Unleashing Entrepreneurial Potential with Dave Hirsch
Episode 1
In this episode, Dafne Canales hosts Dave Hirsch, founder of Metamorph Partners and author of Reignition. Together, they delve into the complexities of entrepreneurship, touching on both mindset and structural challenges entrepreneurs face. Here’s a breakdown of the insights shared:
Lessons from Experience
Dave's entrepreneurial journey began with founding and growing a company, taking it from bootstrapping through venture capital to a public listing. Through personal experiences with failure and success, he uncovered systemic flaws in the startup ecosystem and the psychological patterns that frequently hold entrepreneurs back. His book, Reignition, addresses these issues, offering readers a roadmap to avoid common pitfalls and create lasting success.
Key Entrepreneurial Lessons
Dave reflects on three core misconceptions he had as an entrepreneur, which he dispels in his book:
Funding Equals Success: Many entrepreneurs assume that raising capital guarantees success. Dave argues that a strong foundation matters more than just the funds.
Scale Fast and Broad: The belief that large markets are the only way to achieve success can often lead entrepreneurs astray.
Following the Playbook: Entrepreneurs frequently feel pressure to emulate widely accepted methods, but success often requires adapting to one’s strengths and market position.
Dave emphasizes the importance of a growth mindset, finding that true business success hinges on understanding one’s own psychological blocks and insecurities. Only by addressing these internal factors can entrepreneurs make better decisions for long-term success.
Digging Deeper: The Power of Intuition in Business
Dave describes intuition as a critical component of effective leadership, likening it to the "flow state" in sports. He notes that when leaders tap into their intuition, decision-making feels natural and clear, unhindered by external pressures or insecurities. By fostering an intuitive approach, entrepreneurs can make strategic choices that align with their strengths and values, instead of being swayed by fleeting trends or competitive pressures.
Niche Markets: The Secret to Early Success
Discussing market strategy, Dave highlights the value of focusing on niche markets before expanding. By honing skills and establishing credibility within a smaller market, companies can grow sustainably and prepare for broader opportunities. He uses the Beatles as an analogy, illustrating how years of practice in Hamburg made them exceptional. In the same way, companies benefit from mastery in a focused area before taking on larger competitors.
Workshop Sneak Peek: Unlocking the Entrepreneurial Mindset
Dave will be leading a workshop for the Entrepreneurs’ Organization (EO), where he plans to help entrepreneurs identify and address the subconscious beliefs that may be holding their companies back. This hands-on workshop will explore cognitive behavioral techniques to reshape limiting beliefs and provide actionable strategies for getting unstuck. Participants will walk away with tools to continuously refine their mindsets, making incremental improvements in both their personal and business lives.
Episode Takeaway: Transformation Through Self-Awareness
Dave emphasizes that many entrepreneurs aren't even aware of the deeper mindset issues affecting their decisions. By acknowledging and working through these challenges, they can unlock new potential and set a course for genuine, sustainable growth.
Transcription
00:00
Dafne Canales
Hello everybody and welcome to another episode of our podcast. I have Dave Hirsch here from Metamorph Partners and author of Reignition. Welcome to the show. How intuition helps us better.
00:12
Dave Hersh
Stem cells function in the body and.
00:14
Dafne Canales
Want to build the greatest country cup in the world.
00:18
Dave Hersh
It's really about the genomics.
00:20
Dafne Canales
Tell us a little bit about, you know, what brought you to your cur.
00:27
Dave Hersh
Thanks so much for having me.
00:29
Dafne Canales
Let's start with your book. It's such an interesting book and we're going to be talking about a workshop in a moment. But tell me a little bit about what your book is about. Tell our audience.
00:39
Dave Hersh
So I was an entrepreneur and founded a company, bootstrapped it for a long time, then took venture capital and then even took it public. And after that whole experience and all of the lessons learned from that, I worked in private equity, I worked in venture capital and coached CEOs, helped found companies again. Kind of saw the system from every angle and saw some of the inherent flaws in the system, both structurally in terms of how the financial ecosystem is set up to support startups as well as psychologically and some of the patterns that entrepreneurs will run into consistently that get them stuck. And so I saw a lot of failure. Right? Only 10% of traditional startups are successful as the way that we define success. And in that other 90% were a lot of really promising companies that got in their own way.
01:34
Dave Hersh
And I had experienced that personally. So the book was really a letter to my former self as an entrepreneur about how the system is stacked against me, how the odds are stacked against me and how my own mindset is stacked against me and all of the lessons I've learned about taking companies that feel stuck and transform them into healthy organizations and what that process looks like.
01:59
Dafne Canales
I love that you talk about entrepreneurship and mindset like we, you know those. We've seen so many books on how to grow a company and it doesn't always address, you know, it talks about market, product fit and all that, but it doesn't address the mindset that's so powerful for entrepreneurs to make sure that they harness right their mindset and their skills and all that kind of stuff. So what are three lessons that you might share from your own journey when you were like a mid entrepreneur, not that early stage, but kind of like your business is growing but there was still a block, right? You talk a little bit about that. What are three things that you can share with us?
02:38
Dave Hersh
Well, certainly three of the myths that I believed back then were that success was equated to Raising a lot of money. It was equated to scaling fast, it was equated to pursuing large markets, and it was equated to running the playbook that people talked about in traditional media and among your peers. So there were a lot of myths that I believed that were propagated by the system that turned out to be false, that I tried to dispel in the book and that I saw firsthand. And again, yeah, the other one was how important it is to be in the right mindset. And as I look back on the potential billions in value that could have been created and the value that was created, so much of it came down to understanding my mindset and reconciling with a lot of the fears and insecurities.
03:32
Dave Hersh
And traditionally we talk about how, you know, companies get stuck. You know, they don't have product market fit, they don't have enough money, they face too much competition, they run into legal battles. What I did was dig under the hood of those and go, why did you make the decisions you did? And what was the psychology that was in support of those decisions? And that to me was much more fertile territory. And what I've realized through the years is that reconciling with your own blind spots and putting yourself in the best position you can to be that leader that the company needs has a much bigger impact on the long term trajectory of the company than anything else we can do.
04:13
Dafne Canales
That's so incredible. You know, I work a lot in the longevity industry and I'm seeing so many similarities with our health, you know, with what you said. So for example, if we're sick, we have to put, you know, an emergency bandaid on it, we have to have surgery and you know, it's a big problem. But if we find things before they even happen, before we even have symptoms and we're dealing with the root cause, then the problems are much less like grand. And so I hear you say that as well. If you deal with the root cause of like why you're getting sued, like you said, what decisions you're making from the beginning from like the mindset of the owner, the entrepreneur, the leader, you're going to have way less issues in the end, way less stuffs to get unstuck. Right.
04:57
Dafne Canales
So can you give us some examples of, you know, an example of, you know, something that we could have changed as an entrepreneur that led to this different outcome or what have you seen in the work that you've done?
05:08
Dave Hersh
Well, certainly in my own life, even, you know, my biggest success that people point to which became a public company. I can go back and look at the trajectory. There was another company called Atlassian, who is now a $50 billion company that was doing the exact same thing were. And were kind of neck and they were friends of ours and were doing the same thing. And I could point to a juncture where my insecurities got the best of me and I decided to pivot the company and go up market into the enterprise. And ultimately that decision was based on fears and insecurities and wanting to do the playbook and doing a thing I thought I was supposed to do to get success instead of working from my own intuition.
05:47
Dave Hersh
So you can actually see that juncture when my company went off and ultimately kind of died a slow death on the public markets because we had made that pivot and because it was based on insecurity. If I had been in a much stronger position as a leader and following my own intuition, I could have built at least a 15 to 20 billion dollars company that was based on what we did really well, what our sweet spot was, what our core, our special sauce was, and brought that to the world on a larger scale. I think most entrepreneurs have some version of this where we have these patterns that have been in place for a long time that are insidious and are subconsciously playing out in our decisions.
06:28
Dave Hersh
And unless we understand those patterns and have mechanisms and a toolbox to redirect them and to put ourselves in a better position to make those decisions, we're going to keep getting stuck in the eddy instead of flowing down the river that we should be flowing down.
06:42
Dafne Canales
Right. And you talk about intuition and from a business perspective, sometimes we're using our intuition as leaders, but maybe not intentionally. Can you talk a little bit more about how intuition helps us better leaders? How, you know, how do we tap into our intuition? It's. It always feels like such a word or like, you know, this. This thing that not everybody can grasp.
07:06
Dave Hersh
Yeah. You know, I related to sports. If anybody who's played sports has that feeling of being in a flow state rhythm. Right. Where you know, we talk about great athletes being out of their mind, being unconscious, you know. Right. They're doing things that are seemingly unbelievable. It is because they have figured out a way to get out of their thinking brain and to operate from a deeper, more intuitive place. There's a very strong similarity with being a leader, which is the CEO and the founder has way more data and narrative cohesion to what's really happening. And therefore they're in this beautiful position to align the path of the company with where it needs to go.
07:50
Dave Hersh
But what gets in the way is this thinking brain, these neuroses telling us we need to, you know, do the thing that we're supposed to do here, or we got to follow the playbook or we got to follow the data. Because then I can, you know, cover my decision with data and say that I did the best I could with what I had. Right? And those thinking patterns really get in the way of unleashing the business and building out something that is really unique, that can form deeper relationships with customers. And when you can work from that intuitive space, decisions really start to make themselves known. They cease to be decisions. So when I work with CEOs, they may be weighing two options. Do I take this funding round or do I sell the company? If you're working from intuition, there is no decision.
08:39
Dave Hersh
You know exactly what to do. Right. It's all in there. Right. And that's the beauty of the human spirit when it's in that place, is that you can see it for what it is. It's kind of like Neo in the matrix when he can see all the numbers for what they were. Right? And when I coach CEOs, what I try to do is get them to that place where they believe in themselves. They have conviction, and they're not always questioning things or trying to hide behind the data, but they're working from that place of intuitive strength and clarity. And so I focus on it a lot with the teams that I work with.
09:13
Dave Hersh
And I certainly know in my career it would have made a huge difference if I were able to tap into that and had support in doing so at an early age.
09:20
Dafne Canales
It's about like shutting out all that noise. So you've got your employees telling you something. You've got your customers telling you something. You might have investors, they're giving advice, coaches giving advice. In eo, we have forum, which is not giving advice, which is super helpful because it cuts down the clutter. We can only do experience share. And so we're coached to make our own decisions by the stories that other people tell us. And I think that is so important is how do you center yourself to make that right decision? You talked earlier about going into bigger markets instead of niching, and that's always a problem for entrepreneurship. Do I go to this bigger? For example, enterprise takes so long to close. Can we survive that long to close the sale? Because. And we're looking for, like, this is.
10:11
Dafne Canales
It's going to be such a big Sale versus going, you know, a smaller route or niching. You have quite a bit of experience with that. You talk about that in the book as well. What can you share with us about the niche market and making those decisions?
10:26
Dave Hersh
It is incredibly important for a company to get reps and to feel successful and to establish themselves on the overall market in the right way. And that's why beachhead markets, these niche markets are really important, right. Kind of the equivalent of the Beatles playing Hamburg, Germany for years and years to hone their skills, right. And then by the time they actually burst out in the seam, they were amazing because they had so many reps. Right. And I think the same is true for a lot of these companies where in order to raise money, in order to be a big company, they have to go after a big market. But when they actually get to that stage, they can't compete.
11:05
Dave Hersh
And it's very hard for them to get any traction if they just picked out one small part of that market where they can be the best in the world. What they start to do is develop a core, they get a sense of their soul as a business, what they're great at, because they can succeed on that smaller stage. And so if they could be patient and thoughtful and take time and be very successful within that niche market, what it's going to allow them to do is start to visualize and see and feel the pull of adjacent markets. And then they start to expand based on a position of strength rather than trying to jump into a big blood filled ocean of competitors who are probably more well financed than they are.
11:45
Dafne Canales
Right? And it goes back to your sport analogy. If you're working on the fundamentals, you know, over and over again, you're going to be amazing. Your foundation is going to be amazing. Right. Instead of trying like the hot new move, right. You know, and trying to compete with somebody who's got like, you know, all the coaching and all the tools and everything. When you're restarting guerrilla style or bootstrapping your company with less funding, you're teaching a workshop at Entrepreneur Organization, Francisco. It's an in person workshop and tell us a little bit about what entrepreneurs can expect there.
12:23
Dave Hersh
So I got into the world of first consulting and then acquiring stuck companies, and in that process got to meet with hundreds upon hundreds of companies that had gotten stuck. And those were venture backed, they were bootstrapped, they were spin outs, they were all manner of companies and all manner of industries. And I got to see a similar pattern for how and why companies get stuck and Again, what I found to be the most impactful lens into that was the psychology of the founders and the CEO and how it was guiding decision making. And so these patterns they would get stuck in and how ultimately the company would get to a position where it couldn't get out of its current position. So much of that was based on the underlying beliefs and mindset of the founders and the executives.
13:16
Dave Hersh
And so what I want to do in the presentation is show people what this really looks like and offer some stories of companies that have gone through a transformation so you can see how important it is to have that mindset and how much you can unleash the potential of this company and get it flowing on the river towards its destiny if you can get out of your own way. And then in the workshop, what I want to do is actually work with people to understand where do they feel stuck right now, and what are the limiting beliefs? What are the thoughts that we don't even see happening under the hood that are starting to contribute to that stuckness? And then we'll reframe it. It's a form of cognitive behavioral therapy, a cognitive behavioral approach to reframing our thoughts.
14:04
Dave Hersh
Because when we reframe our thoughts, that changes our emotional state and it changes the actions that we take. And so in this workshop, I want to help people go through a process of reframing a thought and give them the tools so they can do this on their own in the future and see the power of what that means in terms of the collateral effects on the company and how you can dramatically change its trajectory and get out of your own way and be able to do that in the future with yourself and with your team. And so there is so much power to this, and I've seen it firsthand, and I believe deeply in the mission of what I'm doing and the purpose of what I'm doing. I'm not really selling services so much as I just love going out and meeting with entrepreneurs.
14:44
Dave Hersh
And I was an EO member way back when and was in forum when it was Y E O. And when I was Y, I was a part of multiple forums. And I love that context. And I just want to support the entrepreneurs and give them some additional tools for the toolbox to build the company of their dreams and to get out of their way in areas where they currently feel stuck.
15:08
Dafne Canales
And it's not just about your business being stuck, you mentioned before. It's also about, you know, if you're stuck on a project or, you know, something that you're trying to work through. You were giving me an example the other day of somebody from EO who was, you know, stuck with a problem, like a certain problem. And you were able to kind of walk through your system to get them unstuck.
15:31
Dave Hersh
That's right. I think you could talk to a lot of entrepreneurs and they'll tell you, everything's going great. I'm not stuck. And while the business may not be an existential crisis, when you dig, you start realizing what is stuck. And their narrative may belie the truth of what's really going on. And they may be having issues with their founder. They may be up at night worrying about the future of the business. They may have a team that they don't believe is the best team and may be spending too much. You start to figure out where they do feel stuck. And then the coolest part about it is to go into the mindset that is behind that and to keep digging and to keep digging. When you keep digging, you get to a place of aha. Wow.
16:18
Dave Hersh
I had no idea that's what was going on. And that's the moment I want to get to with people. And I think that's what can support an EO audience that is already so good at being vulnerable and understanding how to share and understanding how to get to the meat of the matter. I want to give them a toolkit that I have used to great effect in helping unleash their leadership and unleashing these companies to being the best they can be.
16:44
Dafne Canales
So this workshop is for people who are feeling stuck or who are looking for continuous improvement, because there's always something that you can refine, do better. There's always areas in our business that we can work on and using your methodology to undo that. And as you mentioned before, it's going to be very hands on workshop style and we're going to have a lot of fun at the workshop.
17:09
Dave Hersh
It'll be a lot of fun. We'll make it light, we'll make it easy, we'll make it story driven and we'll give them a lot of stuff that they can take with them, including this worksheet and including a plan of action that they can put into effect right away.
17:22
Dafne Canales
Awesome. Well, thank you for being on the show, Dave. I'm looking forward.
17:25
Dave Hersh
Thanks so much for having me. Yeah, I really appreciate it.