Episode 21: The Psychology of Sales w/ Dr. Daniel Crosby Three Behavioral Biases That Sabotage Sales | Why Fund Managers Miss the Mark in Business Storytelling
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If 'speaking to the heart of your client' has always sounded like fluff to you, this episode is your reality check.
Today, In part 3 of the Scientist and The Storyteller mini-series, Dr. Crosby takes the hot seat to explain the science behind why making your prospect feel something is the key to getting them to sign on the dotted line.
Listen in as he and Stacy Discuss:
Mirror neurons: The science behind empathy and connection in storytelling
The backfire effect: How to get your prospects to drop their old fund manager without crushing their ego
The blemishing effect: Leveraging it to tackle tough questions and build trust in sales meetings
About Dr. Daniel Crosby
Dr. Daniel Crosby is a psychologist, behavioral finance expert, and New York Times bestselling author who helps organizations understand the intersection of mind and markets.
He is also a father of 3, a fanatical follower of the St. Louis Cardinals, an explorer of the American South, and an amateur hot sauce chef.
Resources mentioned in this episode:
TRANSCRIPT
Below is an AI-generated transcript and therefore it may contain errors.
Dr. Daniel Crosby: [00:00:00] They were looking at brain scans of monkeys, right? And they found they had these monkeys hook up to this brain scans and they're doing all these tests on them. And they found that like when the researchers would eat an ice cream cone and the monkeys would observe them, the parts of their brain associated with eating.
Dr. Daniel Crosby: With light up, even though they're just observing this behavior and someone else and so we are literally wired for connection. We're wired to mirror whatever someone else is experiencing, and so if you're taking someone through a story and their mirror neurons are never lighting up for one instant, like you've done it wrong.
Dr. Daniel Crosby: Like you've left this incredibly powerful piece of human nature sort of on the cutting room floor.
Stacy Havener: Hey, my name is Stacey Havener. I'm obsessed with startups, stories, and sales. Storytelling has fueled my success as a female founder in the toughest boys club, Wall Street. I've raised over 8 billion that has led to [00:01:00] 30 billion in follow on assets for investment boutiques.
Stacy Havener: You could say against the odds. Yeah. Understatement. I share stories of the people behind the portfolios while teaching you how to use story to shape outcomes. It's real talk here. Money, authenticity, growth, setbacks, sales, and marketing are all topics we discuss. Think of this as the capital raising class you wish you had in college mixed with happy hour.
Stacy Havener: Pull up a seat, grab your notebook and get ready to be inspired and challenged while you learn. This is the billion dollar backstory podcast.
Stacy Havener: So a scientist and a storyteller walk into a. Podcast Studio? That's how the story goes, right? Well, that's how it goes here, my friends. I'm super excited for this four part miniseries with my [00:02:00] B5 bestie, Dr. Daniel Crosby, Chief Behavioral Officer at Orion and the host of Standard Deviations Podcast. This is not the first time Daniel and I are teaming up, but it may be the best yet.
Stacy Havener: I've been on his podcast. He's been on mine. And now we are joining forces because successful sales is art and science. It's right brain and left brain. It's Daniel's unique ability and it's mine. together. If you want to get good at selling, you've come to the right place. I don't know, it's kind of like two rappers in the studio freestyling.
Stacy Havener: At least that's what I'm telling myself. So stop, collaborate, and listen. Here we go. Hello, everyone, and welcome to episode three of the Standard Deviations and Billion Dollar Backstory podcast collab. The scientist and the storyteller. I am here with my B5 bestie, [00:03:00] Dr. Daniel Crosby. And today we're going to talk about our two favorite things.
Stacy Havener: We talk about every time we're together, behavioral science and storytelling and guess who's in the hot seat. Not me. I am going to be asking Dr. Dan some questions. B5
Dr. Daniel Crosby: bestie is so good. And I'm sitting here going, Storyteller's super friend, like what's the equivalent?
Stacy Havener: Hey, you got to get creative here. So this is really like a glimpse of what some of our conversations are like, because what happens often is I call Daniel up, I tell him some story or anecdote of something I'm seeing live in the wild of sales, and then Daniel, of course, will just go, well, of course, that's blah, blah, blah, behavioral bias at work.
Stacy Havener: And I want to do that today. Like, I want people to see how our combos actually go. [00:04:00] Are you cool with that? I'm super cool with it. So here's my first story for you. From the wild from the wild. A lot of managers take this approach when they're crafting a story, a narrative marketing, they meet with a prospect and they sort of say, the prospect will say, you know, I'm using X, Y, Z fund and the manager.
Stacy Havener: The fund manager will instantly kind of go to, aha, I need to tell a story, convince this prospect that they should 86 that fund, get that fund out of their portfolio and replace it with mine. And that's sort of the place they come from when they're. Approaching this allocator. I have found that that doesn't work as well as if you go into the conversation, not trying to kick that fund out per se, like not trying to be better than but to go in as a compliment to be different than and live [00:05:00] alongside that fund.
Stacy Havener: And that seems to work so much better. And I want to know why that's
Dr. Daniel Crosby: happening. Okay. So I got some research for you. It's one of my favorite pieces of research. So we're going to pretend you're, I'm the shrink in this study because duh, and you're the participant. Okay. Cause duh. Cause duh. So I bring you into my office and I'm like, Stacy, thank you for taking part in our research today.
Dr. Daniel Crosby: You like art, right? You like art? Yeah. I love art. Beautiful. Seems like it. You seem very cultured. I present you with six pieces of impressionist artwork, right? And I say, okay, Stacey, easy job today. Rank these from your most preferred to your least preferred. Okay? Perfect. And you do that. I love this one. I hate this one.
Dr. Daniel Crosby: And then everything in the middle. And so I say, hey, thank you so much for participating in this study. As a reward, like as a little gift for your time, I'm going to get you a print of the one you like the most and you can take it home and you can put it over your couch. Right? [00:06:00] So I run back to my, you know, to the back room and I come back and I'm wringing my hands and I go, Stacy, I'm like, I'm so sorry.
Dr. Daniel Crosby: We're actually out of number one and number two. We're out of number five and number six. So we don't have the ones you really liked. We don't have the ones you really hated. All we have are these ones you didn't have like strong feelings about. Okay. Okay. So you go, okay, well, cool. Give me number three.
Dr. Daniel Crosby: Right? Like, number three, because your choice is between three and four. Okay, you take it home, you put it in your office, and I call you back two weeks later with some, you know, excuse. Hey, you know, my, the computer burned down or whatever, like, we lost all the data, right? Okay. And I need you to come back and do this exercise again, and you're a nice person, and so you say, sure thing.
Dr. Daniel Crosby: Okay? So you come back and you rank these six again. Now I want you to tell me, Where do you think they have gone? Okay, number three, the one you took [00:07:00] home, where is it now? Number one. Number one, okay. Most people get that. Let's see if you can get the second part. Okay. Number four, the one you didn't take home, where is that
Stacy Havener: now?
Stacy Havener: I'm gonna say number two. Number six. Damn! Can you say that on a
Dr. Daniel Crosby: podcast? No, you can say that on a podcast. That's a PG 13. That's a PG 13 square root. Okay. So most people do what you did, right? They say, okay, the one you took home is number one. The one you didn't take home. So understanding the mental process that went down.
Dr. Daniel Crosby: So think about this. At the end of the day, this was only a choice between number three and number four. The other ones are moot. They weren't really part of the consideration. So two things happened when you chose number three. You made a choice and you built that choice up, right? You said, this looks so good with my drapes.
Dr. Daniel Crosby: Like this matches the paint in my living room, whatever. You were like, what a great choice. I really wanted this one anyway. Right. [00:08:00] Simultaneously with the road not taken. Right. And the road not taken is number four. You're like, that one sucked. I didn't want it. It would have been tacky. It wouldn't have matched my carpet, like whatever.
Dr. Daniel Crosby: And we do this. This is like one of the core features of human nature. And it's how we synthesize happiness. Right? Is, whatever happens to us, or whatever decision we make, we build that thing up, and as sort of sour grapes, the thing that we didn't do, we tear it to shreds. Right? And this helps us feel happy.
Dr. Daniel Crosby: So, like, I forget his name because everyone forgets his name. But the drummer before Ringo Starr, like, okay, the drummer who was part of the Beatles. Exactly. Before Ringo Starr, when you talk to that guy and you say, Hey, dude, you were almost one of the Beatles. Like you missed out on being in the Beatles and he'll go, Oh, my [00:09:00] life is actually better.
Dr. Daniel Crosby: Like, right. Like, I'm, I'm glad I wasn't part of the Beatles. Like, shut up, bro. Like Totally not
Stacy Havener: true. Can't be. But to him, it is. Yeah.
Dr. Daniel Crosby: Telling yourself that is the only way you can get through life, right? And... So what does this have to do with your original question when a manager makes a choice? I'm going to put XYZ fund in the portfolio.
Dr. Daniel Crosby: They are building that up, right? They are building that up. They're telling themselves and their clients formally and informally. All the reasons why that was a wise decision. So when financial salesperson from ABC co comes through the door and says, Hey, effectively, you got to sell this thing you bought.
Dr. Daniel Crosby: It's garbage. You've got to put our fund in there instead. You are asking them to violate one of the fundamental core tenets of human nature, which is at every [00:10:00] decision point and at every inflection point to build ourselves up and to tear down the road not taken. So, you know, we can get into this some more, but like, this is something called the backfire effect.
Dr. Daniel Crosby: When we. Have an emotionally valent position. We have an emotionally strong position and someone tries to erode that position with facts and figures. Not only are we unconvinced, we actually double down on our pre existing belief that what we did was the right thing. So that manager put that fund that you're crapping on.
Dr. Daniel Crosby: In their portfolio, for a good reason, they believe that they're smart and wise and prudent for having done so. And you trying to erode that or attack that is viewed as a personal attack. Yes! That will redouble their commitment to keeping it there.
Stacy Havener: We'll be back in a moment after a word from [00:11:00] our premier brand partner, Ultimis Fund Solutions.
Dr. Daniel Crosby: Since our founding in 1989, we believe that alternative investments are integral part of client portfolios. Unfortunately, delivering high quality hedge funds and private market exposures has always been a challenge for the wealth management industry. These type of alternative investments introduce unique challenges related to taxes, qualifications, paperwork, and reporting.
Dr. Daniel Crosby: As a result, high net worth investors tend to be significantly under allocated to both hedge funds and private markets relative to institutional
Stacy Havener: investors. That's Stephanie Lang, Chief Investment Officer from Homer Berg, an 11 2,
Stacy Havener: 700 clients in 46 states. You can tell they believe in helping high net worth clients access hedge funds and other [00:12:00] alternative investments. They are equally as passionate about broadening that access for all their clients. not just qualified purchasers or a select group of accredited investors. Meet Nick Darsh from Ultimis with some backstory.
Stacy Havener: Hall McBurgh
Dr. Daniel Crosby: created a 3C1 fund in January, 1999 to provide their high net worth and institutional investors with ready access to a diversified portfolio of hedge funds. As interest in the fund grew and the constraint of the hundred investor rule loomed. HB began exploring ways to continue expanding the investor pool without negatively affecting existing shareholders.
Stacy Havener: We'll hear more about the creative fund conversion work that made it possible later in the show. Now, back to the program.
Stacy Havener: I mean, our clients, I would never allow them to do that, by the way, but I have seen it done. And you can [00:13:00] see that what the person who's receiving this narrative is going through, and it's painful to watch. So let's keep going. That was amazing. Because so the flip side, like what we teach our clients and what seems to work better is not to try to kick that fund out is sort of to acknowledge that that was.
Stacy Havener: a good choice, even if the fund is underperforming because every strategy comes under pressure. So sort of acknowledging the work that this research person or, or, or whatever, you know, person has chosen this strategy and then show how you compliment it. And what ends up happening is the allocator will say, you know, you're right.
Stacy Havener: Like. That I have my original choice and now I'm adding something in that sort of complements and the two things together are really, really special. And over time, that allocator may decide to reweight those two funds in their [00:14:00] portfolio, but it's their choice. Their
Dr. Daniel Crosby: choice. Yeah. So
Stacy Havener: why does that work better?
Dr. Daniel Crosby: Yeah. So a quick bit on the backfire effect and then kind of. What you've observed in the wild, and I'll just put a little science polish on it, right? So, the backfire effect, the original research was done on vaccine hesitancy. So like, when parents don't want to vaccinate their kids, right? And so they would say, well I don't want to get, you know, the polio or measles, mumps, rubella, whatever, for my kid.
Dr. Daniel Crosby: And so what they would do is they would have them read these articles that say like, okay, fact one, fact two, fact three. This is all the reasons why you're being sort of imprudent or foolish by not having your kid vaccinated. Then they would test these parents theories, and they were more committed to their anti vaccine stances than before, after they got hit with these facts, because again, it's perceived as a personal attack.
Dr. Daniel Crosby: So, this is something [00:15:00] that I want our listeners to tattoo on their arms, right, and then show us. Good luck. If you get this tattoo and you show us, Stacy and I will come do a free event for you, okay? Yeah, we will. Yeah, we will. You cannot solve an emotional problem with a, with a logical solution, right? It's a big tattoo.
Stacy Havener: It's big. I want to throw, I have a plethora of mics around me. I want to throw one of them. I don't know. Yeah,
Dr. Daniel Crosby: it's a very big tattoo, but you can't solve an emotional problem with a logical solution. And so what we have to do Is exactly what you just talked about. And there's two basic things. First of all, show them that changing their behavior doesn't mean changing their mind or admitting a fault, right?
Dr. Daniel Crosby: So like, look, you can do the thing I'm asking you to do, which is to like put a sleeve of my product in this portfolio without out. Like wholesale saying I goofed up, right? So you have to make a [00:16:00] path for them to save face, which is exactly what you've talked about here. Make it so that they can engage in the desired behavior without sort of an admission of guilt.
Dr. Daniel Crosby: And then the second thing, back to, you know, back to our tattoo, you've got to do it with story, metaphor, analogy, visuals. Right? That it's not a white paper, right? It's not some, you know, ten point font, one pager. It's an emotional problem. You have to meet them at the level of emotion. And you have to do it in a way that doesn't make them look foolish.
Stacy Havener: That one Q& A right there was worth the price of this podcast, don't you think? Yeah.
Dr. Daniel Crosby: I was being accused of being low energy 15 minutes ago, and
Stacy Havener: here we are. Oh yeah, yeah, no, you're bringing the fire now. Yeah, this should be sponsored by, you know, our friends at Coca Cola. Okay, so, next anecdote from the wild.
Stacy Havener: Is this one I've been [00:17:00] really geeking out on so I'm so glad we're doing like this is like live hot off the press. There are certain questions different for everyone, by the way, that fund managers hate. Like unique to their situation, they have certain questions that a prospect will ask that they're like, dang it, I just don't want to answer that question, like an elephant in the room type of question, and it's very, very interesting because typically those questions are the questions that more than one investor actually has.
Stacy Havener: So now you have the manager who's like, do not let them ask this question. I don't want to talk about this. Like I am basically, it's like the equivalent of a social media filter or something like I am putting a filter on and that question is behind the curtain. For us, what we've seen is that if you address the elephant in the room question head on, You as the manager own these questions that you hate.
Stacy Havener: You [00:18:00] talk about them. In so doing, you sort of decrease their power. What's
happening
Dr. Daniel Crosby: there? We're gonna do what I do, which is do stories. I'm gonna give you a story of the worst restaurant in America, and I believe that the worst restaurant in America is Cheesecake Factory. And I'm so angry at Cheesecake Factory, because the principle that you're talking about is authority, right?
Dr. Daniel Crosby: If you read Robert Cialdini's book about the six weapons of influence, which everyone on this podcast should go by, influence the psychology of persuasion, you know, authority is one of his six ways that we get people to buy, right? And fund managers are scared of a question. That's going to make them look bad and thus erode their authority.
Dr. Daniel Crosby: Right? So Cheesecake Factory is the nightmare example of this. And Cheesecake Factory has a menu the size of a phone book. Right? It's got sushi and tacos and [00:19:00] pizza and pasta and salad and steak. And you see this thing and you go, there's no way. But you can do all of this stuff. Well, right. There's no, it defies the laws of physics that a good pizza place and a good sushi place can be under the same Las Vegas looking roof.
Dr. Daniel Crosby: Right? So We're actually at our best when we're realist about our shortcomings. And this is something called the blemishing effect, right? This is something called the blemishing effect. And it's, it's a one two punch, right? So it's not enough to just admit weakness. Keep it in the restaurant vibe. You love it when a waiter comes to you and you're about to order the fish, right?
Dr. Daniel Crosby: You're about to order the fish, you go, Hey, I'll have the, you know, the catch of the day. And the waiter says to you, You know what? Honestly, like, the fish is good. Like, you could do that. But the steak [00:20:00] is incredible. Like we've got the best steak in the world. And you go, your view of the restaurant is not diminished.
Dr. Daniel Crosby: You go, the fish isn't that great. This place sucks. You go, thank you so much for that. I'll get the steak. Right. And it's the same basic principle as the pratfall effect that we talked about earlier, where politicians who are flawed, but competent. Are rated more highly than ones who just look flawless, right?
Dr. Daniel Crosby: So the one two punch is admit a small sort of non debilitating weakness and follow it up, so that's where the foundation of trust is built, because everyone has a sense that no person or no organization does everything well. Cheesecake factory, right? So, you know, admit something that is imperfect or flawed or not great.
Dr. Daniel Crosby: And follow it up with the one two punch of what you are the best in the world at, right? There's [00:21:00] actually funny examples of this from, from the marketing world. I believe it was Hertz, Rent A Car, was the second biggest, they were the second by market share, they were second to Enterprise. Their whole tagline was effectively like, We're second best, so we're gonna treat you like gold, like, like, you know, yeah, it's like, we're not big enough to take you for granted.
Dr. Daniel Crosby: And so it's this great message, you know, and like another funny one, Smuckers, like, with a name like Smuckers, it has to be good. Has to be good. Our name is so dumb that our jam has to be really tasty. And so, this one two punch of just like, be honest about what you're not the best in the world at, but then follow that up just as confidently with where you're
Stacy Havener: fantastic.
Stacy Havener: I love that. And I think if I put myself in the shoes of anyone who was planning on going to Cheesecake Factory tonight, they're probably not going. So that's one avenue I went down. Please don't. If I put [00:22:00] myself in the shoes of a fund manager here, my challenge to you might be, well, that's fine. But these elephant in the room blemish.
Stacy Havener: The elephant in the room questions, what if they feel big to the manager? So, for instance, I'll try to come up with something. It could be, like, a really big drawdown. That they had at some point in their track record or maybe their fees seem high relative to peers and they sort of like don't want to talk about that and it feels big to them.
Stacy Havener: Is that just their perception? Because to me, it's kind of like it's not that big. You just have to address it and explain the situation. And then the size of that blemish shrinks right down.
Dr. Daniel Crosby: There's two things I would say here. First of all, there's not enough Wizard of Oz sleight of hand in the world to overcome certain types of problems, right?
Dr. Daniel Crosby: There is such a thing as a problem that is so real and so [00:23:00] glaring that there's no way to sort of wave your hands out of that problem. So, you know, I'm not discounting that some problems are real, but if you are asked, right, the size of that problem will be gauged through the anxiety of your response.
Dr. Daniel Crosby: We've all had the experience of asking someone a question, one of these hard questions, and watching them dance, and BS, and stumble their way through a convoluted garbage answer, where we go. Oh, it's not only as bad as I thought, it's worse. And so you can't, you know, first of all, work to address those problems, but know that the size of the problem will be viewed through the lens of your response.
Dr. Daniel Crosby: And that if you can look them in the eye and shake their hand and give them a cogent, honest response, that problem will seem [00:24:00] smaller than it did before. And if you, If you give them a vague, evasive answer... They will assume that it's the tip of the problem iceberg.
Stacy Havener: We'll be back in a moment after a word from our premier brand partner, Ultimis Fund Solutions.
Dr. Daniel Crosby: When we first launched our internal fund to funds as a limited partnership, it was a great option for us to be able to provide a hundred of our accredited and qualified purchaser clients with access to a diversified portfolio of hedge fund strategies. However, fast forward to 2016, our firm had grown to manage over 4 billion and serve over a thousand clients of various sizes, accreditations, and tax situations.
Dr. Daniel Crosby: We still firmly believe that high quality hedge fund exposure is important to client portfolios. It provides stability. To client portfolios and generates a return stream that was not available in public and equity and fixed income markets. [00:25:00] Unfortunately, the 3C1 structure with its slot limitations, high minimums and K1 reporting was no longer ideal solution for our growing.
Dr. Daniel Crosby: And complex client base, we looked at various alternative options with third party hedge fund managers, liquid hedge mutual funds, but also discovered that we had an opportunity to register our fund with the SEC, preserve his extensive track record and solve all of the issues that the three C one structure was creating for our business.
Dr. Daniel Crosby: And clients. That's when we teamed up with Ultimis to begin the process of registering our legacy fund with the SEC and converting it to a tender offer fund.
Stacy Havener: We'll hear more later in the show. Now back to the program.
Stacy Havener: Again, this is like the podcast filled with mic drop moments for me. That is exactly how it feels to me, not being the scientist, being the one in the wild [00:26:00] living the stories, that's exactly how it feels, and I hope people really, like, pause the podcast here, and just sit with this for a second, because the elephant in the room question, you should own it, you should own it, and decrease its power.
Stacy Havener: That is so great. Okay, my last one, this is something I've also really been geeking out on. In a very big way, like something I feel like we need to do a better job of with our clients. And so, you know, I've spent my whole career really talking about crafting your story, like how to write your story. And we do that for clients.
Stacy Havener: We have, we come up with the whole story for them and we hand it to them. It's really beautifully presented on a nice piece of paper. There's one thing we're not doing really well though, how to write it. Here you go. But there's another side, which is how to tell it, and I'm realizing that people, you know, it's not enough to just have the words [00:27:00] in a nice story arc with all the elements of a powerful story.
Stacy Havener: They need to know how to deliver it. And so. I really am doing a lot of work around this for our clients, and I'd love to get your perspective because I've been saying this thing to myself, which is when you tell a story, you sort of need to blow your own mind. You need to, like, fascinate yourself because when you do, the people who are sort of receiving that story, listening to that story, hopefully in an active way, they feel it.
Stacy Havener: They go through what you're going through when you tell the story. So if you deliver it really flat and factual and timeline bullets, it's not going to hit the same as if you allow yourself to
Dr. Daniel Crosby: feel it. Clearly I'm hungry. But we're gonna talk about a food example again because I think people misunderstand the purpose of story, right?
Dr. Daniel Crosby: Purpose of a story is not merely to convey information at any more than a [00:28:00] purpose of a meal is to supply calories, right, or, or energy. The purpose of a story, in addition to supplying information, is to captivate and to make the, you know, the digestion of that information. Uh, more enduring, more sticky, more compelling, right?
Dr. Daniel Crosby: It's the equivalent of taking a five star meal, throwing it in a blender, blending it up, and giving it to someone in a milkshake and saying, like, well, hey, like, this has all the protein, you know, this has all the protein and the carbohydrates that you'll need. So, look, Stacy, I'm gonna, I'm gonna brag on myself here for a minute.
Dr. Daniel Crosby: Because an 85 year old lady named Bobby yesterday told me I was a good presenter. So I spoke at a client event yesterday. Shout out Bobby. But you know, afterwards Bobby came up to me and said, look, you know, usually we get some sort of fixed income update or like some macro update or something. And it's very dry and it's very boring.
Dr. Daniel Crosby: And I don't remember anything. And she said, I've never laughed in a finance [00:29:00] presentation. And let me suggest to you that if people aren't laughing, or smiling, or frowning, or clapping, or something during your storytelling, you have not done your job, right? Like you have not done your job. Because just like with Emil, presentation matters.
Dr. Daniel Crosby: And we know from the research that a presentation with an emotionally compelling hook is so much more memorable and likely to be acted on than not. And so he would be very proud of me. I can't wait. What I work. Finally, you'll be proud of me. I've waited for so long for this approval. But at dinner, right when my kids, I've got three kids when we're sitting around, you know, how was your day?
Dr. Daniel Crosby: And my kids are telling me stories about their day. Kids have this tendency to kind of perseverate on dumb, dumb details, right? They'll be like, I was at the playground and my friend was wearing a pink shirt and I was wearing a green shirt and it was sunny and [00:30:00] then it was cloudy. Okay. I'm gonna stop you here for a minute.
Stacy Havener: I'm not proud of you yet, by the way, if you're gonna interrupt your kid, who's telling you this beautiful story. Okay.
Dr. Daniel Crosby: Looking on a seven year old, they're not proud? No. I do this gently, but you have to help them go, okay, well, we're gonna move this story along, like, here's the compelling parts of the story, right?
Dr. Daniel Crosby: You got the intro, you got the hook, you got the resolution, there's a level of detail, like, everything you've said is true, Not all of it is important, right? And so, aw, Stacey, you're still not proud of me.
Stacy Havener: I'm crying! I'm waiting for the moment where I'm gonna say, I'm so proud of you.
Dr. Daniel Crosby: Nobody has a worse life than a therapist kid.
Dr. Daniel Crosby: But I do. It's important to me. That my kids know how to communicate and to tell a story and like going down on some rabbit trail on a bunch of things that are factual, but unimportant, you have to like, okay, [00:31:00] we're gonna talk about it gently. We're gonna go over here and like, get me an interesting part of the story, right?
Stacy Havener: Okay. I love it. I mean, they're going to be fabulous storytellers and probably great scientists. So they're going to be better than both of us. So that's clear. A
Dr. Daniel Crosby: good storyteller needs a good deal of pathos and just neurosis. And my kids will definitely have that. Right. Because of the way that I'm raising them.
Dr. Daniel Crosby: But you know, a good story has a clear message. It has a struggle. It has an emotional core. And if you're storytelling with your fund or your product doesn't have those things, it will
Stacy Havener: be forgotten. Yeah, and I think, you know, it's so interesting. I did a LinkedIn post about this recently. I was doing a backstory session with a founder and these things, stories to your point, sometimes take a while to develop.
Stacy Havener: And I do let people sort of work through that and all their details and kind of talk and talk and talk. And if I see a thread, I'll pull it. So we're getting to. you know, the good [00:32:00] stuff. And this particular founder starts telling a story about his father. I won't go into it because it's too long, but if you want to check it out, I'll put a link to the post in the show notes.
Stacy Havener: The nutshell is as he's telling this part of the story, it's hitting him right in the feels. And I can see his face is sort of like Crinkling and I can tell that the tears are like welling up and I start having the same experience. I feel myself starting to well up, et cetera. And now we're both kind of like, where are the Kleenex right now?
Stacy Havener: I'm not saying that every fund story needs to put people into some sort of cry state, but this particular one did. Now the session ends. I go next door to talk to Eric. I tell him the story. And what does he do? You know, as I'm telling it, I feel myself welling up. He starts welling up. Now we're both grabbing the tissues.
Stacy Havener: And so the point is that if you allow, allow yourself to feel whatever the feeling [00:33:00] is and to what you said, like get to the good stuff, then When people watch, or hear, or feel your story, they sort of go through it with you.
Dr. Daniel Crosby: So, there's this great thing called mirror neurons, right? Where we are wired to experience what we...
Dr. Daniel Crosby: Few other people experiencing it's why when you're watching TV and the main characters in a car accident, you sort of wince or shudder. It's why, you know, when someone sits across from you telling an emotional story, you cry to it's what allows us to empathize with people. And it's fascinating. Sorry, quick direct digression.
Dr. Daniel Crosby: You see where my kids get it now. Some of the original research was done on this. They were looking at brain scans of monkeys, right? And they found, they had these monkeys hook up to these brain scans, and they're doing all these tests on them. And they found that, like, when the researchers would eat an ice cream cone, and the monkeys would observe [00:34:00] them, the parts of their brain associated with eating would light up, even though they're just observing this behavior in someone else.
Dr. Daniel Crosby: And so, we are literally wired for connection. We're wired to mirror whatever someone else is experiencing. And so if you're taking someone through a story and their mirror neurons are never lighting up for one instant, like you've done it wrong, like you've left this incredibly powerful piece of human nature sort of on the cutting room floor.
Stacy Havener: Agreed. And I think it's also, you really must be hungry.
Dr. Daniel Crosby: Yeah. Ice cream now? God, I am hungry.
Stacy Havener: Yeah, for real. Like the time of day, next time, bring your breakfast to the podcast studio. It's fine. It's this idea, I think, that, and it probably goes back to a little bit of the authenticity and vulnerability, that here we sit, you know, in this industry that is so intellectual and so cerebral and so smart, and [00:35:00] we are slightly afraid to show another side of us.
Stacy Havener: I think what happens then is we end up sort of aiming our story or our pitch at somebody's intellect, their head. And going back to something you said earlier, it's like that doesn't convert somebody. The shared experience and the heart is actually what engages first. And even when we coach fund managers with this, when, when they sort of get into the spotlight and they Instantly revert back to like, I'm only operating in the intellect and they, it's right.
Stacy Havener: They miss a huge opportunity. So those are my three anecdotes from the wild. This is what our conversations look like, almost literally, because also, we've had tech glitches. I might have, you know, cussed here or there. You've been, you know, apparently [00:36:00] starving. Starving. Starving. And slightly grouchy.
Dr. Daniel Crosby: At 10.
Dr. Daniel Crosby: 42 AM. Yeah. I'm definitely on the guy with three kids eating schedule. It's like 5. 30, 11, and 5 is, let's be honest, when I eat.
Stacy Havener: Well, I mean, I think you should go have a snack. Is it snack time? 1030? Yeah. It's snack
Dr. Daniel Crosby: time.
Stacy Havener: 1042. Can I just say, we have one more episode left after this in our miniseries. I'm gonna be a little bit sad when it's over.
Dr. Daniel Crosby: Well, I'll be a lot sad. I'll be a lot sad. These have been fantastic, and we've actually gotten some really great feedback, so thank you to everyone who's followed
Stacy Havener: along. Yes. So, okay, Daniel, I'm gonna let you go snack it up. Um, snacks on snacks. Thanks for your brilliance. Thanks for, uh, helping me, you know, sort of decipher what's happening in the wild with, uh, what's happening in science.
Dr. Daniel Crosby: Well, thank you as always for your dispatches from the wild. I look forward to putting you on the hot seat in our last
Stacy Havener: episode. Can't wait. [00:37:00] If you know a fund manager or a founder in the investment world with a great story, drop a note to Stacey at Stacey Havener. com and tell me about it till next time.
Stacy Havener: I'm Stacey Havener. Thanks for listening. And now a final word from our premier brand partner. Ultimis Berg's
Dr. Daniel Crosby: LP into an integral fund empowered them to grow the fund from 90 million to over 200 million and expand the reach from 100 investors to nearly 700 new investors and continues to grow today. By pursuing the conversion, Homer Berg was able to lower minimums to 25, 000, welcome accredited investors in addition to qualified purchasers.
Dr. Daniel Crosby: The entire conversion process was highly efficient. Because Hallmark Berg chose to partner with Ultimis and other partners with a proven track record in this type of structure to structure product transition. The headlines are often too focused on [00:38:00] new interval funds from pedigree providers, this new fund from this cool big firm, et cetera.
Dr. Daniel Crosby: Maximizing a fund's potential through a conversion can be a powerful too. As we see in the story of Homer Berg traditional investment management and alternative investment management are conversion. More retail investors are demanding access to non correlated strategies in a liquid asset classes to compliment or supplement public markets exposure interval and tender offer funds offer managers a flexible wrapper.
Dr. Daniel Crosby: That combines many of the benefits of both 1940 Act and private fund structures. Interest in these products has increased significantly in the past decade, and we anticipate the volume of both new launches and structure conversions to continue well into the future.[00:39:00]
Stacy Havener: This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. The information is not an offer, solicitation or recommendation of any of the funds, services or products or to adopt any investment strategy. Investment values may fluctuate and past performance is not a guide to future performance.
Stacy Havener: All opinions expressed
Dr. Daniel Crosby: by guests on the show are
Stacy Havener: solely their own opinion and do not necessarily
Dr. Daniel Crosby: reflect those
Stacy Havener: at their firm. Manager's appearance on the show does not constitute an endorsement by Stacey Havener or Havener Capital
Dr. Daniel Crosby: Partners.
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