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1001 Entrepreneurial Tales: Keyword Spotting & The Magic Of Closing The Deal

This is a story about one of the most profound lessons in business of my entire career.

If I only had a $ for each time I tell this story to other CEOs — and encourage them to apply the same strategy toward winning the business from their customers.

And since it is a part of my 1001 Entrepreneurial Tales, you can also find it on my YouTube channel at

It All Started 30 Years Ago…

About 30 years ago, I started an ambitious artificial intelligence software company, International Neural Machines (INM). We developed numerous applications using neural networks — all utilizing our innovative pattern recognition.

NRC Funding

As our AI competence grew, INM was awarded significant grants to develop applications aimed at speech recognition, and in particular — at “keyword spotting”. With the support of the Canadian Police Research Center (CPRC) and the National Research Council — we developed a very accurate recognition of specific words within an unconstrained audio recording.

CPRC Problem

CPRC was quite impressed with our technology and requested our help to solve a serious problem:

· In most cases, a police cruiser would rush to attend the accident — immediately after being dispatched

· However, in case of a chemical spill, the cops would first open the trunk of their car and reach out for the thick manual, instead

· Our objective was to build a product that would recognize the keywords such as “Chemical Spill” — and retrieve the pertinent information from the Operations Manual

· No time is wasted, as the cop is being debriefed through a speech synthesizer — while rushing to the scene of an accident

Verizon To the Rescue

Our CPRC app worked very well. So, to turn our prototype into a successful business offering, I identified Verizon as a key partner and a viable distribution channel. At that time, Verizon was still known as Bell Atlantic.

The giant telco liked our innovative technology and saw its potential to solve their customers’ problems. And shortly after our Verizon demo, the company arranged for the demonstration at one of their clients in Maryland — a maximum-security prison.

All Prisons, Large And Small…

All prisons at that time had a big problem:

• The inmates were only allowed to make collect calls from within the prison walls — using only a small number of public phones installed at each institution

• Since many of the criminals kept using jails as “an office without the overhead” — all the outgoing calls were recorded to intercept the illegal activities

• Unfortunately, each prison ended up with hundreds of hours of audio recordings daily — but they had no manpower to analyze the calls and identify crime-related activities

Going To Prison

Verizon invited us to make the presentation to the warden. Make no mistake, it took almost one hour to pass the security checks — which included the dog-sniffing exercise and leaving all our cell phones and watches at the gate.

Not surprisingly, our prison presentation went very well, and the warden was genuinely impressed. He understood that our software would automatically scan all the daily audio in minutes and that it will mark the suspicious audio segments for an offline review by the prison staff.

The productivity gain was enormous and the ability to zero in on criminal information — uncanny. One could review all the daily suspicions in just… 20 minutes!

How Much Is This Doggie In A Window?

Finally, the warden asked us for the price and he wanted to know how much it would cost to install and maintain our system by a trusted telco provider — Verizon. Our joint response was: ~$500K for a one-time site license. That was it!

To my surprise, the reaction of the warden was not what we expected… In short, he said the following:

· Yes, he loves our system and the proposed efficiency gains

· However, $500K is a lot of money, and that instead, he could bring in a lot of dogs, and put many more guards on the prison payroll

· So, his answer was: thanks, but no thanks, guys — better luck next time…

It’s Time For a Plan B

Following such an unanticipated roadblock, we re-grouped. It took me about 3 weeks to convince Verizon that instead of asking for an outright purchase of the system (using the capital budget) — we could offer the same system in exchange for a monthly installment of $8K/month.

We assumed that the monthly installments could be easily covered by the operating budget of the prison — without the need for a budget appropriation request.

Massaging The Budgets…

The second meeting with the warden took place shortly after we all agreed on the final numbers. The dogs, the watches, and the cell phones were all left at the gate again — and we proudly presented the benefits of our value proposition to the prison’s boss.

Although genuinely intrigued by our flexibility, the warden was still haunted by the long-term effect on the number of dogs and the guards in his jail — and sent us packing, politely.

Losing The Battle?

We left the jail and decided to review our options at the nearby coffee shop. Verizon succinctly summarized the obvious:

· Look, we tried kicking the can — not once, but twice

· If our proposal doesn’t work at the maximum-security prison — it won’t work at any other prison, either. End of story

My Three “Passover” Questions…

Now, since my name is not Moses and I can’t part water, I decided to ask Verizon the following three “Passover” questions:

1. Are collect calls made from the public phones inside the prison PROFITABLE to Verizon?

a. The answer was a decisive yes. These are the most profitable charges per minute that Verizon ever gets

2. Since I noticed only 3 public phones on a wall and a significant prisoner’s lineup behind them — would 150 phones on a wall make a big difference?

a. Once more, the answer was a resounding yes. The collect call revenues would skyrocket!

3. So, my last question was: how long would it take to pay for our keyword spotting system if Verizon could install all the 150 phones at the jail?

a. A back-of-the-envelope calculation brought the answer — it will take only 8–10 months until we break even…

And The Winner Is…

We had a winner! I asked Verizon to call the warden again and ask for a third visit — the same afternoon. The warden was visibly unhappy and greeted us with a terse message. He gave us only 5 minutes to make the case and stated that he has no desire to further discuss our value proposition — ever again.

My proposal was short and concise:

· I offered to install 150 public phones at the prison, at no cost. This would reduce the big lineups — significant security risk in its own right

· At the same time, we would also install our keyword spotting solution at no cost to the prison

· In addition, we would even share the 10% of Verizon’s collect call revenues with the prison — turning our system from a COST into a PROFIT center…

Too Good To Be True?

Undoubtedly, we took the warden by surprise. He repeated twice my offer — to ensure that he got it right. Then he reached out for the phone on his desk and called… the Governor of the state of Maryland. To my astonishment, his message to the Governor was simple:

· Look, Verizon is at his office and just offered him an unbelievable deal

· He is convinced that immediately after leaving his prison, Verizon is going to visit additional jails in Maryland — with a similar offer

· All he wants is to be the first in line and that the Governor… “owns” him such favor!

Lessons learned…

· It doesn’t matter what are you trying to sell and to whom

· The only thing that matters, is WHAT’S IN IT FOR THE CUSTOMER

· Offering lower cost at a higher value is necessary but often not sufficient to “seal the deal”

· So, treat your customers as Joint Venture Partners & demonstrate how you are going to make money for the both of you…

My Recommendations…

The real MAGIC occurs when you’re able to turn customers’ COST into a PROFIT center. Use it wisely, and you will, too — pull the rabbit out of the hat…

Do not think about how to make money from your customers. Instead, figure out how to share your profits with the customer — by creating untapped revenue streams for both. All you need is to use your… IMAGINATION.

It was Albert Einstein who once said: “Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution”

So, use your imagination, wisely. By doing so, you will turn your offers into Irresistible Value Propositions — and escape the competition altogether…

For More Information…

For more information, please see my posts on LinkedIn, Twitter, Medium, and CGE’s website.

AI Boogeyman

You can also find additional info in my book on amazon: “AI Boogeyman — Dispelling Fake News About Job Losses”, and on our YouTube Studio channel… Thank you.

I offer hands-on AI investment advice to Venture Capital & Private Equity portfolio companies. Hence, I am in the business of joining Advisory Boards (ABs). And in many cases, I deliver results in 90 days by structuring JVs to bring untapped revenue streams — just as I did w/ Verizon 20-yrs ago…

A good Advisory Board improves the decision-making process by helping the CEOs to consider different perspectives. More importantly, there is not a single top athlete who does not have a coach. And yet, only 20% of CEOs are coached by Advisors. The other 80% — may never become the top performers they could have been. Thus, my advice to CEOs: “Amateurs don’t use coaches, professionals do… and so should you”.

I used advanced BusinessAI™ strategies in Renewable Energy for 12 yrs. Now, I help VC/CVC/PE funds to maximize their returns in Healthcare, Fintech, Transportation, Construction & Manufacturing, too. And I apply the same structured finance expertise I acquired through financing over $1B of Renewable Energy projects.

As a 30-yr BusinessAI™ veteran, I Propose, Design, Structure, Finance, and Deploy state-of-the-art Joint Ventures to bring RAPID & SUSTAINABLE REVENUES. And as a coach & mentor, I bring business savvy to separate the wheat from the chaff — through a unique process to beat the odds. Such pattern recognition abilities allow me to see what is still missing & how to maximize business offerings & profitability…

What I learned over the years is that it is not just technology innovation, but also the exponential increase in the value offered to clients at a much lower cost — that makes all the difference. Business Model Innovation is as disruptive as Technology Innovation and yet I see too many companies focused on pushing their product out the door — while losing ~70% of untapped revenue streams.

My LeanBOD™ recommendation? Mandate CEO Advisory Boards and create a pool of viable Co-CEOs to be chosen by the BODs. Co-CEOs offer the fastest way to accelerate Scale-Up & Expansion, Revenue Growth, Margin Enhancement & Opening New Channels.

SELECT ACCOMPLISHMENTS: Using AI in CT medical diagnostic, financial fraud detection, solar PV, wind, WTE, energy efficiency, etc. Finance skills: equity, non-recourse debt, balance sheet financing, and tax equity. I also took a tiny startup public, building a $135MM enterprise & received funding from NRC & DND. Academic R&D collaborations included: UW, UofG, UofT, and MCC Consortium in Texas.



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