016: Investing in Startups and Mentoring with Daniel Cotlar
Daniel Cotlar learned early on that he enjoyed the creative, risky, high-energy startup world, and after learning much over his years working at them, now invests and mentors startups. He is passionate about helping others and learning from them. In this episode, he discusses his steps to a successful startup business and mentoring relationships, and some of the stumbling blocks he’s found along the way.
Key Points + Topics
- [2:25] Daniel Cotlar originally went to a startup school when he was younger. It was a very small school, and the parents who sent their children there knew they were taking a bit of a risk, but they did it because it inspired the entrepreneurial spirit. It taught him that he was comfortable being a big fish in a small pond. He then went into the yeshiva school system for his secondary schooling. He eventually became a Rabbi. Then, after working at a few startup businesses, he went to Rice for his master’s in business. This helped solidify the structure of his marketing approach. He really enjoyed learning about things that were closer to the consumer than, say, accounting and finance. He liked to experiment and create things. It was fascinating to coordinate with an engineer or designer and make a product and then see customers interact with it.
- [5:00] After getting his master’s degree, Daniel reached a stage in life where a steady, reliable income was a priority. He worked at a major corporation for five years and confirmed what he already suspected – that he was less comfortable with the diplomacy, politics, and “businessman” life at a large company. So, through a friendly connection, he transitioned to a small, burgeoning business: Blinds.com.
- [6:44] Daniel had an internship while getting his MBA. He describes how some experiences teach you things, and others teach you things you don’t want to do. He was a small cog in a much larger system at this internship. He would submit reports through the bureaucracy that he doubted ever saw the light of day. At this job, his first hire was an intern. Eventually, this intern came to him upset and stressed because she felt she didn’t know what she was supposed to be doing. He took this as motivation to learn to be a better manager and mentor.
- [8:55] Daniel has learned from a mentor that you should believe somebody can do anything. That you’re capable until proven otherwise. He and a friend were basically entrusted to run a surgical instruments company. He is encouraged by seeing others in his community, looking around to see the different experiences, and finding things to learn from and teach others.
- [10:25] A mentor must really want what’s good for the other person. There are the things you say and what you believe, and what you believe is going to come through. Some people Daniel highly respects will often go to an event and constantly look around for how they can help someone. There also needs to be a structure to a mentor relationship. There should be meetings and one-on-ones, where there should be a focus, an agenda, and a discussion about what the mentee wants and their development path. A mentor should ask many questions in lieu of just dumping solutions out.
- [12:58] When he first started mentoring in a larger scope, Daniel was given feedback that he wasn’t candid enough. So, he got more candid and believes this is an important trait in mentors. But you have to find the balance in your delivery. We all tend to overplay the negative feedback and underplay the positive. So, you should give your mentee genuine praise often so that when you need to give harsher criticisms, there is that bank of positivity to draw on.
- [14:34] Jay Steinfeld (also a guest of The Digital Marketing Mentor) is one of Daniel’s most influential mentors. When they first worked together at Blinds.com, Jay was still developing his style of work and leading. Their relationship was somewhere between friend and mentor. Jay Steinfeld is someone intent on continual improvement and was always reading. This encouraged Daniel to do the same. While working together, Jay developed the company’s core values (that remain to this day):
- Experiment without fear of failure
- Express yourself
- Evolve continuously
- Enjoy the ride
- [15:40] These values resonated with Daniel and his love for experimentation, pioneering, and curiosity. He also taught Daniel to hire someone because you believe they’re better than him at something and then give them room to grow. He also helped develop some structure for mentoring and marketing for Daniel’s processes.
- [17:27] Daniel does a lot of mentoring these days. His hope is to have an effect through those he mentors. With leverage, one hour from him becomes more hours through someone else’s efforts. He’s on two boards and has made several angel investments. Generally, the way he works involves meeting with the startup founder, marketing team, or CEO. He will consult and gently steer (with no true authority) to help improve the enterprise of these companies.
- [18:30] A common piece of advice he finds himself giving is to just try something. Get the “thing” out of the idea stage and in front of the intended customer, even if it’s just cobbled together. Get the product to the customer with minimal cost, then observe, learn, and improve upon it. Many startup owners believe their biggest concern is money, but that’s usually not the case. The key to success is truly understanding if you have a product-market fit. If you can prove that, people will invest in your business.
- [21:10] Daniel truly enjoys mentoring others. It’s an internal drive. After working with Home Depot for some time after the Blinds.com acquisition, he felt drawn to work with more entrepreneurial companies again. He craved variety. He discovered that the people mentoring and teaching can often learn more than those they set out to teach. You learn new things and technologies and engage with people from a variety of backgrounds and scenarios. Additionally, he found many new investment opportunities.
- [22:45] When it comes to the businesses Daniel likes to invest in, he looks for founders with tenacity, intelligence, and a willingness to learn. He admits he doesn’t understand the intricacies of oil and gas, complicated technology, or medical instruments and instead finds himself drawn to businesses with a small business or consumer element to them. He’s learned over time the only real reason to be an early-stage investor is if you can offer something to help the businesses. These days he is leaning more toward working with slightly larger companies because his impact is multiplied by a larger revenue base and team to implement tactics. He is very passionate about expanding the yeshiva world down the entrepreneurial path.
- [25:25] Daniel, like The Digital Marketing Mentor, attended yeshiva, a traditional Jewish college education program. The process of studying the Talmud is very involved. The Talmud is the internet from two thousand years ago. All the scholars were putting together this corpus of knowledge through the good times and bad. It’s very logically intense, and the study of it teaches you how to distill thoughts and patterns and tie disparate events together. It also helps promote debate and logic. All of these traits are helpful in the business world.
- [27:39] ChatGPT has been described as a calculator but for words. Daniel believes calculators have made us less patient with math in some way, but it also allows us to go further with math and use it in new ways. ChatGPT could be the same with words. He is not a fan of “word carbs,” all the words we often say that don’t bring value. He believes AI will help us differentiate between the extra fluff words and the true knowledge of value.
- [33:46] Over his years working with different startups, Daniel has learned much about Customer Lifetime Value (CLV). He believes it to be most useful not as a number on its own, but in differentiating and comparing different customer sets, time periods, or campaigns. It helps to see trends and differences. As a startup, you need to estimate what you’re going to make. It will be an airy, gap-filled framework. But as the company continues to exist and gather data, you will fill in those gaps and adjust that estimate. Also, achieving and expanding CLV only gets more challenging as a business ages. So, it’s also important to give yourself some room to breathe in your CLV estimates.
Guest + Episode Links
Danny Gavin 00:05
Hey everyone, I’m Danny Gavin, founder of Optidge, marketing professor, and the host of The Digital Marketing Mentor. I’m so excited to have our guest here today, Daniel Cotlar. He was near founding chief marketing officer at blinds.com He led the company from early days to over 200,000,000 in annual sales before selling to The Home Depot, staying on for four years to position it for success within The Home Depot as the Center for Configurable products. His interests include the influence of technology on stagnant industries and quantitative marketing. The equations of customer acquisition and customer experience with a career spanning from startups to Fortune 100 and at MBA from Rice University. Daniel has presented marketing and strategy topics at Rice and University of Houston as well as industry conferences. Today, he supports future business leaders through Cotlar Seed Capital as an investor, advisor, and board member of Growth and VCPE backed companies including Bark Spain, Sila, Brain Check, Spruce, Pave mobility and TIF streets. Daniel, how are you?
Daniel Cotlar 01:25
Great thank G-d. Thank you for having me on the program.
Danny Gavin 01:27
Pleasure. So first of all, I wanted to thank you. Why do I want to thank you? As others have said on previous episodes, you have been a mentor to many people, including myself. You paved a path for many in our community to have a successful career both from a religious side but also from a business side. And you know, whether you meant it or a lot, but you gave a lot of hope and courage and like a path forward for a lot of people. So it’s a real honor to have you on the podcast today.
Daniel Cotlar 01:59
Well, that’s very nice. That’s very kind words. And i don’t think I deserve it, but I’m glad that I’m glad I could be helpful to you and I’m honored to be here. Thank you.
Danny Gavin 02:09
So today we’re going to chat about your mentorship journey that led to where you are right now with Cutler seed capital and how now you mentor owners of startups. And we’ll explore marketing strategies with custom experience, experimentation and lifetime value. So where I want to start is, let’s talk about your educational background. How did you get here today?
Daniel Cotlar 02:28
Well, I went to a startup school growing up. Our school is really small. I think that in one time I had three people in my class and that did a few things. First of all. It may be more comfortable with being a big fish and smaller pond than vice versa. I think more importantly though, it was a demonstration that everyone involved with somebody who was willing to take a risk, these are parents who were betting on something outside of the box and saying, I don’t want the factory schooling system, I want something to produce something specific. They’re risk takers and the willingness to try to do the best for their children. And so, like I the people who I grew up with, including, you know, your parents, Danny. More inspirations and looking at like this entrepreneurial whether it was literally entrepreneurial or at least in spirit entrepreneurial mentality. So coming out of that onto the Shiva system and unlike many marketers I became a rabbi although you’re familiar with that you know there’s very important things actually surprisingly in becoming a rabbi with regard to marketing this philosophy psychology. How to make chickens kosher? All very important marketing topics. That aside, I think it’s been at least here in Houston, the Orthodox Jew in the startup world in the tech world has been a personal branding help and it’s I think that’s important for anybody to know what their personal brand is and that you know makes you memorable. So is it moving on there, I was at a few startups and then went to Business School at Rice. Getting my degree and with the concentration on marketing rice was really helpful for me in solidifying some structure and infrastructure and on how to market. Most of the class was concentrating on finance or energy. I like the things that are closer to the customer where you can actually experiment. It was just fascinating to be able to run an experiment, see the results of it. I mean this sounds like I’m really old, but this was around the time that the Internet was becoming, ecommerce is becoming popular. You could literally see your, you could run things, experiment and see the results in real time. I also got a kick out of the idea that you could create something, the creative idea of describing something for an engineer or working with software designers to create a product and then seeing it in action a few days later and then looking at how well customers interacted with it. And all that was just fascinating. Coming out of Business School, I was at a couple of startups and they were not. They were unsuccessful and by that time I had. Two children. It’s highly recommended to have an income at that stage, and so I did. I did take a corporate job for a number of years, for five years or so. That’s my longest stint inside of a corporation. I think it was Nassim Taylor who said the most dangerously addicted things are heroin, carbs and a monthly salary. Even though there are certainly benefits and at the right time, it’s very important. But I also believe there’s something very freeing about not having a monthly salary and knowing that you trust in, well, trust in God for me, and just being open to possibilities rather than locked into a very specific path. That’s always appealed to me. And I only realized it after that became more of my daily life one.
Danny Gavin 05:41
Question I always had for you is I imagine there was this point where it was like the fork in the road corporate. Here’s this opportunity to be more startup entrepreneurial and that’s a tough decision. What helped you make that decision? Or was it just like you kind of looked into yourself and like you felt it?
Daniel Cotlar 05:59
Yeah, you know, like as I mentioned part partly this was just background. I was less comfortable, although willing to do it for to bring in food for the family. But I’m just less comfortable with the diplomacy politics. William White’s organizational man kind of the company man mentality when I had the opportunity to leave Reliant Energy, which was which was great. It was a learning experience for me. I took it and that was when I moved over to blinds calm, which was then a very young company that was the first executive hire and for I guess the answer to your question is finding a bridge was a help, so I wasn’t sure. I wasn’t just going out alone and putting up a shingle. As you’ve done, but rather working for a smaller company where I have a more opportunity to have an influence on the outcome.
Danny Gavin 06:43
I want to go back to one point that we often talk about is internships. I know you had an internship while you were doing your MBA, I think it was with BMC. How is that internship? Did it have any bearing on your future? Like I know my internship with blinds calm was a huge big deal for me. But how about you? How was your internship experience?
Daniel Cotlar 07:03
You know, there’s experiences that teach you things and experiences that teach you things that are what you don’t want to do. And so that was for me. It was, it taught me what I don’t want to do. And that was, you know, inside of a very large company delivering a report on storage systems into the ether of this large company that I’m not sure ever saw the day, the light of day. And however, you know, with G-d’s plan that resulted in one of the jobs that I had later because I worked for somebody who worked for somebody who worked for. Somebody who I went to work for their new startup. So it was a good thing I was there. And it was. And you know, like those experiences helped me. A similar one I had being on the other side of the table. My first hire, when I was a Reliant energy was an intern. I did a terrible job because I still remember this meeting with her and she was crying that she doesn’t know what she’s supposed to be doing. And it wasn’t that i wasn’t a mean person. It was more like I wasn’t providing good direction and this was a smart girl. Young woman. And that was when I decided i have to learn how to manage, how to be a leader, a mentor, a boss, whatever it is, because this is terrible. So I think it’s important to remember the negative experiences we have. And I’ve certainly had people who I’ve learned a lot about how not to mentor. That’s good too. Both of them are learning.
Danny Gavin 08:18
It’s definitely really important because you’re not always going to have an experience that always turns out correct and perfect, but. I always tell people the more internships, the more situations you can put yourself into you, you’re going to know what you’re going to want and then what you don’t want.
Daniel Cotlar 08:32
Yeah, absolutely. It’s just putting yourself out there. It increases, like you said, your knowledge about what you like and what you don’t like and what you’re good at and what you’re blessed and good at and what you maybe you want to improve at. And then also it lines you up with opportunities and you never know which one’s going to be. The one that’s going to be either a big thing or a stepping stone towards a big thing or just some discovery for yourself, you know, Speaking of that, for the very first internship I had earlier on and somebody who was a mentor to me and still in some ways is a business person here in Houston, Victor Greenstein, who gave my first job. What I learned from him was the idea of. Believing that somebody can do anything and i kind of take this approach. You’re kind of capable until proven otherwise. He had hired a friend of mine and I to effectively run the surgical instruments company. And then earlier in my career, I hired me for a different job. I learned a lot from that and it was really my chance at seeing the workplace. So I’m very grateful and i like, you know, I think people in the community look around and that’s another source for mentorship. And just looking at the what is there to the respect about their life, like my parents Father reads a ton, he’s always reading. He never gets upset. I try to learn from that. My mother has very uncompromising values and beliefs and what’s right and wrong and is constantly busy helping other people. So anyway, that’s not a personal story as much as just I think that you have to find mentors that are not necessarily like this is your mentor. Specifically, but you find something in others. Somebody once told me from everywhere you go there’s something to collect. You can either collect everything you don’t like, or everything you do like, and you can, you know, be a composite on amalgam. Of the good things that you’ve seen in other people, or you could be the same for the negative things you’ve seen, just collect them. So I.
Danny Gavin 10:19
Just I think that’s a great segue into our next topic about mentorship. So I feel like you’ve already defined what a mentor is. Outside of going around and looking at people and finding the best in them and then applying it to yourself, how else would you define a mentor?
Daniel Cotlar 10:31
First of all, you have to really want what’s good for the other person. That was something that will come through and every scenario. There’s the things you say, and then there’s the things you believe. What you believe is going to come through. And if you are looking for some tangential benefits yourself that will come through, and even when you’re aiming an interaction. So the people I’ve seen who I really respect it is they go to an event and they’re just on the hunt for how they can help people. Every interaction is about helping people. This is not unique to mentorships. Eventually it comes back to you in some way. And if it doesn’t, there’s the fulfillment of just of it being involved and helping. I think that’s the first step. Then there’s also a structure and that is you know there’s depending on the role, there’s their structures that I learned at globalcustomcommerceblinds.com things like oh one and one oh one oh one. If you’re a boss and that’s the kind of member mentorship. It is a coaching, you know, making sure that when you have meetings it’s focused on what do you want, what’s your self development path, checking in with them and remembering what it was that they talked about last time. So that you can say however you made progress on it, you’re, you know, another thing is asking more questions than this, dumping solutions on them. And then, you know, we can talk about in these individually. But when I started to do more mentoring outside of the company after we were acquired by the Home Depot and I looked for ways to be involved in the younger companies and startups and all that, I got some feedback that I wasn’t candid enough. There was a good mentor for the mentors and that was at station Houston, which is a startup ecosystem that started a while ago and now it’s been, you know, upgraded and replaced by some other things. I was one of the really people there and there was somebody there who said you’re not doing somebody a favor by not hurting their feelings if you know they’re on a path that’s going to be unsuccessful or disagree with something. So I got more candid and I feel that’s another thing that is important for a mentor because if you really want what’s best for the other person. Then they’ll come through even criticism and say I just don’t think this is going to work and you can feel comfortable saying very sometimes tough things, blunt, harsh, whatever it is, if you, the person truly believes that you mean it for them.
Danny Gavin 12:41
I feel like, you know, that is really easy when it’s like a relationship, let’s say like where you’re at station Houston, but like put yourself back in like the blinds.com days. It’s hard sometimes when you have a direct report. And you’re like scared to say too much because you don’t want them to like, run away. How do you think you can balance that, the?
Daniel Cotlar 12:59
Balance is the answer, and that is that we all say we want candor and that we like just to hear the way it is, but then somebody tells us something. I remember early on somebody told me I had bananas in my ears and I thought about that forever and how rude it was that he said that. And then I eventually I decided that I’m going to try and listen better. We always overplay the bad things that somebody says and we undervalue the good things. And so there’s this ratio. I don’t know if you’ve ever heard of anything like this, but you’ve got to do 5 to one or something like that. It just to be even you’ve got to do five to one because the bad stuff counts so much more if the only things you say to somebody are criticism even the most. Well-intentioned criticism. You’re going to be less likely to be effective and they’re not going to like you that much. With on the other hand, you’re continually genuinely praising for something specific, important you know that’s really helpful. Then you’ll have the opportunity. You put a lot of money in the bank and you can take the money out when you need to.
Danny Gavin 13:53
And it’s so important to remember that when you’re dealing with people, making sure that those praises happen all the time, and so that when you do have that important conversation. On one to one where it gets a little bit more serious, little bit more constructive criticism, they’re actually going to open up their ears and listen to you yeah. I mean, it’s parenting and relationship too. I can tell you how to do a lot of things. It doesn’t mean I’m good at it.
Danny Gavin 14:18
Well, I think we all have to set a bar, and we’ve got to do our best to get there. I think that’s a beautiful thing in some of the texts that we learn, right? Like, we know that there’s this thing called a righteous person and it’s really hard to get there. But when we have the right North Star to focus on, I think we can. Push ourselves higher. So let’s talk a little bit about your influential mentor. You’ve mentioned in the past that this was Jay Steinfeld, the CEO of blinds.com Would love to learn a little bit more about that mentorship relationship and how you learned from him and.
Daniel Cotlar 14:45
One of the things is he was developing, I think his a lot of style and everything throughout the time. So I’m going to early and it was between a friend and a mentor. Jay is somebody who is intent on. Continual improvement. For example, you something you find in people were usually good mentors are they read a lot. He was just constantly reading as using that as an example, you see somebody who you respect doing that. Then there’s the pressure to also do that without him even asking reading and curiosity. One of the things that with you know he developed at the company were these core values that are still there today even after we’ve all left. And that’s experiment without fear or failure. Express yourself, evolve continuously, enjoy the ride. The four e’s. These are laid out in his book leading from the core. It’s to see values that actually get put into action as important. They resonated with me. Just like I said, you know their love for experimentation and pioneering and curiosity. Another thing about Jay is that when you hire somebody, you hire them because you think they’re better than you at something and you let them do their job and you have a respect for their expertise so he gave me a lot of room and expected me to give my employees a lot of room and you know, that’s something I certainly aren’t from.
Danny Gavin 16:02
Him it brings back a memory for me of like every Friday you’d like sit around with the marketing department and kind of go through what everyone accomplished. And I feel like back in 2009 2010 not a lot of people were doing that. Now it’s like normal. I remember there like being in that environment, checking that out, how just how cool it was and I’m sure that was. You know, some of that innovation and some of that opening up and speaking with people, those were things that you learned and then obviously took that and ran with it with your own sort of rocesses.
Daniel Cotlar 16:32
I’m not a super organized person and so. With all the best intentions, you can. You still need some structure, and some of those structures we developed and J helped to lead. You know, what does a meeting look like? What does A1 on one look like? What is a weekly Rah RAH session look like? So that too is a question of experimentation and improvement. You don’t just like stick with the meeting structure you have. You figure out what actually works and it’s not constant. It’s not static either. It needs to change with certain circumstances. Is my longest. Career at 12 years. So, you know, stint an opportunity to be there for an entire ride from very small company to, you know, four years as an executive inside Home Depot.
Danny Gavin 17:15
And that expertise and just going through from beginning to end, I’m sure really helps out with what you’re doing now. So let’s talk about a little bit now of how you’re mentoring founders at startups and executives that like early companies.
Daniel Cotlar 17:30
I think that I’m at the point in my career where I’m not pulling the dials and wheels as much. And I hope to have an effect through people maybe like with leverage that, you know, one hour of my time ends up being more hours of somebody else’s time. At least that’s how it’s supposed to work. So I’m on two boards of private equity backed companies that are very much gross stage companies. One is in the home improvement space, one’s that in the residential home buying space. I’ve made a number of Angel investments and involvements including an accelerator specifically for Yeshiva World founders and so what I do for most of this time is meet with either the startup founder or the marketing team or the CEO at these companies to consult and to consult on marketing topics and steer gently, steer with no authority and just trying to be helpful in order to improve the enterprise value of the company I’m involved with.
Danny Gavin 18:28
So startup companies must have particular challenges. Is there any skill or mindset you find yourself consistently instilling in your mentees or stressing the importance of?
Daniel Cotlar 18:38
Just trying something, getting something out of the idea stage and in front of the intended customer, even if it’s pulled together with gum and barbed wire and tape and but you know, rather than spending a six months planning, get in front of the customer with the minimal costs possible. So that you can learn from it and then improve it. And so the innerative thing, that’s not new, it’s not me, it was new when we talked about it 1015 years ago and this is now, you know, standard, but I think that’s probably a refrain, a theme that comes up a lot.
Danny Gavin 19:12
So outside of getting over the fear of testing, where else do you find the owners of startups struggling the most, and is there a specific approach you try to take with them?
Daniel Cotlar 19:21
I think a lot of people believe their biggest problem is money. Like we just had money and it’s almost never the answer. I mean, all startups fail because they run out of money, but they it’s something else happened way before then. Even though it’s top concern for so many founders, really understanding whether you have product market fit is the way you have to succeed. If you have product market fit and you can demonstrate it, even if you’ve made very little revenue, people will let you. People will invest in you. Go get the money. And So what becomes important in an early stage, in a very early stage is not even, you know, people say MVP minimum viable product, but a minimum viable test. Just a way to demonstrate answer questions that you have about product market fits. A lot of times people are afraid. I’ve personally been there where you love your idea so much that you’re afraid to test it, you don’t want to see it fail and it’s weird to be in that situation, but you can see people all the time. We’re saying no, I’m afraid to run this test because if I think it’s going to fail and it’s going to fail, don’t you want to know that? Yeah, it’ll. Because I didn’t spend enough money in creating this entire massive system that ever, you know, it has to. We have to have all these things in place first, like parts of the blood won’t coagulate. Unless you have 42 unique chemicals all active at the exact same time. That’s not how it works. You test one thing at a time. So I think that’s another point that’s a tangent off the last one.
Danny Gavin 20:43
It feels like that’s very similar to like receiving feedback. Just in general. Companies are so sometimes they’re so scared to say how did we do? What happened? Because you’re scared you’re actually gonna hear something bad. So it’s better to like, imagine stick your like an ostrich, stick your head in the sand and then you know you’re not you aren’t gonna have to hear anything think it’s a challenge that we all kind of have to get over.
Daniel Cotlar 21:02
G-d just makes perfect. Or at least, as somebody once told me, practice makes permanent perfect practice makes perfect. Yeah, you need to ask for feedback. We all need to do that more.
Danny Gavin 21:10
Daniel, it’s amazing how much mentoring you do these days. You must really enjoy it. I do.
Daniel Cotlar 21:15
And also, I don’t want you to think it’s like purely altruistic. I first of all, and once I was at Home Depot for some time, I was itching for ways to be involved in more entrepreneurial younger companies. And so it just is something that I needed and that is to be exposed to. A variety of companies and people. It’s it, you know, it ends up being a bigger benefit for the mentor than the person being mentored. In many cases. It’s cliche, but it’s true. Especially as you know, you manage more, you lose your touch with how hands on you are and it’s all about people. And what about, you know, tools, technology. So you learn this as a mentor, you engage with people. With great variety of scenarios, you know, that’s for one. And the other thing is it ends up being an investment opportunity for me is several of the companies I invested in came out of these as well as one that I ended up jumping into for a year of employment as a midterm COO was also from this. I mean I just basically encourage anyone who’s interested finds, finds a place. If you have, there’s something that you have that people could learn from, if it’s a generalized knowledge or if it’s marketing, if it’s tech or if it’s something specific and then find a startup ecosystem. Or some Co working space that you can, you know, help young companies out in that matter and you’re gonna get more out of it than they’re gonna get at.
Danny Gavin 22:39
Now that you’re in an advising and investing role, is there anything in particular you look for in the businesses you wanna connect with? Is there a sort of checklists of elements or personalities or offerings?
Daniel Cotlar 22:49
Where the founders tenacity and. Intelligence, tenacity and willingness to learn and coachability are just essential. I don’t want to get involved in anything where that’s not present particularly with regard to the business. I don’t understand oil and gas. I don’t understand like very hard tech when it comes to some things you know or health medical instruments. I mostly understand things with a small business or consumer element to them and so that I can I can connect with a product. I also learned over time that. The only real reason to be an early stage investor is if you can do something to help the business. Just putting in money you’re not creating odds that are good enough for yourself. That’s another element that requires you to have some familiarity or some way to help them. In some cases the, I don’t understand the industry very well but I understand but there’s other issues like ability to coach that particular founder also it takes a lot of time to be involved with the company and that’s true whether it’s an early stage extremely early stage or series C and so I’m leaning these days more towards slightly larger companies. Where my involvement can be leveraged over a larger revenue base and opportunity for me personally. And also there’s the team that can put some things into place. Having said that, I’m very optimistic about the yeshiva world. Traditionally, a knowledge of people in the Orthodox Jewish community did not go on to a university system and went to yeshiva instead and put them in some kind ways in a disadvantage, not having a degree. I believe that’s changing and. First of all the value of degrees is falling precipitously, their cost is rising. And so I think that we’re going to see a large scale resettlement of what a degree really means and in what cases somebody should get it because I think they can be a lot of it will be replaced by a self led learning online or you know certifications and things like that actually demonstrates specific. Helpful knowledge as opposed to I went somewhere for 40 years. My parents shelled out sixty thousand dollars a year. Just a money maker in some cases, for the university system. All right, having gone on my rant, I’m bullish about the background that Yeshiva gives young founders, and now with it becoming more acceptable to find your education in other ways, I think they’re going to be very investable, and with the right coaching and ecosystem, you’re going to see a lot of successes there and I think for some of our listeners who don’t know about like the yeshiva background, can you share a little bit why? Like what’s that advantage of studying Talmud or studying things you know, in pairs? Different situations that you know, you wouldn’t get those opportunities and just like a regular college system.
Daniel Cotlar 25:32
Well, the Talmud is the basis for a lot of the study and the Talmud is a document from it’s the original Internet from 2000 years ago where all the scholars over a 500 year period of time through good and bad times, in the middle of running away from Romans or Babylonians or in peaceful times. They were putting together this corpus of knowledge that was the tradition. But it’s extremely logically intense, and you have this process of distilling down what is the real opinion of this scholar versus that? Why do they say that? How can you draw ties between patterns across the entire Talmud? It’s like a hyperlink you’d find something said here and something said there, and you have to tie it all together and then argue your way out of things. So it develops the debating ability. That’s why you see, I think a lot of people come out of the you see the world and become lawyers and also logic. And then pride of learning and not patience for, you know some answer that’s just half right and impatience for that and finding the right answer so that that’s one thing. And then in the Pacific world you have the added element of philosophy and self improvement and understanding that kind of a mystical level that’s on top of that, that’s later on top of that.
Danny Gavin 26:45
It reminds me of a story personally when I was transitioning from the Shiva world into getting my MBA. I remember the first couple assignments that I had were like simple questions like please go ahead and tell us why this should be the fact. And I literally just sat there for like 15 minutes, like banging my head. Like, what does this question mean? Like does it mean this? It could mean that it could maybe mean this, but I have no clue. And my literally my head like went crazy and like I had to like go to, you know, whether it was my wife or my mom. And kind of like I really need help here because. And, you know, I’ve been trained to look at things really, you know, in multiple facets. And I’m confused. Can you just and they’d look at me like, I’m nuts. Like look at this question. It’s what do you mean? It’s very simple. So it’s kind of funny how kind of like retrocharge our brain to look at things a certain way. And I really think that brings an advantage.
Daniel Cotlar 27:37
Especially as we enter an age with a I built into everything. I’ve seen it like chap GPT compared to a calculator, but for words I like that analogy calculators in some ways that made us less patient with doing the math, but then it also elevated us to not to, you know, beyond the mechanics. Instead of spending so much time on the mechanics of mathematics, we can actually use the numbers for something else. I’ve never been a fan of what I call word carbs, which is. All the words that we all say that are that don’t bring extra value there, okay. Then there’s like 10 % that’s what you needed to know inside of there. And I think this will basically make it even easier to differentiate between the piece of knowledge that you need and all of that fluff all around it because it’s so easy to produce. Now instead of that being a valuable skill, putting together this just packaging and packaging on packaging of words, you’re going to get value the value of the of the real knowledge becomes highlighted.
Danny Gavin 28:42
I’m so glad that you mentioned chat TBT because and for those people who don’t know like the power of it. So for example, like let’s say I sit on a call for 30 minutes and I’m taking notes, copious notes. I’m exactly what people are saying. What I will then do is I can take that transcript, stick it into chat TBT and say, hey, can you pull out the main points of the conversation or you know what are the main things that I should focus on or remember and literally it will analyze that text and. Bring to the surface what you’re looking for. I think a lot of people spend like is chat GB T accurate or not, but I think the power is sometimes taking your own data and your own information, feeding it in and then building off of that. And it’s been truly powerful i tried it for the first time in that respect with a Community WhatsApp group. It was all this discussion. It just was. I woke up to 400 or 500 messages. It was about something about housing in our neighborhood. And the housing prices or whatever. And I copied and pasted it in and I asked Chachi to be to summarize. And it did. And then I said, can you list the five main opinions? And this was by the way, I didn’t format it well. I just plumped it in with, you know, bad formatting. And it listed the five main opinions, the most vocal voices, what they believe. This stuff is coming. This is already here. And we have the change is going to be something on the order of the Internet. Not specifically from Chatcha, BT, but the whole age of all of the stuff from all the companies and how it’s going to be integrated and everything. I think it’s going to shake everything up again much like the Internet did and there’s going to be entirely new opportunities. The playing board is just, it’s going to be shaken up. So it ties into that other conversation, you know, with kind of the packaging becoming less important. Because it can be done by a robot versus the value that we humans add is the true creativity, not the amalgamation of every opinion on the Internet, but something that’s new and creative and it will always be those things. And so back to like the yeshiva world and why I’m bullish on it and in generally speaking why I think that there are opportunities for self-directed people. Who are not inside the mainstream of the university system is because there’ll be opportunities for them to shine, especially with these kinds of tools.
Danny Gavin 31:01
Yeah, it levels the playing field even more where it’s not about the degree, it’s about what can you think through, what can you get the most out of this tool, and that’s who’s going to be the real winners.
Daniel Cotlar 31:11
One thing I forgot to mention was when you were talking about internships, your internship was I think unique because you actually provided value back or many times. You know, you think you’re doing the intern a favor, but I think you were like right from the start, you just came in and provided true value to the company. And so I’m glad to hear that it was a good internship for you, but it was even better for the company that hired you, which is really what you what you want I do.
Danny Gavin 31:37
Yeah, and I’ll throw it back to you, but I think you set up the internship that way. You know, it was really good. And, you know, kudos to Esther who was directly, you know, I reported to her and she like made sure to meet with me and set my goals and obviously you know the end of that internship being able to present that both to you and to the CEO, just some 22 year old guy but can actually make an impact was huge like you can’t imagine. So I think both places or both people entities helped each other out.
Daniel Cotlar 32:06
It would never would have happened if not for that. The girl who I did a really bad job in her internship and she was crying because she didn’t know what to do. So I learned my lesson.
Danny Gavin 32:15
So being a dad, I’d love to get your perspective on this. So for a while I was like, I don’t want to. Talk about chat g p t around my kids because as soon as they find out about it, like their school thing is going to be totally different. But I had to chat with one of my other friends recently. Like, no. Like I spent, you know, at night and sitting down with my, you know, 13 year old and going through and I was like, ooh, that’s a really good point. So I actually sat down, you know, with my eldest and kind of went through what it’s capable of and what I think you know is the right way of using it and what is technically not be great. Just wanting your thought on that.
Daniel Cotlar 32:48
It’s important to like I have already gone with my high school age daughter we were working on something together with it and yeah I definitely basically it’s in the tool set now and so we have to figure out how to how to use it these kinds of tools to shine. I would not try to like prevent it or prohibit it. It’s also the school’s jobs to figure out how to how to make it part of the curriculum and then also. Create opportunities to make sure children learn. And they’re not just copying and pasting and there should be some very clear ways to do it. I don’t necessarily mean the arms race of technology. You know, Chad Zero is GPD 0, whatever it’s called, finding out whether they use it or not. But things that are very clear, you know, just pen and paper things that show whether somebody’s actually thought about a topic and other ways that chad gpt couldn’t do.
Danny Gavin 33:41
So I know we weren’t going to speak too much about marketing. But I do have one question to ask you. I know being at blinds.com customer lifetime value really any company is really important or has there been any particular interesting attempts to determine lifetime value. It can be hard to get all of the real data needed to make those determinations, especially for companies that are in their very early stages. So just wanted to know if you had any advice for our listeners and kind of how you approach that?
Daniel Cotlar 34:08
Lifetime value is most useful not as a number. But as in pulling apart differentiation between different customer sets or different periods of time or you could have a lot of arguments about no, this is too much to include, this is too little to include. The number is 500$ it should be a it should be six hundred seven hundred that’s less interesting than using all the same criteria. How does the group from this particular campaign compared to that campaign or the kinds of people that we attract. Using this messaging and that or this day of the week or you know whatever then the other or this year versus the next year, it’s trends, it’s differences. So I that’s true for a lot of things it’s less than number as well as much as the stratification and the differentiation you find within. You can break it up by a lot of things and you learn lessons. Having said that, I mean you need obviously especially for raising money and for understanding how much to spend to acquire a customer you need to estimate what you’re going to make from that customer. You just do your best. You put out a an estimate and then it’s like a framework, an airy gap filled framework that you get data points and you fill it in and change it over time and you find out I was really wrong about this or that, but you’re working with estimates on how much you’ll be able to make from them. But another thing is you know your lifetime value obviously is in terms of the profit not revenue. So you have to understand you can’t spend a thousand dollars to acquire a thousand dollars in lifetime your. Profit is two hundred dollars from that revenue, you want to also probably give yourself a little room because the best laid out you know plans, everyone’s optimistic. You want to down sample it a little bit or I mean down play a little bit. And also because customer acquisition costs generally don’t get better, they get they get worse, they get harder. When you start and you’re operating at a very small scale, you can be super scrappy. And you can find, you know, your sister-in-law to become a customer, or you know some version of that online where it’s the people who are most likely to raise their hand and there’s only ten of them a day, you know, searching for XYZ Well, when you got a scale and you have to, each time you break into a new type of customer, you’ve got to work harder for it. Now there are exceptions and they’re breakthroughs, but absent those it gets harder. Which means to say that your lifetime value. Has to have a lot of room in it to justify your customer acquisition costs.
Danny Gavin 36:31
It’s time for our lightning round. So what we’re going to do is I’m going to mention a topic and you’re going to let me know the first thing that comes to your mind. You ready?
Daniel Cotlar 36:39
I think so.
Danny Gavin 36:40
Best fiction book?
Daniel Cotlar 36:41
Oh, I like science fiction. Recently I’ve been. I read the three body problem and that trilogy. I like Tchaikovsky, Dan Simmons, Neal Stephenson.
Danny Gavin 36:52
All right. Best nonfiction book.
Daniel Cotlar 36:54
Well, i liked anti fragile by massim Taylor. And then for things related to mentorship on our topic it was something called. It’s a pretty simple, straightforward book, but it gets to the idea of being really caring about what’s best for the other person. I think it was called leadership and self perception. It was a good one as well.
Danny Gavin 37:11
Best place to travel?
Daniel Cotlar 37:13
My favorite was Iceland was very lucky to be able to go there and it was, it was just unbelievable to see the beauty of nature favorite show. I like the little rascals from 1930 the early nineteen thirties versions. It’s fun to watch it. Their kids watch Fauda recently, that’s a punch in the gut. It’s pretty good. Favorite food schmaltz, herring.
Danny Gavin 37:36
And finally, what do you do when you’re bored?
Daniel Cotlar 37:38
I lose at tennis, then I win at chess.
Danny Gavin 37:41
And what’s better, actual chess or like iPhone or Android?
Daniel Cotlar 37:46
I play online against real people, against real people.
Danny Gavin 37:48
So, Daniel, where can listeners learn more about you and the different activities that you do?
Daniel Cotlar 37:53
I guess LinkedIn and on your podcast cuz I don’t appear on a lot of podcasts. I’m always open for you know, on Twitter or LinkedIn and I enjoy the opportunities around early stage companies. You never know which one’s gonna be the next big thing for you and for me. I also mentor at Apple factory. And at the Crown ventures accelerator in Brooklyn super.
Danny Gavin 38:19
Thank you so much for being a guest on The Digital Marketing Mentor today. It really means a lot. We’ve covered some amazing topics and we’ll definitely put the links to your social profiles in the blog post when the episode comes out. Thank you listeners for tuning into the digital marketing mentor. And thank you, Daniel, for joining us.
Daniel Cotlar 38:38
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