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Next Coast Ventures is a private equity firm headquartered in but not limited to Austin, Texas. Next Coast invest in amazing entrepreneurs who are building disruptive companies in big markets. I co-founded this firm with long-time associate and great investor/entrepreneur, Tom Ball.
Listen in as groundbreaking leaders discuss what they have learned. Discover the books, podcasts, presentations, courses, research, articles and lessons that shaped their journey. Hosted by: Kevin Horek, Gregg Oldring, & Jon Larson.
Intro/Outro: Welcome to the learner.co show hosted by Kevin horic and his fellow learner co-founders listen in is groundbreaking leaders discuss what they've learned, discover the books, podcasts, presentations, courses, research articles, and lessons that shaped their journey to listen to past episodes and find links to all sources of learning mentioned. Visit learner.co that's learner with two L's dot co.
Kevin Horek: Welcome back to the learner.co show. Today we have Mike smirk lo he's an entrepreneur investor and part-time author. I'm excited to have Mike on the show today. I I've talked to him in the past. I think his book is actually really, there's a lot of really good learnings in it. It's called Mr. Monkey and me, and he's got a really, there's a lot of really good kind of investment and advice in it. So I'm interested to get bad. I always find it interesting when investors write a book, especially when it's for entrepreneurs. John and Greg, what do you guys think?
Jon Larson: Oh, I'm really looking forward to this. I think it would be really interesting. I was, I was looking at the book and it, I I'm going to put it actually on my wishlist, the books to read. I was also looking at their investment site and they have themes that they invest around it. I think it's six of them. I'd be interested to hear about that as well. Like how they're looking for companies to fit into these, see these themes that they've.
Gregg Oldring: I always love it when people have been on both sides of the table, essentially with investment in Ms. Entrepreneurs. That it's really helpful to see things from different perspectives. There's lots to share and learn lots of learn from what are you guys to share. I'm sure. As always, I always love this weird stuff that comes out that you don't necessarily know about. I'm curious what things will come that we don't expect that maybe come from outside of, taking an MBA or starting a business.
Jon Larson: I'm also interested in the, in how I came up with the book cover. If you have a chance to take a look at the book cover for the book.
Kevin Horek: Cool. Well, on with the show, Mike, welcome to the show.
Mike Smerklo: It's great to be here.
Kevin Horek: Yeah. I'm excited to have you on the show. I think the book that you wrote next coast ventures, and a bunch of other stuff that we're going to talk about today is really innovative and cool. Maybe before we get into that, let's get to know you better and start off with where you grew up.
Mike Smerklo: I grew up in the wonderful Toledo, Ohio area sarcasm. Yes. Yeah.
Kevin Horek: So you went to university. What did you take and why?
Mike Smerklo: I went to, well, first of all, I was the first one in my family to ever go to college. I, I remember walking onto the campus at Miami university in Ohio, not the one in Florida and just being overwhelmed. There were people with, this was a long time ago, but there were these people wearing shirts with little horses on it, which I didn't know what that was. It turns out it was Ralph Lauren. It was just a totally different environment than the kind of gritty or inner city world I'd been grown up in. I went to Miami while I tried to play basketball. There tried to walk on by basketball that didn't work out. I figured I'd better get educated. Fortunately, I had a family friend who recommended accounting of all things largely because his advice was it's the language of business, you'll get a job and, it'll take, you will be a good foundation for whatever career you choose in business.
Mike Smerklo: So that's what I did. And it was right.
Kevin Horek: Interesting. How did you decide to be the first person in your family to actually go to university because you basically broke that cycle for better or worse?
Mike Smerklo: Yeah, I mean, it was a totally different topic and just the environment I grew up in, fortunately I was raised by a single mom. I was youngest of three. She was, it was kind of her impetus. If you will to break the mold and really challenged me to go get educated for me at the time growing up, I just wanted to get out. I wanted to get out of the environment I was in. I didn't really have a path to do that, but, ing that the current direction that I saw, everyone around me on was not attractive combined with luckily, a single a mom's intuition, if you will, to say, you've got some intellect, you got some capabilities, don't waste it. I think that was probably the driving force more than anything else. I just had to figure out how to pay for it, which was a totally different question.
Kevin Horek: Interesting. How did you fund your education and then walk us through, obviously getting out into the workforce and then getting your MBA?
Mike Smerklo: Yeah, well, so I was, so my mom was able to help with some of it. Luckily I went to the state school, so it wasn't that expensive back. This is, when dinosaurs roamed the earth kind of thing. I worked three jobs or in college, I was a, I worked as a, at the recreation center. I was there as a scheduler. I worked as a umpire for softball games and then I sold beer. There was a local football team about our way and Cincinnati, Ohio called Cincinnati Bengals. Every Sunday I would, I talked about in my book, I would sneak out of my fraternity house. I'd drive down, I'd put on a blue polyester suit and I'd walk the stadium steps, yelling cold beer here. I, I did that throughout my entire college career in order to be able to basically afford it. Yeah, definitely learned about the value of hard work from there.
Mike Smerklo: I went to work at Ernst and young in Chicago as a CPA was one of the jobs I walked in the first day and said, oh my goodness, what have I done? But I did that for two years. I got recruited to go work on wall street, had to watch the movie pretty woman to try and get some idea what that job was. I worked for Lehman brothers when there was a Lehman brothers for two years, and then I applied to a bunch of applied to law schools. Like we didn't get into any thank goodness. Well, that falls into like, thank goodness for unanswered prayers. I think I wanted to be a sports agent and that didn't work out. Luckily I finally applied to business school and Northwestern was kind enough to take me on as a student.
Kevin Horek: Interesting. Walk us through the rest of your career up until basically what you're doing now with next coast. I want to dive into the book.
Mike Smerklo: Yeah. After business school, I knew I wanted to be an entrepreneur. I just didn't have any great ideas. I, I made a pledge to myself at the time that I would be running something within five years of graduation, which is kind of enriched specter, really bold and crazy idea. I went out to Silicon valley in the late nineties. I just wanted to be out there. I knew, I didn't know technology, but I knew it was just kind of an amazing vibe that was happening in the late nineties. I went out there, I went back to investment banking because they paid for my business school and I thought it would be a good way just to get networked in. I worked for Lehman for and then went to work for Morgan Stanley. This is the height of the.com bubble. By serendipity, this guy named mark Andreessen was starting a new company.
Mike Smerklo: He and his, a guy named Ben Horowitz had just sold Netscape, the first browser to AOL. And they were starting a new company. I went out to breakfast with mark and he said, how come we're working for us? That's, it sounds like pretty cool idea. I went and worked for mark and Ben now of legendary venture fame injuries Norwood's but I went in to work for them for two years and saw something from literally a PowerPoint presentation through initial public offering. Also saw Ben and mark operate in a kind of a boom to bust through the.com cycle. And then I quit. I want to be an entrepreneur. I raised a small pool of capital to go look for a company to buy because I didn't have a great idea. I used a vehicle called the search fund. I bought a business called service source, and then I ran it for the next 13 years.
Mike Smerklo: Took it from the small business all the way to 3000 employees around the world, publicly traded oversaw the IPO in 2011. By 2014, I was at the end of my runway. I moved to chairman, moved my family to Austin, Texas, and co founded next cause ventures.
Kevin Horek: Interesting. Very, very cool. What made you actually decide to become an investor and what types of investments and investment themes does next coast ventures she invest in?
Mike Smerklo: Yeah, so the decision I thought long and hard because I was still reasonably young, I thought about going back to operating. As I talked about in the book, one of my real, I had a lot of weaknesses as an Ultima, but one of them was my inability to find balance. I just was never a kind of a, balance was not something I was really good at. So I knew that about myself. I had four younger children at the time, and I just didn't want to go back to the grind of operations if you will. I also saw an opportunity to bring some of my experience, and this was a shared value with my co-founder. Next goes, we looked at it and said, we both been entrepreneurs. How can we help? Money is kind of the easiest part of the entrepreneurial community right now, but can we bring some real world experience some how, and can we help the next generation of entrepreneurs?
Mike Smerklo: That was the real motivating factor in terms of my own decision to become an investor and also our desire to start next coast ventures. We've got about $300 million of assets under management. We invest your second question. We invest in typical series a and series B. That's gotten muddied, but we're looking for innovation companies in software and internet technologies. Yeah, we invest about two thirds of our capital goes into Austin, Texas, where we live. Cause there's so much good stuff going on. We also invest in other similar next coast markets in United States.
Kevin Horek: Very cool. I, yeah, and I think Austin's a very fun city, even. There are a couple of times, so I, I totally get it and there's tons of really cool stuff being built there. No, it makes a lot of sense. I'm curious before we dive deeper into the investment side, I want to talk about the book because I think they tie hand in hand so well, because they're complimentary. What made you actually decide to write a book and what's the book called in about?
Mike Smerklo: Most things in life, if I knew how hard it was, I would probably wouldn't have done it. My motive that was my decision was I, it was a bucket list thing, but more importantly, I became kind of annoyed in that when I started really investing in helping entrepreneurs, I saw advice for entrepreneurs falling into two buckets. I'm the one bucket, there's the, how to write a business plan or legal documentation, which is really critical. Sure. The other bucket is what I used to call entrepreneur porn. I got to come up with a better name, but it's all that stuff that, it's kinda like when you binge out and eat a bag of Doritos and you kind of don't feel good about yourself and it's that kind of stuff. That's that tells you, Hey, Kevin, here's the seven things that mark Zuckerberg does before five in the morning.
Mike Smerklo: Yep. If you're starting a business and you're trying to get going, it doesn't really matter what mark Zuckerberg had for breakfast before 5:00 AM. Right. It just doesn't help you. What I, and more importantly, what I saw was a big gap was around the mental aspect of entrepreneurship. Helping entrepreneurs current or future understand the mental challenges of it was a gap that I saw. It's something that I was and am very passionate about. So I wrote the book called Mr. Monkey and me a real survival guide for entrepreneurs. That's the name of the.
Kevin Horek: Very cool, I think that the book cover is really interesting. How did you come up with the idea for it and maybe talk about the rationale behind the cover?
Mike Smerklo: Well, this is really interesting story. What I tried to do in the story just because it supports the cover is, and for that, like the cover is a guy sitting on a, a bag with a monkey arm. Who's flipping the guy off and the guy's supposed to be me. That's actually the PG version of the book. I'll tell you a quick story if we have time. Basically the monkey is the star of the book. The monkey is the voice inside all of our heads. It tries to sabotage it's the monkey voice that said, Kevin's a great interviewer, but Mike, no, one's gonna give a hoot what you say, right. It's it's, for me, it shows up as fear, uncertainty and doubt. In the book, the monkey is, my constant enemy, if you will. I was actually my 12 year old son who's quite artistic, came up with an idea.
Mike Smerklo: He came up with the original idea for the cover, which was the monkey was supersized. He was two double hands flipping me off. There was a little shadow down in the bottom that cover, were scheduled to release the fall of 2020. If you think about some of the political charge that was happening and still continues, but in some of the good activists, there was a belief that it may get swept up into some cancel culture. We got reworked and probably for the better, like, I, I don't, it was never meant to have any, it was just that this monkey is a strong force. My son went back to the drawing board and re-imagined it in a cool way.
Kevin Horek: Oh, very cool. I want to dive deeper into what you guys actually do and the deals that you guys invest in, because what I thought was different about what you guys do at next coast is you kind of have these like theme buckets. Do you want to talk about that and how you came up with that idea?
Mike Smerklo: Yeah. It's, it's re we, the things that, how we start everything we do right now, one of the exciting things and daunting things about being a venture capitalist is innovation is happening everywhere. And that's the exciting part. So it's great. There's not a corner of the global economy is being rewritten right now by amazing entrepreneurs. So innovation is everywhere. The challenge with that from an investor is trying to figure out where you can actually have an expertise or understanding what's happening. Also for us, a relatively smaller firm compared to some of the folks on the coast, how we can actually add value to the entrepreneurial community. We started with our answer was to come up with themes. And these are right now. We just published them actually yesterday here in October of 2021, we republished our latest version. Twice a year, we get together as a firm, we get a bunch of experts to come in and we talk about areas where we think innovation is that there's still a lot of innovation to happen.
Mike Smerklo: And, and that we believe that we, as a firm could have a ability to help entrepreneurs. So, yeah, so, and, unfortunately were back in, we started the farm in 2015, 16. Some of our key themes were a future of work thing, pre COVID digital health think pre COVID and re-imagining retail, those three themes, which we just believed that we thought they'd take 10 years, candidly, COVID among other things, accelerated them by almost a decade. It's been, not discounting the, all the pain and suffering and pandemic, but some of these themes have just gotten accelerated and we think those changes are here to stay. It's true.
Kevin Horek: No, that makes total sense. I'm curious then what do you look for when you're doing investments and then maybe pull some examples from the book into that? If that makes sense. Yeah.
Mike Smerklo: I mean, it's such an interesting job because I can tell you our exciting themes and we are excited about them. We think they're really significant from there. We can, then we throw them out in the world and we try and get both inbound and outbound ideas. We reach out to entrepreneurs or they come to us at the end of the day, all themes. The business idea, 90% of our decision, or maybe more goes into the entrepreneur and what we use this term at next coast called glass eaters. Not a, not a very fun thing to think about, but really does the entrepreneur, does she have the passion and energy to get through all the ups and downs that entrepreneurship endures, and that really, it that's a perfect parallel to the books I wrote about it, which is you can have the greatest idea in the world.
Mike Smerklo: I mean, think that every day you see a Starbucks versus every other coffee chain idea go into, Uber Lyft or whatever the examples are there being be, wasn't the only B2B sharing for couch surfing if you will, back in the day. For some reason, one company emerges and our general belief is it comes down to the mental aspect that the entrepreneur possesses. We see the entrepreneur and we understand she has a great idea in a big market, but most partly she is going to do everything she can within legal and ethical boundaries to build an amazing business. That's where we get really excited and go. Yep. That's what we're looking for.
Kevin Horek: No, no, I think that's really great. How do you figure that out? Or, or what advice or what things do you look for in a person? Because that's gotta be really hard to figure out.
Mike Smerklo: Yeah. It's, it isn't, I think in a first meeting was one of the things that hardened COVID cause it was, it's harder to do over zoom. I think there's a lot of things about our job that are, it's great. Like we can do this over zoom it's awesome. Or teams, whatever it is. I do think it's multiple occurrences. We have certain areas we like to push them on where it really comes down to is can the person, does, can the person be talked out of the idea? It's kind of interesting. Like, okay, did they, do they believe there's something special when a human can't imagine a world without their idea coming to fruition.
Kevin Horek: Interested.
Mike Smerklo: That is kind of the first aspect. It's like, wow, they can't be talked out of it. Then, secondarily though, a tied to that is you look at and say, can he, or she actually built a team? Cause it's one thing to be passionate about the idea it's like, can this person, because entrepreneurship is not a solo game, if you want to scale. Can he or she hire people will, are the people who are going to want to come work for her. The last attribute of that, which all tied together is do you think they'll take advice? You want one in the spectrum, they won't be talked out of their idea, but the other end, the spectrum is, but they'll listen, they'll take feedback. They'll learn from others. Who've done it before. Again, that's the kind of, as you kind of do this Rubik's cube, if you will, and you spend more time when all those things start to come together, that's you go, okay, there's we have a class either here and in Catlin in most of those cases, we would back that entrepreneur almost independent of the idea.
Kevin Horek: Interesting. No. Okay. That, that makes a lot of sense. You put all these, will you call it like a real survival guide for entrepreneurs? How did you decide and maybe give us some examples of other things that you put in the book and then how did you learn about those things to decide, to put them actually in the book?
Mike Smerklo: Yeah. Great question. It was interesting to be clear my joke about this and it's kind of true is like, I had a great entrepreneurial career, but it's not in the hall of fame or anything close to it. I'm like B and maybe a C actor in Hollywood. So what I did to supplement that. Yeah, no, but I mean, no, listen, I mean, it's this isn't, it's not Phil Knight telling you how he built Nike over. Like you want to read a great book, read shoe dog by Phil Knight. I'll tell you how you book 30 years to build Nike. That's pretty good book. Pretty good story. What I did was I looked back and I was very fortunate among many things. My career had great mentors. I went back and said, okay, what did I learn from Ben and market when they were starting LoudCloud, I looked at my own journey.
Mike Smerklo: I looked across, which is the much broader sample set ecosystem and invests in 60 different companies and entrepreneurs. What attributes do they see? The last part of research I did is I went and talked to probably eight to 12 amazing entrepreneurs that I'm fortunate to know and ask them, what are the mental attributes that you would attribute your success to? And what was fascinating about that? Kevin is, you start with that, scattergram, it came down to a pretty tight pattern. That's what in the book, there's this thing called the shaped formula, which is, the five attributes that I believe you need to have to develop this mental toughness, but that wasn't none, a lot of my never acquired or tried to acquire, but those are the things that became consistently returned to me from that research. And that's what drove the formula. What I try and do in the book is provide at the end of each chapter, provide three or four very specific tactics to acquire those assets.
Kevin Horek: Okay. What are, what is that shape formula for people that don't know?
Mike Smerklo: Yeah, it seems so simple acronym. It's not exactly built top each other, but it's kind is, I mean, it's, it could be, it's like Maslow's hierarchy of needs. Like the first one is assets for self awareness. Okay. Ages for help. A is for authenticity. P is for persistence and E is for expectations and the kind of, they kind of feed, I mean, to have self-awareness, which is really understanding your strengths and weaknesses, that then allows you to get help. Where, where do you need to acquire direct or indirect help and assistance? I think the more you do that allows for authenticity, as you become more authenticity, authentic, you can have a persistent mindset and then ease the one where it's just trying to have a proper mindset for each step in your journey on entrepreneurship.
Kevin Horek: Interesting. I'm curious, you talked a lot about you learnt from mentors and other people in the past. There anything that you learned outside of your work life, maybe in your personal life or, through art or music or something else that you brought back into your actual entrepreneur and or investor life?
Mike Smerklo: Yeah, I mean, it's interesting whether it's direct or indirect. One of the things, one of my favorite books, well, I've got read all the time, but one of my favorite comments from one of my favorite books was Steve Martin's book about his career as a stand-up comedian comedy. One of the things that he talks about in that book is his early mantra was when something like this be so good that they can't ignore you. Now is my I've got four kids and three of them are now teenagers. We talked about this, which is about in every field of human endeavor. There's someone that has spent the time and energy to become a master. The master tends to get a disproportionate amount of awards. I don't, as a father, I'm not, it's not really economic awards, but if you think about your point, if you think about the best artist, the best musician or the best guitarist, whatever it is, someone who's willing to take a passion, put the time and energy into it and become an expert.
Mike Smerklo: The lion's share of whatever awards are out there, a claim or economical boards go to that person. There is, who the best basketball player in the NBA is, the best football players. You also, who's the best author and it's, I don't, I best, I hate that word cause it sometimes kind of competition, but I think it's more around mastery. I'm kind of in awe of mastery and how it, someone can be, there's probably, I don't know, there might be a thousand golfers that could play in the PGA. I don't know how many that is, but there's a lot, but five or 10 consistently went. Right. When I talk to people in sports and I played high school basketball sweater to work, but like when I talk to people in sports, they're like, oh yeah, the number 200 dusk golfer in the country or in the world and the fi number five or four, they hit the ball the same.
Mike Smerklo: It's not like one's dramatically better. It's just that one person has developed, an extra gear if you will, that allows for that success. I'm just, I'm more than upset, a little obsessed about that.
Kevin Horek: Interesting. I'm guessing then, and correct me if I'm wrong, you think anybody could be a great entrepreneur if they put in the time and effort? Is that what you're basically saying?
Mike Smerklo: I think if they put in the time and effort yes. With one massive asterisk that says bad ideas are still bad ideas. One of the things that I talk about in the book is, being passionate about something is table stakes. Listen, there's a lot of great, like there's great entrepreneurs that run wonderful restaurants in the city of Boston where I live, right. Don't want a great restaurant. That's all they want to do. And they're happy. That's awesome, man. That is like life success. Totally. If you want, if you want to run a big that's where the idea has to have some level of scale and it has to be like the customer, you have to do something that in this world, especially, I think you have to do something where the customer has a wow experience. I think the more you focus on the wow experience and how you're going to change someone's life or experience, it's usually a pretty good inkling that you might have a big idea.
Kevin Horek: Interesting. At what point then do you guys invest in a company? I know you said kind of a series, a kind of series B and maybe a little gray area in there, but, and again, you can correct me if I'm wrong. It seems like depending on where you are in America, series a is at a different point in a startup's career. What does that mean for you guys at next code?
Mike Smerklo: Great, great question. It's all getting convoluted now at best. The way I would do it is perhaps a different way to think about it. Kevin is stages of business creation. Okay. There's ideation, which is you and I getting together and coming and building a PowerPoint or a business plan and saying, Hey, we think this is pretty interesting idea. Then there's from ideation. You go into like starting to prove out whether or not it actually works. That's usually around this term, we're using venture called product market fit, which is a sophisticated way to say, does someone want to buy what you're selling? Right. From there, you start thinking about scale and then, hypergrowth or whatever we're playing in technology. Usually past ideation, meaning someone's got the PowerPoint and using, when you start to get some level of customer traction, you've, you've created the proverbial lemonade stand and you've shown that every day a bunch of people will come by and buy it or some people buy it.
Mike Smerklo: You're trying to figure out how you can scale that lemonade stand or piece of software to the next level. That's usually where we play largely because we've all been operators and entrepreneurs that next coast. We'd like to roll up our sleeves and help the super early. I've got an idea on a PowerPoint that's easy left to what's called seed investors. 10. It's really insane part of the market. Just not exactly where we find the best place for us to invest.
Kevin Horek: No, that makes a lot of sense. There like a certain formula, you kind of touched on something a bit that if somebody wants to actually pitch to you guys that they kind of need to follow, or is it more, like you said, a lot based on a person in a vertical that you guys kind of invest in.
Mike Smerklo: It's it's both, here's what I'd say. If you came in to pitch, I want to understand the market you're playing in. I want to understand the, how innovative your solution is. I want to understand what your customers think of your business. I want to understand the financial profile and high level, how are you going to make money? I want understand the competitive landscape. I think way too often entrepreneurs pitch us, just leave that out. By the way, I've written a blog about this. One of the biggest competitors that's often left out is called inertia, right? We're all busy. We're all, we're all super stressed out and busy. Inertia tends to be a pretty big competitor. That's the business attributes, but equally important. I think this is often understood. Like we're looking just as closely at those looking for those attributes I mentioned earlier,
Kevin Horek: Right? No, that.
Mike Smerklo: Makes sense. Yeah. I mean it's yeah. What am I biased entrepreneurs is understand the firm, understand what type of investments they make the stage, what else have they done? Because you don't want to waste your time. If you came in and talk to me about, a huge capital raise of a hundred million dollar capital raise for some electric vehicle, this is not us, right. Lots of investors out there. Or if you came in and you had a great new can of water, like consumer goods, we don't do consumer goods like in that like non-internet based businesses. I think the key is like understanding what the investment firm looks for from a business metrics. Also understanding that we're looking just as closely at the personal attributes I discussed earlier.
Kevin Horek: Sure. You talk about mistakes and stuff that you made as an entrepreneur. What mistakes do you pass on to P or, well, I guess what advice do you give to people to make sure they don't make the same mistakes you did as an entrepreneur?
Mike Smerklo: Yeah. That's pretty long list of mistakes I made, but it's like one of the things that I think that I probably one of the earliest mistakes I made was not getting enough help. Kind of believing that I'm believing that as a CEO founder, that I was supposed to have, like this persona, like talked about in the book, like my monkey voice was saying, do not ask for help. Always. You should always know the answers, which is complete BS, but that's what my voice is telling me. I tell this story in the book about this, I had this lucky encounter with this amazing a guy named bill Campbell. There's a book written about him called trillion dollar coach. Bill Campbell was former CEO of Intuit, but then became in the valley, the coach to Steve jobs, the founders of Google, the founders of Twitter, right? Yeah.
Mike Smerklo: I went down, I had a beer with bill one time at this bar called the old pro in Palo Alto. I walk in and bill, grass, people, I used to be a football coach at Columbia. He went to be a CEO and so amazing career. I walk in sparkle, you look like, s**t, thanks bill. Good to see. But, but I, I sit down and was having trouble. I'd had to fire like my fourth head of sales and for years, and I knew that if I didn't get it right, I was probably going to be on the chopping block. I explained that to bill and bill was like, who's your coach? I have a bill. I don't have time for coach bill. Like I just told him, working 20 hours a day, I can't find a head of sales. In an eloquent way you said Steve jobs as a coach tiger woods has a coach.
Mike Smerklo: Why the blank doesn't Mike Smirchler have a coach. It was just an eyeopening thing. Like, okay, well, that's right. Like if I wanted to better at call for better at tennis, I would go get a coach. Oftentimes we see founders that feel like that's a sign of weakness. That's probably one of the easiest ones for me to say, go get a coach. It doesn't have to be like someone you pay, but find mentors that have done what you've you're trying to do. There's a whole host of other ones, but that's probably the biggest one. I think the other thing that I try and do remind our founders all the time is that self care really matters. This is the proverbial marathon, not a sprint. I hate that globalism, but I can't think of a better one. Trying to make sure that I don't like to get emails from my founders on Sunday, right.
Mike Smerklo: Or Saturday. I just, I think there's a there's way too much in this culture about, work a hundred hours a week and sleep at your desk. I did that. The problem is it doesn't last, you burn out, causes family issues. I'm a big believer as Emmons by the book and mental health. Right? I'm there for trying to pass them along to our founders as well.
Kevin Horek: On the mental health side, what do you recommend to other entrepreneurs that are maybe struggling with that? Because you've obviously been on both sides of that, where it was really bad. You seem to have it under control. Now, how do you make that mental shift and actually start taking care of yourself?
Mike Smerklo: Well, I mean, the good news is we're talking about it, right? I think that's one of 'em is not just me. Obviously my book is one of many voices on it, but I think what's most exciting about entrepreneurship and mental health is, can be, it was a topic that it's why one of the reasons I wrote the book and said earlier, but when I was an entrepreneur, no one was sitting there saying, Hey, are you meditating? Are you watching your diet? Are you getting exercise? It just was not a topic. So, first of all, I think the talking about it is helpful, but then secondarily, there has been some really good progress around like, just think about meditation. Yeah. There's apps. Now that will help you do that. Diet and exercise, understanding, balance. Those things are, I'm super excited that they're moving more and more into the workforce.
Mike Smerklo: Sure. Not just for founders, but more and more in the workforce to people understand that, this stuff does really matter. I think that's probably the best, first step that's happening.
Kevin Horek: Nope. That makes a lot of sense. For, it can be maybe scary to talk about their competitors or maybe even try to build some relationship with their competitors, whether maybe one will acquire the other one or maybe they can send customers or share customers. Why do you think that's important?
Mike Smerklo: Well, let me understand the question, Kevin, in terms of why is it important to think about competitors or have a corn maybe,
Kevin Horek: Maybe a bit of both, I guess like, why is it important to cause when I'm pitching, if I'm pitching to you next coast, like obviously you're going to ask me who my competitors are, but that can also be kind of a scary thing to think about. Right. And it could validate my idea. It could make me not do something. I also heard some people actually become even friends sometimes with their competitors, because sometimes it's like, look, you're not a good fit for our product, but what, like one of our, maybe not direct competitors is a good fit. Like what are your thoughts around that?
Mike Smerklo: Well, on the first part, I think in terms of talking about your competitors, I don't know a business maybe, in the last, I don't know about history, but I can't think of a business that doesn't have a well let's sit back. There was so much capital floating around right now for entrepreneurs. It's a great time to be an entrepreneur in that regard. It is a really good time to be raising money for your business. If that's the path you want to go down as a result of that, just about every subcategory of subcategory has multiple players that have been funded. I'm talking more in the venture landscape versus the bootstrap, but I don't think it's much different. To walk in and not openly acknowledge and talk about the customer is my opinion tends to be a sign of ignorance. Not, not to be personally escaping, but just, if you go start that lemonade stand, I was just referring to there's a bunch of competitors.
Mike Smerklo: They may not be direct competitors. They may be substitutes. Sure. I do a lot of podcasts unfortunate in this book. I say all the time, like if you said who's your competitors, well, I'm a business to business. Well, Joe Rogan the substitute, like I can choose to listen to building the future or I can choose to listen to Joe Rogan, very different topic, but you're still competing for the eardrums, if you will. I think there's that part, I think in terms of understanding your competitive landscape, I'm all for understanding it, developing relationships. I don't know if I would go into, like, I also think you can get distracted by competitors. I I'm acknowledged them, understand what they're doing, but being, going too far to the other end of the spectrum, which is, I was never really friendly with my competitors. I just know I wanted like, it motivated me.
Mike Smerklo: It was like, I want to go kick their butts and so much like, a football game or a basketball game, I may say hi to them, but I wanted to oddly enough probably anonymize them. I, so I could be more focused on beating them.
Kevin Horek: Interesting. No, that makes total sense. I'm curious, what advice do you give to people that are hesitant to actually go for it? What I mean, I don't mean necessarily like quit their job and just like go all in if they can't do that or maybe they can do that. What do you, what advice do you actually give to people to get over that mental hurdle of actually deciding to start, working on that path to your startup or your company or your dreams or whatever that is?
Mike Smerklo: Well, I do two things. I mean, one, I think there's something about expectations. It's one of the letters in the acumen. It's just like understanding that it starts with the first step, your idea, all the big businesses that we love to talk about all started with a simple idea. No Starbucks was not that there should be one on every corner. It was to replicate the experience of being in Italy at a small cafe. So every business idea Facebook was started. Mark sector group could be girls at Harvard. Like, first of all, it's like, it's gonna be hard. B every idea has to start small. Like these things aren't are on purpose big from day one, but when it comes to motivation and also argued that entrepreneurship isn't for everyone, I think the world needs more of it needs more diversity, but listen, it doesn't mean it's not a bad idea and you don't want to be out tomorrow, but if you're thinking about it and you're on the edge, I just go back to like, and you want to live your life in a cube.
Mike Smerklo: You want to live your life, live in someone else's dream. And if you do, that's great. If you feel that are in your belly, that itch, like, no, I don't know. I'm kind of a philosophical guy. Like we do wake up and then end of your life. I do believe like the Jeff Bezos talks about the regret minimization. Like, are you going to sit back when you're 60 or 70 and go, damn it. I don't know why I didn't try it. I think if you have any of that inkling on it, then just challenge yourself to be like, what's the worst case scenario. It's kinda like going up and you see an attractive potential mate at a dance, worst case scenario. They say, no, right? Yeah, no better off. Like they say no. What, but I just, I feel like there's some of that says with the right mental attributes with the right resources and the right mindset.
Mike Smerklo: Hell I don't know. I'd rather, I'd rather try it in loss than not try it at all. I guess what,
Kevin Horek: No, I a hundred percent agree with you. I'm curious because you've been on obviously the entrepreneurial side and the investment side. How did you get through some of the lows when you were an entrepreneur and what advice do you give to people to help them get through those lows? Because you've been there and you've done that.
Mike Smerklo: Well, the real answer on the Lowe's is probably like alcohol and so, and senseless TV or something like that. I wouldn't recommend that. That's what I did. This is a classic example of like the book talks about things I did wrong, in all seriousness. I think that there's some things now that I'm very fortunate about. I've got a great support infrastructure. I've got family, I've got friends, I've got my faith, I've got dogs. Like, I mean, there's things you can do to make this less daunting. I think the other thing you can do is there's ways to take yourself physically and mentally, are you doing in some spiritual or meditative practice? Are you getting some exercise? Like, are you doing things to make sure you don't get out of balance? Which I, as I mentioned earlier, I struggled with, and then last but not least.
Mike Smerklo: I think probably what, I don't know if I would've done this differently, but realizing it's, we're not life and death, fortunately. I mean, there's some people that are, like there's certain things about this world that are life and death, starting a new software business is not life or death. I think perspective really helps at the end of the day, fight your fight, do your best, do all those great things. When you get in your car to drive home, to see your family at whatever time o'clock at night, it, you don't have to treat it like it's the end of the world. That perspective is a hard one to do when you're an entrepreneur when you're in the thick of it.
Kevin Horek: No, that I think that's really good advice. The proceeds of the book go to charity. Why did you choose to do that? Because I think that's actually really cool of you.
Mike Smerklo: Well, I guess, the cause the book was never meant to be a profit motivator. It really was to try and help it entrepreneurs. Secondly, I've been beyond blessed in my life. I didn't feel this is something that I need to do to make money for myself. Third and by far, the most important thing is I'm just passionate about the need for entrepreneurs in this world. I believe the world needs more entrepreneurs. I think we need more diversity entrepreneurship and we need more entrepreneurs that once they achieve some level of success, stay healthy. All the proceeds go to a scholarship that my wife and I set up for diverse and underrepresented students interested in entrepreneurship. That's where it goes to, but it just listen. I mean, I think the biggest problems in this world, I was out in the bay area a couple of days ago.
Mike Smerklo: One of my friends is talking about wildfires and he's investing in companies that are focused on prevention, mitigation of wildfires, all these things like all for-profit plays. My point is left to the government left agencies. It'll take 30 years. Hopefully we'll be able to save it and, help stop those really bad wildfires in the west in this decade. It's just that type of belief that I have about entrepreneurship, but that really drove me do it.
Kevin Horek: No, that's very cool. There, we're kind of coming to the end of the show, but is there any other advice you would want to give entrepreneurs that you maybe see all the time that you maybe wish they wouldn't do or that they would do more of that we haven't talked about yet?
Mike Smerklo: Well, yeah, I think we've covered quite a bit of ground. I guess I would just say is, the whole book was trying to bring forward this voice inside your head, everyone has a voice, I guess that's my one piece of advice on first. Like you're not alone. If you think, if you have fear, uncertainty, doubt, lethargic, whatever it is, some reason that's preventing you from doing what you really want to do. My biggest belief is that everyone has that voice, the differences, how you react to that voice. That's the one thing I'd emphasize is you're not alone in terms of the voice telling you not to do it. The key is to think about some of the stuff that's in the book, but how do you overcome that voice? If you're really passionate about it, give it a try. Like, again, it's like life is short.
Mike Smerklo: You get one time, one chance to do this. If you have something that's really, you can't sleep at night and a good way and you want to go do, I would just encourage everyone listening with the right parameters to go for it. It's it's really, that's my biggest push.
Kevin Horek: Sure. Do you think people should be all in, have a plan B, do it kind of maybe in the evenings or weekends, or does it really depend on that individual's situation?
Mike Smerklo: I think, let me answer a question for me. I think if you're thinking about entrepreneurship, you should take into consideration your situation. There is a time and a place for everything. If you're, if you're a financially strapped and you're really challenged and you're got young kids at home or whatever the situation is, be thoughtful about that, there is a good time in the back. I think there's also a bad there's bad examples. Like sometimes it's not the right time. I think waiting can make sense and getting relevant experience. I talked to a lot of people right out of university. I say, you know what? I love your passion for our ship, but you may want to go get some skills, maybe not, but it's not a bad advice. I think that's the general backdrop, but then are not a plan. B person never have been.
Mike Smerklo: Don't think I ever will be. If you're going to do this, it's going to be tough. It's going to be gut wrenching, but it's gonna be the best job you've ever had. Having a plan B in my mind, you might as well not go because you're already thinking about what if it doesn't work. I think the truly successful entrepreneurs don't have a plan B.
Kevin Horek: Interesting. Well, and you've, and have met and worked with a ton of them. Right. So it's pretty good advice.
Mike Smerklo: Yeah. It's like, it's like, you're going to go run a marathon, like yeah. But it could mile 12. I can be tired. I can always drop out. Guess what? Mile 12. You're probably gonna drop out. Right. So you've already told yourself that. Again, with all parameters I mentioned before, I just think, listen, if you want to do something amazing back to that mastery comment, you got to go all in and I think the world will reward you.
Kevin Horek: No, I, I think that's really good advice, but we're kind of coming to the end of the show. How about we close with mentioning where people can get more information about yourself next ghost ventures, the book, and any other links you want to mention?
Mike Smerklo: Yeah. Well, thanks for having me. Next ghost ventures is just that spelled out Mexico's pinterest.com. We're in Austin, Texas. All of our themes are mentioned on our web. I mentioned it on our website. You can learn more about us and if you have a great idea, please send it along for me personally, the book Mr. Monkey me is available on Amazon, that people do get into it. Reminders. You said earlier, all proceeds go to charity. Reviews are social members mentioned favorable are going to help that scholarship. I also under my own name, Mike smirk Lowe, S M E R K L o.com. That's my Twitter handle my Facebook handle. Under that web domain, I publish thoughts about entrepreneur journey. There's a short quiz there about mental readiness to be an entrepreneur, a bunch of cool resources. They're all under Mike's mark lowe.com.
Kevin Horek: Perfect Mike. Well, I really appreciate you taking the time out of your day to be on the show and I look forward to keeping in touch with you and have a good rest of your day.
Mike Smerklo: Thanks for having me, Kevin, always a pleasure to talk to you. Thank you.
Kevin Horek: As well. Thank you. Okay, bye. Guys, I thought that was a really interesting interview. I think we covered a lot of really interesting advice, especially for the entrepreneur. What did you guys think?
Jon Larson: Yeah, I thought it was a really great interview. Really interesting. I think Mike had a lot of great insights and a lot of great advice that the, that a lot, our listeners can take a lot of, a lot away from.
Gregg Oldring: I've got to say to you, if he's a guy that I would want to hang out with, it sounds like too, which is why you have this idea of the successful entrepreneur investor type that they're this super type a irritating person. He seems so genuine. When he caught it, classified himself as a, a C actor or whatever. I love that. That cracked me up. Yeah, just a genuine guy too, which I think makes what he says a lot more. I'd take it to heart a lot more.
Jon Larson: I thought I thought his comments about looking for glass eaters. I thought that was really interesting. What you have to go through in order to be an entrepreneur and just to make it through the, all the grind of that year you're putting through.
Kevin Horek: Yeah, totally. I think that's, that was great.
Gregg Oldring: I guess we'd lose the question of, do we want any class I don't want any class is we do eat glass. Yep. Great episode.
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