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The senior living industry has a voice. You can hear it on Bridge the Gap podcast!

Episode 81: David Smith

Co-founder of Sherpa CRM David Smith joins Josh and Lucas for part one of a two-part episode that looks into the making and success of Sherpa! 

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Lucas: Welcome to Bridge the Gap podcast. We are in St. Louis at the HQ of Sherpa with one of the founders, David Smith. David, welcome to the show today. 

David: Thank you. It’s so nice to be here. 

Lucas: Josh, pretty easy trip to get out here. But this is something that we’ve been anticipating for a while and just to let our listeners in, they’re probably out there exercising, walking the dog. They’re traveling right now and they’re wondering where these guys at right now. Well Sherpa’s known for they’re digital content. They’re known for many different things, but I’ve seen the room that we’re sitting in on Instagram and Facebook  many times. I mean this is ground zero. This is the conference room. 

Josh: You’re exactly right. We have talked about, we wanted to be in here just to see what this place is like. So we love Sherpa and it’s a cool experience. We just got the grand tour. David, what an awesome job you and Alex have done here with this place. The team is excited, everybody is so welcoming. It’s a creative atmosphere, professional atmosphere. I can hang out here for a while, for sure. 

David: Thanks. We’re excited you guys are here. 

Josh: Well, it’s super special. So St. Louis we’re here for, this is a mouthful, the Sherpa Sales Culture Starter Conference.

David: That’s it. 

Josh: Did I get it right?

David: You got it. It is a mouthful. 

Josh: So we’re going to talk about that, but we want to talk a lot about, just, your background. I mean, I have learned a lot about you over the last few years, but I learned a lot just in our conversations and I think we had some similar upbringings and what got us into the industry. So, you know, I want to hear a little bit about your why, and what got you to this point. So take us back to the early years.

David: To the early years, they get further and further away. So I grew up with a bunch of hero stories in my family and my goal in life was always to try to make the world a better place. Whatever that was going to be. And my parents’ only directions were, be good at something. I chose to go into the practice of law thinking that that’s how I’d learn about the world, about business, that’s how I’d be able to help people who are in trouble and it took me ten years to figure out I was basically just fighting over money. Which I happened to be really good at. I was a partner in a law firm and at some point I just decided that I really wanted to do something different with my life, something that would make a much bigger impact. And I chose senior housing for a variety of reasons and went about with a partner from the residential building industry from the construction world and we built our first project. We opened in 1988 with a thirty million dollar independent living community here in St. Louis, our flagship, which is still there today.

Josh: That’s fascinating so we brushed over a lot of details there cause we went from law school to a thirty million dollar senior living development deal. 

Lucas: You need to explain that… 

Josh: So, yeah, you need to fill in a little bit of the color there. What was the genesis moment for you when you’re like senior living, that’s where it’s at? That’s what I’m going to do.

David: So there were a number of things, a number of influences. One of which was I was very familiar with the not-for-profit world and had a lot of fundraising. I’d also sold a lot of residential real estate to put myself through college and law school and I watched some not-for-profit senior communities being built. In fact, my father was involved in helping to concede one and thought, wow, I wonder if you could make a business out of this and service the same underlying needs for people who could afford to pay for it. We went around the country and at the time there weren’t a lot of models that you could look at, especially for a rental community. There were some religious not-for-profit CCRCs that were out there and we basically just decided to build a place that we would like to live in. 

Josh: What a novel concept, right? 

David: Yeah that was really our concept.

Josh: That was probably a little bit more difficult to execute than to dream up right? So, what were some of the challenges you encountered on on that journey?

David: The best part of it was, we had no idea we couldn’t do it. And so we would go and just knock on doors and try to raise money and people would say why don’t you just build apartments? Well, that’s interesting, but we’re going to try something else. We did raise over 22 million bucks and conceived the plans. We had to buy fourteen parcels of ground one house at a time and assemble the ground and took about a year to build it. Then we started trying to fill it and I drew upon a lot of the information and knowledge that I had in selling residential real estate. My partner was the builder and he built it, our job roles and assignments were he’d build it and I’d fill it up. 

Josh: Okay, and how did that go?

David: His job was easy, my job was really hard. It was really hard. So we built two hundred and twenty high-end independent living units, rental community. First of its kind in the market, one of the first of its kind in the country and there was no over-building or competition like there is today but on the other hand, nobody knew what it was we were doing and how the pricing worked or how the services would work. So we had to really educate the market coming in and it was difficult. In hindsight, we did great we filled to a 1005 on 220 units in 23 months.

Josh: Wow. I think anybody nowadays would be happy with that, right? 

David: Yeah, I think they would. I think I would be happy with that. My only problem was that I ran out of money after about 15 months. Because we had no idea what it was going to cost or how long it was going to take to fill and so just carrying the operating deficits and so forth and continuing to market until it was full put a lot of strain and pressure, especially on me trying to figure out how in the heck am I going to do this? 

So, my focus had really been on marketing and lead generation and I went to all the people who were available in the industry and consulted with them. There was some great folks at the time, but they really were not oriented towards the kind of product that we were building. So the type of sales, the marketing went great and I found myself at one point about 19 months in with fifty vacancies and 3,000 leads. And at some point it finally went off in my head, after I tried and failed many different approaches, that what if the 50 I need is in the 3,000 I have. 

When the light bulb went off, the challenge was really in helping people convert and the understanding that it was emotional as opposed to transactional, that people the reason they weren’t accepting it wasn’t because they couldn’t need the products. They didn’t need it. They couldn’t benefit from it. They couldn’t afford it. It was just that they were scared to give up their homes and make a significant life change. 

So that was a real eye-opener for me. And once I was able to figure that out and then execute, we filled the last 50 units in about three months and you know from there I’ve been able to do that many times over and over again. I still continue to sell from time to time and get in the leasing trenches myself. 

Then the challenge came as I had a huge personal debt. I had over a 1.5 million dollars with a personal debt once we got full and had to figure out what am I going to do? I didn’t want to go back and practice law, so I found some other builder-developers like us who were trying this new approach to senior housing and went and made a deal and filled up somebody else’s and then I did that several dozen times. I’d live on site. I’d just have them cover my expenses. I never went more than four months. Usually three months and said, I’ll fill you up if you give me assets. The more I added to the performance end of the incentives, the more they believed me, the more they paid attention and the easier it got to fill them. 

And so I did that for about 20 years and at some point Alex Fisher who’s my partner now and co-founder of Sherpaa got involved and we did a bunch of them together. She helped us create a theory based on the psychology of change in a theoretical model. It really helped us teach and train other people and be able to explain what it was that we were doing as opposed to just doing it ourselves. And at some point about 5 years ago, Alex said, “You know the only way this is really going to be stick, the only way we’re really going to be able to perpetuate this is if we have a software program for the leasing counselors are motivated and guided in the actual processes that we’re trying to teach,” and so that’s really how Sherpa came to life. She just started drawing it on grease boards, and we brought some local developers in to just watch how we were doing our sales processes. At that time we were still using lead cards, they’d get really thick and we’d have a two box system… and so we showed the developers and that’s how Sherpa got started. 

Josh: That’s fascinating. So all that really kind of came to a head so to speak and started just about five years ago. Is that correct? 

David: Yeah.

Josh: Wow.


David: June of 2014 we had our first launch.

Josh: So fair to say a lot of what you learned in the trenches, so to speak, in that first community and then what you kind of refined over multiple communities is ultimately what became Sherpa?

David: That’s exactly would became Sherpa. And we’ve continued to learn we’re we’re pretty good if we sell ourselves and go hands-on in the trenches, me and Alex we can probably close about half the people we interact with. I can’t predict which half but what’s baffled me given the product, whether it’s our product or somebody else in the market that we’re helping to fill, given the tremendous benefits there are of the product, I don’t get why we can’t figure out how to close the other half.  

Josh: Well before we get into that, I want to talk about, you know from the time Sherpa started,  what you’ve learned, what you’ve been doing, the trajectory you’re on. But I’m really curious because you know, there’s so much talking in our space today and really over the last couple of years, but it’s just increasing on this change that’s occurring in our industry from the greatest generation, this kind of silent generation, and now the boomers are coming. What are we going to do. Are some of these things consistent as far as your approach- do you see at Sherpa, you’re like, oh my gosh we’re radically going to have to change or are these principles that have worked for ten, twenty, fifteen years- are they kind of the same and you’re just delivering them in different ways? What do you see happening? 

David: That’s a great question. So my first concern when I first went out thirty years ago to help some other people fill up was would it work? Would it work in another geography? And we’ve worked in geographies all across the U.S. and Canada and everybody’s geography is unique and has unique factors, and yet people are the same and then I began to be concerned with will it work with different care levels, or different financial models. And because the model is based upon the psychology of change it works across  all models. Some models in some areas that work may be a little bit more effective in terms of the boost that you get, but it really is helping people overcome the fear of a significant lifestyle change.

Josh: Well,  that’s fascinating one thing that we’ll talk a lot about because you guys talked a lot about is the relationship and being very focused on that other than just the transaction. So take us on this journey, you know five years ago Sherpa came into existence. She went from the the card system, which sounds like it was highly effective, got a little bit more sophisticated, have a robust platform that is widely accepted and being adopted all over our space. So tell us what that journey’s been like to get into the world that you’re in now.

David: So the cards had a lot of disadvantages, mostly that you couldn’t get feedback or data and you couldn’t scale. So having a set of metrics that ties to the methodology and the approach so that you can see how well that you’re doing and you can both predict as well as correct course has been extremely helpful. And so that was one advantage of moving away from the card. Take me back to the question, I apologize. 

Josh: Where have you, where have you come over the last five years where you are now? I mean and I know we’re going to talk a little bit with Alex in our next episode about what you guys are doing, you know you’re expanding a ton and looking towards the future and changing the way sales culture has done. So how have you advanced over the last five years since you first got in this business of Sherpa to where you are now?

David: So part of our vision from the very beginning  has been that we truly believe in senior housing and that’s across operators and across locations. We truly believe that most people, nearly all people who move into senior housing are better off than they were before, both in terms of the quality of their life and the length of their life as well. And so for us the issue became first of all can we do it? Can we repeat it? Can we repeat it in different markets and different care levels which we were able to do? Can we teach other people to do it without us being hands on involved, which we were able to do? And the evolution of Sherpa has been how can we can we help more and more people adopt these policies and practices which increase conversion rates and wind up in having tens or hundreds of thousands of more senior adults actually enjoying the benefits what the industry has to offer. 

And so just as moving from the index cards into a software application helped in terms of the ability to scale and share and pull data, what we learned is that the cultural aspect actually bringing this change into the sales culture for some organizations, especially large organizations can be the hardest part. It can be a stumbling block. So again, we went back to first of all the metrics and doing a ton of research, Margaret Wild and ProMatura has done research with us and with our data and is now engaged in a study being sponsored by ASHA to actually look at sales metrics from a different perspective. So one of the things that we evolved towards is redefining sales metrics primarily by introducing the idea of time, and the investment of time. 

Josh: So give us an example of that, of how maybe the industry might be even calculating that wrong or maybe looking at it a little bit differently than you think they should be.

David: Sure, so there are a lot of metrics when it comes to marketing and we understand what it takes and what the different vehicles or distribution systems for marketing; what they cost, how well they work, how effective they are. The same has not been true in terms of sales because there’s been a pretty standard methodology about how you go about selling which was borrowed at first from skilled nursing and then from Procter & Gamble. A lot of the people from the skilled nursing world Bill Haven and Beverly at the time actually went to Procter & Gamble and learned about how they sell toothpaste and cosmetics. Very transactional. 

There was some borrowing from the residential real estate world and from the hospitality industry, but nobody before that we’re aware of this actually created a different process based on the theory of change, the psychology of change. So the methodology, the approach has to do with drawing information out of people in order to help motivate them to self persuade. As opposed to trying to take arguments which are clearly beneficial or logic and reason and try to help somebody persuade or convince that they should make the change. So it’s a different process.

Josh: Yeah totally different process. So Lucas, we’re here at the headquarters. We’re going to be actually getting to attend, we’re lucky enough to be able to attend the Sales Culture Starter Workshop. Tell us the why behind this. Because you’re not just selling a software, a CRM system, you’re actually now equipping and training people through these so tell us about this. 

David: So what we found again just as Sherpa expanded what we were able to do with the lead cards, we found out one of the obstacles in organizations adopting and be able to consistently use and sustain the processes had to do with culture change. So we do teach the methodology. We teach practical ways that you could go about selling with or without Sherpa. Sherpa is an enhancement, because its a tool that supports the methodology, but methodology stands on its own and I’ve done it myself for over 25 years without the application. 

What the Sales Culture Starter is intended to do is to expose those people not only who were in the trenches and interacting face to face and hands on with the prospect, but also the people that supervise them. Whether it be the executive director inside of the building, regional operators or who manage the process. Again regionals or the corporate office in terms of how do you look at and how do you reinforce the investment of time and the adoption of certain specific processes and activities that enhance the prospects ability to overcome fear and say yes. 

Josh: I love that. I love that. So talk to us a little bit about your partner, Alex. We’re going to be talking with her on our next episode. Look forward to every one getting to meet her. First of all bottle of energy and we got the tour her office, which we’re still trying to kind of debrief after all the creative writing we saw on the wall. She made us swear  that we would never tell anything that was on that wall or show that to the public because that’s all the secret sauce. But so tell us a little bit about how you all met. And what role do you guys kind of play on a daily basis here. 

David: Alex and I met 20 years ago, she had recently moved to St. Louis with her family. She was actually a portrait artist from Argentina. 

Josh: Oh wow.

David: And had lived and raised her kids in Venezuela and different parts of the country, came to St. Louis to raise her family. She had family here and was looking for dental insurance for her kids. And wound up applying for a sales support position at the Gatesworth, our community in St. Louis.

Josh: Oh wow, so she actually applied at the community that you had developed- 

David: -the Gatesworth- 

Lucas: -Which you still own and operate correct, correct? 

Jsoh: Yeah, which I think is expanded multiple times from what you were expecting.

David: It has. 

Josh: I’m looking forward to going over and seeing that. So, now, many years later? 

David: So what most attracted me to Alex was the fact that she was extremely curious. She was very determined in terms of being a problem solver and that she had very high empathic concern, very high emotional intelligence.


Josh: Well yeah she talks a lot about that.

David: And the other advantage that she had from my perspective was she knew absolutely nothing about sales or senior housing sales have never done, so she was totally a blank slate. 

Josh: So you didn’t have to retrain her on anything? 

David: There was nothing to retrain, in fact what I did was gave her one of those big thick lead cards that we were working with. Somebody that I was stuck with a prospect. I said here, take your time, I’ll come back in a little while and just read this and just tell me what you see and what you think you would do. Her insight, ability to figure what what the issues were and how you could actually approach somebody from a creative way were amazing and she’s probably the best hands-on leasing counselor that I know. 

Josh: Well, I mean, I believe it. She’s sold us on everything as we’ve been talking, a lot of passion. She’s already thinking of how can we better ourselves? How can we better deliver to our clients or customers? How can we help shape the industry, so I love her energy and enthusiasm as we start to round out this show and take some time to speak with Alex as well. You got to give the audience a little bit inside. Why the name Sherpa?

David: Oh Alex and I were sitting, we were working on a consulting job, I don’t recall where and we were talking about a particular prospect. And we were trying to help ourselves get ourselves motivated by thinking about what is our role? What is this prospect really need from us? Because the logic was obvious of the situation and yet we were unable to really kind of penetrate the fear and the emotional resistance that was there andI believe it was Alex that came up with the idea. You know what this isn’t really about building a relationship anymore than in a clinical setting with a counselors true relationship. It’s really about having a guide, being an emotional Sherpa.

Josh: I love that. I love that, and there you go.

David: It just stuck. 

Josh: That’s so awesome 

Lucas: Before you go, I want to talk to you about an icon in the business that you talked about coming up you had the start in the 80s when senior living was just emerging out of an institutional healthcare-type nursing home situation, and I think there’s a lot of new people in the business, now, young people that are coming in and even just outsiders that are coming in that really don’t know about the history of this really young vertical. Senior living is in general a young industry. You mentioned ASHA, I took a lot of notes. You were one of the speakers at the Hall of Fame induction of Tony Moly. Would you talk to us about his influence on your life? 

David: There were a number of people who had an influence on me in the beginning and I reached out to everybody I could see  and talk to you to try to figure out how to make this work. Tony was one of those people and became a dear friend. He and I each have consulted with each other at different stages of our careers. He was a mentor to me. He helped start the John Hopkins Graduate Education School of Aging and then eventually the Erickson School of Aging and enlisted myself, and then myself and Alex to teach the sales and marketing modules. He had his annual summit which is where we we presented almost every year at summit and each year he would insist that we pretend something not only that we had never presented before but that no one had presented before.  And so he would really push the limits of how does this work? He would make sure that it was evidence based in terms of what the theoretical terms were, he would push us to try to continue expanding our own learning. He was a sounding board. He was my source of all kinds of information in the industry and was open and willing to share that not only with us but with everybody. He made a huge contribution and I much appreciate your having had a chance to know him and work with him. 

Josh: That’s so awesome.

Lucas: Yeah, what an impact and it was great to hear his family members be there at that event to help honor the impact that he’s had on the industry. I may have it wrong but am I aware of is there a library of his? I saw some video of some of his ideas and on specifically culture.

David: There is a library. He taught a lot of people and later in his own journey he came up with a video and a lecture series and I believe the family still has access to those. 

Josh: Very cool. 

Lucas: Very interesting. It’s great to reminisce and realize that the people that have helped shape the culture of this business are some of the most fascinating and interesting people that we’ve talked about.

Josh: I know,  so awesome, and it’s so awesome to spend this much time with you today. Thanks for taking time right on the heels of this awesome event that we’re about to be apart of and I know you got a lot of that you got to get ready for so thanks for taking time with us. 

Lucas: Yeah David thanks for the hospitality. 

David: Thank you for coming. 

Lucas: Absolutely. Thank you so much.


Thank you to our supporting partners NHI, RCare, NRC Health, TSOLife, ERDMAN, TIS, and Sherpa.

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Episode 81: David Smith