Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital marketplace for mature startups and midsized companies raising capital using Regulation A+. He has played a key role in building successful companies including Symantec/Norton, Ashton Tate, MicroPort, Knowledge Adventure and more.
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Time Stamped Show Notes
(click the time stamp to jump directly to that point in the episode.)
- [00:36] – Welcoming Rod to the show.
- [01:03] – Rod started as an engineer.
- [01:30] – He used to be involved in amateur road racing.
- [02:09] – How do you generate revenue in your business? – Manhattan Street Capital is a funding platform.
- [04:32] – Give an example of how Regulation A+ is changing the game for fundraising – People can put in the money by buying shares.
- [05:27] – Real businesses promote themselves through selling shares.
- [06:00] – How could someone go about investing in a company? When would they get paid? – The stocks are tradable.
- [06:48] – If people invest in something that is compelling, they get shares that they can sell, or they will wait for their shares to go up in value.
- [07:55] – Investors can show support to products and companies that they believe in.
- [09:01] – Go to ManhattanStreetCapital.com and put in your email to get a white paper that describes Regulation A+.
- [09:36] – Worst Entrepreneurial Moment: There are quite a few, but the worst was when he was the Executive VP of a new company.
- [10:34] – He had not sold one share of the company.
- [10:54] – He thought about getting liquidity.
- [11:09] – He sent an email to human resources, and they gave him a quote for the money he would get if he sold his shares.
- [11:37] – He didn’t sell a single share at that price.
- [12:28] – He ran out of time and missed the window to sell his shares.
- [12:36] – He should have offered half of a share.
- [13:05] – The value of diversification and liquidity.
- [13:36] – Entrepreneurial AH-HA Moment: He had acquired a utilities company.
- [14:06] – The software “was a total bomb.”
- [14:33] – He had to fix the product and its marketing.
- [15:18] – They did extensive testing.
- [15:37] – A group of IT professionals saw their new pitch and loved it.
- [16:12] – Their reaction to the headline “Never Say Die”.
- [16:36] – It was an emotional response.
- [17:04] – They ran that campaign and it was super successful.
- [17:30] – What do you want people to get from that AH-Ha moment? – The best marketing comes when you emotionally engage with your audience.
- [17:58] – Biggest weakness? – He thinks he can figure things out himself.
- [18:08] – Biggest strength? – He is always paying attention and learning.
- [18:28] – Practical thinking in business and life.
- [20:50] – The Lightning Round
- What was holding you back from becoming an entrepreneur? – Growing up in England.
- What’s the best piece of advice you’ve ever received? – His uncle told him, “Your job security is your ability to deliver. You don’t need a big company…. You won’t enjoy that.”
- What’s a personal habit that contributes to your success? – Visualization of goals. Meditation.
- Share an internet resource, like Evernote, with Fire Nation – CrowdFire and Pocket
- If you could recommend one book to our listeners, what would it be and why? – The Pillars of the Earth
- Imagine you woke up in a brand new world, and all you have is a laptop and $500. What would you do in the next 7 days? – I’d find a guitar for $250 and then give the other $250 to people on the streets. I’d start marketing to get my businesses going and share my music with the world.
- Parting piece of advice – Get started. Even if you fail, you will learn and be able to improve.
- [25:19] – @IamRodTurner on Twitter
Rod Turner: I absolutely am.
John Lee Dumas: Yes! Rod’s the founder and CEO of Manhattan Street Capital, the No. 1 growth capital marketplace for mature startups in midsize companies raising capital using Regulation A+. He’s played a key role in building successful companies to include Symantec, Norton, Ashton-Tate, MicroPort, Knowledge Adventure and more. Rod, take a minute, fill in some gaps from that intro and give us just a little glimpse of your personal life.
Rod Turner: I’m an engineer; initially I started out as an engineer. I’ve had the good fortune to broaden my experience based in my career to all the functional areas of businesses. Married. I have two kids, an 11 year old and 18 year old; boys. We live in San Diego, which I love. I love boating. I’ve done a lot of car racing. These days, I am not actively racing but used to race, world race, amateur world racing with the SCCA. So it’s a heavily modified Mazda RX-7, which was an absolute blast. That was a true passion of mine. I’m so glad I got to do it.
John Lee Dumas: I’m going to have to connect you with a fellow San Diegan, Michael O’Neill, who lives right over there in North Park. Big time racer, loves all that stuff. You guys would have a lot of good stuff to chat about for sure. But, Rod, what I kind of want to focus on first now is you today as an entrepreneur. I mean, we’re going to go back into your journey and hear about the ups and the downs and the great ideas that you’ve had. But how do you specifically generate revenue in your business right now?
Rod Turner: So, Manhattan Street Capital is a funding platform for companies that need to raise capital between $4 and $50 million per company per year. It’s Regulation A+. It’s a whole new way for private companies to raise capital. That’s how we make money, is by providing that service to companies. So we have a simple fee structure for that. It’s honestly something that is very valuable to the right companies. Because Reg A+ is new, it’s only been in existence for 14 months, this is a new area that is growing.
People’s awareness level is low, but over time – because the history since 1933/’34 has been that private companies weren’t allowed to sell their shares to main street investors, Mom and Pop as it were. Now, through Reg A+, we’re allowed to sell their shares to anybody worldwide, regardless of their wealth, which is huge. The investors can also sell their shares immediately after purchase. So it’s a kind of public offering. In fact, you can use Reg A+ to take a company public to the NASDAQ or to the New York Stock Exchange. I believe over time we’ll see more evidence.
There’s one company doing this now, where they are doing public to the NASDAQ through using the Regulation A+ process, instead of the conventional, underwritten, old-style approach. Because the old style has become uneconomic since 2001, when the decimalization of broker trader fees occurred. That made small public offerings unprofitable for underwriters, so they largely disappeared. Reg A+ is bringing them back to life, I think. For companies that need to raise up to $50 million a year or up to $50 million in one transaction, they now have a way to go public.
If they choose to go out on one of the big markets, they can do so, with the ability to actually promote their business and their offering instead of having a quiet period, which has been the conventional IPO method for so long.
John Lee Dumas: So you’ve got to talk maybe a little bit more about exactly what Regulation A+ is, because you said it’s only been around for 14 months. It’s going to kind of change the game. So maybe instead of kind of getting lost in the vocabulary, can you give an example of how Regulation A+ is changing the game with a company?
Rod Turner: Think of it this way: think about a crowd-funding site like Kickstarter. Think about an offering there that’s raising money from donations. What Reg A+ allows is for the people that want to put in the money to be buying shares instead. So it’s very similar in terms of the appeal – social media sharing, the online advertising, broadcasting far and wide about what the offering is. But now, instead of relying on the generosity of donations or of people buying a gadget for a discount that doesn’t exist yet.
In this case, these are real businesses where they’re not allowed and encouraged through Reg A+ - it’s actually required that the companies promote themselves in order to make these offerings succeed. They’re allowed to use all of the digital tools available to them just like a Kickstarter offering, except now we’re selling shares. So it’s a whole new game. As you can imagine, there’s an established understanding you can’t do this because you haven’t been able to do it for a long time, but now we can. It’s a pretty revolutionary thing.
John Lee Dumas: Well, let me kind of talk this through a little bit. So like just say there’s a company that I’m like, wow, I believe in that company. Like I think that company is going to be the next Airbnb, the next Uber like in their industry, in their niche, what have you. I would love to invest in that company, pre-IPO. You know, pre-going public whatever. So I say have like maybe $700.00. Okay, I’m going to invest that $700.00. What does that look like? Like I’m going to get a percentage back of the company and then when do I get paid? Is it when the company ends up going public and then I get the shares? How does that work?
Rod Turner: This is a kind of public offering, because the shares are tradeable right after the investor buys them. So that’s better and different than one would expect. But say somebody wanted to – typically, individuals, people will hear of these offerings through social media. That is obviously the most cost-effective manner. They go and they look at the offering, they like it. If it’s really engaging, something healthy, something that maybe a cancer treatment or a stem-cell treatment for people to recover from joint injuries – things of that type that are very engaging. A chronic pain treatment system that’s FDA approved and patented; something like that would be very compelling.
So then the investor puts in some money and when the offering goes effective, which could be very soon, depending on the stage of that particular offering, then they get shares in that company that they now own and they can sell them through a stock brokerage with some restrictions to other people right away, but more likely they believe in the company and they’re hoping that it’s going to grow and prosper over time and that their shares will go up in value. If the company is not listed on a major market and does so later, then the liquidity of those shares would improve later.
But the real point of this, I think, is that investors get to show support for, and put money behind – they’re voting with their feet to back products and companies that they believe in. So, quite painfully, but for example, if there’s a company offering of a chronic pain treatment system and by investing in it one can accelerate the number of centers so maybe they’ll be one opening by Aunt Ethel that’s in chronic pain every day of her life, then people may want to put in some money for that purpose. Buy some shares partly because of the good it will do and partly because of the investment upside that may or may not exist.
As we know, when you buy shares and things in companies, there’s always risk in doing so.
John Lee Dumas: Well, that’s a good example. I like that last example you shared – that there might be an alternative reason for investing beyond just, I hope this company does really well, etc. So we’re going to mention this again at the end, Rod, but I know that you and I talked pre-interview about the fact that you have some white papers on this. Can you maybe share with Fire Nation, the people that want to learn more about Regulation A+ could go to snag this?
Rod Turner: Yeah, so go to ManhattanStreetCapital.com, spelled the way it sounds. At the bottom of the home page, just put in your email and we’ll send you, free of charge, a white paper that describes Reg A+, both from a company’s point of view, as well as from an investor’s point of view.
John Lee Dumas: So cool. Well, again, we’ll mention that again at the end, Fire Nation. And of course, have it in the show notes. But of course, just go directly to ManhattanStreetCapital.com, put your email in, and you’re good to go. So, Rod, let’s kind of maybe shift this conversation now to your journey as an entrepreneur. I mean, you weren’t always in Regulation A+; it’s only been around for 14 months. You weren’t always just always just ripping around corners on your Mazda. I mean, you’ve had the ups and the downs. Take us to your worst entrepreneurial moment to date. Tell us that story.
Rod Turner: Yeah. You know, I spent long time thinking about that because there’s quite a few of them. I’ve made a lot of mistakes along the way. But I think the worst one, the one that had the biggest impact on me for the longest time was I was the executive vice president at Symantec – of an old anti-virus company – from the very early stages of that company’s life. I had a lot of fun with that. We went public and then about two and a half, three years later, I was running the Norton business, which we had acquired. We acquired Peter Norton Computing. I was the general manager of that business unit, which was growing gangbusters.
It was a really fun, exciting time in my career. But anyway, I had not sold one share in the company since the public offering and we had been delivering on our numbers. Each quarter, we delivered bigger and better profit-to-revenues and exceeded analysts’ expectations. So the investment community and analyst community was happy with us. Our share price was doing nicely as a result. So I thought, you know what? Maybe I should think about getting some liquidity here because it’s done so well so far. But I was optimistic and had [inaudible] [00:10:30] to do this, so I actually hadn’t sold any shares yet.
So I sent an email to the woman in Human Resources asking her to calculate how much money I would get if I sold all my stock options that were vested at that point. She came back to me and it was a lovely, big number. I had asked this question in time – there’s only ten days per quarter when you get to sell shares when you’re an insider executive in a company that’s public. So I had timed that question in a way that allowed me to sell it. But the bottom line here is, I didn’t sell one share. Not one share at that price.
The reason that I screwed up and didn’t sell one share, it turned out in retrospect that the share price continued to do well and then we had some very disappointing results and there was a lawsuit and our stock price plummeted. Anyway, I didn’t sell one share, not one share. And the reason was it was just such a big number. It was like wow, oh my God, I can actually make that money now? I mean, I’d been aspiring to that, building to this. That’s been the whole goal, part of the whole goal. But, oh my God, that’s so much. Well, the tax is going to be more money than I thought I’d ever own.
So now I start going in to talk to the broker, talking to investor advisors, tax planners. It got so bloody complicated and some of the stuff didn’t make any sense, so I had to check it out. I didn’t have time because I was kicking ass in driving, running the business. So I ran out of time. Missed the window to sell my shares through all this over-complicated analysis. If I had just taken the simple approach and said, you know what? Sell half the stock. It’s such a great price. You don’t need to be so concentrated; it’s a good idea to get some liquidity. If I’d just done that that would have been such a smart move in retrospect.
So I would say I suffered from that one because the stock price plummeted and it stayed low for a long time and oh my God, yeah. Many, many times I wished I’d handled that one differently.
John Lee Dumas: Yeah. Well, Fire Nation, I mean, this is what I want you to be taking away from this is the reality we need, as entrepreneurs, to be diversified at some levels. We need to say, hey listen. I can’t just have all of my chips on one table because I just don’t know – no matter how sturdy this table looks – what tomorrow’s going to bring. We’ve all seen what’s happened over the past 10, 15 years with market corrections and housing, all of the above. So have that nice little diversification.
Have some of that liquidity that Rod keeps talking about. Liquidity is, frankly, cash in the bank. It’s a good thing to have. Now, Rod, let’s kind of shift a little bit and talk about an ah-ha moment that you’ve had. You’ve had a lot of these, but what’s one of your greatest? Tell us that story.
Rod Turner: Yeah, so this one, it goes to a similar time where Symantec acquired the Peter Norton utility company – Peter Norton Computing. They had prepared, just prior to the acquisition, they had made a new update to Norton Utilities, which was their flagship product prior to accommodation. We repackaged it with the Symantec packaging, but didn’t change the software before we launched it. It was a total bomb. It was primarily because there were some bugs in it, and a lot of power features had been removed. This beautiful user interface had been put on it, but our users didn’t want that.
It was blocking them doing things productively. So, of course, people concluded that Symantec screwed it up. We bought the company and we messed up that product. That was a reasonable assumption for an outsider. So I had to fix that. We needed to get the momentum and the market presence that product deserved. So we did a bunch of things, one of which was had two marketing agencies compete. The Symantec agency of record at that time and the Norton agency compete in order to stay with us, to be the one that would continue to work with our Norton utility division of Symantec products.
They came up with some amazing concepts. It was literally a face-off between the two of them. I picked the best one. The best one – this is so far I’m just sort of building to the real ah-ha moment. Because I went to the focus groups, you know, we had enough budget in those days because we were really successful, that we would do proper testing through mirrors and ask questions of people as to what their responses were in order to test out our marketing concepts and pitches and so forth. So I was there looking through the one-way mirror, observing the reaction, when we had this group of IT professionals, influencers.
They were the bread-and-butter, they were the heartland, if you will, for the Norton Utilities as a business, as a product. We ran the pitch by them and they loved it. I’ll explain it a little bit more. It was a three-page print spread. In those days, print media was a bigger deal than online obviously was. The first page said, “Peter Norton’s philosophy on data recovery can be summed up in three short words.” Over the two-page spread: Never. Say. Die. And then a lot of good material beneath it. But that headline – seeing the response of these IT professionals, the power users, Never. Say. Die.
Seeing them respond to that, it was absolutely amazing. I’ve never had such a marketing moment because they emotionally responded. It was like – they were saying things like Peter, Peter Norton and me, we go way back. Oh, yeah. Pete’s my man, yeah, yeah. He and I, we think the same way. We got a customer, we got a user with a problem, and we fix the problem. We don’t take no for an answer. And it was such an emotional pull on them, nothing else came close. We’re talking exponentially more powerful. Then we ran that campaign with a bunch of other marketing programs in place and it was ballistically successful.
That established the positive momentum for the Norton utility and Norton business within Symantec that we were able to sustain for many years and build that into Symantec. Symantec these days is the utility business with lots of new variations and improvements.
John Lee Dumas: So, Rod, I’m going to challenge you here. Just try to sum it up in one sentence. What is the big takeaway that you want to make sure Fire Nation gets from that ah-ha moment?
Rod Turner: The absolute best marketing comes when you emotionally engage with your audience. Emotionally engage. It’s hard, but when you do that, the results are exponentially better. That’s when you shoot the lights out.
John Lee Dumas: Rod, what’s your biggest weakness as an entrepreneur?
Rod Turner: I have this silly belief that I should be able to figure it out myself too much of the time. I resist asking advice too much.
John Lee Dumas: What’s your biggest strength?
Rod Turner: Probably that I’m always paying attention and learning, even in the most unlikely places. So I pick up methods and techniques. Some of them state-of-the-art, some of them not, and apply them in different areas which look like that’s radically innovative thinking. It’s really not innovative thinking, it’s practical. Taking something that works in one environment and putting it in another environment where it hasn’t been done before. I did that in car racing. I do that in business all the time. I do it in life as well, but it’s more obviously beneficial in business.
John Lee Dumas: Well, Fire Nation, we are definitely going to be innovative in the lightning round, so don’t you go anywhere. I’m going to take a quick minute first to thank our sponsors.
Rod, are you prepared for the lightning rounds?
Rod Turner: Yeah, you bet.
John Lee Dumas: What was holding you back from becoming an entrepreneur?
Rod Turner: This is a funny one because really, I don’t think anything actually was except that I grew up in England. England over here seems like a small place, but there’s 60 million people living there and they’re generally not an entrepreneurial as people in the States are. So that probably is like, the ambient entrepreneurship is so much lower there. You go out and hang out with your friends; people aren’t talking about the next business they’re going to build. Whereas here, that’s a part of every conversation I ever was exposed to, even when I moved to the States at the age of 23. So yeah, it’s a big country and it was slowing me down. I mean, 60 million people, that’s what’s going to happen, right?
John Lee Dumas: What’s the best advice you’ve ever received?
Rod Turner: My uncle, Uncle Jack, my Dad’s younger brother – I was in England. I was looking for career guidance and counsel and it was very hard to get much of any useful help there. A lot of talk about job security amongst people that I would discuss career moves with. I’m at the age of 17 or something, 18 at the time. He said something to me. He said, “Rod, your job security is your ability to do well, your ability to deliver. You don’t need a big company that you’ll work for 20 or 30 years or so or 40 years and they’ll pay you a pension. You can get that, but you’re not going to enjoy that and that isn’t where the upside in your career is going to come from.” He was so right.
John Lee Dumas: What’s a personal habit that contributes to your success?
Rod Turner: Probably visualization of the goal that I’m striving towards? I’ve been really lucky that I’ve had that natural tendency from the age of 14 or something. I didn’t even realize what I was doing, but I was visualizing the outcome of successful accomplishment and meditation. Those are the two things. Clear visualization, always focused on what I want to accomplish, not paying attention to what I don’t want, and meditation.
John Lee Dumas: Can you share an internet resource like Evernotes with Fire Nation?
Rod Turner: The two really impressive things for me: Crowdfire, which you’re probably very aware of, is a great way to expand one’s social media following. I’ve been amazed with how effective that is. And Pocket. Pocket is kind of reminiscent of Evernote, but for me, Evernote just sort of disappeared for some reason, but Pocket is what I use. If I see something I want to get back to later or if I want to share it but now isn’t the right time of day or the right day of the week, then I put it in Pocket and come back to it later.
John Lee Dumas: If you could recommend one book, what would it be and why?
Rod Turner: I work so hard and I’m so intent on what I’m doing, I need to get a break here and there. So fantastic fiction is what I need, so that’s what I’m going to recommend. One of my favorite authors is Ken Follet, I think it’s one T. His book, “Pillars of the Earth,” is the best book that I’ve ever read. I mean, it’s thick. It’s probably 700 pages. You feel guilty putting it down because those people’s lives are on hold. There’s drama, there’s [inaudible] [00:21:53] happening. Excuse my language. There’s things happening. And then there’s horrible things that are about to happen and you know that they don’t and it’s like, oh my God, I’ve got to pick it up again.
John Lee Dumas: Well, it is two Ts in Ken Follett. I definitely recommend that book as well, Fire Nation. And Rod, I want to end today on fire with a parting piece of guidance from you, the best way that we can connect with you, and then we can say goodbye.
Rod Turner: Get started. Even if you fail, getting started will tell you that it’s failing and then you’ll learn that instead of being in a holding pattern. I think the only big mistake I see entrepreneurs making is where they want to do it and they don’t do it. They don’t start. They study it, they think about it, they evaluate it for years and years and years and then the window of opportunity has passed and it’s too late in their lives. So I would say one way or the other, get your feet wet. “Do it” would be my simple guidance there.
The best way to connect with me is through Manhattan Street Capital or @IamRodTurner is my handle on Twitter. Those would be really the best ways to get in touch with me. My email is [email protected] Again, spelled the way it sounds.
John Lee Dumas: Fire Nation, you’re the average of the five people you spend the most time with and you’ve been hanging out with RT and JLD today, so keep up the heat and head over to EOFire.com. Just type Rod in the search bar. His show notes page will pop up with everything that we’ve been talking about. These are the best show notes in the biz – time stamps, links to everything. And of course, take people up when they give you these great gifts, Fire Nation. Go to ManhattanStreetCapital.com. Put in your email; get that great white paper on Regulation A+.
Email Rod – [email protected] He’ll get back to you. He put it out there. Make this stuff happen, Fire Nation. Rod, I want to thank you, brother, for sharing your journey with Fire Nation today. For that, we salute you and we’ll catch you on the flip side.
Rod Turner: Thank you, John. You have a great day.
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