Latest / Success Story with Scott Clary / Colin C. Campbell - Serial Entrepreneur & Bestselling Author | Start. Scale. Exit. Repeat.

Transcript

Colin C. Campbell - Serial Entrepreneur & Bestselling Author | Start. Scale. Exit. Repeat. · Success Story with Scott Clary

0:00
It does take time, but when you get it, the dominoes will.
0:02
What does it take to start, scale, and exit multiple successful companies?
0:06
Colancy Campbell has done it all. From co-founding some of the biggest names in tech,
0:09
like two cows in hostopia, to creating the dot club domain that was ultimately sold to go dad.
0:14
We had hundreds of employees front page of the profit magazine at the time,
0:18
bought 16 months later company file for bankruptcy protection.
0:20
That $19 a share, I ended up selling all my shares for six cents a share.
0:25
But here's the real story.
0:26
What drives an entrepreneur to keep repeating the process of building and selling companies
0:32
even after achieving success?
0:34
Sad things do happen.
0:35
Focus on your core business, but then also when you start getting to a certain point,
0:39
begin to think about watching new businesses outside of existing businesses.
0:43
Don't panic if you haven't figured out your ex-factor on day one.
0:46
Think that everybody thinks they have a great idea,
0:48
but ideas are worthless, actions are priceless.
0:50
In this episode, Colin shares his journey of innovation,
0:52
the lessons he's learned from the highs and lows of entrepreneurship,
0:55
and why is latest books start, scale, exit, repeat,
0:59
is a must read for anyone looking to build a lasting business legacy.
1:03
Also launched a company called Hostopia.
1:05
Fast forward six years later,
1:07
Hostopia became the fastest growing company in Canada.
1:14
Welcome to success story.
1:15
I'm your host, Scott Clary.
1:17
The success story podcast is part of the HubSpot podcast network.
1:20
I'm also a big user of HubSpot products.
1:23
I've supported the show for over three years now.
1:25
And for all entrepreneurs out there,
1:27
I need you to go back to a time and place when building businesses as tough as it is,
1:32
can be sometimes a little bit fun.
1:34
When you're marketing, it should be fun,
1:36
but marketing is not so fun anymore because it's very time consuming.
1:40
It's very difficult and it feels like there's just a lot of friction.
1:44
Content was simpler to make.
1:46
Leads were easier to capture and we weren't all spread so thin.
1:50
As marketers, as entrepreneurs, the bottom line is that marketing used to be fun.
1:53
It's not so fun anymore.
1:55
But with HubSpots newly launched marketing and content hubs,
1:58
I've been using it myself.
1:59
It brings a little bit of fun and creativity back into marketing for your business.
2:03
They're going to generate better content.
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They're going to generate more leads and next level results,
2:07
which really make marketing fun again.
2:09
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2:27
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2:29
So put the fun back into your marketing funnel with HubSpot.
2:32
Visit HubSpot.com to get started for free.
2:44
Call it. I'm excited.
2:45
I'm excited to do this.
2:46
This is like a long time coming.
2:47
We should have done it probably six months ago.
2:50
But I digress over here.
2:51
So I mean, when we talk about entrepreneurship,
2:56
I think a lot of people have a lot of failures.
2:59
I don't know if many of you have had failures as large
3:02
as some of your failures when you're trying to build things out when you're first starting.
3:05
So I think that's a really fun place to start it
3:08
because it will show we have to go through to be successful.
3:13
So let's kick it off there.
3:14
So talk to me about,
3:16
were you always an entrepreneur?
3:19
Were you born an entrepreneur?
3:20
Was that something that was just inherent to you?
3:22
Or, you know, whether it was selling puppy dogs at the flea market
3:26
or delivering newspapers or you're sitting
3:29
up a small business in college.
3:32
We've always had that sort of mindset.
3:33
I think it comes from my parents.
3:35
Come from a farming background as well.
3:37
We own farms in the family.
3:39
Hard working background.
3:40
Always selling vegetables at the market.
3:43
That kind of stuff.
3:43
So it was great growing up having that kind of experience.
3:48
And went to college, got a commerce degree, business degree,
3:52
and right out of college,
3:55
we started our software rental business.
3:57
This was in 1993 up in Toronto, okay?
4:00
And it lasted a while.
4:02
It lasted a while in a software rental business.
4:04
So you could actually, before 1994,
4:06
January 1st, 1994,
4:08
the free trade agreement came into place and Bill Gates convinced them
4:11
to put in a tiny law that said software rental would not be legal in Canada.
4:15
What software rental was, basically, is there
4:17
discounts at the time and you'd rent the discounts, bring them home.
4:22
But of course, people would put some of those on the computer or duplicate them.
4:25
And so there's probably a good reason.
4:27
It was outlawed, but we had set up two stores.
4:29
And literally within 18 months,
4:32
we had to close both of those stores.
4:34
And it was fascinating exit too.
4:36
Because we did what we did well on that exit.
4:39
We learned how to maximize failure.
4:41
We actually ran full page ads saying the government
4:44
is outlawing software rental.
4:46
And we had lineups out the door.
4:49
But what was cool is we also started something called a BBS,
4:53
a bulletin board service.
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This was just before the advent of the World Wide Web.
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And we had thousands of members who were paying us
5:00
to be on this BBS bulletin board service.
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It grew actually quite large.
5:05
But something else came along.
5:07
And it was called the Information Super Highway.
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I'm using some old terms here.
5:11
Now you're the internet.
5:13
I don't think people understand how early you are
5:16
in an online internet digital entrepreneurship.
5:21
You probably one of the first.
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We were one of the first internet access companies in Canada.
5:25
It became, I'll jump into that one first.
5:28
But we were also the second largest bulletin board service.
5:31
But because we didn't have the funding from the banks,
5:33
banks looked us and said,
5:34
okay, just internet this internet thing,
5:35
get it, get out of here, right?
5:37
So they said we decided to shut down our second business.
5:41
We shut down our BBS.
5:43
Just to use the phone lines for the internet business.
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And it turned out to be a good decision.
5:49
Because when we went to a trade show a couple of years later,
5:51
all the people who kept their BBS opened,
5:54
their buggy whips running,
5:55
they were all out of business.
5:57
And all the people that transitioned from this industry
5:59
to the next, they were successful.
6:01
Well, we grew that company,
6:04
Scott, to become the largest ISP in Canada.
6:08
It came in the seventh fastest growing company in Canada.
6:11
The third fastest growing company in Canada in 1998.
6:15
I mean, literally one of the most successful stories
6:19
was a publicly traded company.
6:21
We decided to merge it with a cable company
6:24
called Look Communications.
6:26
And we were granted a license by the government,
6:29
wireless license for all of Canada
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for fixed wireless internet.
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It was incredible.
6:34
Around that, by the way, that's like wild.
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So if someone's listening to this,
6:38
at that time, who were your competitors?
6:40
So you'd have Telus,
6:42
Bel Canada, Rogers,
6:44
and the government thought we can create extra competition
6:47
by awarding this license to this other company,
6:50
this internet server larger than all of them.
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We were larger than as an ISP
6:54
until later on up.
6:56
We strike it into the later 90s.
6:58
They began to just take off.
7:00
And they were late to the game.
7:01
We see that often in paradigm shifts
7:04
in where technologies are adopted.
7:07
And big companies are slower to the market.
7:12
And I always say, enter the entrepreneur.
7:14
And that's what we did.
7:15
We build it and we build it up to become big
7:17
and then we sell it to these competitors,
7:21
the larger companies.
7:22
But here's this company.
7:23
You know, we had hundreds of employees
7:25
were on the front page of the profit magazine
7:27
at the time, just like the ink magazine
7:29
and up in Canada as one of the fastest growing companies
7:32
in Canada.
7:34
And something happened in March of 2000.
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I know you're too young to remember this.
7:39
But that was the time when a judge announced
7:42
that they were going to break up Microsoft.
7:44
And we had sold the company.
7:45
We were down, our shareholders got 40%.
7:48
So we were no longer in control of the company.
7:51
And the stock that we did get
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after that we won the license
7:54
went to as high as $19 a share,
7:57
as well over a billion dollars.
7:58
And I had, how old are you?
7:59
I have some 28 years old at time
8:02
at a heart and 30 million in stock.
8:05
That's why I was insane.
8:07
Oh, it was incredible because before that
8:09
you didn't have any big financial wins.
8:10
You had it.
8:11
Yeah. So we did.
8:12
I did have one financial win.
8:13
Okay.
8:14
Okay. And that was company called two cows.
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Today it's worth almost a half billion dollars.
8:19
And that's another story.
8:21
Okay, we're talking about that.
8:22
Get to that in a minute.
8:24
But here's this company,
8:26
Internet Directs, publicly traded $19 a share
8:30
or the fastest growing companies in Canada.
8:32
And they decide to break up Microsoft.
8:34
We have something called the .com crash.
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There was just wasn't enough chairs to go around.
8:40
In the people running and controlling the company
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said, oh, let's go back.
8:46
Let's pull our $50 million offering.
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We're doing a secondary offering
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because the NASDAQ had gone from $5,000 to $4,000.
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Well, guess what, Scott,
8:53
went all the way to $1,200.
8:54
Now that is a crash.
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Fast forward 16 months later,
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company filed for bankruptcy protection.
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And I ended up selling that $19 a share.
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I ended up selling all my shares for $6 cents a share.
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From one of the fastest growing companies in Canada
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to last place finished.
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And that really, really hit me hard.
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I had failed myself.
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I had failed my business partners.
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I had failed my family,
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my investors, my employees.
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We had 12 paper milleners as well.
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And what went wrong?
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And I looked back at that and I tried to understand
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and what went wrong with this huge failure.
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And really, it was two things.
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One, we had done a lock-up agreement for 18 months.
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Thinking that things are just going to keep getting better and better.
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18 months now.
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This will be a bigger company.
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We'll sell for even more money.
9:52
We didn't know there was going to be a crash.
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But bad things do happen.
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And that's what happened.
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We had the .com crash.
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And there's wasn't enough shares to go around.
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So the reality is that company went down.
10:03
And you're probably saying at this point,
10:05
you know, why did I invite this guy in my show?
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He's had three huge failures in his personal business.
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A lot of $130 million.
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And I was about 95% of my wealth at the time.
10:16
Yeah.
10:17
We were lucky in that we had also done a company called Two Cows.
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Two Cows was software download at the time.
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And we launched that business.
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And fortunately, it did very well because we had a huge technical problem.
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Internet was very expensive.
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And this was downloading software and it took down our servers when we launched it.
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And so we decided to create mirror sites for each ISP globally.
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Well, it was a technical solution to turn out to be a genius marketing thing.
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And what happened was all the ISPs around the world would mirror our website.
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And they'd have local downloadable sites.
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So that they would reduce their internet cost.
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But what it did is a great gave us a global presence.
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And we became one of the top 100 websites on the internet.
11:03
By PC Magazine, we built it to $5 million in revenue.
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And then we sold it to the group behind ICQ, a billionaire group.
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And that was interesting, too, because that was the first time I began to taste money.
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In fact, there's a story there.
11:17
Walk me through the timeline, though, too, just so that's 1998.
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So that's just before the collapse of internet direct.
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You had the bandwidth to build these at the same time.
11:29
Yeah, we talk a lot about that in the book.
11:31
Start scale exit repeat about this concept of focus on your core business.
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But then also when you start getting to a certain point,
11:38
begin to think about launching new businesses outside of existing businesses.
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And so you picked up on something very interesting there because when we were at the
11:46
software rental, we launched a BBS.
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And then we were at the BBS, we launched an ISP.
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And then we're at the ISP, we launched two cows.
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And then we also launched a company called Hostopia.
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And fast forward six years later,
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Hostopia became the fastest growing company in Canada, number one.
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And we took it public.
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And we sold it to a Fortune 500 company two years after that for 17 times EBITABs,
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a phenomenal exit.
12:15
And guess what?
12:16
It was a month before the Lehman crisis.
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That's how close we're talking.
12:21
But going, that's a very, oh, it's crazy.
12:24
And I talk it, we talk a lot in the book about the stories.
12:27
And by the way, they're not just my stories on the book.
12:29
We interviewed over 200 people, including individuals like Joe Foster,
12:33
who I know you've interviewed as well from Reebok.
12:35
His story is incredible.
12:37
But I will tell you the you asked earlier about, you know,
12:40
the first early days, you know, when I was 27 years old,
12:44
and we lived a very tiny home in Oakville, you know,
12:50
very old car in tiny home, very, you know,
12:54
big mortgage, you know, the whole kind of kind of thing,
12:56
although prices of homes were cheaper back then.
12:58
But it was cheaper.
13:00
And we sold two cows for $30 million.
13:04
And it was split three ways.
13:06
We had to pay 37% capital gains to act.
13:08
So, you know, there was still, we made a lot of money.
13:15
At a very short period of time.
13:16
And you go from the zero to $7 million dollars of wealth,
13:20
whatever I walked away at that time.
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And I remember a story because my wife really never believed
13:25
that any of this was happening.
13:27
She would, you know, I'm doing this thing.
13:29
I think we're going to sell this company.
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So we closed the transaction around one o'clock in the morning,
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a two about five hours back then to sign all the documents.
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And so we took the, they gave us a check.
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No, it's, it's funny.
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They gave us a certified check for $20 million dollars
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of first payment.
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And I was told in check and I brought it home.
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And I walked up to the third floor,
13:50
a skinny tiny little home and I walked into the room
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and I tap on my wife's shoulder and I handed this check
13:55
for $22 million dollars.
13:57
And she's like, Larry, I just like one three in the morning
14:00
and she looks at me and she goes, I don't understand.
14:02
I don't understand the zero.
14:04
So like I didn't say anything.
14:05
She just couldn't understand the zeros.
14:07
There were just too many zeros.
14:09
And it was just, but it was interesting going from that point of,
14:13
you know, we're really struggling as an entrepreneur
14:16
to this that one of that happens.
14:18
And the next thing you know, you're, you're a multi-millionaire.
14:21
So that was, that was an interesting thing.
14:23
That was a while.
14:24
So from like 25 to 30, this was a roller coaster.
14:28
Yeah, it was an internet boom.
14:31
And you were amazing.
14:32
Right plays, right time.
14:33
We're focusing on internet companies.
14:35
But that's really what you focused on.
14:38
And the next idea, it came that idea of hostopia
14:43
that was the next company.
14:44
It was again, publicly traded.
14:46
That idea came because we had a customer
14:49
who was at a Saskatchewan Telecom.
14:53
There was a, that was appointed by a call to Saskatchewan Telecom.
14:56
I don't know, but they call this up and they wanted to license our platform for hosting.
15:00
By the way, I just want to say one thing.
15:01
So for the audience, a lot of like Americans in the audience.
15:04
So this is like AT&T Verizon.
15:07
Like these are the comparables, right?
15:08
So you're talking about telcos.
15:10
That, these are the behemoths that are in the US.
15:14
Similar, similar companies in Canada.
15:16
If you're talking about Rogers and Bell and Tellus and whatnot.
15:19
So just to give a comparison,
15:21
people understand like the game that you were playing
15:23
and the space that you were playing in.
15:24
Yeah, so Saskatchewan called us up.
15:25
They wanted us to license our hosting platform.
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So Bing, ding, ding, ding.
15:32
If South Tele wants it, maybe Bell Canada wants it.
15:35
Maybe Tellus wants it.
15:36
Maybe Vodafone wants it.
15:38
So we launched that company and we did sell to 9 out of 10 telecoms in Canada.
15:42
We broke into the United States and we ended up selling to AT&T,
15:46
Vodafone, British Telecom.
15:48
We talk about a really cool story in the book about scaling
15:52
and how we, we found our X factor.
15:56
And this is something that I think that if any entrepreneur does,
16:01
if they can figure out that they're X factor.
16:04
Now, what is an X factor?
16:05
Think Domino's pizza, 30 minutes or free.
16:08
You know, a national car rental.
16:09
You just get in the car and go.
16:12
Bernhardt has talks about this.
16:13
He talks about solving a bottleneck,
16:16
you know, particular industry.
16:18
You're solving a problem.
16:20
And a lot of us can be working today in companies and see,
16:24
oh, there's a lot of bottlenecks.
16:25
But AI could do this, this, and this.
16:27
And ding, ding, ding.
16:28
That's for the idea for a company can come along.
16:31
And so that's what we had hostopia.
16:33
Our X factor was 100% migration guarantee.
16:39
So here we are in 2005.
16:42
I've been told that we're going to lose the earth link deal.
16:44
Earth link was a, if you remember that company,
16:46
it was a relatively large telecom at the time.
16:49
I really, I asked one of the companies that you were selling to.
16:52
You're selling the hoes.
16:53
We sell our hosting service.
16:54
Yeah, exactly.
16:55
And you sold like he said.
16:56
So it's at 9, 9 out of 10 telecos.
16:59
Earth link was just one of the other.
17:01
Yeah, right.
17:02
But the earth link was one of the big ones before we broke into the US.
17:06
And, um, but we were told we were not going to get this deal.
17:10
And I said, okay, I've grabbed the CTO.
17:12
We got on a plane.
17:12
We flew down.
17:13
We met with this mid-level executive, um, uh, at earth link.
17:19
And he said, okay, let's go to lunch,
17:20
but he actually had a WIGO.
17:21
This is 2005.
17:23
A WIGO was one of the first electric cars,
17:25
but only had two seats.
17:27
So I, I, my CTO is at the front,
17:30
and I sat in the trunk of this vehicle.
17:33
And we drove to lunch.
17:34
And this is all just to close this deal.
17:36
Well, we do anything to close you.
17:37
Yeah, right?
17:38
Yeah, but that's not what closed the deal.
17:39
I'll be quite frank.
17:40
And we told him at lunch, he says,
17:42
we're willing to guarantee 100% migration.
17:45
See, our buyer's not earth link.
17:48
It's not, it wasn't AT&T.
17:49
Our buyer were mid-level executives,
17:51
who were fearful of being fired at their job,
17:54
if they make a mistake.
17:56
And migrations are probably one of the number one reasons
17:58
why these IT folks get fired.
18:01
So we came in and said, well, we'll guarantee it.
18:04
And we would pay fair market value.
18:06
At the time, it's $350 a website.
18:08
We would, we would, we were moving over 80,000 websites.
18:11
And probably about a million email addresses.
18:13
And we guaranteed if we lose one website,
18:16
we'll pay $350.
18:18
Imagine losing 10,000 websites,
18:21
$3.5 million.
18:23
We'd have to pay the company.
18:24
I mean, this was serious.
18:27
Serious about what you're doing.
18:29
It is a very smart strategy for an entrepreneur
18:32
for somebody trying to sell anything.
18:34
You're de-risking.
18:35
You're de-risking the deal, completely.
18:38
Yeah, well, we're making it so he doesn't get fired.
18:40
Yeah, right?
18:41
Yeah, but by not, by him not,
18:43
we're going about getting fired.
18:45
All of a sudden, you just made it,
18:47
like, you removed all the risk and the stress
18:51
in making a buying decision, basically.
18:54
It was an easy, though.
18:55
Let me tell you.
18:55
And also, you're putting yourself on the line.
18:57
It was not easy.
18:58
And we re-engineered our entire organization.
19:01
Just think of what Domino's Pizza had to do
19:03
to get it in 30 minutes or free.
19:05
Right?
19:05
It wasn't easy.
19:06
You had to re-engineer your entire organization.
19:08
We had hundreds of people in the Ukraine
19:11
who were all manually looking at websites.
19:13
We had turistics that we designed and developed.
19:16
To move over websites and migrate them.
19:21
And we also stopped letting the customer dictate to us
19:25
how they wanted it done.
19:27
Because if they said something that could lead to
19:30
a migration mistake or an error.
19:33
And this happened before this, by the way.
19:36
I won't go into all of our stories,
19:38
but we went to a telecom that lost 3 million emails
19:41
went offline and CNN's talking about it.
19:43
It's all because they wanted to change
19:45
their user settings.
19:46
But we wouldn't let that happen anymore
19:48
in this Earthlink deal.
19:49
But we won Earthlink.
19:50
And we didn't only just win Earthlink.
19:52
We won AT&T, Vodafone, British Telecom.
19:55
All the South American telecoms,
19:57
it was a domino effect that was unbelievable.
20:00
And then we became the number one global standard
20:02
for outsourcing email and hosting to telecoms.
20:06
And it was because of the X-Factor.
20:08
I can't tell you how important it is now.
20:10
Don't panic if you haven't figured
20:12
a lecture X-Factor on day one.
20:14
I often talk to students who are just starting their business.
20:16
I asked them to think about it.
20:18
But it took us six years to get the X-Factor.
20:22
I'm sort of taken dominoes years to get theirs.
20:24
And national car rental, the same thing.
20:28
It does take time.
20:29
But when you get it, the dominoes will fall.
20:31
When you look at sort of that X-Factor,
20:36
you've discovered it led to this huge success.
20:40
As an entrepreneur,
20:41
how do you make sure that you don't screw up
20:43
that success or that growth?
20:45
Because now there's a year's scaling.
20:47
But I mean, there's all these other components
20:49
that you have to make sure don't break as you scale
20:51
as you take on all these customers.
20:53
Especially if you're going to be guarantee
20:55
that they don't go down or there's like a financial issue
20:59
and there's a financial reason why you can't screw this up.
21:02
Yeah, I mean, you have to re-engineer your organization.
21:04
You have to re-engineer your systems.
21:06
But the first thing we did there was we found out
21:08
who our customer really was.
21:10
It wasn't a telecom.
21:11
It was a mid-level executive.
21:13
Right, that's important.
21:15
And then once we figured out what made that person tick,
21:18
first not get fired, second look like a hero.
21:21
Then we can build a barren promise around that.
21:25
I call it that in the book, I call it the nearly unbearable brand promise.
21:29
So it's just something that's almost unbearable.
21:32
But if you can do it and you can deliver on it,
21:36
and there's so many examples I can use.
21:37
I use a lot more of the book.
21:38
I use another one called Cookie Delivery.
21:40
This is a company that actually had the domain cookie delivery.com.
21:44
And they wanted to win the cookie market in that city.
21:49
It's a city in Texas.
21:50
And they decided to create a mobile truck
21:55
to bake the cookies on the way to the office.
21:59
So when they arrived at the office, they're piping hot.
22:02
But all the other bakeries would send these cookies from the bakery to the office
22:06
and they're cold when they arrive.
22:08
So they sold that bottleneck and they won in that marketplace.
22:11
It's absolutely incredible.
22:12
I love that chapter of the X-Factor in the book and yeah.
22:16
Okay, so then, so this is the,
22:18
this is, wait, at this point, this is your second public.
22:21
Second public or third public?
22:22
Second public, okay.
22:23
So how did that story end up?
22:26
Because that, oh, so, yeah.
22:27
So that's the one that we sold right before.
22:29
Fortune 500.
22:30
That's right, okay.
22:30
Company for 17 times EBITDA.
22:32
And it was in the nine figures.
22:33
And it was a great exit.
22:35
And, um, you know, it was,
22:38
it was, I called it my lab.
22:41
Because I had a lot, because it was running positive.
22:43
I don't know if you've been aware.
22:44
Yeah, yeah, yeah.
22:44
You can swear.
22:45
Yeah, I called it Vinden Vindafuckincation.
22:48
Vindafuckincation because so many of the shareholders
22:52
were calling me up and screaming me.
22:54
I had a fight with my business partner.
22:55
We had to, he had to leave the company.
22:57
He was dumping shares after the IPO.
23:00
It was a mess.
23:01
It was a little bit of a mess, right?
23:03
And, uh, and then also I had the board
23:05
beginning to move on me as well.
23:07
So I was, I felt pretty good about it.
23:09
I really did feel good about it.
23:11
You know, I did make a commitment
23:12
to work for this Fortune 500 company for three years.
23:15
And I actually did that.
23:16
And it was very, very tough.
23:18
I hated it.
23:19
But I worked at the very top of the corporation.
23:21
And I got to understand what moves,
23:23
how a corporation makes decisions,
23:24
why they're risk-averse.
23:26
Um, I began to really understand corporate America
23:29
and the culture and corporate America as well.
23:32
I do want to talk about one other problem
23:34
I had at Ostopia.
23:35
And that was, that was, and you brought it up really,
23:38
you know, the scaling thing like you're trying to scale.
23:41
So we actually began to flatline in 2006.
23:45
And because the problems with my business partner
23:47
leaving the company and the shares being sold,
23:50
a board member came to me and says,
23:51
look, I think you might be over your head
23:53
called as CEO and, you know, I was,
23:56
I was feeling it, right?
23:58
And we didn't have control of the board
23:59
or venture capables on the board and whatnot.
24:02
And we've all seen this story before.
24:04
So I called a lifeline friend called me up
24:06
and I met this gentleman named Patrick Thean
24:08
who runs a company called Rhythm Systems.
24:10
And I went to Vegas, met him in Vegas.
24:12
They said, I just need you to get the board off my back.
24:15
You know, because they want to see a professionally managed
24:17
company that just need him to get them off my back.
24:19
So can you just give me some stuff to do
24:22
and I'll just say you're hired or whatever.
24:24
So no, I don't want to work with you.
24:25
Because what he's talking about,
24:27
is unless you do it right,
24:30
then I don't want to work with you.
24:31
This is like somebody who's overweight going to the doctors
24:33
and saying, yeah, I don't really want to work out.
24:35
I don't want to change my lifestyle.
24:37
Just give me the pill, right?
24:38
That's it. That's all I want.
24:39
Just the pill, right?
24:41
And no, he said, I'm not going to work with you
24:42
unless you do it right.
24:43
And we did it right, and by do it, right?
24:45
So that's what I'm going to tell you right now.
24:46
I'm just going to tell you right now.
24:47
So what that meant was two days of strategic planning,
24:50
once a year, once a quarter,
24:53
and 90 days of execution,
24:56
we had goal setting implemented red yellow green
24:59
for the company goals for the year,
25:01
the quarter and the individuals,
25:04
three to five smart goals.
25:07
We implemented daily sales huddle.
25:11
We implemented a lot of systems that helped the company scale.
25:15
See, as entrepreneurs, we have the right instinct, generally,
25:19
but really, really don't know what the heck we're doing when we get too big.
25:22
Most people don't.
25:23
And if you can implement the right systems,
25:25
they can help you scale your company as well.
25:28
How did that get the board off of your back?
25:30
Because you're doing all the right.
25:32
90 days, you can see the numbers turning around.
25:35
Within three years, we almost tripled our revenue.
25:38
Like, this was incredible.
25:40
By implementing these systems, you know,
25:43
you know, Stan, we used to have situations where,
25:46
you know, two days before the end of the quarter,
25:49
somebody says, oh, we didn't get the deal or oh,
25:52
we'd, we messed this up or something happens.
25:54
We got blindsided all the time.
25:57
And so by implementing these systems,
26:00
it really helped us scale the company.
26:02
And so that's one of the key chapters in the book I talk about
26:04
is how to scale by using systems.
26:08
There's really four things we need to think about in scaling.
26:11
It's the story, which we talked about the X factor.
26:13
That's the story, how it changes from start,
26:16
the people, including yourself and who's around you.
26:20
That's interesting.
26:23
The money and the systems.
26:25
So we've talked about the story.
26:26
We've talked about the systems.
26:28
Let me also add to you about the people.
26:30
The number one reason why most companies in America fail to scale
26:35
is because of the entrepreneur themselves.
26:37
A big shout out to HubSpot and the HubSpot podcast network
26:40
for sponsoring success story.
26:42
If you enjoy success story,
26:43
you're going to enjoy a ton of podcasts
26:45
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26:47
including hustle and flowchart hosted by Joey Fear.
26:50
The hustle and flowchart podcast with Joey
26:52
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26:54
So it gives you the freedom and fuel for your life.
26:57
You're going to join Joey as you discuss his systems,
26:59
mindset tweaks, reframes, and strategies for entrepreneurs
27:02
and really anyone to enjoy the process of being in business
27:06
and having fun.
27:07
This isn't for entrepreneurs looking to build a billion dollar business.
27:11
It's for somebody who wants to build the lifestyle.
27:13
Somebody who is looking to build systems that work.
27:16
Listen to hustle and flowchart wherever you get your podcasts.
27:19
That was going to be my next question
27:21
because I was curious if you feel that all entrepreneurs
27:25
should stick around for the life cycle of a company.
27:29
You did it successfully,
27:30
but I have seen instances where entrepreneurs
27:34
maybe aren't the right fit.
27:36
They're good for 0 to 5, 0 to 10,
27:39
maybe even 10 to 50, maybe even 50 to 100,
27:43
but post IPO or even pre IPO,
27:46
are they the right fit to bring that sort of over the finish line?
27:49
You saw that post about Paul Graham.
27:51
A founder mode,
27:52
brilliant manager.
27:53
Yeah, exactly.
27:54
Yeah, no, I'm well aware of it.
27:55
And actually, so I live in a world right now
27:58
where we run a family office.
28:00
I've invested in 20 companies.
28:02
And I've removed CEOs at certain stages
28:06
and brought in professional managers.
28:08
At the same time,
28:10
you know, when I was there,
28:11
I felt I had the capability of delivering the goods,
28:14
but you could see people were saying,
28:16
well, not too young.
28:17
Maybe we need to bring in a professional manager.
28:19
So I've sort of played both sides.
28:21
And I just think it really depends.
28:23
But I also believe that every entrepreneur has the ability
28:26
to be in founder mode and to scale the company
28:29
if they so choose.
28:31
But the first thing they need to do is understand
28:33
who they are and what the personality profile is.
28:36
And we talk a lot about personality profiles in the book.
28:39
And then what we want to do,
28:41
if we really want to scale,
28:42
we want to hire executives around us,
28:45
who have a particular personality profile for that position.
28:49
And I think the personality profiles
28:50
are actually more important in skills
28:52
and even experience.
28:53
Although I have to say,
28:55
experience does matter.
28:56
We're going to want to hire people with runway.
28:59
That's Jack Welch.
29:00
Welch is common.
29:02
But we don't want to hire people.
29:03
If we're in a million dollars and we want to go to 10 million,
29:05
we want to hire the people
29:06
who are working at the 10 million dollar company.
29:08
We don't want to hire the people at the billion dollar company.
29:10
It's too extreme.
29:11
I've seen that mistake happen as well.
29:13
Would you bring executives down into smaller businesses?
29:15
But what we do want to do is we want to make certain
29:17
we hire a team of people around us
29:21
that have the right personality profile.
29:22
And under the disc methodology,
29:24
it's dominant influence,
29:26
stability and conscientiousness.
29:28
Under that philosophy,
29:30
we're going to want to hire D-somethings.
29:32
So if you want people to be proactive,
29:36
you want them to be entrepreneurial,
29:37
you want them to create wealth for you,
29:40
then you need to hire the right leader.
29:42
And having a leader who's a DI or a DC or a DS,
29:46
that's critical for helping you scale your business.
29:48
And that's what we did at Hostopia.
29:50
Literally, we had so many Ds around the table.
29:53
It was dangerous.
29:55
I joke about this, Elliot Nas,
29:58
who's the CEO of Two Cows today,
30:00
we hired him back in 1998.
30:03
He's to drive me nuts.
30:06
He's constantly fought me on everything.
30:10
He's just like, it doesn't.
30:11
That's like an A.
30:11
You're getting an A personality.
30:12
That's an A plus person,
30:14
a person personality player.
30:16
Like, they have their own opinions.
30:18
Yeah, and a lot of people,
30:19
they make the mistake of the drawing,
30:22
drawing, drawing, drawing, and they want people just to listen to them.
30:24
They want the A-sayers.
30:26
Well, no, I'm here to say bring in the people
30:28
who are going to challenge you,
30:30
bring in those people with that personality
30:32
and what's fascinating is they go and create wealth for you.
30:35
Well, in this repeat section of the book,
30:37
we start talking about how serial entrepreneurs
30:40
can create wealth not only by hiring executives around them,
30:44
but by hiring CEOs to run the companies for them
30:47
and finding the right business profile.
30:50
The last component is money.
30:53
And it's really important to try to raise the right type of funding
30:57
for the right situation.
30:59
And we've done everything from venture capital
31:01
to the IPOs, as you know,
31:04
to the REG-D, which is a private placement memorandum.
31:09
And haven't done the REG-CF yet,
31:11
which I am absolutely fascinated by.
31:13
The REG-CF, which you can raise up to $5 million.
31:16
And it's essentially allowing you to solicit
31:18
securities, and you can do this, actually,
31:21
along with the crypto coin too, if you're going to get into that,
31:24
or you don't even have to use the coin.
31:25
You know, but I'm seeing real estate projects that are tokenizing
31:28
and we're seeing some fascinating stuff out there.
31:31
It was really hopeful SPACs would make a bit of a,
31:34
you know, where it would be well.
31:35
I mean, they basically, they blew up completely blew up.
31:38
And, you know, that was an issue.
31:41
But it's been very hard for entrepreneurs to
31:44
raise money unless you go down that venture private equity group.
31:49
And I, in a book, we talk a lot about venture capital.
31:51
And we used venture capital.
31:53
And I think the right type of company should use venture capital.
31:55
Let me ask you a question, Scott.
31:57
What percentage of companies that receive venture capital fail?
32:01
That's a great question.
32:02
I've never heard a question phrase like that.
32:04
I mean, you hit the lottery, right?
32:06
You hit it big, didn't you?
32:07
I feel like, I feel like I'm going to get,
32:09
I feel like I'm going to get sidelined by the answer.
32:10
I feel like, I feel like if the average entrepreneur's start
32:15
is like 90 or 95 percent of companies fail,
32:18
I feel like the ones that raise,
32:19
it's not that different of a number.
32:20
Can you give me a number?
32:22
All right, 85 percent.
32:23
Oh, yeah, yeah, he's sort of know where I was going with that.
32:26
75 percent of venture backed companies fail.
32:31
And there's reasons for that.
32:33
And because they push companies in a certain way,
32:35
I'm working with a company that raised $60 million in venture funding.
32:39
And the entrepreneur put a few million dollars
32:41
of his family money in.
32:42
He was second to the funding from the venture capital
32:45
because there's something called liquidation preference.
32:48
And if you ever raising money,
32:49
please look up that definition of what that is.
32:51
But basically, they get paid out first.
32:54
You know, over 90,
32:56
though, in this situation I'm working with,
32:57
that gentleman completely wiped out 99.9 percent
33:00
after working for 15 years.
33:02
And the company still has value.
33:04
It might be worth 20 million dollars.
33:06
But they raised $60 million in venture capital.
33:08
They get paid out first.
33:10
The delusions are going to eventually come
33:11
or the eventually is going to wipe out
33:13
the original investors or the original founders.
33:15
So you have to be really cautious of this.
33:18
But under a scenario
33:19
where all the investors took the same risk,
33:22
he would have walked to he had about 40 percent
33:24
of the company, he would have walked
33:24
their way with $8 million.
33:26
That wouldn't have been the end of the world.
33:28
Right? That's not the end of the world.
33:29
A lot of entrepreneurs don't pay,
33:31
don't know this liquidation preference.
33:34
They don't know this world at all.
33:36
I mean, unless you've done it before,
33:38
you don't, you're raising money.
33:40
Raise it on a safe or something like that.
33:42
You don't really understand who gets their money out first.
33:44
Or maybe you do.
33:45
But at that point,
33:46
somebody's saying yes to you.
33:47
And you're so damn excited about the fact
33:49
that somebody's saying yes to you.
33:50
You're not thinking 15 years down the road.
33:53
You're thinking, oh my god,
33:55
the entrepreneurship just worked out for me.
33:58
I just found a way to raise money.
34:00
This is what everybody wants to do.
34:01
Like how could I not be successful at this point?
34:05
I think there's like so much emotion
34:07
and a little bit of delusion
34:09
when entrepreneurs are raising money.
34:12
They're not paying attention to all,
34:13
they're not paying attention to this.
34:15
Because I know entrepreneurs have raised money
34:16
and they say, well, we raise this at this valuation.
34:20
At first, I'm entrepreneur.
34:21
Like you're not going to have any company left in 10 years
34:24
if you keep this up.
34:25
I know a kid who had a billion dollar company
34:27
at the age of 28,
34:29
who did know shit
34:31
and got locked up for 16 months.
34:34
Bad things do happen.
34:36
The second thing I learned is liquidity or control.
34:39
Liquidity or control never give up control or a company
34:42
unless you're getting paid,
34:44
unless you're taking chips off the table.
34:46
Yeah, spend 10 years building that company
34:49
in 10 weeks screwing it up.
34:51
So you're right.
34:52
We don't know this kind of stuff.
34:53
That's why people listening to your show.
34:55
They can learn about these kind of things
34:56
and be aware of, at least be aware of these kind of things.
34:59
You know the night over 90%
35:01
I'm giving you another stat.
35:02
Over 90% of companies in the Inc. 5000
35:05
do not have venture capital.
35:07
There's this notion that we all have to have venture capital.
35:10
Here is the vast majority of fastest-growing companies in America
35:14
do not have venture capital.
35:16
There are other methods.
35:17
My favorite method if you do need to raise money
35:19
has been the REGD
35:21
where you can sell securities to sophisticated investors.
35:25
And we did this at .club.
35:28
That was one of the next companies.
35:30
.club was an alternative to .com.net.
35:32
So if I actually look through all the companies,
35:34
you've done a lot.
35:36
So yes, you got two cows.
35:38
You got internet direct, hostopia, you geeks for less.
35:42
Geeks for less 800 people.
35:43
Don per lab.
35:45
And then startup club.
35:46
That's a shirt you're wearing right now.
35:48
So you've done, you've done a,
35:49
you don't forget pod.com.
35:51
pod.com.
35:51
Yeah, that's actually still around.
35:52
That's that's live right now.
35:54
pod.com.
35:55
So you've done, you've done a, so I mean,
35:58
if you look back at all the companies that you built,
36:01
was there one that you enjoyed building
36:05
just the way that you built it more than others,
36:07
one that was like the least stressful on you as an entrepreneur?
36:11
.club.
36:12
And I'll tell you why it's my,
36:14
first of all, it's a recurring revenue business.
36:16
It's digital.
36:18
You have unlimited inventory.
36:21
And we raised them.
36:23
We did everything right from the beginning.
36:25
You know, that coach I told you about,
36:26
we brought in, we brought them in from day one.
36:29
We set up core values from day one.
36:32
We set up the goal setting from day one.
36:35
It was a micro global brand.
36:36
We traveled to about 50 countries.
36:39
Fortunately, we sold that company to go daddy
36:42
about six months before the tech rec in 2022.
36:45
So I think it's wild.
36:47
Everybody keeps saying that.
36:48
That's why I was asked to speak at MIT
36:51
on how I always seem to get the timing right.
36:55
Well, if you remember going back to that big,
36:58
you know, I think I think it,
36:59
those failures that we have,
37:01
like they really are scars of our past
37:03
that help us guide us through those new ventures.
37:06
And I was so scarred,
37:09
but at loss, so paranoid of liquidity or control
37:13
that and so paranoid of bad things do happen.
37:16
You do remember 2021, right?
37:18
When there were $500,000 board apes,
37:22
when GameStop was hitting $300 a share,
37:25
when SPACs were going crazy, absolutely crazy.
37:29
And then 2022, it all came apart.
37:32
The crypto crash, the tech rec SPACs collapsed.
37:37
So in the book, I talk about exit.
37:41
And I talk about 50% of values on exit is timing.
37:47
And we've actually now come up with a time to sell index,
37:51
which we do on our monthly newsletter.
37:53
And we come up with it every quarter.
37:56
We update it.
37:57
And by the way, right now, it's at 3.6 out of 100.
38:00
And it's based on empirical data.
38:02
And this is only to send you a signal
38:04
that when you see the time to sell index is here,
38:08
exit stage left.
38:09
It's time let other people take some money off the table.
38:12
Let other people take your company to the next level.
38:15
It's okay for other companies to make money.
38:17
In fact, if you look at all of the companies that we've sold in the last 15 years,
38:23
most of them were to strategic buyers.
38:26
17 times EBITDA.
38:28
The dot club one, I'm not allowed to talk about,
38:30
but I'll tell you, it was a lot higher than that.
38:32
I mean, you look at these valuations and they're incredible.
38:35
Because like, for instance, when we sold the go daddy registry,
38:38
they have way more distribution than we have.
38:40
So they can take our product and they can distribute it
38:43
to a much broader audience.
38:45
So when you're thinking about exit,
38:47
it's important to think about the companies that you're going to sell to.
38:53
The least favorable are the private equity cash flow companies.
38:58
Not saying you shouldn't do these if that's all your only option.
39:01
But that they're the least, my least favorite companies to sell to.
39:05
Is it because everything's based on EBITDA.
39:08
And when you have a high interest rate environment,
39:10
they've got a borrow.
39:11
You generally they would borrow to 75% of these acquisitions.
39:15
Now, I know it's come down in recent years and the interest rates are up.
39:18
So they might be paying 10, 11% interest rate.
39:20
So they need to make 18, 19% interest rate.
39:22
So they need to have that's a five times earnings on a multiple on a company.
39:27
It's all based on the earnings multiple.
39:31
Whereas a competitor, that's the second best,
39:34
they can come along and they can buy your business based on somewhere in between
39:39
the consolidated value and your street value.
39:42
Right? That earnings multiple.
39:44
So they'll give you a bit of a premium because they're going to reduce the cost.
39:47
But the best, the best are the strategic buyers.
39:50
You can identify those and you position yourself to sell to those companies.
39:54
You'll make, you'll do so much better.
39:57
And in the case of hostopia, when we sold,
40:01
the tax rate was 15% capital gains.
40:04
And we were paying 42% corporate tax.
40:07
So it would have taken us 30 years to get back the money
40:11
based on a 17 times EBITDA multiple selling at that point.
40:15
Because of the higher tax rates associated with income tax and earnings.
40:21
So we're covering a lot of ground here.
40:23
But you can see how from start scale exit repeat, there is a formula.
40:27
There is a for and there's a whole life cycle to this company that you sort of perfected
40:31
after going through all these different kinds of exit events.
40:35
Because I don't think many people have access to,
40:39
okay, we've we've we've IPO this company.
40:42
And this one was strategic.
40:43
Like you've gone through all these different iterations of a company life cycle.
40:47
So it lets you know, you have the experience as to what you like,
40:51
what you don't like, what's best for the entrepreneur,
40:54
what's best for like financially, what's best for the entrepreneur after they've built
40:57
this company spent their whole life trying to scale this.
41:00
So I think that this is the formula for, hey,
41:03
this is I've gone through all these different permutations of companies.
41:07
This is what I think you should do.
41:09
So it's start scale exit to strategic and then repeat that process.
41:13
And that's really the net from all the different things that you've done.
41:17
Yeah, and we've learned a lot of patterns at start as well.
41:20
So for instance, we learned that the companies that you really want to think about
41:23
launching are highly scalable, that you can build a moat or defense around that company,
41:29
and that catch a wave.
41:31
And this is interesting because probably one of my mentors,
41:35
I read his book back in the 90s, Jeffrey Moore,
41:38
who wrote Crossing the Casm.
41:39
Inside the tornado, we had the chance to interview him.
41:42
And it was interesting interviewing him because I had lived it
41:47
for the prior companies that we had started.
41:50
But really, one of the things that we've been really good at is
41:53
figuring out how to catch a wave,
41:55
how to, how to cross a chasm and win in a tornado.
42:00
And so when the book we go into that formula as well,
42:03
and we really talk about the things you can do to win in a tornado,
42:07
I mean, there are basically three major things.
42:09
One is make it easy, the easier you make your product or technology,
42:14
the better off you'll be.
42:15
I like Jeffrey Moore.
42:16
He has, you know, he has whoever delivers the fastest wins.
42:22
Right?
42:22
And you think about those AOL discats back in the 90s,
42:26
they just they send it or they killed coffee.
42:28
Distribution is everything.
42:30
At Potacom, we're focused now on distributing products faster.
42:34
So we come up with these really cool trendy dog beds and rugs and and blankets.
42:40
But then a year later, two years later, we're seeing finding them in Costco.
42:43
Right?
42:44
So so we've changed our formula now.
42:45
We're we're dramatically increasing our distribution.
42:49
So when we get a product that comes to market is a trendy product.
42:51
It's trending up and we've got to put three or four right now that are hitting
42:55
really nicely.
42:56
We're scaling those really quickly.
42:59
The third thing is focus, be a laser beam.
43:03
I invested in an AI company called Pensilla.
43:06
And when they were first developing, it's been two years now in development.
43:09
And they want it to be sort of like a Canva 2.0.
43:14
So you guys are going to fail at this.
43:17
They they brought it down to become a Canva for e-commerce companies.
43:21
They're integrated with more e-commerce,
43:23
super niche, super laser beam focused.
43:27
If you're the best in the world at it, you're going to win.
43:29
You're going to with the early majority in tornado once,
43:33
they want products of services that are the leading products.
43:36
You know, when you're in the innovator status, when you're early on,
43:39
you can sort of compete in the market where you're competing for innovators.
43:43
But early majority, they tend to be a little followers and they're very pragmatic.
43:47
So they really want to grab on his technology, the pragmatic and that succeeding.
43:51
We we talked about hostopia and how the dominoes fell.
43:54
Well, we had to win that earthland contract.
43:56
We had to have that X factor.
43:58
And then we had that then we were able to win all the other telecoms and then sell the companies.
44:02
One thing you mentioned is very important, though, catching a wave.
44:06
How do you identify a wave?
44:07
Okay, so I have really cool ideas around this.
44:10
First thing I do is I always live in the future.
44:13
Brand new iPhone came out four days ago.
44:15
I always have a late, I mean, damn.
44:17
We were quick.
44:17
Oh, yeah.
44:18
Oh, yeah.
44:19
I mean, like people in my office are like, I'll get you a new iPhone call and like,
44:23
hey, it's so they're already ordering the new iPhone because I know I want the,
44:26
I want the latest technology, got the glasses, got the fast.
44:30
I've always had the fastest internet.
44:32
I was the number 984 for the Model X, right?
44:35
You know, I'm always trying to live in the future.
44:38
I call it live in the future.
44:39
Be part of the future because when you're there, you begin to see opportunity.
44:43
You know, I have every AI subscription out there.
44:45
Everyone, I mean, AI, I do.
44:48
So, and if you're an entrepreneur today,
44:52
really, this is probably one of the best times in history to be an entrepreneur
44:55
because you can do so much with AI.
44:59
You know, I like in it to Tony Stark, you're familiar with Iron Man.
45:02
Of course, I drive on that, of course.
45:04
He drops on that suit.
45:06
Yeah.
45:06
That's like me at the office now.
45:08
I strap on that suit and I'm doing legal contracts.
45:11
I'm not a lawyer.
45:12
I'm doing, I'm doing marketing things.
45:14
It's just amazing calculations.
45:16
It's amazing what you can do with AI.
45:18
And if you're not embracing it, you're going to fall behind.
45:20
So, that's the one thing I will say is you want to really focus on
45:25
using this the latest technology.
45:27
And then you'll see opportunities.
45:28
You'll be in your particular industry.
45:30
There'll be opportunities at AI.
45:32
And then you can apply those and actually build a company
45:34
around that concept as well.
45:36
So, that's it.
45:37
I mean, that
45:39
is critical if you want to see what you're on.
45:42
That's also what's happening.
45:44
Exactly, I tell you the funny story.
45:45
And here's the thing that was,
45:46
because I worked at that Fortune 500 company.
45:48
Yeah.
45:49
You know, when we were launching, they were launching .club.
45:52
They were deregulating the space.
45:54
So, sometimes it's a technical shift.
45:55
Sometimes it's a legal shift.
45:57
Congress is making a new legislation to change something.
46:00
So, enter the entrepreneur.
46:02
That is the point where we can move faster,
46:04
quicker than the big companies.
46:07
I reached out to the company that bought our company
46:09
because they, you know, obviously, I had,
46:11
I had, this was a similar company.
46:13
They did similar services.
46:15
So, do you want to, I talked to CEO.
46:17
Do you want to launch these TLDs?
46:19
I want to launch one.
46:21
Would that be okay with you?
46:22
And he says, absolutely, it's too risky for us anyway.
46:24
We don't want to go near it.
46:26
And whatnot.
46:27
And so, I said, okay, I'll launch it.
46:29
And this is a big company.
46:31
It's all big company in the world.
46:32
Hundreds of millions of dollars a profiteer.
46:34
Yeah.
46:34
And they thought it's too risky to do.
46:36
So, here's a software that says, okay, well, I'll do it.
46:39
So, we did it.
46:40
We raised $12 million.
46:41
We sold it to go at any years later for a huge multiple
46:44
for our investors.
46:45
And that's it.
46:48
They're fearful of technology.
46:49
So, if you, as an entrepreneur, if you can get that window,
46:52
you've got a small window.
46:54
Now, I think AI is moving faster than I've seen
46:56
with a lot of technological shifts.
46:59
But it also represents the greatest technological shift
47:01
in our lifetime.
47:03
It is the biggest.
47:04
There will be AI will make more millionaires
47:07
than any other technological shift in history.
47:10
Now, you have a story.
47:11
I do have a story.
47:12
I was laughing because I just came back from Boston
47:14
and you saw me at inbound.
47:16
And I did two sessions at inbound.
47:18
And one was on like marketing and content and brand,
47:21
which is my thing.
47:22
I live and breed marketing and content right now.
47:24
And obviously, by the way, so AI is fully integrated
47:27
in my post-production workflow.
47:29
Like every single piece of AI that you can possibly imagine
47:32
that's consumer facing.
47:34
I use it in some capacity for audio, video, audio improvement.
47:39
So, I use Adobe to improve the sound coming out of these mics.
47:42
So, if we were in like a windy field,
47:44
it would sound like we're in a studio.
47:46
Maybe because we're actually in a studio,
47:48
gives me like a 5% increase in audio quality.
47:51
But the same AI could be used
47:52
if you're recording this in the middle of a construction site.
47:55
So, it's, and then obviously, long-form video,
47:57
gets turned into a whole bunch of short-form with opus.
47:59
I mean, perplexity is just like a sandbox for everything else
48:02
for all the kinds of chat generated.
48:05
You know, like a generative chat that you want to create.
48:07
So, my team uses AI in all their post-production workflow.
48:11
It kind of like as a first pass at the creative process.
48:15
It's the best way to put it.
48:16
It's ever going to be the final solution
48:18
that is not going to be good enough to put out and post.
48:21
But it's going to be very good at getting 80% to 90% of the work done
48:27
at, you know, at a fraction of the cost or the time or the energy.
48:31
But to show you how people still aren't picking up AI,
48:37
I was asked to do a talk at inbound, not just on content.
48:41
The second talk was on AI,
48:42
only because I use it in my post-production workflow.
48:45
I'm not a developer.
48:46
I'm not technical.
48:48
I literally just use tools that I pay between 20 to 30 bucks a month
48:53
and that already positioned me better to speak
48:57
about how AI can impact your marketing strategy
48:59
than a room full of 10,000 marketers,
49:04
which is wild to me.
49:05
And the point is,
49:07
I should not be the one teaching AI.
49:10
I should not be the one teaching about AI.
49:13
This has been around for a year and a half
49:15
and still marketers for large organizations
49:18
are not using it and are not understanding it.
49:20
And our listening to a guy like me
49:22
who is solo printer,
49:24
basically with a very small team doing a podcast
49:26
who just nerds out at AI,
49:28
that's the person who's teaching them.
49:30
That's not, that's, it should be the inverse.
49:32
But I think the companies are very slow to adopt.
49:35
This is not like a,
49:37
it's not to say that all companies are not adopting
49:39
to some are,
49:40
but I think that,
49:42
I think that a lot of companies are very hesitant
49:45
to include it in their workflows.
49:46
And I think that's a mistake.
49:47
I think that's an opportunity for entrepreneurs
49:49
and it's an opportunity for disruption.
49:50
But I think it's a massive mistake.
49:52
So I don't know if you're listening
49:54
to this in your company,
49:55
like start figuring out how to use it.
49:57
And my favorite little hack recently
49:59
is our custom GPT's.
50:00
I don't know if you've been playing with custom.
50:02
I have, and you have,
50:03
and so it's all due to agents now.
50:04
You've used it for two different purposes.
50:06
You can use a private one.
50:07
Yes.
50:08
So first you just open up a private,
50:09
it takes 10 seconds,
50:10
clicked on it,
50:11
uploaded a contract.
50:12
Now anytime I have a question for that contract,
50:14
I just go to that custom GPT.
50:16
I asked the question is if it's a lawyer.
50:18
And that custom GPT knows that contract
50:21
better than your lawyer.
50:22
We had a very big contract at PAW.
50:25
PAW.com.
50:26
And so we went into it.
50:28
I asked it 100.
50:29
And they keep beating it up.
50:30
I keep asking and asking and asking questions.
50:32
And then we said, okay, this is too big to just let AI run it.
50:35
So we went to lawyers.
50:36
We had them do it.
50:37
They came back to the exact same answers.
50:38
I thought it was fascinating.
50:39
Second thing is you can post your GPT's in a store now
50:42
and make them public.
50:44
Yes.
50:44
And by the way, you don't have to be a programmer at all.
50:47
So like you said, you can't program.
50:48
I'm horrible.
50:49
I'm not a geek.
50:50
I only aspire to be one.
50:51
Right?
50:52
So I go in there and I create these little apps now.
50:55
And we did this for a workbook.
50:56
So we just start scale exit workbook.
50:59
And is that almost done yet?
51:00
That's live.
51:01
It was actually was the best seller last week.
51:02
I was out of that because when we spoke last time,
51:05
it was somebody who was ripping off your book on it.
51:07
That's right.
51:08
They were doing workbooks.
51:09
Oh yeah.
51:10
That's, you know, whatever.
51:11
That irritated me because their quality was so bad.
51:14
So we did.
51:14
We put in all these exercises.
51:16
We put in QR codes and domain names.
51:18
Like you can go to personally profile AI.com.
51:20
And you can actually use a GPT
51:22
that will tell you your disk profile,
51:24
your Myers big profile,
51:26
and then compare you to other celebrities as well.
51:28
And you can do that with all your staff and it's free.
51:31
This is what we're talking with.
51:32
This is the world we're moving to.
51:33
And I simply answered questions and sat there
51:35
and spent and there's some tricks you need to do to do it.
51:38
Like to really make it usable.
51:39
Like make a multiple choice.
51:41
Start with question 10.
51:42
Go down and question one.
51:43
You know, some tricks you need to do.
51:44
But it's a really cool hack
51:46
that should be the next one you play with.
51:47
I love that.
51:48
But why do you think, okay,
51:49
so I'm actually very impressed with your book.
51:52
And I don't usually,
51:53
I don't usually like completely focus on the book
51:55
when we do a podcast.
51:56
But how many, how many you send me some accolades
52:01
or some rankings or some top charts
52:04
you hit with this book?
52:05
And I'm super curious where this book is
52:08
is ended up right now.
52:10
Because I actually, I can probably pull it up.
52:12
Well, I'll tell you, I can tell me.
52:14
Tell me, yeah.
52:15
I think 30 years is a serial entrepreneur.
52:17
But I'm also curious why.
52:18
Yep.
52:19
Why this book did so well.
52:21
30 years is a serial entrepreneur.
52:24
10 years writing the book.
52:25
We interviewed over 200 people.
52:27
That's insane.
52:28
200 people's 10 years writing the book.
52:29
I know, it's insane.
52:30
It did it on airplanes.
52:31
You know, I was,
52:32
there's one passage in there about.club
52:34
which was written 10 years ago.
52:35
So I kept the exact exact thing
52:38
because this was before.club launched.
52:40
I wrote it.
52:41
It was fascinating.
52:42
And so it was like kept exactly.
52:43
So we're going to follow this.
52:44
The the start scale.exe or peak methodology.
52:46
We're going to focus on story,
52:47
people, money and systems.
52:48
And it was it's there.
52:50
So we, we also of the 200 people we interviewed,
52:54
phenomenal people.
52:57
And only about 50 have actually made the book.
53:00
We also wrote the book for ADHD entrepreneurs.
53:04
There's 58 chapters.
53:05
And they're very short and digestible.
53:08
And by the way, it's stories.
53:09
It's the stories.
53:10
My stories and the stories.
53:11
Those other 50 people who were interviewed for the book.
53:14
Then we also put in illustrations,
53:16
30 illustrations.
53:17
We color coded it.
53:18
Forbes books did a phenomenal job.
53:21
Putting this book together and making it look like a world class book.
53:24
It's been number one on Amazon in 15 categories.
53:28
It's when 13 awards globally.
53:31
And it came out 11 months ago.
53:33
It's already won 13 awards.
53:34
It's the most awarded book on entrepreneurship in 2024.
53:39
That's for that.
53:40
Congratulations dude.
53:41
Thank you.
53:41
It's phenomenal.
53:42
And you know, you do these things.
53:43
I see a lot of my friends.
53:44
They launch these books and they're people are famous people
53:47
watching these books.
53:47
Why don't they?
53:48
And they hardly sell out of that.
53:49
I get them all my thought.
53:50
Cats caught.
53:51
And they look at the like last week.
53:53
We're a number one in every category.
53:55
We were the number four.
53:57
We were number one in entrepreneurship for a week.
53:59
And we were number four of all business books in the United States.
54:03
Last week.
54:04
It was up there with Elon Musk and start scale eggs at the peak.
54:06
Right.
54:07
I wanted that was fascinating.
54:08
I think that there's a lesson there.
54:10
I think you're putting 10 years into something.
54:13
Like there's so much competition at the bottom and in mid market in terms of like mediocreness.
54:19
There's so much competition when you put up mediocre content.
54:22
There's so much competition when you build a mediocre company.
54:25
But when you put so much time and energy into something.
54:29
And you are in like the .001 percent of individuals.
54:33
Which I think taking 10 years to write a book definitely puts you.
54:36
I had some other businesses to run too.
54:38
Yeah, I know.
54:39
But there really is not a lot of competition at the top of the market when you put
54:43
that much energy or effort into something.
54:45
And I think that we are in an era where everyone's trying to do the least and expect the most.
54:51
And I think that the one and people are so frustrated because
54:56
they don't stand out on social or they don't feel like they're.
55:02
They write a book in a couple months and they put it out and nobody buys it.
55:06
Why does, why does effort not, minimal effort not equal output or outcome?
55:11
I think it's really because
55:14
like anything you just have to put a lot of yourself into it.
55:17
And the market recognizes when you put a lot of yourself into it.
55:21
I believe that's why it's so successful because you spent so long and so much
55:25
energy and blood as wet and tears and insight and thought leadership and
55:28
experience goes into it.
55:31
Yeah, I mean, and I think a lot of very successful entrepreneurs like myself,
55:36
they write books and it's all about them.
55:38
This book is not an autobiography.
55:40
Yes, there are the short stories.
55:42
There's still stories are in there, right?
55:44
There are stories in there, but it's not about me.
55:46
It's about the reader who wants to learn how to start a business.
55:51
It's about the reader who wants to learn to scale the business.
55:53
It's about a reader who wants to learn to exit.
55:55
And it's also about the leader who wants to know how to do this over and over again.
55:59
So it's really if it's a philosophy and it's it's it's different.
56:02
It's a different philosophy to then a lot of other books out there.
56:05
You know, I read the very beginning of the book that if you want to become a unicorn,
56:08
this is the wrong book for you.
56:10
This is not this is all about building a solid foundation, a base,
56:14
building something up, selling that off, taking some money off the table
56:18
because bad things do happen.
56:20
And then repeating that process over and over again.
56:22
See, entrepreneurship, you are not a CEO of one particular company.
56:26
You're not just a podcaster.
56:28
You're an entrepreneur and entrepreneurship is a trade.
56:30
And if you can learn that trade, you can increase your chances of success dramatically.
56:35
In fact, we've seen that with serial entrepreneurs,
56:37
they have a much higher chance of succeeding.
56:39
It's like almost double.
56:40
It's like 18% for first time and it's 36% for a second or third time entrepreneur
56:45
because even if they failed in the past because they've had that experience doing it,
56:50
it really is a trade and we need to learn how to sharpen that sort and
56:53
improve our knowledge on the topic of entrepreneurship.
56:57
And there's a lot of mental health challenges that we have to talk about as well.
57:00
We'll talk about that in a second.
57:02
I don't I want to just sort of tie a bow and sort of the concepts coming out of the book as well
57:06
and then we can talk about mental health and a couple other concepts.
57:09
But so just so that people are clear because we sort of
57:13
gone back and forth between I would guess I would say two frameworks because you have
57:18
start scale exit repeat but then you also have story people money and systems.
57:23
So there's a how do these two frameworks play into each other.
57:27
Okay, so in start you have to story you have to come up with the idea you have to solve the
57:31
problem so you're talking about the story and then you also have the people who do you need in
57:37
start and really it's all about the entrepreneur in start right and then you have systems they talk
57:42
about systems and start I just say just figure out your KPIs don't get too complicated so
57:47
the support components they do play a piece and any two one ago section but that changed dramatically.
57:52
I got between each section and that's how we wrote the book so you'll you'll see there's the
57:56
the story people money and systems and start and then a story people money systems and scale and
58:01
by the way it's all different in exit you wouldn't be surprised how many things you can do
58:05
as an individual as an entrepreneur to increase the valuation of your company just by understanding
58:11
the what goes into selling the company by understanding the mindset of the buyer.
58:16
I was I was on that when I did work for the fortune five-hour company I bought probably about
58:21
15 companies so I totally understand the mindset of the buyer now and so that's reflected in the book
58:26
as well. When you go through this process it starts failing to repeat what are the things because
58:32
again this is positioned for an entrepreneur not trying to build a unicorn or a billion dollar
58:37
company that even happens good for you but you're trying to build a process that it's almost like
58:42
you're teaching entrepreneurship it's not it's not just dumb luck this is a process that can be repeated
58:47
again and again and again as as you've shown as you've done in your own life but what are keeping
58:53
the end in mind or the exit in mind what are the most important things in this start process that
58:59
can impact the exit process. Well I think one of the things I we did at dot club is we actually
59:05
identified the buyer who we wanted to buy the company from day one right and we knew it was
59:10
GoDaddy right I mean they're they're the big ones really badly elephant right they wanted
59:13
and so optimal conferences and we pitched to GoDaddy met with people got to know them at the
59:18
conferences I like to when we start a company I always say you know one of the biggest challenges
59:24
when you're selling a company are the schedules and the due diligence so make certain every contract
59:30
is an virtual drive every single contract it's got you can't be scrambling at the last minute
59:37
to put documents together and we know about things can happen right and when you know they've got
59:42
20 people on the other side you got two right and that's it and it's it's it's it's it's daunting
59:47
when you go into these exit processes and it can take months and get bogged down um but no no you
59:55
do you need to when you get into deal mode it's closed mode there's no such thing as weekends or
1:00:00
evenings it's it's a football game you gotta get that ball across the line that's it and um and
1:00:06
it's start if you don't organize you know that's going to be it's going to make it that much harder
1:00:12
to actually sell the company down the road so then we also want to state your family business from
1:00:16
that right yeah we also want to state pure you know we we're running a um a software platform
1:00:21
company we would want to buy a farm and put that in the company and this is a you got to it's
1:00:26
got to be clean okay and there's some certain there are other things we need to do as well
1:00:30
for instance to get venture capital or we want to stay within the normal standards and like for
1:00:35
instance when you do give options in your company you want to generally want to do it between 10
1:00:39
and 20% of your company if you go too much higher it's going to be negative for your evaluations down
1:00:43
the road you go a little too low that can be negative as well but you generally want to be around 10
1:00:47
to 15% for options in your company so the certain standards that you can set up early on as well
1:00:53
and we talk a lot about that in the book it just it really isn't the type of book that's going to
1:00:59
tell you how to make a billion dollars and and and I I worry a lot about and I've seen too many
1:01:06
companies I've invested in too many company founders where they get Silicon Valley disease and this
1:01:11
is a term that I coined based on this concept that we get this venture funding we're gonna build it
1:01:16
out and we're gonna build that billion dollar company by the way they're pushing you they're pushing
1:01:20
you to get the 10x they want you to gamble you say want the gamble they don't want that double
1:01:25
or triple that's not what they want so they're actually pushing you and it also can lead to
1:01:30
issues in in your company and spending that you shouldn't really be doing what are my favorite
1:01:35
forms of funding is customer funded startups and we had a gentleman named John Mullins on who
1:01:40
wrote the book customer funded startup and we interviewed him for this book and I can't tell you
1:01:45
how many companies that fortune 5,000 lists use customer funded techniques use your customers
1:01:51
to fund your business um so if you look at all the all the entrepreneurs that you've invested in
1:01:58
I will talk about mental health now but the last question on this all the entrepreneurs that you
1:02:02
invested in all the all the less sort of lessons that you've learned as an entrepreneur what is
1:02:06
the biggest misconception about entrepreneurship do you see time and time again um I think that
1:02:13
everybody thinks they have a great idea but ideas are worthless actions are priceless we had a
1:02:19
situation back in um 2004 where we were traveling all over the world for the sostopia selling
1:02:26
the telecom and we go to these office perks and we we leave the beating and we try to get a taxi
1:02:32
and it was almost impossible so we're sitting in a dasha in Ukraine dasha is like a cabin in
1:02:38
Ukraine on a farm and we're diving to to drinks and stuff like that too and we're coming up with ideas
1:02:44
and we says you know what irritates us we can never seem to get a taxi well I don't we want
1:02:48
to come at the time we had a mobile development company which is developing games uh and we say
1:02:53
well but why don't we develop a company is we call it my yellow button so it's one yellow button
1:02:57
you press the yellow button on your phone and then you can see the taxi coming towards you
1:03:02
with GPS and literally the team that's back before this was three years before Uber right and
1:03:09
the team went back and we got distracted we came up with another game we never got around to
1:03:14
we never took action on it we didn't take action on it and obviously Uber and Lyft launched
1:03:18
with billions of dollars and you know now I could laugh but I still own the domain name though
1:03:22
my yellow button if you want to buy it it's 20 bucks I feel like it had a little bit more value
1:03:28
pre-Uber and Lyft than it does right now but that could be listen I've seen a lot of companies build
1:03:35
competitors that they build them be acquired by Uber or Lyft no you can do that too because
1:03:40
that's you're thinking with the exit mind that's smart there's a you ever heard of these
1:03:45
there's another strategy that I think is very interesting does these brothers do German brothers
1:03:51
have you heard of this this family and what they do is they copy ideas in the US and they
1:03:55
kick it to the German market and that's quite common as well and Canadians we can copy ideas in
1:04:00
US Americans can copy Canadian ideas I mean I think that's actually a smart idea I think
1:04:06
the very smart because you already you already know that the idea works right just bring it to
1:04:09
your market bring it to your market and I can't remember the name of them now but they've
1:04:13
done it's a few times they've done it with like Pinterest they've done it with us and other
1:04:17
billionaires so just taken US tech ideas and brought them to Germany and actually have a friend
1:04:22
right now who has taken an idea from China which is these pop up phone charger stands and now he's
1:04:31
taking he's bringing it to the US and basically you just you're walking in a stadium or an airport
1:04:37
and your phone's dying there'll be a little pop up and there's like 20 different ports
1:04:42
do you plug your phone to apparently they're everywhere in China now he's bringing that over to
1:04:46
the US so I mean there's something to be said for not having to like reinvent the wheel when it comes
1:04:51
to businesses as well because the the ideas that work they're all already out there it's just like
1:04:56
he said it's action it's all about that it's all about action so talk to me about mental health
1:05:03
what do what what what plays entrepreneurs I know as an entrepreneur I haven't done what you've
1:05:09
done but already what I've done in my short career very stressful very lonely yeah it's a lot
1:05:17
it's a lot I like there's I mean I'm fortunate that I have have Gina too and I feel like that's
1:05:23
you know having somebody who who sort of brings you out of the anxiety and the stress when
1:05:29
something bad happens just remind you that it's not so bad and you know life's going to go
1:05:33
wanting that's very important as well I think I have I think I have a very strong mental
1:05:38
fortitude I don't think that I don't even deal with big issues but I know that some of the issues
1:05:42
that I do deal with I think that would really stress out somebody who's only ever worked a nine
1:05:47
to five w two before so I don't think mental health is spoken enough about enough with entrepreneurs
1:05:54
and I think that I think it's something that we should bring up I know you have stories as well
1:05:59
but even talked about from your own personal experience dude I haven't lost $130 million
1:06:06
dollars I haven't taken a company public I don't even know how I would deal with those situations
1:06:13
I'm sure I've managed but how about yourself like when you went through that
1:06:18
yeah absolutely and you know that's this is why we had to have a chapter in the book on mental
1:06:23
health because and by the way it's it's the last chapter of the book the formula of success yeah
1:06:28
you can lay out all these formulas but if you don't deal internally with what goes on this is a
1:06:32
roller coaster you're launching a business it's a really off thing to do and those downs I mean
1:06:39
sure the highs still pretty good right yeah the downs are nice down those down periods are very
1:06:44
hard that the nervous is the payroll the the fact you might lose your home the interest rates going
1:06:50
up the external factors I mean it's very stressful um 49% let me tell you something about entrepreneurs
1:06:58
there is they are neurodiverse in a lot of ways and that neurodiversity is a positive and
1:07:02
and sometimes can be negative okay um 49% of entrepreneurs have some form of mental illness 30%
1:07:12
have depression 29% ADHD 11% have addiction issues 9% are bipolar the fact is we have these
1:07:25
things some of these things are talent for us and and and help us be successful and some of these
1:07:31
things can be dangerous I have a I had a good friends here in South Florida he had a company he'd
1:07:37
run more and for about 15 years was a real estate was almost like buy your ugly houses type companies
1:07:43
and he ran his company for 15 years he had a hundred employees on Friday he laid them off
1:07:49
this was about eight months ago and because he industry it's a gun up nobody was much but selling
1:07:54
homes anymore in his business he had a hundred employees Friday he laid all his people off on Tuesday
1:07:59
he committed suicide and I don't think it needed to happen because this gentleman
1:08:05
was so talented at creating and building businesses yes he needed to shut the company down yeah
1:08:12
the industry it took him out external factors but he could have come back down the road when
1:08:16
the industries came down or he could have launched their businesses we need to talk about this we
1:08:21
need to surround ourselves with others in a community you know I'm belong to an organization called
1:08:28
the entrepreneurs organization every month eight of us get together and we talk about our personal
1:08:34
family and business issues there are incubators out there there's a community out there and I think
1:08:40
the more that we help get help from others the more we talk about it I think the better it is
1:08:45
the reality is though I can talk like this but you know and you know but there's only a
1:08:50
shade story too and we talk about that in the book and how unfortunately he he's a billionaire
1:08:55
any any he dies we don't know if it was accident or suicide but we know is definitely mental health
1:09:01
challenges the reality is entrepreneurs they're strong individuals they're perfect they live the
1:09:08
perfect life and and it's hard for an entrepreneur to do that it's hard for an entrepreneur to say look
1:09:14
I have an issue but I think if we can adjust like I want I ask entrepreneurs to identify their
1:09:20
personality profile try to identify your own neurodiversity right and use that to your advantage
1:09:26
right if if if you know addiction is an abit of an issue and for me it's buying domain names
1:09:31
it's like an addiction but how do I use that to my advantage right how do I take that and use
1:09:36
that to my advantage the same time how do we address the negatives of entrepreneurship the ups and
1:09:42
the downs and it's not just you it's your family it's your family's good my wife has gone through
1:09:50
30 years of hell you know up and downs and great yeah we've landed well at the end of it all
1:09:57
but the reality is it's not easy but a lot of rough times you know in our in our in my career
1:10:05
yeah it's it's not easy but but I think it's important to find people that you can get
1:10:11
to talk to about this in a safe environment and there are people out there there are groups and
1:10:17
organizations out there that can help you do that I think it's also important to understand that
1:10:22
no matter what you're going through this is sort of what I was alluding to with when when
1:10:28
sort of Gina pulls me back from shitty situations first of all it's not as bad as you think this
1:10:34
because life life does go on and second of all this somebody who's dealt with that just at a
1:10:39
bigger scale who can probably help you navigate it and I think that that is very hard for the person
1:10:46
living in the situation to understand but again if you have friends who have gone through this and
1:10:53
who've dealt with it all of a sudden it just puts it in perspective it helps you sort of like
1:10:57
like zoom out a little bit and understand that whatever's happening right now
1:11:02
yeah you shut down a company with 100 people but there's companies that laid off 3,000 people
1:11:10
last week and it's not to say it's a shitty circumstance but it definitely doesn't warrant you
1:11:15
taking your own life like there's so much on the other side of that the fact that you could have
1:11:20
done that the first time literally I mean this is what you teach it's like if you can do it once
1:11:26
and do it repeatedly and in this particular case it came out afterwards that it was his
1:11:33
he did it because it was his identity he was successful entrepreneur who ran this business
1:11:40
that's not your identity you are an entrepreneur and you're good experience failures
1:11:44
and you're gonna accept successes to be too arrogant when you are successful as well and when
1:11:50
you do falter when it does all fall apart let's learn from that let's let's take that scar and
1:11:56
let's make something of it right and that's our identity we're entrepreneurs that's what we do
1:12:01
all the time we face those hardships we fail we get back up we do it again we build something
1:12:08
get back we do it over and over again we start scale exit repeat was there a good time 130 million
1:12:14
when you were you have to keep saying that because it's such a huge number like it wasn't even
1:12:19
bigger back then with inflation so my the reason why keep bringing that up is because I think a lot of
1:12:24
people would have not been so keen on starting again after that yeah you know what I did I really
1:12:34
internally focused on what I love to do and what we loved was technology and how that can change
1:12:39
the world that's why we jumped right into hostopia and that hosting in web platform and we
1:12:44
began to scale that and it wasn't easy either that that was you know we had to get venture capital
1:12:49
we had to we're we're taking we're taking massive losses up to 9.11 happened and it'll have
1:12:54
planned dollars a month and it wasn't easy but every month was getting better and we built it and
1:12:59
we just focused on what we loved building technology companies and that's that I think that has to
1:13:05
be your north star so outside of all of it because if your north star is money or if your north star
1:13:10
is fame or if your north star is anything but what you love I don't think you'll make it through
1:13:16
I agree I don't think you'll make it you can't handle those those downs like in pot.com yeah you
1:13:20
know we I've had three King Charles Spaniels now I have a Cavapoo for sure three or gone but you
1:13:26
can you can't you'd be surprised at at how much these dogs have influenced the products the seat
1:13:33
the current CEO Michelle Vento work she's got three dogs and big doodles and how every product is
1:13:39
we long dogs we love building dog products we love inventing new dog products you know that's
1:13:45
what helps you when you get to those low points and you're always going to hit low points and
1:13:50
then you start up I have a question about passion because this is sort of what we're talking about
1:13:55
and I think it's this is always sort of a debate for me if entrepreneurs are passionate about
1:14:01
something great it will carry them through the highs and the lows but it can also blind them to
1:14:06
the realities of the market if they're too passionate about something in the end the market
1:14:10
doesn't actually need their their solution so how do you balance that passion and that pragmatism
1:14:17
when you're building a company so in the start section of the book we call some we have something
1:14:22
called stage gates stage gates are do you remember that video game car driving game when you're driving
1:14:27
around the track and you have to get through the gates and if you don't you got to put another
1:14:32
quarter and you probably don't remember quarters I do remember cool I'm not that young I want to
1:14:36
arcade so if you don't have the you know if you don't get through the gate then you got to put
1:14:42
more money and you got to keep going it I call it a stage gate in the book this is a certain
1:14:47
specific measurable attainable relevant timely goal smart goal that you're going to pick in the future
1:14:55
and if you don't hit it you either pivot or kill it but here's the other thing from a mental
1:15:00
challenge because entrepreneurs and I had this when I was starting businesses early on so many
1:15:05
people are saying oh you're wasting your time and she go get a lot of degree or she go to this
1:15:08
oh this idea doesn't got going to work that you say look guys my stage gate is I'm going to have
1:15:13
an MVP ready by this date on this time in the future and I'm going to show it to an investors
1:15:21
and try to raise a hundred thousand dollars or a million dollars that's my MVP if it doesn't happen
1:15:27
fine then you can you can reign on my parade but if it but until then I have the flexibility and
1:15:32
freedom to achieve that that's why I love the concept of stage gates and I like putting them in
1:15:37
in in different stage gates so I'll do one and then I'll do a second stage gate and in the the
1:15:41
start book we also have something called the four sticking oak business plan where why sticking
1:15:46
else because you can stick them on the board and they're small because this is a business plan
1:15:51
just for you just for your own strategic thinking and it takes ship probably one half hour to put
1:15:56
this business plan together and included in that are the stage gates and how much money do I need
1:16:01
to raise to get to that stage gate who are the people I need to get to that stage gate and what are
1:16:06
the KPIs the systems what are the KPIs I need to track performance to get to that stage gate
1:16:12
you mentioned a few times you just mentioned like raising money and this is another thing that I
1:16:16
think a lot of entrepreneurs get confused about so you also said sometimes customer funding is
1:16:24
the best way to build a business but of course you've raised money as well so when you look at
1:16:29
the two options raising money or not is there certain things that you look for or signals that
1:16:36
indicate this particular type of business should be something that we raise venture capital or
1:16:40
even just angel investment for versus not absolutely absolutely so if we were in a very high mood a
1:16:45
very fast moving environment like for instance remember clubhouse that that app from years ago
1:16:51
they had to raise a lot of money fast because otherwise if they didn't then you'd have the big
1:16:56
competitors and guess what did happen spaces came in chatter came in from meta linked in audio I
1:17:02
mean all these competitors came out with a solution so if you're in a in a market like that you
1:17:06
have to move quickly venture capital is your best route silicon value I know I call I talk about
1:17:12
the negatives but they're all it's also been the most successful environment in the world to raise
1:17:16
money and in more successful companies have come at a silicon value than any other any other ecosystem
1:17:21
in the world so I'm very positive about it for the right type of company if you need to move quickly
1:17:26
if you if by holding back and allowing others to take your market share you've you've made a huge
1:17:33
mistake that's is one way do need to bring in venture capital to allow us to win that market because
1:17:39
if we wait too long if we try to do it the conservative we get for too conservative all the way
1:17:44
long somebody else is going to take that market and and that's I'd rather own a smaller percentage of
1:17:49
a product that wins in the marketplace than a niche product or a much smaller market product that
1:17:57
has a much lower market share because typically the winners take the lion share of the so that's how
1:18:03
you have to look at you and I think this is all it all comes down to not just following a trend
1:18:07
but understanding what kind of business you're trying to build in what kind of market I mean there's
1:18:11
so many different versions of entrepreneurship too I mean I speak about this a lot but some people
1:18:16
don't even want to sell some people want to build lifestyle business it's my wife my wife owns a
1:18:21
school she just want to get to a certain level she's got a great school and a great school's
1:18:24
job or gets the highest rate in Fort Lauderdale that's it and you don't have to sell that if you
1:18:30
don't want to but you have to decide what you want to do and I think that's very important I think
1:18:35
self-awareness is probably one of the most powerful things you can have is an entrepreneur yeah well
1:18:39
you know what a lot of the Murray or against I know that I work especially one particular one I'm
1:18:44
thinking right now I won't mention names oh my god he's of the CEO but he thinks he knows everything
1:18:49
and you know he doesn't and when you think you know everything that's the worst mistake you can
1:18:54
make when you begin to recognize I don't know everything when you begin to pick up books like the
1:18:58
emeth or zero to one or start scale x repeat when you begin to learn these philosophies that
1:19:05
can strengthen your ability to succeed in entrepreneurship it'll increase your chances of success
1:19:11
what would be some of the most harmful behaviors that you see or or with entrepreneurs when
1:19:18
they're trying to scale or achieve success what are things that they absolutely should not do
1:19:23
try to try to do everything yourself okay so in the start methodology we talk about
1:19:30
entrepreneurs they delegate tasks right they're well you have to be it's like winning a baby you have
1:19:36
to sort of be aware of everything when you're in the scale mode it's delegate responsibilities
1:19:42
not tasks okay and this is important because this is more than just a nine to five roll this is a 24
1:19:51
and when you're responsible for every aspect of a business time I mentioned my wife
1:19:56
she is net she hasn't figured out the philosophy of delegating responsibilities she has 16 teachers
1:20:01
100 students and about 50 parents or 60 parents and she has got her hands and everything okay but
1:20:08
she's up in the in three o'clock in the morning almost every brick and night worried about this
1:20:14
or worried about that when you've got people who are now responsible let's say you have someone
1:20:20
who's responsible for the IT or responsible for the sales and you're you're not having to be up at
1:20:25
three o'clock in the morning now they'll have to be up at three o'clock in the morning but they're
1:20:29
focused on this one specific area but that's their job exactly but if you're delegating those tasks
1:20:35
and you're not letting go of your company you're not delegating responsibilities you're going to
1:20:38
hold yourself back I love that that's good um what did we not go into that he think is important
1:20:44
for entrepreneurs to know like I mean the book covers so much we know we could do like so many
1:20:50
shows you could do one follow just on exactly I know that right because it's so much it really does
1:20:58
and here's no one spends it's writing a book yeah are you gonna do another one yeah you always
1:21:03
have to say the negative things don't you you lose what how is that negative I think that I think
1:21:07
that may suit you know I didn't I didn't actually do well in English in school just see that I did
1:21:12
not have the best marks I was much better at math than in economics and things like that um and
1:21:19
actually it's interesting because my twin brother he says I really liked your book uh and he goes I
1:21:24
liked it because it was simple I understood it they wasn't you know a lot of sometimes you get
1:21:29
these business books are ethereal and like really yes probably that's that this is just you know
1:21:35
street language on the street this is how it is it's my voice it's who I am I think it's actually
1:21:40
super ironic how everything that I think is your superpower you think is a negative so good
1:21:46
copywriting is at a fifth grade level that is good copywriting I can't do more than a fifth grade
1:21:51
but I'm dead serious this is not like me just like like like uh making up if you want the book to
1:21:57
hit home if you want writing to hit home you have to write at a fifth grade level you have to take
1:22:01
very complex idea and I actually think that shows that you know the concept better and you take a
1:22:07
very complex idea and you can and you can find a way to communicate it at a fifth grade level I think
1:22:12
that if you can't do that that means that you actually don't have a mastery of the concept that's
1:22:17
my that's my so yeah I'm surprised we got 13 awards because you know I you know literary awards
1:22:22
and yeah on we had the American Legacy Book Awards top book for entrepreneurship in 2024
1:22:29
we had the international book awards we had won the best nonfiction first time author and then
1:22:35
like IPPA we won the second silver medal for business and business and communications
1:22:44
categories so I mean they're big categories and so I was actually surprised we did we did so well
1:22:51
but we did have it human editors thankfully and a lot of Forbes books did a great job at helping
1:22:56
with the editing and cleaning it up a little bit but it's definitely you know it's written
1:23:00
very simply I think I think it's great I mean I've read it it's great it's also out of all the books
1:23:06
and I mean I don't have all my books out here I used to have all my books out here at the old
1:23:09
and the old studio but I think it's like one of the biggest books yeah yeah it it really is
1:23:15
but it was double the size of any Forbes published book and they kept getting mad at me and I
1:23:20
said what I kept trying to cut it if I cut this then the entrepreneurs they won't they won't know
1:23:24
how to do this or they won't know to do that but it's very easy it's it's like 58 chapters and
1:23:29
they're very short chapters so you could just jump to a part of the book or you can I mean I think
1:23:33
it's good idea to read the whole book but also we have this gentleman who did the audible he was
1:23:39
also he's like a fellow Kenny I didn't to do your own audible I can't kidding me he's a fellow
1:23:44
Canadian who he did Budweiser commercials oh yeah yeah so he does quite an entertaining job when he
1:23:49
reads the book I've been good I said I'm not do I'm not gonna have somebody reading it putting
1:23:53
people to sleep so he's a little animated he's a bit animated he does a good job so the audible
1:23:58
comes across very well very good um okay so are you gonna write another one or are you this hit
1:24:04
no I keep people keep saying you're right now what we are doing is coming out four workbooks
1:24:07
one for start one for scale one for exit one for repeat the start one is out there right now
1:24:12
scale I'm having a lot of fun with this but this is going to be the most complicated
1:24:16
workbook ever produced for the scaling I'm partnered with two other firms the rhythm systems
1:24:21
who I told you about and then also Jack daily and Dan Larson who wrote the sales playbook and
1:24:27
working with them as well so we're we're putting together something that could really make a
1:24:32
difference for somebody wants to take their business and scale it and it's gonna have of course
1:24:36
we're gonna have AI custom GPTs embedded throughout it I love it and so if you want to they want to
1:24:43
connect with you um what startup club yeah just go to startup club subscribe to our email lists
1:24:48
we do one email a month that is like a publication right and that's where we have the time to sell
1:24:53
index now I've added that into it but we we list the authors that are coming on to our show or
1:24:59
we do a live clubhouse show but that's yeah people don't even know that maybe some of them do but
1:25:04
you that's the largest entrepreneur clubhouse yep so almost a million member ush over a million
1:25:10
members now we have 80,000 on YouTube and yeah we just started TikTok a month ago I'm excited about
1:25:15
I got 500 followers I saw I've seen your content it's good oh really yeah so we're just starting
1:25:19
that and we're just that's taking off and I'm like wow is because our the key demographic
1:25:24
our persona is an individual between the age of 18 and 34 younger younger demographic yeah right
1:25:31
and I think we had to think like that because you can't just post it on Facebook linked in I'm very
1:25:35
big on LinkedIn we do very well on LinkedIn but the reality is to reach the sort of younger audience
1:25:40
we said what's going to TikTok so we started to TikTok how does how does your business link
1:25:43
do on TikTok it's just seems to be doing very well yeah yeah like I got to figure out TikTok I
1:25:49
haven't figured it out yet I know it's nice about it you don't have to have a lot of followers and
1:25:52
you get a lot of views right away yeah which I thought was interesting but we're we're looking for
1:25:56
engagement as well so if you're if you want to follow us on TikTok this one video is we come
1:26:00
out with every week but the best way to do it really get in the know how is just go to startup.club
1:26:05
sign up to our email list and then if you want to buy the book go to amazon and you can buy it an
1:26:11
audible hardcover softcover and Kindle as well all that we'll go in the show notes too so I'll
1:26:18
get all the links for everything yes yeah I mean look I just be clear thank god you
1:26:22
saw her to our app.club right but it's www.startup.club okay for it's right yeah
1:26:29
www.startup.club and we've written now I think I've written about 20 articles 20 articles for
1:26:36
Forbes as well which we link in in startup.club as well so this is like everyone you know if
1:26:42
you're listening right now Colin is like all things entrepreneurship so there is not really many
1:26:49
questions as an entrepreneur that you could have that he does not have an answer to somewhere
1:26:54
whether or not it's in the book or whether or not it's on TikTok or YouTube like I mean
1:26:58
you you live and breathe this and I've seen I mean I've seen your co-working space I've seen some
1:27:03
of the people like some of the companies you've invested in I saw your talk at EO so in
1:27:08
I didn't afford lottery at the power or whatever it's called yeah there's not much that you don't
1:27:13
cover in your content yeah I do you haven't dealt with yourself by the way which is actually the
1:27:18
that's the X factor in good content I do tend to sort of stay above the fray though and I don't
1:27:23
get involved in the weeds I don't rely on of course I delegate responsibilities right so I delegate
1:27:28
people to do the TikTok and the LinkedIn and and all the other aspects of our businesses so I'm
1:27:33
not a social media expert at all so if you start asking me a question like you know I was getting
1:27:37
nervous there for a second no I'm not gonna ask you no I'm not gonna do a quest talk we would
1:27:43
ever and I'm like would I always my team's doing a great job I mean I can tell you that well
1:27:48
hiring the right people that's that's that's that's half the battle no my point is why I love
1:27:55
and respect you so much as an entrepreneur is because you got through again I alluded to this
1:28:01
before but you got through so many versions of entrepreneurship that I don't think many people even
1:28:06
people that are massively successful it's kind of like they stay within the same version of entrepreneurship
1:28:12
and they had one big success or they've tried one thing repeatedly then they have a success
1:28:17
but I don't know many people that again have gone through exit events for you know like a strategic
1:28:24
buyer also IPOed highly successful failed at the degree that you failed as well like there's so
1:28:30
many different versions that you've lived through that's why I think the information's valuable
1:28:34
because I didn't get information you can go find it on YouTube but unless the person lived through
1:28:38
it it doesn't mean anything that's my that's my two cents at least but I agree and there's
1:28:42
other 50 other stories yeah the book as well that really resonated well with us and the team and
1:28:48
we put them in there as well um so we've gone through a lot uh do we not really not touch on
1:28:54
something that you want it to go into I think we've covered we covered a lot okay the last
1:28:58
question that clapping it last question um if you could go back and you could tell your 20 year old
1:29:04
self one thing what would that be believe in yourself because you know what I didn't really
1:29:09
believe in myself when I was in merely 20s I had my head business partners and I relied on the
1:29:14
business partners and one of them turned out to be a massive disaster and caused a big fight and
1:29:20
I recognized my instinct was right at the time but I was so young and I was thinking I didn't
1:29:26
really know what I was doing but my instinct was right I should just believe more of my instincts
1:29:31
and it took me until my mid 30s to really break off from from the people around me who were not
1:29:37
helping me but but pulling me down right so you know fire those people quickly in your life you know
1:29:43
hire yourself believe in yourself and you know when you're not broke you have the right instinct
1:29:48
and into the second thing is you have the right instinct but then you don't really know what
1:29:52
how you're doing so that's when you do bring in a coach and when I brought in a coach Patrick Tien
1:29:58
from uh rhythm systems it changed my life he's been my coach now for almost 15 years and all my
1:30:03
companies so he's he's amazing