Interview with David Bach
Learning from the Founder and CEO of Platypus Neuro
What are the insights that you think would be most important to share with an entrepreneur that you’ve had in your journey?
I n my business career, I have had one insight that’s taken me more than a decade to learn. And because it’s so important to me, rather than kind of saying something which sounds like pablum, let me tell you a couple stories to illustrate this, because it is an important lesson.
I started my first company 17 years ago. It was called Touchstone Health Partnership. It was a Medicare HMO. And we had a product which is an insurance product, and on paper, this product looked amazing. It was a really good deal for the patients. It was a much better product for them than any other other products on the market. And we worked with doctors, and it was a great thing for them, and you ran the numbers and they made tons of money. And economically, it made sense and it had been validated in other markets.
Now, in addition to the fact that we had designed that, I had done market research on this thing. So I talked to over 30 doctors who all said, “Yeah, this is great. Totally behind it.” We had run focus groups with potential Medicare customers and they said, “This is great. I want to sign up.” So I put all of my money into this thing and I raised some capital and we started this HMO. And six weeks later, we had 14 people signed up. I mean, it was a disaster.
Where was the error? What did I do wrong? And I mean, I think the answer’s pretty obvious, which is I did exactly the same thing that most early-stage entrepreneurs do, which is I designed a product that I believed the customer should want or would want, but it actually wasn’t a product that the customer did want.
And it wasn’t about how we were marketing it. It was just the wrong product design. Now, a lot of entrepreneurs fail because they design something kind of in their own garage and they’re like, “People will want this.” But I had gone one step further. I had actually done market research and I had talked to the doctors and I had run the focus groups. And everybody said, “Oh, I really want this.”
And so here is the lesson I learned. I learned the customer has no idea what they really want. And so if you go and you interview a customer and they say, “Oh, this is a great product and I want it.” You are unwise to just take that at face-value. Because most people have a distorted view of what they actually will buy. So intellectually, they think they want it. But in fact, what is driving them, what makes them make a buying decision are emotions that are kind of below the surface of their conscious awareness.
We fought for seven years and ultimately, we turned the company around and we got it growing and profitable. But it was a miserable journey. And after that company and I had an exit, but it wasn’t a ton of money, I made kind of a sacred vow to myself and I was like, “Never again am I starting a company where we have a product that is not going to kind of fly off the shelves.”
Here’s the second story. What I did is I did market research in a really different way. I’m the healthcare guy. And so I started doing informational interviews with leaders in the healthcare world. And here’s the question I asked them. I said, “Tell me something which is going to be a huge problem a year from now for you that you haven’t started thinking about.” And I got on the phone with the CEO of United Healthcare and Cigna. And it was cool because I was talking to these people and they were super psyched to have this conversation. I would get these 15-minute interviews which would go two hours because they were like, “I’m running a company. I’ve got to hit quarterly results. I haven’t thought about what I’m going to be worrying about a year from now.”
And when I did the interviews, having learned from those seven years, I listened. And I didn’t only listen to the words, but I listened to the emotion. I listened to what were they telling me where there was fear or greed. And I was like, “Oh. Here is something that a year from now, they’re going to buy it.” And after that six-month process, we came up with this company, Leprechaun, which I think you know is the fastest-growing company in the country. And we were profitable in six weeks and generated 90X returns for investors. And it was all because of the lesson I learned which was when you build a business, if you don’t want to have revenue growth challenges, you need to understand not what is the customer going to want, but what is the customer going to do anything in order to buy.
And so that’s what we did with PlatypusNeuro. And you’re seeing the results. And here we go into the market with a sports product and people were saying, “It’s going to be a two-year sales cycle.” We’ve had the product in the market 12 weeks. We’ve got five customers. It’s all because we knew if we could solve a certain problem for them, they would move mountains in order to buy it. And so if there’s one lesson I have, it is understand your customer. And if you think you understand them, just assume you’re wrong. Really, really understand what’s going to drive them.
What’s important to you in life and why are you building PlatypusNeuro?
I was watching the US Open tennis match a couple days ago. I was watching Federer. the guy next to me was a big tennis fan, so we were watching it. And he turns to me and says, “I don’t understand why the hell is this guy playing? Right? He’s won more championships than any other person alive. He’s in his late 30s. It’s like, he doesn’t need to play anymore.” And kind of spontaneously out of my mouth what I said is, “You know, I don’t think you’re right. I think he does have to play. Because I think this is what he was born to be, and if he’s not doing it, it doesn’t feel right.”
So there’s this concept in sort of Hindu literature about dharma. The thing you were brought into the planet to do. And the idea is if you are doing what you are here to do, you feel fulfilled. And if you’re not, you’re not. And so I mean, I’m going to say it like this. I was retired. I don’t have to work. But when I was not working, it didn’t feel good. And now I feel alive. Now I feel like I’m doing what I’m here on the planet to do.
You look at me, and I’m alive. This is what I want to do. This feels like my life’s purpose. And it’s incredibly intellectually stimulating. And the competition is phenomenal. I get to deal with really incredibly cool people. And there’s something about the game. I’ve got this number, but I want to get to that number. Not like my life is going to be different, but it’s like … Right? It makes it pleasurable. And I think that’s it. I think those of us who are born to do this, it’s just like if you’re not living, you’re dying kind of thing.
Tell me about how you go about building teams and maybe some of the lessons you’ve learned in that area?
It is really important. I’ve been at this long enough. The team is everything. The truth of the matter is, I think it’s really hard to build a good team. And I’ve read so many books about this and I’ve been trained and I’ve brought in people. I’ve had the privilege … This is my fourth company. I’ve had the privilege in two of the four, and this is one of them, where kind of everything clicks. And when that happens, it’s just like magic. But it’s just really hard to do. So when I share these lessons, the context I want to give you is I’m still learning this. And I just don’t think it’s as easy as people make it to be.
But lesson number one, it’s different for everybody. And so I have a very clear set of strengths and weaknesses, as you know. And the strengths I have, I’m really good at. And my weaknesses, I am really bad at. And so in designing a team, I need to have insight into myself. I need to have insight into where are the gaps that need to be filled in, because it’s got to be integrated. And someone with a different personality, they need a different team. And of course, the industry is different, as well. And so you really have to design it based on the circumstances and based on who you are. And so that’s lesson number one.
And the reason I share that is in my first company, I brought in a team of people who I liked and who thought exactly like me, and it was a disaster. And so what I’ve learned is if I’m on a team with a bunch of people where I want to be your friend and I want to go talk and we think the same way, it’s wrong. There are people on my team who I really like and respect, but they’re not the kind of people I would be friends with because everything I think, they think differently. And that’s really important to have that kind of dissonance. If I’m really extreme in this way, I need someone else who’s extreme in that way who’s going to fight so we can find a common ground.
And so the classic example of that is you always want kind of people in the marketing and sales world who are kind of over-promising and want to solve the customer problem, and they have to be balanced out with the kind of science engineering people who are just never going to want to release product. And you want that tension.
Now, in that context, the other thing that I just think is really important, and this is a lesson I’m still learning about, is around shared values. And so when you build this team where everyone’s different and you’re not necessarily kind of made to be friends and you have a lot of conflict, there have to be — your partner Tony Robbins talks about this — trust and respect. Right? And so when the engineer is screaming at the marketing person, at some level, they have to understand, “I trust you. I know you’re giving your best. I respect, I honor what you have to bring to the table. I totally disagree with you, but I’m going to treat you with respect.”
And so I think that’s a starting point. But the other thing is there is this notion of common values. And just like in any relationship, if you have people who are wildly talented and they fit the boxes, but they don’t share a common set of values, it just fails. And the reason I say it’s hard is when you build a team of eight or nine people, one person who’s off, where they’re sort of resonating differently or their values aren’t the same, they can just bring the whole ship down. So you really need to find that weird cohesion where there’s violent disagreement and different perspectives, and yet that kind of everyone’s on the same page around values.
And so that’s what I have to offer. I hope it’s helpful. I just would say it’s the most magical thing in the world when you get the right team. And it’s just really super hard, for me. And I’ve never known anyone who’s actually … I’ve known people who say they’re good at it, but I’ve never … Even them, they seem to have a 50 or a 60% batting average in hiring.
What are some of the things that you do in hiring to either identify values or identify that there will be trust and respect, to make your batting average as high as possible?
We all do it differently. One of the things I’ve been doing at Platypus which has been really good is we’re using a consult to hire model. And so 2/3 of our people worked with us as consultants for six months. And what’s nice is if you have that six-month observation period, people just kind of naturally fall off. That’s a really good way of kind of doing a test run. I mean, otherwise, it’s like you meet someone on a date and you marry them. And so it’s nice to kind of date beforehand. That’s one thing.
The other thing, and this is just a personal thing that I have found, is I spend personally hours on reference checks. And I’ve found over the years that that’s really helpful. And so I get on the phone with people and my typical reference check goes about 45 minutes. And I’ll do five of them. And I will not get off the phone until they tell me something bad about the person. And if they’re like, “Oh, they’re great at this and this and this,” I’ll just not let them hang up. And I’ll just be, “Okay, but tell me something wrong.” And I make them tell me a story about something which is a problem for the person. And if they don’t, I just don’t accept the reference check. And I have found that the things that come out in those things are just really helpful.
The other thing is, this is just how I do it, personally. When I hire, when we hire, we tend to be panicked. Because we’re in rapid-growth mode and we need this position filled yesterday, right? And we’re in that position right now. And when you get into a panic mode, you tend to settle. Right? Because you’re like … Because this person’s just going to relieve the pain. And one of the things, and I would say Jamie (our COO) has taught me this, because I think she may be the best person in hiring I’ve ever known.
And what she’ll say … If you interviewed her, she would say she just feels it. And it’s like if anything feels off, and I’ve seen her do this with two candidates, she’s like, “I don’t know. It’s just something doesn’t feel right.” And I’ve just learned if she says that, I’m not even going to question it.
Because you’re panicked and intellectually, you say, “This is right.” But if your intuition is not going, “Oh, yeah, yeah, yeah. This person is right there in the values thing. That’s right.” I’ve heard these great stories. I can’t remember who the company is, but … Oh, shoot. But anyway, they have this process where they put people through a day of interviews and then they send them on a shuttle bus back to the airport. And then they interview the shuttle bus driver and if they were negative to the shuttle bus driver, they don’t get hired. So they’ve got these little tricks.
This is, again, this is a real struggle for me. But I just have learned over the years how important it is. I don’t know. It’s a pretty, pretty amazing team we’ve got here.
Tell me about where you started, how you knew you weren’t good at selling, what you did to learn and grow, and kind of what advice you’d offer people in that area?
So I’ve been working on this for probably 15 years. So as you know, I’m a guy who’s very into personal growth. And as you perhaps don’t know, I have the benefit of having started off in such a bad place that there was only room to grow and I was very motivated. By nature, I’m not good at personal interactions. I’ve been trained.
So when I started, I had a job as a management consultant. And everybody was like, “You’re really fucking smart.” But people weren’t buying from me. And they were giving me feedback saying, “You’ve got a script and you’re following a script, but you’re not listening to people, at all.” And so the first piece of feedback I got was, “You suck at selling. And you’d better learn this.”
And so I mean, I think the answer to your question is I just took it upon myself to train myself. I kept and I read books about it. And over time … And I practiced and I practiced. And I just tracked my results. And I finally … I think it’s just a matter of when you really don’t have the ability to naturally pick up social cues, then you start getting trained. And it’s like, “When they do this, you do this.” And so I’m not skilled because I’ve trained myself. And I think it’s just because I really have worked hard and I’ve done it like a science project.
I’ll give you an example. So we’re going off to hedge funds to go and do a deal. I will have, by the time I hit there, spent 30 hours with a speech coach going over every single word of that pitch. And then every time we have a meeting, I’m going to go back and I’m going to write down notes and say what worked, what didn’t, how did they respond. And so it’s just an iterative process. But, yeah, I mean, I know … I mean, at this point, I’ve got a rep for being pretty good at selling. And it’s just 10 years of work.
What are the three most important lessons you have learned in life?
So the first lesson I’ve learned, is that there is a state available to all of us, this flow state, where you just feel one with the universe and you just find this level of joy and power that is extraordinary. And of course, I first experienced it really on the fire walk. But what I’ve discovered is that’s a state available to all of us. I didn’t discover it. It was discovered thousands of years ago. But knowing that’s available and that it’s just such an exalted state is really one of the major lessons I’ve taken in.
And the second one is, having been a guy that’s trained himself a lot, the brain is really plastic. And you and I, we can rewire ourselves so dramatically. And so I think that combination of lessons. You can really be incredible and you can change yourself immensely. Those are two of the three.
And then I think the final one is a very big neuroscience thing: it is this power of visualization. And as I’ve learned more and more about the brain, I’ve realized people think about it as, okay, it’s in the book The Secret. But I mean, that’s actually how we work. When I take a step, what my brain is doing is visualizing my foot going from here to there. And then your unconscious mind just sort of fills in the rest. And so to the extent that you create and hold a vision for the future, which is stable and associated with certainty, your unconscious mind will just bring incredible things to bear. And so I think just going into the world with the natural assumption that the stuff everybody says is going to be hard will be easy allows it to become easy, because that’s just what we tell the world we’re going to experience.
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