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Mindset Matters Most: Steven Krein on the Mindset of Transformative Entrepreneurs · StartUp Health NOW Podcast

• 0:00
  [ on-hold music] We practice, and I practice in particular, and I think a lot of us at StartUp Health practice this notion of being organized with how you think about the things that you're concerned about, the biggest challenges that you're facing, or the biggest obstacles that you're facing, and being able to not just name them, but prioritize them.
• 0:30
  What is the biggest challenge that you're having? What is the second biggest challenge, and what is the third biggest challenge you're having?
• 0:36
  Because once you can kinda start to talk about that, people can see what's most important to you, what you're concerned about.
• 0:42
  But at the same time, compartmentalize that with a discussion about what opportunities you're excited about.
• 0:48
  [upbeat music] Welcome to StartUp Health NOW, the podcast where we discuss the entrepreneurs shaping the future of health and the health moonshots they're working to achieve.
• 1:03
  I'm Logan Plaster, editor-in-chief at StartUp Health.
• 1:06
  So when people hear about StartUp Health, specifically that the company has invested in 340 health innovation companies, a common question is this: What do you look for in a startup or in an entrepreneur when you're investing?
• 1:18
  The answer might not be exactly what you'd expect. From the very beginning, co-founders Stephen Krein and Unity Stoakes have emphasized the incredible importance of assessing the mindset of the founder.
• 1:29
  They operate with the belief that how founders think is every bit as important as what they think when it comes to achieving health, health moonshots as a collaborative body.
• 1:39
  Of course, the idea of, quote-unquote, "having the right mindset" is pretty open-ended and raises as many questions as it answers.
• 1:46
  So to get clarity on the subject and to better understand how StartUp Health assesses entrepreneurs, I dialed up Stephen Krein, StartUp Health CEO and managing partner.
• 1:54
  He offered a wealth of insight that I think you'll enjoy. [upbeat music] Steve, great to be talking to you. Um, we only have a... We don't have a ton of time.
• 2:10
  You've got a busy schedule, so I wanted to dive right in on this topic, uh, that we've been discussing and wanting to talk about, uh, the mindset of the health transformer.
• 2:19
  The other day, uh, you gave this talk at Sown, this conference, um, about, uh, health innovators around the world, and you used this great alliteration that mindset matters most, and I wanted to dig into that, uh, what that really means, um, and what that means for the StartUp Health portfolio.
• 2:38
  So w- give us like kind of a initially a fly-over of what you meant when you said mindset matters most.
• 2:45
  Uh, first of all, it's great to be here, Logan, and, um, I appreciate you digging in deeper into this comment that I make almost every day, which is that the single most important thing that has a factor in any company's success, especially young startups and companies that are very influenced by their CEOs and their founding teams, um, that mindset really does become either an attractor, in other words, people being attracted to something, or a deflector, people not wanting to be near something.
• 3:20
  And I found that whole experience that an entrepreneur has as they're developing their companies and growing is how is their mindset when they walk into a room to talk to a customer, to talk to an investor, to talk to their team, and how are they communicating the information they're trying to share.
• 3:42
  And so it could be going in to pitch a customer for a sale. It could be in a board meeting with investors. It could be for prospects.
• 3:50
  But I believe, and I think it's, it's clear when you look at the performance of companies, not just in our portfolio, but all around the world, is that you dig into the mindset of the entrepreneurs and the leadership team, and it seems to be that they have a transformational mindset hitting on all cylinders when they succeed throughout the whole process of succeeding, succeeding with that meeting, succeeding with that sale.
• 4:18
  And it's so easy to see once you're kinda cl- tuned into it that when you have the right mindset, you can achieve great things, and when you have the wrong one, you can struggle, almost fail as a result of that energy that you're putting out there.
• 4:33
  You know, sometimes it's easier to understand what something is by looking at what it's not.
• 4:37
  So I wonder, without naming any names, if you could give me a situation where you d- were talking to an entrepreneur, and on paper, everything seemed to be working out, uh, maybe logistically or pragmatically, like this should work, and yet you identified there's a mindset issue here that's gonna hold you back.
• 4:55
  Yeah, just listening to anybody talk about their company, and I could use an example without naming names of an entrepreneur that I spoke to two weeks ago, and he was getting to send over his board packet for preparation for a board meeting he was having, uh, the following day.
• 5:12
  And mixed within the deck that he was sending over, the materials he was sending over, he was, he was confusing good news and bad news, struggles that he's concerned about with great opportunities that he's working on, um, and, and focusing on.
• 5:28
  And so oftentimes it's simply not being organized with your thoughts yourself inside your own head, um, that could be helped by writing it down, that can kinda help you organize how you present in that board meeting.
• 5:42
  And so the entrepreneur, you know, 20, 30 different items he wanted to cover in his board meeting, but it wasn't organized in a way that would enable people to kind of respond to the emotion.
• 5:54
  And so typically we talk about inside of StartUp Health, even coming into StartUp Health, that we really assess an entrepreneur's mindset, what-It, how they convey and hold themselves.
• 6:04
  Do they talk about a long-term vision? Do they talk about having supportive relationships? Are they ambitious and confident about the vision they're describing?
• 6:12
  And oftentimes they think they are, but then all of a sudden they start talking and it's all mixed together.
• 6:18
  And so we practice, and I practice in particular, and I think a lot of us at Startup Health practice this notion of being organized with how you think about the things that you're concerned about, the biggest challenges that you're facing, or the biggest obstacles that you're facing, and being able to not just name them, but prioritize them.
• 6:36
  What is the biggest challenge that you're having? What is the second biggest challenge? And what is the third biggest challenge you're having?
• 6:42
  Because once you can kind of start to talk about that, people can see what's most important to you, what you're concerned about.
• 6:48
  But at the same time, compartmentalize that with a discussion about what opportunities you're excited about. Mm.
• 6:55
  Those kinds of things that you're working on, that you're focused on, that you're excited about, that are giving you a tremendous boost in energy, and again, giving that time to breathe.
• 7:05
  And so what is the biggest opportunity, the second biggest opportunity, the third biggest opportunity? And then finally, I wrap up with strengths. What are you most confident about, that you just take as second nature?
• 7:17
  And oftentimes, being able to articulate what you consider to be your three biggest strengths becomes the catalyst for a discussion.
• 7:23
  And so for this entrepreneur who was getting ready to go into his board meetings, he was, he was mixing up the discussion about his accomplishments with his challenges, his challenges with his opportunities.
• 7:35
  And so what was happening was it was almost like a whiplash of emotion, whiplash of discussion.
• 7:41
  And so just by getting organized yourself and then being able to communicate to others what is your three biggest challenges, what are your three biggest opportunities, what are your three biggest strengths, letting them each be different discussions, but all play off of one another.
• 7:55
  Very interesting. Uh, what's fascinating to me, what, what I hear you saying, is you're bringing structure and organization to an area, uh, where... that can often be very unstructured.
• 8:05
  If I think about what's my mindset, my, my knee-jerk reaction might be, "It's good. I'm positive." And you're saying there are ways of kind of going through all the elements of what your mindset is.
• 8:16
  I know that you coach. You've been coaching entrepreneurs for years. How important is it to have standardized ways of doing this? I know you have tools that you use. Um- Yeah... how important is that? So I've found...
• 8:30
  You know, I've been coached by one of the best coaches in the world, Dan Sullivan, for the last 20-plus years.
• 8:35
  And, um, I remember a statement he made very early on when I met him was that it's not about a problem that you're facing that's the problem, it's actually how you think about the problem.
• 8:47
  So it's actually this notion of how do you think about your thinking- Mm...
• 8:51
  and do it in a way that you start to think about how you might access tools that you already know and are familiar with for any problem that you're facing, whether that's a communication challenge, whether that's a situational challenge, whether that's a mindset challenge.
• 9:05
  So as an example, this DOS that I talk about, dangers, opportunities, and strengths, was something that is a little takeoff of the SWOT analysis that, you know, you learn in business school, you learn in college.
• 9:16
  But it's not thought of as a daily tool and a daily practice for a lot of people.
• 9:21
  I found that this simple idea of having it as one of the tools in your tool belt, it becomes one of those things that you constantly say when you get on- onto a phone and you're gonna have a difficult conversation with somebody who's struggling, or you wanna communicate something big to somebody.
• 9:39
  Being able to either define your own dangers, opportunities, and strengths or ask somebody else about their dangers, opportunities, strengths cuts right to the chase. And so it helps you think about your thinking.
• 9:50
  Um, it's been an indispensable tool. I use it every single day. I wake up in the morning, I go, "What is, what is my biggest challenge today? What is the company's biggest challenge today?
• 9:59
  What are our biggest opportunities? What are our three biggest strengths?"
• 10:02
  And this muscle that's become almost automatic for me is one that I try to instill in others and make sure that you're always armed with these simple answers.
• 10:10
  Because we are living in a time where, uh, people are brief [laughs]. People's attention or ability to pay attention is very, uh, much waning. And so the sooner you can articulate this
• 10:23
  to someone so they understand where you're coming from, the quicker you get to a real meaty conversation.
• 10:29
  So the, the, the punchline in that, uh, in that, um, example I gave you earlier about the entrepreneur going into the board meeting is he got organized with his thoughts, presented right away into the board meeting, uh, prep material, these three buckets of information.
• 10:45
  And by the way, the umbrella to all three of these questions is where is it that you're trying to go that will make you happy with your progress?
• 10:53
  So for the example of this entrepreneur, he was describing what needs to happen over the next year, and that these three challenges, these three opportunities, these three strengths were gonna help get him there.
• 11:03
  And therefore, he reserved most of the meaty conversation in the board meeting to how he was thinking about it.
• 11:10
  And so he, great praise at the end of the board meeting for how aw- aw- how, how he presented it beforehand, how he discussed it during the meeting, and how he navigated the discussion during the meeting.
• 11:23
  And so again, it just gives you an organizing structure- Interesting... to every conversation to create value.
• 11:28
  What would you say to an entrepreneur who says, "Yeah, thinking about my thinking, that sounds great if I had time. I just need to raise $5 million yesterday. I don't have time for that."
• 11:38
  How would w- what would you say to them? Yeah. Um, therein lies the challenge that you're gonna have raising capital because your ability to communicate...
• 11:46
  First of all, your ability to have the right mindset when you're having conversations is as visible as what clothes you're wearing to a skilled investor, to, to a venture capitalist, an angel investor, private ac- any investor you're talking to is gonna feed off of energy.
• 12:04
  They're gonna feed off-Energy that is fake. They're gonna feed off energy that's scared. They're gonna feed off-- They wanna feed authentic energy.
• 12:12
  What ends up happening is you might rush to have those meetings, but if you're not confident about your story, about your progress, about, by the way, what your organizational biggest challenges are, biggest opportunities, biggest strengths,
• 12:27
  literally up to date, like right now, not what they were three months ago or what-- not what they're gonna be three months from now, but what they are today, you're missing the opportunity to have the person or people that you're speaking with have confidence in what they're hearing out of your mouth.
• 12:41
  Hmm. Now, obviously, we're having this conversation- There's no-- There is no shortcut. There is no shortcut... no shortcuts. [laughs] Um... that-- except dangers, opportunities, threats.
• 12:51
  We're having this conversation in the, um, in the realm of startup health, and obviously we are committed to working towards and achieving long-term health moonshots, these, these, these long-distance goals.
• 13:03
  You know, I'm, I'm just w-wondering your thoughts on kind of why mindset is particularly important in that conversation, uh, succeeding long-term versus compared to maybe the typical industry mentality. Yeah.
• 13:21
  I think in healthcare, um, the impact that entrepreneurs have today in if they stay with it and if they stay able to achieve the vision they have, they can really impact millions if not billions of people.
• 13:36
  And I think that whether it's a health moonshot like ending cancer, curing disease, or bringing access to care, those umbrella moonshots become kind of the ultimate end game for what happens ten, twenty, thirty years from now.
• 13:50
  But today, you're just chopping aw-chopping away at that or chopping away at that. And so long-term vision, short-term goals is something we like to talk about.
• 13:59
  Without short-term vision, it sounds like you're just selling a product and a service, and ultimately what the, the missed opportunity, especially for entrepreneurs in healthcare, is to kinda talk about it all working and what happens if it all goes the way you're expecting, not in the straight line way you're expecting, but if you're really focused as an organization.
• 14:17
  Like, we're focused on really improving the health and well-being of everyone in the world by investing and organizing and supporting a global army of entrepreneurs and innovators who are committed to achieving health moonshots.
• 14:30
  That has been our goal since the day we launched. My expectation is that'll be our goal ten years from now and twenty years from now. However, we have short-term goals to get there. It could be launching funds.
• 14:39
  It could be investing in companies. It could be building different parts of our platform to help them achieve that.
• 14:44
  But it gives a container for everything that we're doing, North Star that we're focused on, and it's also timeless.
• 14:51
  And we love to use the metaphor of the, uh, JFK speech in Congress in 1961 where he simply said, for the first time, "Our goal is to land a man on the Moon and bring them safely back by the end of a decade."
• 15:09
  And at that moment in time, none of the technology existed, none of the funding existed, none of the capability existed, and almost everybody, including many of the people at NASA, were doubters of the possibility. Hmm.
• 15:23
  But that created a North Star for lots of organizations, twenty thousand to be exact, and four hundred thousand people to collaborate day after day, quarter after quarter, year after year at this one goal.
• 15:37
  And so whether it was eleven or twelve or thirteen Apollo missions to not just get there but to continue expanding on that original vision, whether it was the different parts of the goal that people were able to play a role in, there were people that made the wheels on the lunar landers or people that made the camera lenses.
• 15:55
  There were people that made the- Right... everyone had a role in this one goal. And so the opportunity for entrepreneurs is it doesn't really cost any money to have a big goal.
• 16:06
  It does cost money to achieve it, but it really does tell you a lot about an entrepreneur's mindset, about their ambition. Do they have a twenty-five-year ambition- Hmm... or are they just short-term focused?
• 16:17
  We've just found that the short-term focused entrepreneurs don't have the staying power, nor do they have the ability to keep iterating long-term, 'cause their expectation- Yeah... is for short-term wins.
• 16:27
  And so short-term wins are great, but the idea of it, a s-twenty-five-year goal is a hundred quarters long, right? Hmm. So we've been doing this now...
• 16:38
  We're thirty-two quarters in to investing in health moonshots, and thirty quarters from now, and thirty quarters after that, and thirty quarters after that, we're still gonna be doing the same thing.
• 16:49
  But what we hope to do is really build the generation of entrepreneurs who are connected together to doing it, and be able to look to the left and to the right in their circle that they join in startup health, which is like a forum where they meet together, or in a room,
• 17:07
  um, others who share their ambition and share like them, but they are connected as a global army to achieve it together.
• 17:17
  And that's why that mindset is the most important kind of thing to curate on, not just what we invest in, but who we bring into the community and how we really support them.
• 17:26
  You, uh, you jumped in without me having to ask, but my final question was gonna be because, uh, I was gonna ask about the community aspect.
• 17:33
  I know this afternoon you, uh, will be talking about this and, and, uh, sort of group coaching an entire, uh, sort of digital room of entrepreneurs, and that you also do these, uh, regular Health Transformer circles where you talk to, uh, entrepreneurs.
• 17:49
  Why is it important to think about mindset in the context of community and not just one s-one entrepreneur, uh, on their journey?
• 17:58
  [lip smack] Um, I think it's important, and this last piece I was just talking about, is to know who you're working with, collaborating with, asking from, getting help from, um, whoYou know, I think, uh, your investors are matters, I think who your friends are matters, who- who's, uh, who your team members and co-founders and leadership team matters.
• 18:21
  Because if you're, first of all, not centered with your mindset and in the transformational zone... We have these four different zones that we kinda categorize a conversation into.
• 18:32
  The transformational zone, which is really the idea that you're in a category o- on your own pushing for something that is not just long-term impactful, but all the things that are embodied in that embody someone who's thinking about transformation.
• 18:47
  The second one down is the transactional or the traditional entrepreneurial mindset, which is you're gonna be successful.
• 18:54
  Doesn't have to be as difficult as you're making it, but it's really about a traditional or conventional thinking around entrepreneurship, and there's a difference between the two.
• 19:04
  Then there's the frustrated mindset, which you're kinda spinning your wheels and wondering why you're not getting any traction, and then there's the failure mindset.
• 19:11
  And you could take something like long-term commitment, and if you're all in, willing to do whatever it takes for as long as it takes, you're in the transformational zone.
• 19:18
  But if you're in it for the next couple years, that's okay, but only for those that know you're only thinking about this traditionally, a traditional business, a traditional success.
• 19:27
  You're not trying to achieve a moonshot. You're just trying to build a great product or service. Sure. Sure.
• 19:31
  Then there's the entrepreneurs half in and half out, and they're gonna be frustrated because they're not gonna know why people aren't investing or customers aren't buying, people aren't joining them.
• 19:40
  And then there's the one who's not willing to make a commitment, and you're in the failure zone. So I just dissected one mindset- Yeah... in one of the four zones.
• 19:48
  And so when you build a community of people who not only are in that transformational zone, but their ambition is to remain in that transformational zone, the results are different.
• 19:57
  And so we spend a lot of time working with the community at large as well as small groups of eight to 10 recalibrating their mindset because we found there's nothing more impactful at helping companies raise the capital, entrepreneurs raise capital,
• 20:13
  attract customers, build a team than magnet of the right mindset.
• 20:18
  And so building a community of people with the right mindset is the most important part of getting this right for us, and it makes it also the most enjoyable, and it makes us also the most likely we're all gonna be wanting to be together 10, 20, 30 years from now doing this, working on this, and achieving it together.
• 20:35
  Yeah. One of the nice side benefits of this focus is that we just surround ourselves with really amazing people [laughs] really wonderful people. When you have a great mindset- Yeah... they, they give you energy.
• 20:47
  Um, yeah. There's, there's a, there's an oversimplification of mindset that I use, uh, almost every talk that I give or used to give in public. It's a little more difficult to do this, uh, over Zoom calls.
• 20:56
  But I used to do this thing in public and I loved to talk about whether you are batteries included giving energy, or you're batteries not included sucking energy away.
• 21:07
  This is another Dan Sullivan favorite of mine, which helps you quickly assess somebody in a conversation and get a sense of how you're feeling as a result of that interaction.
• 21:17
  We as entrepreneurs, of course, not only want batteries included, but we wanna make sure that everybody around us is batteries included, and we don't wanna be battery drains. I hope not.
• 21:27
  And so the easiest way for us to kind of just get to the core of a mindset is are they batteries included, batteries not included?
• 21:35
  That doesn't solve everything, but it definitely starts off with a agreement that we do care who we spend our time with, we do care who we partner with and collaborate with, especially for long-term, uh, relationships.
• 21:49
  And whether it's a friendship, whether it's a marriage, whether it's a business, you wanna be surrounded by people who give you energy, and you wanna be somebody who gives energy as well, and that is the catalyst for helping make sure that we have the best chance for achieving these moonshots and enjoy doing it.
• 22:06
  And so we like to say, "Are you batteries included or are you batteries not included?"
• 22:11
  And it's your decision to how when you walk in the room, you take responsibility for the energy you wanna give off and why mindset matters most. Excellent. Excellent. All right.
• 22:20
  Well, appreciate you giving context to that mindset matters most theme, and we will come back to this, uh, in, at a future session. Sound good? Thanks, Logan.
• 22:31
  [upbeat music] StartUp Health invests in health transformers from around the world who are committed to achieving audacious health moonshots.
• 22:45
  If you wanna learn how you can join this community of entrepreneurs, or if you wanna connect with one of our 330 companies, go to startuphealth.com. Thanks for listening to StartUp Health NOW. We'll be back next week.
• 22:57
  [upbeat music]