Phil Alexander is his own man when it comes to making a sales pitch.
“It’s about trying to create a story that you can pitch with real conviction,” the serial entrepreneur says. “When I go out and I’m raising money for the business, there are table stakes for components you need to have in a successful business to have the right trajectory. But it’s also explaining why we’re doing this and what is the real story behind it.”
As founder and CEO at ConceptDrop and Nexus A.I., Alexander has built two companies that leverage artificial intelligence to help clients get things done. ConceptDrop is an online marketplace that uses AI to help companies to match their projects with top freelance designers and writers. Nexus A.I., a spinout from ConceptDrop, uses machine learning to allow enterprises to build teams, manage human capital and predict future performance
For both companies, the ability to develop a narrative has played a big part in attracting investors and achieving growth.
“Being a good dealmaker is not just running through numbers and outlining your product,” he says. “It’s telling a powerful story.”
We spoke with Alexander about the role personality can play in making better connections with potential investors.
Don’t wait to sell
ConceptDrop uses artificial intelligence to identify the best freelancers for every enterprise project. We had a company ask if they can buy our code and use it to help them find the right internal employees for projects in 2017. This led us to launch Nexus A.I., a platform that uses A.I. and behavioral science to recommend the optimal teams across all internal company projects. So the idea for Nexus was born out of the technology we had built with ConceptDrop.
The No. 1 thing I’ve seen from companies when it comes to attracting investors is they wait too long to start selling. At Nexus, we closed a deal with a very significant company, more than 125,000 employees, and we started selling to them six months before we even started building the product. The best lessons comes from trying to sell to customers anyway because you’re able to shape the product based on those discussions.
What happens is you have a lot of entrepreneurs who are waiting for this perfect product and then they spend too much time trying to get it perfect. They realize they need money, but they don't have any traction around sales. You need to start selling as soon as possible, even before you have a product.
Shed your ego
There is an advantage to be gained when you come at companies from a certain point of view. Instead of going in and saying, ‘We're the experts in the room,’ it's, ‘We’re the team that's entirely dedicated to solving this problem.’ You're coming at it from the perspective of we're really looking for partners to go on this journey with us and we're going to work with you to build a world-class product. We're going to have an entire team dedicated to solving this problem. We want your insight from day one.
When you approach it more as we're looking for a partner like a true partner as opposed to we’re the experts and here's the product, I think that that approach allows you to begin selling a lot earlier than maybe you would anticipate.
At some point, you really do start to become the thought leader and expert in the space. But all of that is built upon those initial relationships and conversations when you’re still finding your way.
Dealmaking plays an incredibly important role in the health of a region. If you look at our base of investors, whether it's the funds or limited partners in those funds, I think a lot of the liquidity and the reasons that they're investing are because of deals that they have completed in the last couple of years. So it really spills down from much larger PE deals that create opportunities for the partners and those firms to become limited partners, maybe in earlier-stage venture funds. It really does trickle down all the way to the startup.
A key takeaway from my time with Zodius was just having an eye to look for opportunities where they might not normally be seen. Zodius is a private equity fund based in India, but they were looking at businesses in the UK as well as India. That was a quick lesson in how cultural differences can make things look entirely different and bring you a different perspective. You need to be cognizant of where they come from. What are best practices and the ways to move through a deal in that region as opposed to the cookie-cutter way you might do it in Chicago?
The Last Word
One of the issues with entrepreneurship is the picture generally painted is that it’s show up to work in casual outfits, have fun, use your creativity and be innovative. But the real truth is that you have to put your head down and put in the work.
I never liked being tied to one thing. When I went in to sell, I probably knew 5% or less than that of what I needed to know. My approach has always been to not assume someone else is going to do it for you. To not assume you can just bring in a vendor or contractor every single time there's a challenge. Instead, you have to embrace that challenge and take it head on.