Is John "Grizz" Deal the greatest salesperson around?
Is John "Grizz" Deal the greatest salesperson around?
"You can tell a lot about what you're up against in a sales pitch by the way they serve you coffee," John Deal mumbles to me, as the others in the room noisily take their seats around the conference table at a well-known British engineering and defense contracting company on a dreary day in central England. I take this to mean that Deal has his work cut out for him, given that his prospects have unceremoniously plunked down in front of him a jug of scalding coffee and a stack of plastic cups, with no cream or sugar in sight.
Deal begins making his case to six poker-faced executives, who proceed to blast him with an array of questions that cast doubt on his product, his business plan, his prospects for survival, and possibly his sanity. Every sentence seems to start with, "What I don't get is," or "The sticking point with me is," or "But how can you possibly...?"
Forty-five minutes later, however, the managers have changed their tune. Now they are asking about partnership opportunities and setting up more meetings. Someone has produced cream, sugar, and real coffee cups. It seems like a stunning turnaround to me, but on the train back to London, Deal is less sanguine. "On a scale of 1 to 10, where 10 means they're handing you a check on the spot, and 1 means they've thrown you out," he says, "that was a 5." Having already seen Deal in action several times, I get his point. Hard-nosed investors, wary customers, skeptical potential partners, distracted politicians -- Deal has an uncanny ability to convert them not merely to interested players but to enthusiastic supporters. And though not all of them are ready to hand over checks, some seem pretty close.
Deal, the co-founder and CEO of Hyperion Power Generation, is pitching what have long been some of the hardest-to-move products on the planet -- nuclear power plants. And he is selling the hell out of them, having already racked up more than 120 deals. This in spite of the fact that his technology faces daunting regulatory hurdles, doesn't exist even in prototype, is less efficient than other nuclear designs, and comes from a tiny start-up in Santa Fe, New Mexico, that competes against some of the best-established names in the world, including Toshiba and Westinghouse. Some of the orders come from power producers so eager to buy that they have gone beyond the letter of intent standard for a design-stage plant to handing over escrowed deposits.
It doesn't hurt Hyperion's appeal that its generators boast a small, unusually simple, and safe design that promises to be easy to manufacture, ship, install, and operate. In many ways, it more closely resembles a large diesel engine than a conventional nuclear generator. At about $70 million, a Hyperion plant doesn't exactly go for small change. But its price is a small fraction of that of a conventional plant.
Still, watching Deal work his prospects is to understand that even a great product doesn't sell itself: It takes a great salesperson to create the desire to buy and overcome a blizzard of potential obstacles. And by nearly all accounts, Deal -- who has been known as Grizz since a close encounter with a bear during a boyhood hike -- is particularly adept. "If you listen to 22 pitches today, the one you'll remember tomorrow is Grizz's," says Sherman McCorkle, the CEO of Technology Ventures, an Albuquerque-based nonprofit investor/start-up matchmaking firm. McCorkle has helped funnel more than $1 billion to high-tech companies, and he has been listening to Deal's pitches for one company or another for nearly 20 years. "He takes ideas that seem very risky and paints pictures of how the risk can be mitigated to lead to success," says McCorkle. Mehar Karan Singh, the former chief executive of the Indian subsidiary of multinational elevator manufacturer Schindler and now a real estate developer and health care financier looking to bring electricity to rural India, puts it even more simply: "Grizz creates a vision and then carries people with him."
That, in essence, is what all salespeople are charged with doing -- whether they are hawking nuclear power plants or Web-based software or widgets. It's a tough job, made all the more difficult by the fact that the rules cited by successful salespeople -- listen more than talk, understand your customer's needs, be well informed -- are so basic as to be meaningless. Indeed, those and other maddeningly familiar maxims form the basis for what Deal jokingly refers to as his sales "Grizzdom." The difference is that Deal executes these basic rules with extraordinary insight and flair, relying on a complex brew of talent, discipline, and improvisation.
Another day, another meeting. Today's is taking place in a handsome conference room in a clubby London hotel off Trafalgar Square. Deal, 46, is wearing a fleece vest over a shirt and gray slacks. With his reading glasses perched on top of his thinning but attentively arranged hair, he comes off as a kind of adventurer-professor à la Indiana Jones. To look at Deal, you might think that he doesn't much worry about his appearance, but this outfit has been carefully chosen, he tells me later. Today's prospect is in the construction business, in which many executives chafe at having to wear a suit. What's more, Deal's shunning of standard business attire is designed to subtly signal that he is different from the buttoned-down salarymen his large competitors likely have been sending. "I'm not a midlevel manager from GE, and I want people to know it," Deal says.
He is meeting with Nic Barnes, an IT executive with the Mace Group, a London-based construction management company that works on projects worldwide and has annual revenue of more than $1 billion. One of Barnes's specialties is constructing large-scale data centers, and he's interested in exploring new options for meeting the outsize power demands of such facilities.
Barnes arrives. He's a friendly fellow with the plainspoken demeanor one might expect of a construction manager. He is wearing a suit. Deal immediately gets him chatting about the 2012 London Olympics, but it's not exactly small talk: The topic is what's being built for the event, and that line of conversation quickly, and not coincidentally, leads Barnes to describe some of Mace's projects.
"Salespeople usually start out by laying out goals, setting up agendas, figuring out how much time they have. I try to keep things relaxed -- let's just talk. But I don't need to know if he's married, and I don't want to seem like I'm trying to be his best friend. You want to get to the point where they feel emotionally committed to a partnership. But that's a process, and you have to let them feel they're controlling it. My role in the beginning of the meeting is to say just enough to get them talking, and once they start talking, I shut up."
It's barely five minutes into the meeting before Barnes is enthusiastically monologuing about a new manufacturing facility Mace recently built for Rolls-Royce. Deal listens for a long time before finally piping up with a comment. "It sounds like you want to leverage your expertise with building facilities into something more than just buildings," he says. Barnes responds enthusiastically, explaining that Mace is considering ways to generate its own power instead of depending on the electric company. "You're looking to provide better security?" Deal asks. That sparks even more enthusiasm from Barnes, given that security in the world of data centers is largely about employing banks of diesel generators and as many as thousands of linked car batteries to keep the juice flowing and the computers cool during a power failure or brownout, avoiding a catastrophic loss of data. These backup capabilities cost millions of dollars, even though they might be used just 15 minutes a year, or not at all.
"I once called up a copier company and was put through to a salesperson. I started to tell him how my copier had died, and before I could say anything else he said he wanted to send me a packet of information and set up a meeting to talk about their models. I told him he just lost a sale. I had been ready to tell him about my problems, and all he wanted to do was move me through a set sales process. People want to tell you about what they care about. All you have to do is give them a way to do it."
"Let me tell you what we're about," says Deal. Even though the meeting began 45 minutes ago, it's the first time he's mentioned his company. He starts by dropping the names of several U.K. companies and government agencies with which Hyperion has relationships, and he ticks off some of Hyperion's executives, board members and advisers, including a retired captain in the U.S. Naval Reserve and the chairman of the U.K. Atomic Energy Authority. Then he provides a brief rundown of how the costs of the electricity produced by his tiny, emission-free power plant stack up favorably against those of wind and solar power -- and don't do badly against even big nuclear and coal.
"Most sales guys like to put off getting into price. But people are very sensitive to value, so I get pricing right out there up front."
Deal gives a quick sketch of how his nuclear plant works: A room-size reactor is buried underground, where the uranium fuel heats up metal, which in turn heats up water sent to a conventional electricity-generating steam turbine above-ground. "The specifics are boring," says Deal. "I'll send you a white paper with all this technical junk in it." This will be Deal's excuse for follow-up contact.
"The top question you'll get from your customers," he continues, "will be about safety and security." And that just happens to be Hyperion's strong point. He goes on to describe how the more conventionally designed mini nuke offerings from other competitors resemble "big teakettles," in which boiling water around the nuclear core provides cooling and heat transfer, with a "real potential for failure." (No turbine water runs through Hyperion's metal-filled reactor.) No nuclear power vendor wants to explicitly invoke the specter of a nuclear catastrophe, but Deal has doubtless said enough to help Barnes recall the sorts of radioactive steam plumes associated with the Three Mile Island and Chernobyl accidents -- accidents that haunt the industry. "Our reactor is more like a battery," Deal says. Bad guys can't get at the sealed core, he says, and even if they could, they wouldn't be able to do anything with the molten, non-weapons-grade mess. "We're not quite as efficient as the others," he admits. "But who cares? We're about safety and security, and we make our price point."
"Sooner or later the customer will figure out what your weak point is, and for us, it's efficiency. I'm not going to wait for him to ask. I bring it up preemptively and get it out of the way."
Deal continues to pound on safety. The reactor is sealed at the factory and shipped to the customer's site for burying. It runs for seven to 10 years, without requiring refueling or tampering with. Other reactors need human intervention, and that's where accidents tend to occur, Deal observes. After the Hyperion unit is spent, customers can swap in a new reactor "cartridge," simply leave it buried, or let Hyperion dig it up and take it away for recycling.
"There's plenty of heat available," Deal tells Barnes. "That's free energy, and Mace could use it to set up a water- or sewage-treatment business." Another profit-line suggestion, though it's an unlikely one -- most power plants give off heat, and the obvious opportunity is to provide warmth to buildings, not to clean water and sewage. As it turns out, though, water is one of Deal's obsessions. He sees nuclear power as a means to an end: to address the lack of clean water that leaves huge swaths of the planet mired in sickness, poverty, and even warfare. It's an obsession that drove him in 2002 to start a wind-power company in New Mexico. But unreliable winds, regulatory hassles, and objections from many locals to rows of hilltop wind turbines left Deal discouraged and the company in limbo.
That's when he ran into Otis ("Pete") Peterson, a scientist at the U.S. government's Los Alamos National Laboratory in New Mexico who had a design for a tiny nuclear plant (and who is now the company's chief technical officer). Deal wasn't a fan of nuclear power, but he wondered if a small-scale generator could be the key not only to green energy but also to clean water. Such a device, after all, could be easily shipped to and set up alongside any small town or village, where it could sit safely underground, cheaply turning out electricity for homes, factories, and irrigation -- along with water-cleaning heat.
Barnes seems delighted with the notion of all that free heat, though it's not clean water he's thinking about. Heat, as it happens, can also be used to power chilling units, which means that Hyperion's plant could reduce the huge costs of cooling a data center's computers. "I hadn't even thought of that," Barnes says.
"Are there particular projects you have in mind?" asks Deal, sensing this would be a good moment to start steering things toward a possible sale.
Barnes explains that a certain very large, very ubiquitous U.S. company is interested in building a number of massive new data centers around the globe, and Mace will likely be putting one up in the U.K. Deal asks what the electrical demands would be and then calculates that Mace would need two reactors. "You'd probably be looking at $90 million, all in," he says. Deal reckons off the top of his head that replacing the power company and conventional backup with his nuclear plant would cut Mace's power costs by two-thirds. He adds that the plant is small enough to be exempt from certain U.K. government regulations, a tidbit that widens Barnes's eyes. "That's significant," Barnes says. "We're under a lot of time pressure."
Deal nods thoughtfully. "Well, we're looking for a few highly distinctive projects to launch with," he says. "A data center might be perfect for us." Deal stands up to conclude the meeting. As he walks Barnes to the door, he adds, "We'll be deciding who we pick in the next few weeks, so I'll need to know soon if you're on board."
Barnes seems pleased to hear that he may have sold Deal on letting Mace be one of the first Hyperion customers. "I'll set up meetings with the right people this afternoon," he assures Deal before leaving.
"I never ask for money. I ask for an emotional commitment. I let someone else nail down the details of the contract. Then I come back in to get everyone feeling good again."
Later, outside the hotel, I spot Deal huddled against a building, dragging heavily on a cigarette. In the meeting, and in his conversations with me, he has seemed constitutionally laid back, focused, and confident. But in this unguarded moment, he seems anxious and distracted. It won't be the first time I see him this way. (He later confesses to me that after one particularly tense meeting, he threw up.) "For the past three years, I've spent nearly half my time on the road, and half of that has been international travel," he says. "I feel like I'm with a band that's playing one small club after another. I find it hard to relax." It occurs to me that making selling look easy is a lot of work for Grizz Deal.
They say that salespeople are born, not made. That rings true about Deal, says his sister Deborah, who oversees public policy and government affairs for Hyperion. Grizz, she says, probably got his sales instincts from his grandfather -- a successful Ford parts dealer who eventually left his business to become a preacher, delivering sermons every Sunday at five churches. Deal himself went as far as becoming ordained but ultimately decided his calling was elsewhere.
After college, a master's degree in geography, and a short stint teaching high school science, Deal landed a job at Los Alamos as a project manager and editor for the lab's technical publications. He noticed that the lab's researchers tended to be as business-challenged as they were brilliant -- and decided that his role would be that of a shepherd, leading the scientists into the light of commercialization. At the time, scientists at the lab were producing software capable of digitizing and compressing highly detailed satellite and medical images. In 1992, Deal created a company called Paradigm Concepts to license the technology. Paradigm limped along until 1995, when Deal raised his first round of venture capital. He changed the name of the company to LizardTech and set out to dominate the market for transmitting and analyzing digital images. Eventually, the company raised more than $40 million and employed some 250. "We raised a lot and spent a lot," says Deal. "Though I couldn't even tell you on what."
When the tech market imploded in 2002, so did LizardTech. Deal took the top marketing job at the satellite earth-mapping company Space Imaging and within a year was trying to put together a deal to buy the company, but at the last minute the financing fell through. Deal then turned his attention to wind power. But when that venture fizzled, Deal lost his home and wound up hauling boxes for UPS to make ends meet. Los Alamos soon took him back as an entrepreneur in residence, at which point Deal came across the mini nuclear power plant.
A passion for clean water may seem like a strange motivation for a salesperson. But it could be one key to what helps Deal break down people's defenses during the sales process. "Passion can make up for a lot of sins," he says. "When you're convinced it's important, other people see it in that light, too." Deal tells me about the salesman at Nordstrom who manages to sell him expensive suits, even though he doesn't often wear them. "He thinks he's changing the world by getting people to appreciate how a suit can flatter different body types, how to make sure your suit travels well. He'll spend half an hour talking about the history of suits. He's really interested in this stuff, and it's changed the way I think about it."
Not that passion alone will move product. Far more important is the ability to think critically, says Eric Shaver, a former superstar software salesman who is co-founder of a sales training and consulting firm called Kensei Partners in Needham, Massachusetts. "You can teach a rhesus monkey to execute the basic techniques of sales," Shaver says. "But the great salespeople can look at a scenario and analyze what it is about what they're selling that can have an impact on the customer. They figure out how to create opportunities that others can't see."
Deal is a rare example of that combination of passion and problem solving, say those who have worked with him. "Whatever it is he needs to know, he's consumed it and thought about it, and he's going to feed it back to you with a lot of energy, honesty, and credibility," says Todd Packebush, sales director of the Littleton, Colorado -- based software-development firm Info-Fusion and a former employee at LizardTech. McCorkle of Technology Ventures says Deal connects with people not merely on an intellectual level but in terms of what McCorkle calls "emotional knowledge." In other words, says McCorkle, Deal doesn't merely provide information; he alters beliefs.
We've barely cleared security at Parliament's Portcullis House, located in the shadow of Big Ben, when Deal's mobile phone starts ringing. The call is from Lady Barbara Thomas Judge, chairman of the U.K. Atomic Energy Authority, one of the agencies that oversee nuclear power in Britain, and a member of Hyperion's advisory board. (She's "Lady Judge," by virtue of being married to a knight.) Deal explains to me that Judge dislikes using e-mail, which means he gets a lot of calls from her. (Speaking of phones, Deal won't sell over the phone, because the delays and poor sound quality are too distracting. Nor does he do dinner meetings. He won't converse in crowded rooms, either.)
This time Judge is calling to provide some last-minute intelligence on the Right Honourable John Hutton, the Member of Parliament we are about to meet. Deal cuts the call short as Hutton shows up to greet us. Suave and chatty, Hutton sweeps us into Portcullis House's massive atrium, where we are served tea in a café alongside a substantial indoor forest. Charming as he may be, Hutton is a formidable character. Until last year, he served as the U.K. Secretary of State for Defence and before that as the equivalent of our Commerce Secretary.
Deal is hoping that Hutton might become another high-profile adviser. His name would be an impressive one to drop in the U.K., and Deal needs all the clout he can muster there. The U.K., like most of the world, is friendlier to nuclear power than the U.S., which remains resistant. Much of Europe -- France in particular -- and Asia have continued to plan for and build new nuclear power plants, without significant incident. But launching a Hyperion plant in the U.K. will require approval from the Nuclear Installations Inspectorate. Getting the agency to process the application quickly and skip some of the red tape with which it could bury Hyperion will be critical to success. Deal hopes he can persuade Hutton to help.
Deal seems relaxed and confident. But given that the meeting is likely to be a quick one, he gets right to the point: If the U.K. embraces Hyperion, it will be gaining access to $200 million worth of the leading-edge nuclear technology for relative peanuts. The U.S. government is only too happy to hand it over cheaply, Deal says, eager as it is to commercialize the output of its otherwise costly national labs.
Hutton listens politely, but it's clear he's not impressed, and he apologizes for the time being short. Seemingly unfazed, Deal changes course and punches a different point: Given that few new nuclear power plants are scheduled to be built in the Western Hemisphere within the next 10 years, there are a lot of underemployed people and assets in the industry, many of them in the U.K. With government approval, Hyperion could start putting a lot of people to work within a few years, and most of the construction could be outsourced to British companies.
Hutton barely seems to have heard. So Deal tries one last tack. He explains that a U.K. launch would just be a beachhead for the company, that the real market is in smaller and less-developed countries that are desperate for cheap, local power and could never afford a large, conventional nuclear plant. Eastern European countries, he says, have long depended on Russian-built facilities, but now they want to distance themselves from Russia and need something cheaper than the big Western units. Deal notes that most of Hyperion's customers are from these markets. "Nigeria alone is a potential big buyer," he adds. "It's ready for nuclear, but they need to start small."
"I was reading newspapers at 5 this morning. I've got to be up on culture, politics, finance, technology. I need to know what's going on around the world. If someone asks me how I'd be affected by the proposal someone made at some meeting in Copenhagen yesterday, I can't say, 'What proposal? What meeting?'"
Bingo. The Third World angle seems to have ignited Hutton's interest. "This would be a sweet product for developing countries," he says, staring off for a moment as if calculating the possibilities. "Everyone is clamoring to protect the environment from fossil fuels. The timing is right. The budgets are there." How long is Deal in town? Hutton asks. When is he coming back? Would Deal mind if he set up a get-together with some key people he would like him to meet?
Hutton is a tough customer. But Deal often sees tougher. Take those six wary executives on that dreary day north of London. Deal is proposing that the company partner with Hyperion -- and invest $4 million. (Hyperion has raised about $20 million so far, a third of it from Denver-based venture fund Altira Group.) He describes his plant design to the executives and proposes that their company help build it. "We don't make widgets," one of the executives snaps.
"Never worry about how you're doing in a meeting. Focus on the other guy. Otherwise, it's like watching your feet while you're running. And be emotionally prepared to be slaughtered -- it makes you bulletproof."
An executive asks why the company even needs Hyperion. It already has some pretty good power products and is perfectly capable of coming up with its own innovative new designs. "We ought to be collaborating, not competing," Deal suggests calmly. "We're fast moving, and we're going to be figuring out very quickly who our partners will be."
The executives practically snicker. They point out that Hyperion may be agile, but the regulatory process isn't. He will be mired in it for a decade. "We've been told we start evaluation February of 2011," Deal replies in a matter-of-fact way.
This leads to a moment of silence and some exchanged glances. Then the executives issue a barrage of pointed technical questions about the plant design. Deal gives the nod to Mark Campagna, Hyperion's COO, whom he has brought along in anticipation of the meeting taking this turn. Campagna was a captain in the U.S. Naval Reserve and came up through the Navy's highly regarded nuclear power program. (The Navy operates the world's most sophisticated small nuclear reactors, which are locked away in its subs and large ships.) He has also worked for several large commercial nuclear power companies and knows design specs inside and out. Campagna immediately proceeds to bury the executives in details. Deal sits back and enjoys the show, which goes on for about 20 minutes.
"You won't sell anyone with your technology. If they don't want to do business with you, they'll always be able to find a reason the technology falls short. You have to get them to want the technology to work."
Sensing that the executives are feeling a bit less cocky, Deal leans forward and begins to speak. "We have great connections with the U.S. military, and they're not bound by regulatory agencies," he says. "We have political connections who see us as having a chance to be the ones who lead a U.S. nuclear renaissance. We're overcommitted on orders. We keep hearing, 'When will you be able to ship us one?' And we hear it in a lot of different accents. And we're not worried about the approval process. The reception from the agencies has been great, and we expect the process to take less than two and a half years. This thing was designed to be approved. We've got $200 million of U.S. National Lab research behind us. The Japanese have already spent $1 billion on their design. How much are you ready to spend on yours?"
No one speaks for several seconds. Then one of the executives clears his throat. "Um...I think we get where you're coming from," he says. "What are the opportunities for us?"
"The key is, you have to make people believe you believe. Like a sermon, you have to let it flow out. And then let it come back to you from the audience."
David H. Freedman is a Boston-based freelance writer. His latest book, Wrong: Why Experts Keep Failing Us -- And How to Know When Not to Trust Them, will be published in June.