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Host Stacy Havener brings you the storytelling tips, sales strategies, behavioral secrets, and inspirational stories that help YOU turn your words into dollars. Learn from sales and marketing experts. Meet finance and investment leaders, founders and fund managers who have made it, and the ones on the rise. Because there are people behind the portfolios. Their stories matter. So does yours.
Presented by:
Ultimus Fund Solutions // www.ultimusfundsolutions.com
GemCap // www.geminicapital.ie
@stacyhavener // www.billiondollarbackstory.com
Stacy: Many business and branding
experts will tell you that trying
to be better than your competition
doesn't work for a lot of reasons.
One of which is better is subjective.
So let's take an example.
I'm gonna throw myself under
the bus here a little bit.
Let's use dunk and donut's coffee.
Now Dunkin Donut's coffee is
better than Starbucks coffee.
Not only is that my own subjective belief,
it's one that's not shared by many people
at all for good reason on many levels.
Dunkin isn't a better coffee.
They probably don't have
the best coffee beans.
They're probably not sourced in
the best way, probably not prepared
with the best water and so on.
But if I have a choice between
Dunkin or Starbucks, I pick Dunkin.
Every time.
It's not better or worse than Starbucks.
It's different.
And in fact, there's a Starbucks
across the street from our office.
I go there a couple times
a week and I enjoy it.
It's a very different experience.
It's a different coffee drink.
It's different breakfast items.
I meet people there.
It's cozy.
There's a whole vibe to Starbucks
that Dunkin just doesn't have.
The point is there's
room in my life for both.
I appreciate them both.
They play very different
roles in my day-to-day.
So you could say coffee, my coffee
and breakfast game is better.
Because I have Starbucks and Dunkin.
Oh, and by the way, why don't we just
throw my local coffee shop in that
has better coffee than them both,
but it just takes longer to get to.
So you see, there's room for
all those coffee spots in my
portfolio of caffeinated beverages.
And it's like that with many things
in life and biz, and certainly
with a portfolio of funds.
Investors likely have more than one
manager per asset class, and those
managers compliment each other.
Yet on the other side of the table,
the managers approach the situation
as if it's fight to the death.
Let the best fund win.
Today's episode is a
challenge to that mindset.
We're going to unpack it and then
we're gonna talk about how you
can identify and lean into your
edges, because better isn't better.
Different is better.
Let's dive in.
Hey, my name is Stacy Havener.
I'm obsessed with startups,
stories, and sales.
Storytelling has fueled my
success as a female founder in the
Toughest Boys Club, wall Street.
I've raised over 8 billion that
has led to 30 billion in follow on
assets for investment boutiques,
you could say, against the ads.
Yeah, understatement.
I share stories of the people behind
the portfolios while teaching you
how to use story to shape outcomes.
It's real talk here, money,
authenticity, growth, setbacks, sales
and marketing are all topics we discuss.
Think of this as the capital
raising class you wish you had
in college mixed with happy hour.
Pull up a seat, grab your notebook,
and get ready to be inspired
and challenged while you learn.
This is the Billion
Dollar Backstory podcast.
Okay, I wanna start.
With the idea that the investment
industry, contrary to everything
I just said, actually does
define itself by better.
Every podcast guest that I've had
has talked about the importance of
differentiation in the investment industry
and its core to the marketing and sales
work we do with clients at Havener.
So the investment industry though, has
a response to all the branding experts
who believe better is subjective, and
the response they have is not here.
It isn't.
Our industry believes better
and best are objective.
Why?
Performance Assets, center management,
M P T, statistics, numbers can
prove who is better than whom.
So better can work here, or at least
that's what the industry thinks.
Maybe they even think better is best here.
I beg to differ.
It's a very dangerous way to
build a business and we'll talk
about why, and it's also not true.
Here's the thing.
If better was best, then the data
would support that and it doesn't.
The biggest funds are
not the best performers.
The best performers don't get the
most in fund flows, so whatever growth
metric you wanna look at from a business
perspective, head-to-head competition
isn't the path to the winner circle.
There's more to it than that
yet so much of the marketing and
sales content in the investment
industry is focused on being better.
Than the competition.
So the classic example is saying something
like your benchmark or your peers buy
this marginal mile over some timeframe,
and let's just be clear, a couple
basis points of outperformance does
not qualify as a strong differentiator.
I mean, even hundreds of basis points
of performance doesn't qualify.
It's not an edge.
Okay.
It's not an edge.
It might be an outcome of
your edge, but the performance
itself isn't the differentiator.
We have to go layer deep.
And instead of focusing on marginal
difference, instead of focusing
on results, what if we challenged
ourselves to key in on the real
drivers for massive differentiation?
I'm talking about the 20% of who we are
or what we do, or why we do it that is
vastly different than our peers and.
The same 20% is what's
driving 80% of our results.
So different is better than better,
even in the investment industry.
So I had this great study and I may
have to grab a piece of paper here,
um, from Bain on differentiation, and I
wanted to share some of this with you.
So, So Bain asked executives whether their
company's offerings are differentiated,
and about 80% of them say, yes, our
company offerings are differentiated.
But if you ask customers of those
companies the same question, only
about 10% of them will agree.
Okay.
That's a pretty big disconnect or.
Ask a company's management team
exactly what it is that makes their
products or services different from
competitors, and you'll often hear as
many as a dozen different responses.
And yet, if a company isn't clearly
differentiated from competitors,
It essentially has no strategy.
This is still the Bain study.
The assets and capabilities that
form true differentiation are your
company's crown jewels determining
whether you outperform competitors.
You dig?
We all think we're different.
But the reality is our clients,
our customers, our prospects don't
perceive that differentiation.
And by the way, that's where brand
really lives, is in the minds and
hearts and souls of our customers.
And I think it highlights a
real challenge that we have.
Which is, we can't define what
really makes us different.
So I wanna stay with that a little bit
because the secret to differentiation
is really to go to the edges.
Okay?
It's to get radical, it's
to find your fascinating.
And I don't know if you know
Sally Hog's head, she's one of my
favorite experts on differentiation.
Also, can we talk about how different
and awesome her last name is?
She has a great.
A couple great Ted Talks and she actually
kind of talks about her last name, so
I'll put a link to that in the show notes.
Anyway, here are some of the things
that, that Sally talks about and
I think they will get us thinking.
So 90% of people think they're
more intelligent than the average
person, but only 39% believe
they are more fascinating.
Okay.
I don't know why that makes me laugh.
It just makes me laugh.
And yet 80% of people behave differently
when they're fascinated by a brand.
They do research, they talk to
friends, fascinating brands, and
people create a physical response.
Better is not better.
It's actually worse.
This is all kind of Sally
Hog's head language here.
And she says, better keeps
you chained to the same way of
working as your competition.
I think that is so true.
If we are trying to compete at a level
of, I'm better than this person, or
this company or this fund, we have to
compete the same way that they are.
It's very hard to stand out when you're
doing the same thing as everybody else.
So Sally continues.
She says Being better is temporary.
It's a flimsy advantage that can be
toppled in a millisecond by someone with
a bigger following, or a lower price
or better location, a shinier award, a
newer technology or a fancier degree.
And then I would add to that in
the investment industry or better
performance, it's not enough.
Instead, think about what
makes you radically different.
What makes you fascinating?
I know probably didn't expect
fascinating and fund management to live
in the same podcast, but here we are.
Another person I've really been deep
diving on lately is Marty Newmeyer
and he is a pioneer in branding.
I listened to a podcast with
him recently, I think it was
called the Brand Master Podcast.
And at from that I ordered a bunch of
his books and I'll put some links in
the show notes, but check this out.
So he defines brand strategy
as the long-term plan to
out-maneuver competitors.
Through radical differentiation, companies
believe they're being different because
they know that differentiation is
strategically very helpful because you
don't wanna be competing head to head with
anybody, but companies underestimate how
much difference you really need to make
it clear that you actually are different.
And he tees up this idea of an
accidental brand, which is interesting
because, and maybe some of us
can relate to this, you know, you
come up with something different.
You tried it, it worked, but
you don't actually know how you
did it, so you can't repeat it.
Yeah, so that's not enough.
We can't just identify the
outlier moments where we did
something radically different.
We need to find the repeatable
differentiators that define our edge.
So ask yourself what is core
to who you are, how you do
what you do, why you do it.
That is also very different than your
peers and that's gonna take some bravery
to find your fascinating by the way.
That's okay.
We're in it together.
Marty also talks about this
concept of category of one.
And this is interesting cuz of
course in the fund business,
like what category or asset class
you're in is very important, right?
Everybody wants to make sure they're
in the right category or I don't belong
in a category, don't put me in a box.
You know that whole narrative there.
And I get that because you don't
want to be the best, long only US
value manager or the top global
fixed income manager that's fleeting.
To go back to what Sally Hogs had said,
you know, you battle your way to the
top position in a category, but it's
very unlikely that you'll stay there.
The persistence is gonna be low.
Instead, what if you
created your own category?
A category of one, and the way
you get there is by being a
specialist, by owning a niche.
And if you've listened to this
podcast, you may remember the
episode with Simon Evan Cook.
I don't know what number episode
that is off the top of my head, but I
will also put that in the show notes.
And he really holds a masterclass
in the art of differentiation.
So he says he's not interested
in the average fund manager.
In fact, he's like, they're
not even worth holding.
What he's looking for is the
exceptional, the different, the
Marmite fund manager as he calls them.
And if you listen to that podcast,
you know, I'm apparently getting
a shipment of Marmite here that
I will be taste testing on video.
But the idea of that Marmite thing is
it's something that attracts and repels,
and that can apply to us as people.
It can apply to our companies,
our funds, and that's exactly what
Simon, Evan Cook was leaning into.
He's saying, I want the
disagreeable fund manager.
I want the one who challenges the
status quo, who doesn't follow the norm.
And so that.
Forces us to ask ourselves, are we
being brave enough to attract and repel?
Are we leaning into what we stand
for and what we stand against?
And that is actually a really big unlock
to ask yourself what you stand against.
And we're gonna talk about
that a little bit more.
Okay.
There's another podcast we did with
James Fletcher, founder and portfolio
manager at ethos, and he gave a great
example of Differentiation and Edge
when he talked about how they view
culture as a big driver of return
in the companies they invest in.
And he shared some research around
that thesis and he gave some examples
of investments they've made and the
role culture played in that decision
making process and culture Alpha.
If that's such a thing,
is an edge at ethos.
So I wanna talk about
competing and complimenting.
I'm gonna save that.
Let's spend a few minutes here on what
is differentiation and what isn't.
I think we know it when we
see it, but let's try to put
some framework around that.
So too often our answer to what makes us
different sounds like everyone else's.
Our differentiator is exactly the same.
And so that's by definition
not a differentiator.
And um, Dan Mcsk in the episode with
him, he talked about, you know, when
you get a pitch book from a fund
manager and they have like all their
locations on a map, and they talk
about their people and the combined
experience and the depth, the number of
employees, and of course their values.
And I get like, So the point
being that everybody says those
things, and I get it because it's
in our nature to want to fit in.
But if you want to get selected by
an allocator or by a client or a
prospect, you need to stand out and
that requires bravery and courage.
Go back to Simon Evan Cooke
when he talks about that
disagreeable rebel fund manager.
You gotta tap into that part of you.
So here are a few ways you can do that.
So the first obvious thing is you can
kind of grab a notebook in a pen and
ask yourself what makes you different.
Now, I think the challenge with
that is the truisms come up, and
that was something Dan Mikulski
also talked about in his episode.
So ask yourself then what you.
Don't like about your industry.
So you could ask yourself what makes you
different, what you stand for, right?
Or you could ask yourself what you
don't like about your industry,
something your peers do that you
disagree with or don't do, or like
what pisses you off about your space?
And that would be things
you stand against.
And I'm not talking
like moral stance here.
I'm just talking about things that are
typically done by your peers that you
don't do or you do differently, things
that you stand against, and that can
be kind of a really cool rallying cry.
I think it taps into some emotion, which
of course makes an even better story.
And going back to my friend Dan again,
he deep dives on differentiation,
or I guess the lack thereof.
In the asset management space, and he
has a great hack for listeners, which
is to ask yourself if you're defining
your differentiators with truisms.
I'm not gonna lie, I am an English major.
I still looked up truism to make sure
I could really capture the nuance of
this fabulous word choice from Dan.
And it's a statement
that is obviously true.
And what I liked about his usage of
it was he said, for which there's
not really a valid counter-argument.
Meaning when you articulate your edge
or your differentiator, ask yourself
if the opposite is also valid.
If the opposite is also valid,
then you've hit on something.
If the opposite is not really
valid, it might be a truism.
So for example, if you said,
our people are a differentiator,
like we have great people.
Is the opposite of that a valid statement?
Is there an asset management firm
who could come out and say, our
people are not our differentiator.
In fact, our people suck.
That's not really a valid statement.
So our people are, our
differentiators is a truism.
Alternatively, you could say we believe
that a portfolio of best ideas should
not be more than 15 names, right?
That's a differentiator for us.
Or maybe it's 10.
I don't know.
Someone could take the other side of that
and still make a valid statement, right?
They could say, we believe a
portfolio of the best ideas
can have 25 positions in it.
It's valid.
So that's an example of how
you can know if you're sort of.
Getting stuck in truisms.
The other thing that I like to
do there is if we're working on
something, marketing or sales copy
or content, and we could just swap
out the name of our client and insert
the name of any of their competitors,
and the statement still holds.
That's not a differentiated statement.
Speaking of statements, let's
go back to Marty Neumeyer.
One of the books I got after listening
to his podcast episode was called
Zag, and there's an exercise in zag.
There's so many cool things
in that book, by the way.
Um, but there's an exercise in there
on how to create an onlyness statement,
and I'm gonna need, I don't even know if
I printed this, which is gonna really.
Stink cuz I can't tell you what it is.
Shoot.
I will put that in the show notes.
It's basically, I think this is gonna
be off the cuff, but we are the only
insert offering in our insert category
that insert benefit kind of hard to.
Hear that and not visualize it.
But what we're trying to get
to is like, it's almost that
cross thing that we talk about.
What are the unique elements, maybe
things that don't even seem related, that
when you cross them, create a category
of one and can create this loneliness
statement, not in like a hyperbole way.
By the way, I'm not a fan of like
we're the best or like we're the
only, unless you do it with things
are just really uniquely different.
Okay.
Another thing you can do to get at your
differentiators is old way, verse new way.
The old game verse new game.
And the master of this in
my mind is Andy Raskin.
He talks a lot about strategic narrative
and around paradigm shifts, and I'm like,
someday I'm gonna ask him to be on this
podcast, but I'm so not ready for that.
I hope he will come and
share his expertise with us.
Old way, verse new way.
Like, you know how everybody in, everybody
who's a value investor does this?
Well, we do that.
Right.
It's also that zag idea,
old way versus new way.
One of the examples that Andy Raskin often
uses is when salesforce.com came out and
Mark Benioff said, you know, software
is the old way and cloud is the new way.
Right?
A big shift in which there
will be winners and losers.
So that's a way to get to differentiation.
And Ron Carson in our podcast episode.
If you listen to that one, talked about
differentiation, the same, that old
way, verse new way, and he actually
went back to kind of the early days
of, of his career saying the original
old game was financial advisors and
mutual fund companies, you know,
used to treat clients as a number.
There was no fiduciary responsibility.
They weren't sitting on the same
side of the table as their clients.
And kind of the first big shift that
had to happen was, was that right?
The opposite of that fiduciary.
Removing conflict of interest,
uh, you know, fee only, all
that stuff, disclosures.
But now he did a, a second old way
versus new way where he talked about
the idea that, that the new way today
is leveraging technology and innovation
to scale, which typically was not in
the realm of the financial advisor.
While not losing what makes
us special and unique.
So kind of combining repeatability in
tech and scalability with specialization.
Oh yeah.
Here I found that our offering
is the only, so it's our
offering is the only thing in the
category that has this benefit.
So I was, I was right.
Okay.
Sorry.
Jumping around a little.
Okay, so let's summarize.
The big thing I want you to take away
from this podcast episode is that the
industry really wants to create a zero sum
game, or believes that getting selected
by an allocator is a zero sum game that
somebody loses in order for you to win.
And that's not true.
There isn't just one allocation
or one manager in an asset class.
There's usually multiple, for many
reasons, on manager diversification,
concentration risk, business
risk, all of those things.
But also just from the very basic idea
that people and funds are different and
that the sum of the parts, you know, the
hole is greater than the sum of the parts.
And so, Compliment instead of compete
zag when everybody else is zigging,
and if we can't get there, then.
As allocators or prospects or clients
are looking at us, they are gonna be
trying to find points of differentiation.
Oh, by the way, that's where fees come
in and it becomes a race to the bottom.
We don't wanna do that.
Okay?
We also don't wanna battle our way to
the top of an existing category, okay?
We'd rather have a category
of one, and that means being a
specialist, not a generalist.
And nicheing down.
And I know that's terrifying to
people because if you're building
a business, you're thinking, great.
Stacy's telling me I have to niche
down, which means now I'm marketing to
a much smaller group of people and she's
totally killing my odds for success here.
And it's, I know that that's a real fear,
but I, I'm telling you that it's a myth.
When you try to be everything to
everyone, you end up meaning, You failed
to mean anything to anyone at all.
You wanna be a meaningful specific,
I know you think you wanna cast the
widest net, but I'm challenging you
to think differently about that.
When you broaden your prospect
pool and you try to be everything
to everyone, you're also
broadening your competitive pool.
Everyone becomes a competitor.
Let's find a small, passionate audience
that's being underserved and serve
them by what you are uniquely good at.
You're differentiated.
Unique authority, unique
ability, unique offering.
And remember too, that brand is a
perception in your investor's mind,
not what you say your brand is.
So don't forget to keep a
pulse and kind of ask your
investors how are they using you?
What did they think
makes you different or.
What strategies or funds are you
complimenting and, and how are,
what is that differentiation?
Oftentimes that allocator is trying to
balance out exposures or even results
in experience or how managers think and,
and what makes their process unique.
I wanna also, Talk about an end
with Daniel Crosby's podcast,
which I mean is just like a
masterclass in behavioral everything.
And I'm gonna have him
on the podcast again.
Uh, we're gonna do a little
mini-series, so stay tuned for that.
But he talks about how our brains
want to answer an easier question.
So quantitatively, when they're looking at
like a big group of funds, they're gonna
weed out the funds that just aren't good.
And then our brain's gonna whittle
it down, you know, wants to
whittle it down to a short list.
But at that point, the subconscious
buying kicks it, right?
Because 95% of decision making
happens in our subconscious,
even in the investment world.
And Daniel talked about that likability
or the power of authenticity in the
beer question, which is typically.
Given in the context of voting and the
idea that when you're trying to square
a whole bunch of different things
that are very big and very complex,
sometimes you wanna just get down
to the nitty gritty, which is what I
wanna have a beer with this person.
Are they likable?
Do I think they're authentic?
Differentiation can hide
in our eccentricities.
What makes us different?
What makes us fascinating
is often at the edges.
So I'm here to encourage you to be
brave, be willing to attract and repel.
Here's to the rare birds.
This podcast is for informational
purposes only and should not be relied
upon as a basis for investment decisions.
The information is not an offer,
solicitation, or recommendation of any
of the funds, services, or products,
or to adopt any investment strategy.
Investment values may fluctuate
and past performance is not a
guide to future performance.
All opinions expressed by guests
on the show are solely their own
opinion and do not necessarily
reflect those at their firm.
Manager's appearance on the show does
not constitute an endorsement by Stacy
Havener or Havener Capital Partners.