Most explanations for startup failure still focus on founders themselves.
The assumptions are familiar: weak execution, poor hiring, bad fundraising timing, or an inability to adapt under pressure. Gregory Shepard sees the problem differently. In his view, many founders fail inside operational systems that were never designed to scale coherently in the first place.
The startup world has spent decades building disconnected support structures around entrepreneurs: accelerators, incubators, advisors, investors, software platforms, educational systems, and service providers operating through separate workflows and competing priorities. Founders move between them trying to assemble consistent guidance from fragmented inputs.
What appears to be founder failure is often infrastructure failure.
That distinction matters well beyond startups. Scaling companies create similar conditions internally as they grow. Systems multiply. Teams operate from different assumptions. Reporting structures diverge. Information becomes scattered across disconnected workflows. Leadership spends more time coordinating operations than improving them.
Gregory Shepard’s work through Startup Science centers on a direct observation: many organizations trying to support founder growth are themselves constrained by fragmented systems that no longer scale effectively.
The episode develops into a broader discussion about operational fragmentation, organizational inertia, AI-driven acceleration, and the increasing importance of judgment as execution speeds compress.
Shepard describes industry development as a repeating cycle.
Innovation creates expansion. Expansion creates fragmentation. Fragmentation eventually forces consolidation.
He traces that pattern through affiliate marketing, ecommerce infrastructure, CRM systems, and now AI-enabled software markets. New technologies lower barriers to entry. More companies emerge. More specialized tools appear. More operational complexity accumulates.
Eventually the fragmentation itself becomes the problem.
That is the condition Shepard believes now defines large portions of the startup support world.
“The startup ecosystem for the last thirty-five years has had a ninety percent failure rate.”
His point is not that founders lack ambition or capability. His argument is that the systems surrounding them have become structurally incoherent.
Accelerators operate through disconnected tools. Advisors work through separate channels. Educational content lives in different environments. Investor relationships sit elsewhere. Reporting workflows become fragmented across spreadsheets, CRMs, project management systems, and forms.
As Shepard explains, “Founders are getting sent in a hundred different directions.”
The consequences compound quietly.
Founders lose time trying to reconcile conflicting guidance. Support organizations become harder to scale operationally. Decision-making slows because no single system reflects the entire operating picture.
The same pattern appears repeatedly inside scaling companies.
Operational friction often gets misdiagnosed as a talent problem or a process issue when the deeper problem is structural fragmentation. Teams continue functioning, but coordination quality steadily deteriorates. Leadership spends increasing energy managing disconnected systems instead of improving execution.
The organization continues moving, but less coherently than before.
One of the sharpest observations in the conversation has little to do with startups specifically.
“The real competitor that people have is do nothing.”
Shepard applies this to entrepreneur support organizations trying to modernize fragmented systems, but the pattern extends naturally into larger operating environments.
Most organizations recognize structural problems long before they act on them.
Leadership teams know their systems are disconnected. They know reporting structures are inefficient. They know data lives across too many tools. They know onboarding is inconsistent. They know operational coordination has become harder.
But migration carries immediate costs:
So organizations postpone the decision.
The delay feels manageable because the business continues operating. Teams improvise around inefficiencies. Revenue still arrives. Customers still get served.
But fragmentation compounds underneath the surface.
The hidden risk is not operational inconvenience alone. The deeper problem is reduced adaptability during periods where coordination and timing increasingly determine competitive position.
That becomes especially dangerous in AI-driven environments because execution cycles compress dramatically. Organizations can now scale mistakes faster than leadership can fully evaluate them.
Shepard frames the tension directly:
“The faster you go, the more you need to pause because it’s reckless if you don’t.”
That observation runs against much of the current conversation around AI adoption.
Many organizations interpret AI primarily as an acceleration tool. Shepard treats acceleration as incomplete without corresponding improvements in judgment, coordination, and lifecycle clarity. Faster execution amplifies both competence and confusion.
Organizations with fragmented systems simply create fragmentation faster.
One of the more grounded aspects of Shepard’s perspective is his refusal to treat AI as purely additive.
He acknowledges the operational leverage. Smaller teams can build products faster. Software development cycles compress. New companies enter markets with dramatically lower capital requirements.
But he also sees AI rapidly increasing fragmentation across industries.
As development costs fall, more point solutions emerge. More overlapping products compete simultaneously. More operational redundancy accumulates. Markets become noisier before they become more consolidated.
In Shepard’s framing, AI initially increases structural complexity rather than reducing it.
“AI is leaving behind a trail of wreckage.”
The organizations that survive the next phase are unlikely to be the ones simply moving fastest. They are more likely to be the organizations capable of preserving strategic clarity while the surrounding environment becomes increasingly fragmented.
That distinction shapes Shepard’s emphasis on human judgment.
AI can organize information and accelerate execution. It cannot independently determine whether an organization is solving the correct problem at the correct stage with the correct priorities.
As execution friction decreases, poor judgment becomes more expensive because organizations can now scale flawed assumptions far more quickly.
This is why Shepard places increasing importance on experienced operators, advisors, and domain expertise rather than assuming AI removes the need for them. The constraint shifts away from production capacity and toward decision quality.
For scaling CEOs, that changes the leadership challenge considerably.
The question is no longer whether teams can move quickly. The harder question is whether the organization can maintain enough operational coherence that faster movement remains directionally useful.
One of Shepard’s strongest ideas appears late in the discussion when he explains the motivation behind his Startup Life Cycle framework.
“The first major reason why founders were failing is they didn’t know where they were going or where they were.”
His criticism centers on how startups define progress.
Many founders rely on financing language — pre-seed, seed, Series A — as shorthand for company maturity. Shepard argues those labels rarely clarify the operational realities the business should actually be addressing.
Lifecycle awareness does.
His framework attempts to create clearer operational definitions around:
Without that clarity, founders often pursue decisions disconnected from the company’s actual developmental stage.
The relevance extends well beyond startups.
Scaling companies regularly experience similar distortions:
Lifecycle clarity creates decision discipline.
It allows leadership teams to distinguish between strategically important problems and operationally urgent ones. It reduces wasted motion created by solving constraints out of sequence.
That becomes increasingly important in fast-moving markets where organizations can scale incomplete assumptions much faster than before.
One of the more revealing moments in the episode comes when Shepard explains why accelerators themselves struggle to expand capacity.
“You have a better chance of getting into Harvard than you do an accelerator these days.”
His explanation is operational rather than philosophical.
Most entrepreneur support organizations remain dependent on fragmented combinations of CRMs, spreadsheets, forms, educational platforms, reporting systems, and project management tools. The organizations helping founders scale are often operating through infrastructure that cannot scale effectively itself.
“Their systems are limiting their ability to scale.”
The same pattern emerges constantly inside scaling businesses.
Leadership teams often assume growth constraints are primarily market-driven or talent-driven. Frequently the larger constraint is operational coordination. The organization reaches a level of complexity its systems were never designed to absorb cleanly.
At earlier stages, improvisation works surprisingly well. As complexity increases, improvisation turns into operational debt.
The companies that navigate scaling transitions effectively tend to recognize this earlier than competitors do. They improve coordination systems before fragmentation becomes debilitating.
That does not necessarily require heavier bureaucracy. It requires clearer operational architecture.
The distinction matters because over-structuring too early slows learning, while under-structuring too long slows scale.
The judgment challenge is recognizing when operational flexibility stops being an advantage and starts becoming a liability.
Shepard’s argument ultimately reaches beyond startups.
The episode becomes a broader discussion about organizational coherence during periods of accelerated technological change.
As AI lowers execution barriers, more organizations will build products quickly. More competitors will emerge simultaneously. More operational fragmentation will accumulate across markets.
The advantage shifts toward organizations capable of maintaining alignment while complexity increases.
That requires discipline across several dimensions at once:
Most importantly, it requires recognizing that operational inertia compounds risk during periods of acceleration.
Organizations rarely fail because they were unaware of structural problems. More often, they delay difficult operational decisions until fragmentation becomes expensive enough to force action under pressure.
Shepard reframes startup failure away from founder mythology and toward system design. The same reframing applies inside scaling companies.
Execution problems are not always execution problems.
Sometimes the organization no longer has a coherent understanding of where it is, which systems govern decisions, or what operational stage it actually occupies.
That confusion becomes harder to survive as execution speed accelerates.
For leaders operating in AI-driven environments, the challenge is not simply moving faster. It is preserving enough clarity and coordination that faster movement continues producing useful outcomes.
The full episode explores these dynamics in greater detail, particularly around startup lifecycle management, organizational migration resistance, and the operational consequences of AI-driven fragmentation.
Gregory Shepard is the Founder of Startup Science, a platform focused on helping startup support organizations scale founder support infrastructure. After building and selling multiple companies and conducting extensive research into startup success and failure, Shepard developed frameworks around startup lifecycle management, operational fragmentation, and founder support systems.
Jeff Holman is a CEO advisor, legal strategist, and founder of Intellectual Strategies. With years of experience guiding leaders through complex business and legal challenges, Jeff equips CEOs to scale with confidence by blending legal expertise with strategic foresight. Connect with him on LinkedIn.
Intellectual Strategies provides innovative legal solutions for CEOs and founders through its fractional legal team model. By offering proactive, integrated legal support at predictable costs, the firm helps leaders protect their businesses, manage risk, and focus on growth with confidence.
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The Breakout CEO podcast brings you inside the pivotal moments of scaling leaders. Each week, host Jeff Holman spotlights breakout stories of scaling CEOs—showing how resilience, insight, and strategy create pivotal inflection points and lasting growth.
Listen and subscribe on your favorite podcast platform:
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Want to be a guest—or know a scaling CEO with a breakout story to share? Apply directly at go.intellectualstrategies.com.
TRANSCRIPT SUMMARY:
00:00 — Introduction To Gregory Shepard
02:05 — Growing Up In Extreme Poverty
04:45 — Discovering Industry Expansion Cycles
07:35 — First Mover Disadvantage Explained
10:10 — Startup Ecosystem Fragmentation Problems
12:10 — AI Driven Market Consolidation
15:05 — Why Human Judgment Still Matters
18:45 — Building Startup Science Platform
22:05 — Scaling Entrepreneur Support Organizations
25:10 — Platform Infrastructure For Founders
28:10 — Measuring Ecosystem Success Outcomes
30:05 — Fighting Organizational Inertia
33:05 — Change Management And Migration
35:20 — The Future Of Work
40:10 — Building The Startup Life Cycle
FULL TRANSCRIPT:
Gregory Shepard (00:00)
Real competitor that people have is do nothing. AI is leaving behind. It's like trail of wreckage. And you have a better chance of getting into Harvard than you do ⁓ an accelerator these days. But the faster you go, the more you need to pause. Nobody's looked at it from a holistic perspective.
Jeff Holman (00:15)
Welcome back everybody to the Breakout CEO podcast. I'm your host, Jeff Holman, and I am really excited to bring you a what would we call it? A multifaceted, maybe a multi layered ⁓ expert here, Gregory Shepherd. Greg, it's great to have you on the show.
Gregory Shepard (00:31)
Thank you. I appreciate you having me.
Jeff Holman (00:33)
Yeah, really glad to have you. So ⁓ you I I am going to admit right now I'm at a bit of a loss because you've done so many different things from the different companies you've started and you know, grown and everything to the to the startup science entire ecosystem that you've built out. ⁓ so I'm gonna I'm gonna leave this up to you. What is the what is the theme that you would say ties
your career and your work together across everything you've done.
Gregory Shepard (01:07)
That's an interesting way of asking that. Okay. So ⁓ you know, I started building companies when I was eighteen. So I've built and sold twelve. ⁓ I've invested in nine, sold four so far.
Jeff Holman (01:23)
You're not very active, are you? You're just you're just dabbling.
Gregory Shepard (01:25)
I wrote ⁓ three books. Let's see. I've co-founded the Fulbright Entrepreneurship Initiative. and I was named by MSN Top Ten Visionary in Innovation and Entrepreneurship just about three weeks ago. Yeah, and then I'm speaking at the United Nations on Innovation and Entrepreneurship in September. ⁓ I think that what ties everything together is
Jeff Holman (01:42)
congratulations.
Gregory Shepard (01:54)
Two of the companies I sold to eBay, and I was the chief strategy for eBay Enterprise Marketing Solutions. I left after three years and I went into politics, which was a terrible, terrible, terrible decision. ⁓ but I was trying to move money down to startups, right? So I I went to them, they said no, and then I did a five-year research project on startup success and failure, which is ⁓ a lot of the content from the books came from that.
Went back to them, they said no again. So then I started startup science and wrote the books to try to help. I think what sort of braids everything together is my desire to help entrepreneurs. I think that entrepreneurs change the future. they, you know, help us evolve. It's a good way for equality and equity ⁓ amongst people. And ⁓ you know, me myself coming from a poor family, you know, I mean
We lived in tents, you know, for for like two and a half years.
Jeff Holman (02:56)
Actual actual tents. What where was this? Where where were you where did you grow up?
Gregory Shepard (02:58)
Yeah.
Yeah, so I I lived in Oakland but I kept getting beat up ⁓ in Oakland. So my parents moved us to the mountains and we homesteaded on property for five years. So I mean this is showering from bagging from a tree, going to the bathroom in a bucket. Yeah, yeah. Campfire to cook. You know, it was it was s you know, no water, no electricity.
Jeff Holman (03:20)
This is I mean, when you say move to the mountains, is it like this is this the the hills outside of you know, the city or?
Gregory Shepard (03:26)
No, no, this is way up. This is ⁓ near Tahoe. Okay. Lake Tahoe. So this is like between Sacramento and Lake Tahoe. It's like in the mountain mountains. Like there was nobody around for I mean, you'd have to drive for
Jeff Holman (03:38)
You're up at eight thousand feet or something,
Gregory Shepard (03:40)
Yeah,
yeah, it was like it yeah, it was high elevation, it was it was you know, but I mean I fought my way through and did everything that I just named, right? So I was like, Well, other people should be able to do it too. What's stopping them? And that's what got me into this whole idea of like how d how can I help? How can I give back and how can I help? So that's sort of like the thing that braids everything together.
Jeff Holman (04:04)
So so okay. So innovation and entrepreneurship and Fulbright ⁓ entrepreneurship, something or other, and United Nations, small names like that, and ⁓ so you've done like I said, I wasn't sure how to do this introduction ⁓ without your help here. As you think about your career and you think, you know, there's one or two moments ⁓ maybe there's more, you've done so many things, but but one or two moments where you say
These were the defining moments a as I was going along. Like ⁓ a business that was gonna go under and then you're and then you reinvented it, or ⁓ maybe a personal moment where you said, I just can't do this anymore. Like I love entrepreneurship, but it's maybe it's not for me until you find until you until you try to walk away and it's like, wait a second, where will I where would I go? Like, d are there some moments like that that resonate with you?
Gregory Shepard (04:58)
from yeah I mean I can tell you a couple of them. When before affiliate marketing became like a a big thing, you know, where you have like all these affiliate networks, there used to be directories, affiliate program directories. And what you would do is you would go sign up, somebody would get a contact form and then they would put together tracking for you.
And you would go to directories, these l little directories that listed all the programs you could sign up for and market products and services. I bought all the directories and then created software that automatically submitted to them. And then I sold that because affiliate networks were coming and I knew it. So then I built the first of affiliate marketing agency, the first one to go global and the first one to be acquired. And that was a game changer.
Right. That was like a a moment where I was like, I started to understand that the way disruption works is that there's like a still pond and it's like stagnant and still. We've seen these ponds, you know? And then somebody throws a rock and it brings up all the sediment and everything. And then there's rings that start to form. And those first rings are bigger. There's not very many opportunities in them because the ring is small, but the rings are big. Right. And then as it starts to spread out, there's more and more opportunities.
But that also creates fragmentation. And the fragmentation creates almost like a breathing of an ecosystem where it expands and then it contracts. And once I started to understand this, it was a turning point because I was like, wow, all these ecosystems go through this expansion, which creates fragmentation. Then when they contract, there's consolidation. Right. So if you time it out right, you can actually hit it at the right time and
Then you can exit a company pretty quickly because you come in during the expansion phase. When it starts to contract, people start to go out of business. This is where the big ones, you buy them or merge them or do something with them. And then slowly you start to become the consolidator, right? And and that changes everything. That's what happened with affiliate marketing and shopping carts and CRMs and I mean you could go around the horn and pretty much anything in marketing.
you know, was a consolidation like HubSpot as an example is a revenue C R They have sales, service, and marketing, right? So it's a revenue C RM. Well, those used to be separate components, but they consolidated them, right? And Salesforce consolidated them and, you know, everybody else did too. So that's what I mean by that. So that was a fundamental change.
Jeff Holman (07:40)
Well it's so yeah, I I I I know a lot of people talk about, you know, these I I love the water analogies. People talk about catching the waves, all that stuff. But you're presenting it in a different way where it's it's not just a wave, like it's it's the expansion contraction innovation cycles ⁓ that that happen. I if I feel like Clayton Christian talk Christensen talks about some of those expansion contraction or I don't maybe it wasn't him, but ⁓ but those are those are kind of the quintessential
motions of innovation and and development of new technologies, right? I hadn't thought of it though in a way that well, it takes me back to when I was when I was in college, I I worked for this guy and he he talked about how his father grew the hi grew the business that eventually became his business by buying all of the what was it? I think it was electrical ⁓ wiring supplies in the business during a huge downturn in the market because they became available.
Sort of a sort of a contraction consolidation cycle ⁓ you know on a small scale. ⁓ but but what you're describing is really I don't know if it's is it does it align with like second mover advantage? Because first mover advantage, you're you're at risk of all of the expansion cracks that are forming, right? Is a second mover advantage in a better position or or where does
Where does this contraction consolidation cycle hit and how do you identify it in a market? Just a quick note about our guests. I host the Breakout CEO podcast to share behind the scenes insights from scaling businesses. As an attorney, I see the real challenges leaders face long before success becomes public. But client stories have to stay confidential. So we invite guest CEOs to share their own moments of struggle and success.
I'm so grateful to our guests and my team at Intellectual Strategies for making this show possible. Now, let's get back to the show.
Gregory Shepard (09:45)
Yeah, I mean, I think that I call it the second mover look back and the first mover disadvantage. Because if you are if you're walking through a jungle and you have a machete and you're cutting the trail, but somebody's right behind you, walking right up behind you, who's got the advantage?
Jeff Holman (10:03)
That's the second person for sure. If you're t if you're talking energy expenditure and yeah.
Gregory Shepard (10:08)
They just run up behind you and say, Keep going, I'm I'm right here. You know? So I I think that the the first mover has a timing advantage, but in this day and age with AI and all the how fast tech is moving, is it really an advantage or is it a disadvantage? You know, like let them build the wheel and then come up behind them and use the wheel. Yeah. You know? So I think that that's how I think about that, right? Is this idea. I think that the the difference though is
When I was referencing the pond, it's a stagnant pond, meaning an industry that's stagnant and ripe for innovation. Like and they go through rotations. Every time there's an expansion and contraction, there's there's room for for more people to step in and change things. Right. Like you see these roll-ups happen all the time with the big companies. They'll go out, somebody will roll up a bunch of stuff, do a spec or whatever, and then some big will come in and buy them and
Roll them into their suite of things, and then this repeats over and over and over and over again. Yeah. Right. ⁓ so I think that those, it's like a heartbeat, right? It's it's sort of like, you know, beats and it brings life to a situation, sucks everything back in, brings life to a situation. But I think that the thing that changes whether the opportunity is a is a big opportunity or just an opportunity to solve a problem.
Is how stagnant the pond is that you're you're d disrupting.
Jeff Holman (11:39)
Mm. So it's not just it's not just your timing or placement relative to the movement. It's what's the where where are you? What pond are you in where where the movement's happening?
Gregory Shepard (11:51)
Right. Like look at the startup ecosystem. Uh-huh. So the startup ecosystem for the last thirty five years has had a ninety percent failure rate for entrepreneurs. Like that's your first indicator right something's wrong. Right. Like how could that like what industry is gonna sit there and go, yeah, that's fine. Just so then you have all these people starting to create all these point solutions to solve all the little problems that they see from their lens. Right. But somebody else comes in and looks at the entirety of the ecosystem.
And takes all these fragmented pieces, looks at the whole thing and says, ⁓ this really should be one platform because they're all interconnected. That pond is really stagnant because it's been like that for thirty five years, and nobody's disrupting it because nobody's looked at it from a holistic perspective, and everybody's focused on their own startup, you know, versus the ecosystem at large.
Jeff Holman (12:46)
Well in so so in this day and age it would seem like maybe there's a the the the gut reaction to that is, well, isn't AI making it so there's not a stagnant pond anymore? Are you like are all the ponds becoming less stagnant or or i is that a different is that a different thing than the stagnant pond theory that we're talking about?
Gregory Shepard (13:06)
No, no, it's true. It is cr it is helping out with all these little areas, these all these little stagnant ponds, but it's also creating fragmentation at at a scale we've never seen before. Which means that in the next five years you'll see like a lot of roll ups. You see a lot of people buying things that people have built and and managed to to get off the ground and AI threatening to take them down.
Because somebody can vibe code something that took somebody five years with an engineering team, they can do it now in, you know, a month or two by themselves vibe coding. So those companies are s they're creating fragmentation by creating competition. And that fragmentation is bound to be consolidated, right? There's there's leftovers, you know, there's there's constant leftovers everywhere. You can see this like trail of wreckage.
that AI is leaving behind and one man's trash is another man's treasure.
Jeff Holman (14:06)
Yes. Well, so so this so I had a call with a a potential client today. They said, Hey, we're we're building this, you know, new technology. It's software related, and ⁓ you know, we're gonna go out, we're gonna raise eight to ten million dollars. And our timeline to build this is, you know, eleven months, twelve months, something like that. And I just thought to myself, wait a second, are people doing that still? Like is that still an an option to to do that? ⁓ or or is the whole concept of vibe coding ⁓
fast validation, like scale scaling, you know, efficiently, like like what is your gut reaction to somebody, whether they're running their own business or trying to start a business who says, Hey, yeah, I'm, you know, eight to ten million dollars and I can get this thing off the ground. Is is that are you seeing that are you seeing that through the same lens today that you saw it, you know, ten years ago?
Gregory Shepard (14:58)
N no, no, definitely not the same. But it's there's a difference. The way I see it is like if you're using one of the AI claud code or whatever it is that you're using to write code, you're going to be writing code, you know, maybe twenty times faster, ⁓ maybe thirty times faster than you did before. But it writes code in pieces. It doesn't write platforms.
So if you have a multi tenant platform, that's a moat. And if you're building something that's a real platform, Claude is not Claude and ChatGTP and all the rest of them, perplexity, et cetera. They're they're not interested in solving they're not building platforms and they're not interested in solving small problems, right? They're going after the bigs. They're going after big market, big market share, because they have to come up against this trillion dollar, you know, IPO that they're trying to get done, right? Right.
So ⁓ you know
Jeff Holman (15:59)
The
legal market, right? Like legal is legal is maybe one of the most stagnant ponds still out there to be disrupted. And it's a huge potential market where where the AI tools can be deployed in a way that could make very meaningful ⁓ strides forward for people who ha traditionally have not been making a lot of strides forward with technology.
Gregory Shepard (16:25)
Yeah, I mean, it's gonna force the legal industry to step into the game, just like it's forcing the financial industry to step into the game with ⁓ their CFO tool. But I think that, you know, there's one thing that won't go away and that is that people wanna talk to somebody. Like, you know, you you work on an acquisition in AI all you want, but you still feel like I need to I need to talk to somebody and and walk through this and see what AI is missing.
Because the way that AI works is it only answers the question that you ask. And it doesn't usually probe past that very far unless you ask so it it uses data. I always think of this this stack. There's data, which is unc unstructured information, then there's information, which is structured information, then there's wisdom, which is people that have activated the the information that came from the data. The wisdom the AI can't do.
But it can take s unstructured data and create information. So, you know, they're like the these things in a lot of ways are as good as the driver. You know, so you you what's going to happen, I think, is you're gonna have more and more CFOs and attorneys using the systems because they understand what to say and how to talk to the system. I think that in addition to that, that is there's gonna be
the competition's gonna be fierce, the prices are gonna go down, ⁓ you know, things like that. People will be using things like caseway dot AI to do contracts, you know, but they're still gonna want to talk to somebody. So you'll have like your attorney with the structure that attorneys usually have with paralegals, except for it's gonna be AAI instead of paralegals. Right, right. Just like what happened with coding, right? Like with coding, you have a seasoned engineer on top of the stack and they have like 10
Junior coders that are agents, AI agents that they're using, I think attorneys are gonna go the same direction and accountants and so on and so forth.
Jeff Holman (18:29)
Do you think that this will increase and we don't need to dwell on this too long, but I'm curious to round this out. Do you think this will increase the the value of the the good we'll just call them the good general counsel or the good CFOs, the people who have that judgment and wisdom, that system level thinking and can and can step in? I I 'cause I wonder if this actually returns us in a way to what a general counsel role in the legal field used to be, which is
Gregory Shepard (18:59)
That's what I think might happen. Yeah. Yeah. Yeah. I think you're going to have like a fractional general counsel, like your own fractional in house general counsel that utilizes AI on your behalf. Yeah. Right. Because now it's less expensive and it's more affordable. So you're going to do more with your lawyer because it's more affordable to work with the lawyer. Instead of and this is a transition. Like right now, people are trying to skate around the attorney because they're like, I can just go to
You know, chat GTP or whatever and draft a purchase agreement or something, right? ⁓ but I think that's going to change because I think people are gonna make some serious mistakes and they're gonna learn from those mistakes and go, I need to like talk to a human being, even if that human being is using AI. Yeah. Because they know how to talk to the AI. You know, like if you think about a coder, coders, the the the real coders, real engineers, they know how to talk to Claud Code.
in a way that it writes the code they want. It's not sloppy code. Right. But that takes the experience of that engineer to do that, just like it would an ⁓ an attorney or an accountant or or pretty much anybody else that they're going at underneath the the big umbrella of management consulting, you know, or services.
Jeff Holman (20:16)
Yeah. It's it's a it's an interesting world and I'll I'll bet this is playing out in a fascinating way within your your own s startup ecosystem that you're building, right? I mean you're tell tell us a little bit about that because I wanna make sure everyone has kind of the the context for what that is.
Gregory Shepard (20:31)
Sure. So what I did is I saw that fragmentation that I was talking about in two thousand sixteen and I started the five year research project on startup success and failure back then. About five years later, I saw in that process that the reason why this failure was happening is because of the fragmentation. And these founders are getting sent in a hundred different directions. The the accelerators and incubators, I mean the whole system is
I mean, th these accelerators and incubators are trying to ⁓ duct tape together, you know, forms and CRMs and things like Notion and Project Management Solutions and all this kind of stuff to try to create something.
Jeff Holman (21:11)
You're you're talking about the about the groups that like real incubators where you you go in and a a startup gets maybe access to some money, but they get access to the the team member the experienced team members that will bring, you know, the the data, information and wisdom in from, you know, legal, financial, go to market sales ⁓ people this is what you're talking about. But it yeah, like but instead of being coordinated it's it's it's a fragmented kind of
mashed together thing, not a not a really coordinated.
Gregory Shepard (21:44)
If you go into an accelerator, well, let me back up to go forward. If you look at the startup space, what you have is you have the entrepreneur support organizations like accelerators, incubators, chambers of commerce, hackathons, maker labs, startup studios, all those guys. Then you have the founder, of course, and then you have the advisors, mentors, ⁓ fractional workers, you know, all the different forms of advisors. And then you have the investors.
the the people that are investing directly into it. And then you have the the ⁓ the providers. And the providers are folks like attorneys and accountants and you know those folks. So you have like there's five players in the ecosystem. Okay. Right now, if you're an ⁓ a an entrepreneur support organization or we call them ESOs, if you're an ESO and you're out there working, you have to try to keep track of all this stuff that's going on among hundreds of founders
through five to ten different systems. Yeah. Like it's it's a disaster, right? It's no wonder that founders are are falling by the wayside, right? Because it it's impossible for them. The other thing is is that they only accept about two percent. I mean, you have a better chance of getting into Harvard than you do ⁓ an accelerator these days because they're limited in what they can actually do, because their systems are limiting their ability to scale. The same problem they always talk about with the startups themselves.
They can't scale. If you look at these accelerators and incubators and stuff, they've been stuck at twenty-five. The big ones do fifty, but typically about twenty-five entrepreneurs per cohort because they can't do anymore because they don't have the the infrastructure around them to scale to it. Yeah. So that's holding back more founders from getting out into the world. Right. So
You either have two solutions, either more accelerators, incubators, et cetera, or the ones that are there scale. So I've chosen to scale the ones the help the ones that are helping entrepreneurs scale and then make it easier for new ones to launch. And that's that's what startup science is.
Jeff Holman (23:55)
So so d does that make you a a an entrepreneur support organization support organization?
Gregory Shepard (24:01)
Yes. Yeah, that is exactly right. Yeah. We are we I say that we're the infrastructure for the startup economy.
Jeff Holman (24:09)
Okay. And so and so what is it you provide? How do you how do you come in and and ⁓ provide that support to them?
Gregory Shepard (24:17)
So ⁓ when I wrote the startup life cycle, I learned I did so many I did like forty eight hundred interviews with ESOs, I did interviews with founders, I did interviews with mentors, service providers, all five of the ecosystem for years.
Jeff Holman (24:33)
W I have to interject. Were you doing a PhD or something? Like this is like this is intense research.
Gregory Shepard (24:39)
Yeah, I I got an honorary PhD for doing it. Yeah. And I was doing my Fulbright Scholar. I'm a Fulbright Scholar also. So I was putting that together. And so when I finished this whole thing, you know, I was like looking at the entrepreneur support organizations, they have they have to build a program based off of a grant, based off sponsors and other fees that they make from investors, et cetera. That's where their money comes from. And then they have to build a whole curriculum and then they have to build
Jeff Holman (24:42)
Okay.
Gregory Shepard (25:09)
get mentors to help out and then they have to get sponsors. I mean, the amount of work that an accelerator has to ⁓ do to to put on a cohort is immense. And they typically have like three to five people trying to do all of this. Yeah. With, you know, typically twelve different pieces of software. I mean, it's crazy. ⁓ it's amazing that they even are successful in the first place. And and ⁓ so this is where I learned everything.
You know, and I was like looking at this and I was I would break it down into details and I just couldn't believe it. I was like, how is this how does the startup ecosystem not have something for the startup ecosystem? I couldn't believe it, right? I was like, and so I kept looking for it, right? I kept looking and trying to find like how come nobody has done this? It's so it just blew my mind, you know, and nobody did. Nobody's done it. So I was like, well, I guess I'm gonna I guess I'm gonna be the disruptor and I'm gonna do it.
Jeff Holman (25:49)
Yeah.
Gregory Shepard (26:07)
Yeah. And so that's what I've been doing now for almost six years.
Jeff Holman (26:11)
And so and so you've been building this out and and w if I were a an an ES an ESO and and I were helping, you know, my twenty five companies and a cohort, what would I what would I turn to to you for? How would that ⁓ you know, what does that augment with what I'm able to provide to the the entrepreneurs in my group?
Gregory Shepard (26:34)
So it depends on who you are, right? So the it's it's like five platforms in one. So if you log in as a provider, you're gonna get a platform for you. If you're log in as a mentor or an advisor, you're gonna get a platform for you, et cetera, et cetera, right? So the platform changes depending on who's logging in to suit that person's needs. Okay. The founder has a collection of everything and the ESO has a collection of everything.
So the founder now has their own side of the system that has investors. It has a marketplace for discounts on software and services, you know, non-dilutive capital. There's dilutive capital, non-dilutive capital. There's tools that allow you to do cap table simulations and things like that. You know, I mean it's it's a full suite projections, data room analysis tools, like it's a whole, you know.
Collection of different tools you can use. There's an LMS in it with courses that you can take. So you can take courses on anything you want. So it's like a turnkey accelerator. and the accelerators will go in and they'll put in their own courses and they'll put in their own investors and their own ⁓ deals that they have for the marketplace, which is like perks and incentives and stuff from service and software providers for entrepreneurs. So that's that's basically the concept is that it
It's like an independent platform for each player that collects everything in front of the founder so that the founder has one place to go for everything instead of fragmentation. And that's the same way for everybody, right? Like I'll give you an example. Advisors, if you look at the knowledge worker environment, there's all been all these layoffs and all these knowledge workers, and they're all becoming fractionals. Right. And the fractionals have started to collect
come together and create agencies sort of like you would see a law firm or accounting firm.
Jeff Holman (28:27)
I see
some calling themselves co ops too.
Gregory Shepard (28:30)
Yeah, exactly. And so what we did is build a platform for them because it doesn't exist and allow them to run their own business on our platform, but that also makes it so they're available for the founders. Right. So we're helping the founders and we're helping the ecosystem. And that's sort of the way the platform works in all five of these different profiles.
Jeff Holman (28:52)
That's very interesting. And the and the and the focus here, from what I understand, is is really getting the right information to the founders at the right time so they can build their build their business. Well, do you have stories of ⁓ and I know that, you know, that's kind of the I don't I wan I don't want to call it indirect, but it's it's a two step process. You're providing the software for the groups that then support the entrepreneurs or the founders. But have you seen have have you seen from the ESOs that you work with or maybe even some founders directly
some of the successes that come from utilizing the ecosystem you built.
Gregory Shepard (29:27)
yeah. Yeah, definitely. Yeah. We've seen the numbers of founders that our clients are using our software have gone up. So typically way up, like sometimes ten more founders. You know, if they're typically doing twenty five, they're doing thirty five now 'cause they can handle more.
Jeff Holman (29:45)
Forty percent expansion.
Gregory Shepard (29:47)
Yeah, it's substantial, right? And so think about that across in a nine trillion dollar industry. ⁓ and then you have you look at it from the perspective of the founders and you see that the founders are actually more successful. They're spending more time on the things they need to spend time on. They're getting all of the little fragmented education pieces that they missed the first time. They're able to save all their information in one place. It's just more organized for them.
And that adds value. So you start to see more of the whole the holistic ecosystem starting to be more successful. Yeah. ⁓ that is my objective objective, right? It's to really I want to increase the success rate by 10%. And I want to make the entire ecosystem more collaborative, more connected instead of so disconnected.
Jeff Holman (30:43)
Well and and so you've been through a dozen of your own businesses with some exits and you've acquired other businesses. This is in a form, ⁓ you know, with an i focus on impact, this is, you know, maybe call it business number thirteen, right?
Gregory Shepard (31:01)
Yeah, this is number thirteen. Yeah. And you know what I didn't even tell you. I've won four private equity awards for transactions between two hundred and fifty million and a billion too. I forgot about.
Jeff Holman (31:11)
What what do you mean you've won transaction w sorry?
Gregory Shepard (31:14)
So the private equity awards for companies that I sold or built and sold or whatever. Uhhuh. ⁓ they issue awards every they have an award ceremony every year. And so I've gotten a bunch of awards. That's what's behind me here. You can see actually right there.
Jeff Holman (31:27)
Are you?
And they're like, and the winner is, ⁓ again, it's Greg.
Gregory Shepard (31:39)
Yeah.
Jeff Holman (31:40)
Well, but so what are you seeing as you're building and scaling this this ecosystem, this business, what are you able to draw on from your past and what are you what are the new things that you're running into trying to, you know, get this out there to the founders who need it most?
Gregory Shepard (32:00)
I think, and I tell founders this, you know, the biggest competitor that people have, everybody does so much competitive research, right? But the real competitor that people have is do nothing. Right. And so that's the biggest challenge I have is that, you know, an accelerator will sit there and go, Well, my data is over here in Notion and it's in this CRM and I have this Google form I use for my intake and I've got these spreadsheets, and it's all over the place, and they want to solve the problem, but they're busy.
So they choose to do nothing and just take the the problem and eventually they have to do something. Yeah. You know, it it just becomes unscalable. But that's the biggest challenge I have is that they're like, Well, how do I move all my data from here to there? That's a lot of work. I'm like, Yeah, you only have do it once and then it's saving you thirty five hundred a month typically as we
We typically save the average ESO thirty five hundred a month and all their data's in one place. So now they can do their reports for grants and stuff a lot easier too.
Jeff Holman (33:00)
I guess I guess it's not surprising that that type of problem is exactly what a lot of, you know, new founders are run into as they're building their own business, right? They're, you know, somebody th th they're like, Hey, I got this awesome thing, you know. It it might be me and I might be might Well, I've got this fractional legal team, nobody else is really doing it. It's the right way to serve clients, you know, get the right attorneys in front the right people, solving the right problems at the right time, without having to go out and hire, you know, a dozen different attorneys along the way.
And and while I might think it's, you know, the best thing in the world from a legal perspective, ⁓ getting it out there and talking to people who say, It's you know, this is ⁓ I I've got I've got my guys already. Like I they they might be spread out, but I'm using them and this is, you know, I don't I just don't wanna change. I I'm gonna just keep doing what I'm doing. Or, you know, that that same thing applies to software or any other business, right?
Gregory Shepard (33:54)
But there's some cache that comes with, you know, I have my own in house attorney, even though it's fractional. Like people say, here's my CTO, here's my CFO, whatever, and they're just and they're fractionals. But there's some cache that comes with that. Like, ⁓ man, this guy's got his own attorney, and there's some fear on the other side because they don't know that you're paying the same, right? They think this dude's on salary, man, this guy can do this forever. Right. So
Jeff Holman (34:01)
Right.
I'm gonna clip that and turn that in into an ad, okay? No, but yeah, I know what you're saying. There I mean, there's always that I guess what you're kind of highlighting in my example situation is that that while there is this, you know, no action competitive position, you have to find the what's the twist, right? What is the twist where where people say, Yeah, I could take no action and that's really easy for ninety percent of the time.
But there's still ten percent advantage. Like there's still something that triggers a reason to take that action. And what is that for you and your business when you when you go to these ESOs and they're like, well, you know, we we we would like this is awesome. We we would, we should. How do you get them to to say, Okay, let's do it?
Gregory Shepard (35:11)
We put together a free migration product. So we're like, if you switch over to us, we'll do all the work for you. So just give us access to everything. We'll put it all into the platform for you. We'll give you an orientation so you know how to use the platform and there you go. Okay. So it's saving them the migration, right? Saving them the hassle of, ⁓ you know, it reminds me, when you're using AI, you know you have to sit if you're working on a project, you have to sit there with the AI and you have to train it every single time. Yeah. You'd sit down and you have to
Right. Type in what you're trying to do and why you're trying to do it and what outcome you want and blah, blah, blah, blah, blah. And then you do this for 30 minutes and then you can finally get the work done. It's really fast after that. But it takes you 30, maybe even an hour to get it, you know, ramped up. And then you can produce things in seconds that would take you, you know, hours or days. But you still have to invest that initial amount of time. That I think is change management for people. So
The migration that we do is more of a change management process. Like, hey, don't stress out. It's gonna be fine. You'll get the benefits of this without the the withdrawals that you're having right now from having to pull out all the data that you you've organized all over the place. Right. And I think it's the same for you, right? If you're like, hey, listen, you've got five attorneys. Yeah, you you don't wanna change anything because they know everything that's going on. We have a migration plan that includes
Underst you know, moving what these people know over to us and now we are the the the source of truth, you know.
Jeff Holman (36:47)
Yeah. It's it's it's minimizing that transaction cost ⁓ with switching costs, yeah. Yep, that's involved with with change management. I love those topics, but ⁓ yeah, there's probably another another layer to dig into there at some point. But I want to save some time so because I know we've got a a hard stop here, but where do you see this going? Like if you're able to to lock in with the people who are trying to create the impact for the founders.
that they say they're trying to create. Where where do you see this going and what role do you see playing in that in the long term?
Gregory Shepard (37:26)
I think that I think in the lo I think what's i inevitable in the long term, and I think anybody that really is honest about this is that we are going to end up working less and getting more done. That there's just no is if everybody needs a job but you only have jobs for half the people, then people work half the time and everybody's employed. Right? So
Like that's where I think it's going is that people will just work less and get more done and everybody will have a job and you know, that because what what else is there? What's the other option? The government's not gonna step in. You're gonna have a huge unemployment problem. There's gonna somebody's gonna have to do s like the the market is gonna have to do something. That's really
Jeff Holman (38:10)
Interesting
'cause I don't you know, when I look at what people are doing, I see people working more, pushing more, trying to build more, do f do more faster, better, and that's gonna be a what you've just described might be the inevitable it's gonna be a drastic change though from where it feels like momentum is headed right now.
Gregory Shepard (38:31)
I think they're parallel tracks though.
Jeff Holman (38:33)
Are they? How so? Because
Gregory Shepard (38:36)
Because you know, you if you are powering through something, right, you're gonna get to where that road starts to become thinner quick, right? Quicker than it would take before. So inevitably, whatever it is that you're doing, you're using AI, you're going faster and faster, and you're building more and you're doing more and you're going faster. Like that is not a sustainable structure, right? Eventually you will get to the end of the project. And then it goes into maintenance mode.
Right. And when it goes into maintenance mode, it's going to take less time and then the person's going to work less, just like we already do. You know, if you think about, you know, people that are really productive, they'll be really productive and then they'll go on vacation because they can. You know, because they've allowed they've worked to work themselves up to the point that they can take time off. I think it's just how it's going to I think it's how we're we're built. You know, we're going to go, people are going to
work really hard and take time off or work really hard for half the day and take time off and you know people are going to start doing other projects, you know. It's so fascinating to me because the people that have been left behind traditionally, these are people hand I call them hands workers. Right. So the the construction people and you know people that are doing those sort of tasks, those people are going are are going to be
more important than they ever have. Because AI can't do those things. You know, I mean robotics to, you know, build a house, that's a ways out.
Jeff Holman (40:12)
Yeah, my son says my son really likes welding. He's sixteen and and and as a you know, growing up at my age, I'm like, welding, I mean, it's great, but you gotta you might want to think about owning your own business or something because just welding might not be the the most financially rewarding. But I wonder if I'm off track looking ahead fifteen years. Welding might be might be a very profitable, you know, in demand service because it's a ⁓ what do you call it, hand a hands hands business?
Gregory Shepard (40:37)
Hands business. Yeah. Like you're using your hands, right? I mean, you know, the ⁓ welding as an example, if he works for a big shop, a a robot could take that over. But if he's doing custom welding for people, you know, like coming in fixing this and that kind of stuff, he's gonna be good. Like 'cause it just like AI, they're not after the little details, they're after the big hits. Robotics is gonna be the same thing, you know, like
Jeff Holman (41:01)
Right.
Well, and that's an interesting point because when you think about ⁓ AI and reaching the end point faster and, you know, taking time like i in in the startup world, in the innovating ⁓ ecosystem, you run into the ⁓ into the forest a lot faster and then you have to slow down because you don't know where to go from there. So you the the innovation slows you down in a sense. Even though you're innovating faster, you have to probably
stop and look at the landscape a a lot more frequently to to know where to where to innovate now. But
Gregory Shepard (41:38)
Yeah, the ⁓ the faster you go, the more you need to pause because it's reckless if you don't. Yeah. You know, I mean, before it was like running through peanut butter to do a startup, right? Just just incredibly painful. And now you have the wind at your back, right? And you're just you're hauling. But that also means that you could be passing up things right and making mistakes fast and getting to the point that you've made irreversible mistakes.
Getting to point where it's irreversible faster.
Jeff Holman (42:10)
I I love this conversation. There's so much more to it. I can see why I can see why you've won awards, why you're being invited to speak places like the UN and and why you're writing books. There's a lot here. ⁓ tell us ⁓ tell the audience before you head out, what tell us about the book that you've that you've written most recently and ⁓ want to share with everyone.
Gregory Shepard (42:31)
The startup life cycle. ⁓ what I did is I realized that the people's understanding about startups, the first major reason why founders were failing is they didn't know where they were going or where they were. Right. If you're going anywhere, that's what you need to know, where you are and where you're going, right? I mean, it's like common sense. They were all saying, I'm at pre-seed, I'm at seed. These are things that happen during the life cycle of a startup. They aren't the stage that they're at.
And that's evident in that people say I'm at pre seed or seed or series seed or whatever. I mean, they're all over the place, right? There is no standard. So what I wanted to do was build a life cycle standard and then apply things like technology readiness levels and investor readiness levels and, you know, all that sort of stuff to the life cycle and rounds of funding, et cetera. So you can say I'm at the vision stage and I need to do all these things.
And this is the things that I can expect to happen during that stage. That's what the life cycle was about. That's what I wrote it for, is to is to give some guidance, right? ⁓ it's I mean, it's common sense. If you're gonna go on a vacation, you you know, you know where you're going and where you're gonna stay. And you know, you know, there's some idea of how much gas you're gonna use, how much money you need, and right food and stuff, right? I mean, you have some plan.
Right. You don't just like leave your house with no idea of where you're going when just start driving, you know? So that's what a lot of founders do. They're like, I have an idea. I'm gonna leave home. And then they just start driving, you know, and it's no wonder they fail, right? It's right. It's disaster. So ⁓ that's what the startup life cycle is about. It's it's it's it's really good context for the for what you can expect to have happen, what you need to do, why founders fail during
The different phases of the life cycle. It's it's it's thorough. It was it took me four years to write it ⁓ after the five years of research. Yeah. Because of the before AI, it was really hard to go through the data. It it took years just to go through the data and pull out meaningful stuff, you know, things where you're looking at that and you're like, this matters. Like people need to know this.
Jeff Holman (44:48)
That's a that's sounds like a sounds like a tenacious goal and ⁓ y you're you're working on really big things. This is part of what you do. It's it's it's a pretty amazing, you know, ⁓ not to focus on the the the origin story of, you know, saying that you grew up in the mountains and that you know, lived in a tent with your family for a while and now you're out there not just providing, but building ecosystems
for entire an entire community of people in the startup world. ⁓ there's something something to be said there, and I'm not sure how to articulate it, but ⁓ kudos to you for w the work that you're doing.
Gregory Shepard (45:28)
That's so kind of you. I r I really appreciate. That's so kind. Thank you so much.
Jeff Holman (45:33)
Yeah. Well thank you for coming on the show. Where can people get in touch with you if they if they want to reach out, buy the book, ⁓ hear some of your other thoughts?
Gregory Shepard (45:41)
So the book is the startup lifecycle. It's an Amazon. There's also an audio book and they have those summary books and there's Kindle. I mean, they have it in every possible way you want to read it. ⁓ and my website is Gregory Shepherd.com. So you can see where I'm speaking or whatever I'm doing, it it it's there. And all the companies I built and all the investments I've made and everything I've done is in there because some people just don't believe it. So I put it in there to prove it. ⁓
And ⁓ then ⁓ you know LinkedIn obviously.
Jeff Holman (46:15)
Yeah. Well fantastic. Well, I appreciate you coming on the show, Greg. ⁓ there's there's so much to be ⁓ to be discussed and maybe pulled out of this. We might have to do another another episode in the future.
Gregory Shepard (46:28)
That would be cool. And you're a cool cat. Thanks for having me. I appreciate it
Jeff Holman (46:32)
I appreciate it. And to those of you who listen today, thanks for joining us on the Breakout CEO podcast. Be sure to follow or subscribe on your favorite podcast platform. And if you enjoy the show, a rating or a review goes a long way. Our mission is to promote the stories of breakout CEOs in scaling SaaS, e-commerce, and tech companies to equip peer CEOs with valuable perspectives and confidence.
Thanks again for joining us on this episode of the Breakout CEO. I'm Jeff Holman, and I'll see you next time.
