The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - Speak Like a CEO With These 7 Simple Rules - Ep. #319

Starting point is 00:00:00 It was 15 years ago, almost to the day, April 27, 2011, I had just opened my very first real business. It was an iPhone repair store in Tuscaloosa, Alabama, and it was right next to a subway. It smelled like fresh bread all day long, and I loved it. But after a few weeks, nobody was coming in the store. The haters were right. I was going to fail. I had signed a personal guarantee on this five-year lease and a newborn son at home, who is now almost 16. And yes, you may have heard the story before, but stick with me for one minute because this is a brand-new friend.

Starting point is 00:00:30 episode. And then I was lying in bed on a Sunday night, staring at the ceiling, and I had a stupid idea. Now, keep in mind, I don't drink. I'd never been to a bar in Tuscaloosa, Alabama in my life. That's where I was living. But I thought, hey, college students go to bars, they get wristbands. What if I put my ad for my iPhone repair store on a wristband? So I pulled out my clunky Dell laptop. I googled custom wristbands. There were two cents each. I ordered a few boxes, and I started distributing them to bars around campus. What would happen? Well, college students would go out, get drunk, break their iPhone, wake up the next morning, hung over with a wristband on the wrist that said phone restore,

Starting point is 00:01:06 and then they would walk into my shop holding a broken phone and a ratty, smelly wristband. It changed everything. My store survived. We opened three more stores, and eventually we sold the business for about a million bucks. And here's the thing that nobody tells you about running a business. On the surface, the wristband was like a marketing gimmick. But that's not what it was. It was communication.

Starting point is 00:01:30 The kid was going to break his phone either way. The question was whether my message was the one that his brain would grab when he woke up the next morning. That is communication. That's the game here. Remember, I've started about 80 businesses in the last 17, 18 years, and I've recorded almost 300 episodes of this podcast. I've watched founders close deals worth tens of millions on this exact microphone. I've watched other business owners fumble in real time. So I want to talk about seven different communication tactics that the best of the best do that

Starting point is 00:02:03 everyone else misses out on. These are backed by real research and they're backed by my own stories of when they worked for me and also a couple stories of when I bombed because I didn't implement these tactics. So if you're a founder, a wannabe founder, entrepreneur, operator, an employee asking for a raise, anything. This episode is for you because the money is found in improving your communication skills. And these principles apply no matter who or what you are. So I'm going to end this with a wild story, but I want to start by going through these seven tactics.

Starting point is 00:02:34 Number one, the hook, the first sentence, that's everything. The first sentence is worth more than everything after it combined. Open your inbox right now and look at all of the cold pitches you get and delete in three seconds. Hi, my name is I'm reaching out because we'd love to hop on a quick call. No, stop. You're just going to delete those. Everyone deletes those. Yet you're also sending those.

Starting point is 00:02:55 And around that same time as my wristband story, I learned the hard way that the CMO, the chief marketing officer of Best Buy, deletes those as well. These people have heard that line 10,000 times, and they're going to tune you out before sentence two. You're sounding like a car alarm in a parking lot. It gets shut out after a while. Now, the cold pitches that I hear or read that stand out, they hit me with something specific to me.

Starting point is 00:03:18 Not AI generated specific. Hey, Chris, I see you went to the University of Alabama and that you currently run it. No, not specific like that. Specific to a tweet that I posted yesterday or an episode that I aired just last week. Honestly, if it's AI generated, it doesn't even matter because it's still relevant to me. This is something that proves the person actually paid attention. A few months ago, I got a cold email that started with this one sentence. Hey, you said on a recent episode that your favorite type of business is one a high schooler could run.

Starting point is 00:03:46 Well, I built one. Here's what it looks like. I read that entire email and I responded within 30 minutes. And he's coming on the show. Now, many, many moons ago, I cold called the chief marketing officer of Best Buy to get my iPhone repair company into their stores. I thought, hey, they have Geek Squad, they're fixed computers. They need to fix phones too.

Starting point is 00:04:04 This is a no-brainer offer. And I also did reverse engineering research, aka Googling, and learned that Geek Squad was a very small business at the time they were purchased. They bought a system and a process. And really, that's all I had at the time. So I thought, okay, I don't need to be huge for them to buy me. But before I made this call, I met with maybe the only men. I've ever had in my life. His name's John Nolan, love the guy. And he asked me about this woman,

Starting point is 00:04:27 the CMO at the time. We pulled up her LinkedIn and he told me a fact about her. He scrolled way down to the bottom of the LinkedIn. That's where the magic is. He saw that she had played women's basketball at Gonzaga. And he said, Chris, that one fact tells you everything you need to know about her personality type. It also tells you how to open the conversation. So that's what I did when I called her. I led with the Gonzaga thing. Before I got to me and my pitch, I led with her because what do people care about themselves? That first sentence is going to do 80% of the legwork. Everything after the first sentence is just confirming what the first sentence already promised. So if the opener is generic, they're going to assume that everything else is generic and they won't even

Starting point is 00:05:05 read it. So tactic number two, admit a flaw fast. I know this one's going to feel wrong instinctually to you. Trust me. There's a thing in social psychology called the Prattfall effect. And that's when you admit a flaw or a weakness and then people somehow, for some reason, trust you more. That polish and sheen that you're always trying to convey to others, you think it makes you look more credible when actually it's having the opposite effect. So here's an example from my own life. When I first opened my first iPhone repair store, I had never fixed an iPhone in my life. People would walk in with a broken iPhone and I would say, okay, cool, cool, yeah, okay, uh-huh. Oh, okay, yeah. Give us a few hours, we'll figure it out. Then I would go in the back, pull up YouTube and learn how to fix their iPhone

Starting point is 00:05:46 with their phone in my hand in real time. Hey, please just take half a second and hit subscribe. on Apple Podcasts or Spotify or wherever you're listening to this right now, it would really mean a lot. Now, maybe I should have been faking confidence that I didn't actually have, but instead I started practicing what happened when I told customers the truth. Yeah, I can figure out how to fix this. It disarmed them. And any concern that they might have had about my credibility or lack thereof was offset by the frankness of it all. They'd laugh, they'd come back, they'd tell their friends, and they became regulars. Believe it or not, there are more regulars in the iPhone repair business than you'd ever believe.

Starting point is 00:06:21 Remember, if I would have been polished, I probably would have lost those customers, but the honest version got them. And I see this on my show every week. I don't know if you heard this episode from about a month ago. Mike Yoder had that drone deer recovery business turned drone agricultural business. He made 50 grand in his first 10 weeks doing agricultural spring. But after we stopped recording, he just mentioned offhand that he grew up Amish. And I'm like, whoa, whoa, whoa, that's the story. Can we turn the camera back on? He said yes. We talked for 20 more minutes about what it was like to leave his community. And that little clip outperformed all the business stuff. And this is a business podcast. We'll link to that episode in the description, by the way.

Starting point is 00:06:58 It's one of my favorites of all time. But it's a disarming story and it shows the person behind the story. And people love that. So when you walk into a pitch, lead with one specific thing that you tried that did not work. Here's what we got wrong in year one. Well, humility? Who leads with humility nowadays? Just watch when you say something like that, how the room will shift towards you. And I say room. It doesn't need to be literal. This could be on Zoom over an email text, whatever. The cleaned up version of yourself sells less, but the honest version sells more. Which I've said this a million times. Honesty is profitable. Doing the right thing is profitable. Being a good human is more profitable in the long run than otherwise. All right, tactic number three,

Starting point is 00:07:36 stories sell. Sell your story. The data confirms this. The episodes of mine that crush on the show are never the ones where a guest reads off their profit and loss statement. It's the ones with one specific moment that a founder can't shake. Also, anytime I reference an old episode in this, we're going to link to it. So just check in the description. I interviewed a woman named Shannon. She has a roadside peach stand business. And she gave me all the numbers, the margins cost, the logistics, et cetera. But the clip that resonated the most was when she talked about pulling up to a gas station in South Carolina at 5 a.m. with her 11-year-old son in the passenger seat and how she learned how to run a peach stand from her mentor. That's the thing that people talk about.

Starting point is 00:08:15 So anytime you're pitching anything, leave the data and the numbers in the deck. But the story should be the thing that you tell yourself. Because investors, customers, vendors, business partners, anyone, they're buying the founder. The numbers are just the receipts. I'm sure you've heard on Shark Tank. People say, well, I bet on the jockey, not the horse. Well, that's true, not just an investing, but in life, in business, and life and anything. It's about people.

Starting point is 00:08:38 It all comes down to people. So if your pitch is 90% slides and 10% story, flip it and watch your close rate skyrocket. Okay, number four, the dumber it sounds, the smarter you look. Let me tell you about a ship. Stockholm, Sweden, in the 1600s, the Vasa was the biggest baddest warship that had ever been built. It had 64 bronze cannons, two rows of 16 on each side. It was the best of the best. Gold paint, wood carvings, the pride of the king, they'd never seen anything like it.

Starting point is 00:09:04 And on its maiden voyage, August 10th, 1628, the Vasa sailed out of the harbor, and it was supposed to do a parade lap so everyone could see how awesome it was. But half a mile out, a minor breeze caught the sails and the ship tipped to one side. Then it tip back, tip further. The portholes for the cannons were open because they wanted to show off. It looked cooler that way. And they filled with water. The ship sank right there in the harbor in front of everyone. 30 people tragically died.

Starting point is 00:09:30 And 330 years later, divers pulled up the ship. And now it's in a museum right next to where it sank originally. And I saw it in person in 2018. And it was amazing. It was the best museum I've ever been to. And I realized that the Vasa sank because the builders were warned that it might be top heavy, but they ignored it because it looked awesome. And they wanted to build something that looked awesome, not something that was necessarily safe.

Starting point is 00:09:53 Ideally, you have both, but they chose for something that looked awesome. They didn't add enough ballast. Now, ballast is what goes in the bottom of the hole to make it more bottom heavy, to weigh it down to keep it more stable. But everything above the waterline is pretty, and that's what they focused on. So the VASA is what a bad pitch looks like. It's what bad communication looks like. beautiful slides, big words, Tam, ARR, blended cack, vertical sass, reoccurring revenue, motion.

Starting point is 00:10:17 It's all pretty above the water line, but hollow below. And the first breeze you get, aka the first real piece of pushback or question you get, the whole thing will tip over. And research at the University of Munich backs this up. They notice that speakers who use simple, clear language, get rated as more smart and more competent than otherwise. Speakers who lean into jargon, big words, trying to sound. smart sound dumb. They get rated lower. And the reason is because of what jargon does to a listener's

Starting point is 00:10:47 brain. It triggers like a quiet alarm that says, I think this guy's hiding something. And I see this on my show every week. You might not see it as much because we edit it out. But oftentimes the founder comes on and I ask what they do and they're like, oh, I have this vertical sass reoccurring revenue yet. And I'm just like, bro, stop. Like, do you even know your business? The best business owners explain it like a sixth grader. What did phone restore? do, we fix broken iPhones. Four words. Do you remember my toasted tours episode? What did Kevin do?

Starting point is 00:11:17 They put windows and shipping containers, put it on a semi-truck and drive people through wine country. Peach stands? I sell peaches on the side of the road. If you can't explain your business in one short sentence, then you don't understand your business well enough yet. It's hard to hear, but it's true. The first sentence of your pitch should be one that your grandmother could repeat to her

Starting point is 00:11:35 friends. Number five, specifics beat adjectives every single time. This is the one that almost nobody teaches, and it's the kick. cleanest tell of an amateur communicator. Listen to this sentence. We saw really strong growth in our first year and we believe we can scale rapidly with the right investment. What? Strong growth? That's so broad. Scale rapidly? How rapidly? What is scale? How much growth does that represent? The right investment? Is that a million, a trillion dollars? Let's deliver the same message with this sentence. We grew from three to 247 customers. Between December and January, we grew from three to 247 customers.

Starting point is 00:12:10 We add 30 new customers a month with no paid marketing. We need $400,000 to hire two engineers so we can double our growth. Basically the same message, but a different universe of meaning. You speak in numbers. You want to communicate with real numbers and proper nouns. That's the whole culture of this podcast is being tactical and specific. And simple and approachable and accessible, et cetera, you know the drill. Name the dollar amount and the time frame, the city, the year, the marketing method you used.

Starting point is 00:12:39 What did Mike Yoder say? The drone business, I made 50 grand in my first 10 weeks. Connor Gross said, I wholesaled one self-storage deal for $360,000 a profit. Shannon said, I opened 100 peach stands my first summer. You heard me talk about the business I bought for $750,000 about five years ago. We made $10 million in 90 days. We didn't raise any money. We didn't use any paid marketing.

Starting point is 00:13:02 That's my story. I could have said, we grew really fast. But that doesn't tell the story. That's not interesting. So strip out every really, very, truly, incredibly out of your pitch altogether and replace each one with a specific number, date, or a name. And your pitch will land twice as hard with half as many words. Number six, you want to talk in chunks. Force the silence. Here's one of my favorite quotes about good writing and I would apply it to good speaking as well. This sentence has five words. Here are five more

Starting point is 00:13:30 words. Five words sentences are fine, but several together become monotonous. Listen to what is happening. is getting boring. The sound of it drones. It's like a stuck record. The ear demands some variety. Now listen. I vary the sentence length and I create music. Music. The writing sings. It has a pleasant rhythm, a lilt, a harmony. I use short sentences and I use sentences of medium length. And sometimes when I am certain the reader is rested. I will engage him with a sentence of considerable length, a sentence that burns with energy and builds with all the impetus of a crescendo, the roll of the drums, the crash of the symbols, sounds that say, listen to this. It is important. Good thinking is good writing, is good speaking, is good communicating. Okay, mix up your words, mix up your sentences,

Starting point is 00:14:18 mix up your sentence lengths. The best communicators talk in short bursts, but the ramblers, and there's a lot of ramblers out there, it just sags. It just loses interest, even if the story itself is awesome. Now, when people get nervous, the default move is just to keep talking. You want to fill the air. You want to keep the room warm so you just keep rambling. You add caveats. You hedge. But don't. Try not to. Have some self-awareness about that. If you watch a CEO talk at the top of their game, think of Steve Jobs presenting the new iPhone. They land a sentence and they stop. Pause. But they also know when to not stop, when to keep going, when to power through, speed up or when to slow down. And of course, in any negotiation, the person doing most of the talking is

Starting point is 00:15:00 usually the one losing the negotiation. I learned this the hard way. It was October. 21st, 2021, I was sitting in Texas Children's Hospital next to my daughter who was waiting on a lung transplant and our biggest customer was 90% of our revenue. He was an absolute nightmare, wielding his revenue over me like a club. And that afternoon, I sat in the hospital and wrote him an email. Short paragraphs, no softeners. And this was the closing line. Your continued involvement in this working relationship is a greater liability to our business than the current threats you are making. It removed all power from him. One sentence, put your strongest line at the end. Put your your strongest two lines, no matter what you're communicating, if you only want them to remember two

Starting point is 00:15:39 sentences, you want to put one at the beginning and one at the end. What happened in this case? He kept talking, kept threatening. Eventually, his own team had to step in around him because he was a liability. We never worked with him again. And it was the right call. It was the only call. So if someone's steamrolling you, getting louder will lose you the battle. Going longer will lose you the battle. So go shorter. There's a quote I read. I can't remember who said it, but it was, I have made this letter long. longer than usual because I have not had the time to make it shorter. It's a lot of work to be succinct. It takes practice, but it's worth working at. Guys, tkowners.com. That's my community where people are building businesses. I do

Starting point is 00:16:16 AMAs, Q&As every week live. You can ask me anything you want. You can have accountability partners. It's about a thousand people in there building, starting growing businesses. Check out TKO as in the corner office. TKowners.com. Number seven, end with a recommendation in all of your communications. Don't end with a question. People will follow a specific recommendation about 60% more often than responding to just an open-ended question. Because the open-ended question requires them to think, exercise their brain. That's friction. How many of your outgoing emails end with something like, let me know what you think. Open to your thoughts. Would love to hear your reaction. I do that sometimes. I'm guilty

Starting point is 00:16:54 of a lot of this stuff. But when you end with something like that, then it's a signal to the other person that you don't fully believe in the thing that you're sending. So end it with a recommendation, something like, Here's what I recommend we do next. We get on a 20-minute call next Thursday at 2 p.m. And I'll walk you through implementation. I'll send the calendar invite later tonight. Very specific. A recommendation.

Starting point is 00:17:15 Just one thing. Real time on a real day. This is what leadership and communication looks and sounds like. And people follow leaders. They don't follow people that stall and seem unsure about what should happen next. Test this in your outreach. 50% of your emails end with something like, let me know what you think,

Starting point is 00:17:30 aka set aside part of your day to think about this and then respond to me, not going to happen. And then in the other 50%, end with a recommendation. Your response rate will go way up. And yes, all of these principles work in person as well. End the meeting with, here's what we're going to do next in a specific date

Starting point is 00:17:48 and watch just how quickly things move. It's funny how a lot of these principles make sense in retrospect. And I look back on my life and I can recognize times where I did them well in times where I didn't. And usually it was just by accident and I'm only able to connect the dots in retrospect. So by no means do I want you to think that like I'm this master communicator? Because I'm neglecting to tell you about all the times where we're really screwed this up. But one of my favorite stories, my best stories of all time is when I pitched to John McAfee, the accused

Starting point is 00:18:16 murderer, founder of McAfee's security. At the time I pitched to him, he was hiding out somewhere in Tennessee. But I guessed his email address. And I wanted to pitch him on this software that I was trying to build. And he responded. He said, come pitch me in person on your business. And the business idea, really, it was just an idea, was this piece of software or algorithm or Google sheet, really, that could help predict cryptocurrency price movements. But he was so paranoid about his security that he would only give me his actual address the morning of the meeting. So it was like a late February in 2018, I think, drove to his house. I pitched him in front of an Australian film crew that happened to be there anyway to film like an Australian version of 60 minutes about

Starting point is 00:18:58 him and he agreed to partner with me for 25% of that business and to promote me. And we ended up building a community of over 70,000 people. We launched a free air drop token that hit like $30 million in market cap in a matter of months. And then, you know, the crypto market crashed and everything died. And, you know, that was a year and a half, two years of my life wasted. Not really, but it was a great learning experience. And for those months that I ran that business with John McAfee, he was tweeting about me twice a week. I actually tell the full version of the story on episode nine of this show, if you scroll way back about two years to spring of 2024, March of 2024. We link that as well. But I'm telling you this story again, because the entire

Starting point is 00:19:40 reason that pitch landed was all because of the first sentence that I said to him when I first sat down with him. I led with a question about something specific he had posted online, specifically him. A, I told him I did my research. This was pre-AI. B, I threw in a compliment. And we love compliments. So his brain stopped for just a moment. And this was the same move that I used on the CMO of Best Buy about, you know, Gonzaga. And this is the same move that I'm teaching you here today. So before you go, remember this one thing. From all these businesses that have started, some hit, most failed and or were abandoned. But the ones that hit and the ones that failed had the same thing in common. They either lived or died on communication, how you communicate with your customers,

Starting point is 00:20:21 your employees, your vendors, your investors, etc. The founders I interview on the show, that are crushing it are not any smarter, they're just better at communication. They've done more reps with these seven things that I just taught you. That's the difference. So, I got to eat my own dog food, right? I got to end this with a recommendation. My recommendation to you is to pick one move of these seven. Let me know what you think out of your outbox. That's one example. Pick that or any of the other six. And let me know how it goes in the comments. And we'll see you next time on the Kerner office.

The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - Speak Like a CEO With These 7 Simple Rules - Ep. #319

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