March 12, 2025 • 8 mins
Why do startups succeed? Gregory Shepard, CEO at StartUp.Science.io, nurturing Technology Startups from seed to Series A and Author of "The Startup Lifecycle" shares his view. Find the book on Amazon or https://gregoryshepard.com https://www.linkedin.com/in/gregshepard
Find other Café & Networking Business Expert interviews.
Find other Café & Networking Business Expert interviews.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Time tom ri are promoting successful business experts connecting people
throughout the world. From my podcast Studio in Brazil. Joining
us today from San Diego, California. Gregory Shepard, CEO at
Startupscience dot io, nurturing technology startups from seed to Series
A and also author of The Startup life Cycle. So, Gregory,
(00:28):
a lot of talk about failure, but why do startups succeed?
Speaker 2 (00:34):
Startup succeed primarily because of the opposite of the same
reasons why they fail. So overvaluation is one of them,
so instead of coming in with a super high valuation,
they come in with a low valuation and make it
up over the long tail. That's one of the things.
Another reason is because they will go out and hire
a management team that are executives, and those executives hire
(00:56):
other people and that increases cost. Another one is standardization.
So this is a big reason companies buy other companies
because they want a synergy and there's two types, either
a synergy to make or save money. And this is
the biggest reason why they fail is that they don't
(01:16):
start out with the end in mind. So if you
think about it, you would never build a product without
having a customer and if your whole company is essentially
a product to your acquirer, why would you build a
company without having an acquirer, just like from the beginning,
just like you would have a product customer match from
the very beginning. So this is like one of the
(01:37):
primary things they get out to the end and then
they try to find a buyer at the last minute.
Speaker 1 (01:42):
But you say overvalued. But the key here is how
do you value? How do you create value?
Speaker 2 (01:49):
Yeah, I mean typically there are some in startup science,
we have classes that actually say companies that are between
this stage and this stage are typically valued between this
much and this much, right. But the big mistake that
a lot of founders make is they will sit there
and say I raised a million dollars and my company
was worth a million. So now my post money after
(02:10):
money valuation is two million. But the investors are looking
for ten x that, right, So now you have to
sell it for twelve million, not two million, right, So
they think they don't understand the return concept. So the
next investor down the line looks at the valuation says, oh,
now he raised another million, so now there's three million,
(02:32):
So it's a four million dollar post money right after
the investment. But now that guy also wants to make
ten x right, so quickly you can see how you
can get to a point where it doesn't appear as
if it's overvalued. And a lot of founders don't know
why they can't raise money, but the truth is because
there's no room for the arbitrage. You know, there's no
(02:54):
room for the profit in between.
Speaker 1 (02:56):
I saw that's really the step towards growth actually becomes
more complicated from just a question of having more people
on board to do more things.
Speaker 2 (03:05):
Yeah, I mean, ultimately, you know, you should do as
much as you can with as little money as possible
and wait as long as you can be you take
on money. Most of the startups that fail the biggest,
the number one reason is because of bad decisions. And
bad decisions came from bad advice. Right, So I'd like
to just you have to be really careful who you
(03:26):
actually take advice from and make sure that.
Speaker 1 (03:29):
That's that's a life and anything. Right.
Speaker 2 (03:32):
Yeah, but this is I'm talking about specific areas, right, Right,
If you're getting advice from valuation, you want somebody that
understands this thoroughly. If you're getting advice on your go
to market, strategy. You want to make sure you're talking
to somebody that understands that, right. So it's not general advice,
it's very specific niche advice.
Speaker 1 (03:50):
And really it's a step by step where you are
in your process.
Speaker 2 (03:54):
Yeah, there's seven stages in the startup life cycle based
on my five year research on found their failure and success.
And each one of those stages comes with the things
that you need to have or need to understand in
that stage. It's all in the Startup life Cycle book.
Speaker 1 (04:11):
Well, two things I can see what you're saying, and success.
It's not necessarily just getting the money, but I also see,
looking from your experience, what you call achieve optimal exit.
Speaker 2 (04:23):
Yeah, and optimal exit means that all the parties involved
made what they expect to get, including the founder, which
is again why you need to start with the end
in mind. You need to start when you start your business,
you need to know these are my acquirers, these are
their customers. To make sure that your customers and their
(04:43):
customers match. This is how much they're accustomed to paying
for companies. You don't overvalue your company, right, Otherwise you
get to the road and you're like, I want a
hundred million, but all your acquires has never bought anything
for twenty five million, So what you're it's not realistic.
But that's some you need to know in the beginning,
not something you want to know right at the end
when you're sitting there at the home stretch and.
Speaker 1 (05:05):
Then there's no exit.
Speaker 2 (05:06):
That's failure, right one hundred percent, Or you do what
people do oftentimes, which is they cover up a failure
by going IPO.
Speaker 1 (05:20):
And then that's another whole book, right, yeah, that's a
whole other thing. But Sarah, is what we want is
the people for people to find the book to start
up life cycle, understand from you what you've written about
how to make it a success.
Speaker 2 (05:35):
Yeah. I mean the book took me four years, and
that was after five years of research. It's really packed
with real information. It's very pragmatic, you know, it's not
one of these books like you read a lot of
these books where you walk away and there's no action items.
You're just sitting there going that was fascinating and really
good information.
Speaker 1 (05:56):
But what do I do with it today? Right?
Speaker 2 (05:58):
Yeah, yeah, exactly. But I wrote this so that there
are things that you can actually do, Like you'll read
it chapter and go I can do this right now, right,
and it's broken out by each stage of the life cycle,
so you can find your place in the life cycle,
which it helps you do, and then it gives you
the actual action items, and.
Speaker 1 (06:17):
The action items you know you have to take action.
It's not something you just sit around and watch.
Speaker 2 (06:23):
Yeah, I mean execution is key, right. If you can't
actually make it happen through execution, then you will fail
one hundred percent.
Speaker 1 (06:32):
Well, so from the investor standpoint, they want to see
how you act. They want to see movement.
Speaker 2 (06:37):
They yeah, they want to see movement, and they want
to see not just movement but progress. Whether they're really
after most of the time is they want to see
predictable evidence that you're going to be success successful over time,
and they want to see probability. So they want to
know how probable is the success, how probable is the exit,
(06:57):
and then how predictable is the business. So probability and
predictability and those are.
Speaker 1 (07:03):
The sake, not secrets, but that's what you're sharing.
Speaker 2 (07:06):
Yeah, I mean that's the part of the big key
when you're talking to investors, right, and investor puts in
money for a payoff, right, right. So the things that
are in their mind that they won't tell you is
when they want to know when am I going to
get my money back?
Speaker 1 (07:20):
Right?
Speaker 2 (07:21):
And they want to know how much I'm going to
get back? Those are the two things. And now you
combine those two questions with probability. Probability, I I'm going
to get my money back on this date, and I'm
going to get this much money back, and predictability, which
means to your point, that it's being executed and moving
forward so it becomes more predictable.
Speaker 1 (07:41):
Well, it's a show and tell and do.
Speaker 2 (07:44):
One percent. Yeah, very very well said.
Speaker 1 (07:47):
Very good. Well, Gregory, how can our listeners find you
and find the book?
Speaker 2 (07:52):
They can find the book in all the bookstores or Amazon.
It's called The Startup life Cycle, The Definitive Guide From
Idea to Exit by Gregory Shepherd. My website also has
the book and all my socials and everything about me.
It's Gregory Shephard dot com, so g R E G
O R Y s H E P A r D
(08:15):
dot com.
Speaker 1 (08:16):
Very good, well, thanks for sharing in success. Thank you
and for our listeners. Again, you can find more information.
It's Gregory Shepherd. Find them on LinkedIn and Gregory Shepherd
dot com where you can find the book Start the
Startup life Cycle. Cafe networkings brought to us by Focus
SMI market Intelligence and agricultural market research specialist in Brazil.
(08:38):
More information at f O c U s m I
dot com. Talk to Tom, Talk to the world, Thanks
for listening. Till the next time here at cuf fit
and Networking podcast
Time tom ri are promoting successful business experts connecting people
throughout the world. From my podcast Studio in Brazil. Joining
us today from San Diego, California. Gregory Shepard, CEO at
Startupscience dot io, nurturing technology startups from seed to Series
A and also author of The Startup life Cycle. So, Gregory,
(00:28):
a lot of talk about failure, but why do startups succeed?
Speaker 2 (00:34):
Startup succeed primarily because of the opposite of the same
reasons why they fail. So overvaluation is one of them,
so instead of coming in with a super high valuation,
they come in with a low valuation and make it
up over the long tail. That's one of the things.
Another reason is because they will go out and hire
a management team that are executives, and those executives hire
(00:56):
other people and that increases cost. Another one is standardization.
So this is a big reason companies buy other companies
because they want a synergy and there's two types, either
a synergy to make or save money. And this is
the biggest reason why they fail is that they don't
(01:16):
start out with the end in mind. So if you
think about it, you would never build a product without
having a customer and if your whole company is essentially
a product to your acquirer, why would you build a
company without having an acquirer, just like from the beginning,
just like you would have a product customer match from
the very beginning. So this is like one of the
(01:37):
primary things they get out to the end and then
they try to find a buyer at the last minute.
Speaker 1 (01:42):
But you say overvalued. But the key here is how
do you value? How do you create value?
Speaker 2 (01:49):
Yeah, I mean typically there are some in startup science,
we have classes that actually say companies that are between
this stage and this stage are typically valued between this
much and this much, right. But the big mistake that
a lot of founders make is they will sit there
and say I raised a million dollars and my company
was worth a million. So now my post money after
(02:10):
money valuation is two million. But the investors are looking
for ten x that, right, So now you have to
sell it for twelve million, not two million, right, So
they think they don't understand the return concept. So the
next investor down the line looks at the valuation says, oh,
now he raised another million, so now there's three million,
(02:32):
So it's a four million dollar post money right after
the investment. But now that guy also wants to make
ten x right, so quickly you can see how you
can get to a point where it doesn't appear as
if it's overvalued. And a lot of founders don't know
why they can't raise money, but the truth is because
there's no room for the arbitrage. You know, there's no
(02:54):
room for the profit in between.
Speaker 1 (02:56):
I saw that's really the step towards growth actually becomes
more complicated from just a question of having more people
on board to do more things.
Speaker 2 (03:05):
Yeah, I mean, ultimately, you know, you should do as
much as you can with as little money as possible
and wait as long as you can be you take
on money. Most of the startups that fail the biggest,
the number one reason is because of bad decisions. And
bad decisions came from bad advice. Right, So I'd like
to just you have to be really careful who you
(03:26):
actually take advice from and make sure that.
Speaker 1 (03:29):
That's that's a life and anything. Right.
Speaker 2 (03:32):
Yeah, but this is I'm talking about specific areas, right, Right,
If you're getting advice from valuation, you want somebody that
understands this thoroughly. If you're getting advice on your go
to market, strategy. You want to make sure you're talking
to somebody that understands that, right. So it's not general advice,
it's very specific niche advice.
Speaker 1 (03:50):
And really it's a step by step where you are
in your process.
Speaker 2 (03:54):
Yeah, there's seven stages in the startup life cycle based
on my five year research on found their failure and success.
And each one of those stages comes with the things
that you need to have or need to understand in
that stage. It's all in the Startup life Cycle book.
Speaker 1 (04:11):
Well, two things I can see what you're saying, and success.
It's not necessarily just getting the money, but I also see,
looking from your experience, what you call achieve optimal exit.
Speaker 2 (04:23):
Yeah, and optimal exit means that all the parties involved
made what they expect to get, including the founder, which
is again why you need to start with the end
in mind. You need to start when you start your business,
you need to know these are my acquirers, these are
their customers. To make sure that your customers and their
(04:43):
customers match. This is how much they're accustomed to paying
for companies. You don't overvalue your company, right, Otherwise you
get to the road and you're like, I want a
hundred million, but all your acquires has never bought anything
for twenty five million, So what you're it's not realistic.
But that's some you need to know in the beginning,
not something you want to know right at the end
when you're sitting there at the home stretch and.
Speaker 1 (05:05):
Then there's no exit.
Speaker 2 (05:06):
That's failure, right one hundred percent, Or you do what
people do oftentimes, which is they cover up a failure
by going IPO.
Speaker 1 (05:20):
And then that's another whole book, right, yeah, that's a
whole other thing. But Sarah, is what we want is
the people for people to find the book to start
up life cycle, understand from you what you've written about
how to make it a success.
Speaker 2 (05:35):
Yeah. I mean the book took me four years, and
that was after five years of research. It's really packed
with real information. It's very pragmatic, you know, it's not
one of these books like you read a lot of
these books where you walk away and there's no action items.
You're just sitting there going that was fascinating and really
good information.
Speaker 1 (05:56):
But what do I do with it today? Right?
Speaker 2 (05:58):
Yeah, yeah, exactly. But I wrote this so that there
are things that you can actually do, Like you'll read
it chapter and go I can do this right now, right,
and it's broken out by each stage of the life cycle,
so you can find your place in the life cycle,
which it helps you do, and then it gives you
the actual action items, and.
Speaker 1 (06:17):
The action items you know you have to take action.
It's not something you just sit around and watch.
Speaker 2 (06:23):
Yeah, I mean execution is key, right. If you can't
actually make it happen through execution, then you will fail
one hundred percent.
Speaker 1 (06:32):
Well, so from the investor standpoint, they want to see
how you act. They want to see movement.
Speaker 2 (06:37):
They yeah, they want to see movement, and they want
to see not just movement but progress. Whether they're really
after most of the time is they want to see
predictable evidence that you're going to be success successful over time,
and they want to see probability. So they want to
know how probable is the success, how probable is the exit,
(06:57):
and then how predictable is the business. So probability and
predictability and those are.
Speaker 1 (07:03):
The sake, not secrets, but that's what you're sharing.
Speaker 2 (07:06):
Yeah, I mean that's the part of the big key
when you're talking to investors, right, and investor puts in
money for a payoff, right, right. So the things that
are in their mind that they won't tell you is
when they want to know when am I going to
get my money back?
Speaker 1 (07:20):
Right?
Speaker 2 (07:21):
And they want to know how much I'm going to
get back? Those are the two things. And now you
combine those two questions with probability. Probability, I I'm going
to get my money back on this date, and I'm
going to get this much money back, and predictability, which
means to your point, that it's being executed and moving
forward so it becomes more predictable.
Speaker 1 (07:41):
Well, it's a show and tell and do.
Speaker 2 (07:44):
One percent. Yeah, very very well said.
Speaker 1 (07:47):
Very good. Well, Gregory, how can our listeners find you
and find the book?
Speaker 2 (07:52):
They can find the book in all the bookstores or Amazon.
It's called The Startup life Cycle, The Definitive Guide From
Idea to Exit by Gregory Shepherd. My website also has
the book and all my socials and everything about me.
It's Gregory Shephard dot com, so g R E G
O R Y s H E P A r D
(08:15):
dot com.
Speaker 1 (08:16):
Very good, well, thanks for sharing in success. Thank you
and for our listeners. Again, you can find more information.
It's Gregory Shepherd. Find them on LinkedIn and Gregory Shepherd
dot com where you can find the book Start the
Startup life Cycle. Cafe networkings brought to us by Focus
SMI market Intelligence and agricultural market research specialist in Brazil.
(08:38):
More information at f O c U s m I
dot com. Talk to Tom, Talk to the world, Thanks
for listening. Till the next time here at cuf fit
and Networking podcast
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.