I had the opportunity to sit down and interview Topher Morrison. He is the Managing Director of Key Person of Influence - USA, a growth accelerator firm that has worked with over 1,000 companies, globally, to help them dominate their market share.
Jairek: Of the 25,000 - 60,000 people who apply to get on the hit TV show, Shark Tank, only a small percentage make it through to the auditions. So I have to ask, how did you get one of the original sharks, Kevin Harrington, as a business partner?
Topher: The same way any savvy business owner gets any powerful venture capitalist to come on board, and it's not what you might think. Most business owners falsely assume that investment potential is based on having an innovative product or service. However, I've seen the craziest business opportunities get funding on Shark Tank solely because of the leader in the business, and I've seen some of the best products elude investment because the person leading the vision wasn't convincing.
Before anyone ever tries to get a venture capitalist to come on board with their company, there are 4 things that every business owner must do.
Jairek: Let's start with #1.
Topher: You must create massive external clarity. Most entrepreneurs focus their efforts on internal clarity by staying focused on their goals, visualizing their success, and creating dream boards to stay on track. However, what's more important is that everyone who comes in contact with your business must get with absolute clarity what your business does and who they do it for.
Jairek: Some might argue you need internal clarity in order to communicate to the world what you want. Thoughts?
Topher: Not really. In fact, when the business owner has all internal clarity their pitch isn't very clear because they falsely assume everyone just 'gets' what they are talking about. If I can communicate to everyone with precision where my company is headed, I will be able to attract the right people who can tell me exactly how to go about doing it.
Jairek: What's the second thing a business owner must do?
Topher: Massive external credibility. Again, most entrepreneurs focus on their internal credibility. They work on their confidence, and recite affirmations to build their self-esteem, but what if other people don't give you the same level of respect as you give yourself? The end result is nobody supports you.
Jairek: How do you recommend building external credibility?
Topher: This simplest way is to become published in a trade journal, newspaper, or a popular blog. Many entrepreneurs find the ultimate credibility is to become a published author. I call it the "Suzy Orman Effect". Most financial advisors can't stand Suzy Orman because most think her advice is not well researched. But the general public thinks she's one of the best financial experts because she has several NYT best selling books.
Jairek: Makes sense. What's third?
Topher: It's all about design. If you're looking for equity investors to inject your business with tons of working capital, then you must design your business to be attractive to investors from day 1. Any serious investor will always want to see a manual before they make a bid. Another key ingredient in proper business design is the number of products and services. Successful companies are designed with 4 products or product lines, not just one.
Jairek: My understanding is that the biggest problem venture capitalists have is that they have too much money and they don't know where to invest it?
Topher: It's true! The fourth thing every business owner must do is become visible in your community. Unfortunately venture capitalists have many people approaching them asking for money, but when you initiate the conversation you have about a 90% chance you won't get the deal. If the investor approaches you, you'll have about a 90% chance of getting the exact deal you want. But they will never come to you if they can't find you. You must increase your visibility so that investors know where you are.
The culmination of these 4 things leads to effective partnership, and it the new age of collaboration. Partnership is going to be more important than it has ever been. The new big business won't be big at all. It will be the collaboration of several small businesses or people banning together to reach a level of influence that it will impact the big companies profits.
Jairek: Lyft would be a great example of that. It's a social network of people with cars willing to give other people rides to where they want to go, and it's made up of nothing more than a bunch people that is already bigger in numbers than some of the big cab companies in the cities they operate from.
Topher: Exactly right! And you are going to see more and more of those types of new business popping up all over. Industries that have been doing the same thing the same way for over 50 years are all of a sudden going to see a new type of competition and for many of the big businesses it's going to hit them like a ton of bricks.
Jairek: That's what your latest book, Collaboration Economy is all about. How small business linked together can become bigger than the biggest of companies, correct?
Topher: That's just one of the main parts, but it really covers all aspects of collaboration and how nowadays, businesses have all sorts of collaborative resources available to them for a fraction of what it used to cost by hiring a full time expert or consultant to do the same thing. Venture Capital Partnership is the ultimate collaboration for most, but there are so many other collaborative resources available before you get to that phase in business.
For anyone who would like to learn more about Topher's book, he is giving it to readers for free, you simply pay postage. Visit www.collaborationeconomy.com.