Husband-Father-Christian- Business Exec and Sometimes Insightful Thinker. Writing, Reposting, Thinking and Wondering about Life, Faith, Family, Biz Life, New Ventures,Wine, Sailing and the Ocean -N 33 27' 37 w 117 42' 15
Like many of the readers of this article, for more than 25 years now I have been working with and struggling with sales leads. From the late ‘80s and ‘90s when ISHN and others sent you the “bingo card” responses from the magazine by snail mail (is that still a phrase?), then fax, to electronic lead flow process today we’re all still trying to close leads. Regardless of if you’re a brand or manufacturer exhibiting at national or international shows or a distributor exhibiting at local or regional shows, the struggle is the same: “How do I turn leads into revenue?” or Lead 2 Revenue “as I like to call it.
Once upon a time…
In the past we collected business cards, then later scanned cards into machines and now we have QR or bar-code readers. We end up with big lists, well hopefully big lists, from the shows and events we attend, and the story is the same, isn’t it? Our sales support or marketing team sorts the database by salesperson, independent rep or agent, etc., and the lead is sent by email or from a CRM of some sort. We hope and pray that they get it to the distributor partner and something eventually happens and someone in the food chain notifies us.
Sound familiar?
Your system might be a little bit more advanced, but no matter how you slice it, we all struggle to turn show, event, or other marketing and lead generation endeavors into revenue. I like to refer to this as a “Lead Chasm” where leads can easily fall into the “Black Hole of Sales Leads.”
The “Lead Chasm”
The “Lead Chasm” isn’t a little problem haunting only the safety and industrial markets. In the U.S. more than $30 billion are spent each year on trade shows and events, with well more than $10 billion spent on other lead generation activities. Yet according to Forrester Research only one percent of those leads turn to revenue.
Statistics also say that more than 50 percent of attendees at shows have specific intentions to buy and a far greater number have the ability to purchase and the authority to purchase. Here are some interesting stats to consider when evaluating your tradeshow/event leads and processes.
U.S. B2B companies spend more than $40 billion a year on events, shows and other lead generation activities’
Nearly 50 percent don’t know what percentage of trade show and event leads convert to sales; and
Only 47 percent have a system to track, share and manage sales leads.
Following up on sales leads is hard. Following up on sales leads becomes much harder when you have a multi-channel distribution model utilizing third-party partners like manufacturers reps and distributors. It’s not about bad intentions. Everyone wants more sales, but we still have the Black Hole leads fall into.
Current tools
What about CRM or lead management tools? A large number of robust and functionality-rich CRM tools exist, such as SalesForce.com, SAP CRM, RPMS or Macs for Mfg Reps, Microsoft Dynamics and more. These systems range in cost from free online CRM tools to $200+per month/per user. You’ll likely need to configure and customize these systems to align to your business needs and goals, requiring more expense and resources. Still, most companies struggle to get full adoption and rarely use the full functionality of the product they choose.
Why isn’t there a better way?
When I come home from a trade show, enter 300 leads into a CRM and send to the sales channel, it always feels like a futile use of my money.
Coming to the rescue
Well, that was then, this is now. At LeadSmart Technologies we’ve developed an automated solution that is more than just another piece of software or a “new and improved” CRM. The LeadSmart solution combines technology, automation, and processes into a complete system for rescuing Black Hole Leads and converting these leads into revenue and customers.
The core of the solution is LeadSmart Connect™. LeadSmart Connect was designed and developed to address what we call Lead Chasms and Stale Leads.
This is how it works:
As leads are generated they are immediately loaded into LeadSmart and assigned to the appropriate member(s) of the sales channel.
The lead is categorized and mapped to a specific stage of the business cycle which is customized as part of the Quick Start program. This sets your individual companies’ terms, processes, timing, sequences, etc. to manage your leads and channel partners.
When a lead is assigned all members of the sale channel (company salespeople, reps, distributors, etc.) are notified and given access to a custom, mobile-friendly lead portal where they can access their assigned leads, make updates, change status, update lead value, and track activity and sales progress. This information is automatically made available to the businesses sales team and management through a series of systematic reports and dashboards.
All leads are colored-coded. This makes it easy to visually track which leads are being moved through the sales process and turned into revenue, and which need attention.
All members of the sales channel (including all third-party sales partners) receive a regularly scheduled email that contains a list of all of their assigned leads, their color-coded status and recent activity. From this email, the sales team member can directly access the LeadSmart Portal to update a lead or a series of leads.
Finally, the business has a full set of real-time dashboards and reports where all leads can be tracked and managed ensuring full visibility, accountability and intelligence for each and every lead. Plus, LeadSmart Connect can be programed to access your ERP or accounting system to bring full data regarding not only your sales leads but your company, sales team, and channel partners’ financial performance.
LeadSmart has built this game changing Lead2Revenue tool on the SalesForce Unified Platform Services. LeadSmart is built on the same platform as SalesForce.com, bringing customers nearly all the functionality of the world’s most popular CRM, but most importantly adding the LeadSmart layer to eliminate Black Hole Sales Leads and drive Leads2Revenue. All this at a price significantly less than CRM or other tools lacking the functionality of LeadSmart.
Imagine if you increased your sales lead conversions by 5, 10 or 15 percent. Imagine what that would that do to your company revenues. And imagine what it would do for your channel partners commissions and profits.
Kevin Brown has spent the better part of the last 30 years in sales, marketing, business development, and manufacturing roles in the safety, industrial, and electrical/electronics markets. In 2009 Kevin founded Sunwest Ventures, a boutique advisory and investment company in southern California. Sunwest is an investor in and Kevin a Co-Founder of LeadSmart Technologies LLC a Leads2Revenue technology company.
We always hear the call from management, “We need more sales!” The call from the marketing team: “Sales needs to do better with the leads, they don’t close enough.” The sales team complaining that “these leads from marketing are horrible.” Same story, new year.
Fashion, political officials and the weather might change but the same call for “MORE SALES” seems to stick. For nearly 30 years I have been working within the industrial market and have been challenged with the same issue as others: How to get more leads and how to grow more sales. I have worked for a major national distributor, as a manufacturer’s rep, a manufacturer myself and now advise others on sales and marketing strategies and solutions, so I have seen all perspectives.
Does everyone have good intentions when it comes to driving growth? I would suggest in the vast majority of cases YES. Does everyone or every organization have the right tools, or use the right tools? Certainly not!
Recall the “black hole”
You might remember an article I wrote earlier this year about the “BLACK HOLE LEAD CRISIS” and the challenge companies have with turning leads into revenue. Since then my partners and I at LeadSmart have continued to build out our product and systems and have done a lot of ongoing research.
What we have found is that the primary reason businesses are struggling with CRM adoption, developing high-quality leads and with converting leads into revenue is they just don’t have the right technology.
While most businesses have an ERP system, some sort of a CRM and maybe even a high-cost marketing/email automation tool, we have discovered that getting good internal adoption of these tools and driving revenue from their use is an ongoing struggle.
Why most businesses struggle
We have discovered the five key reasons most businesses struggle with using technology to actually turn leads into revenue:
Many CRM products that are designed for and marketed to small- and medium-sized businesses (SMBs) are missing essential CRM features and functionality. Most low-cost CRM tools are missing critical functionality needed to track, manage and automate the process of turning a lead into a customer.
On the flip side, the use of a full-feature enterprise CRM systems like Salesforce, Microsoft Dynamics, SAP, etc. can be complicated and overwhelming and employee adoption is poor. People tend to shy away from using what they don’t fully understand. At the end of the day there is an expensive and powerful tool that still doesn’t drive sales or efficiencies in the business!
In the U.S. nearly $40 billion is spent annually on trade shows and events, yet Forrester Research states that only about one percent of leads ever turn into customers. Why? Businesses have not implemented the right technology and processes to automate the development of these leads into real prospects and opportunities. Your business may already be closing more than one percent of your leads but the right lead development technology can increase close rates on sales leads by 20 percent or more -- which is game-changing.
Most manufacturers sell through channels (reps, brokers, distributors, etc.) yet many rely on old-school email and spreadsheets for communication and coordination with their sales partners i.e., “go to show, download all leads, sort by state, send to rep, hope rep sends to distributor and hope distributor tells rep they contacted company.” What SMB’s require is a system that brings 24/7/365 visibility and accountability across both their internal and external sales channels.
The cost of a full-feature CRM system combined with a marketing automation system and a partner management system can run several thousand dollars per month, which is prohibitive for most SMB’s. What is needed is an integrated system that contains the necessary CRM, lead development/marketing automation and partner collaboration features at a reasonable price.
We have found the above five points to be the major challenges facing small and midsized businesses when it comes to converting more leads into revenue. Unfortunately, companies spend a large budget on technology but don’t get the results and ROI expected.
That’s what we’ve found with our clients and definitely what I have experienced in my career. What is your experience? We’d love to hear your thoughts on shows, leads, marketing automation and business tools! Let’s keep the conversation going!
Kevin Brown has spent the better part of the last 30 years in sales, marketing, business development, and manufacturing roles in the safety, industrial, and electrical/electronics markets. In 2009 Kevin founded Sunwest Ventures, a boutique advisory and investment company in southern California. Sunwest is an investor in and Kevin a Co-Founder of LeadSmart Technologies LLC a Leads2Revenue technology company.
Had a great time last week being interviewed by Will Crist on his podcast! We spent about 40 minutes talking about LeadSmart and its inception and benefits etc. Enjoyed sharing the journey with Will and his guests!
Had a great day here at Suite World learning more about how LeadSmart can support both Netsuite Alliance partners and also sales partners/resellers! Huge opportunity to bundle LeadSmart with Netsuite!
TOPSFIELD, Mass., March 13, 2019 /PRNewswire/ -- BrainSell, a value-added reseller (VAR) specializing in end-to-end business technologies and consulting and implementation services, today announced a new partnership with LeadSmart Technologies. LeadSmart offers a CRM, Marketing Automation, and Partner Collaboration software suite with multiple product options to help businesses turn contacts into leads and leads into revenue.
BrainSell is excited to offer LeadSmart products, which are built on the Salesforce Lightning Platform, as a part of its diverse portfolio of business software tools. Some of the many valuable LeadSmart product features include sales "lead to revenue" management, multi-channel marketing automation and outreach, and robust channel partner collaboration functionality.
"LeadSmart's stand-alone CRM and marketing automation platform meets a lot of lead nurturing and sales process needs that clients have, for our manufacturing, distribution, and technology companies especially," says BrainSell's Executive Vice President, Kevin Cook. "They also offer add-on applications and supplementary tools for Salesforce.com software."
LeadSmart's team of technology specialists welcomes BrainSell onboard their network of partners and consultants. They plan to contribute to this partnership with their technical expertise and dedication to shared values between the two companies. "We're looking forward to collaborating with BrainSell's team and are happy to find a partner as enthusiastic about emerging smart software technologies as we are," says Kevin Brown, co-founder and CEO.
This sentiment is echoed in a quote from BrainSell's COO, Theresa Conway: "LeadSmart is a team of insightful, knowledgeable people who really understand the value of partnership."
About LeadSmart
LeadSmart is the number one CRM, marketing automation, and channel collaboration suite. LeadSmart was founded in 2018 by three business and technology veterans who were looking for a product to manage both day-to-day customer interactions and third-party channel partners activities. LeadSmart is used by companies throughout the U.S. and internationally as well to drive business outcomes and turn leads to revenue.
About BrainSell
BrainSell helps companies thrive by solving business challenges with expert guidance and technology. They've offered unbiased software selection, implementation, support, and consulting services to clients of all sizes across North America for over 25 years. Their methodology helps clients identify the clearest areas for potential improvement in their processes. If technology can help you, then the BrainSell team can guide you on your path to business growth.
We're here to help! Please call us any time at 1.866.356.2654 or email sales@brainsell.net
LeadSmart introduces game-changing SaaS Suite that brings CRM, Marketing Automation and Channel Collaboration into a single suite priced like comparable standalone CRM products. Built on the Force.com/Lightning Development Platform from Salesforce.com LeadSmart combines critical tools into a single platform to drive business outcomes quickly and easily.
Santa Barbara, California (PRUnderground) March 14th, 201
LeadSmart Technologies today launched LeadSmart Pro, its new game-changing Customer Relationship Management (CRM), Marketing Automation and Channel Collaboration Suite. LeadSmart Pro changes the way companies manage sales from a lead through revenue by simplifying the CRM process with an innovative Marketing Automation component built right into the LeadSmart platform.
LeadSmart Co-founder and CEO Kevin Brown said, “So many companies struggle to get adoption of their CRM software within their organization and have an even harder time managing their channel partners and getting them engaged in the process of closing sales. LeadSmart brings world class CRM with the ability to automate communications and follow-up with channel partners like independent reps, brokers, agents, dealers and distributors. LeadSmart is so much more than another SaaS software tool, LeadSmart drives business outcomes both internally and with partners right out of the box.”
LeadSmart, built on the Lighting Development Platform from Salesforce.com, brings all of the tools necessary to manage customers, service, leads, marketing processes and automations, and channel partners. LeadSmart provides automations that keeps a company’s entire business in alignment.
Added LeadSmart COO Tom Burton, “Today companies are struggling with managing sales and partner data and, most importantly, trying to figure out how to communicate better with customers and integrate that communication into other company systems. LeadSmart’s Marketing Automation component automates campaigns and customer outreach, and shares results within the LeadSmart CRM component and directly to channel partners.”
LeadSmart is available directly at www.leadsmarttech.com or through numerous VARS, Re-Sellers and other technology partners. LeadSmart Pro provides a full-featured CRM, Marketing Automation and Channel Collaboration Suite to users worldwide at a price that most would expect to pay for a comparable CRM product alone.
About LeadSmart LeadSmart Technologies is the developer of CRM, Marketing Automation and Channel Collaboration tools that make it easier for organizations to turn leads to revenue. The company was founded in 2018 by three business and technology veterans who had individually and collectively been looking for a product that managed both day-to-day customer interactions and third party channel partner activities. LeadSmart is used by companies throughout the US and internationally to drive business outcomes and turn Leads 2 Revenue. More information is available online or at info@leadsmarttech.com
About LeadSmart Technologies
LeadSmart introduces game-changing SaaS Suite that brings CRM, Marketing Automation and Channel Collaboration into a single suite priced like comparable standalone CRM products. Built on the Force.com/Lightning Development Platform from Salesforce.com LeadSmart combines critical tools into a single platform to drive business outcomes quickly and easily.
I am very appreciative of all the effort UCI and their Applied Innovation Center plus the folks at Octane put into the local Orange County startup community. Month after month the Applied Innovation center puts on great presentations from local professionals, educators and other startups.
If you haven't had a chance to visit the folks at University of California Irvine Applied Innovation Center go check them out -http://innovation.uci.edu/
I am also happy to have been invited back to UCI Irvine School of Business to speak in their Marketing School in early 2019! Always fun to see the young minds and hear from international students!
Getting excited about the upcoming update to the www.leadsmarttech.com website. We have added a lot of features since launching the original website. Total new look and feel and we're providing much more info than in past on our affiliation with www.salesforce.com and our LeadSmart Engage system.
Like many of the readers of this article, for more than 25 years now I have been working with and struggling with sales leads. From the late ‘80s and ‘90s when ISHN and others sent you the “bingo card” responses from the magazine by snail mail (is that still a phrase?), then fax, to electronic lead flow process today we’re all still trying to close leads. Regardless of if you’re a brand or manufacturer exhibiting at national or international shows or a distributor exhibiting at local or regional shows, the struggle is the same: “How do I turn leads into revenue?” or Lead 2 Revenue “as I like to call it.
Once upon a time…
In the past we collected business cards, then later scanned cards into machines and now we have QR or bar-code readers. We end up with big lists, well hopefully big lists, from the shows and events we attend, and the story is the same, isn’t it? Our sales support or marketing team sorts the database by salesperson, independent rep or agent, etc., and the lead is sent by email or from a CRM of some sort. We hope and pray that they get it to the distributor partner and something eventually happens and someone in the food chain notifies us.
Sound familiar?
Your system might be a little bit more advanced, but no matter how you slice it, we all struggle to turn show, event, or other marketing and lead generation endeavors into revenue. I like to refer to this as a “Lead Chasm” where leads can easily fall into the “Black Hole of Sales Leads.”
The “Lead Chasm”
The “Lead Chasm” isn’t a little problem haunting only the safety and industrial markets. In the U.S. more than $30 billion are spent each year on trade shows and events, with well more than $10 billion spent on other lead generation activities. Yet according to Forrester Research only one percent of those leads turn to revenue.
Statistics also say that more than 50 percent of attendees at shows have specific intentions to buy and a far greater number have the ability to purchase and the authority to purchase. Here are some interesting stats to consider when evaluating your tradeshow/event leads and processes.
U.S. B2B companies spend more than $40 billion a year on events, shows and other lead generation activities’
Nearly 50 percent don’t know what percentage of trade show and event leads convert to sales; and
Only 47 percent have a system to track, share and manage sales leads.
Following up on sales leads is hard. Following up on sales leads becomes much harder when you have a multi-channel distribution model utilizing third-party partners like manufacturers reps and distributors. It’s not about bad intentions. Everyone wants more sales, but we still have the Black Hole leads fall into.
Current tools
What about CRM or lead management tools? A large number of robust and functionality-rich CRM tools exist, such as SalesForce.com, SAP CRM, RPMS or Macs for Mfg Reps, Microsoft Dynamics and more. These systems range in cost from free online CRM tools to $200+per month/per user. You’ll likely need to configure and customize these systems to align to your business needs and goals, requiring more expense and resources. Still, most companies struggle to get full adoption and rarely use the full functionality of the product they choose.
Why isn’t there a better way?
When I come home from a trade show, enter 300 leads into a CRM and send to the sales channel, it always feels like a futile use of my money.
Coming to the rescue
Well, that was then, this is now. At LeadSmart Technologies we’ve developed an automated solution that is more than just another piece of software or a “new and improved” CRM. The LeadSmart solution combines technology, automation, and processes into a complete system for rescuing Black Hole Leads and converting these leads into revenue and customers.
The core of the solution is LeadSmart Connect™. LeadSmart Connect was designed and developed to address what we call Lead Chasms and Stale Leads.
This is how it works:
As leads are generated they are immediately loaded into LeadSmart and assigned to the appropriate member(s) of the sales channel.
The lead is categorized and mapped to a specific stage of the business cycle which is customized as part of the Quick Start program. This sets your individual companies’ terms, processes, timing, sequences, etc. to manage your leads and channel partners.
When a lead is assigned all members of the sale channel (company salespeople, reps, distributors, etc.) are notified and given access to a custom, mobile-friendly lead portal where they can access their assigned leads, make updates, change status, update lead value, and track activity and sales progress. This information is automatically made available to the businesses sales team and management through a series of systematic reports and dashboards.
All leads are colored-coded. This makes it easy to visually track which leads are being moved through the sales process and turned into revenue, and which need attention.
All members of the sales channel (including all third-party sales partners) receive a regularly scheduled email that contains a list of all of their assigned leads, their color-coded status and recent activity. From this email, the sales team member can directly access the LeadSmart Portal to update a lead or a series of leads.
Finally, the business has a full set of real-time dashboards and reports where all leads can be tracked and managed ensuring full visibility, accountability and intelligence for each and every lead. Plus, LeadSmart Connect can be programmed to access your ERP or accounting system to bring full data regarding not only your sales leads but your company, sales team, and channel partners’ financial performance.
LeadSmart has built this game-changing Lead2Revenue tool on the SalesForce Unified Platform Services. LeadSmart is built on the same platform as SalesForce.com, bringing customers nearly all the functionality of the world’s most popular CRM, but most importantly adding the LeadSmart layer to eliminate Black Hole Sales Leads and drive Leads2Revenue. All this at a price significantly less than CRM or other tools lacking the functionality of LeadSmart.
Imagine if you increased your sales lead conversions by 5, 10 or 15 percent. Imagine what that would that do to your company revenues. And imagine what it would do for your channel partners commissions and profits.
If you know me you know that I have my hands in a number of projects. A few years back I worked hard to structure www.sunwestventures.com into a more focused company. Heres whats has been accomplished since our last conversation a few years back. www.sunwestventures.com
1. Refined Sunwest into a clearly defined Advisory and Investment firm. Currently, we're advising a foreign mfg of industrial and medical safety products and a few other smaller clients.
2. We've expanded out our digital services by adding new partner Tom Burton. Tom is a computer scientist by training and has run numerous software companies with multiple exits. Tom brings many years of both business management experience and digital strategy and marketing experience running online campaigns etc. As a side note, Tom and I have done multiple projects together prior to him joining Sunwest and we have literally been friends since KINDERGARTEN!
3. Traditional marketing and ad biz veteran Marc Villarreal joined us in 2017 as a partner as well. Marc sold his agency a number of years ago after successfully working with hundreds of brands over nearly 25 years. Marc now teaches marketing at UCLA and UC Irvine and I couldn't be happier having him on the team.
On the investment side of Sunwest we're currently working on investments with,
STARDUST Spill Products- Environmental cleanup products- absorbents, spill kits etc and environmentally friendly cleaners and degreasers.
ViZion Security Products- DIY home security and monitoring products
LeadSmart Technologies - Lead2Revenue system built on the Force.com platform from Salesforce.com
Mark Suster explains what to do--and not to do--during your first meeting with a VC
Don't "tell and sell."The most effective pitches are two-way conversations. So stop talking once in a while and elicit feedback, Suster advises. Raise open-ended questions. Allow VCs to challenge you, and don't respond defensively. And if you don't have an answer right away, be honest. Use it as an excuse to follow up after the meeting.
Point out the elephant in the room...Handle any uncomfortable issues that are public knowledge head on. Maybe you got some bad press or a founder quit. Better to raise the obvious questions yourself--and be armed with answers--rather than let suspicions linger.
...but keep your skeletons hidden--at first. Speak up about public problems, but don't drag out your skeletons during a first date with a VC.
You're ethically obliged to address hidden problems prior to getting funded but not during the initial moments of courtship, Suster says. Just be sure to raise the issues with your sponsor before attending a full partner meeting.
Ask for referrals. If your company shows promise but isn't the right fit, many VCs will happily refer you to more suitable firms. So be sure to ask for referrals at the end of your meeting.
And Here are Sure Fire ways to Piss a VC off
Don't keep in touch. "Some people think, Well, I update the VC when we have board meetings," Suster says. "But when we have more context about what you're working on in a shorter cycle, we can be more helpful." Early-stage companies, especially, should send their VCs a brief summary every two weeks, charting recent accomplishments and short-term goals.
Focus on one partner. The venture firm that funded you may have half a dozen partners or more. Only one sits on the board of your company. "Almost all entrepreneurs I know just manage that one relationship," Suster says. "That's a big mistake. You have to build a relationship with all the partners." After all, funding decisions are made collectively.
Make it all about the money. Your venture capitalist isn't a wallet on legs. If you treat him or her like one, you're missing a valuable opportunity for mentorship. "Each partner has their own relationships, their own unique insights and experiences," Suster says. "That's a benefit to you. Not tapping into it is crazy."
Mark Suster is running late. Sitting in his Mercedes-Benz CLS63 AMG, he surveys the traffic on West Sunset Boulevard through mirrored sunglasses. When his cell phone rings, Suster apologizes to the caller, an up-and-comer in Silicon Valley. "I'm sorry," he says. "I had a crazy morning."
This was no exaggeration. That morning in May, Suster had attended a business summit with South Korean President Park Geun-hye, raced to a taping of a Wall Street Journal webcast co-starring social-media mogul Gary Vaynerchuk, and attended two meetings with start-up founders. Now, he is speeding off to give a talk at the Hollywood Roosevelt Hotel.
When the conversation with the caller turns to term sheets, Suster's tone goes from apologetic to irritated. "You earn the right, through success, to get the kind of terms and protections you want. But you don't even have a product," he lectures. "You're not at the point in your career where you get to act like a prima donna." With that, Suster ends the call, leaves his car with the valet, and strides into the hotel to make his presentation.
Suster (rhymes with rooster) is in high demand these days. The entrepreneur-turned-investor is best known for Both Sides of the Table--the brash, opinionated, and gleefully obscene blog he has been writing since 2009.
Being a founder, Suster says, means enduring long days of anxiety, exhaustion, airport delays, and bad fast food. It means staving off creditors and working with less than nine months' worth of cash in your family's or company's bank account at any given time.
Co-managing partner at Los Angeles venture capital firm GRP Partners, he has built his name into a powerful brand, much of which is based on his hype-deflating candor. Suster, 45, has a talent for tipping sacred cows--and, on occasion, infuriating his readers.
On his blog, founders who waste time strutting around industry gatherings are "conference hos." Businessmen who smile, shake hands, and then eviscerate you are "grin f--ers." For an entrepreneur, becoming a VC means "going to the dark side." Suster keeps a reminder of this last phrase--a Darth Vader bobblehead doll--on the windowsill of his corner office. "If you never piss anybody off, you're not trying hard enough," he says. "And I piss people off on a regular basis."
Suster wrote one of his most popular blog posts, "Entrepreneurshit," on a sleepless night in November after returning from a weeklong business trip. The post dismantled the kind of glamorous fantasies about start-up life that are perpetuated by the tech press and celebrity entrepreneurs.
"If you read the tech press every day, you'd get the impression that it's all glamor. It's not," he wrote. Being a founder, he continued, means enduring long days of anxiety, exhaustion, airport delays, and bad fast food. It means staving off creditors and working with less than nine months' worth of cash in your family's or company's bank account at any given time.
It means tamping down your insecurities long enough to persuade potential employees, customers, and investors to take a huge gamble on you. All of this in pursuit of a vision that, statistically, stands only the slimmest chance of success. "No, it's not as bad as working in coal mines," he wrote in the post. "But it is quite the roller coaster, and the stress is real."
In fact, most entrepreneurs shouldn't seek the "rocket fuel" of venture capital, he says, firmly and often. Many businesses haven't yet maximized what they can do without it, and some businesses just aren't made to scale.
And there's nothing wrong, he says, with starting a company that's not positioned for massive growth, even if folks in Silicon Valley may deride it as a "lifestyle business." His take on venture capitalists? "The VC industry is very lemmingish," he says. "They find a trend and then everyone does it. But the Internet is a winner-take-most market. So you either back the winner, or you don't have outsize returns."
Six years ago, Suster was a new and relatively unknown player in venture capital. He had built and sold two businesses--the second, a content-management company called Koral, was acquired by Salesforce.com--before joining his mentor and longtime investor, Yves Sisteron, as a partner at GRP.
His original plan was to move with his wife and two young sons to Los Angeles, spend a couple of years there learning the game from his fellow partners, then head home to open a satellite office in Silicon Valley.
But around 18 months into the work, he had a revelation. "I realized, Why on earth would I go to Silicon Valley and compete with 80 other firms on Sand Hill Road, when here we're the largest VC in town?" Suster recalls. "We have amazing entrepreneurs at our doorstep and very limited venture capital. There was this enormous opportunity."
Besides, when he looked back over the trajectory of Internet-era innovation, he saw how the focus had shifted from Web infrastructure (routers, switches, and the like) to what he calls the three C's--content, communication, and commerce, sectors that haven't historically been dominated by Silicon Valley. Los Angeles, he says, "is the content capital of the world in terms of film and television."
So he stayed put, dedicating himself to helping build the city's nascent tech scene. In 2009, he founded Launchpad LA, a mentorship network that encourages start-ups to grow locally--and stay local.
This evolved into an accelerator, which now offers young businesses up to $100,000 apiece and free space in an airy, open-plan office in Santa Monica, one block from the beach. (Notable alumni include Chromatik, maker of an iPad app and Web-based learning platform for musicians that is used on American Idol, and Sometrics, a company that helps publishers monetize online games using virtual currency and was acquired in 2011 by American Express.)
Launchpad invested in 18 start-ups last year; the companies ended up raising more than $30 million combined in outside capital.
Of course, exposure, Suster-style, isn't always flattering. Sam Teller, Launchpad LA's managing director, still remembers what happened two years ago, when Suster introduced him to Courtney Holt, the former president of Myspace Music.
Holt had just signed on as the chief operating officer at Maker Studios, a GRP portfolio company whose YouTube videos, including the blockbuster "Epic Rap Battles of History," together get more than three billion views a month. After the introduction, Teller emailed Holt to ask him out for lunch. The next morning, he recalls, Suster published a blog post titled "Never Ask a Busy Person to Lunch."
The post didn't out Teller by name, but the message was clear: Lunch lasts too long. It imposes on a busy person's schedule. Try coffee instead. (Teller wasn't offended, but a flame war broke out in response to the post. Commenters called Suster's stance "Machiavellian bullshit" and told him to "get over himself.")
Today, Suster is one of the most influential tech investors on the Web. He is often mentioned alongside--and linked by--the two VC-blogger titans he came up admiring: Brad Feld of the Foundry Group in Boulder, Colorado; and Fred Wilson of New York City's Union Square Ventures.
Feld first blogged about Suster in 2006, when Suster was still running his second company; Suster had lambasted a group of venture capitalists who started a meeting 30 minutes late and then barely paid attention to him.
For that, Gawker founder Nick Denton gave Suster a "hero award" on the Valleywag website. "I'm just glad I don't appear to be one of the assholes he met with," Feld wrote.
Suster's credibility comes from hard-won wisdom. In the aftermath of the dot-com collapse in 2000, he was forced to lay off more than half of the 92-person staff of his first company, BuildOnline, which made collaboration tools for the construction industry in Europe. "I cut some of my closest friends," he says. He was devastated.
Not long before, he had attended the Fortune Global Forum at the Palace of Versailles in France, where he dined alongside Michael Dell and sipped champagne in the private wine cellars of Bernard Arnault, the chief executive of French luxury group LVMH. "I drank my own Kool-Aid," he says. "I thought we were changing the world."
Six months later, no one would return his calls. The economy had taken a dive, and companies were less open to spending money on newfangled Web software. On top of those challenges, BuildOnline had grown too quickly. It had raised too much money, hired too many employees, and charged customers too much.
So austerity set in. Suster went from staying in high-end hotels to a 20-euro-a-night dump in Frankfurt, where guests had to step out into the snow to reach the communal bathrooms. "It was freezing, f--ing cold, and there were these Turkish construction workers with leopard-print underwear--like bikini-style underwear--going to shower with me, and I was like, 'What am I doing?' "Suster recalls.
Sisteron, his mentor and investor at GRP, watched him struggle. "Nothing teaches you more than that kind of punishment," Sisteron says. "He survived. He matured."
Now, Suster brings his unvarnished perspective to young entrepreneurs. A few hours after meeting South Korea's president in May, he commandeers a conference room at the Santa Monica offices of Burstly, one of GRP's portfolio companies. Two entrepreneurs--Salmaun Ahmad, 32, and Jamal Ashraf, 29--walk in to discuss their start-up, Advocus.
They had just moved from San Francisco to spend four months at Launchpad LA, where Suster had met them the week before. Ahmad nervously recaps Advocus's mission: helping businesses put potential clients in touch with their best customers for recommendations. "Every company has advocates and evangelists," he tells Suster. "We're making those advocates accessible in the sales process."
Suster, who was double fisting Diet Dr Pepper and coffee, interjects between bites of his turkey sandwich. He likes the idea but is skeptical about the implementation. "My best customers ought not be talking to the unwashed masses," he says. "And my medium and worst people ought not be talking to anybody.
I don't have all the answers. I don't pretend that I do. I'm just here to spar with you and make sure you're thinking about it the right way." Ahmad responds, "We hear you loud and clear." They agree to meet again.
Next, Suster walks down the hall to Burstly's rec room. On a couch beside Ping-Pong and foosball tables, he meets with Arye Barnehama and Laura Michelle Berman. Their start-up, Melon, makes a brainwave-measuring headband that works with a mobile app to help users gauge their concentration. "It's about turning the invisible activity of your mind visible in a meaningful way," Barnehama explains. "Almost like a 21st-century journal."
Suster likes the idea, wondering aloud if Melon could help kids with attention disorders. (Suster himself has ADD.) But did it really have to be a headband? "It kind of needs something that makes it feel less like, 'I'm John McEnroe,' " he quips.
Suster loves this kind of work. "I get paid to have the smartest people I know come to my office and hear how they want to change the world," he said. "And if I don't like the idea, I don't have to spend any more time with them."
He misses being an entrepreneur, but he says he sleeps better as a VC. "The highs are more muted, the lows are a little less panic driven," he explains. Having a bunch of start-ups in his portfolio dilutes his personal risk.
This spring, GRP promoted Suster to co-managing partner. With a young protégé, Jordan Hudson, he is preparing to rebrand the 17-year-old firm, which will be renamed Upfront Ventures, in a way that will emphasize openness, transparency, and strong opinions. In a sense, this project is his latest start-up. Its offices will move from buttoned-up Century City to lively Santa Monica, a hot spot in the Los Angeles start-up scene.
Not that Suster has to be there to connect. Thanks to his blog, he gets cold pitched by strangers everywhere these days. They collar him when he walks down the street at South by Southwest or when he is dining with his wife at a restaurant in New York City.
That busy day in May is no different. That night, he attends a party at YouTube Space, a 41,000-square-foot Playa Vista aircraft hangar, to honor Cenk Uygur, co-founder of the Young Turks online news network, which has just reached one billion views.
After the party, Suster is waiting for a valet to pull his car around when he is rushed by the founder of a digital media start-up from Irvine, California. "I recognize you by your image," the man gushes. After 14 hours straight of accessibility and blunt talk, Suster is eager to get home to his family in Pacific Palisades. But he stands still, nodding patiently as he listens to the pitch.
That's the contradiction in Suster. Beneath the tough talk, many of his critiques are meant as tough love. Case in point: A week after he chastised the "prima donna" from Silicon Valley on the phone, he had an update. With Suster as the sponsoring partner, GRP would lead a $2 million round of financing for the company, which is set to debut this year. "Remember that guy I was talking to in the car?" he says. "We did sign a term sheet in the end. I got him to be reasonable."
Susterspeak: Here are some Susterisms defined
Entrepreneurshit. The unglamorous reality of start-up life.
Ballers on a budget. Founders who lease fancy cars as they rack up credit card bills.
Elephant hunters. Start-ups that focus on landing massive customers with enough "meat" to feed them for a long time. Instead, Suster says, you should hunt for deer--clients that are easier to catch but still have plenty of meat.
Gym salesmen VCs. VCs who pressure you to sign a term sheet in a couple of days and allude to pulling the deal if you don't.
Seagulls. Investors who know enough about your project to have an opinion but not enough to help. They swoop in for one day to check in, shit on you, and fly away.
