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About The Guest
As the CEO and Co-founder of RSE Ventures, a private investment firm focused on sports, media, and entertainment, Matt Higgins has always believed in the importance of trusting one’s instincts and not outsourcing one’s judgment. Growing up in Queens, Matt worked to support their family by selling flowers on street corners and working at McDonald’s. To transcend poverty as quickly as possible, Matt dropped out of high school at 16 to work full-time and enroll in college early.
Over the next decade, Matt earned a law degree from Fordham at night and began a career as the youngest press secretary in NYC history, where he helped manage the global press response to 9/11. He went on to become an executive for two NFL teams, found/invest in some of the most dynamic brands through RSE Ventures, and become a guest shark on ABC’s Shark Tank (seasons 10-11) as well as an executive fellow at Harvard Business School, where he co-teaches “Moving Beyond Direct-to-Consumer.”
Matt Higgins is always on the lookout to meet great founders and the people who invest in them.
- 00:00 — Introduction
- 01:08 — Matt’s origin story
- 07:23 — Enabling a sense of responsibility
- 10:15 — Burning the boat
- 15:23 — Framework for evaluating investments
- 22:05 — Backing the jockey, not the horse
- 22:50 — Why Shark Tank chose Matt Higgins
- 26:55 — What Matt looks for before investing
- 31:30 — Evaluating coachability and mission orientation
- 33:12 — Matt’s first investment
- 38:34 — Advice for people that are playing small
- 42:38 — Optimizing anxiety
- 44:39 — Going all in and failing
- 47:22 — Where can people connect with Matt Higgins?
- 48:09 — What does success mean to Matt Higgins?
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What is the Success Story Podcast?
On this podcast, you’ll find interviews, Q&A, keynote presentations & conversations on sales, marketing, business, startups, and entrepreneurship.
The podcast is hosted by entrepreneur, business executive, author, educator & speaker, Scott D. Clary.
Scott will discuss some of the lessons he’s learned over his own career, as well as have candid interviews with execs, celebrities, notable figures, and politicians. All who have achieved success through both wins and losses, to learn more about their life, their ideas, and insights.
He sits down with leaders and mentors and unpacks their stories to help pass those lessons on to others through both experiences and tactical strategies for business professionals, entrepreneurs, and everyone in between.
Host of the Success Story Podcast: https://www.successstorypodcast.com
Machine Generated Transcript
people, book, anxiety, boats, business, life, burn, idea, failure, mother, context, founders, reason, success, defiance, high school dropout, feel, high school, degree, situation
Matt Higgins, Scott D Clary
Scott D Clary 00:00
Welcome to success story. I’m your host Scott D. Clary. The success story podcast is part of the HubSpot Podcast Network, which has other amazing podcasts like business made simple hosted by Donald Miller. Business made simple takes the mystery out of growing your business, so make sure you tune in wherever you get your podcast. Today, my guest is Matt Higgins, an American businessman, author and the co founder and CEO of RSC ventures, a private investment firm that focuses on sports and entertainment, media and marketing, food and lifestyle and technology. In 2012, Higgins co founded RSC with Stephen M. Ross, the founder of related companies, and the owner of the Miami Dolphins, he again served as Vice Chairman of the dolphins from 2012 to 2021, having previously been a high level executive with the New York Jets, and we spoke about the burn the boats philosophy, the title of his new book, Why trusting our instincts is so important, how we can predict CEO failure based on one particular trait, optimizing anxiety, how we got on Shark Tank, his first investment, what he looks for in founders, and why he reminds himself that he’s going to die five times a day.
Matt Higgins 01:09
I’m gonna bet to piss off every parent who’s listening to this right now. But the life event that set it all in motion, from honest is dropping out of high school, it’s actually the single greatest decision I made throughout the course of my life, and it set everything in motion, I can take you deeper into it, if you want to go back in time. I would
Scott D Clary 01:29
actually love to because that’s a obviously a very unpopular view. Even though I have my own opinions about whether or not college university is worth it. And and MBAs are worth it. I’ve never made an argument for high school. So So why is that?
Matt Higgins 01:43
Okay, so a little bit of context. When I was I grew up in a place called Queens, New York, and being taken care of by a single mother living in a shoebox apartment. And you know, these words tend to lose meaning abject poverty, like what it’s sort of, you know, it’s their loss loses its emotional resonance, but like, what does that really mean to say those words, for me, it meant not sure what I was going to eat for dinner, it meant getting government cheese, literally from the US Department of Agriculture, a big block of cheddar cheese, by the way, of which I keep the empty box on my desk to this day, years later, to remind me where it came from. It meant selling flowers on street corners, that little kid who would knock on your windows, excuse me, sir, would you like to buy some roses for your wife, or on Mother’s Day, it just meant it meant surviving, and meant becoming a parent of another parent, you know, at a very young age, right, because my mother had all sorts of health disabilities. And so that was the context I was born into. And around 1011 years old, I was having all these jobs. By the time I was 13, I got my first big, big boy job, we’re going to McDonald’s. And my job was to get on my hands and knees and scrape the gum underneath the tables in the party room. Because if the gum were to land on somebody’s dress, you know, ruin the party, so that I can tell you everything about dry gum if you’re interested. But that’s the context, right? And so, I spent a lot of my early years desperate, like any little kid, when they see their parents suffering, and they also want to be selfish, right? I was always juggling the idea of feeling like I was going to be a hero and save my mom and then being selfish and wanting to have a typical life, right. So those two things were happening in parallel. And a lot of my early years were spent just hoping a white night would come that there’d be some cavalry. And I remember taking my mother to the ER, because we didn’t have insurance and just sitting there thinking like, can anyone intervene. And my mother’s health issues were very generic. But they were compounding she had obesity and thyroid gland disorder. So that’s the context. And eventually, I got to the point of saying, If I don’t have a direct trajectory changing event, we’re facing imminent disaster, my mother is going to die. I’m unhappy with my life. And I can’t keep up school at this pace anyway. And I had an epiphany, which is the following. My mother actually went back to school. She was a high school dropout, but she was brilliant, born into her own dysfunction. And I watched her go get a GED. And as a nine year old boy, she would take me to classes at Queens College on the weekends. And I was probably around 1314, I had an epiphany like, Wait, if I had to, because I was looking to a Pennysaver, a free newspaper in Queens as look at the job section. And it said, you know, $9 an hour delivering flyers, college students only and I was like college students only? How do I become a college student faster? And I had this idea. Well, what if I dropped out of high school at 16 got a GED and got into college because my mother got into a GED. And I remember going to college night at high school once I enrolled in high school, and I was like, Excuse me, sir. You know, if I were to borrow, if somebody would have a GED, and they did really well, you know, could they get admitted to your Augusta institution? And I talked about this in a book. It’s like a degree of noblesse oblige. You’re like, Yes, young man. We believe in second chances. You know, very remote scenario obviously. Right. And so that set in motion, like, I’m going to do something radical, because that’s what the situation calls for is a radical change, I’m going to drop out. But I also knew that every time I surfaced this idea to any adult, they said, You’re absolutely crazy cluding, the guidance counselor that I was going to ruin my future because of the stigma of being a high school dropout, that if I didn’t actually make it impossible for me to do anything else, I was going to back out, like in other words, if there wasn’t any possibility of salvaging high school, I wouldn’t go through with it. So I decided I was going to fail every single class and get left back. And so I spent over two and a half years in the same homeroom with the I call it the land of misfit toys, some of the kids would be burrs on taking very different career choices. Equally ambitious, but just different. And then the, and then the moment of truth came, so I reason why I isolate that decision is I number one, people didn’t have the context for why I was making it. Because when you’re growing up poor, you’re doing everything you can to hide it, we all carry around a degree of shame. So you have to be careful about the advice you get unless you’ve been fully transparent with where you’re at with the context. So my guidance counselor didn’t have the context and my mother was degrading in the room next door. Number two, when your back is up against the wall, you tend to make the best decisions, right? The lot of clarity came with the poverty and with the desperation of taking care of a parent, right. And number three, when you see an angle, don’t wait for validation, right? You don’t need validation. If your instincts are telling you this is the right plan for me even though no one’s ever gone in this direction before. Nobody would affirmatively torpedo high school to be a high school dropout. But it actually made a lot of sense to go from making 375 and McDonald’s or $5 at the at the deli on Woodhaven Boulevard to nine bucks as a college student as crazy as that sounds, because the most important thing was I needed to get out of this situation. So I dropped out of high school. And a year later, I went to my prom is president of the debate team. And I remember seeing the Mr. My guidance counselor, my teachers, and the look of pity, because it was pity when I dropped out like what a shame What a waste to one of respect with one chest move. So that single burn the boats move is the reason why I wrote this book. It’s the it’s the reason why I was on Shark Tank. And we can get into everything else. But you asked me so I gave you an unpopular answer. I’m sorry moms and dads out there. But now that you have the context, it’s as simple as telling everybody to just drop out high school.
Scott D Clary 07:23
No, but you’re very clear on your vision. And you know what the one thing that I see emulated in a lot of successful individuals, it’s always a chip on the shoulder, it’s always the we got it, there’s a reason why you’re so clear on your vision. And there’s a reason like you didn’t just drop out of high school. And again, like a lot of other kids who dropped out of high school, maybe they had, maybe they had alternative career choices. You’re very purposeful and strategic. But that chip on your shoulder, I always the burn burn the boats is a great is a great concept. But the chip on the shoulder makes it possible. And you had this environment that forced you to not have an anger, but just have a little bit of unhappiness with the situation that you are in. So I always like to pull out that origin story. But then I also like to ask you, how does somebody manufacture that feeling? Because that’s what it takes to be successful?
Matt Higgins 08:17
I love this question. By the way, I talk about it in the book, you know, the burn the boats, when I break down these common patterns of successful individuals, successful leaders, and you isolated one of them, which is defiance, I actually I use an industrial psychologist, way too much. Everybody’s always you in the psychologist but like I think the fish rots from the head, right. So I always tried to get the head right and look under the hood when I’m making writing a check. But one of the qualities that she identified that repeats over and over again, is defiance, that when you’re overly dead overly deferential to the status quo, or to others, you can’t have breakout success. So while you know I like the way you distinct distinguished and I don’t really have a chip on my shoulder, I’m not bitter, I left that experience incredibly empathetic, and I retain that empathy. But I am defined. And I have found the worst decisions I’ve made of when I’ve tried to outsource my judgment to suppose that experts because a exceptional generalist will have much better judgment than a mediocre specialist specialist all day long. And so Defiance is a creative thing. So how do you manufacture it a bit? One, you have to believe it that it’s necessary. And two, honestly, it stems from from self worth. Like if you really believe in yourself and believe in your destiny and believe that there’s better for you and you’re not entitled to better for but deserving of better for you will seek it out and you will be defiant when somebody is trying to force you to accept mediocrity. We see a manifest all the time in the relationship context. When I see somebody tolerating a partner who’s putting them down, putting them in their place, you know, or is just unhappy. It’s usually for one of two reasons. One, you don’t believe you deserve better or two, you don’t believe better exists, right? And they’re very they’re nuanced scenario. Ever. But if you approach every situation with a degree of defiance where your base case is, what’s the best I can have in this situation? You will always be a little bit wary of accepting mediocrity for yourself.
Scott D Clary 10:12
That’s a great, that’s a great answer. I love that. And I’ve never heard a chip on the shoulder reframed as defiance, but it’s much more positive way to look at it. I’ve never been to
Matt Higgins 10:21
people, people will say to me, I still got a chip. I’m like, actually don’t have a chip. I like cry and like a heartbeat when somebody when I encountered somebody else’s pain. I have the opposite of the chip. You know, I have defiance and insistence and unrelenting energy, but but I’m not bitter.
Scott D Clary 10:35
So okay, so let’s now now you’ve moved yourself out of this really destitute situation that you’re in? burn the boats, at later stages in your career? What does that actually look like for you?
Matt Higgins 10:49
So, and I think it’s good to frame a little bit what the phrase me and why I became obsessed with this idea. Actually,
Scott D Clary 10:55
I think we’ve heard some of us have heard this before, but I’ve never heard somebody go so into the weeds on it. Yeah.
Matt Higgins 11:00
Yeah. No, it’s funny. I remember I was with Mark Cuban at an event and I made this burn, you know, burn the boats reference. And he’s like, burn the boats. What are you talking about? And I was like, Oh, I thought, I thought this is sort of like in the vernacular. And I realize it’s not entirely so what where does the phrase come from throughout recorded history, from time immemorial, you’ll see military strategists will invoke this idea that they weighed the way they got their army to overcome improbable odds, they were outnumbered 10 to one, whatever the case is, that they literally burned the boats, they eliminated their escape out their escape hatch, Art of War, they refer to burn the boats of the cooking pots. And the reason why is that humans perform better when they have no plan B, they have no, you know, escape route. Now, these tend to be some pretty nasty people in history. So I’ve, I’ve appropriated this military doctrine and decided to use it for the rest of us in peacetime. So let’s forget Caesar, you know, Sun Tzu and and Cortes and pull it forward for our own life. So I got obsessed with this idea. And then when I worked for the New York Jets, for those who don’t know, I used to oversee the business of the New York Jets back in the day and I worked with Rex Ryan as a coach. And you know, Rex is is animated individual wears his heart on his sleeve and can fire anybody up. And we were playing the Pittsburgh Steelers in the playoffs, and the underdog. And Rex gave a speech about this idea of burn the boats. I’m just asking you to go all in for one day. And don’t worry about what happens if we fail. Don’t worry about the consequences. Just give me everything you got for one quarter. One half it was I think it was a halftime speech. No, it was the night before for one day, and the team one and you could feel it was palpable in the room? How catalytic this idea of just surrender to the goal submit, let it go. And so I said, okay, that I want to prove to India to people that humans perform better without a safety net. And I want to approach it from two different angles. One, I want to approach it empirically. So I want to serve a history, psychology and science to prove that humans actually performed better without a plan B. And the reason why is when they when a lot of folks here, the title of this book, they reflexively say, Well, I can’t take on risks. This is irresponsible. It’s called burn the boats not burned the boats with you in it. And it’s not called blow bridges. Right. So the idea is eliminate your plan B that doesn’t part of the process of doing so is actually processing the worst case scenario. One of the I talked about this, and about one of the first steps is to synthesize and recognize what’s the worst that can happen if this big move I’m about to make goes wrong. And by doing that, you now can peacefully accept the risk because you’ve already processed, you know, the downside. So one, I want to approach it from science and history and psychology. But the other is I want to provide actionable case studies illustrations, so that you wouldn’t distance yourself from the individual. What I mean by that, like, I’m on Shark Tank, if you met me and I look well dressed, you can make lots of assumptions about me, I teach at Harvard Business School, you could assume that I was born on third base, right? I want to deconstruct who I am. So you see the origin and the journey. And you could say, Oh, you are a high school dropout. Oh, you have impostor syndrome. You are divorced, and you’re embarrassed by it and you went through a lot of pain, you suffer from anxiety, you have a degree of lingering PTSD, you’re not over you’re stuck, right like, is very important to me to manifest in this world as a representation of how I got there, not where I am. And I then broke down 50 different individuals that that from every different angle, founders, billionaires, actresses, Scarlett Johansson is a friend of mine, an Olympian who became a paraplegic at 14 and thinks her life is better off for it and activist who was who was the victim of sexual abuse when she was a child from her nanny, every angle so that those who reflexively say I can’t afford to burn the boats and I can’t afford to let go my plan B. And those people are different from me. I want to offer so many different case studies that it would be hard not to identify with something and the second part, Instagram is full of so many, you know, empty platitudes. You know, Sunday Sunday advice like burn the boats, you know, get Get out there, like that stuff is useless. It doesn’t last more than 30 seconds a little adrenaline hit. I hope what I’ve done with the book is provided an actionable blueprint to to embrace a growth mindset. And to just let go like shed your shame shed the things that are holding you back and move beyond the rhetoric into actually actionable advice.
Scott D Clary 15:23
And okay, so let’s so let’s lay out like a little bit of this framework, so people can understand it. So what is what is the framework that you actually teach over? Because obviously, this is probably something you’ve seen, again, across all those leaders that you just mentioned, you’ve probably seen it with, I’m assuming some of the successful investments you made on Shark Tank, obviously, in your own life as well. So what’s what are the main points of that framework?
Matt Higgins 15:44
Okay, great. It’s, well, one, number one, the whole concept is premised on the idea that the true joy of living is in the striving. And you know, when you go to the top of the mountain top and you look around, you realize there’s nothing to see that the joy was the climbing, when you were looking up trying to get there not looking down and looking around. So that’s number one. So I think I think that’s true for like, 99% of the population. So we begin there. So how do you live a life of perpetual growth? And how do you and the things that stand in our way, are either internal obstacles and external obstacles? So I say any journey of transcendence crossing the threshold to make that bold move begins by unlocking the greatest arbitrage entirely within our control, which is self awareness. Right? It’s figuring out what is it in me, that’s preventing me from making that bold move? You know, it’s an whether it’s impostor syndrome, and I talked about how to overcome it. Whether it’s shame, I think a lot of the reasons why leaders underperform is because they haven’t gone through the exercise of shedding shame. So how do you create a place and space for you to go ahead and let go of your vulnerability? It’s how do you retrain your the voice in your head to be your greatest ally, rather than your greatest enemy, I talk a lot about sabotage. And so a lot with it’s a little bit similar to what I do when I’m assessing an investment is I analyze and look under the hood, because the fish rots from the head as the Italian say, so you need to undertake that own exercise for yourself. My book takes you through the journey of how I did it myself, but how other leaders have reflected upon what’s holding them back and overcome those internal obstacles. And then there are the external obstacles that stand in your way, I go through the corporate saboteurs. And I tried to put into words things we all feel, and I’ll make it a little abstract. They are these archetypes that manifest in a corporate setting, as leaders, CEOs, managers, and they’re either victims, they’re martyrs. They’re corporate gas lighters, the one that I think a lot of people can relate to is this idea of with holder. So what’s a with holder, or with holder is someone who recognizes that an employee or a partner in a relationship context is a pleaser, and is dependent upon validation and affirmation in order to sustain themselves, right. And they understand that if they if they withhold that recognition that praise, they destabilize that individual that pleaser and they’ll work that much harder to go ahead and over and get that approval. Right. So there, I tried to in the book deconstruct these unsaid things that operate upon us that hold us back, that prevent us from going that destabilize us so that if you can identify it, you can deal with it. And I I love that withholding one. Because when I mentioned this to people, Oh, I feel that I feel like somebody is denying me the praise that I need. And I’m and when I’m sad that I can’t get it into I’m sad that I need it. And so I think what you find when you read the book, again, that’s pretty abstract stuff we’re talking about. But you know, you can reduce these things that are operating on us that are holding us back into words, articulate them, and then manage them. And so for each of these ideas, I come up with strategies for how to how to move beyond them and talk about how I did it in my own personal life.
Scott D Clary 18:52
And one thing you mentioned, you mentioned, perpetual growth. And then when you adopt this mindset, it says almost a forever mindset that you apply to your life. So for people listening, this can be very stressful, because now they’re thinking, Oh, if I really want to make it, I always have to be uncomfortable. I always have to be growing i i always have to you know, I got the next career advancement or I launched the side hustle, turned it into a company and now what do I have to burn next so that I take it to the next level? So I get the you have to enjoy the journey. But does this not turn into perpetual stress perpetual discontent? How do you mitigate that so that you still enjoy what you’re doing? If you’re always putting yourself into this position of high stress, high growth?
Matt Higgins 19:36
Such a great question. I talked about this in a book too, because if positioned the wrong way, you’d be like stop like, I’m good. So so a couple thoughts on that. It is only stressful if you live in a perpetual place of anticipation if you’re never present. If you’re always worried and thinking about you know, what’s going to happen. The downside. I talk a lot in my book about how to how to how to retain your grip on the moment, and how much contemplating my own mortality factors into this philosophy. I have an app on my phone call we croak five times a day, it sounds actually crazy, but five times a day, and in different ways, it reminds me that I’m gonna die. It’s a different philosophical message from Socrates or somebody else, it’s a little bit of stoicism built into. That’s right, a little bit of a lot of bit of stoicism, right on the simple idea that, that when you’re reminded of your mortality, the number one thing that we all fear, it actually does the opposite of what we’re afraid of. It makes us peacefully locked in on the moment. So number one, you in order to have a joyful life of perpetual pursuit, you actually have to stay present, which is counterintuitive. The second thing is it’s okay to take a break. It’s okay. I talked in the book about consolidating gains, you achieve a new milestone, you consolidate it, you go ahead and you lock it in. You don’t want to be a grasshopper, where you’re jumping from one team thing to the next. The point is, sooner or later, if you’re like most people, melancholy will set in because you don’t feel challenged. So my, the point of the book is not you have to perpetually jump in a frantic way from one thing to the next. The sequences, burn the boats achieve what you previously thought was unachievable, consolidate your gains, because what’s the point of achieving things and then the accomplishment has eroded because you didn’t focus enough to make it scale? Scale yourself, right? So that it works in your apps absence, or with less energy, right? I talked in the book, how I taught at Harvard Business School was really, really hard the first time, the second time, less hard. Third time, every time you repeat something through habituation, you unlock more energy for you to allocate to something else. So again, I want to make very clear to me listening, I’m not arguing that you have to live a life of perpetual discontent. I’m, I’m asserting that eventually, you will feel melancholy, like every Olympian Maillet, marathon runner who finishes the race, and you will want another race. And so the thing that holds us back, are these internal and external obstacles, I try to deconstruct them, so that you can figure out how to one burn the boats to consolidate the gains. And then three, continue on.
Scott D Clary 22:05
One of the concepts in the book is backing the jockey not just the horse. What does that mean?
Matt Higgins 22:12
Yeah, it’s a bit of a cliche, but there’s reasons for these cliches, right? It’s just that though some of the worst deals I’ve ever done in my life have been when I dropped behind a private equity firm that has supposedly reams of data and diligence in Excel sheets, like it’s just all nonsense, the answers are always about the individual. But that’s, it feels inaccessible, borderline mystical. And so the folks who under index on EQ want it to be about the numbers. And it isn’t about the numbers. It’s about the jockey. So it’s just something I strongly believe in. And I put a lot of energy into, like I said before, looking under the hood, and figuring out what makes people tick.
Scott D Clary 22:50
I’m actually curious, because obviously, we’re speaking, more generalized, but a lot of the audience here is founders, entrepreneurs, and obviously very interested in your opinion on that, because you you work with a lot of them. So I want to pull some lessons out from what you’ve seen with all the companies that you’ve invested in, as, you know, building a private equity firm, also as, as an actual Angel venture capitalist. But let’s talk about Shark Tank. That’s always a fun topic. So I’m actually curious. Why, because you have great business ideas, experience, but why did they choose you? What’s what’s the what’s the differentiator with you, that allows you to be on that show? What’s the value add?
Matt Higgins 23:30
I mean, also a great question. That one that I asked myself when the lights went on saying, wait, wait, what? Let’s Cuban looked at me, like, who invited this guy? Why did they choose me? I if I’m honest, I chose myself. And then I manifested it. If you held me up against constellation. Yeah, I mean, let’s just be honest, if you held me up against a constellation of people who’ve tried to be on that show, or want to be on that show, or pretend like they don’t want to be, you know, there are some serious, huge CEOs out there. The difference is, I thought it was possible. I thought I belonged on that set. And I worked for a year of my life, to put myself in a position to do it. In the end, why did they choose it is because they thought the origin story was compelling. And I had something to share. They thought the way I approach business was intelligent, you know, probably wanted a New Yorker, you know, got, like, there was a whole range of things. But I think that’s the end of the story is less interesting than the beginning that somebody like myself, who, you know, objectively didn’t have any business, being on the set at the time, reached out to some random producer and said, Would you give me a minute, and I met him on his name is Clay Newbill. And my agent got me a meeting. I’d never been on a Hollywood set period, and the sun was setting and he said he’d meet me for coffee was supposed to be 15 minutes, you know, an hour and a half later, we’re talking about what we’re talking about right now. So it began with the belief that I belong there, and that I was willing to put in the work and the uncomfortable energy, and the honestly the embarrassment and ridicule and the audacity to put myself on Mad sad.
Scott D Clary 25:00
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Matt Higgins 26:07
we’re talking right now. And it’s hard for me because sometimes people be like, well, you don’t have to tell all that. I just say it’s because you’re one of the biggest investors in the country, whatever nonsense and I’m like what’s not true? Like, it could be true. And it’s sort of true on one plate.
Scott D Clary 26:20
It’s sort of true. But like, but I
Matt Higgins 26:23
don’t think that’s the accurate truth. And if I say that the reason why it’s important to me to be transparent about this, I want somebody listening this to not separate yourself from me, right and and think, Oh, well, you’re that’s why you are no, no, no, no, I like I, I worked hard at it. And I also don’t want to perpetuate this idea that they chose me right? Because that’s another thing. Well, of course, right? Like they chose me, it may look that way now because of my credentials, right? But I don’t know, we do a disservice when we don’t pull back the curtain in my opinion, and we perpetuate the myth. And then people feel like the myth is not for them, right?
Scott D Clary 26:55
So when you when you work with all these different founders, and you work with all these different entrepreneurs, what do you look for in because I’m, I’m a founder centric investor, I’m very bullish on the person, like you just mentioned, you know, it’s it’s great to go into the spreadsheets and the data, but you can sell everything with a great spreadsheet and great PowerPoint like it really, it really depends on the person who’s running the company. So what do you look for? What is what is the characteristics of a business leader? I’m sure some of them are actually discussed in your book, because that’s what you look forward to invest in. But just quantify for me a little bit.
Matt Higgins 27:26
Yeah. So let’s, let’s eliminate intellect, table stakes, right degree of intelligence, just to go to the, you know, the core issues, right, number one, I want to feel like the universe, or God put this person on this earth to pursue this business. So I want to see a connective tissue to something in the person’s life or their values, that led them to create this specific business, because that connective tissue is going to be the thing that sustains them in the dark hours, right? When nothing is manifesting or playing out as as that PowerPoint. So I want to make sure that the y is strong enough to sustain someone because that helps de risk my check. Right. So those are just like two specific, you know, examples. And then in terms of the person, I am, above all else, back to what I said before, I’m looking for proxies of self awareness. Because again, I love that I’m talking to you and founders who are listening to you, they can understand what I’m about to say, right? Why is why is that so important? Every single co founder listening to this is going to have to pivot their business at some point, right. And I believe that every one of us has given us an given an opportunity to avoid disaster. Before it’s too late, right? The the the universe is benevolent, fundamentally, in my opinion. And if you look back to some of the worst decisions you’ve ever made in your life, you can identify the moments were like, Ah, if only I just had, you know, like, we all have them if we’re honest. And so the ones who make the pivots and of course, corrections before it’s too late, are the ones who don’t need to see the iceberg courtside in order to steer clear, right, like the ones who can and I always say, I can determine and predict the future the success of a CEO by how much data they have to have in order to make a decision that is objectively inevitable. Like you are going to hit that iceberg. Do you really need it to be 10 feet away? Or can you forecast and so so self awareness will enable you to look for those icebergs to be intellectually curious about them so you can find them. And then a degree of confidence and humility will be the reason why you act upon that insight. So why those two together confidence gives you the willingness to look within the willingness to sort of ask the questions about why and why might I be wrong. Humility gives you the comfort to acknowledge it publicly and not worry about judgment, right to recognize that you know, there but by the grace of God, go i and we all make mistakes. So that’s a lot to like, unpack, but I’m telling you 100% When I’m talking to somebody, I’m looking for them. So what was interesting about shark tag, you have 40 minutes to figure all those things out, you know, consistent with my philosophy. So I’m looking for little tells signals, right? That are part. So I’ll give you an example on the on the set of Shark Tank, you know, when you have an investor Come on, and one of the more assertive sharks will say, like Mark Cuban or Kevin O’Leary, like, you know, this business is dumb, you should change the name, and you should no longer sell widgets, you should open a brick and mortar, and the person is a great idea Mark Cuban, I will abandon my business. And I will open if only you’ll go ahead and you know, become my investor, right. And like, right, that little microcosm of an exchange tells you a lot about the person, it tells me you don’t really have conviction and your vision, it tells me you’re willing to do anything you you know, you want to go ahead and you know, get the check, etc, and etc. So I stay very closely to my core philosophy that it’s about self awareness, manifesting is competence, and humility. And I have a bunch of signals that I’ll look for. And that’s why I use industrial psychologists a lot when I’m writing a large check, because I want to efficiently get under the hood, and see if I can identify it. Now. If I see somebody under indexing, for any of that, it doesn’t mean I don’t write the checker, I dismiss them. It means I have an honest conversation about the things that I pick up and say, Hey, I’m, I’m picking up that you’re somebody who won’t take feedback, or I’m picking up you’re using the word AI a lot. But this was clearly a week situation. But you say I write AI. And so I’ll give somebody the data. And by the way, as you can see, as we’re doing on this podcast, I’ll also create space for vulnerability by sharing my story to see how people respond to it.
Scott D Clary 31:30
And how do you wait, that’s a great, that’s a great problem to solve for, because you just mentioned that if somebody is so, so passionate about what they’re building, that’s great. But then you don’t want them to waver too much of somebody who’s influential offers a new idea. But how do you gauge whether or not their culture coachable and they’re willing to learn versus they’re, they’re mission oriented, and there’s, they’re steadfast in their idea, which could be a benefit, but it could be a detriment if taken to the extreme, because then they won’t listen to any outside advice. So how do you how do you balance that out?
Matt Higgins 32:06
Well, you know, Jeff, Jeff, Jeff Bezos has this great quote, right, you want you want to be you want to be rigid in your vision and flexible in your execution. So I do look for a degree of steadfast fastness in the vision. But that is not that is not in opposition to being intellectually curious about where your execution is wrong, or intellectually curious about other people’s opinions. Right, those two are not i i, to a detriment. Sometimes I take all these inputs, right. I’m, I’m not one of those people like Gary Vaynerchuk is amazing. Like, he blocks out all the criticism, and I don’t block it out. Because I want to sift through for nuggets of truth. Sometimes I relate, like has a point. So I’m looking for the rigidity and the conviction on the vision, but I’m looking for flexibility in the inputs and intellectual curiosity. And so now, you obviously don’t want to be destabilized by those, right? So if I see somebody who, you know, can’t handle it, or you know, the shoulders are all slouched, because they’re criticized once like, that’s, that’s that, you know, we need to do a reset, but I don’t I don’t think it’s that hard to reconcile those two, because I don’t think they’re incompatible.
Scott D Clary 33:13
And in all the in all the investments that you’ve made, let’s take it back to even when you first started investing, so your your investing career commenced? What was that first investment? What did it look like? Was it a success? Was it a massive failure? Do you even want to talk about it? If not, that’s okay, do
Matt Higgins 33:30
no, that’s great. I will say when I first partner with Steve Ross, who’s amazing, and one of the greatest entrepreneurs, you know, most of his career is in real estate. He’s known for that, but actually incredibly dynamic and delightful and curious, always trying to shake things up. But um, when I first presented this idea, I will partner with you on the dolphins and help oversee the team. But my real passion is to creating things from inception, and backing great people and helping unlock their potential. I had some specific ideas that I talked to him about. And one of them was this crazy guy who sells wine named Gary Vaynerchuk. And, and, you know, this firm that he was building and social media, were trying to
Scott D Clary 34:09
sell them jets tickets from what I understand.
Matt Higgins 34:12
Yeah, yeah. So so so I had Gary was on it was on my was our original conversation, believe it or not. And then another one was a guy named Jesse Daris. So I’ll use that as the case study, because that was, in fact, the first deal that we did. There was a young man named Jesse and I had hired him to do public relations at different points in my career, and I think it was 27 at the time, and he’s one of those people that is able to identify the patterns of the universe in a way that is almost mystical and makes you a little bit uncomfortable and feel violated, like how do you know how this is going to play out? Right. So we say that practitioner of the dark arts you know, but I have had a conversation with with him all the time and you will own your own firm one day and by the way, just FYI, if you don’t end up owning your own firm, you made a big mistake. In your future, but we’ll just leave it at that. And those were the coaching sessions we’d have. And then when I partnered up, I said, I want to try to put him in business and help create his own firm. And I talked about this in the book about how I call Jesse up, we went for a walk. And I painted a picture of the way sliding doors of how his life could play out. On the one hand, you know, continue to work, hope that your name ends up on the door one day, you know, you think you’ll launch your firm when you’re when you when you’re 40. But at that point, you’ll have kids and 529 plans to worry about, and you’re actually your risk tolerance will go down, not increase, or you can quit, and we’ll backstop it, look, we’ll build a firm together, and we’ll get going. And, like, he did it, he quit. And just a few months ago, he sold that firm for 10s of millions of dollars. He is fantastically wealthy, not that that’s the object of the exercise, but it’s one it’s one way we keep score. And I and the money part is, is great. But what would what would what would feel so magical is going from an idea, a conversation, a walk in a park, you know, us trying to figure out how do we get email addresses? Like how does you know, where do we where do we where do we have the whole cloud thing work, right? And then walking into a room and seeing, you know, 80 people work for us? Like it actually makes me emotional. Like that is incredible. So that was the first deal I ever did. And then and then the second day we
Scott D Clary 36:25
decide on him. But what what made you decide on what made you decide on him?
Matt Higgins 36:30
I just number one, the product was so great. The quality of his advice was fantastic, too. I love him. He’s like a brother, but man, he can be a pain in the ass. And he just is really convicted. You know? And like, that’s why I said he would speak truth to power. I’d watch him in these situations. Like you didn’t just say that, like you like you just told that CEO, by the way, why did you tell me that? You know? And so at first I would look at I would call him like a punk. Like, I can’t believe you’re giving me this advice. And I’m like, I can’t believe you’re giving me this advice. Your advice is probably right. I think I needed to hear it. So you know, he’s so the product was great, then But then running a company is a lot more than the product is like do you have and because he had such strong conviction about principles about how he would like to run something if he was in charge, you know, when you see somebody with very strong principles about what they would do if they were the boss, that’s a pretty big part of the foundation of one day being a boss, right. And when I would talk to him, this is how I would do it. This is who I would hire this is I knew okay, what he was missing was the capacity to burn boats. He had all these reasons, you know, to hedge hesitate. This was happens when I talked to folks a lot. I talked about this in a book, I love this idea. I think most people when presented with an opportunity to grow reflexively or instinctively choose incremental ism, overstep change. So what I mean by that is they presume that in order for me to get to where I really want to go, I got to make all these little stops along the way, well, I want to I want to own a lemonade, you know, conglomerate, but I gotta make a lemonade stand first, you know, outside my house, like, So Jessie, at the time felt like, maybe I need to do this, maybe you know, I need more seasoning. And I love challenging that because 90% of the time, we are manufacturing reasons to delay getting to our ultimate destination 90% of the time, we are overestimating the value of experience, because you already have the experience, you just don’t have the title, you just don’t have the recognition from society. So that was Jesse’s case, that was the one thing we had to overcome. And again, also talk about that, and he overcame it. And he ended up reaping the rewards.
Scott D Clary 38:33
And and what what advice you have for people that are in that mindset that are playing small,
Matt Higgins 38:39
I would say, take a step back and audit all the reasons why you think you knew you need to do X, before you could do Z, right? Ask yourself, and here’s what oftentimes is the origin, you feel like you need to do X, because you’re embarrassed that somebody’s going to believe you’re not ready to do the thing you really want to do. Or you believe that Well, dad, my dad feels like first I shouldn’t get an accounting degree before I do whatever it is I really want to do, there’s usually an external voice of approval that is telling you, you shouldn’t be allowed to do it yet. Or there’s a partner because you’re in a bad relationship, who keeps cutting you down? Every time you have an audacious goal? Who keeps finding ways to undercut your ambition? It’s true, I talked about this, like we are all partnering often with frenemies of some sort or another. And sometimes we end up married to them and, and so there’s usually something that is telling a person and contradicting their instinct. So I say alright, isolate the reasons why you’re choosing incremental ism over a step change. And then to ask yourself what the step change looks like, and start looking. Can I kind of pull it off? I have a great sir. I teach it, you know, HBs right. And I had a student come to my office once and he worked. He was a military Special Forces guy. Special Operations and and just brilliant. And had an idea for his own fund. He had the deal flow to do it. He had the experience, in my opinion to do he had everything. But he came to meet with me. And he said, Hey, I’m in New York, because I’m about to take a job with a big private equity firm. I’m like, Well, you don’t look too happy. He’s like, it’s not my first choice. And so what do you want to do is like, Well, I really want to have fun, I have all this deal flow. And I’m like, Well, why don’t you do it? And he goes, Well, who’s gonna write me a check? I said, Nobody, until somebody writes you the check. So, you know, I don’t get it. We have a great conversation. I assume he takes a job calls me up. A few months later, he said, Hey, I want to get your addresses for what to send you some Swag, swag from what the firm that I created when I walked out of your office. So that was like, stop. He’s like, Yeah, raise $10 million. Now I’m raising $50 million. Like, I love it to anybody listening who’s making small moves, just like when I sat on the steps of Cardozo High School and dropped out and said, Why do I need a school, that single decision compounded my success dramatically, I would, I would, I would urge you just to consider whether you’re manufacturing reasons for why you can’t make that big move.
Scott D Clary 41:07
And another concept again, another concept that I love how, by the way, this book actually walks you through the whole the whole cycle of a founder journey, so it gets them off the ground. But then it walks you through all the different things you’re gonna have to basically overcome as you’re building out literally anything, any category, any industry, one of the concepts like,
Matt Higgins 41:26
Thank you, thank you for reading the book. I mean, did you find it helpful? Now, I have to ask you like now? No, it
Scott D Clary 41:31
was actually i. So I actually, I actually really enjoyed it, because it does walk through everything that I’ve dealt with myself personally. And I find that it doesn’t leave a lot lacking. So there’s actually, there’s two more points that I want to pull out that I found in the book that are helpful for the founder, because I’ve hit these at various stages in my own career. But yes, it’s it’s exceptional. And I actually appreciate that it speaks from a place of experience. So no, my pleasure, it’s well done. It’s your first book, by the way.
Matt Higgins 41:58
Yeah, my first book, yeah, I know, I worked like, Well, I mean, it’s, I always I use the word extra in a positive context is definitely a little extra interviewing 50 people was quite an undertaking. But I find a lot of these books when somebody is in a position of authority or prominence, we write a book because they have permission from society to write a book, and they don’t worry whether the book is useful. I really tried to not make it an autobiography, because I don’t really care. And I want people I want it to provide value to the reader. And I tried to keep the you Scott at the center of the journey. And not me, Matt, you know, and hopefully,
Scott D Clary 42:34
I totally get it. I totally get it. A concept that you discuss, optimizing anxiety, I want to I want you to explain that concept how to do it. Obviously, if you’ve built anything, sometimes you’re like, in a perpetual state of anxiety. And then there’s one last point that I want to go into and then and then we’ll close it out. And we’ll tell people where to go to get this and connect with you. But optimized anxiety. What does that mean? How do we how do we do it?
Matt Higgins 43:01
Yeah, so great question, I talk openly in the book about anxiety, I think anybody who’s you know, uber successful, doing hard things probably has a degree of anxiety propelling them either. And then, and then there is a good degree of science around this idea of optimal anxiety, right, which is, the balance between a certain amount of anxiety is actually needed to produce exceptional effort. So you don’t want to walk away from that. And too much anxiety can obviously render you paralyzed. And so how do you constantly strike a balance B between those two situations. So number one, to put yourself in a position of anxiety, you need to be doing things that are a bit uncomfortable, that’s a fact. And you need to look at the feeling of being uncomfortable as a feedback loop as actual confirmation that you are engaging in a perpetual growth mindset. And again, those sound like words, but it’s so true. It’s very peaceful. When you say I feel uncomfortable and distressed. I feel a degree of impostor syndrome like Okay, good. Well, you’ve put yourself in the arena. That’s number one. I’m a huge believer in self talk in the third person, lots of science shows that self talk with the in the third person is creates a super ego that you that you defer to as an authority that can calm you down. So I go through lots of different ways to bring it into balance and talk about ways in which I have been completely crushed by anxiety and they, you know, can do reel to reel the outcome. I think the most important part is that we all have an open conversation that anxiety is not a proxy for necessarily illness, and not a proxy for necessarily things are wrong. It’s potentially a feedback loop. You just need to keep the two end equilibrium.
Scott D Clary 44:39
And last question that pull out of this and now we’re, we’re still going along the founders journey or anyone’s journey really, but what happens when you go all in and you fail? Hmm, well, it will, and under percent it will. So
Matt Higgins 44:55
first I have to say that I am not one of those people that you know fetishize this failure. Some of the rhetoric we use just feel so dishonest and inauthentic, like failure is amazing. You know, I’m so glad I felt today. Like, that’s not true. I hate failure, and I do everything I can to avoid it and rocks my world when I do. But I do think that if you can adopt a mindset, a process, it can make it manageable. So one of the things I found that with some of the most widely wildly successful people, let’s just start with some billionaires that I’ve talked to friends in a book, Mark, Mark, Michael Rubin is a great example is a CEO fanatics, right? What I found with him and many other really successful people, is that anytime they encounter a specific incident of failure, right, they simply widen the definition of success to accommodate that fulfill failure on the road to success. It’s amazing. It’s like it’s almost instinctive sometimes from afar, it looks delusional, like, No, that was like a big mess. Nope. As a result of doing that, now I’m able to, you know, etc, to whatever. So, my overall advice is, number one, never allow your identity to be enmeshed with a specific failure. So I never use a language, I am a failure. I never allow myself to believe that. But I do use the words I have failed. That’s number one, to remain intellectually curious about that failure. disect exactly what happened? What can you extract from it, what value you can create three I buried in the desert, I never pay my respects again to it. So I just move on. But I, I’m sharing the first part about the billionaires because it contradicts what I just said. They have a unique ability to reflect the losses, repel them, and absorb the winds in what almost appears delusional, I do not have that capacity. If you wish to be a incredible multimillionaire work on the degree of delusion that anytime you fail, you’re like No, no big deal that I really meant to do that actually, and just widen that that is the common thread, and I talked about in the book. But for the rest of us mere mortals like myself, we need a process to ensure that we never allow our identity to be in meshed with a single act of failure. And that’s how I do it. So I’ll talk to some other folks. And they’re not even intellectually curious about why they failed. And those, those people do tend to be extremely, extremely successful and weirdly resilient. I unfortunately, don’t have that thick skin and I need to process failure.
Scott D Clary 47:22
Okay, so where should people go to connect with you to wet? When is the book coming out? Where can they get it? I’m assuming all the regular places, but still drop me all the links. Okay, great.
Matt Higgins 47:33
So the book is available. Now you can go to Amazon, it’s burnt, burn the boats, you can go to my website burned the boats book, I tend to spend a lot of time on LinkedIn. I like LinkedIn a little more civilized, and, and thoughtful. So the best way to probably get in touch with me is to go to LinkedIn and look for Matt Higgins there, and I’m on Instagram as well. But I’m so excited for people out there to read it. It means the world to me, if this in some way affects you changes your life gets you changes your relationship with risk. This is why I’m doing it. So if you could let me know I’m a vulnerable human being just like you that feedback makes it all worthwhile.
Scott D Clary 48:09
Last question, I asked everyone before we close this out, after all, all the things you’ve accomplished, what does success mean to you?
Matt Higgins 48:20
What does success mean to me? I I. So I went through like a lot of people a lot of trauma when I was young that sort of shaped the future. And I do believe that the reason why it happened to me because I I witnessed something at 16 that I have not been able to unsee and that is the power of human intervention. When someone is suffering or dealing with subjugation. In other words, if somebody had come along and taken an interest in my mother, and our situation she would not she would be alive now probably. So I believe that the highest and best use of your power money platform is to ameliorate suffering and another. So the more time I spent an allocate to ameliorating suffering, either through sharing the wisdom of this book, or the work I’m doing with migrants and refugees, I’ve had two private audiences with Pope Francis in the last year, which is amazing like, to me, success looks like an increasing amount of my life devoted to ameliorating suffering and then seeing the impact. The impact makes me feel good. Maybe that’s selfish, but I bet it feels like living