Launching a Successful Business, with Keynote Speaker Scott Duffy
|It’s not just one entrepreneur that big companies need to watch out for. There are literally millions of entrepreneurs nibbling at their feet.|
|Why do small businesses have a market advantage over large businesses?|
| Big businesses used to have every advantage, because the barriers to launching and building a successful company were too high for many entrepreneurs and small businesses. Over the years, though, technology has leveled the playing field and ushered in the “entrepreneur economy.”
Lower barriers to entry have created tremendous opportunities for small business along with fierce competition on every front. Today’s small businesses, armed with laptops, cell phones, and online tools can move more quickly than big business, get closer to customers, and help them meet their needs in ways that are better, faster and cheaper. These small companies run leaner, stronger, and more efficiently than their counterparts while generating greater profits.
This scares the hell out of big business and to make matters worse, it’s not just one entrepreneur that big companies need to watch out for. There are literally millions of entrepreneurs nibbling at their feet.
|Your newest book, Launch!, spells out a 90-day plan for launching a business. Why did you choose 90 days as the time frame?|
| To me, 90 Days represents an “innovation cycle”. It’s a philosophical approach to building great companies.
In today’s business environment, speed is like gold. It is the greatest asset and most valuable currency you have as a small business. In 90 days, you can sharpen your focus, take products and services to market, get valuable feedback from customers, iterate based on what you learn, and relaunch.
Most people say they need “more” time, but to me, “more” means more complexity, more moving parts, more money, and more risk. Speed, on the other hand, protects you. With short time frames, you can take an idea, go to market, get valuable feedback, and make well informed decisions, all without breaking the bank.
|How can entrepreneurs stop themselves from making things more complicated than they need to be?|
| Too often, entrepreneurs focus on too many things at once, a phenomenon that I refer to as the “hammers and nails” syndrome.
To illustrate this, let’s say I give you one hammer and one nail. Your job is simple: all you need to do is take that hammer, drive that nail into a piece of wood, and really nail that one business. Odds are you are going to miss the first, the second, and maybe even the third time, but eventually you’ll nail it.
On the other hand, let’s say I give you two hammers and two nails. This creates a problem: who is going to hold the nails? Even if you find someone crazy enough to do it, you still have to bring both hammers back and strike at the exact same time. The odds are you will miss the first and second time; in fact, you may never get it right.
Now imagine, I give you 10 hammers and 10 nails. You get the point!
In conclusion, focus on one thing – the simplest thing – at a time. Really nail that one thing and then move onto the next.
|Don’t build everything. Build one thing, get it into the market quickly, get feedback, and let your customers tell you what to build next.|
|What are some signs that you may be overcomplicating the path to your goals?|
| A couple of years ago a very close friend of mine raised $2,000,000 for his company, a very exciting lean and mean business in the fitness category. They ran a tight ship and were dedicated to solving one very specific problem for one very specific target customer. Imagine with that kind of focus and clarity, what they could do with that kind of capital.
About a year later, I ran into my buddy and asked him how things were going with the business. He replied, “I’m on my way to see our attorney and shut it down.”
I couldn’t believe it! “What happened?” I asked.
“When we were a small capital-constrained business we were very focused,” he answered. “However, as soon as the money came in a funny thing happened. Every day someone came into the office with another ‘great idea’ so we started building and lost our focus. We built and built until finally, with very little money in the bank, we launched. What happened next? 95% of our customers used just 5% of our product. In other words, 95% of our time and money was wasted building stuff that our users did not want. Ironically, the 5% they did use was the original product we raised money to build!”
My friend’s experience offers a major takeaway: don’t build everything. Build one thing, get it into the market quickly, get feedback, and let your customers tell you what to build next.
|I learned the most important person in the company was actually the person I came home to! I call this person the CVO (Chief “Venting” Officer) and even though their job is the most important job in the business, it is by far the worse one.|
|What is a “Chief Venting Officer” and why is their role crucial to a company’s success?|
| As an entrepreneur and small business owner, I used to think I was the most important person in the company. It was my idea, I had the fancy title, etc. As I got older, though, I learned the most important person in the company was actually the person I came home to! I call this person the CVO (Chief “Venting” Officer) and even though their job is the most important job in the business, it is by far the worse one.
Here’s what I mean: being an entrepreneur can be a lonely job. Each day you experience ups and downs, but you can’t tell your investors, or partners, or employees about everything you’re going through. So what do you do? You go home and “vent” to your Chief Venting Officer! By 11PM, you’ve got everything off your chest and are sleeping like a baby while your CVO is up until the break of dawn with =nervous knots in their stomach and one eye open.
In my experience then, if you’re in a relationship, there are three things you need to do as an entrepreneur. First, make sure you are on the same page regarding how much time and money you will put into this venture. I would rather put in less and be on the same page as my CVO, then put in more and make them constantly worried or resentful.
Second, make sure you respect your partner’s communication strategy. Some CVOs want to hear the blow-by-blow of the business, but for others that’s just way too many highs and lows. You need to understand how much information to give and “when” to give it.
Finally, my wife Rachel taught me the way to spell love with an entrepreneur is “TIME”. You won’t have much of it, but when you do, you need to turn off the phone and learn to be present.
|How do you know when your business is getting too big?|
| Businesses don’t get too big; rather, they outgrow their team’s ability to scale.
One of the most difficult jobs of a small business is to constantly ensure it has the right people in the right jobs at the right time in the business cycle. There are two ways a business can do this. It can either develop and grow its team through training or replace current staff with people that have already taken companies to the same places you want yours to go.
For example, if you want to build a one-million-dollar business, you need to spend your time around and staff your company with people than have “already” built one-million-dollar businesses. If you’ve already built a one-million-dollar business and want to grow it ten-fold, you need to surround yourself with people that have built ten-million-dollar businesses, because most likely the people who helped you build that one-million-dollar company, won’t know how to execute your vision and take a business where you want it to go.
|I didn’t ask anyone in the industry for help because “I had read up”, “knew it all”, and “many people outside the industry told me I had a great idea”. Boy, was I wrong!|
|What are the most important things entrepreneurs need to know when it comes to switching industries?|
| Years ago, I decided that I wanted to switch from the technology industry to real estate. My goal was to build a portfolio of passive income so I did my homework and chose self-storage. I went into the space because there were over 50,000 self-storage facilities in the United States, yet the largest company in the space only had 3% marketshare. In fact, the average owner had only 1-3 facilities.
Since I had been successful in technology, I just assumed that success would transfer seamlessly to self-storage. I thought I was going to swoop in, buy up a bunch of locations, consolidate the market, and create a huge consumer brand. I didn’t ask anyone in the industry for help because “I had read up”, “knew it all”, and “many people outside the industry told me I had a great idea”. Boy, was I wrong!
After losing a ton of money, I finally started to ask for help. I quickly learned that consolidating the industry wasn’t a new idea. The reason nobody did it was that self-storage businesses are mostly “mom and pop” operations. In many cases the family lives on site, the kids work in the business, and they are proud of it. The facilities generate good income so they usually don’t want to or need to sell, because what else would they do?
The people in that industry who were making all the money at that time were “building and not buying”. They would build 2-3 facilities, package, and sell them to REITS. If I had taken the money I had already spent on trying to consolidate and applied it to development instead, I would have made a fortune.
In the end I learned that when considering a switch to a new industry, it is important not to seek opinion, but rather, seek council. Opinion comes from people that are well intentioned with no direct personal experience in the space. Council comes from those who have direct personal experience in the industry. These people can provide inside education on the market, share how the industry “really works” vs. what someone may read online, make introductions to key influencers, and be a sounding board for ideas. Once you get enough inside knowledge to really understand the market, you can make informed decisions.
I believe that game-changing innovation in an industry can only come from someone outside of it so if you decide to disrupt, you will be in better position to do so. True innovation creates a 180-degree change in the way the market looks at things, but when someone comes from inside of an industry and is used to playing by its rules, it is harder to create such a big shift in their own thinking, let alone the thinking of others. An insider is more likely to make incremental changes, rather than a dramatic 180-degree change.
|What do big businesses need to do differently to maintain a competitive edge in an entrepreneur-based economy?|
| Having a competitive edge in today’s market means that you are creating value for customers in a way that your competitors can’t match. As a big company, this starts with getting closer to customers, shortening product delivery cycles, creating feedback loops, and having the agility to respond to the market. Again, the keys here are speed and flexibility.
For some big companies, these changes may be slow or difficult to come by. A few ideas to kick start this type of innovation include encouraging employees to make small bets, partnering with incubators and accelerators to get closer to new and merging ideas and technologies, and having key employees spend six months inside of a startup or early stage company to understand how they compete, etc.
|The biggest responsibility...that both entrepreneurs and Intrapreneurs have is “mitigating risk”. You need to make sure that if things take longer than planned, cost more than planned, or go sideways, you have protected yourself, your bank isn’t broken, and you can bounce right back.|
|From an entrepreneur’s point of view, what are the important differences between launching a traditional start-up and launching a start-up inside a giant company?|
| I know from my personal experience working in both roles that entrepreneurs and Intrapreneurs are very much alike. As an entrepreneur, you create a vision, you sell the vision, write a plan, build a team, bootstrap/borrow/and maybe even raise capital, take products to market, execute sales and marketing plans, and so forth. Your business becomes a 24/7 commitment as you take both personal and financial risks.
As an intraprenuer, your role is very similar. You create and sell a vision to someone in your company. You write a plan and have to sell that plan internally. You bootstrap with other departments and raise capital by getting funding approved in your budget. You also take on risk; the money spent on the project may not be your own, but the project success or failure could have an impact on you and your position with the company. Finally, your commitment is also 24/7 and you face many of the same issues at home.
The biggest responsibility, though, that both entrepreneurs and Intrapreneurs have is “mitigating risk”. You need to make sure that if things take longer than planned, cost more than planned, or go sideways, you have protected yourself, your bank isn’t broken, and you can bounce right back.
|How did you come to work with Tony Robbins and Sir Richard Branson?|
| When I was a junior in college, I was in a terrible car accident and suffered two brain hemorrhages. I was forced to drop out of school and spent a lot of time in bed recovering. I couldn’t read or watch TV because everything made me sick, so I started listening to motivational books on tape all day every day. Even though I could barely hear what they were saying, I absorbed every bit. I decided that once I got stronger, I would go back to school and apply to be an intern for someone who had inspired me and helped me heal. I applied to work for Tony first, since he was based near my school in San Diego. To my surprise, instead of an internship, I was offered a job! At age 21, I went to work for Tony Robbins, speaking and promoting his programs throughout the United States & Canada.
In 2005 I decided to jump into private aviation, which was a very “manual” business at the time. People were still using phone books and fax machines to book charter flights. I believed I could make the industry more efficient by leveraging technology. The idea was to aggregate supply and demand in a marketplace and provide online ordering, like an “Expedia” for private jets.
When I started raising money, I went to Silicon Valley and several investors made commitments. One day I got a call from a friend who worked at Virgin. He told me that Richard Branson was interested in private aviation and had a team at Virgin creating a plan to enter the market. He asked if I would be willing to meet with the team in New York City and let them share their ideas. “Of course”! I exclaimed.
I told him that I just happened to be going to New York the next day - even though I had no such plans. As soon as we got off the phone, I booked a red-eye flight from my home in LA to NYC, and a few hours later headed to the airport to take my flight.
The next day In NYC, I shared my idea with Virgin’s Team, who told me, “You should pitch us on that!” It took several months and many ups and down, but eventually we got a deal done. I was very fortunate and had a chance to work for the most amazing brand, and some of the best people in the world!
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