Simulation: A Game-Changer for Startup Success with Michael Badham

Simulation: A Game-Changer for Startup Success with Michael Badham

Kelly Kennedy: Welcome to episode 126 of the business development podcast. And today we're chatting with Michael Badham about business simulators. Stick with us. This one's really cool.

Intro: The Great Mark Cuban once said business happens over years and years value is measured in the total upside of a business relationship, not by how much you squeezed out in any one deal.

And we couldn't agree more. This is the business development podcast based in Edmonton, Alberta, Canada, and broadcasting to the world. You'll get expert business development, advice, tips, and experiences. And you'll hear interviews with business owners, CEOs. And business development reps. You'll get actionable advice on how to grow business brought to you by capital business development, capitalbd.ca. Let's do it. Welcome to the business development podcast, and now your expert host, Kelly Kennedy.

Kelly Kennedy: Welcome to episode 126 of the business development podcast. It is with great pleasure that we welcome back Michael Badham, a seasoned expert in corporate finance, strategic planning, and executive leadership. As the managing director of the Georgian Angel Network and a business partner at Strategy Tools, Michael brings over four decades of invaluable Experienced our discussion today.

In today's episode, we will have the privilege of tapping into Michael's deep well of knowledge as he guides us through the intricate world of business simulation and its pivotal role in driving organizational transformations. With a wealth of expertise spanning various sectors across Canada, Michael will illuminate the methodologies, frameworks, and techniques that empower companies to navigate the complexities of change in today's dynamic business landscape.

From scenario planning to agile methodologies and change management frameworks, Michael will provide us with a comprehensive understanding of how businesses can leverage simulation to anticipate challenges, seize opportunities and thrive in an ever evolving marketplace. Welcome back to the show, Michael.

It's a pleasure to have you.

Michael Badham: Oh, it's great to be here, Kelly.

Kelly Kennedy: Man, I I've been excited about this. When we first had our initial conversation, I knew this was going to be two shows. I wanted one on Angel Networks and VC, and one on Simulation, because simulation is something that is absolutely critical in so many industries.

And yet it's not something that you typically see in business. And so when we kind of initially had this conversation, I was like, this is awesome. We haven't had anything like this on the show, and I'm really excited to talk about it, but we've actually done a previous show. And for those that are just tuning into this one, can you just give them an update as to who is Michael Badham?

How did you get here?

Michael Badham: Well, I started my career after graduating from the University of Waterloo in mathematics and computers. With the Pete Marwick, one of the predecessor firms of KPMG. And because I started my career in 1980, right at the beginning of a recession, a lot of us were pushed into the restructuring world.

And as a result of that, we were keenly focused on rebuilding and restructuring businesses that had found themselves in financial difficulty. And I found a real passion for helping people reorganize their businesses and build strategies to, to change with the ever changing world. I went from there to a private equity at power financial capital.

I went from there to Nesbitt Burns and investment banking and ultimately ended up as a partner in Deloitte. Running their corporate finance group across Canada. I left Deloitte around 2009 and went on my own personal journey, helping startups find funding and also helping people, you know, in the startup scale up world, developing their plans for growing.

I was quite taken back by an interview I heard with one of the CFOs of Google, who I guess in. 2002 or 2003 was tasked with the job of hiring 30, 000 people. And, and I began to think, whoa, what would it be like to hire 30, 000 people? And that got me really fascinated in and passionate about helping people scale up massively and, and what that looks like.

But to sort of fast forward to, to this discussion, Kelly it was around 2020, just as COVID was striking that I began to realize that we've been, we were teaching strategy and we were facilitating strategy. The same way in 2020 that I was doing it in the 1980s, using Porter's five forces, using SWAT analysis, and very much our methodology was he will show you what we're going to do.

And now we'll do it for you and we'll give you a report and the board can approve it. We'll engage the board with you a little bit. But, but we were really doing it. For you or to you. And I thought that was a boy, the whole world is transformed. Everything is changing. Everything is going digital.

And now we're adding into COVID there must be a better way of facilitating strategy. And you know, I've been teaching almost throughout my whole career, whether it's teaching business valuations or teaching corporate finance at colleges and universities or for the the CPA profession and I realized that we weren't really delivering strategy with the, the tell me, show me, let me try adult learning model.

We were still just giving people PowerPoints and checklists. And like, you can't teach somebody to ride a bike with a PowerPoint and a checklist. You have to put on training wheels and let them try. And, and, and, and, you know, you don't teach an airline pilot that. To fly a plane with a PowerPoint, you say here, go in a simulator and, and, and practice until, you know, you're, you're learning.

So in my, I went on a journey, I went on like a personal mission to really explore what was going on. I reached out to all the major universities. I had done some work in 2012 with the U S military, and I reached back out to them in terms of what were they doing in terms of strategic planning and how they taught strategic planning to their leadership group.

And finally my, my colleagues at Deloitte introduced me to a, a, a gentleman named Christian Rangan out of Norway. And he was identified by Deloitte as one of the top 22 people in 2022 that you should meet. And so I reached out to him and he invited me to a masterclass in Norway with 16 other people from around the world who were all interested in, in redefining.

The role of strategy in corporations that were massively growing or that were transforming because of digital transformation that was going on in the world. And immediately I identified with what they were doing. And besides a whole series of modern tools, and when I say tools, think about that business development canvas that people use, you know, strategy tools and Christian and I've developed 300 different canvases, right?

We, you know, it's like, you know, for that expression, we've got an app for that. Well, we have a canvas for that, right? You tell me your needs and what you're doing. I got a canvas for that. The other thing about modern tools is that. Strategy needs to evolve from the bottom up. We, we, as I said, we used to deliver it from the top down, but in fact, every employee in your organization now is, is a sensor.

They're, they, they're, they're monitoring, they're watching, they're listening, they're talking to customers, they're talking to suppliers, they're talking to other employees, and you have to gather all of the data from those sensors. And build your strategy from the bottom up. And so this is a complete reversal of of the way we've done it before.

I think also as a result of COVID, we're in a world now where hybrid and digital technologies are really important. So, you know, we used to have this expression, Kelly, where, you know, the strategy document is a living document. We're going to, we're going to revisit it, but you and I both know that it came in a PowerPoint and we put it in a drawer and what using modern tools like Miro boards, digital whiteboards which have really become very, very user friendly and very easy.

We can build strategies on these boards, which make revisiting from people all over the world. So, you know, no longer have to gather your team and do a strategy, you know, off campus, you know, three day event, which now everybody enjoys, but everybody knows doesn't really work. We can now. Use digital tools to gather people more regularly, more easily, more quickly, and really use monitor and update the strategy periodically throughout the year by monitoring, by updating these, these digital boards.

So you've got a new set of tools. You've got a new way of doing it from the bottom up, and you've got a way of using hybrid meetings and, and digital whiteboards to capture the information, evolve it, think about it and, and update it over time. And this has led strategy tools to develop a series of simulators.

And these simulators. Again you know, follow the adult learning of tell me, show me, let me try. And these simulators are just like an airplane. Flight simulator. But if a flight simulator is a video based on a video platform, this looks like a board game and, and your, your listeners need to imagine something that looks like a board game.

We don't like to call it a game. Because it really is a simulator and we can adjust the learning objectives to the audience. So we specifically, you know, if we want to practice fundraising, we can do that. If we want to practice transformation of an existing corporation into a new business area, we can, we can practice that.

And, but in order to create a level of stress and a level of focus, we gamify the simulation a little bit. So each of the different versions are played. With four teams of three to five people, and we set a competitive benchmark, the first team to raise 50 million, the first team to go public, the first team to increase their market valuation at hundreds of millions of whatever the objective is, we'll, we set those terms.

And then we, we brief people on how the simulation will work, and then we let them essentially roll the dice and start moving around the board as if they were encountering events during the year and encountering strategic challenges. And we're finding that this tool is people come out of it blown away by how much they've learned.

I mean, it's, it's almost a little embarrassing when you're doing it at a university and the students say to you, you know, I've just finished my fourth year strategy class and I've learned more in the last two days than I learned all year. But that's the level of impact that that comes out of this, right?

So.

Kelly Kennedy: Yeah, well, I think it comes down to that. Let me try. Right? Yeah. It's one thing to sit in a room and understand the theory. It's a whole nother thing. And everybody who has started a business, everybody who works in business. Or has learned a skill knows that they can only teach you so much. You learn, you know, 80 percent to 90 percent of what you're going to know by actually doing that work, by actually day to day operations in a business, running a business.

You know, doing your craft or skill, that's how you learn. And so I think, you know, you're, you're kind of right. Like at the same time, it's like they could learn these theories all day long, but it's all just knowledge until they actually get a chance to execute.

Michael Badham: So, so strategy is kind of interesting, right?

Because it's not planning. It's not, it's not business planning. It's actually making. Strategic choices and allocating your resources appropriately based on the strategic choices you're making. And really the best way to learn to be a strategist is to practice it. You know, you just have to, and the problem with being in a business is you don't want to practice with live ammo.

You want to be in a, in a safe, secure environment where you can take a few risks that didn't work out, did it? Let's try it. Let's try that again. Let's reload. Let's try the simulation again and let's see if we can take a A slightly different path.

Kelly Kennedy: Absolutely. Absolutely. Run us through, you know, currently founders and startups have a few options available to them, right?

Typically there's an accelerator program or there's something else that they can hop into to just help them achieve growth in their organizations. Can you maybe explain to our listeners, maybe the differences between an accelerator program or what they're learning there versus what they could learn with strategy tools?

Michael Badham: And we're incorporating our, our workshops and our simulators in various accelerators across Canada. So in many ways I, I accelerators and, and deliver the, the, the simulator. To their cohort of founders and startups so that they can experience what it's like. And I, I've been talking to various accelerators about doing things like when you get a new cohort of founders that are going to run through a, let's call it a 20 week program with you.

Why don't we run them through the simulator on day one and see how they struggle. And then run them through again at the end of the program and see how much more they've learned in terms of, of doing it, you know, currently simulators, you know, or sorry accelerators will deliver through PowerPoint presentations, introducing people that have been there and done it before introducing various subject matter experts, they put entire programs together, but So, None of them that I've run across other than the ones we've worked with to offer some sort of simulation where you enter and it could go one, two, three days long a period where you get to go from, you know, start all the way through to IPO.

If you want to take it to the final place, normally, you know, with we try and position it to run from startup to raising your a hundred million dollar round, or we can start it. You know, you, you've got your seed round and now you're going to try and take it to, to IPO. But so we, because just how much you can, there's just a limit to how much you can learn over a two or three day period.

Right. And, and what we try and do is factor in real life challenges that people run into at where, you know, they're talked about at in academic circles. And you certainly in accelerators have people that you can seek their advice from, but you don't get to practice it. So an example would be. In one of the scale up simulations, we, we run you know, they're, they're, all the teams are building their business.

They've done a couple of rounds of financing, but I've set the teams up with there's, there's two co founders and then there's. A key employee and then there's, you know, a contracted CFO and the two founders and the key employee, I, I give the key employees some, some information about how important they are to the business.

They in a sense know the secret sauce. So the first thing that the founders have to do is they have to negotiate an employment contract with the with the key employee. And, you know, you, you've talked about it, but have you ever done it? Have you ever gone face to face with somebody and said, okay, we're 50 percent founders how much equity do you want in this?

Right. And they, they have to solve that problem. Well, then we run the simulator for a period of time, maybe You know, over the simulator in simulation years, we, we let it run three or four years where the business now has some value. It probably has, let's call it a 50 million pre money value. I then call the key employees out of the room and I asked them to take the position that they're frustrated.

And angry, and they want more equity, they're going to sue the founders for more equity. And so we put them back in the room and I say to everybody, you now have 30 minutes to strike a deal with your key employee, or you go bankrupt. And so they're under time pressure to get a deal. And you have no idea how intense this 30 minutes can be, right?

Nobody's checking their emails, nobody, you know, they are driven to get an agreement. And in the, not the last time, but two times ago when we, we, we did this, The groups were still fighting the next morning, right? Like they, they couldn't let it go. And you remember, I was telling you earlier that we don't like calling it a game.

Yeah. Right. But I literally had to say, it's a simulation. It's okay. Put it down. We need to move on now. Right. So we know those learnings take place, right? We, we know that. And the more you practice it, the better you get at it.

Kelly Kennedy: Yeah, absolutely. Absolutely. You know, man, I see this as being so valuable. So valuable and it actually surprises me a little bit michael that this This hasn't been around for 20 or 30 years at this point.

Like it actually blows my mind because you're right. A simulation for business is incredibly valuable. Why do you think like it just hasn't been a thing?

Michael Badham: A lot of universities and, and will use case studies. And in many ways, a case study is a, is a short simulation, right? You put yourself in a role and you're, you're in a case study and you solve it.

So in many ways that the. The many of the universities that they are doing case studies, but I'm surprised given the technology that we now have. That more people haven't done this and, and, you know, we just keep improving the simulation every time we, we offer it. And it's, I think now strategy tools has offered the simulation some 300 times around the world.

Wow. This is the other thing that, that strikes me as really interesting is that, you know, my, my colleagues in Europe are offering it all throughout Europe, Dubai, Singapore. Like it's, it's happening all over the world and I'm. You know, we're, you know, Stuart Morley and myself are trying really hard to to offer this to the Canadian accelerators and Canadian universities, because I think this is kind of like the capstone to a, to a great business program. Right?

Kelly Kennedy: Absolutely. Absolutely. And, you know, for the listeners who are listening, who didn't hear the first episode, Michael, the thing that I find really awesome about this. is the fact, you know, that you are the managing director of the Georgian Angel Network. And so who better would know or want you to succeed want this program to work than somebody who is looking for potential companies to invest in that are geared for success.

I think that pairing of having somebody in your position who would At some point, make a buying decision on whether or not you were going to, you know help, help help do a story you know, become an angel for a company and to kind of help them take it to the next level to some point where they can get to be VC.

You know, you're the right person for this. You're the right person to help develop a program to make them successful because it is, it is in both your best interest that they are successful.

Michael Badham: Thank you for that. I think that the measure, the true measure of success of an accelerator is what percentage of the companies that graduated from your program were able to get financing.

We're able to get that seed round of funding done. That got them launched and the numbers out of the programs are, are not that high. They're not that good. You know, even the best in the world, like Y Combinator. I believe that, you know, I can't that, you know, it's, it is around 50 percent of their companies get funding going forward.

And I know that accelerators in Canada, that, that number is, is, you know, less than 15% go on to get funding. So, you know, there is you know, I am able to apply my knowledge of how to, how to raise a seed round with angel investors, how to work with VCs. I am able to apply that to the simulator. So one of the areas that we do focus on is, is actually putting together rounds of, of financing.

So as you're going through the simulator. As a startup scale up business, you, as you're, you know, moving your piece around the board, you are meeting different investors. And what you have to do is gather a group of investors and then work to pull them together as a syndicate, find a group of investors that are like minded that fit with your objectives, that agree with your valuation, your pre money valuation.

And then you basically have to pull that syndicate of investors together. What happens is you bring it. To the, the operators of the simulator. And then we, we act as the regulator. And then we approve that financing and then you go ahead and get the money and that enables you to invest in hiring more people and growing your business and doing all those other important parts.

But we have tended to focus on what it's like and how difficult it is to pull that syndicate of investors together. And that's just a real skill that you need to practice. And if you think about it, if you're a successful founder, you, you know, there are founders who have had multiple successes. So they, you know, they were, they're started businesses, you know, more than one time.

But you've likely only done one round of, of seed funding, maybe two rounds of seed funding in your life. And, you know, if I were to ask you the question, how many, Seed rounds of financing. Do you think you need to do before you can call yourself an expert in seed round financing, right? It's not one or two, right?

It's going to be dozens. And so there are really very few people in the world that have done dozens of seed round financings, and you're going to find those people, you know, working with the angel groups, working in the accelerators. But I really believe that by building, having built this into the simulator that, that people get real life experience of what it's like to, to do this kind of finance.

Kelly Kennedy: Yes, absolutely. It's one of those things where you're right, like there would be a very limited amount of experts. Most of the experts I imagine are actually the mentors, not the companies. Cause like you said, they might only do it once or twice in their lives.

Michael Badham: Yep.

Kelly Kennedy: But I feel like the mentors in these organizations tend to be working alongside them.

You know, you mentioned though, a statistic that actually just blew my mind a little bit. 15 to 20 percent is all that makes it through typically to, to a seed round funding stage.

Michael Badham: It's a low number. Like it's a, it's an interestingly low number, right? And, and part of that, you, you know, you don't expect them all to succeed because they didn't achieve product market fit or their idea, you know, there, there, some of that is normal, right?

But some of that, you know, you can blame on, well, there just isn't the amount of financing that's available. Part of it is people just don't know how to do it, right? There's some combination of, of issues here, right? And you know, you mentioned mentors one of the use cases, For the simulators that we found really interesting is what I call coaching mentors.

So you go to an accelerator and you say, can we work with all of your mentors and your subject matter experts? And run them through the simulator. So they now know what it's like to start up a business because many of them are seasoned executives with huge skills, usually in a particular vertical, their marketing specialists, their technology specialists, their you know, organizational leadership specialists, they, they might be financing.

But nowhere have they, you know, they're not the successful entrepreneur that's been through three or four startups, right? And, and so here's an opportunity for the mentors to learn what their mentees are actually going through in terms of the stresses of building a business on multiple dimensions. And we've found that to be a really fascinating use case.

Kelly Kennedy: Wow. Wow. So what you're suggesting is that there's actually a, probably a pretty large disconnect between some of these mentors and the companies that are menteeing?

Michael Badham: Well, they're subject matter experts and they're bringing a particular expertise to the table. But there's no, to, you know, to use the sporting analogy a little bit further, there's no head coach, right?

Who was saying, well, we have a, you know, we have a physiotherapist, we've got a swing coach, we've got a an, an athletic aerobic coach, we had a strength training coach, you know, you, so you have marketing coaches, you have leadership people, you have you know, organizational skills, you have marketing sales.

But, but who's bringing it all together? And, and, and so when you, when you run mentors through the simulator, they get a, they all get a very much an aha moment in terms of the multidimensional challenge that their mentees are facing, right?

Kelly Kennedy: In your expert opinion, what are some of the challenges that you think some of the companies that aren't going through a program like this, you know, that aren't using you know, something like strategy tools when they come to you, when they're pitching to you, what do you think they're missing that they maybe wouldn't be missing had they went through a program such as strategy tools?

Michael Badham: I would say that there are probably three broad areas. The first one we've talked about it is just the experience of having pulled a financing together. What are all the moving parts? How do you talk to investors? How do you, how do you pull that all together? The, I think the second part, which we see quite a bit is that they haven't necessarily achieved product market fit.

And, and everybody knows they have to get to product market fit, but they're, they, they kind A bit of a, the end of the runway where they're out of money. And so they just want to try and convince investors that they've got product market fit, but they haven't got all of the evidence, all of the data to support that they have product market fit.

And, and we also go through a little bit of a challenge with them defining what product market fit is. How do you know? When you've got product market fit, or is it one of those things that when you have it, you'll know it, you get product market fit when your customers enthusiastically or spontaneously tell their friends about your product.

That's when you know you've got it. So if that's the definition, how do you measure that? How do you measure that your customers are, you know, your beta customers are so happy that they're spontaneously telling their friends about it? And, and that piece, you know, I think needs a lot of work and they, they, they get real they face real challenges doing that in the simulator.

And, and I would say the third part is hiring people like it's really hard to hire people and, and even extending the hiring to choosing who your mentors and coaches will be. Because you're, you're, you're exposed and introduced to all these people, but it's really hard as a founder, particularly a young founder to sit back and say, are these in fact, the right advisors for me, are these the, the right mentors for me?

And, and cause I'll often find that people will come to Georgian Angel Network and, and say, well, my, my advisor said that, you know, we should ask for a pre money valuation of 10 million and I'll say, yeah, but you don't have any sales. And, you know, what we're seeing is that pre money valuation should be closer to two or three million and, and they'll want to engage with me and into the, in the discussion, but all I can say to them, you have to go back to your, your mentors and say, where did that number come from?

How do you know it's right? You know, so they don't have necessarily a critical thinking lens. On challenging their advisors necessarily. And again, in the simulation, you get a chance to do that. You get a chance to actually, are we actually doing this right? Like whose advice are we taking?

Kelly Kennedy: And I think that that's a really tough space for founders, especially ones that are really trying to grow.

Maybe they are like straight out of university. They just don't have that life experience yet. And, you know, these mentors come in and they are the experts as far as, you know, most of these founders are concerned. And so I think you're right. I think that, you know, a little bit of life experience would lead them to maybe question a little bit more, but I think some of these people are quite young.

You know, what advice might you give those people?

Michael Badham: Number one, I'd say get yourself into an accelerator and, and get yourself into an accelerator that will allow you to practice that will actually allow you to try out things either through case studies or simulations. You've got to practice this. You know, if I were telling you to ride a bicycle, I wouldn't give you a PowerPoint and a checklist.

I wouldn't even write introduce you to tour de France, bike riders who have obviously got huge experience. I'd say, you know what, put on a set of training wheels. Put on a helmet, put on some pads and go give it a try. Like, like, you know, it's, you know, if you're overwhelmed you know, when you're, when you're young and trying this out and, you know, to a certain extent.

Kelly, there, there's this sort of line that goes around, Oh, fail, fail, often fail, fast failures. Okay. I can tell you that if you are a young person coming out of university and you devote two or three years to a startup and you fail, this is PTSD stuff. This is devastating, right? And you, you relied on your family and friends for support, and now you've gotten nowhere.

How much better would it have been if before you started down that three year journey, you spent three days in a simulator and you're really determined. Am I cut out for this? Is my idea good enough? Can we move forward with this and then get yourself into an accelerator and make it happen?

Kelly Kennedy: Would you recommend that a company go through essentially something like strategy tools ahead of an accelerator or, or coinciding

Michael Badham: coinciding with part of, you know, it's really taking what you're learning in the accelerator program and and applying it, right?

And so I think it's a, it's an addition to, it's part of a full program.

Kelly Kennedy: You know, Michael, this could not have been easy to develop. I just, you know, I think of what you were talking about before, and there's basically a scenario for everything. Can you walk us through what it was like to develop such a complex simulator?

Michael Badham: I can tell you that there's a group of people around the world that we get together monthly, and we compare notes on every simulation that's being done, and we're always adding things to it, always updating it, always keeping it current for current market conditions. That's and so part of, you know, building it is you, you start with a basic simulator and then you just keep adding to it all the time.

And it's just getting to the point now where each of the, the four verticals that we're in with the simulator has now had a number of years of experience. And we, as I said, we've done them over 300 times around the world. And, and we meet as a group monthly, always enhancing it. And it's that constant enhancing, constantly adding new challenges, constantly changing for changing market conditions, valuations going up IPO market closed you know, You know, whatever the condition is so we're always updating it.

And I think that's what makes the simulation so real is that we're really applying current market conditions in the simulator every time we operate it.

Kelly Kennedy: Tell me a little bit about what it is like to actually go through the simulator and maybe some of the different use case applications. Like we've been, we've been focusing really hard on, you know, founders and startups and tech stuff.

It's better for more things than that, right? Or it has more use case applications than that. Can we go through all the use cases and then maybe how, how, how it might help an organization aside from just a startup or a founder?

Michael Badham: So the, the original. Simulator was built it's called transform and it was built to help larger corporations adapt to digital transformation.

So you can imagine, you know, hundreds, even thousands of employees trying to figure out how are we going to change our behaviors and the way we set our planning goals. To adapt to all of the new digital opportunities that are out there and in the world of strategy, what people are mostly looking at in is not linear development of new ideas, but a portfolio approach to new ideas.

So think about the corporate venture capital group that there's a group within the corporation that's looking at all kinds of new ideas and trying to figure out how these. fit within the organization. So this transform simulation allows employees from a single corporation to identify areas of growth and areas that need to be explored in order to, to modernize and transform their business.

And this all came out of some research that was done. A few years ago that when they interviewed fortune 500 CEOs there was some crazy number that that said that the, you know, when asked the question, what percentage of your current business do you expect to still have in 2030? And and the number, the, the median was something like 7%.

So like more than, you know, five, like I think they interviewed like 200. Fortune 500 CEOs. And the median response was 7 percent of our current business will still exist in 2030. So they were all looking at where the new revenues would come from. And, and that became, and, and, you know, in order to transform your organization, you have to get all your employees on board with this.

And so we. Been running this transform simulation for literally hundreds of employees at a particular corporation. And I can tell you one anecdotal story. Well, the a hundred employees of this corporation ran through a three day simulation in the financial services area. And when it was all over and we were doing the reflection and recap at the end with the CEO there were a small group of people in the room who said, you know, this is all fascinating stuff, but you pay me to do a job.

I'll just do my job. I'll whatever strategy you choose, I'm happy to, to implement, but I don't really want to do this. I just want to do my job. And the CEO was so shocked by that, that he basically said, no, I need. Every one of my employees to be a strategist. I need every one of my employees to be alert.

The new opportunities. So he, he invited them all to meet with the HR department in the morning and leave the firm. Like it was really that dramatic, right? Because you really are trying to train your people. You want everybody in your organization to be thinking about strategy. At least part of their time, right.

To help you, to help you transform, you know, we're in a, you know, just think about the large auto companies, right. And moving into electric vehicles. Think of the kind of. Human change that's needed in order to affect that. So we have the simulate, the transform simulation is one vertical and another vertical that we've had quite a bit of interest in is, is actually the vertical of being a venture capital.

Firm, so there's very few places. There are a couple of universities around the world that offer courses on, you know, how to run a VC firm. But again, you don't get to try, right? So you start off in a, in a comp, in a VC firm, hopefully you can get a job there and, and you learn by by working there. But there's no where that you can go and practice.

So we built a simulator for building a VC fund going out. And, and, you know, there's two sides. So the business, you have to raise funds from limited partners, big institutions. And at the same time, you have to be chasing deal flow and finding deal opportunities and investing in them. And so that simulation is also really interesting for, for, for students that are coming out of out of university and are looking at a job in.

Private equity or venture capital. And we've been doing some work with the Canadian Venture Capital Association rolling parts of our simulation out to universities across Canada. And it's been really, really well received.

Kelly Kennedy: It sounds, yeah, it sounds like very complex, right? Like to do what you do, you know, whether you're an angel or you're in, you're in venture capitalism or whether you're in venture capital.

The reality is that you almost have to know more about business than the people that are operating businesses, because in order to make a good decision, you, you almost need to understand it better than they do.

Michael Badham: Well, and you have to have a growth strategy and you have to have a, an ability to, to really work with the CEOs and, and bring the best out of them.

In order to have you know, the best, best, best success growing, growing the business.

Kelly Kennedy: Yeah, absolutely.

Michael Badham: You know, another use case. Is with angel investors. And we've done this a couple of times in Georgia and angel network where we've invited people who are not angel investors to experience what it's like to be an angel investor.

So we run them through a small simulation where we show them four different companies and they have, and we give them a couple of million dollars and we say now invest in a portfolio of businesses and and work with them over a period of time. And, and we'll, you know, we use a couple of dice to determine what the value of the, of the, each of the companies is at various stages through the, through the simulation, through the case study.

And you'll have people who like really liked one business and not so much the other. So they put all their money in one spot. You'll have other people who evenly distributed their funds across all businesses. You'll have people that picked and choose and, and actually left money available for follow on rounds later on.

And you know, of course you roll the dice, you know, what happens, what happens, but it's a real learning experience for people is to understand how to make an investment decision based on the information you have, right.

Kelly Kennedy: It sounds so valuable, Michael, so valuable, like congratulations on, you know, being part of a team that created something so that's going to have so much potential impact on the world, you know, like the reality is it's it's so needed and anybody who understands simulations and what they do for you, you know, we talked about this earlier, and it sounds kind of silly, and it's not really the same thing.

But as a kid, I spent a ton of time learning how to fly remote controlled airplanes and helicopters. I've been a little bit of an airplane junkie my whole life. You can see I have an airplane on my wall. I absolutely just love flying and, and and airplanes and such. But learning how to fly an RC aircraft is not an easy task.

It is very complicated. It is very hard. It is very much the same as flying a real aircraft, but you're doing it from the ground from a single point perspective. And when that airplane turns and flies at you, all of your controls are actually reversed. And so in the real world, if you were learning how to fly these things without a simulator, you would crash thousands and thousands and thousands of dollars into the ground before you would ever.

Learn how to do it correctly. And so learning on a simulator was a very critical part of that process for me and probably saved me thousands of dollars over time. And now, yeah, I don't crash, but there was a time when I crashed all the time.

Michael Badham: And that's so funny because I look at those videos of people who have flying RC jets and I keep thinking to myself, how did they learn to do that?

Because that's like a 10, 000 toy. Like how did, how did you learn to do that? Right. Yeah, it's simulator. I'm going to look one up now.

Kelly Kennedy: Yeah, no, I I used to fly those RC jets. I used to fly helicopters, you name it. I don't get out much anymore with family and work and life. It gets in the way, but there was a time when I was out almost every weekend doing that.

And yeah, practice makes perfect, but practice makes perfect in everything. Including business. And if you can, if you can try something and not lose your real money, that is going to be a much better way to learn than if you were crashing and burning every single time, Michael, run me through the various program offerings.

Michael Badham: We've got a vertical for venture capital funds and running a fund. We we call it fund manager. We have a scale up startup simulator. We have a scale up startup simulator for angel investors. So that you can practice angel investing and we can actually put. The angel investor simulation together with the scale up so that we can actually have founders and angels in a room working together and, and doing that.

We, we also have the, the transform corporate simulator for simulating, you know, transformational things. Strategy implementation at, at organizations. And we also have a simulator for ecosystems that want to figure out how to build a a startup investment ecosystem that includes, you know, the municipal governments, the universities, the hospitals the founders, the investors.

You bring everybody together in an ecosystem and, and how do you, how do you help that ecosystem work together to identify gaps and also just coordinate what everybody's doing to to create an environment where startups and scale up businesses are, are part of. Are, are growing. Right? So those, those, those are the basic verticals that we have.

Kelly Kennedy: And they sound obviously very complex.

I imagine this isn't something that runs in an hour and a half, like a typical like a typical board board simulator or board game. What is a typical length of time to run this strategy from start to finish?

Michael Badham: The ideal. Length of time is three days which allows a little bit of time at the beginning to go through some of the more detailed technical knowledge that you will need.

For instance, if you're trying to put an investment syndicate together, you really know how, you really need to know how to prepare a cap table. And and so some founders know how to do it, others don't. So we, you know, there's a, there's a couple of hours of just prepping people. And then you need a little bit of time at the end, you know, a couple of hours for people to reflect on what they've gone through, what they've learned and, and how they can apply that learning to their own specific real project.

And so between those two, if you ran the simulator for, you know, eight hours or 10 hours in between those two gaps. You would get a good amount of experience. So, well, you know, we can run them in three straight days. The shortest period of time that we do it as a day, but it's really like a sampler.

It's more of a team building exercise than it is actually moving the, the, you know, the, the mark a little bit. If we do it in a day, I generally like to have a couple of hours with everybody a week before, just to get everybody thinking about, about it and, and dealing with, you know, the, the knowledge gap that everybody will have to bring everybody up to a minimum level and, and we can do this You know, digitally, and we can do it in person in a big room, it works better in a, in a big room, but it can also happen digitally and, and and you can bring in people remotely onto a, onto a Miro board where the, the simulation can, can exist.

But yeah, so, and, and as I said, we've, we've looked at doing integrating into existing programs where we would do it at the beginning in the middle, in the end, or the beginning, in the end, just to watch people's improvement.

Kelly Kennedy: I know we have a lot of organizations listening that are wondering, is this right for them?

For me, how would an organization know that this simulation could benefit them? Do you have maybe any key indicators that they might be experiencing in their organization, in their startup programs or something like that, where there's a gap that this would fill and they're just, they're not sure, you know, how to look for that gap.

Michael Badham: If an organization is facing competitive challenges and digital transformation issues, and they've gone through a typical strategic planning process, and they've come out of that feeling a little bit flat, then this is a way of engaging the whole team from the, you know, all of your employees and, and helping deal with the issue that just because you've chosen.

A new plan doesn't mean everybody in the organization buys into it. And, and sometimes the top down leadership style doesn't work anymore. And, and if you've identified that and you really need to, to work with your employees and, and you're looking for new ideas. You're trying to decide what's core, what areas do we want to build on and naturally grow their natural extensions of what we're doing and what are completely new ideas that we should be exploring.

We should have our eyes on you know, just to understand what's going on in that sector or that space. And you want to try and bring all of that together. In a, in a, in a corporate strategy, that's where the simulation can be the most helpful.

Kelly Kennedy: And so if we have people that want to reach out, they're hearing this right now and they're like, yeah, this is for me, you know, how do they how do they get a hold of you?

How do they book a session with strategy tools?

Michael Badham: Just call me. You know, Strategy Tools Canada and just just reach out to me. I'm happy to talk to you.

Kelly Kennedy: Absolutely. And you do work across Canada. Do you also work like around the world? You were mentioning other locations.

Michael Badham: Oh yeah, no. And we've done some remote work with Duke University.

Stuart and I are probably going over to Norway this year. Again, like, and we're connected with this group globally. And when we did a transformation strategy simulator last September in Barry, we brought up one of our colleagues from Panama to to join in with us. And so we have access to people all around the world that we can bring in who are particular experts in an industry or a sector.

And we just want to we bring that. So we've, we're connected to a group of us around the world that we can bring in to help.

Kelly Kennedy: Perfect. Perfect. Okay. So if you're hearing this and you're interested, it is strategy tools. io is their website. You can go check it out. You can get ahold of Michael Badham and book your book your strategy tools session.

This sounds super valuable, Michael. Thank you so much for coming on the show and talking all about it. Obviously we're talking to a lot of entrepreneurs. Do you have anything, any words of advice, parting words of advice to encourage them to take those next steps? Business is hard and sometimes they just need a little boost.

Michael Badham: You know, what I like to say is many of the small business owners that I talk to are really you know, because they're so busy, because there's so many challenges, they're really working hard. What I call in their business, I really encourage people to, you know, once a week, take a couple of hours, change the hat from working in the business to working on the business.

Think of yourself as an investor in your own business. And as an investor, what would you expect the CEO and the founders to be doing? Where would you expect that business to look like a few years from now? Think like an investor just for a couple of hours every week. And, and I think if you do that, you'll start to develop some, some real interest in thinking about strategy, thinking about transforming your business model, thinking about transforming your product, thinking about what your customers really expect from your product in the future.

Kelly Kennedy: I love it. I love it. Think like an investor. That might be some of the best advice that we've had on this show yet, Michael. This has been episode 126 of the Business Development Podcast. We've been graced with Michael Badham, Managing Director of the Georgian Angel Network. And Business Partner at Strategy Tools.

It was an absolute honor to have him on the show until next time. This has been the business development podcast, and we will catch you on the flip side.

Outro: This has been the business development podcast with Kelly Kennedy. Kelly has 15 years in sales and business development experience within the Alberta oil and gas industry and founded his own business development firm in 2020, his passion and his specialization.

Is in customer relationship generation and business development. The show is brought to you by Capital Business Development, your Business Development Specialists. For more, we invite you to the website @ www.capitalbd.ca. See you next time on the Business Development Podcast.