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CliftonStrengths
Improving the Odds of Success for Early-Stage Startups
CliftonStrengths

Improving the Odds of Success for Early-Stage Startups

Webcast Details

  • Gallup Builder Talent Tuesday Webcast Series
  • Season 2, Episode 3
  • Learn how to radically improve early-stage startups' odds of success -- including what Gallup's BP10 can do -- from someone who has made that her life's mission.
  • Interested in learning more on this topic? Read more about how to improve teamwork in the workplace.

Erica Wassinger, practitioner and evangelist in the entrepreneurial world, was our guest on a recent Called to Coach -- Builder Talent Tuesday edition. Erica shared her passion for helping early-stage startups succeed, including:

  • paths and partners in success
  • the role of Gallup's BP10 assessment
  • powerful examples of entrepreneurs who have leveraged markets and customers to make their startup dreams a reality

Below is a full transcript of the conversation, including time stamps. Full audio and video are posted above.

We need more and better-quality startups, and that was the problem we set out to solve.

Erica Wassinger, 9:09

The BP10 correlates really well with the ability to create a customer, not necessarily the ability to just innovate.

Erica Wassinger, 11:14

Jim Collison 0:00

I am Jim Collison, and live from our virtual studios around the world, this is Gallup's Called to Coach, recorded on May 26, 2020.

Jim Collison 0:23

Called to Coach is a resource for those who want to help others discover and use their strengths. We have Gallup experts and independent strengths coaches share tactics, insights and strategies to help coaches maximize the talent of -- the talent of individuals, teams and organizations around the world. If you're listening live, love to have you join us in our chat room. There's actually a link above me there. It'll take you to the YouTube instance -- a chat room there you can log in. In that chat room, there's 3 little buttons. Click that and pop the chat out. That way you can get it off your screen and someplace where you can see it. If you have questions after the fact, you can always send us an email: coaching@gallup.com. Don't forget, if you're watching this on YouTube, subscribe, just do that right now. There's a notification bell that will make sure you get notified whenever we go live. And if you want to listen to this as a podcast, you can just search "Gallup Webcasts" on any podcast player. For this Builder Talent Tuesday episode, Todd Johnson is our host today. Todd's Gallup's Channel Leader for Entrepreneurship and Job Creation. And Todd, it is always great to be with you on a Builder Talent Tuesday. Welcome back!

Todd Johnson 1:16

Well, welcome. And it's great to be with you on your birthday! Gosh, I'm excited about this. And as the folks on this call know, and anybody that reads a newspaper or watches a television knows that building and rebuilding is more important than ever. And I will not sit here publicly or privately and ever, ever, ever wish a guy ... that bad. But he did. And here we are. And the chance to reenergize small business, large business, startups, grow-ups, shoot-ups -- is it's simply, and I know we're all hearing this from a lot of different companies, but it's now more important than ever. So thanks to all those that have joined and for all those that'll watch us repeatedly -- because I've heard that's an issue with these Builder Talent Tuesdays -- that will watch us repeatedly in the future. Thanks for your energy and your efficacy and your belief in rebuilding. And, God, it's important. I don't want this to be overly breathless.

Todd Johnson 2:16

I'm going to spend just a minute because I know in the last call, excuse me, we had some people that weren't overly familiar with BP10. You know, we had some great, great CliftonStrengths Coaches. And so just momentarily, BP10 is a result of a guy named Don Rumsfeld, who challenged us to ask the world what they wanted, and I'm grossly oversimplifying and speeding up a story, but we did. And what we found out was the world wanted a good job. And God that's more important now than ever, right, as we think about our wellbeing and our, and our resiliency and our engagement and our jobs.

Todd Johnson 2:49

So we went to work and began studying entrepreneurs because guess what? Entrepreneurs create companies that create jobs. And I, I beg to find anybody around the world that can defuse that correlative. Entrepreneurs create companies that create jobs and great jobs. So we took that powerful science we have of studying recurring patterns of thought and behavior that can be productively applied (of course, those CliftonStrengths Coaches have that ingrained in their, in their being). And we applied, again, the same rigor and science to studying entrepreneurs. And we've had a lot of names for the assessments, and a lot of iterations over the many years. I think our first launch, Erica, might have been January of 2014. So we've been at this a little while.

Todd Johnson 3:39

And the power of the BP10 is, is really about the understanding your relationship with the demands of building. OK. CliftonStrengths is how we're going to view the world and attack everything through life and God is it foundational and important. The BP10 is really very vocationally focused around building. The talents -- and previous names were "demands" -- functional demands of entrepreneurship, behavioral demands of entrepreneurship. I had this horrific idea once to name it "Entrepreneurial StrengthsFinder," which confused the heck out of everybody. So we got rid of that one pretty quickly. But it's really about giving you a science and an intentionality around having a conversation with yourself over the demands of building, and then all-importantly, all-importantly, you know, conversation with, with those around you, with your team -- be it a cofounder, be it a board of directors or be it anything.

Todd Johnson 4:39

We do have a correlative graph out there, and I'm happy to share it. I think Jim has the technology to pop it up there. Those relationships -- be it strong or be it slightly less direct or be it zero -- between the CliftonStrengths on the, on the left side and of course the BP10 demands of building on the top. So we, we hand this out in our class and we haven't been able to schedule a class for a while. So if somebody sends me an email: Todd_Johnson@gallup.com, that graph, I'm not going to probably write you a real long note, but that graph will appear in your Inbox, let's just say within the next 24 hours.

Jim Collison 5:16

Todd, scientific or not scientific?

Todd Johnson 5:18

Absolutely scientific. And I can get into the various you know, correlatives, and I'd rather not because that's much more Sangeeta's world. But to your very good point, if someone does really want to deep dive into the, the research and all the meta-analysis and all the ways we've built it. We put the technical report right up on the website. There was internal debate, because that's a whole lot of our intellectual property and our science. And I will say I lose most debates, but I won that one. And we've got the technical report on the website. It's been, you know, endorsed by Frank Schmidt. If anybody in the psychometric profiling world doesn't know Frank, then you're not really in that world because he's a preeminent thinker over at the University of Iowa. Very powerful document. It's all up on the [gallup.com/builder].

Todd Johnson 6:09

OK, so those were a few opening, opening remarks about, about BP10. God, I'm excited for this call. A very great friend of mine, a practitioner, I mean, in the streets, sleeves-rolled-up practitioner who runs a number of initiatives. One includes The Startup Collaborative here in Omaha, Nebraska. But she's got her hands in all kinds of things on the coasts, in terms of venture capital and angel. It's really unusual because usually during my introductions, all I do is say, really nice, positive, supportive things. But today's a new day.

Erica Wassinger 6:48

I was going to say you might have fibbed already. You called us "friends."

Todd Johnson 6:51

So here's the one thing about Erica that I love so much. She and I have had a chance to travel the Midwest, you know, and be on various panels and give talks and, and pontificate the, the power of builders and talents. And her sports analogies are priceless. And the one I remember the best, we're talking about when the batter's on the second yard line. And he swings [at] the ball and he hits it into the sand trap. And people think I'm joking. You can't make that stuff up. And she didn't quite get all those sports analogies correct. But the thought was there, the heart was there and we did a slight precall and I asked her to throttle back on the sports analogies, but throttle way up on, on how she's using and understanding the power of talent.

Todd Johnson 7:41

Erica Wassinger -- pretend -- remember that Wall Street Journal (I forget who does it, but she does the interviews on the elevator?). OK, I want you -- I'm giving you 12 floors. And I think I gave the last guy 9, so you get an extra 3 floors to introduce yourself. We just got on the elevator. And then we're going to dig into the topic at hand. Erica 9 floors I just pushed the button. Oh, no, 13 -- 12.

Erica Wassinger 8:07

13. I'm Erica Wassinger. I have made my career, especially over the last 10 or so years, but longer than that, in the making and the pursuit of radically improving the odds of early-stage startups. And so, I've been working with the BP10 for a long time. I'm a huge fan of it, because it's, it's just one step above where I sit in the startup funnel. And Todd is correct. I'm very bad at sports analogies, but I will put them in for humor. It's super fun.

Todd Johnson 8:39

Just don't placate. OK, no, they are fun. Tell us again, give us, give us some context and history about The Startup Collaborative. I think it's part of the Omaha Chamber, because I know it is. But tell us about its inception and some of the funders and enthusiasm we have around it because it's kind of rocking.

Erica Wassinger 8:58

Well, let's start. I think, you know, there's people from all over the world on this call, right, which is, which is awesome to see. When we took a step back in our market and said, We need more and better-quality startups, and that was the problem we set out to solve. And I had been working in venture for a while; I was the cliché PR person running around, telling stories back when media was very different. And I got into the operational side and the investment side of startups, and I realized that what we were doing in Nebraska, we were producing pretty good startups, but just not nearly enough of them. So we had to figure out how to scale everything up. And so at the time, you know, I took my business that I had been running with local venture capitalists. We took an accelerator and convinced the Omaha Chamber, which in our market is an economic development organization, to throw away the playbook that they had been running an entrepreneurship and go "all in" on what we were doing. And my Disruptor talent is very high, as is my Confidence. So, thankfully, this played well for us here.

Erica Wassinger 10:06

But what we ended up doing was help really lean into the cultural assets of our community. So our community, we are in the backyard of Warren Buffett. So we are very, very value-investment-focused, we are pragmatic, and we're incredibly risk averse, truthfully. Failing in Nebraska -- and I don't know how this compares to other markets; I'd love to see this, this conversation in the chat -- but failing in Nebraska is, is more than just a hit to your bank account. It's a reputational risk. And so we had to figure out how to mitigate those psychological factors as well as actual quantifiable objective metrics of creating good startups. So we created The Startup Collaborative. So my colleagues are on the call, Mitch and Cameron. What we do is we work step by step with someone who raises their hand and says, I think I have an idea, question mark? Should it go up or no? And we work with them to figure out, is there a market for your idea?

Erica Wassinger 11:02

And so really what we've been doing to determine if there's a market for your idea and how to create the market around that idea leans really nicely into the BP10. Because, Todd, I think I can steal your words here. But the BP10 correlates really well with the ability to create a customer, not necessarily the ability to just innovate. And so, we've done pretty well. I mean, we've worked with several hundred entrepreneurs over the last couple years. Objectively, we have improved the quantity and quality of deal flow in our state. We have been using the BP10 throughout the entire process. It's part of what we consider our due diligence in helping form teams and making investment decisions.

Todd Johnson 11:45

We found -- and this was early research, probably now dating back 12, 15 years ago -- the problem with these startups and these, these initial early ideators were they gravitated towards people that look like them, think like them, act like them and talk like them because guess what: That's what freakin' human beings do. And it's called human nature. And it's easy and it's safe and it's comfortable. And Erica and I are kind of wired the same. So we should just go build something together. And the reality is, while that might be safe and comfortable, it might not be best for the business. And so talent diversity -- and just a plug for next month's show, but we're gonna have Dr. Sangeeta Badal come on and unveil some of the all-powerful research that, that simply validates what we all know. And what Erica and Mitch, Cameron and Nathan -- that whole group have proven is you're just a better team. God, that sounds so breathless, but you're stronger. Your performance, your chance of success is exponentially -- and again, we're going to quantify this for everybody -- better when you have talent diversity.

Todd Johnson 12:51

We simply know that diversity is an all-powerful mechanism within building economies. And, and most figure out and everybody knows stories of great companies and can see the power of those founders, even though one might be the, you know, the showcase and the celebrity, the Rainmaker that we all celebrate. But show me a company that's growing without a Conductor and an Expert next to it and I'll poke holes all over that, that model, and they probably won't be around. And everything I just said, and I'm going to finish here, is probably, I don't know, 47% to 58% more important than 6 months ago. I mean, hopefully people are watching some of the research coming out of the Gallup labs. But understanding your strengths to build, having the ability to stay in your lane gives you engagement, which, ultimately, is highly correlative towards resilience. And guess what? Resilience in the face of crisis is really important. Talk a little bit about because I know -- I've had the chance to meet a great number of your portfolio. Not everybody, God, you've got some big talents in there. Do you have any stories or examples of diversity?

Erica Wassinger 14:04

Oh, absolutely. So, you know, we've been in the very, very early stages, like I just described. We're helping an entrepreneur figure out if there's a market for their opportunity and then get to their version 1 of product-market fit. So in the venture capital scene, we sit at pre-friends and family or angel capital up to series A. And we're still trying to figure out where we "exit stage left" on startups. We're sort of a little too engrained on some of our teams. But our -- what we see typically, when that early person raises their hand, and they identify that market is we see a lot of Rainmakers. We have a really high number of Rainmaker CEOs, which I think correlates across the board. I was doing an assessment; we've done hundreds of the BP10s across our portfolio, we have about 60, 62 or so active companies in our portfolio right now. And when I was looking -- Jim, your look was perfectly judgmental, and we are on record saying we will be good. But we

Todd Johnson 15:07

I don't know where that came from, but keep going.

Erica Wassinger 15:09

Well, because you were naughty, Todd. You were naughty and he sternly looked at you. So you got to stop.

Todd Johnson 15:16

It happens every time, sorry.

Erica Wassinger 15:18

It happens every time. But what I was saying is that when I look at some of the recurring talents I see in some of these CEOs, I see high Disruptor. I see high Confidence, Selling, Relationship and Profitability are usually the five that I will see across their Top 4 more frequently. What's been interesting is, you know, if we have that as the CEO, typically, in our 60 or so companies, the second employee -- the cofounder that will tend to join tends to be a Conductor. Yeah, you know, I don't know if it's the Conductor's need to move quickly, to check things off their list, to get to an outcome, what it is. But that Conductor really helped support the vision of the Rainmaker and execute it, which, in the early phases, execution is how you win. The third hire or sometimes more of the technical talent -- because we sit in the software space -- can be that Expert. So we have a couple CEOs that are Expert-Rainmaker dual, they sort of straddle CIR level there. But that's how it plays out with us. We do see, it's the Confidence and the Disruptor that's real high in our early-stage CEOs.

Todd Johnson 16:35

And think about how awesome, and I'm just going to get in trouble yet another time, but think about how different that is and some of the history of our NSF and our SBIR granting. Let's just pick on the '80s and '90s, when we loaded up everything on the experts, on the technologists, and, and we didn't really give the same credence to precedence to a customer or to a manager -- think of the Conductor as a manager. And we wonder why -- according to their validation, not even independent -- 80+% of that stuff never got out of the laboratory. Never got out of the university basement.

Erica Wassinger 17:10

It's interesting you bring this up, Todd, because we -- so Todd's worked with me for a long time. And we've, just like any great startup, we've messed with our benchmarks: What if, what if we did this? What if we experimented here? What if we did it like this? And one of the more recent experiments that we made was in our 15 levels, to basically become Series A fundable, is what we say that due diligence accounts to. You don't make it all 15. It's not like a "check the box" thing; it's completely dependent on how the market reacts and if your team can farm with diversity. But what if we started earlier? So say Level 1 and Level 2, it's all about talking to the market, figuring out if the opportunity that you think exists does exist. What if instead of saying everybody's initiated before Level 1, we don't initiate anyone until they've proven the market opportunity. Felt like a huge risk.

Todd Johnson 18:10

Say it again. I mean, you think customers are important part of the startup world? Erica, are you on record saying that?

Erica Wassinger 18:18

I frequently holler, if not scream, "Customers make company; code does not make company!" But I know that Cameron is on this call and Cameron would probably be the best to write in some notes in the chat about the changes we've seen. So we said, We're not initiating you until you talk to, say, 20 customers. 20 potential customers and figure out if the problem you thought existed exists for them too. So if we see 100 applications in a given month to join The Startup Collaborative by simply moving that bench from saying you join before you talk to them or you join after you prove the market adoption, we cut about 75% of the ideas.

Todd Johnson 19:05

Of the ideators. God bless them.

Erica Wassinger 19:07

Bless them. We're, you know, we lovingly call them "onentrepreneurs"; we need them. We need their innovation. But, but they're not, they're not going to create customers. And for us in Nebraska, where value investing is important, where objectivity in business modeling is important, where there is a bend right now to be more revenue-focused (and we're seeing this, not just in Nebraska, but I think across the country; there is a large plant, thanks to the pandemic, to have strong unit economics). We have to figure out if this entrepreneur can talk to a customer or not. So Joanne asks a great question: What can the CIR tell you about those who start up? We started, after we made this shift --

Todd Johnson 19:51

What does CIR mean?

Erica Wassinger 19:54

Well, I always mess it up, but I think it's --

Todd Johnson 19:57

It's Coaches Insight Report.

Erica Wassinger 19:59

I tell Christy to give me the RICs and the CRIs. I get it wrong --

Todd Johnson 20:06

And all that. But it's, and let me digress because again, we have some new folks on the call. We have a special report only available to BP10-Trained Coaches, of which Erica and her team are, that gives talent intensity to the 10. And what was it, maybe a year ago, we added talent intensity of the Rainmaker Conductor and Expert. So the report you get off the website we call the Development Report. It's rank order, it's, we think, very valuable. But it's -- you can't delineate the intensity. Think CliftonStrengths. I have a CliftonStrengths report in my office, which I have been there for 2 months in my drawer that has the scores on it, because we experimented with that early on. And we decided to make that assessment purely 100% development and, you know, only a handful of those that Don studied actually got their scored report.

Todd Johnson 20:59

In the BP10 world, we've, we've, it's beyond experiment, but we do avail a Coaches Insight Report that Erica is referencing, then gives your intensity to the 10, and then it benchmarks you against the most powerful entrepreneurs, I think it's a Top 25 in our database and then Joe Cheeseburger -- general population. So never once in the CIRs -- and there's actually a great Builder Talent Tuesday with Monique Bock up in Montreal, and we do, we do the whole hour on just how she uses the CIRs. So if anybody wants to go back into the archives, that's a really good one to watch. But, and then we, we spend time in the course, and of course, we, we have such incredible trust in the efficacy and, and sophistication of folks like Erica and her team on how to use that data.

Erica Wassinger 21:53

Can you say that again, Todd? No, just joking.

Todd Johnson 21:55

No, it's recorded. You can cut just that out and put it on your Facebook and all that stuff. But didn't -- we had an interesting call with some of your folks yesterday with someone who had a lower score. And I think it was a really insightful. We do caution CIRs to stay very private in public. He chose to bring this out, which I thought showed high Confidence. And obviously a very talented builder. But talk a little bit. OK, so that was my big interruption.

Erica Wassinger 22:24

So, Johann's question was a little bit about, Is this a -- and if I'm paraphrasing this wrong, Johann, correct me but -- is this CR -- CIR -- useful in predicting the company's success? And I would argue it's a variable that should be considered. So, when we look at the teams that we have formed, or when a CEO comes on and needs a cofounder, or in certain examples, we have actually formed entire teams based on their CIRs. It does improve speed; it improves ability to communicate. Todd, you've given me some metrics before on, on just its long-tailed prediction on that company's success. But as an investor, we use it as an important variable in this company's survival. Do we think that if the higher the number, or the higher the intensity against certain things, and the more diversity of roles that we see, we have seen, it improves the likelihood of success for that company?

Todd Johnson 23:24

But no 30-minute assessment should ever be the end-all. And as proud as I am of the science and the rigor of this one, no 30-minute experience on the internet should be a yay/nay, yes/no, stop/go. That's a fallacy. And so I do appreciate the sophistication in which you, you account for it. But --

Erica Wassinger 23:46

It's been, it's been really fascinating because we have always taken a stance that the CIR will not be a gating criteria for joining The Startup Collaborative. That's a hard and fast stance. We do see a very strong correlation between those that can meet the customer-driven outcomes and the higher the CIR. And so I, Cameron again, I'm gonna pick on you, but I don't think that we have seen anyone that has come through that is not significantly above general population or well into the top quartile since we added the ability to take a self-assessment, really get to know their strengths and talents, and then initiate them or officially onboard them into the portfolio after they've talked to 20 to 25 customers.

Todd Johnson 24:43

Right. So it's not selection per se, but it's extreme validation of the hypothesis that talent is important?

Erica Wassinger 24:53

Absolutely.

Todd Johnson 24:54

I don't know if we can get that one recorded. And it's not the only variable. It's a complete fallacy. And I'm not going to get off on the ecosystem thing because, you know, somebody in a developing world without running water is not going to have the same chance of a high-tech company that somebody would have in, you know, Bellevue Nebraska. It's, that's, that's simply fallacy. But all things considered, if you have the choice of leaning in on, on talent intensity, all things considered, probably not a bad bet. Give us some stories about -- I know we've got some major investor sponsors and you put some teams in ... and --

Erica Wassinger 25:36

Oh, gosh, we have, like, the best the best investors. So one of them that I am --

Todd Johnson 25:42

Don't name them.

Erica Wassinger 25:43

No, I will, because they're so good. They continuously shock me because at face value -- I have two investors like this. One is First Westroads, a large community bank here, and we went into First Westroads, and if you saw our key investor there, his BP10, you would understand why he agreed to this. I hadn't seen that prior to. But we went in and said, Hey, we want to, we want to invest in early-stage startups. And we want to improve their odds of success. Now in most banks, you're kind of kicked out. Like, "Thank you! Exit stage left for that lovely idea. We're not going to give you money to do that." But First Westroads stepped up to the plate and made our fund available. After knowing a little bit more about our investor, based on his builder profile, it made perfect sense. He's a Disruptor. He's a legacy sort of relationship guy. This is in his DNA.

Erica Wassinger 26:34

Another investor that we have that I am always shocked that they keep doubling down on all of our experiments they -- we keep getting better, so I guess I'm not that shocked -- but man, they're good to us, is First National Bank of Omaha. So this is the largest privately held bank in the country. It's, it's a big dog here. This bank is looking very specifically at how they create the next innovation. This is a bank that came out with the widespread adoption of Visa and other things. So this bank has legacy and innovation. First National has partnered with us over the years to sort of iterate and figure out what does that look like in our backyard?

Erica Wassinger 27:14

And most recently, they put together sort of a skunkworks team. So a team that was going to go deep on a very specific market opportunity, and they were going to build a proof of concept around it. It happened to be one of the bank's largest profit centers. It happened to be one of their, I would say, most legacy line of customers. And the bank said, Can you help us find the right talent? We, we need some strong interns. We need a good pipeline of the university system in here. How do we do this? And what's been great about it is we've got great relationships with our local universities, of course. We went into the universities and found some really great builders. We found two exceptional Rainmakers and two exceptional Conductors who have helped First National Bank of Omaha talk to hundreds in this customer segments. And I wouldn't say have completely rewritten what they thought the proof of concept would be, but far more intentionally informed it. And this team, thanks to our point of contact over at First National, has a really nice line of communication directly up to the C-suite. So we've seen it work really well in those situations where proximity and closeness to your customer with the intention of building pays off significantly.

Todd Johnson 28:43

Now here's my infomercial. I've been with that bank for 30 years, and their customer orientation was just, start at the top, is -- I've given speeches in a lot of different places. And I have numerous examples of the customer orientation that surges that bank. And if you think about it, financial services is a bit of a commodity. So differentiating between the power of your customer relationship, and you can't finish an email, chat with their leadership, Clark, and where he doesn't say thank you for being a customer and being an engaged customer. And I mean, that orientation surges that bank. So my guess is the gravitation that they found towards to start a collaborative in the focus on customers. And, and it's OK, and I'm going to get in trouble for the fourth or fifth time today, it's OK if customers pay for services. OK. I know the startup world kind of dismisses that because if you just have a big database of users, then you can sell it for a billion dollars and buy a boat and be an angel investor.

Erica Wassinger 29:43

I don't know. We're starting to see a shift there.

Todd Johnson 29:47

I was aiming at some others, but you everybody knows what I'm talking about. We think customers and paying customers are a really important part of the free enterprise. And so we love big databases of users. But I still can't for the life of me figure out where the sustainable business model is if nobody ever puts down their credit card or --

Erica Wassinger 30:07

Well, and Todd, you're hitting on something important here. I mean, if we're talking about the surging, surging levels of unemployment we're seeing, where are we going to create new jobs and where are we going to create sustainable jobs, I like the jobs in the knowledge economy. And that is where net new young firms come in. And so the identification of those that are innately built to build becomes an important piece of this equation as we think about not just recovery, but acceleration of where we're going. And I, I have to commend our chamber and our chamber leadership. You know, they're doing a lot of work right now. And they've announced some of it, but the stuff behind the scenes that I'm probably not supposed to talk about, truthfully, but the stuff behind the scenes is honestly a bit more exciting when we think about our state starting to punch well above our weight in terms of creating new, young, high-growth, knowledge-centered companies.

Todd Johnson 31:07

And I'll plug the chamber because some people think I'm on their payroll because I'm so proud of it, but, and I think there are what -- 6,400 chambers across North America? We were -- I think that's about right. Little ones, big ones, and lots of great ones and everything. But we were awarded the No. 1 chamber in the country, what was it, 3 or 4 years ago now? That's kind of a big deal. And so, you know, during the recession, I remember hosting people at Gallup, and they're all like, you guys didn't you hear there's a recession? I see all these cranes and you guys are building stuff and you're, you're, you're opening stores and, and creating customer energy everywhere. And we I remember someone sarcastically saying, "We decided to sit that one out!" And a lot of that leadership and confidence was absolutely emanating from our chamber. So --

Erica Wassinger 31:56

I think, Todd, it, it comes back to the culture of our community, right. Like we, we started making investments into early-stage, net-new young companies about 12 months ago, maybe 15 on the high end. And the value investment, the pragmatic, the "build with a customer in mind and in reach" way of building businesses here has helped this, this economy, weather a lot of storms. And I would say, although it's still very early in the pandemic, and we're not really clear on when everything's going to --

Todd Johnson 32:35

Don't say get back to normal because it won't.

Erica Wassinger 32:37

Yeah, no, I, well, and I think, I think we'll end up more resilient on the other end of this. When I look at our investment portfolio, we're still seeing growth in gains in revenue. We're still seeing growth in gains in users, we're still seeing growth and gains in engagement. And I have to attribute these founders and these builders of these companies with their Determination -- high, high Determination; that's ratcheting up quite high right now. And their Relationship skills, they're working really hard to figure out how to support the customers that they, they need to to get out on the other end of this well.

Todd Johnson 33:11

I have more -- I've had more Zoomy calls in the last 2 months than I had in the previous year, OK, with people that are seeing with coaches -- predominately coaches, who are seeing incredible opportunities in this horrific, you know, dumpster fire we call the pandemic. And sorry for all those technical terms, but the, the reality is figuring out what lane you should be in, who you need around you, and, if you have a business, reinventing it a little bit, because you're, you're at home, and maybe you have time to reengineer and refine. Yeah, I agree with what you said a minute ago. We'll be better, we'll be absolutely stronger and better and more resilient on the other side of this thing. And I just think the strengths science is going to become more essential in that regard. People know I'm a pretty proud Gallup guy. I'm celebrating 25 in 2 weeks! And we're, we're, we're watching our nickel so closely. I'm not getting a watch or luggage. We're gonna just save that until after austerity is over. I -- totally digressing.

Erica Wassinger 34:20

Well, let me, let me give you a couple examples of what you just described here. So let me talk about Andrew Preci. Andrew Preci is what you call a top-quartile builder. Let me, let me look at his intensity report right now. We've got high intensity in Knowledge, Risk, Independence, Delegator, Determination, Disruptor and Relationship. Those are his top -- he's in the top quartile across those talents. Andrew Preci and his business partner created a tool that helped event marketers -- this was last year -- event marketers get their events to the niche audience that cared about it most more quickly and more easily. In an old era, they were putting sitting across 10 different websites, it took them few hours, they couldn't really sort of reconcile the attendee list, all the things; it was terrible.

Erica Wassinger 35:07

COVID hits. Guess what gets hit hard. Right? So rather than Andrew Preci saying, "I guess I'll sit on my thumbs for a little bit," what he ended up doing was calling every single one of their customers. So they called every single event organizer and small business that had been curating things, and said, "Let me walk you through how you're going to take your stuff digital. Let's figure out what the first month looks like." And then what he started doing was going to small businesses -- think restaurants, think retail -- I'm going to teach you how to create pop-up events that are digital first. He has seen such great growth, and he is so well poised. He -- in Omaha, for those of you that are not subscribers yet, go to eventvesta.com. (I'll leave it to Mitch or Cameron to put that plug in the chat) and hop on. Because he has found a way to make lemonade out of all of this. And it's been absolutely a privilege to watch him shine right now.

Erica Wassinger 36:09

I have another founder in our portfolio. Her name is Abby. Abby is the founder of chance bags. So again, another event-based company. Historically, Abby hated that plastic bags which were stadium- and school-required, were made out of PVC, which is arguably known as the poison plastic. So she created, with Nebraska growers, a better plastic; a safer, more environmentally friendly plastic, and she wants to see these large-scale events and experiences go to a more sustainable way, so we're not creating more trash than the largest cities in Nebraska after a game day. So that's her mission. Well, COVID. What do you do? She has since shifted to take her bag, which now is really easy to clean off, she's added facemasks. And she said, here's an easier way to just be sure that your stuff is clean and that it's safe for you. Because healthcare institutions and other essential employers are now requiring clear bags.

Erica Wassinger 37:18

So these founders, this is the chantbrand.com. They are finding really, really interesting ways, completely rooted in their customer persona to rehone their business model, and it's all about the customer persona. I have another pair of top-quartile builders, Jessica Charlson and Jina Pickarella. Jess is the Rainmaker. Gina straddles both Conductor and Expert for her rivaling top roles. They created a company called Job Share Connect. So job sharing is a very prominent practice in Europe. In fact, it was part of the New Jersey stimulus plan. But what it is -- essentially 2 people, 1 role; you get flexibility in hours, you get benefits but you still get you know somewhat of a reduced pay. But you get more of your life in balance, and this spans across the different, different segments of people.

Erica Wassinger 38:15

This could be people retiring, millennials that love to travel, new parents, etc. For the employer, they end up getting almost 2 to 3x the productivity from these 2 part-time people paired up. So that was, that was a big educating-the-market play that they were doing before. COVID hits, and employers now, their job, their customer persona is having to make really difficult decisions about furloughs, about pay cuts, about layoffs. And Job Share Connect has rode in like a white knight, to these employers to say, Don't lose that talent you have worked so hard to keep them. By the way, some of them are really struggling with the, the hourly requirements as it is in this COVID work-from-home world, with no childcare or otherwise. Job Share might be your opportunity now. So I like watching these builders lean into Knowledge, Relationship, Determination, Disruptor again and again and again. You're almost seeing those skills have a multiple effect.

Todd Johnson 39:19

Yeah, in this environment. And, again, nobody wished it on anybody. But you can sure -- God, I've had some phone calls in the presence of talent, that you get off the call and you're just more elated and enthusiastic and excited for them than ever. And then I'll be darned if that doesn't have a really heavy correlation toward talent. I loved your lemonade thing. Total coincidence, but we -- we're drinking a ton of lemonade in the Johnson house (and I plug Minute Maid) because yeah, we were hand -- I didn't do that on purpose. That was totally unrehearsed. Erica and I are like sync.

Erica Wassinger 39:55

We're just so in sync.

Todd Johnson 39:56

We're so in sync. And those that know me know I love talent and seeing it in action. And they'll fully understand why I'm so excited about The Startup Collaborative, the chamber. I think you guys, without getting out of school here, I think you've proposed some exciting BP10 stuff to the state government.

Erica Wassinger 40:17

Yeah. We have I mean, we see --

Todd Johnson 40:19

Don't go into details.

Erica Wassinger 40:20

I'm not -- no, but I believe that strong economic development starts with entrepreneurs. I firmly believe that. Clearly I'm biased, but the math and the numbers show --

Todd Johnson 40:30

Example validating you, hello. You've all heard me say 1,000 entrepreneurs built the damn place -- I said it twice -- because the whole world was thinking Japan and Germany are going to take over because they figured out quality, or TQM or Six Sigma or whatever. And I'll be darned if this country didn't surge. And everybody that's been following Gallup knows that we did some research and found about 1,000 entrepreneurs created about $12 trillion in GDP. Well, guess what? The same thing is gonna happen on the other side of this thing. We're not gonna need 50 years for it to happen, and I'm not sure we can afford 50 years. It's going to happen in the next couple. But cities and states and countries -- because everything we've talked about is applicable to John in South Africa and, and our friends in Venezuela and everything. It's going to be those entrepreneurs who figure out what lane they need to be in and who they need on the other sides that are gonna win.

Erica Wassinger 41:23

Well, well, and I would argue, Todd, economic development as we know it has, has now been flipped on its head. The office as we knew it is now an amenity, not a requirement. So the idea that -- yeah, I mean, site selector -- site selection changed. All these things changed. So, for economic development at the neighborhood, city, state and federal level will require a rethinking of how you identify and activate entrepreneurs. And, you know, I like what we have done here in Omaha and in Nebraska, where you guys have helped us identify. We've, we've started marketed, you guys identify and help us cull the herd a little, and then activate them. And that, that is a -- that's a regional approach. That's an approach that takes the First Nationals that said, We can create companies out of this.

Erica Wassinger 42:15

This takes UNMC, which is the University of Nebraska Medical Center, to say, we've got tech transfer, can you do something with it? It takes the science of BP10 and the diversity of team formation and objectively helps improve our odds, which is all I'm about. Especially, you know, as I start to move my career more toward the investment angle, the more certainty or the more variables I can have somewhat of awareness to and fewer blind spots around, the better my chances are.

Todd Johnson 42:48

And everything Erica just said about Omaha is as applicable -- and we've got, you know, dozens if not hundreds now of communities on this call -- is, is as applicable. So garner up and gather up your builder talents, coaches, and go find somebody at the chamber who gets it, and/or the state government, and pitch something. You know, we've got all those activities in Born to Build book; they're up on the website. We've got snappy little videos. I mean, we've, we've put a lot of stuff out there. We -- sometimes it's hard to find, but that's actually a qualifier, because when people can find it, they're much more engaged and ready to use it. So that was all done strategically.

Todd Johnson 43:28

But, but when you can, you know, find somebody who gets it, lean in and build a, build a consulting project for yourself in it at the same time, absolutely. You should be paid for the value you bring. So everything Erica and her team has done here in our little enclave in, in Omaha, Nebraska, absolutely has application and universality, because, as far as I can tell, there's like 3 countries who haven't been decimated by this. And I can't name the 3 because I just made it up. But everybody is really taking big hit on this thing. So the services, the sciences of identification and development, because -- I can say it because we're in Nebraska, but -- just weighing a cow doesn't make it fatter. You've got to have an intervention, which is what the [TSC] does so well. So identify and then develop -- God, that model is important right now. I really am wound up about this, Jim.

Jim Collison 44:23

Todd, can I, can I jump in with some questions I think to get us started here? So, one was says, I'm curious if these talents look different based on how they are started or finance their business. Is there a difference between someone who's operating on venture capital versus someone who has put their own personal assets on the line to start a business? What would something -- that's something or a question they'd like to hear it. Does it make a difference, Erica?

Erica Wassinger 44:50

I've seen the talents ladder up, depending on their financing in this stage of their business. So we have one founder who, the woman is exceptional at building relationships and has seen great multiples on the, on the value of her company. And she's done it when Determination swings high for her and Relationship swings high for her. Now if she's heavy in product mode, you know, building out the code or she's heavy in customer-facing mode, you might see her Knowledge and Relationship stay really high. Profitability usually goes very high for founders that are trying to raise capital, probably because they have to focus on the unit economics and they're constantly defending those. But I haven't seen enough of a correlation to say those that put their own money into it -- I would say maybe. And I need to anecdotally look across these. Profitability is usually not as high for those that are self-financing, versus those that are having to consistently say, the cost for me to acquire customers that the lifetime value is the way I arrived at those formulas.

Erica Wassinger 46:09

I can give you an example of a company that started; it's largely bootstrapped. I'm really grateful that we get to invest in this one, too. This was what I really wanted on the cap table for. But it's two serial founders. They have built, they built their first business was a deep tech business, very deep tech. So I won't even try to explain what it did. But it was eventually sold and acquired by Siemens. So they did really well; they came back and said, One of the hardest things for all of us was modeling the financial forecast -- just figuring out how to model it, and then how to share it with our investors. And then, God forbid, the investors would break a single cell in our formula, and we would have to rewrite that heavy Excel spreadsheet that we made. So when you look at these two founders, Profitability is No. 1 and No. 2 for them. So high, probably because they just had an exit event. And because they're creating a company that can justify the unit economics over and over again. So I don't know if that fully answers your question on the correlations, but some anecdotes in there.

Jim Collison 47:13

Todd, would you add, add anything to that?

Todd Johnson 47:15

You've heard me say before, but I'm a firm believer, and this is where, again, we bonded with TSC [The Startup Collaborative], the sometimes the first investor ought to be a customer. And, and I think we ought to be careful. I have no problem with the venture capital industry, other than a lot of it's throwing darts (and I love that you're not throwing darts). And then, then you hit a big one and say, Yeah, look, oh, you know, one of the hundred darts hit the, hit the, hit the center of the thing. So the focus on, on customer and the first investor, maybe being a customer doesn't always work for some tech things, and I get all that, but pretty important.

Jim Collison 47:53

Go ahead, Erica.

Erica Wassinger 47:54

I was going to say we're starting to see a lot more no-code solutions come about. And this no-code movement, you can get your MVP or your prototype out the door for for minimal, if nothing, dollars. And so I think -- I don't know, we, we're inclined to invest in companies that have shown that they have convinced and compel the customer to turn over $1 for what they're doing.

Todd Johnson 48:22

Love it.

Jim Collison 48:24

Todd, in the BP10 world, when they take the assessment, their, their rankings, their intensities are based on their talents -- how they respond to those things like whether I've invested my own money in this or it's venture capital money made -- that wouldn't change the report in any way, right? Their talents are the same. How they respond to those situations may be different, right, kind of based on how their talents are aligned.

Todd Johnson 48:48

That's such a beautiful point. And it's also one of the reasons that we don't make any judgment whatsoever both on the development but also the CIR report. Because your environment, your reality, be it your business, be it your marketplace, be it your partnerships is -- who are we to sit back and say recommended or not recommended? And those in our old selection world know what I mean by, by those terms. So we do not ever say, you know, x vs y, recommended, conditional or not recommended in our CIR world, because these realities and these environments are wildly different. I don't -- if anybody tries to say this is a silver bullet or perfectly linear, just get up and walk away. Because you shouldn't spend a lot of time with those kind of people because they're not very smart.

Erica Wassinger 49:34

There's too many variables.

Jim Collison 49:36

Erica, a question for you. Are you noticing a shift towards more sustainable businesses? And if so, do you notice anything different about their BP10 profiles?

Erica Wassinger 49:44

OK, so this is the one thing that I can say is business as usual in Nebraska. Here is what we are good at: sustainable businesses that convince a customer to be the bulk of your capital. So I love that about our state. I love that about the pragmatism that we see here. Our investment thesis and the TSC methodology has been entirely built upon sustainability. Because I can't look an entrepreneur in the eye and say, "Oh, your runway is running out. Let's just find someone else to finance it." I would much prefer to know that those jobs are safe because there is profit coming in on a more repeatable, recurring and predictable way.

Erica Wassinger 50:29

And so, in Nebraska, it's somewhat business as usual. And I love saying that -- this is literally the only category of the economy I feel like I can say about. What I enjoyed is getting a lot more calls from my coastal colleagues that are in venture, saying, What did you say the evaluations were and what is your --what's your due diligence against customer that you do before you make a deal? I think that we're going to see a major reckoning in venture, both on the model itself as well as what's happening at the IPO level and what's happening at the acquisition level. I think the, the database won't sell the same way it used to because it's not as COVID-proof, candidly.

Todd Johnson 51:17

Wow! Our chamber mantra, and we just added it: We Don't Coast. Omaha, We Don't Coast. We, I added "We host" and I couldn't get that, but now apparently We rise, which is also very apropos. These questions are great.

Jim Collison 51:35

We are -- let me just say one more thing. You said the resources are hard to find, and they're not hard to find. Just go to gallup.com/builder. They're all right there. It's not hard to find.

Todd Johnson 51:45

Where do you find the, the previous versions? And be careful on the catch-up calls. I noticed the other day our website -- we got to -- and maybe Scott Wright if you're out there -- the, the, the Builder Talent Tuesday is from like 2 years ago. So we have to have somehow refresh because we used to do Jim and I -- and only Jim and I would do quarterly updates. Well, if you go to the first quarterly update, it's going to be wildly different than of course the last one. So some are sequential in nature, the updates especially. But there's good stuff out there.

Jim Collison 52:17

You and I changed the way we were going to do Builder Talent Tuesday at the beginning of the year. And so, yeah, that's a good, that's a good reminder. I need to go in and fix that for you guys as well. Todd, any, any final thoughts, final comments? And thank Erica for her time here.

Todd Johnson 52:29

I apologize for getting wound up about this. But I really think that now more than ever -- I know that's so overused, but it's so applicable -- helping companies rebuild, not only start but rebuild, you know, take this downtime and make it, take advantage of it. Yeah, there's great Netflix and I've got some recommendations, but, but there's a really important time in our economy to, you know, if you've had somebody in the wrong lane for a while and you've everybody's kind of known it, you know, fix it now. And because resiliency is going to require you to gather up your strengths and and lean in hard on the customer, God.

Todd Johnson 53:11

I mean, some of our largest customers are in hospitality and airline. I couldn't be more proud of Gallup because we're leaning in as hard as we can on them because they need you now. And by the way, a customer is always going to remember how they were treated during bad times than good. So I appreciate the coaches like crazy. Jim, I appreciate you taking the time out on your birthday. I know there's a cake and a whole bunch of people ready to sing for you outside your studio. Erica, you're awesome. Everybody knows that she's absolutely a critical practitioner evangelist and just a really good friend to Gallup. So thanks for taking your time and your expertise. She's leaned in on other folks around the country who are working on figuring out the success that we've had here, and I know you don't get paid for it. But do know that you get appreciated for it. So you're awesome. Thanks, buddy.

Erica Wassinger 54:04

Well, and for those coaches that are out there, Mitch and Cameron and our team at, at The Startup Collaborative, we're going to be revealing a Seven Days to Startup exercise in the next month or so. And it's really those 7 days that it takes you to do sort of your personal evaluation. What, what am I great at? What do I know well? And do I have what it takes or what I want it to take to start up right now? And so, stay close to Mitch and Cameron in thestartupcollaborative.com if you would like to join that 7-day --

Todd Johnson 54:35

Can I push that out for our global coaches? Is that the kind of thing I could push out to the global coaches?

Erica Wassinger 54:39

Please do!

Todd Johnson 54:40

OK, got, I will guarantee hundreds will sign up.

Jim Collison 54:43

Erica, if folks wanted to get in contact with you, what's the best way to do that?

Erica Wassinger 54:47

Go ahead and reach me via email. I'm at E-R-I-C-A erica@startupcollaborative.co, and I'm pretty active on Twitter. You can see lovely pictures of my children on there too. @ericars.

Jim Collison 54:59

All right, sounds good. With that, a couple reminders before we go (you guys stay, you guys hang tight for one second). A couple reminders before we go. That "so difficult" website: gallup.com/builder, if you want to check out all the resources. And we'll get the videos fixed. I get you, Todd. I get you on that one. We'll get those videos fixed. If you have any questions, you can send us an email: coaching@gallup.com. We've got, if you're listening live, we've got just 6 days till our Gallup at Work Summit, and we'd love to have you join us. If you're listening to the recorded version, 2020's probably -- we had a great time and you missed us. Hopefully you were there and it was a good time. 2021 is already in plan but head out to gallupatwork.com. If you are interested in joining us, you could still do it right now. Get signed up. You don't want to miss it. We are setting records on attendance, and we -- this is one if you miss, you'll miss the opportunity. So you were at the first-ever virtual Clifton -- or, or, Gallup at Work Summit. And so we want you to be there as well: gallupatwork.com. If you want to join us in the Facebook group: facebook.com/groups/calledtocoach. On LinkedIn, just head out to "CliftonStrengths Trained Coaches" and we appreciate that. Erica, Todd, thanks for coming out today to be a part of this. We do plenty of these, and if you want to join us live: gallup.eventbrite.com. With that, we'll say, Goodbye, everybody.

Erica Wassinger's Top 4 Builder talents are Profitability, Confidence, Selling and Independence.

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