon.
Thank you, Andy.
Okay, friends. That was Accelerate! for the week. First of all, as always, I want to thank you for joining me. And I want to thank my guest, Sean Sheppard. Join me again next week as my guest will be Stu Heinecke. We’re going to be talking about Stu’s excellent new book, Get the Meeting! It’s a follow up to his previous book, which was also excellent titled, How to Get a Meeting with Anyone.
And in our conversation Stu talked about some of the strategies from his new book that will help you get that meeting.
So be sure to join us then. And before you go, don’t forget to check out The Sales House. The Sales House is my own growth training platform for B2B sellers just like you. If you’re a seller who’s reached the limits of what the science of selling can do for you, then The Sales House will teach you how to master the human side of selling to crush your numbers. So for more information, visit Thesaleshouse.com. So thanks again for joining me. Until next week, I’m your host, Andy Paul. Good selling, everyone.