Ep569: Richard Moran – Common Sense in the Workplace

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risks but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives to reduce risk in your life, go to my worst investment ever.com today and take the risk reduction assessment I created from the lessons I've learned from more than 500 guests. Fellow risk takers this is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guest, Richard Moran. Richard, are you ready to join the mission?

Richard Moran 00:44
I'm ready, Andrew.

Andrew Stotz 00:47
And I How did I do with my radio voice there?

Richard Moran 00:50
You sounded like an FM radio voice that is on at two o'clock in the morning and hope that somebody out there is listening.

Andrew Stotz 00:59
And that's the story of my life. I actually in Cleveland, Ohio, where I grew up, we had a channel called W MMS. And the guy that came on at about midnight is the BLF bash. That was his name and just just like just went crazy when that guy came on

Richard Moran 01:18
the TV to an FM voices you don't yell at people, you don't make people feel guilty. You just bring them in and welcome.

Andrew Stotz 01:27
And, and the audience is going to understand why I'm asking you that question when I introduce you to the audience. Richard Moran is a Silicon Valley veteran in both investing and operations. He is general partner at Tonic bio ventures and early stage Life Sciences venture firm. Previously, he was the president of Menlo College. His background includes serving as a partner at Venrock, CEO at a creative solutions, Chairman of Portal software and a managing partner at Accenture. his track record includes successful exits in software, gaming, food, and life sciences. He is a best selling author with 10 books to his credit, his latest book is never say whatever to be published by McGraw Hill. He has a syndicated show in the workplace on CBS Radio, and is an influencer on LinkedIn where he is a regular contributor, but never reads the comments. Richard, take a moment and tell us about the unique value that you bring to this wonderful world.

Richard Moran 02:41
Thanks, Andrew. I, my value is I tell the truth. And I tell it in sort of a funny way. And I talk about things that other people are not talking about. So you mentioned that I have a radio show on CBS that runs on weekends. And I'd like to say that I'm my content is so spectacular that there's a clamor for it. But the truth is, the stock market is closed on the weekends. So radio stations need to fill their business section with content. So that's me, so on in my radio show. And I'll talk about strategic planning. I don't talk about spreadsheets and pivot tables. I talked about things like should you take your dog tool? Or what do you how do you deal with the guy who sits next to you who reheats his fish burrito every day in the microwave and thinks up the office? So it's sort of like Seinfeld, you know, it's a show about nothing. But it's really important, because I'm talking about things that other people are not talking about. And, and it resonates because it's, it's, it's, it's what's on people's mind. So my, my contribution to the world is telling the truth and giving people an exit so that they can deal with all the vagaries of the workplace and making a profit.

Andrew Stotz 04:21
It's interesting, because you said, when I asked you, you know, like, what's your unique value? You said, I tell the truth. Well, doesn't everybody tell the truth? Like, you know, that was my first reaction? What is it that's going on in this world? You know, where somebody really can be unique by just telling the truth. What is that? What do you mean by that?

Richard Moran 04:41
Yeah, well, I talked about it a lot in my latest book, never say whatever, which you mentioned. Because lots of times instead of telling the truth, he say whatever, and move on. And that's that's not you know, somebody brings it down. got to work and you're allergic to dogs and say whatever, I'm gonna have to deal with it. No, you should tell the guy not to bring his dog because it's a, it's a problem. So telling the truth, I'm not talking about great truths in the universe, I'm talking about. If the product doesn't work, somebody needs to raise their hand saying, You know what, I'm ready. If you're if we're cutting costs in the wrong places, somebody needs to talk about that. So it's about just double clicking on the truth, and getting to a spot where people can make the right decision, I guess. And truth is, is not a long commodity. I know you're a global show. In the US right now, truth is not necessarily that a commodity that we have too much of. Yeah. And

Andrew Stotz 05:53
it's interesting, because I'm thinking about, you know, okay. If, if someone is if my mother was to say to me when I was young, tell the truth. She's telling me Don't lie. But when you're talking about the truth, what you're talking about is to speak honestly, and kind of directly confront something, rather than just pass it off. And I'm curious if you had, I know, one of the words that I've heard before and seen before in behavior is, like passive aggressive, or people that just don't want to deal with things. Have you ever had that experience? Like when you were young or something that you know, there was people that just didn't deal with things, and it left you in an insecure situation that you just really didn't know how to handle it?

Richard Moran 06:40
Yeah, I'll tell you a story. That was an epiphany for me. I don't talk about it often, because a lot of people don't I haven't even heard of the company. But I started my career after graduate school at Atari, the video game company, Atari, I'm sure a lot of your listeners and viewers remember Atari? And we were having we were, it was a juggernaut. We were having $100 million weeks of revenue. I mean, if you could not get your Pac Man fast enough, we were sold out. But I remember sitting in a strategy session, when a facilitator said, you know, are we sure our strategy is on track? And everybody says, you know, there's an infinite demand for donkey calm, and Miss Pac Man is gonna, I mean, it's, we just went on and on about how this company is going to grow forever. But in my heart of hearts that day, I knew we wouldn't. I knew that costs were out of control that it was just not the right thing. But I didn't say anything. And I come to find out later that everyone in the room knew the same thing. No one said it, we didn't tell the truth. And, you know, two years later, Atari went down the toilet, disappeared. And I think that was an epiphany for me about just being honest, I guess, at a different level, not just don't lie, but about in your heart of hearts, are we really getting to the bottom of what we're trying to talk about?

Andrew Stotz 08:18
It made me think of a story that I've never told before about my own business, which we now have started about, let's say nine years ago with my, one of my best friends, a Thai man here. And he and I started this business, and we had great dreams. And I, it didn't, it didn't work the way we plan. And what I did is I didn't look at the financials. In here, I am a financial guy. And I just didn't want to look at it, it was just scary, that it was evidence that what I was doing wasn't working. And he was patient with me for awhile. And you know, we were able to fund it. It's not like we had a huge, you know, capital needs for the company. But there came a time where he just said, this isn't gonna work. And he's a very direct guy, which is not very common for Thai people, because Thai people tend to not want to have a confrontation. But he basically laid it on me very hard. And he said, I have a wife and kid and I have to, you know, take care of my family and this has to work or else we got to end this. And man, was it a wake up call and it made me realize my obligations are more than just to me, but to him and the other employees in the company and it took a while from that kind of smack in the face to then wake up in and start iterating through our different products to make sure that we eventually got it and we got it. And now every single month we get our monthly financial statement. We close our books every month and I tell every small business out there you know the number one thing that I recommend you do is get your monthly financial numbers close, accurate and on time and review them just for an hour. And if you do that, it's going to be, as I say, finances like a mirror. It's just a relentless mirror. So it made me think of that story.

Richard Moran 10:14
And it's not only a numbers, it's behaviors. I mean, how many times have we seen a leader or CEO, who tolerates poor behavior from their assistant. So, you know, I've seen CEOs who have no trouble firing 3000 anonymous people in a different country, but they can't, they will tell the truth about their own executive assistant, who's a poor performer and will never fire him or her

Andrew Stotz 10:45
voice, you're bringing up a lot of things in my head, because I, you know, recently have had an assistant that's been with me for a long time. And there was a point where I saw her communication with one of the employees was not anywhere aligned with how I would speak to an employee. And it was kind of exercising her power. And I sat down and talked with her, and, and then eventually, she quit. And it was kind of sad, because we had worked together for a while. But I was like, you cannot speak to people that way. It just not acceptable. So that's interesting. And that's a great lesson for the people listening and viewing. Because watch the people around you, you know, it's important, they're communicating a message of who you are. And they're doing it through their actions. So

Richard Moran 11:32
that's also a good ending. That's a good lesson out of my new book, because you could have said, with your assistant, you could have said, whatever, you know, she's been with me for a long time. Maybe she doesn't do that all the time. But you did. You made a decision. And that's why I tell people never seen whatever in work.

Andrew Stotz 11:51
So before we get into the big question, I have one other story that you raised in my mind, you know, for the listeners, most people know a little bit about my story, which is that I had a drug addiction problem when I was young. And I ended up in different rehabs. And the first one didn't really work. And the next one got a little bit better. And the third one was a seven month long term treatment center, where it took some work to remould my brain and my emotions and become aware. And you know, learn how to implement 12 steps and things like that. But the thing that really turned my life around was that the counselors and the 12 step program that I was going through, forced me to unearth everything that I had done. In the past, I wrote it out, I took a personal inventory. And it took a long time, and things just started spilling out, as I started going back in my past, and all the things that I had done. And then they basically, you know, had me sit down with someone that I trusted and share everything. And then after I shared all that I burned that document. And I had let go of all these things, but then I had to make amends to people, you know, that I had heard. And I had to deal directly with particularly my mom and dad. And that was really challenging, and it was really painful. But what I learned from that was that you said, Tell the truth. Well, the truth, south, south shall set you free. From that moment when I was 17. Until today, I can say that I let go of all that baggage because I dealt with it directly. And I didn't deal with it directly by choice I did, I dealt with it directly because I had my back to the wall. And I ended up trusting the people that told me so when you talk about telling the truth, it's also you know, when I think about it, I just think that, you know, the way through most problems is through most problems. There's not a shortcut. There's not a workaround, there are consequences to shortcuts and workarounds that can damage you for life. So I challenge everybody to, you know, follow what Richard is talking about, which is tell the truth, and be direct and clear with it.

Richard Moran 14:15
And just so your listeners and viewers know, I'm my specific areas where where I encourage people is to be you don't have to give a speech about the truth. minutes. Sometimes it's just internal, you know, things like Mrs. Where, you know, I don't write great literature, I posed the question like, should you take the newspaper to the bathroom with you? No, you shouldn't. And you know that you should tell yourself the truth, you shouldn't do that. So it's just things like that, that so I'm not talking about great decisions. I'm talking about being honest with yourself about how your will that will that help you be successful? No, it will not

Andrew Stotz 15:01
My mind's me and my old friend when I was wearing the funkiest weird. It's clothes and I don't didn't know anything about fashion. And he took me when I was a young guy in front of a mirror, and he said, Look at yourself. And I had a new respect for for clothing and

Richard Moran 15:17
appearances. So that's I call people on.

Andrew Stotz 15:21
And nowadays not don't think that newspaper, don't take your mobile phone and talk on the phone when you're in the Yeah.

Richard Moran 15:28
Yeah. Especially if you're in a billable time environment.

Andrew Stotz 15:32
Yeah, there you go. Well, now it's time to share your worst investment ever. And since no one goes into their worst investment, thinking it will be tell us a bit about the circumstances leading up to and then tell us your story.

Richard Moran 15:45
Yeah. The story actually plays is consistent with what we've been talking about so far. As a venture capitalist, with a big firm, I was the guy who made decisions about media and entertainment, which at the time was all about video games was about games. And for those of you know, the gaming industry, it's all about, it's about rock and roll minutes, like you want Eric Clapton and we had a young man come in, who had been very successful, and wanted to start a new company and needed $6 million to start it. And one of the things that people talk about investing, especially in venture capital is pattern recognition, as in past performance is the best indicator of future performance. But in rock and roll, I'm not so sure. And in gaming, I'm not so sure. So I was blind a little bit by his success story. And we invested we gave him $6 million to build this company. And it was all hinged on him. He is, he was the core of this company. And shortly after a couple months afterwards, at a trade show, he's led a tech trade shows, he behaved inappropriately, he's smoking dope with customers in a spot where it's illegal. He went off with a young woman that was unclear what that relationship was, although we knew he was married, and he did it all in front of employees. So in most cases, that would, that he would he should be fired today, he wouldn't. Especially this was a few years ago. So we had a little bit of space. So we had a partner meeting, and came to me about what to do. And I said, in the options were fire him, in which case, we'd lose $6 million. Coach him, in which case he might change or ignore it, in which case, he wants to be involved in that company. So we didn't want to fire him because we didn't want to lose, or I didn't want to lose the $6 million for the fund. And I didn't want to keep him on. So we, I brought him in my office, I reamed him a new asshole, and really, really yelled at him and about if it happens again, you're you will be fired. And you know, what happens? He did something similar again. So he was fired. And we lost $6 million. So my, the worst investment was based on my inability to tell myself the truth about this. There were there were hints of it in the due diligence before the first investment. And I ignored it. I didn't double click on the, on, on the truth. And it was a no, I learned. I learned that lesson. And, you know, he was passionate, you know, it's really easy to get distracted by a passionate founder. And his passions, you know, spread out into other areas. I was distracted. There was a due diligence was pretty good, but not great. But I saw a shiny object with a rock and roll gamer and made a mistake. Yeah,

Andrew Stotz 19:37
if he was a rock star, you may be able to get away with it. But

Richard Moran 19:43
yeah, and you know, I don't know. He's, he's still around. But he's not running a company, that's for sure. Yeah.

Andrew Stotz 19:52
So how would you describe the lessons that you learned from this?

Richard Moran 19:57
Well, I was distracted by a shiny object. You know, I was, I didn't tell myself the, in my heart of hearts, I thought it wasn't quite right. He was never quite right. And the lesson was I should have listened to my heart paid a lot more intense attention to the, to the diligence and not be distracted also by his past track record, because sometimes in investing past performance is not an indicator of future performance as all the disclaimers, say. So that, lots of lessons and, and I've, I've now learned also that, and I still am making investments still work with founders, I own I'm only working with people that I want to work with, that I want to work with. And I want to hang around with that I want to have dinner that I want to spend time with. And it was never in that category. Yeah. So maybe,

Andrew Stotz 21:03
that it's an interesting story, and maybe I'll share a few thoughts on it. First of all, you know, this is kind of a key man risk story, if something goes wrong with that guy. You know, there's just nothing left there. And so that's an important, you know, point for the listeners to think about where do you see key man risk, because it's not just inappropriate behavior. But you know, that guy could lose interest or, you know, whatever. And so this is a key man risk story in a lot of ways. And then I like I wrote down something that you wrote, which is fire coach ignore. And, you know, I think there's plenty of people that may ignore it, particularly when real money is on the line, like, How can I let this go? I can't make 6 million bucks go, and maybe he'll change. If I talk to him. You know, we can all change. But you'll realize the older we get to realize how hard it is to change. Yeah, yeah.

Richard Moran 22:01
You came in point is very, is very important. And it plays true today. I mean, there's a lot of well, Elon Musk, I mean, there's a lot of key men that are, some of them are loosening the socket.

Andrew Stotz 22:15
Yeah. Also, I think the other thing for the listeners out there that have businesses and are building their businesses is that every successful startup, ultimately, probably does come down to a key man or woman with passion and a drive to reach that, and they get some other people on board. And maybe it's two people that are really, the leaders of that. But ultimately, I mean, look at, you know, Apple as an example. So we have to take on key man or key woman risk, to get where we want to go. But you also need to make sure that your business doesn't just collapse, the minute that you, you know, leave that business, because then there's just no redeeming value that an outside investor, for instance, you know, can grab on to so I think that's a kind of side lesson from it to what I also was thinking about, as you mentioned, you know, thinking about how could this be prevented? And you mentioned, like, there was some hints, and then you said, due diligence, and I was thinking about? Yeah, I mean, one of my guests, Llewellyn. And she she's amazing woman that was raising money to lend money to SMEs in Cameroon, in Africa. And she had some investors that came in, and in the end, they fell apart. But the point was, was that the lesson that she learned is, when you do your due diligence, you really have to talk to people who don't like that company, or have had a bad experience. And ultimately, that's where you can get some angle that you know, you won't get and that's not easy, because you know, they're not going to tell you that person. So you really, that level of due diligence is interesting. And you know, you could also say, well, it was only 6 million bucks, you guys probably had a lot more money. I mean, how deep are we going to go? This guy's a rock star? Yeah. So I think it's a good lesson on due diligence and thinking about how you're doing your due diligence.

Richard Moran 24:19
Yeah, the lesson for me on due diligence was it go deeper on the personal people are actually pretty willing to do that. It's shocking. Be careful out there, everybody. He may

Andrew Stotz 24:30
have, he may brag about that. You know, if you sat down and spent an hour with him, he may start bragging about it.

Richard Moran 24:36
Yeah, so I did you know, so it's, it's important not to judge people as much as Wonder worry about the investment. So, you know, I'm not I don't care what he does in his personal life with you. But, but I did care what he did with the investment.

Andrew Stotz 24:57
And the last thing that I just think about, you know, You mentioned you said, in front of employees. And, and then I was thinking, okay, so if you didn't do it in front of employees, would it be okay? And I was thinking about that. And then it reminded me of a guy that a friend of mine a guy, I know, we've worked together. And he was, he was in sales, I was in research, and he was a Fantastic Salesman, but I would say, a very manipulative person. In fact, something maybe a little bit of a screw loose key was he just rejection didn't bother him at all. And it made him an amazing salesperson. But he was into manipulating people. And only a couple of months ago, here in Thailand, some women started to come forward, that they had been, you know, sexually, you know, accusing him of sexual misconduct in some way or another. And then all of a sudden, many women came out and had, you know, copies of messages and all that. And so he's in serious trouble right now. And it just made me think that in front of employees, but for all of us, you know, that great, you know, less than is make sure that your behavior if it was published on the front page of the newspaper, is something that you could stand by. And I think that's something that really is a challenge. Ultimately, I think that's the challenge that I want to give to the audience from this discussion. And that is, you know, it could be you, that's done bad behavior. One of the lessons I learned when I was young is number one, when you've done something wrong, apologize, go to the person directly and apologize, and, and they may or may not accept that apology and make amends. If you owe them in some way or another, you need to, you know, make amends for that. And then, you know, you've done the best that you could in that case, you may have consequences that are severe and significant that you have to face, but face it head on. And so I just think, you know, there's a lot of lessons from that. Anything else you would add to that?

Richard Moran 27:05
Well, just, you know, the one lesson that all of us should learn in high school, is, whatever you do, you'll get caught. You may not get me Thomas Jefferson is still getting caught for things he did, you know, so. And I think, well, the other lesson is, you know, what the Eagle say? What was once memories is now evidence. So, video, I mean, it's, you get caught.

Andrew Stotz 27:34
Think about your behavior, and make sure that you know, make sure that it's good. So based on what you learn from this story and what you continue to learn what one action now I want to think about it from an investor a person that's investing money, time, energy and another person. What one action would you recommend our listeners take to avoid suffering the same fate?

Richard Moran 27:57
Well, it diligence as we've discussed, but I think Don't, don't, don't go after the shiny object. My dad always said that. You know, the money is not in sailboats, or wineries the money is in highway dividers and toilet bowls. And, and I think sometimes, we as an investor, you need to look at things that may not be the may not be web three, may not be NF T's. I mean, there's still opportunities, lots of opportunities in infrastructure, basic software and things that are going to make lives better. So shiny objects. Everybody's after the shiny object. It's like watching seven year olds play soccer. You know, they're all on the ball. So what's the perfect visualization? Yeah, look elsewhere. Because there's, there's opportunities everywhere right now.

Andrew Stotz 28:58
It there's a when I was young, my father's a salesman for DuPont. So he was, you know, selling plastics. And there was a tiny little factory. And there was two guys that owned it and ran it. And he was like, he wanted me to meet them. And we went to some of their like, parties and barbecues. And these guys were really cool down to earth. Really interesting guys. And they had a company called Go Gojo. And, and they were just, you know, going gangbusters and they were just making these plastic dispensers for liquid soap. And then the other day, I was at the hospital with my mother here in Bangkok, and went the bathroom and there is a go Joe Dispenza right there and it's not a shiny object, but boy, it's just it. I think your dad was right that it's it's those very common things that can just make millions and millions

Richard Moran 29:49
are sometimes we joke about it in our family. For those of you who play Scrabble, you get points for doing a word and one of our sons is good Arrays at taking that big long word and adding an S to it, which just happens to be on the triple points the square. And lots of times there's technologies, there's, there's products where you just need to add the s.

Andrew Stotz 30:18
Just add, yes. Now, what is a resource that you've created or that you use that you'd like to recommend to the audience?

Richard Moran 30:25
Um, I use a couple things. One is I, my network, you know, like shop things where I would say, what about this? What do you know about that? So it's not about doing diligence on the person or the company, but it's about the market and asking people what's happening in that category. And the other thing that people I think underestimate is how current an investor needs to be meaning. Well, the best advice I ever got, when I started in venture capital was an older guy, I asked, What's the best way to prepare? He said, The best thing you can do is read this Sunday, New York Times from cover to cover. Don't just read the business section, read the front page, read the society section, read the arts and leisure section, read, read it from cover to cover, read who's getting married? Because it will tell you what's current, what's happening in the world. So I still, you know, I always did, but I, I read it now with an eye toward, you know, is this a trend what's happening here? And I think that was good advice that I will pass on. It doesn't have to be the Sunday New York Times, it could be the London Times it could be mortal. The lesson is stay current stay current.

Andrew Stotz 31:55
And it sounds also like stay current and stay broad, like look at the lots of different stuff that's going on from weddings, to international politics to you know, whatever,

Richard Moran 32:05
battling in fashion, that food at politics, I mean, read it all know, you have to be smart. Yeah, the best investors I know, are Renaissance people. And they are, they're well read. And they're actually very good writers.

Andrew Stotz 32:22
It's, as a financial analyst, my job is to try to predict the future and do it in such a way that we would invest on that, you know, that we could make money from that. And if you're wrong, you know, it's trouble. And recently, I wrote a quarterly strategy that I send out to my clients and presented to about my small group of my clients. But what I told him is that I said, I think World War Three just happened. And it was us against Europe. And by us getting Europe to sever the gas and oil ties with Russia, it is a crushing blow for Europe that does not have natural resources enough to really survive. And then I said, and World War four. And I'm using that euphemistically, hopefully, we're not gonna have a another war is going to be in Africa, where we now have serious risk of hundreds, possibly 100 million people going into starvation and famine due to the war. And China has invested a tremendous amount in Africa. And all of a sudden, America is going to wake up to you just got 100 million people in starvation, demanding, you know, aid, and you've got your, what America calls, its number one adversary now. deeply invested there, and you're not except through military. What are you going to do? And that's going to be an interesting one. So keeping a broad perspective is critical. Last question. What is your number one goal for the next 12 months?

Richard Moran 34:14
My number one goal is to stay healthy. But continue on this. Continue to be an evangelist to common sense in the workplace. simply common sense in the workplace. That is my platform. And I'm an evangelism an evangelist for that.

Andrew Stotz 34:35
Is that your tagline? Or it should be common sense in the workplace. Yeah, I love it. Well, listeners, there you have it another story of laws to keep you winning. If you haven't yet taken the risk reduction assessment, I challenge you to go to my worst investment ever.com right now and start building wealth the easy way by reducing risk as we conclude with Dude, I want to thank you again for joining our mission. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Richard Moran 35:14
Just common sense in the workplace.

Andrew Stotz 35:18
Fantastic. And that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Let's celebrate that today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast host Andrew Stotz saying, I'll see you on the upside.