entrepreneurship

Overcoming Obstacles And The Nature Of Leadership

TWS 66 | Overcoming Obstacles

 

No matter what stage you are in your business, there will always be challenges to face and overcome. The difference between those who succeed and not is how they look at these challenges. In this episode, Patrick Donohoe goes solo to talk about overcoming obstacles in business, particularly the mindset it takes to see them through as a leader. Taking cues from authors and industry leaders, he shares the many lessons and resources out there that can help us realign the nonlinear nature of life that loves to thrust us into uncomfortable places. Join Patrick in this discussion to gain some more wisdom and clarity about overcoming obstacles and the nature of leadership.

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Overcoming Obstacles And The Nature Of Leadership

I hope you have enjoyed the last few episodes. I wanted to first thank the response that we’ve had to the request for feedback in regards to a course that is being created specifically for the audience. Your books are on the way, so you should receive those in the next few days. Although there are some international people that it may take a little bit longer for your books to get there. Nonetheless, thank you guys for your feedback. It was interesting that the feedback was diverse. It wasn’t the sample size that I thought it was going to be. We’re going to extend the survey and do another ten books. We went through the hardbacks. We went through the softback.

We’re going to have a survey. It’s getting a gauge as to where you’re at in business, where you’re at with your investments, where you are with your finances, with your overall sentiments regarding your financial state. That is going to give me a good pulse on the direction to take the different aspects of the course that is being conceptualized. I’m thankful. You have been awesome, thorough, open, honest. I appreciate the candid feedback. Let’s get into the episode.

There Will Always Be Obstacles

I have two topics. First, I want to make the statement that what I had seen in those surveys, what I see with speaking with clients, what I see with the advisors that I mentor is there is always going to be an obstacle. There’s always going to be something that you’re challenged by. There may be this instance where a day or a week, or maybe a month, not much longer than that. They’re always going to be challenges. Even when you accumulate wealth, when you establish a business, there are always going to be challenges.

The non-linear nature of life requires a conditioned linear response. If not, the reaction is going to align with that non-linear and you’re never going to be able to correct the out of control car that’s spinning around these curves. We’re going to talk a little bit about that when it comes to a conversation that I had also with a book that I have re-read. It’s a challenge called 75 Hard. It was put out originally by Andy Frisella, who has a couple of cool motivational podcasts for entrepreneurs, business owners, a straight-up guy. He created this for himself first, but a lot of other people have taken the challenge. In 75 days, you have a checklist of things that you must complete. If not, you have to restart the challenge or quit the challenge.

These checklist items are two 45-minute workouts, one has to be outside. You have to take a picture, like a selfie of yourself to see your physical change over the course of time. You have to drink a gallon of water. You have to read ten pages of nonfiction. You also have to follow a diet. There are no cheat meals or alcohol for 75 days straight. I’m going into week four, about twenty days. It’s going awesome. If you guys want to check it out, search the #75HARD. You can find that out.

The reason I bring that up is that in there are the ten pages. I’ve got into some more books that I’ve been intended on reading. I’ve been reading Shannon Lee’s book who’s Bruce Lee’s daughter. It’s a book about his quote that has so much meaning. We do a whole episode on that regarding being like water. Water takes all sorts of forms and makes its way into whatever it wants to and absorbs friction. It’s a fascinating concept. I won’t get into that now.

There will always be an obstacle, something that you're challenged by. Click To Tweet

One book that I’ve gone through during my workouts, as well as reading is Power vs. Force by David R. Hawkins. He passed away in 2011 or 2012, but he wrote some incredible books on a variety of topics. The one, in particular, is the idea of how we show up. Mostly we don’t do it intentionally. We show up randomly non-strategically. There’s a spectrum that exists when it comes to the energy or the feeling we give to others, whether it’s in the words that we use, whether it’s in our overall demeanor, our tonality. There’s a force spectrum and then there’s a power spectrum.

The force spectrum is the intentions, motivations, energies, words that are used to describe the force side of things is pride, ego, anger, and desire. It’s a fear or shame. When you show up that way, the idea of force is that it’s either a net-zero or a net negative. What that means is you create either the same as what you consume or take, or you produce less than what you take. There is power. Power, the words they used to describe this spectrum. They’re different degrees. One is courage. That’s where it starts.

The nature of courage, hero, overcoming adversity, and these are all net positive. Meaning, you’re producing more than you take or consume. There’s neutrality. It’s being able to assess the situation, the nonlinear aspects of life, and handle it rationally with a reason as opposed to emotionally and reacting to it. You have acceptance. You also have words such as reason, love, joy, peace, and enlightenment. This has much to do with wealth and business.

I consider the Pareto Principle. It’s like the 80/20 rule. This is 80%. How you show up, the energy that you put off, who you are and showing up to whatever the circumstance is. Especially if it’s business, you have some control and influence over that. If you don’t intentionally understand the way in which you show up, then there’s 80% gone of success or at random. It’s interesting to perceive the obstacles people have, the fear that they have of not being able to overcome obstacles or what they would look like if you don’t overcome an obstacle.

The Nature Of Leadership

It’s driven by that carnal aspect of our makeup that reacts to things as if we’re going to get murdered, killed or wiped out. That’s where I look at. If you can understand the energy levels associated with power versus force, then you can start to see how you’re showing up. Are you showing up trying to force initiatives? Are you showing up to empower initiative? That’s the first topic. We’re going to talk about that a little bit. The second topic is going to be the nature of leadership.

I had an excellent conversation with a client that I wanted to share with you. There are two things that I pulled from that. This client is successful, younger under the age of 40 or turned 40, and also in an executive-level position that pays high six-figures plus bonus, but it’s in a corporate type of structure. The conversation revolved around the hierarchical order that they’re in wanting to influence change but having a lot of pushback. Feeling also compelled to go out on their own, have more freedom, experience or capitalize on this entrepreneurial spirit that they have in them. Most people that get to that level especially at an early age with that type of ambition have.

TWS 66 | Overcoming Obstacles

Overcoming Obstacles: Even when you accumulate wealth or establish a business, there will always be challenges.

 

Power Versus Force

First, I’m going to conclude my thoughts in regards to this Power vs. Force: The Hidden Determinants of Human Behavior. There are some different examples and anecdotes that he has in there. It’s a powerful concept. I’ve been able to experience myself and calibrate or know where I’m at, the words I described to use how I’m feeling, what I’m thinking, what my intention is, what my motivation is. If they’re below the line between power and force, which force ends at pride, ego and power begin at courage. It’s knowing there and realizing that if I show up in those power states, the states of neutrality, acceptance, and courage, I’m going to look at the world differently. I’m going to look at opportunities differently.

I’m going to look at the non-linear experiences that I have whether it’s somebody making a mistake at the office or someone misrepresenting this, that, or the other. It could be something a spouse says. It could be something that a sibling says or a child says. It could be that someone you respect says. We are in this volatile environment of emotions when it comes to politics. That is something that you can easily get sucked into. That’s where those types of feelings whether it’s resentment, anger or fear.

You know what that’s like. You can tell when a person is in that state. You can sense it. You understand it. Now if you have some better context where force is going to be a net-zero at best or a net negative, but power is always going to be a net positive. It’s focusing your attention, energy, perspective, the motivation behind powerful forces, those that empower others. You know that. We experienced those energies and those that are most influential. Those that make the biggest difference that commands well. You feel and sense that. That’s the biggest thing.

I’m going to give you some call to actions as far as how do you determine that? What can you do to understand where you’re at and ways in which you can show up? I’ll give you one little insight. What I do at least to see where I’m at on a daily basis is, I would first say that it’s challenging to get into these empowering states to have that state of courage, that state of neutrality, that state of acceptance, that state of joy, and happiness. What you could do is you can use your past, body and mind’s amazing capability to remember the experiences of the past.

We all understand what courage is like. There are moments in our past where we’ve exercised courage, where we stood up to something that was challenging and difficult. We remember how that felt. Neutrality, it’s the same thing. We remember when we were empathetic, neutral to something where all things being equal. It may have come across as something that went against our belief system, what we would’ve done and otherwise would have set us off, but yet we were neutral to it. We found that looking at another’s perspective, understanding, the way they look at things may have caused the behavior. Suddenly that type of reason and rationale allows us to be more indifferent to the situation.

Acceptance, joy, happiness, and success, those types of feelings are within us because we’ve experienced that in the past. We yearn for that. Going to this conundrum of how most people think, which is once they have something, once they have this money, once this occurs, then there’ll be happy. They’ll be in that state. It’s backward. You’re more likely to get everything that you want if you experience and understand that state first.

Be like water because water takes all sorts of forms and makes its way into whatever it really wants to. Click To Tweet

This goes into experiencing and understanding what you’re like when you remember the experiences of your life, where you were courageous, empathetic, and you felt on top of the world and things happened, but it was water off a duck’s back. I have these multiple memories that I’m starting to collect that allow me to easily go into a state where I know I’ve made a difference. I know I’ve impacted someone. I know that I’ve stood up to adversity and overcame the adversity. I try to have my days centered around that energy of power as opposed to what we normally gravitate toward as human beings, which is force.

Hierarchical Structure In The Corporate World

Let’s move on to part two. What’s interesting about some of the feedback that you guys gave. There are several business owners that responded and talked about some of the challenges with their businesses at various sizes. There are also those that were in successful positions, but they were positions that weren’t entrepreneurial, weren’t their own business. It was working essentially for somebody else. What I would say is that there’s a hierarchical structure in small businesses. There’s also a hierarchical structure in the corporate world. Sometimes people get frustrated with reporting to somebody, having somebody tell them what to do. Therefore, they will go off and try to create something on their own. Be self-employed, be an entrepreneur, and start a business.

I’m going to be the first to tell you that the typical path for an entrepreneur, a small business owner now going off and doing things on your own, you’re going to make the same amount of money net and spend probably twice the amount of time and energy. Running a business, being an entrepreneur, being on your own, it’s a skillset that requires more of you than where you’re at right now. I’m not saying that it’s not possible or you shouldn’t do it, but there is a calculated, strategic way in which you can experience it.

I did an interview. It was an episode that lasted a while. It was with Michael Gerber. He wrote The E-Myth. There’s E-Myth for every profession that’s out there. There are E-Myth principles and then they’re applied to several different types of professions or industries. You also can check out Michael Gerber’s book, The E-Myth. There’s E-Myth Revisited. He has a lot of online content as well. It was an awesome interview.

The interview was scheduled for 45 minutes and we ended up going almost two hours. Go back and read that. Where I was going is if you look at the foundation of success within a corporate structure, within a hierarchical structure or in the small business or entrepreneurial world, the one element is that creates success. It’s that 80/20 Rule is leadership. The conversation I had was with this successful individual. He had accomplished a ton. He has seven figures of savings. He makes high six figures and it’s in the healthcare industry.

He has a leadership position, but it’s not the leadership position. There’s only one more level to go and then he’s capped out. What’s going through his mind is there’s a marginal improvement to get to that level, but is it worth it? Is there something else I can do? Should I go on my own? I’ve established all of this knowledge. It’s one of those things where he has initiatives. He has things that he wants to do to grow the specific group. There are about 100 people to a certain level, but yet there’s someone at the top that hired him that is pushing back.

TWS 66 | Overcoming Obstacles

75 HARD challenge: The 75 HARD-Running: Stay Motivated Journal

There’s this feeling of them being threatened. If this person is able to initiate these types of changes and orchestrate them and achieve success, then it makes them look bad. They’re afraid of looking bad because they’re afraid of being let go, less valuable, etc. I’m going to approach it in two ways. Number one, how I approached him being a leader when it comes to those that are above him, even being able to lead them. It’s also finding opportunities that are derivatives of what your core competencies are, your success is. I’ll explain both of these pieces.

The first one is when you are hired or join a company, it is so rare. I’ve seen it a few times. It’s becoming more available and more apparent that companies are going in this direction, but it’s a good sign when you are hired into a hierarchical order where you’re being hired as a position above the person and have a great interview process. That’s golden. Most people are hired underneath the person that’s hiring them or bringing them on.

In your position, not necessarily in a meritocracy where the order is based on experience, knowledge, expertise, core competency. It’s based on seniority, how long you’ve been there. It’s based on those types of factors. This person was hired within a hierarchy underneath the true leader. It was his role to essentially do their job so that they would be able to go out, make rein, be influential here, there, and the other. It made sense from the beginning, but then it came down to making these types of changes, where it would create improvement. It would avoid obstacles. It would prevent some haywire things from happening, which were evidenced.

It’s a train going on the track. It’s on the track. It’s going at a certain speed, yet there’s a gap in the track right before a bridge or a bridge that’s out. One person can see it, the other can’t. There’s a hierarchical order that says that, “I can’t see it. You can see it. Because I’m in the senior order, we’re going to keep going.” It was a multi-hour conversation. The way that I looked at it, which is how I have learned to run a business is this person who’s seniority to him, they have good leadership capabilities.

It has nothing to do with the change and the initiatives that want to be integrated into the structure of the business. It has to do with the way in which it’s presented. I caught this person essentially saying, “They should know this. That’s their role. They should know what to do. They should know that this isn’t working. They should know this and they should.” It’s one of those things where you try to approach irrational behavior with rational thinking. There’s always a quagmire.

The idea is you need to put yourself in that person’s shoes, understand what they want, understand what their life is about, understand their identity, understand what they’re afraid of, what keeps them up at night. When you know that, then you can see how going on the path that they’re on can lead to what they don’t want. You can talk about that, bring that up, highlight that and have them consider that as a possibility.

Force ends at pride and ego, and power begins at courage. Click To Tweet

At the same time, you can’t go in and say, “This is what we’re going to do. Here’s my plan,” because then you’re leaving it up to them to define the meaning of that, and whether you’re trying to usurp their authority or whether you’re trying to help. The context of the conversation and recommendation is way more important to set from the very beginning. The best way to do that especially in hierarchical order is to understand what this person wants. What are they afraid of? What are they passionate about?

This person happened to have a lot of layers of identity that they were trying to protect. They felt threatened by the change that would make them look bad. At the same time, the path that they were going down was going to compromise all the different aspects of their identity, to begin with. That’s where we went. We started to highlight how can you have a conversation with this person and come at it from a neutral perspective, energy, and go in and say, “You want to do this. You want to make rein. You want to be on these boards. I know you’re passionate about that. I know it’s making a difference and here’s what I’m seeing in the future. I see that we’re going on this path. Because of my experience of what I’ve seen at other groups and other companies I’ve been with, this is what the end result is going to be. Here’s where I think we can establish a few pieces of change here, a few pieces of change here, and this is how it’ll get you what you want.”

It may not say it in those words but essentially allude to the fact that it’s going to help them to be better, to get what they want. It’s done in a collaborative fashion. We went into a lot of other details. The idea is that when you’re in this hierarchical order, the greatest fear somebody has is looking bad. If they look bad, the results of that are going to be them losing their job, their position, and losing their credibility. That is going to compromise what is most important to them. You got to work your way backward. You got to start with what’s most important to them? What do they want? What are they after? What are they passionate about? What are they striving for?

Try to view the world the same way they view the world and then approach it, showing how the path that they’re on is ultimately going to lead based on the experience of the new to a place that they don’t want. They may not be able to see it. It’s providing a replacement of their belief system, their perspective with an alternative that will get them what they truly want. Approaching that way is strategic, at the same time, this is where true leaders are. You can be a leader whether you’re the mailroom person or you can be a leader at that level of executive.

At the same time, the same principles apply. Even though there’s way down in the pecking order and the way high up on the pecking order, human behavior, human nature is always relevant. As you can imagine, a person that is at this prestige, that is ambitious, that is young, that is accomplished a lot, they’re thinking of plan B. If they can’t ram through their plan A, which is, “This is what we need to do you should know that, and you should accept my proposal,” they’re thinking of a plan B.

Plan B is, “I’m going to go somewhere else. I’m going to go to another company. Somebody is going to value me more or I’m going to go on my own.” It was interesting because I did an episode a number of months ago where I talked about how the Native Americans would capitalize on every aspect of the buffalo. The same thing with a cow and petroleum, where you have this one central commodity and one central thing, but there are many derivatives and uses out of it. We had that conversation and this individual was very entrepreneurial and driven.

TWS 66 | Overcoming Obstacles

Be Water, My Friend: The Teachings of Bruce Lee

We started to identify the different factions of their value. We started to look at what is their experience? What are they passionate about? What are the ways in which they can do a little bit of a derivative in certain areas? We identified a couple of opportunities. I’m going to give you that example and I’ll cut to some of the calls to action that I came up with. Regardless of where you’re at, you can apply a similar perspective as this individual that I had a great conversation with.

The derivative was he had expertise in the medical field and it was in the merger acquisitions business side of things, business structure. He also had many different contacts in that field of different medical companies, pharmaceutical companies, health networks and insurance companies. He had many executive-level contacts. I said, “What are opportunities where you’re seeing the medical industry go? What direction is it going? What do you see as the future?”

It went to these different startups and incubators that have been created in the city that he’s in that will be forming little specialized services, some of them are medical devices, but essentially it was a startup world, an incubator world of the medical industry. He identified not just one but a couple of them. That’s where I said, “Do you know anybody that’s there? Somebody that is part of it, that’s running it.” He had those relationships.

It went into what role could you play in order to not only have influence in those areas where you can provide some legal and business consulting on a small scale. It’s a derivative of what he’s already doing, but be able to influence good and also potentially have an opportunity for investment and grow his wealth, but then it could lead to a more firm consulting opportunity. I’m not sure what’s going to happen. I’ll know if he took action, which I guarantee he’s already taken action knowing him. The idea is that those opportunities existed. Our mindset is focused on what our primary core competency and obligations are.

Depth Versus Breadth Of Experience

We often don’t necessarily look at, within those competencies, is there a value that can be derived from that and applied to other areas of the business world as opposed to having to go off and completely start fresh and do something new? It’s being able to identify opportunities, whether it’s consulting, freelancing, etc. The thing I wanted to say in that regard, it’s the breadth versus depth. There’s this interesting concept in a business where you can have a depth of experience, which is extreme specialization, or you can have breadth, which is a wide range.

You’d go wide and shallow or you can go narrow and deep, or you can start doing a hybrid. It’s being intentional about your breath, knowledge, experience, specialty, as well as your depth. That is an interesting observation that you can make where you start to realize potential opportunities to go deeper into your field. Opportunities where you can gain even more specialized knowledge or you can start to go to the next level breath wise horizontally where you can start to understand maybe derivative aspects of your field.

Running a business, being an entrepreneur, and being on your own requires more of you than where you're at right now. Click To Tweet

In the end, this is what leads to you making not only the biggest difference and the most amount of money, but it’s being the most fulfilled. I’m going to be the first to say that you don’t have to go out on your own and form a business in order to do this. There are many opportunities. Even more so with COVID-19 and what it has facilitated as far as remote work. People are working from all over the world now where they had to be in a specific centralized location in the past. I look at the tremendous opportunity that exists to number one, identify your core competencies. Identify your strengths. Identify what I call human life value assets that I talk about in the book and start to leverage those.

Start to apply them to different areas with different companies and splinter or create derivatives of that and test here and test there. You don’t have to completely jump ship in order to pursue these types of ventures. What I would say is that from a call to action standpoint with regards to this second part of the episode, you get to know objectively and not just use assumptions or gut reaction as to where your strengths and passions are. This is the know they self where you can look at different assessments that are more objective in nature. The first that I love is Kolbe, the second is StrengthsFinder. The third is the Myers-Briggs.

It’s not simply taking these tests, but it’s studying and understanding the reports. Within those reports, it’s finding if you were to break down the talents, the passions or the fulfillment. As you take those assessments, what do you feel the most strongly about? Were they spot on more than any other area? That’s a signal for you to focus on where they nailed everything almost verbatim. That is where you can start to understand your competencies, where you’re passionate about and find opportunities where you could potentially go deeper.

You can enhance or magnify the depth of what you know before you go horizontally and the breadth of it. Going to The E-Myth, most people when they get frustrated in the hierarchical order of working in a structure, they pursue this path of entrepreneurship, self-employment, and starting their own business. Their core competency is in this little narrow niche whether they know it or not, but yet they take on a breadth of things. Whether it’s, you got to know some accounting, marketing, sales, all these other aspects of things.

It’s an interesting dynamic where you look at people that want to be freer. They want to have more opportunities. They want to make more money. Oftentimes, it’s the paradox. What you should be doing is probably the opposite of what you’re inclined to do. One of the calls to action for you is to know yourself at a deeper level, take these tests. You’ll spend maybe $100 on them, but they will be golden. In there, it objectively shows who you are, why you’re paid, what value you’re bringing to the world.

You can also assess what aspect of those reports is your core and use that as an indicator of what to pursue and find ways in which you can go deeper. A great way to determine that is within that niche, what’s your maximum income? What’s the maximum income in that specific area that these types of reports and self-assessments give you? I study mine all the time. I look at them. Sometimes I’m frustrated by them because I’m inclined to do this, that or the other, but they keep me in my core.

TWS 66 | Overcoming Obstacles

Power vs. Force

The second thing is a call to action I’ve already mentioned this and this goes to part one. From where you show up, your most common and consistent state, is it in a position of force or is it in a position of power? Are you showing up afraid? Are you showing up prideful? Are you showing up angry or resentful? Are you showing up courageously? Are you showing up neutral? Are you showing up with a feeling of acceptance that regardless of what happens, it’s happening for you? It’s not happening to you.

Get a pulse on that and then find some core memories of where you showed up as a hero. You overcame adversity, find those memories where you were neutral, where you were empathetic, where you took control and did it in an empowering way. When you find those, that is one of the best shortcuts to try and to show up every day. Maybe you start showing up in business settings, in meetings, in presentations, and then start applying that to your relationships, starting to apply that to your social relationships.

That’s it. This was a cool episode. It’s something that’s been on my mind. Hopefully, you found value in some of these nuggets. Go head over to TheWealthStandard.com. There’s an episode page for every single episode. Within that page, you can find those links. I’m going to put another plugin for feedback and assessments. That assessment will take you probably ten minutes or so. That feedback is going to help me tremendously because I’m already spending a ton of time putting together content, putting together videos, putting together a course that I believe encompasses the philosophy of the book. It also encompasses the philosophy of the show and the different themes and topics we’ve had over the last few years. It encompasses it in an actionable, personalized way.

I’m excited for that to come out. I want to be as double, triple, quadruple accurate as possible. That’s only going to come from your feedback. Thanks a ton. Thanks for reading. I appreciate it. If you found value, pass it on to others. I spend money on this. I don’t make any money doing the show other than providing value to the other companies that I have. Share this with others, get the word out. These are things that I believe come back when you’re able to share value with others and they find value in it. It’s this compound effect. It always comes back to you. We’ll see you in the next episode. Take care. Bye.

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Jacob Durham on Nomatic, KickStarter, And Starting An Online Business

TWS 32 | Starting An Online Business

 

If we envision selling an innovative product that we thought about, then we have to have the tenacity and courage to face the ups and downs of managing a business. In the current digital age, selling and advertising your products online is the best way to go. In this episode, Patrick Donohoe interviews Nomatic owner and co-founder, Jacob Durham, about how he managed his online business with his team which started on KickStarter. Jacob also tackles why we should learn to accept and retry after experiencing failure, and how his product sales increased using Facebook ads, among other topics on business.

Watch the episode here:

Listen to the podcast here:

Jacob Durham on Nomatic, KickStarter, And Starting An Online Business

I’m excited to be with you. I’m excited to introduce my guest. Before I do that and give you a little story, I tell this story in the interview as well. I wanted to remind you that the offer that I extended over the last couple of podcasts is still live and valid. It is a pretty significant discount to come with me to Tony Robbins’s Unleash The Power Within, which is going to be in San Jose in March 12th through 15th. Go to the website, TheWealthStandard.com to connect with my man over at Tony Robbins Organization. His name is Jeffrey and he’ll take care of you and get you that discount. I can’t wait to see you there.

If you have resonated with at least the theme of the last few months about entrepreneurship, this is an event that I believe will change your life. It’s an event that certainly changed mine as well as countless other individuals. If you have that urge, that itch that you want to scratch, the itch of entrepreneurship and have ideas and have means, but yet your psychology isn’t allowing you to make that leap, this is an event for you. This will change the way in which you view your business, your profession, yourself, your relationships. It’s incredible. You will love it. I can’t wait to be there with you. If you are interested, go ahead over to our website and you will find that information.

My guest is Jacob Durham. This is awesome. It’s a local company. It is a backpack that I purchased a couple of years ago. It’s a brand that this individual is one of the founders of and it’s called Nomatic. It’s Nomatic.com. It’s such an inspiring interview, an inspiring story. You’re able to see a lot of the principles that we’ve talked through over the course of this season in practice. It’s also looking at how serendipity works where when you have some will, a dream, an urge and the magic that can happen because of that is awesome to see. You’re going to hear that from Jacob.

Jacob is an awesome guy you can see the spirit and the drive in him. It was an awesome interview. I researched this company for several months, purchasing a backpack. I have to travel and I wanted something that was durable as well as simple, but yet could fit everything. The company’s incredible. I had a rip in my zipper a few months ago. I took a picture, submitted it, they send me a brand new one within a couple of days. It’s an incredible company. They’re now into more than wallets and backpacks. They’re into all sorts of stuff. You definitely want to follow them. If you’re in the market, it’s definitely a good product to pick up.

The story is there’s like a cultish following behind it because I was in Europe past summer at an event. I was on a row and I looked over and saw my backpack. It wasn’t my backpack, but it looked like my backpack. I looked there and I was confused because I was like, “Why is it there and I’m here?” I noticed mine was right there. I looked at the guy, he looked back at me, he looked out at my backpack and we gave each other the bro wink. That was pretty cool because Nomatic is one of those brands where you can recognize the bag. It’s a cool, sleek-looking bag. If you’re in the market for one, it’s a great product.

Jacob also has an amazing story. Him and his cousin are the ones that started the business. It started on Kickstarter and they did some more crowdfunding campaigns. That’s how they seeded their ideas. It’s such a powerful lesson. You will definitely get a kick out of it. It’s a great almost final episode this season, but I can’t wait for next season as well. We’re going to get into a little bit different topic, much less philosophical, although I’m going to interweave some of the philosophy into it. We’re going to be talking about investment strategy and not typical investment. We’re going to talk about the weird investments, the stuff that you probably haven’t heard of before.

I’m talking more in depth about what I would like to learn as well as what I would love you guys to learn as well. That’s it. If you like what you read, go and give us a good review on iTunes. That helps. They are narrowing down the number of podcasts that are on iTunes. If you don’t have good ratings, there’s not going to be most exposure to new audiences. We appreciate the support that you have given me in the past. Thank you so much for the support. The feedback that I continue to get about the podcast is inspiring to me and I can’t wait to bring you more amazing content. Let’s get to the interview.

I have Jacob Durham. He’s a cool guy and has an amazing business. It’s local but he is one of the Cofounders and Owner of Nomatic. This is Nomatic. This is a new bag because I got a one a few years ago and the zipper came loose. I took a picture, submitted it and got a brand-new bag within three days. This thing is awesome. I chose it because I have to travel. This thing is amazing. First off, the durability, from a travel perspective, you can literally fit everything in it, but Nomatic isn’t just backpacks anymore. We are going to talk through what you are up to in your journey as entrepreneurs.

I love that we’re doing this type of episode at the end because we’ve gone through the philosophy of the entrepreneur. We’ve had tons of different guests from that perspective. We’ve also had those that have been part of other entrepreneur journeys like coaches or authors. I know we’ve also had a couple people that were part of going from zero to nothing or zero to one. It’s awesome to have you here because I didn’t know you guys were in Utah. Utah is a small community. It’s big but it’s small, especially from the business world. It’s cool that you’re here and I can’t wait to talk about Nomatic. First off, did you ever think you were going to be an entrepreneur? Did you have that seed inside you or was this just random series of events and serendipity?

Do what you love and you will never have to work a day in your life. Click To Tweet

My dad is an entrepreneur. My dad’s brother is an entrepreneur. It’s in the family, we call it a sickness because we can’t stop doing more and more. I always dreamed of doing it. When we started this, it wasn’t like, “Let’s start a business and let’s get to this much. Let’s build to this size.” It’s like, “Let’s start a project, get some cash, learn a little bit about the business and then we’ll stop and I’ll continue with my normal day job.”

Is that how Nomatic started? This is one of the first.

It’s pretty much the first where I’ve tried my hand in making serious money. We were trying to raise $10,000 on Kickstarter with our wallet.

It started with a wallet then it went to the backpack.

We did the wallet, then a planner. We did a travel bag, like a duffle and backpacks. We have done about nine Kickstarter so far.

Now you have influencers like Lewis Howes. Who are some of the other influencers that are promoting your stuff and using your products?

Lewis Howes is a big one that we’ve been able to become friends with. He’s an awesome guy. Peter McKinnon is somebody that we’ve worked with. He’s a big photographer. There are a couple other local people that are good friends of ours, but those are probably the two that people will know the most. They’re the ones that we’re going to close with.

You’ve been around for a few years. Talk about maybe where you’re at right now from a size standpoint. How many customers did you have in your first couple of years to now? Where are you at right now?

Customers in our email, we have about 350,000 to 400,000 emails on our email list. We have about eighteen employees on our team. Me and my cousins started it. I’ve been around for a few years. We have 6,000 square-foot office in Sandy.

TWS 32 | Starting An Online Business

Starting An Online Business: Trying to assess where you’re at is a scary thing to do. You always think you’ve learned a lot, but when you look back a few years, you realize you knew nothing and you have grown so much since then.

 

Let’s talk about the journey. We talked briefly about what we have referred to as the entrepreneur journey, which can be paralleled to the life cycle of a human being. You’re born, you have an idea in business. You’re a toddler, you learn to walk and speak. In the business world, you learn how to market a few things and see that people will buy something from you. You go to being a teenager where you think you know everything to the young adult where now you’re super appreciative of not going out of business in the first couple of years. Walk us through the journey of how you went through those stages. Where are you at right now?

Trying to assess where you’re at yourself is probably a scary thing to do. When you’re in a moment, you always think, “I’ve learned a lot. I’m pretty smart now.” A few years then, you look back and you’re like, “I knew nothing about what I was doing. I have grown so much.” At that moment, you think you’re smarter and then a few more years later, again you’re like, “I knew nothing back then.” It’s in progress. I don’t know if I can tell exactly where I am. I’m looking at peers around me. I have some advisors and people I lean on who make me feel like I’m a baby and beginning still. I’d probably say I’m still in the early stages.

Like life, you carry all sorts of ways of doing things like perspective, bias and opinions based on how you were raised, based on what you were like as a toddler or a teenager. I agree with you because it’s hard to identify exactly where you’re at. The prime of life is when you go to hiring people who’ve already done it and you continue to innovate. I’m not there and very few businesses are there. That’s one of those arrivals where instead of figuring it out yourself, you find someone that’s already figured it out, hire them and pay them. As you and your cousin started, you probably were doing everything like marketing. You’re doing payroll. You’re doing the books. You were turning off the lights. You were getting the cleaning done. As you started to achieve some success and bring on people, how did you go about hiring and expanding Nomatic by having the scale of using other people to do certain tasks?

When we started a few years ago, it was my cousin and I. We probably went for a good year and a half until we brought anyone else on. The first thing we brought on was customer service because it was a piece that took so much time and it didn’t need us to do it. It wasn’t what we were there to do. That was the first person. At about probably three years, we had about six people. Bringing on people is an interesting experience. It’s tough because when you’re doing everything yourself, you have a vision and you don’t know how to communicate to someone else what that vision is. You just know, “I want to do this. It’s not working so I’m going to stop. It’s working, I’m going to lean more into that.” You know that intuitively. Getting someone else to think about that well and align with you, I still don’t know how to do it. I’m still figuring it out.

Oftentimes, you assume that they already know what to do.

You think it’s inherent, but they haven’t been there. The fact that they don’t isn’t ever their fault. It’s just they haven’t been there to see all the decisions along the way that got you there. They’ve never been there. There are super smart people around me, but they haven’t had the same experiences with these products and with our vendors and all these things. They haven’t tried these things that I already have. They can’t just know those things. You imagine they would or they would get it, but it’s not the case.

What have you done whether it’s training or onboarding or development of your team? What have you done from that perspective of understanding they’re not going to be hired and get it, even though they’re smart, but teaching them? What are some of the ways you’ve done that?

One of the biggest things is looking within myself saying, “What do I want?” I have to define that first. That’s the hardest part. We’ve been working on it. We’ve spent a year and a half trying to decide what is Nomatic? What is our purpose? Why are we here? What do our customers want from us? What is our vision and goal? All that stuff. The first step for us is trying to find that. That’s constantly changing. We’re constantly asking ourselves what that is. The next step is in learning how to communicate that effectively. Right now, we’re in the process. When you’re in the moment, you think you know everything and you go back, you don’t know anything.

We’re always upgrading this but right now, we’ve gone through 2019 and realized our team lacked a lot of the vision that we wanted them to have. In the moment, you’re so busy. You think it’s working and three months later, you realize, “I failed again and I didn’t do it right.” For us now we’re saying, “When 2020 comes around, we’re going to revamp our bonus, our incentives, our alignment, what meetings we have that reinforce that vision. When the end of the year comes, if things don’t happen, we can point to something to understand why it’s happened. It’s such a big learning process. I wish I had a great answer to say, “This is how you do it.” That is hard.

A huge piece you could add to your company culture is humility. It doesn't matter who's right, as long as you all end up at what's right. Click To Tweet

It’s the perfect answer because it’s something that most entrepreneurs or all entrepreneurs can relate to. Maybe talk about how you’ve gone about discovering who you are, what you want, what role are you best at playing. Talk about some of the bigger roles that you’ve brought on, operational role, marketing role, where it was a very important piece, not necessarily customer service but an important piece.

My dad always had a saying, “Do what you love and you’ll never work a day in your life.” Everyone has heard that. For me, it was finding out what I love to do, what I’m passionate about and what I feel I’m effective at. It’s been product development, working with the factories overseas and innovating, developing and also telling our story of who we are. Those are the pieces that I’ve tried to hold on to a bit. When I’m in the business and working, what energizes me and what drains me? If something’s energizing me, I want to hold onto those pieces a little bit more because I feel like when I’m energized and excited, I’m going to perform at a higher level. When I’m being drained, I’m going to perform at a lower level. That’s probably one of the biggest temperatures I can take on where I should exist in the business.

One of our guests, Craig Ballantyne, who’s a business coach, speaker and author. He has this exercise where you essentially calendar, you keep track of everything you’re doing during the week, all your tasks. You essentially do hot, warm, cold as far as your energy level and your excitement level. That’s where you start. That’s interesting. It’s one of those things where you sometimes get to the point where you like doing something but you know you not necessarily could.

That’s painful when that happens. Some pieces look awesome and cool like if I can be this cool entrepreneur or something but I am not just good at that.

Maybe talk about some of the principal roles, whether it’s an operational role, an accounting role, a marketing role or business development role that you brought on that made a difference. Walk us through that.

The first thing we did was me and my business partner found positions where we didn’t need to be there like those task-oriented ones. Those are the first things we hire and that’s what most people do. The bigger roles that we’ve hired on have been a video guy, which has been awesome. He’s super talented. He worked with Devinsupertramp. He does extreme videos and things on YouTube. Tyson has been an awesome hire, a skill that we don’t have. That’s been helpful to develop the brand and make it look a lot better. We haven’t hired any executive level positions. Up to now, it’s been a lot more of functional leaders like marketing directors or things like that. We have marketing and operations. We have filled out a lot of places, even places where I get energized.

We have hired people who are better than me like product development. We’ve hired on a guy who worked at OGIO. He was their head of product development. When they got bought by Callaway, they moved to California and we were able to bring him onto our team, which was awesome. He’s great. There are people in every position in the company. Me and my cousin now are trying to keep our DNA of the brand with those guys. We meet with them weekly all the time. As we are developing products, we understand what our customers are looking for and want. We try hard to be in those meetings and say, “This bag looks great, but how do we take it to the next level? What’s the next piece of innovation? What’s the next thing we need to do?”

How do you and your cousin work together? Maybe walk us through that, being founders and partners.

We’ve been so lucky. We always say that if we could interview 1 million people, you wouldn’t find someone better than each other. We got lucky. We’re cousins.

TWS 32 | Starting An Online Business

Starting An Online Business: In developing a product, you must understand what your customers want and think. It doesn’t have to just look good, you have to take it to the next level or the next piece of innovation.

 

You’ve known each other your entire life.

We’ve grown up hanging out. We work well together, but we’re very opposite, which is probably why we work well together. He’s very good in the moment, in the details, figuring out if something’s breaking down in the business, he can see it and logically think through what’s happening and fix it. I’m saying, “In a year from now, we have to launch this product.” All these things have to happen between now and then. We work well together that way. He’s very logical. His ability to think through a problem and resolve it is so powerful. I look up to him a lot for that. He’s always like, “I’m always thinking of what’s next and what’s happening next.” He gets frustrated because he’s like, “Jacob, we have so much to work on.” It works well that we bounce off balance each other that way.

You guys didn’t design it that way. It’s one of those serendipitous events, those lucky events that just happened because I see that when you have two founders that are the exact same, that’s where conflict start. When you have polarity, especially when it comes to strengths, that’s huge. It sounds like you have that vision of what things would become, understanding the customer, understanding the brand. At the same time, that can get people into a lot of trouble. We work as a good example. There are millions of different examples of people who want to push the envelope without much operational capability, implementation capability.

I’ll say, “We should do this and this.” He’s like, “Jacob, we can’t do twenty things in a year. We have to do two. We have to do it well.” He’s good at honing me and saying, “You’re being unrealistic.”

It’s not honing in like suppressing that. It’s, “Keep going but let’s find the most important things that will make the biggest difference and chip away at those first.”

Another huge piece that has made everything work for us and it’s our biggest piece of culture whenever we hire someone is humility. Nothing else matters in our company but humility. We always say it doesn’t matter who’s right as long as we ended up at what’s right. We live and die by that. We tell people when we hire them, “If you’re not humble, if you’re bringing in pride, you’re gone right away.” We tell them that every time and we live by it. John and I, as you develop ideas and you work on something for three weeks and you present it and they’re like, “I hate it,” you have to be like, “How do we make this better?” You trust their intentions are right. That’s what’s made it work. It’s that humility. It’s huge.

We’ve talked about this a little bit in prior season where our society is heavily influenced by the concept and the notion of what failure is. It has to do with the school system. There are other elements as well. The school system says, “Failure is bad. Success by yourself is good.” There’s a book that we referenced often, which is why A students work for C students and why B students work for the government. There’s a lot of evidence there because typically the C students aren’t F students, but they’re distracted. They’re bored. They’re not challenged. They’re visionary. They don’t necessarily like to march by the beat of the drum. You need that role. You also need A role. You also need B role. At the same time, it’s seeing how those roles work together. My point in making that example was the idea of failure. If people think they’re going to fail or do something wrong and it’s characterized as something’s wrong with them, it’s vast. It’s amazing you lead with that because business is all about failure. You can’t get to what works unless you know if it works first.

I read a book called Outwitting The Devil. It’s a good book. In that, it talks about one of the devil’s most powerful tools is saying failure is a mistake. Failure should be called education, not failure. I love that principle. Failure is necessary. It’s not a negative thing. It’s growth.

It’s those social rules that exist of what failure is. Failure is one of the most amazing experiences out there because it’s where all the true learning takes place.

If you want people to buy your product, you have to spend money and try to get in front of them. You can't just hope it goes viral. Click To Tweet

You fell over and over. You have to be okay with that. I think it was Gary V who was like, “Fail fast and then fix it,” but you have to do that.

Have you guys established your set of core values, what drives the business? It sounds like that’s one of them. Humility and being willing to fail but being okay with it and learning from it.

Probably our biggest core value is humility and being able to talk openly with each other and no politics. That gets squash right away and thrown out the door. We don’t deal with it. That’s huge. Recognize people who are doing good. If someone else had a good idea, make sure they know that they did a good job. That’s huge.

How did you decide to use Kickstarter? How did you decide to raise capital that way?

Kickstarter is the growth story of our company. The origins of our company is in Kickstarter. It wasn’t that we were trying to start a business when we did all this. I and my cousin went to a Jazz game and we said, “Let’s try our hands at business and make few extra bucks.” I had a baby coming. I was living from paycheck to paycheck. I’m like, “I need extra cash somehow.” We said, “We’re going to do something together.” That was it. We left that night and saying, “Let’s talk every day and try to develop something.” When my cousin was in the BYU Entrepreneurial Program and learned about Kickstarter, he told me about it. We’re like, “That’s great, that’s awesome.” We don’t have any cash. Kickstarter is a way that people can pre-order product. All you have to give is time to make it happen.

What happened was we started designing and developing the product together. We were down in my basement and were holding some pieces of paper and elastic band together. We’re trying to figure out how we could make a wallet differently because it’s been done a million times. We came up with an idea. We went to JOANN and we paid $200 for all these materials. That was our total investment in the company so far. We developed the wallet and Kickstarter was the platform that allowed us to launch it without any financial needs upfront. We launched it there hoping to raise $10,000. We ended up raising $170,000 and we were mind blown. We’re excited. I learned a ton in that process.

What sold the people that got them to $170,000? Was it the fact that you had a new wallet? What were some of the characteristics you associate it with?

The wallet is innovative. It’s the super minimalist wallet, but the big difference is you pull this tab and it pulls out half of your cards. It gives you access to your foremost used cards. It’s pretty innovative, but it’s not like rocket science. We had 30 days in the campaign and for fifteen days we were using our own means to contact people and say, “Come buy our wallet.” We got to $8,000. We were excited, but we were starting to making $200 a day. We’re like, “Are we going to hit our goal? We might not.” At that point, we contacted a local company called Funded Today who ran Facebook ads for us.

When we started running Facebook ads, we went from $200 a day to raising $8,000 a day. We were like “What just happened?” For us it was the a-ha moment of in business, if you want people to buy your product, you have to spend money. You have to get in front of them somehow. You can’t just hope it goes viral. Virality is luck. That for us was like, “You have to spend money to gain customers. You have to do it in smart ways.” Facebook ads is what drove that. That was huge. My cousin quit his full-time job at that point and said, “I’m going to dive full end of Facebook ads,” and that’s what he did.

TWS 32 | Starting An Online Business

Outwitting the Devil: The Secret to Freedom and Success

He got good at it. The campaign ended in November. In January, we had wallets in our hands that we could sell. He started running Facebook ads and it started turning. At the time, it was the golden age of Facebook ads where it was ten or fifteen to one return. It was like printing money. We’re spending everything and kept going. In the first year, we ended up making $1.5 million on $20 wallets because Facebook ads were crushing it. I quit my job six months later. The beauty of Kickstarter is you could launch a product. You don’t have to go and make inventory. You can see that people like it. You get the cash up front and you go on manufacture. The risk is so low.

Through that experience because Facebook changed how all that works, the ads got more expensive. What did you discover about your customer, the audience that was buying? Was it them responding to a video or responding to language? You use certain demographics and tested those because in Facebook, you can get very granular as far as who you targeted. Talk us through how you identified your customer.

Facebook identified the customer for us. We used the Lookalike Audiences. We took all the emails. That was the other cool part because we had a $170,000 campaign. We ended up with 8,000 backers. We had 8,000 emails right from the start, which is a hard thing to get when you’re a new entrepreneur. People actually bought your product who are interested in your brand.

Kickstarter gave you the email addresses.

Yes, we plugged those into Facebook, the Lookalike Audiences. From that, you get 10 million people who look like your audience and you start serving ads. That did the work for us, which was nice. We did learn a lesson throughout it. We launched the wallet. We launched the planner and both of those had features, something that was different like how you pull the tab and you get access. Our notebooks had pen holders and there were sleeves in the back, whiteboard paper, a lot of features and functions.

After that, we launched a watch. It was a minimalist watch that didn’t have a lot of features and it tanked. We learned that for us, that innovation, that feature-rich product was the novelty. The novelty feature is what piques somebody’s interest. We learned that on Facebook. We started an ad agency where we were running Facebook ads for other companies. That’s the entrepreneur in me. It’s a sickness I can’t stop. We learned that for companies that we focused on, we had a niche of companies who were on Kickstarter then went to their own website. We only ran their Facebook ads and not other companies. If you’re selling a t-shirt that has prints on it, it wasn’t innovative. On Facebook, you wanted something eye-catching and different and a story behind it. By having something innovative, that was Kickstarter-worthy, it made it better on Facebook ads because there’s that innovation. It’s that special something that made a difference that caught people’s eye.

Did you ever launch something that wasn’t successful or as successful? You did the watch.

The watch wasn’t on Kickstarter though. We launched that on our site. We expected it to be less. We didn’t expect it to do that bad. In order to go on Kickstarter, you need something innovative. You can’t be on there if it’s not because they’ll shut you down. We had a friend who launched a watch and got shut down because Kickstarter said it wasn’t innovative enough. There’s that requirement, that prerequisite. On Kickstarter, fortunately, the wallet was our lowest campaign at $170,000. Now we’ve done nine. We’ve raised over $10 million through Kickstarter, which has been awesome.

How did you go now from a wallet, which is very minimalistic to the planner, to this complex bag? That’s minimal. This complex bag has pockets galore protections like the RFID protection for identity.

Virality is luck. Click To Tweet

It’s the Swiss Army knife of bags.

I got this bag because it was the newest bag and it had some other things in there that the first one didn’t have. How did you go from simplistic to something more complex?

Our process has always been very data-driven and based around Kickstarter. Kickstarter is our demographic. With the first one, we said, “We’re launching on Kickstarter. What product does well regularly on Kickstarter?” We found that wallets always funded, whether it was a $5,000 goal, $10,000, $20,000. There were campaigns that were making 500,000 on wallets. We’re like, “There are many of them. They always work. Let’s try that one,” so that worked.

After we finished this campaign, we’re like, “What product is next? The planners are doing well.” We did the planner next. We saw that bags were doing well so we jumped into bags. The other piece that drove it too was the Facebook ad cost was rising. We needed a higher price point item. We always said each campaign needed to be at a higher price point and had to be things that do well on Kickstarter regularly. That’s the direction and how we ended up any of the price we did. That learning curve of going from a simple wallet to a complex bag was pretty steep. It took time. Every bag we develop takes about a year to develop.

How did you do that concept development? Have you had some dream and you’re like, “I see this bag with a bunch of pockets in there?” Are you using some process to say, “What’s a product that people or a customer needs? Let’s develop it from there.” Walk us through that process. I’d be curious about that.

Whenever we decided we’re going to develop a product, we have a process that we follow where we say, “Let’s look at all the best bags that we can find out there. Let’s buy them all and look and study them.” We create big surveys that we use Google sheets, Google forms. We create surveys where we say, “What’s in your bag right now?” We’ll ask that question and say, “What type of bag do you carry? Do carry this in your bag?” It’s tons of questions. “What’s the best feature you love about your bag?” We’ll survey like crazy and get tons of information that way. We figured out how to take all the current bags that the people like and grab the best pieces and make a Frankenstein approach, but make it look clean and sleek at the same time.

It sounds like the price point was going to luggage. How did you go to luggage? What was that decision process like?

On the wallet, we’re at $170,000 on Kickstarter. We did $380,000 with the planner. With the travel bag, we have $1.7 million and raised another $1.5 million on Indiegogo. We’re like, “We’re a bag company now. That’s all we’re going to focus on. Our tagline for that was, “The most functional travel bag ever.” We’re saying, “We’re going to make the most functional bags ever.” We made the travel bag like the duffle. We’ve made backpacks and messenger bags. We’re knocking out each bag. Every home has at least one of these bags. We went through it sequentially and luggage was the last one on the list, but also the toughest. We saved that for the end because going into plastics and all that is not easy.

I know there’s a bunch of Kickstarter where they developed smart bags. They have battery and it totally tanked because of regulations stepping in.

TWS 32 | Starting An Online Business

Starting An Online Business: Having something innovative and Kickstarter-worthy makes a difference that catches people’s eyes.

 

There were a couple of companies that went out of business overnight because of that.

I remember going to the airport once with a bag like that and I had to have my wife come pick the bag up.

It was a sad for them, but it was great for us because a lot of those were male-focused brands. A lot of them had to disappear. It paved the way like it was right when we were thinking about doing it. We’re like, “Let’s hit it hard.”

What’s next for Nomatic? What are you thinking? What are you working on? What are the things to expect in 2020?

We launched one of our biggest campaigns ever. We launched the Peter McKinnon camera bag. Photography is a big next step for us that we’re excited about. It’s fun going into a niche where a community exists, where everyone’s doing photography and the bag supports that hobby well. We’re excited about that. We’ve did a travel pack on that one. It’s more of a travel photography bag, so we’re looking forward to do everyday type of bags and gear with Peter. That’s a big thing.

Also, we loved working with someone like Peter McKinnon. He has six million followers. He’s an opinion leader inside of this community. We’re trying to see what other communities resonate with our audience. We’ve talked about gym, tech, minimalism, sustainability, those types of things and say what other big awesome people exist out there that embodies those verticals and try to see if any of them like the Nomatic brand. The cool part with Peter was he was already buying our stuff organically. We brought them in and made a bag with them. In the future, we’re hoping to do more of that type of stuff. Find communities and create bags around them with key opinion leaders to be the face of it.

I was telling you a story about the cultish side of Nomatic. I was in Amsterdam at an event and there was a guy that was on my row. I looked over and I saw his bag. I’m like, “Why is my bag over there?” He had a Nomatic bag. I looked at it and I looked at him. He looked at my bag. He looked at me, then we did the bro nod. What are some examples that you’ve seen out there? Have you tried to figure out ways in which you capitalize on that?

I love that story because it’s exactly what we’ve had talked about in our conferences. As motorcycles drive by, they look at each other and give a peace sign. They have this brotherhood where they’re like, “We’re brothers. We’re the road warriors. We’re doing this.” We want that feeling of Nomatic is all about life on the move where life on the move is more than physical movement. It’s a way of being, constantly growing, developing and becoming more. We want people that when you see someone with a Nomatic bag they’re like, “That guy is doing cool stuff. I like that guy.” If you have one and you’re like, “We’re changing the world here.” We want that feeling.

That’s certainly a push for them. We do have some of our ambassadors like Lewis Howes and those guys. We do Life on The Move videos where we talk about these people that are changing the world. They’re doing cool things. We do big videos on our YouTube channel where are we tell their story. We don’t push the product at all. We just say, “Here’s how this person is doing cool stuff.” We have this culture of how people involved with Nomatic aren’t your average people. They’re exceptional individuals. That’s some words we’re trying to push with the brand because we believe that people who are like that want quality gear. They want to be organized. They want to have their whole life. It gives you confidence as you travel.

Changing people's lives by creating opportunities where we can have a fun place to work is the best feeling in the world. Click To Tweet

It makes sense based on how you do product development where you go find all the bags that are out there and find other stuff that’s out there that you would compete with. You take all the goods and leave all the bag and make it look cool, which is profound because that’s why I bought mine. I didn’t know you are a Utah company. I just looked at a few different bags and I knew exactly what I wanted because I had experienced bad bags. That’s what I came across. It’s been a cool experience since. I didn’t know you had luggage. Walk us through some of the more challenging pieces of your entrepreneur journey. I’ll tell mine while you’re thinking about yours. For me, it’s been relationships because I work alongside people. I’m not from Utah, but I consider this my second family. I become friends with people.

When friction starts to happen or when we have different opinions of this, that and the other, that’s been challenging for me. Hiring is something I’ve focused on for the last couple of years. We used programs like Topgrading and we have ways in which we go about doing interviews to hire the right people. Some of the people we have now are amazing from day one. A lot of it comes down to seeking those that align with your culture, your values, but also were good at what you’re hiring them for. I thought a job description was like Google “marketing person, job description” and copy paste. That got me in a lot of trouble with a lot of different positions. What’s been some of the biggest challenge I’ve faced is parting ways with people I considered friends. What are maybe some of the things that you’ve experienced that had been difficult to overcome?

It’s not to take the same thing, but I would say it’s working with a team, rallying a team around you, getting them excited, getting them aligned, even the vision there so that everyone is excited to be there. When they celebrate a win, they’re celebrating the right win. It’s tough to figure out how to get people excited. It’s scary too when you bring someone on your team, you’re making commitments to each other. You’re like, “I’m bringing you on because I believe in you. I’m going to keep you employed here and I hope that you succeed. I don’t want to let you go the next day. I want to provide an awesome place for you to work and you’ll love it here.” That’s what I’m committed to do and they’re committed to work hard and help build value.

That’s tricky when you want to help people. Getting them aligned in the vision altogether is hard. Everything else, I feel like all of it is hard. People will say, “I want to be an entrepreneur and I’m going to do this.” They say, “By this time, I’ll have this and this.” You’re like, “It’s so hard. It takes so much longer than you think.” Nothing is easy but I feel like everything else, like you can put it on a checklist and say, “Do this, then do this,” and a lot of things. Working with people and being a human, engaging with them and helping them want to be a part of the team is tough. It’s the highest highs and the lowest lows. When it’s good, it’s good. When it’s hard, it’s hard.

It’s one of those things where relationships are what make the world go round. A lesson I’ve learned several times is people aren’t going to care as much about the brand and the direction as you are, even though you want them to. For me, it’s layering on expectations that they should have based on what I would set as expectation. It’s not necessarily that there are expectations. That’s why it’s profound as you onboard people and you talk about your values and what you want for people, how you want them to operate and work together. Those are the expectations and it’s setting that from day one. The expectations will exist. Either you create them or they will create themselves, but you have no control over that. That’s been a huge lesson. The people are part of a business. Getting the people game, understanding the psychology of how people work, how they’re motivated, it is a challenge, but it’s also fun.

You have to realize how bad you are. No one is intuitively great. Everything is business. People might be good at 10%. They can excel in those things, but it’s another 90%. It is so painful how often you have to look at yourself and you have to say that you’re the problem. You have to recognize your fault in it because it’s never just someone else’s fault. If you’re saying that, you’re always wrong. You play a big part. As a leader especially as we’ve grown from six people to eighteen people on the team, many times I’m like, “I am so bad at this. How do I get better? What books can I read?” You try and try and it’s hard. You have to realize that you’re going to keep going and you’re going to keep failing, learning, growing and try to become better and try to be fair to people.

It’s interesting because it’s clear that you embody your values by saying some of the things that you’ve said because clearly the success that you have has not come by not knowing what you’re doing. Obviously, you know what you’re doing in a lot of different ways. I also say that something I’ve resonated with as we’ve talked about entrepreneurship and doing some self-reflection. Where you want your company to go and who you want them to be together cannot outpace you. It can’t be at your level. In order for it to grow, you have to grow first. You can’t lead a person to a place that you haven’t been to. When I connected that, that’s where it’s reading, studying, events, coaching made such a difference. I realized I had to break thresholds in order for the team around me to break their threshold. It sounds like you’ve resonated with that as well. What are some of the things you’ve done to expand your capacity as a leader? Humility and understanding your values first are huge.

The thing that I’ve been trying to focus on more and more, it’s in my mind right now because I’m working through as I’m preparing for 2020. I have this goal of having a fresh start with a new year. It’s a lot of first recognizing what’s wrong, talking with your employees and seeing where I am falling short, being open to listen to them. It’s amazing what you don’t know is happening behind all the office closed doors. I’ll talk with some of our employees and learn all kinds of stuff I didn’t know existed. Having those conversations is huge. Everything they’re saying, there’s always a grain of truth to it even if it hurts, if it’s wrong. If you feel it’s a lie, there’s always a grain of truth to it and you can’t ignore any of it.

If it’s exaggerated, it’s still an exaggeration of something that could be true.

TWS 32 | Starting An Online Business

Starting An Online Business: Recognize what’s wrong, see where you’re falling short and be open to listen to your employees. It’s amazing what you don’t know is happening behind the closed office doors.

 

It’s something that I did or someone else did. There’s a part of the system that’s broken that has to be fixed. As far as growing myself, I always go back to that humility of saying, “These are the faults.” A big piece is communication. Another thing we always say is, “If there’s a problem, come and talk to us. Don’t let it fester. We will never be angry about that.” We live by that. When people come and talk to us, we’re never angry. We say, “Thank you for telling us how do we fix this.” We create plans together like, “I’ve learned that I’m not giving enough recognition to some players on my team and I need to recognize them more, so how do I do that better?” It’s talking with their directors to say, “What systems can we put in place?” It’s open communication about everything and whenever someone comes with a problem, never let yourself think that it’s not true. It always is.

It’s the nature of the feedback loop. There are many instances of that in different parallels. John Boyd is the one that popularized the feedback loop. It’s his OODA Loop, which is Observe, Orient, Decide and Act, and it loops back. The more feedback you can get, the quicker the feedback. That’s the nature of the team because everyone brings a perspective of life to the table. We all have our what’s right, what’s wrong, what’s good, what’s bad, what’s success, what’s failure, what incentivizes me, what doesn’t incentivizes me. The more communication, the more openness that you can feed that, the quicker you can either talk about it and communicate in a way that people understand then you can move forward. The last thing you want is some sliver in a person’s thumb. It’s so small, tiny and insignificant, but yet it’s so annoying. You can’t do anything. Do you do SWOT analysis with Strengths, Weaknesses, Opportunities and Threats with your team? Do you do the Net Promoter score? What are some of the things you do to get feedback from your team?

Early on we tried to do one-on-ones frequently and talk through what’s going on with everybody. We’ve gotten bigger. We’ve tried to learn. What I’m learning right now is we’ve gotten bigger and now had directors over multiple people and I’m over the director. That’s been an interesting thing to be one more step away from the people on the front lines. When I had one-on-ones, I could get a pulse if that person is happy or not. Now that I say this, I hope that my directors are savvy in human connection enough to be able to feel, “This person isn’t happy and I need to fix that.” You don’t know. For us, it’s constant communication. We don’t have a big format, which is what I’m trying to do for 2020. It’s trying to constantly communicate on a regular basis and have something on the calendar that says we’re going to meet at this time every month. They can rely on that. It’s huge.

There are ways in which you can do it, but it has to work with the company based on what the culture is. It’s totally true. When you start to go from the distance of one-to-one to once removed, twice removed, three times removed, it becomes challenging, especially if you connect with people at that level. That’s part of the journey. Part of those stages is you go from being in the business to working on the business, but as far as scaling and making the biggest difference, you go from connected to the customer and connected to the company and employees to connected to as much of the customer as possible and to those level of employees, the director levels, the executive levels that then carry the message forward. We could probably share a lot of war stories. It’s part of the journey.

My favorite thing is when you set up those multiple layers, it works. When something works, it’s the most incredible thing. Everyone along the line is happy and everyone feels rewarded. It’s so beautiful when it works. It’s the best feeling and you’re changing people’s lives by creating opportunities where we can have a fun place to work. That’s what it’s all about. For me, as I’m doing entrepreneurship, I created a wall and I laugh like, “It comes into my life.” I’m like, “I created a wall in my life.” That’s not what it is. You’re working with these people and changing their lives, creating relationships and creating a good life for yourself and everyone around you. That’s what it’s all about.

There’s a dynamic of team. If you look at individual sports versus team sports, even in individual sports like golf, you see these little cliques and groups that form. Why does the President’s Cup exist? Because people want to be part of a group or a team. You look at some of the most iconic teams in history, obviously the Jazz with Stockton to Malone and those iconic players that worked so well together. The Chicago Bulls and their dynasty and you still see it to a degree. The Jazz right now, they had an incredible team and incredible leadership. When some of those players start to not do so well, sometimes the whole team and the whole structure falls.

When everybody is picking up the pieces and supporting one another, it’s amazing how it re-energizes the entire team. When I look at a business and taking something that didn’t exist, turning it into something that does exist that people like and love and you have a cult following behind it, people participating in that is super empowering. It’s one of those feelings that feeds that entrepreneurial hunger. It fulfills you, but it makes you hungrier. It’s the same thing. If you didn’t make mistakes, if you didn’t fall short, if you didn’t fail in certain capacities, you’re not going to enjoy that.

When you fail and then you make it work and your teams sees the progress, it’s so good.

There’s a quote we used on one of the episodes as far as the depth of your feeling or experience. The deeper you go as far as failure and experience, the more can you expand on the other side of the spectrum. There’s total truth to that when it comes to business. It’s like stretching yourself. It’s like building muscle. You tear with heavier weights. In order to lift even more heavier, you have to tear it first and go deeper. It’s awesome to hear your story and I’m grateful for you coming in and sharing it with us. How do audience buy bags from Nomatic? It’s such an awesome product. How can they learn more about Nomatic? How can they follow you and see what you are up to on social media? What’s the best way to for them to connect?

Go to Nomatic.com, our website. You can buy a product there. At the bottom, you see our social feeds. We are @Nomatic on Instagram. We have a YouTube channel where we have those Life on The Move videos. We highlight a lot of entrepreneurs. We’re doing cool stuff, some local ones, some that aren’t local and we talk about that. You can get to understand what our culture is all about and stuff. Check us out on YouTube, Instagram and our website.

Jacob, it’s awesome to have you here. It’s a pleasure to meet you. Thanks for what you’re doing and championing the entrepreneurial spirit. It’s inspirational and motivational.

Thanks.

Everyone, thanks for tuning in. We’ll check in with you on the next episode. Until then.

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About Jacob Durham

TWS 32 | Starting An Online BusinessJacob Durham is the owner and co-founder of Nomatic. Nomatic began when two cousins — Jon Richards and Jacob Durham — designed an innovative wallet and launched it on Kickstarter. They expected to get about 50 orders, but over 6,000 people backed their campaign. Since then, they have launched multiple crowdfunding campaigns and shipped product to hundreds of thousands of people worldwide.

Nomatic has continued to innovate products by listening to what consumers want, prioritizing quality, and creating the most functional products ever.

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Planting And Nurturing The Seed For Entrepreneurial Success

TWS 30 | Entrepreneurial Success

 

Cultivating your business can be well compared to the process on how we cultivate and grow plants. In this 30th episode, Patrick Donohoe unloads the experiences and lessons he has learned this year. Reviewing some concepts, he talks about entrepreneurship and success and teaches on how we can rewrite the rules of failure, rewire our conditioning, and live successfully. Sit back and tune in to this episode to learn how you can plant and nurture new seeds, and start seeing things transpire.

Watch the episode here:

Listen to the podcast here:

Planting And Nurturing The Seed For Entrepreneurial Success

I’m solo and I have a lot to cover. I’m excited to share a few things with you. This is the episode after Thanksgiving. I hope you guys had an amazing Thanksgiving and were able to celebrate the amazing things that we all have around us. I’ve come to love this year, which is trading expectations for appreciation. I’m going to get into a lot of that. I hope you guys had a great break and it’s hard to believe that we’re coming to the end of the year and the end of the season on entrepreneurship. I’ve had a good time and I want to unload on everyone, the experiences I’ve had this year that have revolved around this topic. We still have a few more guests left. It’s not going to be the last episode. I’ll probably do a conclusion to the season, but I have a few more guests.

My good friend, Craig Ballantyne, is the author of The Perfect Day Formula. For those of you who have read my book, I talk about the story behind how the book came to light and Craig’s couple day workshop was instrumental in initiating those thoughts, feelings, drive and motivation to the book. Also, we have the CEO of a local company. One of my guys, Ben Curtis, an amazing friend and one of the executives here at Paradigm. He knows everybody it seems like. We both have about a year ago bought this backpack from Nomatic and I’ve seen them everywhere and I got to travel a lot this year. There are a lot of people, even internationally, they have Nomatic backpacks. The CEO and the founder are going to join us. We have him on here and then a few more guests.

We have more than the actual weeks are. We’re going to probably do a couple in a week. Anyway, I hope you guys have enjoyed it. The purpose of doing this is as much to benefit me as it is to benefit you because I’m on this journey as well and I know you tuning in and the feedback that we get around the notion of entrepreneur, it doesn’t relate to those that are already entrepreneurs. There’s an entrepreneur bug in everyone. There’s this I would say seed in us that we can nourish and nurture and then once it becomes a plant, we can prune it and ultimately get fruit from it. It’s one of those things where it’s not this overnight thing. There’s some entrepreneurial perspective out there that you get these insanely successful results.

The fruit, without ever having to plant a seed and multiple seeds and nourish the soil, make sure it’s in the right soil and prune, fertilize and weed and there’s a whole process to it. It’s a never-ending process, the whole idea of infinite game. It’s this never-ending process of improving ourselves, expanding, providing more value to others. I’ve had a great time and I want to talk about some of the things that have been going on with me, some of the experiences I’ve had, my breakthroughs. Before I do that, I’m going to introduce the next season for The Wealth Standard podcast and we have a lot of stuff that we could talk about and I felt appropriate to talk more practical things.

We’ve spent essentially two years being very philosophical. 2018 is with the year that my book came out and we got into the notion of life that you are your best asset. We got into liberty, the pursuit of independence, the pursuit of freedom and then property coming from John Locke’s writings and his philosophy back in the late 1700s. We get into this year and we talk about capitalism. Capitalism is very philosophical and then we’re into entrepreneurship, which is also an idea. For 2020, we’re going to kick off the first season talking about investments and wealth strategy. It’s going to be different. I don’t do anything mainstream. Mainstream is boring and mainstream never works either, especially in the long run. My take on it is going to be atypical investments, atypical wealth strategy.

I have an incredible opportunity to network and rub shoulders with so many amazing people and I run across all different types of investments that are fascinating. It’s amazing what people come up with as far as value propositions and how they monetize that, how they raise capital, how they trade investments, do they get others to invest. We’re going to definitely have several months of talking about different investments, alternative investments, atypical investments as well as wealth strategy. I want to weave in the ideas that we’ve been talking about the last couple of years around entrepreneurship pursuing financial independence, what that means and how does investment relate to you as an individual, your business, how you produce and how you generate revenue.

Being in harmony with one another is where fulfillment comes from. Click To Tweet

I know that the success will come from them being hand-in-hand as opposed to contrary. There has to be this balance between the two. In the end, if a person has tons of money and they have tons of investments and they’re earning income every single month without the ability to produce value to somebody else, to provide, to contribute, to give back, to grow who you are and be more valuable to other people, that’s when life is sad for most. There’s that saying that Tony Robbins uses which is, “Success without fulfillment is the ultimate failure.” I believe that fulfillment comes from understanding who we are and being of benefit to somebody else regardless of how financially free we are with investments in wealth. They go hand-in-hand. That’s one of the reasons why I wrote the book because I saw evidence of that all over the place. I hope you guys have had a chance to read it. If you haven’t, go to HeadsOrTailsIWin.com or you can also go to the podcast website, which is TheWealthStandard.com. There are links on there to purchase it.

We’re going to get a lot into investment strategy, wealth strategy and atypical investments. I hope you guys are ready for that because I have some cool people that I’ve met along the way plus some others that I would like to interview. They have some cool angles on making investments, ensuring investments, due diligence. We have a good friend of mine, Mauricio, who’s been on the show in the past. He is an attorney and specialized in syndication raising capital and sees all investments. At the same time, he sees lots of ways in which people syndicate, raise money and do it the wrong way and get themselves in trouble and subsequently get a lot of other people in trouble by losing their money. We’re going to get into the legal side of things. We’re going to get into how to do due diligence. We’re going to get into some weird, interesting types of investments that you’ve probably never heard of before. It’s going to be fun. One other thing, stick with me to the end because in the end, I am going to invite you to something.

Lessons From 2019

Let me talk a lot about what I’ve learned this 2019. If you guys are tuning in for the first time, go back, read the previous blog and binge them all there. There are some that are long. We had the longest podcast with Michael Gerber ever recorded in almost north of our 400 episodes. It was amazing. I intended for it to go maybe 30 minutes, maybe 40 minutes. It went almost two hours and it was amazing. We hope you guys had the chance to read all of that. There are some nuggets in there that totally inspired me. What I’ve learned over the years and the lesson that I’ve taken away from this season and my year spending a lot of time on personal development, I joined up with a Tony Robbins inner circle called the Platinum Partnership and have traveled all over the world. I did 8 or 9 events this year. I was everywhere. It’s insane. It was exhausting to say the least, but it totally changed my life.

What I’ve discovered about myself is the idea that the quality of your life is in proportion to the quality of your relationships. I’ve met some incredible people. Growing up, I was introverted, shy and wouldn’t go out of my way to introduce myself or talk to somebody. I still have those inclinations. At the same time, these were some of the most amazing experiences that I’ve had is coming from knowing and understanding others. With the podcast, I have a unique opportunity to ask questions, to understand a person, to hear stories and build those connections. It’s such a blessing for me. There’s no calculated way in which I got to the point where I was able to do this. In the end I look at how powerful relationships are. It’s what we all seek and to share one another with each other, all different. We’re all unique. We all have different experiences and circumstances.

It’s one of those paradoxes. The idea of connecting with people to fear, there’s this fear associated with it and it’s how we stack up or what if they knew this, how I look or how I’m perceived. We have this way in which you show up at the most successful way in which we show up is to be real, is to be earthy ourselves, to be authentic. It’s like there’s a spider sense and everybody that detects whether that’s BS or not. For me, it’s recognizing that there are some successful people out there. I don’t have to be afraid. Also at the same time, I look at many successful people and with this group that I’ve been a part of efforts, I’ve heard so many stories around success, especially in the business world, the investment world, but horrible failures in relationships, in their bodies, in their physical well-being, their health. It’s one of those things that has caused me to reflect on.

TWS 30 | Entrepreneurial Success

The Perfect Day Formula: How to Own the Day and Control Your Life

There’s this balance of things everybody seeks, but yet nobody ever achieves. That’s where it’s this constant refinement process over and over. It’s not on one aspect of our lives. It’s on all aspects of our lives. Them being in harmony with one another is where that fulfillment comes from. My point was within all individuals, we put people on pedestals that this successful person, they’ve accomplished and achieved all these things, but they’re human. We all battle the same things. That’s what I’m going to talk about because we’re always working on ourselves. We always have those opportunities, but unless we realize it’s going to be very difficult to suppress the real us, it’s eventually going to come out. We might as well accept it from the get-go. What I’ve learned is that I love who I am.

I don’t know if I’ve always believed that. I love the relationships that I have and I feel so fortunate and grateful for that. The same that I mentioned in the beginning, trading appreciation for expectations. It’s changed my life because there are all sorts of things that I expect. I have high standards for myself, high standards for my kids, high standards for my business, and I realize that we’re all human beings coming to the table, inadequate of subject to failure. Instead of me being frustrated or impatient with those that I’m surrounded by, even myself, I’m the most harsh on myself, it’s to be grateful for them. Grateful for who I am, grateful for my opportunities, grateful for my experiences, good, bad or indifferent. This is the perspective I’d go into these new relationships that I have. I look at from an entrepreneur perspective, I believe that we’re all facing the exact same challenge, the exact same problems in relation to getting ahead. They may be at different scales but it all comes down to fear.

Rewriting The Rules Of Failure

The fear is different, but ultimately fear boils down. The saying boils down is, “You boil saltwater, you’ll get salt in the end.” Where everything boils down to is the fear of not being loved because you have this fear of a feeling of not being enough. You don’t want people to perceive that you’re not enough for this relationship or that relationship. Everybody has that no matter what caliber of person it is, whether it’s amongst your peers, amongst your family. It all boils down to that. It’s at different degrees. These feelings of failure, falling short of expectations, it’s amazing that we have these rules that we’ve unconsciously created for what failure is. Failure, we have to define it, but failure can be defined in so many different ways. Most people would say, “I’m afraid of failing because of how I will look. People will realize that I’m not smart as I or they think I am. I’m not enough. I’m inadequate.”

Everybody has that. We all have it in some capacity in different elements of our life. Rewiring yourself to have different rules. We all had these rules where we’ve unconsciously created them. Rewriting the rule of failure could be failure is only if I fail to see a lesson in my life’s experiences. That’s where you have a challenge. Maybe your expectation is for this to happen but maybe it doesn’t happen. There’s a lesson there. There’s something amazing and failing to see that is ultimate failure. I also heard something that blew me away. It had to do with worthiness. That’s also something, especially when it comes to the Judeo-Christian world. We don’t want to be unworthy. We don’t want to do things that are against this or against that. We have all rules associated with that. I heard a new rule rewriting in the rule around worthiness which is, I’m worthy when I know I push myself beyond my previous limitations.

That’s an incredibly empowering rule. I’m not going to get into all the details of it, but we have these rules associated with how we’re happy. “I’m happy if all of these things happen.” You can be happy without that. Most people have been happy in the past without those expectations. It’s fascinating. We approach life and we approach challenge, that’s never going to end. The human experience I would say is, to constantly have these experiences where we’re challenged, we hit these emotional thresholds and we essentially make a decision in that moment. There’s another saying I love, which is, “All you need is three seconds of courage and you can change your entire life.” In those three seconds, decisions will be made about who you are, what you’re capable of, what you want. Knowing that you can overcome whatever it is to get what you want, that would completely change somebody’s life.

The gap between where we are and where we want to be is ultimately unused courage, it’s not acting on those opportunities. It’s unused faith in ourselves. Believing that we’re not capable or we’re not worthy or inadequate or we’re not smart enough. Ultimately, making decisions and facing what the world constitutes as failure in a lot of people’s eyes is success. That’s one of those common things I’ve seen with successful entrepreneurs is they’ve rewritten the rules associated with what success means and what failure means. It’s powerful and we all face these opportunities to grow. I heard a talk and it talked about how many examples there are in literature, in religious scripture about vegetation the idea of fruit and the idea of seeds. There’s this process between seed and fruit and continual fruit that’s profound. I believe there’s a parallel to our human experience. We want fruit, we want different results, we want better results.

Oftentimes it takes planting a new seed, nurturing that seed, making sure it’s in the right environment, fertilizing it, pruning it and then it gets to the point where it bears fruit and then the fruit falls off. Some of it’s eaten, some of it goes right into the soil and essentially has new seeds in there and it grows into new plants. It’s a fascinating thing to think about. You can get deep into that. The idea is in the end, people want to circumvent nature. Entrepreneurs, especially those that have been successful over and over again, understand this vegetation process, read this plant process, this natural order of things. What’s amazing is that in that order of things, you’re never going to have the same exact environment. There are going to be different storms. There’s going to be a fire. There are going to be lightning storms, a hurricane. In those storms, things get stronger.

Successful entrepreneurs have rewritten the rules associated with what success means and what failure means. Click To Tweet

Oftentimes, we’re so afraid of storms. We’re so afraid of adversity and challenge. We try our best to circumvent it because it goes to this whole failure. “I don’t want to be perceived as incompetent. I don’t want to feel that I’m not enough. I don’t want to experience failure. I love people. When they see that I’m a failure, they’re not going to love me.” It’s weird how we keep coming back to that. Ultimately, I would say approaching these storms and recognizing that growth takes place when there is friction. When we approach that friction, we figure our way through it, not around it. That’s where the growth takes place. I’m going to give you guys a story that is interesting. I went to a relationship course called Relationship Mastery. It was amazing. I’m going to get into one thing that I experienced that I might get into toward the end. The one main thing I experienced there is the concept of immersion and conditioning. It was set up this way, but it was a traumatic environment in which men got into their roots of survival and it was powerful.

It was from a self-defense class, but it wasn’t self-defense in being able to defend yourself. It was self-defense by being able to have wired into your nervous system how to incapacitate somebody. It was profound because of how shocking it was. Also, because of how well I now have the knowledge of that in me. It’s powerful. The guy that taught it was a former Navy SEAL. He’s trained high-level corporate executives. You look at the guy and if you went into a dark alley in the middle of the worst situation possible, he’s the guy you would want to go with.

You look at him, his voice is like presence. He’s freaking huge. Sleeve tattoos, a guy you do not want to mess with. When he speaks, everybody shuts up, there’s a room of hundreds of hundreds of men that were completely silent when he was speaking. They started off this event by having a very faint light in the room. They played these traumatic videos. One of the videos I remember was of a store clerk and he was being robbed at knife point, not at gun point. He tried to defend himself and was unable to defend himself. Ultimately the attacker, knifed him, stabbed him to death and it was all visual. There’s nothing that was edited and my heart sank. It was one of those like your jaw dropped to the floor and you should see the room was perfectly silent because of how traumatizing it was. It showed somebody on the subway, multiple people trying to get this guy that had a gun and they all tried to go after him and he ultimately shot them. It was traumatic. During that, you had an interesting experience among this group of men. One of them completely passed out. We were all standing at the time, completely passed out. It was crazy. Then, another one passed out. He had these big thumbs on the floor. It was super traumatizing, but he showed us that to create the environment, to plant a seed. This goes to that same type of example.

The seed that he started to plant was one of the most powerful things I’ve ever experienced. He cited a book by Daniel Coyle called The Talent Code. In The Talent Code, it talks about the process of establishing what’s called myelin. It’s these different ways in which your brain is wired to do certain things by habit. It’s the whole unconscious competence where you have the Tiger Woods, the Michael Jordans, these professional people, musicians. There’s another example where you’ve conditioned yourself over and over that you do not think when you perform. You’ve done all the work. It’s built into your nervous system and you go out and you know exactly what to do. You don’t consciously know what to do, unconsciously you’d know exactly what to do. This book explains this Russian tennis camp and how they practice a specific way. The practice was done with intensity but in slow motion. What we learned to do is in this environment, it was over the course of a couple of hours. We were partnered up and we practiced this different incapacitating strikes with one another.

The strikes looked it was to the esophagus, to the artery and in your neck. I’m spacing it. The solar plexus, breaking ankles from the outside and inside the groin, how to strike the groin properly, strike the neck from the back, strike ankles from the back as well. It’s side, back and the other side. It was so intense and it was a strike over and over again. We did this over and over again to nurture that seed so that if we ever are in the situation in which our family was in jeopardy, we were attacked that we essentially had our life on the line. That our nervous system will remember what we were learning and we would be able to take out an eye, take out a throat, and incapacitate somebody with taking out their legs, their groin, their solar plexus and their esophagus. The soft spot right below your neck where if hit, the person cannot breathe. It was super traumatizing.

Conditioning

The point of me saying this was the idea of conditioning is building habits, building in ways of doing things. This comes down to the process of making decisions. Conditioning ourselves that when we have a challenge, when something presents itself, you have stimulus as far as the event happening then you have response, which is how you react. You can build in strategically a way in which you approach a challenge, a way in which you approach a difficulty, a way in which you approach your spouse, your children and your business opportunities. If you strategically do that and the new condition that you follow, a certain process essentially changes your life. That’s where everything happens between all the stimulus that we have, which is normally the same every single day and then the responses that we have to it, which are mainly unconscious. You can start to rewire that unconscious and respond to things, rewire things, and redefine the rules of things.

TWS 30 | Entrepreneurial Success

Entrepreneurial Success: Failure is when you fail to see lessons in your life experiences.

 

This has to do with every part of our life. It has to do with our physical well-being. It has to do with our relationships, with work, our spirituality, the full spectrum. We can completely change our life with this process. That’s the thing that I’ve seen in entrepreneurs is whether they’ve done this consciously or they’ve experienced things. They’ve been able to redefine how they approach challenges. They’ve been able to redefine what they do in certain circumstances. What’s the proper way to respond? What’s the improper way to respond? Carnally are response is typically going to be survival. We’re going to defend ourselves. If somebody critiques us, we’re going to be the old tack back. If somebody is condescending or they criticize us in the workplace, we’re going to fire back. If we make a mistake, we’re going to blame other people. These are the carnal instincts that cause us to respond, the way to protect ourselves. Protect ourselves from getting hurt and feeling that we’re not enough and feeling that we’re not loved.

This is where you have to redefine that because you’re going to respond to it anyway. Between that stimulus and response is where a totally new life is available to you. The idea is making these decisions over and over again is going to give you essentially different results. I’m going to give you an example with my five-year-old. Here in the office, about a little over a year ago, one of my guys and I bought a golf simulator. We have been looking one for a while. We have a massive office space. We lease out about 10,000 square feet. We have 30,000 in total. The reason why we have such a massive office space is because we get a great deal on the office. Several years ago, there were new owners and we were about to move. They came to us with this sweetheart deal where we’re going to get almost triple the square footage with less monthly costs than the new place that we were moving. It was amazing. We’ve been here, we have one more year left, and then we’re probably going to move.

The reason I’m saying this is because we have a golf simulator in our office and it’s been amazing. I’ve totally taken this whole The Talent Code thing and practice ten minutes, 3 or 4 times a week. It totally works. I brought my five-year-old son in. It’s so amazing to have kids. It’s one of the blessings in my life and something I do not appreciate as much as I should. With my five-year-old son, I had him do exactly what I had learned at these self-defense courses. Obviously, not breaking an ankle or smacking a groin, I would not do that. My wife would crush me if I did that. Anyway, maybe when he’s older, but from a slow motion from an intensity standpoint and it was fascinating to watch. It was fascinating to experience because I had him slowly walk up one more step. For a five-year-old, this is painful to do anything in slow motion, one step, another step. Get his feet in the right location.

Entrepreneurship And Success

It is grip. “Come down, lean over the ball. Tori is going to hit, look at the back of the ball and do everything in slow motion.” I had him do it five times before he hit a real ball. It’s amazing the results of that. Physically, there’s nothing much on the line but this applies to every other aspect of life. If you’re intentional about it, you can completely rewire things. Let me move on because what I’m trying to get across to you is this whole idea of entrepreneurship and success is essentially understanding ourselves, understanding our behavior. It all starts with planting new seeds, nourishing those seeds, having patience and then seeing where things transpire. It’s going to happen most likely in ways that people don’t think this relationship is created, that relationship is created, but all starts with that planting of a seed.

I would say those seeds are the opportunities that you have between stimulus and response. I believe that you understand the significance of the decisions that you have on a daily basis. It comes down to reverse engineering the day, reverse engineering decision. It could be as simple as showing up differently at the office. It can be showing up differently when you come home. It could be showing up differently for the holidays. You’re going to have some major opportunities to do that, where you see family and it’s amazing how people resort to who they were when they were a child. They conform to how they are with their family.

Cognitive, Emotional And Physical Mastery

It does not have to be that way. You can show up completely different. You can show up with a different state. A state of loving, instead of the state that you’re all comfortable. We’re all comfortable and familiar with. There are always opportunities to be different in those moments. This is the idea behind I would say the different types of mastery. I spoke about this before, there are three forms of mastery: cognitive mastery, emotional mastery and physical mastery. What I’ve seen out there is we have an immense amount of knowledge. It’s everywhere. It’s at our fingertips. We can have access to the heaps and heaps of information but having the access to knowledge will not get us different results. This brings us to the second level of mastery, which is emotional mastery, is understanding the positive emotions and the negative emotions associated with the information you now have available to you. This is where you get to connect to if you use information and try and get new results fail, what emotions are going to take place, and then how do you redefine the rules associated with those motions in order to have a different experience?

Growth takes place when there is friction. Click To Tweet

Doing that over and over conditioning that leads to physical mastery. You’ve purged old habits and you’ve replaced them with new habits. It’s the continual conditioning, reprogramming, rewiring and reinforcing those habits, whether it’s how you eat, how your day goes, how you show up as a father, how you show up as a friend, as son or daughter as a sibling. It applies to everything in life. How you show up as a colleague? You have the circumstances, you have that environment, but you can plant a new seed, you can nourish differently. You can prune differently, all different vegetation out there. Some require a lot of water, some require no water, weeds. Some grow quick and some grow slow. Some take years to bear fruit, some produce fruit in one season. There are all different circumstances that we have. However, we have something that separates us from the natural order of life. We have the ability to choose. We can choose what seeds we plant. We can choose how to nurture differently, observe, prune maybe uproot and replant.

Those choices that we have that we get to confront every single day. This is going to the purpose of me explaining this is what I’ve discovered in entrepreneurs. I’ll go back to the Relationship Mastery I went to. This is where many successful people were there. I can name businesses, I can name even some people, which I won’t. These are billionaires, multi-hundred millionaires who were so successful in certain areas of their life, but were either in horrible shape physically or had horrible relationships. It’s having these successes without fulfillment and fulfillment comes from a few areas.

Intimate Relationships

It’s relationships, number one, that’s where the ultimate, that type of relationship. An intimate relationship, a partner that is where I would say a lot of life’s fulfillment comes from, not everything. I would say it’s one of those primary ingredients that if you don’t have it, it’s going to be very challenging, if not impossible to have a truly fulfilling life. Having relationships, especially with male and female, that where they’re completely wired different yet they both think each other as the same. I won’t go into that. It’s this idea of wanting to have a fulfilling relationship and being willing to approach that challenge in a new way.

Being able to rewire the rules where you’re not afraid of not being enough or not being loved, that you get to the point where you’re generous regardless of the circumstances. It’s not this horse trading, where I do this, I’m only going to do that if she does that or he does this and then I’ll do that. That’s where things get off the rails. That’s why you look at all the different aspects of life and entrepreneurs face challenges in all those different regards. The equation and the ingredients are all the same, it’s just a different application. It’s approaching challenge and recognizing that there is this ideal outcome. Understanding the actual seed nurture, prune, you understand that process and you can start making decisions now. It’s not that life is going to change overnight. These are going to be some decisions that are going to be hard.

If you can rewire yourself, if you can condition yourself then it’s going to be easier and easier. You’re going to want to get to a new level and then another level. The process will never end. It’s an infinite game. It’s going to happen. The infinite game, the purpose of the game is to keep on playing. This is a game that we’re going to play for the rest of our life. There’s not an end to it. That’s probably the first thing you should be aware of. Even though there’s fruit in the end, you’re going to have a storm that’s going to blow all the fruit off and you’ve got to start somewhere else. It’s one of those things where it’s a constant, but there are some things we can be aware of so that we can start getting different results. I’m going to talk about my invitation to you guys.

The events I’ve gone to this year have been life-changing for me. It’s helped me view things differently. It’s exposed some stuff in me that I wasn’t happy about. It’s helped my relationships with my spouse first and foremost. Not without difficult conversations and realizations that I’ve had and she’s had, with my kids, especially the way in which I would respond, in way in which I would show up sometimes. This whole year has caused me to reflect on my life what I want and where I’m at, being appreciative and grateful for everything. Using that as the focus as opposed to what’s missing or what somebody’s not doing, not what are they doing. It’s allowed me to introspect over and over again and rewire myself and I’m not done.

TWS 30 | Entrepreneurial Success

Entrepreneurial Success: Entrepreneurship and success are essentially understanding ourselves and our behavior.

 

Unleash The Power

There are events I’m going to go to next year, but I wanted to invite you guys to an event. It’s an event that I took my daughter who turned fifteen at the event in Miami. I took a great friend of mine and colleague Nate Butler in my office, who’s one of our advisors. These were life-changing experiences for them in different ways as you can imagine. My experience of it as well was different. This is the fourth time I’ve attended this specific event and I walked away from it with something completely different and empowering. It was amazing. I want to invite my podcast audience, The Wealth Standard podcast audience to a physical event this coming March and I believe the dates are March 12th through the 15th, and it’s in San Jose, California. I would like to not only invite you, but I want to meet you there depending on how many people end up coming. I’m going to arrange a meeting, whether it’s at a hotel or at the event itself, so we can all meet up and discuss.

We’ll do it probably after the event has started. I can’t wait to go. I’m going to bring some people from my office. It’s going to be a great event. I would like to invite you, the audience. If you guys head over to TheWealthStandard.com, I’m going to have some information on there and how you can essentially go and register. It has all information on there for you. This is an event that some pretty famous people have been to and go to, most notably Serena Williams, Hugh Jackman, Anthony Hopkins. This is the event of Marc Benioff, who is the Founder of Salesforce. He’s a billionaire because of creating Salesforce and a lot of those ideas, but also the courage to leave Oracle and to start his new journey came from attending this event.

I believe that in each of you, there is something that is there to be unleashed. It’s ready. That seed is there and discovering it is usually possible. When you unplug yourself from the norms, unplug yourself from your daily routine and you plant yourself in an environment that is designed to essentially bring this out of you. It’s a Tony Robbins conference called Unleash The Power. It’s his primary event. I don’t think Tony is going to be doing these conferences for a lot longer. I might be totally wrong. It’s intense. You guys will see, and it’s an incredible experience that I’ve been blessed to attend a number of times and I want to give that gift you. I want to invite you guys to come. If you have the means, some of the tickets are a few $100 but don’t sit up in the nosebleeds. I would say purchase those tickets. Make that investment in yourself for every aspect of your life. It supplies to them all. I would love to see you, too. I love to hang out with you, rub shoulders and brainstorm.

I love to give that gift to you. That’s my invite. Hopefully, you can go over to TheWealthStandard.com and click on the link. It’s going to be awesome. It’s March 12th to 15th, 2020 and it’s in San Jose, California. I’d love to see you there. That’s it for this episode. I hope you guys have gotten something out of it. I believe that within all humans is something super special. The fact that you are on a podcast, educating yourself, the cognitive mastery, I don’t think you’re going to change your life by reading this blog. It’s the application of that knowledge that’s going to start to change things for you.

I know that you don’t have to go to conferences in order to have the experience of physical mastery, but this is a way to accelerate that process. I’d love to see you there. Please tune in. We get some cool guests coming up. I hope you had an amazing Thanksgiving. I feel very grateful to you for the support I’ve received over the years. It’s humbling and I appreciate the emails that are sent, the thumbs up they sent, the reads. It makes me incredibly grateful and appreciative that there are those out there that wants to take their life to new heights and make a bigger difference, not for themselves, but for those that they surround themselves with. I’m super appreciative to you guys. Thank you for all that you do for me. Take care.

Important Links:

Tony Robbins Unleash The Power Within
San Jose, CA
March 12-15, 2020
Special Event Pricing for Listeners of The Wealth Standard:
General Admission
Retail = $1,145
Discounted price = $495
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Retail = $1,495
Discounted price = $695
Gold Admission
Retail = $1,795
Discounted price = $795
To register for the event and take advantage of your special listener discount, please contact:
Jeffre Arguello
Phone: 858-535-6271
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Qualities Of Leaders Past, Present, And Future With Cameron Herold

TWS 28 | Qualities Of Leaders

 

Every project and every major endeavor needs a leader who will make the tough calls, the big decisions, and steer everyone towards success. But what qualities make for a good leader? Using a broad range of examples, Cameron Herold explores the stories and backgrounds of leaders in various fields and industries. Cameron is the host of the Second In Command podcast and the bestselling author of several books, including The Miracle Morning for Entrepreneurs, Free PR, and Double Double. Is there actually small, specific set of qualities that make for a strong leader? Or do we understand what a leader is not? It probably depends on who you want to look at first.

Watch the episode here:

Listen to the podcast here:

Qualities Of Leaders Past, Present, And Future With Cameron Herold

You guys know my guest not necessarily in person but I reference him quite often. His name is Cameron Herold. Cameron is the host of the Second in Command podcast and also the bestselling author of The Miracle Morning for EntrepreneursElevate Your SELF to Elevate Your BUSINESS, as well as Meetings Suck: Turning One of the Most Loathed Elements of Business into One of the Most Valuable. One of his newer books, Free PR: How to Get Chased by the Press Without Hiring a PR Firm. One of my favorites is Double Double: How to Double Your Revenue and Profit in 3 Years or Less. It’s in seventh printing. This has been popular not just in my life but in others’ lives as well. Cameron is also the Founder of COO Alliance, which is an organization that helps COOs become better leaders. He is the mastermind behind hundreds of companies’ exponential growth. He’s built a dynamic consultancy including his time as COO at 1-800-GOT-JUNK?. His clients include Big 4 wireless carrier as well as a monarchy which must be an interesting experience for you. Cameron, you bless my life in so many ways and I’m really grateful to have you on now.

Thank you.

Cameron, let’s focus on the idea of an entrepreneur and what makes up an entrepreneur, not just in the early stages but as they grow. Firstly, what do you often see as the common attributes in an entrepreneur that leads them to long-term success?

Strangely enough, a lot of the attributes are the ones the school system and the medical community have labeled as diseases. A lot of entrepreneurs have Attention Deficit Disorder or ADD or a lot of entrepreneurs are on the spectrum for bipolar disorder. I’ll explain why both of those are traits that are found in most entrepreneurs and why they’re superpowers, not diseases. In terms of attention deficit disorders, I have seventeen of the eighteen signs of ADD. I am hyper-aware of everything that’s happening. I see what’s happening with my customers, suppliers, the market, the economy. I noticed the little tiny things on the website. Patterns jump out at me off spreadsheets. I’m hyper-aware of time and return on investment and everything that’s going on in the business landscape within my company and around me which gives me a superpower because I’m seeing everything that’s happening. Because I’m seeing everything, I get a little bit distracted, which gets me passing stuff off to people, which is delegating. That’s a good thing.

If I was so hyper-focused, I would miss everything. If I was like an engineer, a doctor or a lawyer, I’d be so hyper-focused on one thing, I would miss all the important stuff. It’s almost like the absent-minded professor. That’s a terrible trait to have as a business person. The school system and the medical community thinks that having this disbursement of attention is a bad thing when it’s actually really good. We’re not supposed to be teachers, doctors, engineers or lawyers. They think that there’s something wrong with us but we’re not supposed to be like them. You don’t find a whole lot of inspiring teachers who are running companies. They’re not like us, we’re not like them but we also don’t have a disease.

The second thing is the bipolar. Bipolar is the manic depression or hypomanic episodesTed Turner had it. Bill Gross had it. Two of the founders of Netscape, Steve Jobs, Henry Ford, Richard Branson, all bipolar. Those aren’t diseases after all. The mania of bipolar or the hypomanic periods are often what gives us the energy to start things. They give us the enthusiasm and the energy, the quick start nature of doing an acquisition, opening up in a new market, hiring somebody before we’re sure of how we’re going to pay for them, taking what people see as risks. We get very calculated bets because we see everything going on around us. They see it as risky and we see it as momentum creating momentum. No one’s going to join you if you’re a flat energy. You are controlled, calculated like a teacher, a doctor or an engineer, it’s boring.

That crazy manic energy is why people join. It’s why they quit a company. It’s why they invest. The depression and stress is simply a course-correcting moment when we’ve got too much stress in this zone and we don’t have a network of people to speak with or talk to that we can share how it’s going. You can’t tell the employee that you’re recruiting, that you’re not quite sure how you’re going to be the payroll but you’re the best company in the world. You can’t tell your spouse that you’ve leveraged everything to make that next big bet. You can tell her when you’ve made it successful but it’s hard to tell them about the stress that we’re under. We often live in this zone that causes the hypomanic periods or the stressful depressing.

Leadership is not about having all the skills. It's about having the ability to inspire and align others as well. Click To Tweet

Bipolar disorder has been nicknamed by the medical community as the CEO disease. If 3% of the population are bipolar and 3% of the population are entrepreneurs, maybe it’s a correlation of success, not a correlation of a disease. That’s what makes them successful are traits. That’s the thing one. Thing two, our nature is the traits. The nurture part is strong leadership skills, strong sales skills, strong business planning skills, strong understanding of skills. Nowadays, more than ever, we no longer have to be the smartest person in the room. We have to be in the right room. It’s about the networking and the ability to network, mastermind and connect to with others who can solve the problem for us. It’s a who problem not a how problem. Thirty years ago, you had to memorize everything and learn it and know it or hire people. Now, you just have to know who can do it for you.

Where does leadership fit into that? The principles, the attributes of leadership, is that on the shoulders of the entrepreneurs or on the shoulders of a different position or both maybe in different ways? 

Leadership is a soft skill that allows you to attract people. It allows you to align people, allows you to inspire people. That’s with customers, suppliers and employees. In all three, if you’re not a strong leader, you’ll fail. In fact, 30 years ago, I was in an organization called College Pro Painters. I recruited and hired Kimbal Musk, Elon’s brother, to be a franchisee for me and then also his cousin who built Solar City. He worked for me back in 1993 as well. One of the other guys who worked for me, I won’t use his name, but my VP came in and he said, “This guy will not be successful as a franchisee. He will fail.” I was like, “No, he’s got it. I can lead him, coach him, manage him.” He said, “He’s an alien. He does not fit. He cannot lead. He will not be able to lead himself. He won’t be able to lead his employees. He won’t be able to inspire. He’ll work hard. He’ll have the tenacity, he’ll have goals, but he doesn’t have the leadership traits or skills to be able to lead others or himself.” Sure enough, he was completely right. This guy completely failed. It’s not about having the skills, it’s about having the ability to lead, inspire and align others as well.

Is that innate or is that something that can be acquired?

No, it’s innate. Leadership is something that you noticed in kids. It’s the kid who is basically told to sit still and pay attention in class because they’re disrupting class. The reason we’re disrupting is everyone’s following us. That’s an energy field that you have. A leadership is more of an energy field and an EQ. It’s the ability to notice the top kids, the captain of the teams, the top Cub, the top scout, the kid in a church youth group, the one who calls all of his friends and they follow, the people who they hang out at your house, that’s leadership. That’s innate. It’s a magnetic field and an energy trait that people have or don’t have. You can learn how to be a better leader but it’s really hard to shift the energy in a way that gets other people to be attracted.

The seed has to be there first and then you nurture that seed in order for it to grow. Stepping back one moment, the mold of an entrepreneur and these attributes which are essentially alienating people from the mold of what society considers successful, whether it’s education or the medical community. What are the ways in which entrepreneurs acknowledge this, identify it and then escape it? I’m not sure if escape is the right word but handle it because part of our human nature, we want to have friends, we want to be in community, we want to have fun with other people not just ourselves. What are the ways in which entrepreneurs identify who they are, that they’re different from the common mold and then are good and okay with it?

This is changing now since the last number of years but since 1998, 1999 when the first rise of the first dot-com era happened, entrepreneurship started to be cool. Through 2008, 2009 the second way it became very cool because people realized, “It wasn’t this flash in the pan crash. It’s back. It’s not going away. You can be an entrepreneur. You could travel the world, you could work from anywhere remotely with a laptop. You could make money in your sleep or you could make money remotely.” All of a sudden, entrepreneurship became cool. Prior to 1998, a book written in 1955, the only book where the entrepreneur was a hero. Otherwise, the entrepreneur was a capitalist. They were greedy and were materialistic. Even when I was growing up, the rest of my family thought negatively of our side of the family because we were all entrepreneurs. That we were greedy, profit-centric, only concerned about money. It wasn’t true. I was raised to be an entrepreneur to control my time, that I could have my free time, not about money.

There’s so much similarity in the word capitalist and entrepreneur as far as what they describe. At the same time, those words in most people’s minds have completely different meanings. That’s a very interesting point. Would you consider from how society views on the entrepreneur more of the value creator, the innovator or someone that’s making life a better as opposed to the capitalist, which I would say is construed as the exploiter, someone who takes advantage of others for gain?

TWS 28 | Qualities Of Leaders

Qualities Of Leaders: Leadership is the skill that allows you to attract, align, and inspire people.

 

It’s both but I don’t think they’re exploiting. This is what we realized even in the book, Atlas Shruggedwas we don’t need a government or a union to teach us what we need to do. We’re going to do that out of profit and greed alone. We’re going to build a great company because it gives us more cash and gives us more time. We’re going to take care of employees because they make us more money. We don’t need anyone to tell us to do that. That’s what we will do. If they don’t, we have a bad company. I don’t think there’s anything wrong with being a capitalist. Why shouldn’t we be able to make money and have the profits from what we are? Anybody else out there can take risks too but most don’t. More people work for government, either Army, Navy, Air Force, Marines, teachers, doctors, lawyers, City State, Federal government. More people are paid by the government that are paying taxes into the government. All of those people who sit and complain about capitalists in greed have a choice but they don’t want to make it. They don’t want to be an entrepreneur. A lot of them get a pension for life and they can retire after 25 years. That’s great. That’s not the path I choose. I choose to be in control of my life, my profit and my time.

The philosophical angle that you could take on the nature of an entrepreneur, nature of the capitalist is how long has it’s existed and how evident it is and in so many different aspects of history but yet still, the view on it continues to be misunderstood. We don’t need to go down that path because there are a few things I wanted to get into. I associate these things with your expertise and what you’ve taught and what you’ve written about. When it comes to the entrepreneur and maybe the seed level where an idea is planted and a value proposition is created and then scaling into leveraging a team, what are some of the common challenges as entrepreneurs go from those initial toddler stages into the teenage, young adult years? What are some of the common challenges they face that they must overcome?

I’ll tell you one trait that we’ve noticed with most entrepreneurs is that in grade school or high school, they had at least one venture and it might only last for a day. It might last for a week, but at least one time, they were buying stuff and selling stuff for more. They were buying a box of business or hockey cards and selling them for more. They were buying candy and selling it for more. They were selling their Halloween candy. They were buying low and selling high. That’s a trait and this isn’t necessarily a good thing but there’s an extraordinary amount of entrepreneurs that sold pot at some point in their life. They bought something, they split it up and they sold it. They understood the hustle, the value. They understood that there was a need and they can satisfy it.

Also the margin.

That’s a trait that you see. Something that a lot of them struggle with is a lot of kids are recognizing that school is not that good, not that valuable, that it emotionally is beating up a lot of kids unless you’re a pure A student. The other 95% of the kids are told every day, “You’re dumb. You’re not good enough. You’re not very smart.” That emotionally takes a massive toll on people. I went to school for eighteen years and was always told I was a C student. I was always told I was a 65 percenter. I would struggle and work really hard and let down again. That emotionally destroy somebody’s confidence over time. A lot of kids are wondering why they’re even in school in the first place. I was listening to a couple of girls that were going off to college and they were saying, “I’m going into college but I think I might drop out after first year. I just don’t see value.” I’m like, “Good for you.” You can’t run the ROI and make sense of this anymore in most cases.

You’re familiar with Robert Kiyosaki. He wrote the book, Why ‘A’ Students Work for ‘C’ Students and ‘B’ Students Work for the Government. It’s very relevant to all the comments you’ve made. Again, going to society and how society through the school system has objectively in a sense measured a person of their identity, their intelligence. That’s extremely debilitating for people, for students as they grow up. I do love the thing you said with regard to entrepreneurs. The ideas becoming more renown and there’s more of the hero element labeled as the entrepreneur rather than the black sheep or the person that’s a little weird. It’s growing in popularity because people have seen the results of what ideas have done to improve the lives of everybody. 

The struggle that a lot of them have is that they don’t realize that entrepreneurship is a lot tougher than they think. It’s not that easy to go out and plug up your website and all of a sudden get sales. They get sales, but they realize they’re spending so much on affiliate fees, marketing, advertising and overhead that they not making enough margin. A lot of them don’t slow down enough to think through the little bit of the business model and how much work or time it’s going to take to scale to replace their job. A lot of people are moving more to the gig economy, which is still very entrepreneurial but then the gig economy, what they’re doing is that they are able to do a great job that they’re great at but do it for a number of companies. Instead of being a copywriter for one company, they might be a copywriter for ten. Some of those people are able to make that transition into turning that into a company, which is amazing.

Would you comment on the dynamic of getting to the stage in which a team and employees are required, business units are required. Going off of some of the challenges that entrepreneurs face, what are those common ones when it comes to building a team, building those around you that have certain skillsets that help to maximize yours?

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Sometimes it’s a requirement but sometimes it’s more of an opportunity. The opportunity is that you’re leaning out into the future and deciding to build something that’s bigger than you, that allows you to make money from other people. It replicates yourself. As an example, when I was running my first business, I was 21 years old. I had twelve full-time employees. They were painting houses for me. I was making $3.52 per labor hour. I knew that if I had all twelve people working, I was making about $38 an hour. That was better than me working as a painter and making $15 because if I could have them making $38 an hour and I could take four hours off during the day, I was making money and I controlled my time. It was about, how do you replicate yourself to move yourself out of the equation so that other people are making money for you and they’re still doing well?

Could that be characterized as leverage?

Yes. It’s leaning out into the future and deciding what you are building. A lot of people don’t sit and craft what their life looks like. I talked about this in my book, Vivid Vision, about deciding what your life looks like, deciding what your business looks like and then working it backward and figuring out, “How can I make that happen?” If you want a business that throws off free time and throws off the money, that’s what you have to do, reverse engineer that. You’re not hiring people because you need to, you’re hiring people because it logistically makes sense.

I didn’t plan on asking you this because Vivid Vision is something that I connected deeply with when I read your book. I haven’t finished the second one but wrote the first one from 2017 going into 2020. It was one of the worst points of the business since 2008, 2009. What I was writing down and going through the different exercises that you recommend, it’s this idea of being pulled into the future. Most people are living by looking in the rear-view mirror as opposed through the windshield. I am not sure where that comes from. It’s evident in a lot of different circumstances. The idea of looking into the future and specifying things, thinking about things and visualizing things that pull where you are right now into that vision. Would you maybe comment on that?

A lot of this that people don’t think strategically about what they want to build. They’re thinking strategically of how to build it. Those are very different things. How to build something and what you’re building are two very different things. What people need to first think about is, “What am I building? What does it look like in that future? How do I build that?” When Elon Musk acquired Tesla, he bought Tesla from the founders and investors and then he decided he was going to build something. Do you know why the Tesla Model S has the seven-seat option?

No.

He’s got five kids. He’s got twins and triplets. If you’re going to build a car company, it may as well fit your family. Secondly, he’s got five kids. Elon is 6’5″ and he’s an inch taller than I am. When he sits in the front seat, the person sitting behind him has a lot of legroom. It works for him. It is a really sleek, fast vehicle like his former car, the McLaren F1 was. It’s fast, sleek and fits his family. He said, “We have to price it in a way that people can buy it. Who wants to help me build it?” That’s somebody who was leaning out into the future and reverse engineering it. Most people try to make what they have a little bit bigger.

I’d love to keep going on that topic, but I wanted to address one of the big projects that you have which is the COO Alliance. Would you talk about the difference between a CEO and a COO? How they work in harmony to carry out this vision of the future?

TWS 28 | Qualities Of Leaders

Qualities Of Leaders: Entrepreneurship is a lot tougher than you think. It’s not that easy to go out and plug your website and all of a sudden get sales.

 

The COO’s role is to play the balance to the CEO. The CEO is the visionary and the person who’s thinking about where to go, the COO figures out how to make that happen. It’s almost like if you had a traditional family, it has a husband and wife raising kids. If you asked her how did you raise your kids, she’d have a very true story. If you ask him, how did you raise your kids? He’d have a very true story, but they’d be different. They’re in sync together as a team. It’s a yin and yang. The COO has to be good at and love to do all the stuff the CEO doesn’t like to do or sucks up. It’s very different from different companies. In some cases, the CEO runs finance. In some cases, they run marketing. In some cases, they run ops. It’s very different.

As you work within the COO Alliance, which is training these leadership positions to be better leaders and of course, be the yang to the yin of the CEO. What are some of the common light bulb moments you see when you’re taking them through your curriculum, the exercises, meetings and so forth? What are some of those common things of like, “I never realized that worked, that makes total sense and I can’t believe I didn’t see that before?”

First off is getting the COO aligned with the visions that they understand what their building, coming up with a plan and ensuring the CEO signs off on the plan and then working on the skillset of the COO to keep increasing their skills so that their skillset is ahead of the curve of what they need to be good at. They’re always getting better because the company is going to be getting better as well. They’re always going to be leaning out into the future and working on those.

As you’ve developed like your curriculum and what you’re teaching these COOs, what are some of the initial things that you want to ensure they have that service a foundation for some of the future things that they can stack onto that?

It’s less of a curriculum and it’s more of a mastermind community where they are meeting and connecting with each other, where they’re sharing information and ideas. I give them the topics and they’re sharing the suggestions and best practices with each other. It’s giving them a forum to share with each other versus me sitting and talking and teaching them.

Talk about what you’re working on right now, what you’re paying attention to, where you see opportunity for entrepreneurs to take their games to the next level. What are some of the things you’re paying attention to the books you’re reading? How can our audience follow you, learn more about what you’re writing, what you’re speaking on and so forth?

One of the things that I’m looking at and thinking a lot about is artificial intelligence, autonomous vehicles, automation, robotics and the massive amount of layoffs that are coming because of that. If you think about autonomous vehicles, here’s an interesting example and most people are completely clueless on this. They keep going with Tesla has a lot of competition now. There are a lot of companies building electric cars. Tesla is not an electric car company. Tesla is building the largest autonomous vehicle network in the world. Their entire model has already jumped the shark of building cars. Do you know that the Tesla Model 3 is impossible to purchase at the end of your three-year lease? All of those vehicles go back to Tesla, which means in the next eighteen months from now, all of those Tesla Model 3’s become the initial cars in the rollout of the first autonomous vehicle network in the United States.

Nobody’s even paying attention to that. Once this rolls out over the next few years, every taxi driver, limo driver, shuttle driver, car company, car rental companies, parking lots, gas stations, driver’s Ed programs, car insurance programs, all of these people are getting laid off. The amount of ripples that this is going to cause instantly. People are saying, “Those people can learn how to code.” There’s no way that a taxi driver is going to learn how to code. There’s no way that shuttle driver, a guy working in a parking lot is not going to become a programmer. We’re going to have a huge amount of layoffs coming. That’s going to be a big ripple. The second one is how do you leverage all of these things into your business? How do you leverage AI? How do you leverage robotics? How do you leverage autonomous vehicles? How do you leverage outsourcing? We’re trying to become very protectionist and that’s going to hit us in the head really hard.

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Are you more in the discovery phase of seeing how it’s going to make an impact or have you identified opportunities that would serve a role in various types of industries?

Yes, with all my coaching clients, we’re looking at how do we leverage the tools that exist and start plugging them into our businesses. I attend some conferences specifically for this. I go to Abundance 360, which is Peter Diamandis, the Founder of Singularity when the X Prize started, I would be going back to TED for my ninth year at the Main TED Conference. I’m going to TEDWomen in about which is about 900 TEDsters that are going to see what’s happening in that space. I’m plugged into a couple of very futuristic mastermind groups for the purpose of seeing what’s coming and being able to be ahead of that curve. It’s almost like what’s happening with China. The United States thought it was a military war and China decided to out-think us and out-strategize us into about several years ago shifted to be a financial war. They win. Literally, they won. They out-thought, out-maneuvered and out-strategized and the US is now becoming very protectionist and still trying to fight wars on oil when they’ve already jumped the shark and they’re now buying us up. You can either now get on that way or you can try to fight against it.

Who would you say are thought leaders in that space? Other than Peter Diamandis, some thought leaders that you’re paying attention to and leveraging their visions and seeing what they’re trying to see what they’re seeing.

It’s going to the events and listening to the speakers that are brought in or it’s going online and watching the videos like watching TED and going on and seeing what’s happening. Subscribing to the newsletters and reading what comes out. There’s a lot of that information resources that are there. It’s less than about one person. It’s more about watching the themes of what’s coming regarding podcasts I’m listening. I told one of my kids that the Elon Musk, Joe Rogan’s podcast, everybody’s talking about is one of the most brilliant insights to Elon that I’ve ever seen. I was a reference for Elon in this first round of funding in January of 1995. I have known him for several years. It gave insights into first the humanity of Elon Musk but secondly, his thoughts around AI, autonomous vehicles, robotics and space. He is really concerned about the singularity when computers become smarter than people and governments aren’t listening. That is stuff to listen. Instead of watching another football game or another baseball game, let’s wake up and start devouring the content of what’s going to change the world. I’m an optimist. This is all exciting stuff but the change is happening very fast.

People can look at it from a very pessimistic perspective but there’s not much they can do about it at this point. The train has left the station. It’s more a matter of time and where it starts to make an impact first. It’s exciting because it’s going to make life a lot more efficient, calculated in a sense. It’d be good for people if that’s how they look at it and what they can do as a result as opposed to being afraid, blaming and demonizing some of those advances, which I definitely think is going to be coming down the road. I want to see yes in last year and it’s amazing to see all the different innovation that’s happening. It’s not just in the United States, it’s around the world. 

It’s global. You’re thinking about the iPhone is only twelve years old. This device that we now take for granted is only twelve years old. How has that changed the world? Think about how fast AI is coming and how fast autonomous vehicles are coming. I drove in the very first Google experimental car a number of years ago at TED. It will be ten years this spring. Several years ago, they were doing a demo on video and everyone in the audience was like, “This is the main TED. Bill Gates is in the audience and Bezos is in the audience. Steve Jurvetson is in the audience.” The guy from Google said, “If you want to go try it, it’s out in the parking lot.” Eighteen hundred people got up and went running for the parking lot. No one had seen it. It hadn’t come under wraps. To be able to go ride in that vehicle a number of years ago and now think that in 2018 my Tesla drove itself from Scottsdale to Vancouver, it’s extraordinary how fast this is coming. We’re testing electric autonomous helicopters in four cities and it said the roller to those will be in every city that Uber exists now. An electric autonomous helicopter by 2030 in every city that Uber exists.

Aren’t they building like heliports on a lot of the new high rises with residences as well as commercial spaces?

That would be some of the next hottest real estate will be the heliports on tops of buildings because now you go to one of those that you’ll take an Uber to one, you go up to the top of a building, you fly back to the next building and you go home. The video phone that we now take for granted, like you and I are talking over video but when I was growing up watching The Jetsons like, “That would be cool if you could talk to somebody and see them,” that’s what we’re doing. All of this stuff is coming. What I’m thinking about and working with my clients about is how do you get ahead of that curve. It’s like trying to fight Amazon right now. There’s no point, just get on board.

TWS 28 | Qualities Of Leaders

Qualities Of Leaders: Lean out into the future and decide to build something that’s bigger than you, something that allows you to make money from other people.

 

It’s a testament to a few things. First off, The Jetsons and Star Wars, the ultimate vivid vision for how people have or how the entrepreneurs had been pulled into that future, which I think is pretty fascinating. The other is not hesitating to think big, dream big and explore the question of what’s possible because that’s what we’re wired to do. It’s what sets us apart from all the living things is we can think, we can imagine and we can dream. It may seem crazy to some people. At the same time, those are the ones that may have changed the world.

That’s the old Steve Jobs’ advertisement.

Would you tell the audience the best way to get your books, learn about you, follow you, see what you’re up to?

The Second in Command podcast, which they can listen to and everyone is interviewing the entrepreneur. I only interview the COO. I want the rest of the story. All five of my books are available on Amazon, Audible and iTunes, so they can look up my name and get any of my books and I would get a copy of the book Meetings Suck for every single employee. That’s one that you buy for every employee. You invest $15 and it’s a game-changer for your company. CameronHerold.com has all the rest of my resources, the blog and all the rest of my contacts.

One of the parts of the interview that I wanted to dig it into was business rhythm and meetings and that structure. That’s something I implemented right from your book almost line by line. I can’t tell you what type of difference that structure makes but we will save that for another time.

It sounds great.

Cameron, thank you so much. It’s been a pleasure to talk to you and thank you so much for sharing. I appreciate it.

Thanks for having me on. I appreciate it.

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About Cameron Herold

TWS 28 | Qualities Of LeadersCameron Herold is host of the Second in Command podcast and bestselling author of The Miracle Morning for Entrepreneurs: Elevate Your SELF to Elevate Your BUSINESS, Meetings Suck: Turning One of the Most Loathed Elements of Business into One of the Most Valuable, and the new books Free PR: How to Get Chased By The Press Without Hiring a PR Firm and Double Double: How to Double Your Revenue and Profit in 3 Years or Less (in its seventh printing).

Herold is the founder of COO Alliance, which helps COO’s become better leaders. He is the mastermind behind hundreds of companies’ exponential growth and has built a dynamic consultancy, including his time as COO of 1-800-GOT-JUNK?. His current clients include a ‘Big 4’ wireless carrier and a monarchy.

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Entrepreneurship: Taking Intelligent Risks with Francis Greenburger

TWS 26 | Taking Intelligent Risks

 

Being an entrepreneur involves risk. Our guest, Francis Greenburger, has always been comfortable with it, not the “throw the dice and hope for the best” type but the type he calls intelligent risks. Francis is the Founder and guiding force behind Time Equities, Inc. and has earned a reputation for outstanding integrity and an uncanny ability to foresee changing directions and create value in a variety of real estate markets. Today, he joins us to talk about entrepreneurship, taking and controlling risks, and the characteristics that go into being a good entrepreneur.

Watch the episode here:

Listen to the podcast here:

Entrepreneurship: Taking Intelligent Risks with Francis Greenburger

My guest is Francis Greenburger. He is the Chairman and CEO of Time Equities and the Owner of the literary agency, Sanford J. Greenburger Associates, which has represented noted authors such as Dan Brown, James Patterson, Nicholas Sparks and Nelson DeMille. He is also the Founder and Chairman of Art Omi, which was previously Omi International Arts Center and the Greenburger Center for Social and Criminal Justice. He’s also the bestselling author of Risk Game: Self-Portrait of An Entrepreneur. Francis, it’s such an honor to have you on. Thank you all for taking the time.

It’s my pleasure to be here, Patrick. Thank you.

Francis, I have a good question to start with. It’s around this topic and theme of entrepreneurship. You identify yourself in the subtitle of your book as an entrepreneur. What does that word mean to you?

I’ve thought about what the characteristics of an entrepreneur are. I would say one of the first characteristics are, did you have to be comfortable with risk? If you’re not comfortable with risk, you should use your talents in another context where you’re getting a steady paycheck or appropriate incentives. Being an entrepreneur involves risk. For some reason, I’ve always been comfortable with it. There’s what I call intelligent risk and then there’s throw the dice and hope for the best. I believe in intelligence risks which means if you’re very informed about what the challenges are, whatever it is that you’re undertaking and what the risk reward is, what is the opportunity? The reward, if you’re right, sufficiently reward you, given that there’s a chance that you might underperform your expectations or things might go wrong but you don’t expect. Those are some of the characteristics that go into a good entrepreneur.

The other thing that’s very important is to be creative because if you go out into the marketplace and you are trying to be a generic competitor, do what everybody else is doing in the same way, the only way that you can be effective there is on price. Mostly, entrepreneurs will not be successful at that because it requires quite a bit of scale. That’s a very hard way to succeed up against larger, more established players. The way the entrepreneur succeeds is by seeing things differently than other people or the other players in the market seeing a way out of the problem. Perhaps they can buy the asset of discount to what its stabilized value would be and find a way to bring solution to whatever the situation is or understand a market differently than other people. Tolerance of risk and creativity are two key ingredients.

It’s fascinating because it seems as if creativity and risk have a partnership if you will. Most people have a fear of risk, fear of something not happening the way that they presume, which is always the case. There’s a risk in everything. There are just different degrees. When risk presents itself, it seems like having the value and the understanding of creativity to navigate whatever challenge is thrown your way. Whatever obstacle exists almost allows you to have control over risk.

Don’t be intimidated by risks but see them as opportunities. Click To Tweet

It’s funny you mentioned the fear of risk. My kids have one of those cups that has lettering on it. The expression said, “Imagine what you could accomplish if you weren’t afraid to fail,” which is another way of saying the same thing. What you’re saying is that creativity or understanding options and having ways to meet challenges is a way not to be intimidated by risks but see it as an opportunity.

What are some examples in your successful professional life where you have confronted risk and took it on and achieved success on the backend?

I would say the first thing is I look at markets differently than other people. Our real estate company not only invests nationally within thirteen states but we invest in five different countries within Europe. Years ago, I became aware that Holland was at the end of a very deep recession. A lot of real estate valuations have been hurt. The Dutch banks had stopped financing most commercial real estate at Holland, except if you had a ten-year lease with a credit tenant. In the center of Amsterdam, you could get financed. If you were in one of twenty suburban markets in Holland, you’re in trouble. Prices fell precipitously and occupancies fell. It was a very tough time. There were no local players who have the resources to step up.

We saw that opportunity and we began buying. In the beginning, we bought all the cash because we couldn’t get financing. It’s 3 or 4 years later, we own 40 office buildings and set up an office there. Fortunately for us, when we came in, it was in the later part of the cycle and things were covered, markets are doing very well and we’ve had outstanding results from our investment there. We’ve been able to entice a German bank to see things the way we saw them. In fact, we ended up getting very advantageous financing shortly after we acquired the sprockets. That’s an example of seeing things differently. In this case, bringing perspective that was outside of the Dutch perspective who was way down by their immediate experience by the conditions that they had to cope with.

Looking at that decision process means starting with the macro-economic approach where you saw economic depression. Toward the end of it, where did you see the opportunity that it would rebound? Was it in the company formation increases? Was it the technology that was coming out of Amsterdam? What were some of those micro things that you saw that led you to believe that investing in office space would be a good return on investment?

My approach was fewer data-driven or metric-driven than what you’re suggesting. The first thing I said to myself was Holland was one of the outstanding countries in Europe, always has been. They have a great deal of transparency which not all European do. They have very well-educated, very smart and in fact, quite entrepreneurial population. They have a lot of positives. To me, this was a place that I saw no reason why they shouldn’t be able to repair the cycle they were going to come back to have more normal or standard. The other thing is in the case with the properties that we bought, the first portfolio, we bought ten buildings and there were 70% occupied, but we were making about 9.5% return on the 70% occupants.

TWS 26 | Taking Intelligent Risks

Taking Intelligent Risks: Tolerance of risk and creativity are two key ingredients of entrepreneurial success.

 

It was cash too not leverage, right?

Right, not leverage. My bet was a simple one. I didn’t think that things are going to get a lot worse than where we were or they might get a little worse but even if my return went from 9.5% to 8%, it wouldn’t be a tragedy. I felt whenever times got better, which I didn’t know whether that would be tomorrow or in a year or five years, I’m starting from a very high return base so I wasn’t worried. I felt I could weather any further erosion. I thought that we were a donator at that point. It was a pretty simple view. I thought we were entering at a good point. Things were profitable so we didn’t have to get better and we can still be happy, but my sense was this was a good place intuitively and was going to get better.

It’s the whole asymmetric risk analysis where you have tremendous upside but yet it’s not an equal amount of risks to the downside. It’s a limited amount of risk.

What happens is people often perceive that when you enter difficult times, that’s a risky thing to do. It’s the reverse. When you’re buying things inexpensively, things could get a little worse but they can also get a lot better. Whereas if you go in when things are very good, then you’re going to pay the top price. When you get to the top of the mountain, there’s only one way to go and that’s down. I’d rather start at the bottom.

There are so many sayings, when there’s blood in the streets is when you buy, even if it’s your own but usually it’s the opposite as far as the normal investor. The first time I went there, I had this appreciation of how entrepreneurial but also how driven and educated they were based on a lot of their history. They were the first engineers that figured out how to build a city that was underwater. That’s part of what makes up the future generation is technical and understanding. Parents have tremendous influence on the next generation and so forth. You had that generational work integrity behind what was going to be coming up in the future years to make a wise investment. That’s a great example of asymmetric risk ideas as well as looking at factors out there and seeing where there are opportunities.

It’s worked out very well for us.

Most problems can be solved. Sometimes you just have to be very imaginative and creative. Click To Tweet

I know you were in the publishing business. You took some tremendous risks there. Would you maybe tell us about some of those experiences?

We weren’t publishers, we were literary agents who represented writers and we sought publishers for their books. To some degree, what you’re investing in an author in the beginning is your time and your reputation. Economically beyond that, there isn’t a huge investment. If you’re not successful, you’ll have spent a lot of time working on something. You perhaps have tarnished your reputation if you put forth things either not worthwhile but you don’t have a great economic loss. When you’re an agent and you send a book to publishers, very often if they’re not interested, they go into long-winded explanations for why they’re not interested. In my view, frankly, I threw all those letters in the garbage because I don’t care if people didn’t agree with me. I was looking for a couple of people who did agree with me. There’s one publisher in the end. If 25 said no, it didn’t matter if the 26th said yes.

One of my first clients in the business was somebody who’s now famous but in those days was completely unknown, James Patterson. He sent me this manuscript. I hadn’t met him. He had read somewhere that I was a young age and looking at unsolicited manuscripts. I read this manuscript by him and I started sending it out to publishers. In fact, I sent it to 28 publishers. Every one of them rejected it. The 29th said if you rewrote it, they would consider publishing it. He did and they still rejected it. I then sent it to ten more publishers and by that time, I had run out of the publishers and I was sending it to different people at the same publishing house. Little Brown, they already rejected it. A lower-level editor there already rejected it but I sent it to a higher-level editor and he loved it.

He offered a generous advance for the first novel and went on to win an Edgar for best mystery of the year. His career was legendary. I only represented him for his first three books. That point he said to me, “I read about all your real estate transactions. I’ve got to figure out whether you’re an agent or you’re a in the real estate business.” I said, “I think I’ve done a pretty good job for you.” He said, “No, you’ve got to choose.” I said, “I’m going to be in the real estate business no matter what you say.” We parted company but he’s had an incredible career since then as we all know. That’s an example of having a point of view, feeling conviction with respect to it and then going and trying to get the market to agree with you.

It seems to me that you have a unique way in which you perceive opportunity. Taking the approach you did, putting your reputation on the line as you mentioned, going above and beyond and figuring out creative ways to reach different people at the publishing companies, it showed you that there was an understanding of what that opportunity was. You weren’t doing it to do it. You were doing it because you saw opportunity than most others didn’t see.

I have a conviction about my view of what he had written.

TWS 26 | Taking Intelligent Risks

Taking Intelligent Risks: Every problem has a solution. The person who can find that solution is going to create value.

 

Did you have an affinity toward the mystery genre of writing before or did you read it and knew that there was some gold in there?

I can’t say that I was a mystery aficionado, I wasn’t. The name of the book was The Thomas Berryman Number and it was an assassination novel, espionage but murky. In those days, that would’ve been posting the JF Kennedy assassination, both John and Robert and Martin Luther King’s. Assassination was very much on people’s minds and it played into that and I thought it was well done. It was highly stylized in its language which differentiated it from a lot of other mysteries at the time. I believed in it.

What would you say is something that you see in entrepreneurs regarding the risk that they don’t see?

I work with a lot of people in my real estate company, a lot of very bright capable acquisition people who are in a sense entrepreneurs and often the process of underwriting real estate, take a view of it and then you’ve tried to figure out what you think is going to earn, projecting forward it over ten years. There are all kinds of assumptions that get into it. After a lot of experiences, they come to a set of assumptions and that’s what they present is their vision of that transaction. One of the things that I do is I push them and I say, “Let’s create sensitivities around some of the variables. What happens when you say the rents are going to be $18 and what happens if they’re $17 or $16? Do you think that the occupancy is going to be 92%? Show me what happens as occupancy slips down to 85%.” Creating all kinds of variances to the scenarios that people envisioned and to the assumptions that they put into any given situation is pushing beyond where a lot of entrepreneurs start out. They may be very sophisticated and experienced in reaching their view but then they don’t subject it to quantifying the what ifs. They talk about risks as a generality, but they don’t quantify and then look at the outcome. If X, Y, Z happens, that is at variance with their fluent view of the market.

Do you see the inability to do that as potentially creating a lot of risk in the marketplace right now?

Certainly, to the extent that when one is acquiring assets or competes against people who may be less knowledgeable, it’s important not to follow the market because it’s the market. You have to have a very clear view of what you’re going to do with the asset, how are you going to run it and how are you going to manage it? You have to be very disciplined in that because there are always competitors in the market who may be less informed or they may have other sources of capital. Sometimes if there’s a fund out there who has a use it or lose it situation, maybe they’ve raised $50 million and $100 million invested over two years, you have to return the money to the investors. As they get towards the end of their cycle, if they haven’t been able to invest it, suddenly their standards slip and they have motivations that somebody who’s more disciplined doesn’t. You’ve got to stick tight to your own view and not let the market drag you into dangerous territory. Even if there are other players that are transacting at different pricing. You can use the new one as being sensible and sustainable and having good risk reward associated with it.

The thing that makes risk less intimidating a belief in solutions. Click To Tweet

What are you paying attention to right now as far as where opportunity could be? I know the universal perception of markets is always shifting but as much as there’s a risk, there’s always going to be opportunity as well. What are you paying attention to right now that you see as potential opportunity?

To some degree, we always trade wherever we see price disruption. As an example, the market for retail properties is disrupted. There’s a perception that eCommerce is going to be an overwhelming challenge and that retail properties are going to decline. As a result, the price of the properties has dropped and the cap rates have gone up significantly. We believe that the cap rates are very generous in that even if you underwrite into the equation, some downside is given eCommerce challenge or choppiness in the retail markets it’s very often that you can make a very good investments in retail. You have to understand and adapt it, understand the tenants and a million other considerations. That’s an example of disruption that we buy into.

Another area that we’re investing in at the moment is under-occupied office buildings. Right now, when an office building has weak occupancy for any number of reasons, it tends to trade at a vast discount from the state’s realized value. An office building that would have $150 valuation a foot. If it was the submarket occupancy, let’s say 85%. If its occupancy is 50%, the value of that asset might fall to $60 foot. They asked discount from what it would be worth if it was leased up. The cost of leasing up that asset could be $30, $40 a foot. You’d have wall and cost of a hundred. If it’s then going to be worth $150, that’s a very big reward in the real estate business. I don’t know exactly why office building sells it that heavy discount, clearly one that has significant vacancy is worth less that doesn’t. To us, it’s a mispriced factor. We buy those buildings and we fixed them up and then we become strong competitors in the market because we pay a lot less for our building than everybody else in the market. We can even rent them for a few bucks or less and the tenants are happy and we’re happy.

Do you see opportunities in shifting use of property? As you were speaking, I’m right in downtown Salt Lake and there is a shopping center here that was developed as part of the Olympics back in 2001. It had a competitor come in and take off the tenants and it became a ghost town. There was a fund that bought it a few years ago and turned it into this center for younger entrepreneurs. Since then, all of these different office buildings built around it. In there, there are mystery games like the games where you have to solve problems. I’m not sure if you’ve seen those before but they have arcades and hang out centers and restaurants. They shifted the use from pure retail into this center or hub for more tech-based companies and younger people. Do you see like use changing over the course of time and opportunities there?

Yes. As an example, there’s a property in West Palm. Before we owned it, it was a shopping center. The prior owner has given to us that it became somewhat of a ghost town and the prior owner converted it to B-minus office space, which is not ideal. Shopping center tends to be deep so the space is very dark. It doesn’t give a lot of window line for offices. It’s not perfect. They did some work and for a long time and when we saw it, we bought it because it was on a lot of land. It was on ten acres of land which in West Palms, it’s a big site. For a while, we kept the office building going but a lot of our tenants were government tenants. The government built their own buildings, they move people out. It wasn’t a market for this secondary office space. We made the decision to redevelop it. We’re now in construction. We’re making it into a 300-unit housing complex. We demolished the old building and now it’s going to be a housing complex that West Palm is very strong market. This’ll be an outstanding property when we get done with it. It’s life cycle. It started as a shopping center, it became an office building and now it’s going to be first-class housing. That happens frequently.

As you mentioned right at the beginning of it, that’s where it requires that creative mindset to see there’s always opportunity. It may not have been what it was once. It maybe something new based on how the environment is changing. That’s why I’ve been fascinated with researching ways in which I can interview you because the idea of risk is one of those things that prevents people from taking action. The creativity is also one of those things that I’m not sure if that’s something that you learn or establish. The idea of being creative allows you to see and create opportunities as opposed to it happening. This has been a fascinating conversation.

TWS 26 | Taking Intelligent Risks

Risk Game: Self Portrait of an Entrepreneur

Another way to look at creativity and entrepreneurship is to think that every problem has a solution. The person who can find that solution is going to create value. Whether you’re buying a problem that somebody else has and find new way to solve that problem. If it’s a problem that you have because you already own it. It’s not like when there’s a problem, you should put your head in the sand and say, “OMG.” Most problems can be solved. Sometimes you have to be very imaginative. You have to be very creative. That’s the thing that makes risk less intimidating for me is a belief in solutions.

I love this saying that the problem is an unanswered question. This has been awesome. I appreciate you adding your insight based on your successful experience over the course of time. It sounds like you love what you do. You’re loving life and you’re continuing at it despite your success, after success. Congratulations.

Thank you so very much. I do like what I do. Every morning, I wake up and I’m excited to meet the day’s challenges and opportunities.

How can the audience learn more about you, your book and ways to keep in touch and see what you’re up to?

They can take one of my books online. It’s called Risk Game. At the back of the book, I have my email. If anybody has a question or anything they want to contact me about, I answer all my emails. I get up very early in the morning. From 4:00 or 5:00 until around 7:30, I am answering lots and lots of emails. That’s one way.

Francis, thank you so much. Hopefully we can connect in the future.

Patrick, thank you.

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About Francis Greenburger

TWS 26 | Taking Intelligent RisksAs the Founder and guiding force behind Time Equities, Inc., Francis Greenburger has earned a reputation for outstanding integrity and an uncanny ability to foresee changing directions and create value in a variety of real estate markets.

He is an active board member in and supporter of, various arts, education and community organizations, as well as the owner of Sanford J. Greenburger Associates, Inc., a full-service literary agency based in Manhattan, which has represented noted authors such as Dan Brown, James Patterson, Nicholas Sparks, and Nelson DeMille.

An accomplished writer himself, Francis is also the bestselling author of Risk Game: Self-Portrait of an Entrepreneur. Francis is the founder & chairman of Art Omi (previously Omi International Arts Center) and The Greenburger Center for Social and Criminal Justice. Francis lives with his wife, Isabelle and is a devoted father to his four children. He spends his free moments in search of the perfect backhand or skiing (carefully) down the slopes.

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