“What struck me about Bootcamp is that it was all designed to answer investor questions before they were asked, basically to psych-out the investors. No one else is doing this.” said Patrick McDonald. Here’s the full story:
The other day I had the opportunity to speak with Patrick McDonald, Founder, and CEO of Oshen, a company that helps businesses migrate their worn-out email marketing campaigns to text. Patrick is currently completing the Entrepreneur’$ Bootcamp. Like a few other uber-talented Millennials (he is 26), Patrick seeded Oshen with money he earned in a very creative way: winning a six-figure contract to provide web services to the University of Massachusetts.
Now that was quite a feat for a 20-year-old, but what makes it even more interesting is this: Patrick had just dropped out of U-Mass to pursue his business career full-time. Imagine having the gumption to approach the school you’d just left with a six-figure contract proposal to deliver website development services to them.
How did you win the contract?
“It was an open bid process, so we were aware of the high and low bids and the players we were competing with. We came in around the middle, but they were still unsure. I remember someone asking ‘why should we trust a twenty-year-old with a contract of this size?’
How did you respond?
“I said a twenty-something is exactly the right person to design a web experience for other twenty-somethings. We understand how they think, what they want, how to make a compelling site that students will actually use. We got the contract.”
That really piqued my curiosity, because what Patrick was saying, without saying it, was that he’d overcome the trust barrier with U-Mass.
So, how did Patrick do it?
He used his perceived weaknesses — youth and inexperience — as a strength, something we stress all entrepreneurs must learn to do.
Patrick decided to do the Entrepreneur’$ Bootcamp, primarily because, as he put it, “I knew I wasn’t an experienced pitch-guy and we weren’t getting the same interest from capital sources that we’d initially gotten after the U-Mass contract.”
I asked Patrick if he had been using the same strategy with investors that he’d been using successfully with customers . . .
“Yes, pretty much. At first, it was fairly easy because of the U-Mass contract buzz, but I began to recognize that my skills as our pitch-guy needed an upgrade. That’s why I was looking for a coach on LinkedIn.”
Raising capital was becoming a more difficult endeavor?
“Yes, and taking up more and more of my time. I hadn’t realized at first how much of a CEO’s time had to be devoted to raising capital. I had to find a way to be more effective, more efficient.”
I asked Patrick about our initial phone conversation. “What did you hear that made you feel that the Entrepreneur’$ Bootcamp was a good fit for you?”
“You spoke about what investors are thinking when I’m talking; how what they’re hearing has filters on it that I’m not aware of. It occurred to me that what you guys have done is figured out the mind of the investor, how it works. I’ve learned how to psych-out the investors. There are all kinds of people and books out there about the X’s and O’s for raising money, but I don’t know if anyone besides you guys are applying investor psychology to raising money.”
“Did you experience that unique approach during Bootcamp?”
“Absolutely. The “Deal Scrubber” process was very revealing. I realized that you and George were beating me up in a very targeted way. You were analyzing our business model from the perspective of investors, based on actual research you’d done into what they’re thinking, but not necessarily telling me during a meeting or a pitch. So, it wasn’t just tearing it apart for the sake of tearing it apart. There was a specific method at play.”
“I realized that you were challenging me to look outside of the box that we’d created, explore other potential revenue streams, pricing schemes, potential customers. Even though we may not ultimately implement every suggestion, the process of being challenged to see alternatives we hadn’t considered was powerful. In some ways, looking at alternatives also confirmed the reasoning behind our core strategies.”
“That can breed confidence when dealing with investors . . .”
“Exactly. In some areas, we discovered new strategies to consider, such as truly understanding the lifetime value of a customer. In other areas, we confirmed our existing viewpoint of the market and our approach to it. But now, when I’m speaking to investors I have both perspectives. I’m more confident in the paths we’ve chosen because I can explain why.”
How would you characterize the work of translating all of that to a pitch deck?
“Grueling. But really helpful. It’s basically a completely new pitch. What struck me about the process of Boot Camp is that it was all designed to answer investor questions before they were asked. The entire structure of the pitch is set up to do that. From the outset, it answers core questions that are in every investor’s mind. I know that’s the case because when I’m pitching this new deck, those questions aren’t being asked.”
Excellent, so that allows you to get into the core of the pitch knowing those questions are less likely to interrupt you.
“Right. It’s a good feeling to know you’ve done your homework in advance. I think also our pitch is unique now. Instead of leading with features and benefits, we get the essential information investors are most interested in out there right away. I feel it gives us a leg up on the competition, other people who are pitching the standard way.”
Patrick, you’re in Massachusetts, so you did the Bootcamp partly from a distance. How was that experience?
First of all, I’d say that online time is very focused. We know we have this limited time together so everyone is very focused, maybe more than face to face. That said, the face to face time is really powerful. The two weeks I spent with you and George was awesome. So, I’d say if it’s possible, come to San Diego for the entire Boot Camp experience. But if you’re far away and it isn’t possible, you won’t lose any value in the experience.”
Today, Patrick is in the final weeks of the Entrepreneur’$ Bootcamp, finalizing an equity raise for Oshen.