Transcription
It's so funny. Those of us that are entrepreneurial, we were like, "I want to work for myself." And then you find out your boss is a jerk. You find out he's a slave driver. 16-hour days and cracking the whip, and you're exhausted. You don't even know what you're doing, and you're scared, and you're lonely, and you're, you're, you know, you're stepping and fetching, and you're leaving the cave trying to find something to kill and drag back, and oh my gosh, it's hard. It's really hard. And then add a bunch of outside societal variables to it that are all yelling at you that you're going to fail. It gets scary. It's hard. And um, if you're not a little scared, you're weird, and you should be a little scared. That, that if you're not a little bit lonely and a little bit overworked and a little bit stressed, uh, welcome to self-employment. Welcome to running a small business. That's how it works. Um, the good—that's the bad news. The good news is that it can get better. Uh, it's a natural place to be because I think the hardest you ever work is when you first kick it off.
The thing that ultimately allowed me to get over the hump was actually playing out the worst-case scenario in exquisite detail. Like, so if I went there and I failed, what would I do? I was like, "Well, I'd apply to business school, and I'd have this cool story." And they like entrepreneurs or people who tried to do things. So, this would actually—this would be fine. And I have plenty of friends who would let me sleep on the couch if I had to. I could go back to Mom and Dad's house with my tail between my legs, which I felt it was—was that was honestly the most horrifying thing that I could imagine—going back home as a failure. But the idea, the one that—that got me out of it was, "I can always get the job back." Mhm. So like, this is actually a significantly lower-risk move than I'm perceiving it to be. Me doing all this stuff only makes me more valuable, 'cause I'll have a cooler story than somebody who just did four years of this job rather than two and then did, you know, two years of things on the road.
The secondary argument was, for me, I was young at the time. I thought to myself, "If it's this hard now when I have no kids, I have no wife, I have no stakes, it's going to be nearly impossible for me to do later." And so I was like, "I have to do it now." Those are the two strongest arguments that got me to take the plunge and make that. Go make something a little bit better at the job you have right now. Like step number one, if that coffee shop isn't giving you what you want out of it, you're not making enough money, you don't love what you're doing, how can you actually give more to the business, which sounds counterintuitive, but I would come up with every single day, what's a little bit more that you can be doing? Can you be going around and seeing if anybody wants some additional orders? Try to take note how much the business is making each time that you're on shift and then how much it makes after you start making these changes. Create a little list of the things you did to affect your will on the world. Show that, "Hey, you actually know how a business works and you want it to grow." Small little changes. Maybe you go outside, you're starting to say hi, you hand out a little coffee sample to people. Think like an owner. Have an ownership mindset because when you have an ownership mindset, that transfers to ownership eventually.
Then the second that you do that, I want you to go to the owner of the business. And I want you to tell them just a little brief, "Hey, here's the stuff I've been doing at the business. No ask. I've been doing this little list of things. It seems to be working. Here's some of the experiments I've been trying." First of all, they're going to be shocked. Nobody's going to ever have done something like that to them. You are already now the 1%. Second step, you do it for a few more weeks. At the end of a few weeks, you go, "Hey, I've been doing these extra things. I'd love to make some additional money here. Is that possible? Can you show me like what a career progression looks like here for me to move to the next step? For me to make additional money?" Here's the thing. If they say, "Nothing, this is Starbucks. We don't hire this way," you're stuck here, then that's a bad company and you need to start looking elsewhere. And you need to, as you're looking for your next thing, not just have a resume, but have some case studies. "Here's what I did in my last business that they didn't ask me to do. Here's how I realized that I could provide positive value." I can promise you one thing only. That capability is so rare, and desire is even more rare. And so, if you can show those two things in the world, you will go from having an owner's mindset to an owner one day.
I think the biggest thing that I took away from my time at—at Stanford and from that class was the focus on going after really, really big opportunities. And I think one of the things that's so different growing up here in LA, I think a lot of the—the business community that I was exposed to is more focused on cash flow, right? Like, "How quickly can this business turn a profit? You know, how can we do that really predictably? How much cash are we going to generate?" At Stanford, the business culture is entirely oriented around, "Well, how big is that opportunity? Like, is that a huge opportunity? Is that opportunity big enough? Because if it—if you're not going after something that could reach billions of people, that's not that interesting." Uh, and that was a totally different way of thinking for me, combined with the venture capital approach, which is really to invest a lot of money early and scale quickly and then build out the business later, uh, after you've achieved scale, after you've achieved mass adoption, the big—so the key is the big opportunity is build a personal brand next to an elegant business model. That is—that's everything. If you build the personal brand, it doesn't have to be a massive personal brand. If you've got 5 to 50,000 followers within a high-value niche, if you're seen as a key person of influence in a high-value niche, that's enough of a personal brand to make seven figures. Uh, if you've got an elegant business model, you can sell to anyone in the world. Uh, you can communicate your value to anyone in the world. That's some of the stuff with an elegant business model. So essentially, those are the two pillars. If you're not financially successful or where you want to be at the moment, you want to look at building a personal brand and attaching that personal brand to the right business. Those are the two steps.
So ultimately, if you said, "If I was 21, I'm trying to build my personal brand. I'm trying to attach that brand to a per—to a great business," that's the key to capital. It's the key to talent. It's the key to customers. So, it's that personal brand on a scalable business. You look at every single person who's—who's succeeding right now. They're focused on just those two things. If you're going to move on anything, what I would say is move as fast as possible. And it's fascinating because you've met with many billionaires now doing this podcast. I've met with many of them in buying businesses, building businesses, etc. And if there's one thing they all have in common, it's the same idea of speed. So, um, you know, when I was talking to Bill Perkins the other day, who—him and I have done a bunch of deals together, he said the same thing. He's like, "I am not smarter than anybody else or richer than anybody else. I just move faster than anybody else." And by the time they've even pondered an idea, I've made a move, made three mistakes, and found a better way. And so, if I could give anybody broad money advice, it would be, "You're waiting too long." And maybe be a little honest with yourself about, "Are you thinking a lot? Is there a lot of mental masturbation going on on money, or are you actually taking action and then doing like the scientific process? Trial error, trial error, trial error as quickly as possible with as little cash as possible so you can figure out what works for you." And then the only other thing I would add is, you know, coming into this next year, you have what, I don't know, 40 days left in the year, something like that. So January 1 can start on January 1 for you or it can start today. You know, it can start 30, 40 days earlier than everybody else. And because of that, you've already got a head run. You know, I can't tell you how many people, in fact, I was just talking to uh another person this morning and they were saying, "Well, should I wait until 2025?" You know, because business financials at the end of the year, they're wrapping up their financials. It's actually a really reasonable question, but the answer to waiting is almost always no. And so if you see people who are really successful, they just move faster than you could ever imagine. And I remind myself that a lot. And so I would start there. Whether you're going to start learning, whether you're going to start doing, whether you're going to start allocating, just start. Uh, because you'll make some mistakes, but you'll learn a lot from it. And it's just—it's all dependent on you. And you know that, and that's what you signed up for. So it's okay, but you don't want to stay there 'cause it feels like you're on a treadmill.
And so the way to level up out of that is to start to talk about, "Okay, how do we get some team on board that can create some revenue and that can make some of the widgets and can do—provide some of the services." And I've got to learn to manage my freaking time because you—you know when you're in the treadmill stage, when I was in the treadmill stage, you're—you're uh running from crisis to crisis to crisis. You just wear a fireman's hat all the time, and you're not doing any thought past the moment. All you're doing is living in the moment, and that just is chaos, chaos, chaos, chaos, chaos. The customers feel it, your spouse feels it, you feel it, and you don't feel like you're getting traction 'cause you're not. You're on the treadmill, and—and so you've got to start managing your time and going, "Okay, I'm going to set out blocks of time to think about something other than the flavor of the moment, the crisis of the moment." And I'm going to start talking about how can I add team members. Um, just a few key ones just to get this off of my shoulders. They're tiring. Yeah. And—and the—that sounds very obvious, very primitive, very simple, but that is exactly how you level up out of—out of that and move on. Yeah. And—and so what would it take? And it's like, "Hey, if we have a deal that we're working on, I'm like, 'What would it take?'" Now, you can make the decision whether the price tag's worth it, but at least you learn the price. And what I have found in my life is that when I—when I try to answer those questions, like, "What would it take for me to be number one in this field? What would it take for us to—to—to lead this market? What would it take for me to be the best salesman in this company?" The answers are not as crazy as you'd think. And so a lot of people spend most of their time answering questions not worth answering. It's playing games that aren't worth playing. It's like, "If you play stupid—stupid games, you win stupid prizes." And so no one asked the question before they play the game, "Is this game worth it?" And so when you ask the question of like, "What—what is the big goal and what would it take?" Then you just get to solve for it, and to me it's just great. If—if I know what it is, then either I have those resources or I have to use my resourcefulness to get them.
The framework is that every idea is stupid. There is—everyone, you know, listen, you probably haven't had a corporate job yet in your—No, thank God. Yes. Thank God is right because there's this thing in corporate—I say corporate America but corporate world—and it's the brainstorming session, and they put everyone in a conference room and they go, "We're going to brainstorm and try and come up with an idea for whatever it is," and he goes, "But first, some ground rules for the brainstorming—rule number one—there is no such thing as a bad idea," and I call—there's plenty of bad ideas—in—in fact, there's no such thing as a good idea. Every idea is bad. We just don't know why they're bad yet. And so, the framework I approach, I assume all these ideas are ridiculous. I assume none of them are going to work. But here's the difference. The reason I start from that—that uh position is I don't want to commit the single worst thing you can do as an entrepreneur, which is fall in love with your idea. And you talk about the person who sees the dog throwing up and they go, "I've got a great idea." And then what happens? Nothing. They go home and they go, "This is a great idea." And they tell their partner, and their partner goes, "Oh, that's brilliant. I'd buy that." And so they go, "Okay." And they begin working on a business plan, and they write this 10-page business plan, and they're dreaming about how they're going—they're—how amazing it's going to be. Just think about—we have this line of—we can do cats too and then giraffes. You know, they've—they've built this incredibly ornate business in their head all based on this feeling that this must be a good idea. And you've got to nip that in the bud. And the way you nip it in the bud is you try—rather than dreaming how amazing this idea is. The first thing you think about, the only thing you think about is, "How can I quickly, cheaply, and easily collide this idea with a real person and find out is it in fact a good idea or a bad idea?" How can I do some kind of hack that will allow me to quickly find out whether customers actually would want this or not? And almost always you build this quick, cheap, down and dirty. I don't mean minimal viable product. I mean unviable. Something you can quickly do, like turn the car around and mail a CD to yourself just to find out the—the basic premise of, "Can I actually use the US mail to send movies back and forth?" Because if that had failed—well, great—on to the next one. And that's such a critical—critical step. That's the framework that everyone has to have. It is not about having a good idea. Having ideas is easy and trivial. The important thing is how clever can you be to come up with a quick and cheap and easy way to test it. It's such a waste of time because what happens is two things happen. One is this—or idea becomes so large and ornate and complicated in your head that you go, "Okay, Mark, I need to get started. I need to raise $5 million 'cause it's going to have to hire all these people to—to build this thing." And they're probably building the absolutely the wrong thing. Uh, you—you can't—you—you can't just go ahead and base on what you think is going to happen. You've got to start from a position of real information.
Listen, perhaps the cleanest way since we have a bit of time is to give you an example. I do a lot of work with university students, and uh, I was meeting with a young woman who—uh, at the university, and she goes, "Okay, Mark, I've got this idea. Um, what I want to do is peer-to-peer clothing sharing." In other words, "I've got all this clothing in my closet that I never wear or I don't wear very often. And I know my friends have a lot of clothing in their closet, and other friends have clothes in their closet. It'd be great if we had this website and we could all post what we have and we could borrow each other's clothes," and I'm going, "Okay, that's interesting. What can I help you with?" She goes, "I'm trying to figure out, 'Should I drop out of college to do this? Uh, how do I raise the money to hire a team to build this for me?'" And I went, "Whoa, you know, slow down here." Okay, interesting idea, but let's figure out if we can come up with a quick and cheap and easy way to collide this idea with reality. I said, "Do you have a piece of paper?" She goes, "Yes, smart. I'm a college student. I have a piece of paper." I go, "Great." "All right. Do you have a magic—a marker?" She goes, "I have a marker." "You have a piece of tape?" She goes, "Got a piece of tape." I go, "All right. I want you to write on the piece of paper, 'Would you like to borrow my clothes?' Knock. And I want you to tape that to the outside of your dormatory room. And we're going to find out in the next 24 hours whether the very, very first principle behind your idea is real. Is anyone going to knock? Because if nobody knocks, well, you've learned something very important right there. This thing you think is so attractive might not be. But let's—let's be optimistic. Let's assume a bunch of people knock. Great. You've learned something, but you're also going to learn the next thing, which is are there problems with fit? Are there problems with style? Are the people who knock and look at your clothes actually going to want any of them? All right, let's be even more optimistic. Let's say they do find out ones they want to borrow. Well, you're going to find out the next piece. How do you feel when your favorite blouse comes back stained or torn? You're going to find out about the cost of doing dry cleaning. You're going to find out all of these things. And you're going to find out about all of this for a piece—with a piece of paper, a tape, and a marker. None of this raising money, dropping out of school, and doing any coding. You're going to do something very simple. Now, is this scalable? No. Is this repeatable? No. But that's fine. You're going to do it all with 3x5 cards or on a pad. You're going to do it manually, and you're going to start losing your mind. But when you finally get to the point where you are ready to go and maybe raise money or drop out of school, you're going to know what you're dropping out of school for. You're going to know what you're raising money for. You're going to be able to tell someone, 'Here's my acquisition cost. Here's my lifetime value. Here's my CAC. Here's my—' You're going to know all of these metrics. You're going to know the complexity. You're going to have tried all these different things. You're going to know what demographic," and you found out all of that for nothing except for your time. That's what I mean by figure out some way to validation hack. And that is the key to being an entrepreneur. You have an idea—quickly, cheap and easy—test it, find out it's ridiculous, abandon it, go on to the next one. Heat. [Music] Heat. [Music] Heat. Hey, Heat. [Music]