PHASE 1- CONSTRUCT
Entrepreneurship can be learn.
To most people, entrepreneurship can be seen as a black box of luck, tenacity and passion. Yet somehow along the way entrepreneurs showcased here all realized that their entrepreneurial successes were not from dumb luck, rather skills which could be learned and taught.
They statistically en up happier and healthier in life. And most importantly, small incremental changes are not what drive entrepreneurs, rather they are driven by making significant changes to the world, which may even result in brand new industries being created.
There are 2 types of innovators: conceptual and experimental.
Conceptual innovators are exceptionally rare, as they’re typically born with creative genius (e.g. Mozart), while experimental innovators are much more common (e.g. Chris Rock, Jeff Bezos, Bill Hewlett and David Packard, Thomas Edison). Experimental innovators often utilize the “little bets approach”:
Experiment with new ideas.
Freely play around and improvise ideas.
Define specific problems before solving them.
Reorient your ideas based on their successfulness.
Iterate this process, focusing on the ideas that have been shown to work.
Being a Visionary
Eager adoption of new ideas is essential for innovation. Instead of asking “Why?”, visionaries ask “Why not?”.
Progress comes to a halt with “It’s not possible.” It’s important to embrace inventing something different and unique, and then to fully commit to its development. Despite a long list of reasons why not to develop the Mac, Jobs persevered.
In times of shortages of time, money, or other resources, it might prove helpful for a visionary to look towards external solutions. For example, in search of a Mac printer, Jobs went to Canon in Japan and convinced them to let Apple use their printer.
Unwavering commitment and a willingness to take risks are part of the costs required to make a vision a reality. Sometimes more is said by what a company chooses not to do, instead of what to do.
Quality should always trumps quantity for visionaries. Firms should always maintain a spirit of entrepreneurism and a start-up culture for new ideas to thrive. Acknowledging small mistakes and working upon them creates a more “humane” work environment, as opposed to firms preoccupied with profit. Collaboration and inspiration are essential to maintaining an “open-minded, experimental” atmosphere at a successful company like Apple.
Building the perfect team is important, thus reinforcing the idea that “innovation is a group activity.” Control of the entire system is key to obtaining the best result. Jobs hesitated to depend on other companies for Apple’s production, since the traditional culture of other firms failed to take into consideration consumer needs.
In order to examine the “whole product,” one must not only look at the product itself but also its experience and its place in the user’s life. Beginning with Canon, Jobs started to look beyond Apple in order to learn what already existed, always wary of the people and subpar business practices.
Jobs subsequently purchased “SoundJam” the predecessor to iTunes. iTunes helped develop the iPod, an idea that had already existed but not yet flourished. It was so desirable that the developers couldn’t wait for the product to be released before owning it themselves.
Even if an idea may not seem successful on paper, it is important to consider its merits. Evangelizing one’s own product involves being passionate enough about a product to speak about it outside of the workplace and industry, to those who might not ordinarily purchase it.
Most people are taught to think in binary: right/ wrong yes/no; win/lose. While there often times only seem to be two options, that is frequently a block to innovation.
By thinking outside the binary, you can come up with amazing new ideas that the herd is ignoring.
Try to make new connections between people, ideas and products. Do not accept everything at face value, but rather look for new perceptions. To specifically make connections, learn to recognize patterns, but also to be bold enough to disrupt them. If you explore the opposite of current trends, you may come up with something interesting.
Question everything. Be curious. Seek to understand the message behind everything and why brands and people made their choices. The best questions to ask yourself are:
What if this could be done
What would this look like?
While it is impossible to fully predict the future, you can surely innovate and experiment to create
meaningful change. And some visionaries are capable of getting a glimpse of what is to come.
You may have several things you are passionate about and good at, but you must find what makes you unique. Find what you were born to do, and then focus on that for your work. Finding your passion and working at it every day will yield a happy, healthy, and long life. Do not dumb down what you are saying, but say it in a relatable way. Be inspired and inspiring, not desperate nor derived. Once you know why you are passionate and enthusiastic about something, share it with the world.
The New Outthinker Playbook
Companies must plan, adapt to, and profit from “battleground shifts”. Our enhanced connectivity is largely fueled by advances in technology and the prevalence of social media, specifically from increases in speed, syndication, integrity, and transparency.
Companies must use technology to remain coordinated and adaptable in our fast-paced world. Outthinkers resist being stifled by the mob mentality. Outsourcing tasks and increasing diversity of products and services are vital to stay ahead of the competition.
Launching simultaneous attacks drains their resources. They can’t focus on two attacks at once, so they are left vulnerable to your advances.
People are naturally empathic. However, this empathy might disappear if people discover that a cause doesn’t align with their views. To preserve this empathetic connection with customers, it’s important to create an unwavering sense of leadership. Doing good also entails finding solutions to pressing social issues. Successful companies emphasize their social missions, thus making it difficult for others to imitate them.
Outthinkers play the game by creating surprising new categories that leave the competition baffled. Successful companies who nurture unique perspectives and revolutionary products, are aware that their competitors are susceptible to intellectual rigidity. This rigidity will force competitors to always be reactive to outthinkers, leaving them always one step behind.
Achieving the Definition of Cool
If it can be imagined, it can be built. Achieving a higher status of “cool” than the competition is a recipe for success. While the PC industry fussed over MP3s and DVDs, Apple looked years ahead. The average consumer lived in a new world of multiple devices, so Jobs invented the iPhone to combine them.
Jobs’ attitude of biting off more than he could chew played into him finding a good network for the new iPhone smartphone. At the time, network providers controlled not only the minutes, but also the manufacturing process. Jobs’ attempt to write his own rules for manufacturing was met with rejection.
Nevertheless, his confidence and persistence in his soon to be wildly successful product proved to pay off in the long run. He threatened network providers with going to their competitors unless he was allowed to write his own rules. Predicting the mega-success of the iPhone, he coaxed Cingular (which would later become AT&T) to submit to his agenda.
When Apple was about to roll out the iPad, Jobs insisted on creating more than just a computer on a tablet form. Instead, he wanted an integrated media store; thus came the birth of the App Store. The iPad, much more than just a tablet, is a handsome and easy product that delivers thousands of services to users. Elliot admits that if dictionaries were to include pictures alongside definitions, one would find a picture of Steve Jobs next to the word “cool.”
The 5 Habits of Outthinkers
Great innovators learn to mentally time travel. Outthinkers learn to see and analyze future moves. As an innovator, consider the environment and the things you can’t control. Always make sure to account for the other players, competitors, and their possible actions.
“Systems thinking” involves looking at all parts of a system, including the invisible interconnections. Outthinkers see these interconnections and use them to their advantage, while competitors ignore them and let time pass until it’s too late. Phil Fernandez, CEO of Marketo, lists 5 steps that have brought him success:
Set out to change the world.
Design a product that passes three tests: (a) valuable for the customer, (b) well-defined, and (c) unique relative to the competition.
Say “no” to business opportunities that might distract you from your main focus.
Build with velocity.
Find ways to get new customers at half the cost.
Sometimes, shifting your perspective on an issue will allow you to see novel solutions. Frame-shifting provides the ability to see strategic options that others do not. Additionally, executing unconventional ideas causes confusion and delay from your competition, leaving them in the dust.
New companies often believe they cannot create something new. However, they can always do something that the competition won’t do. This will help your company climb to the top, but it won’t help it stay there. To do that, you must constantly outthink the competition. Although meeting customers’ needs is important, keeping a disruptive mindset keeps you ahead of the competition. After all, the theft of revolutionary ideas has bankrupted more than one company. Business school professor Bruce Greenwald suggests 3 ways to sustain long-term innovation:
Achieve customer captivity.
Secure preferential access to resources.
Build meaningful economies of scale
Outthinkers place less emphasis on the 3rd way because building economies of scale is becoming more difficult today due to evolving business practices.
Outthinkers understand that reality is a subjective social construct. To change the world, you must change reality by first creating a compelling idea, and then determining the necessary course of action.
The act of enrolling a critical mass of people in your vision so it becomes reality is known as the “formation process.” Innovators like director James Cameron know how to benefit from the fact that “people don’t think, they react.” Yet rather than risking a negative reaction from investors, innovators carefully construct a familiar narrative (discussed in Resonate). According to Dr. Iacoboni, “Innovators create stories that others want to be part of.”
Apply the Outthinker Process
Anyone can practice envisioning a new revolutionary future. To overcome the limitations of pure mental time travel, you must gather a team to help focus and diversify opinions. To make the most of collaboration, define the details of your goals and devise metrics that will help you state your goals in terms of a strategic question: “In 12 months, how do we . . .”
It’s important to dissect your vision into constituent parts by building a system map defining the causes, effects, and variables of your vision. Use a diagram to analyze your system map. Break down your goals into primary drivers (near-term goals) and secondary drivers (key requirements). It’s important to note that the goal is not to have an accurate depiction, but rather explicate where the system is headed.
Restate your strategic question, placing it in the middle of your map.
Define your primary issues or drivers.
Selectively expand the map by picking one difficult primary issue and spend time dissecting it further.
Decide which key issue(s) to address right now, rewriting them as questions.
Review the key strategies you’ve identified before you begin brainstorming. Set some ground rules before you begin. For instance, all ideas should be considered, no matter how crazy. You should have about 100 potential strategies after a full session.
If you focus on whether you like or dislike the brainstormed ideas, you could easily rule out some truly innovative ideas. Support disruptive ideas over simply creative ideas. Disruptive ideas are ones that customers will love and competitors will resist copying.
Analyze every idea and ask yourself: “Is this idea easy or difficult to execute?” “If I could execute this idea immediately, what would be the payoff?” “How long would it take the competition to respond to it?” Consider the “four Cs” while assessing how long it will take the competition to copy you:
Conceive: It won’t be long before the competition hears of your idea.
Consider: After the competition hears of your idea, they might not consider it worth doing.
Choose: Your competition might consider the idea, so make sure to research its feasibility.
Can’t: If the competition waits, you will develop a “more permanent competitive advantage.”
Place your ideas into 4 categories:
Winning moves: High-impact, easily-executed.
Tactics: Easy-to-execute ideas that won’t significantly improve your circumstances.
Time wasters: Low-impact, difficult-to-achieve.
Crazy: “Go to the moon ideas” may appear difficult to achieve, but can have significant impact.
After classifying each suggestion, evaluate a few crazy ideas to see if they can become more attainable. Finally, choose 3-7 ideas that you’re committed to enacting as your strategic game plan.
To more effectively share your game plan within your company, make sure you have a clear message that is directed at the appropriate people. Once you’ve identified whom you need to convince, you can begin the 4-step ‘GAME’ process:
Goal: What do you want to achieve?
Audience: Whom do you need to influence or gather feedback from?
Message: What do you want to say?
Expression: How will you deliver the message?
With those you want to influence, you must (a) understand, (b), loosen, and (c) convince them. To understand them, ask these critical questions:
How aware are they of the issue?
How well do they understand it?
Will I need to educate them on it or not?
Do they have a strong position on the issue?
Is that position positive or negative?
Why do they take that position?
Once you know the audience better, construct a clear message. Use something other than conventional logic to convince them — studies show that taking a logical approach is relatively ineffective when trying to persuade (discussed in Maximum Influence).
With your message ready, you can now decide how to express it. Plan for your presentation by determining logistics like the location, and method of delivery.
Big Bets Versus Little Bets
HP founders Bill Hewlett and David Packard had learned users’ needs by asking them directly, thus allowing them to solve specific customer problems. The U.S. Army also uses the little bets approach. U.S. Army strategists used to strictly rely on information they already had, but now the military utilizes more immersive tactics like living among locals in the Middle East. This so-called counterinsurgency approach requires soldiers to operate in the unknown, and to accept that mistakes will be made along the way.
Research on the “little bets” approach, done by Professor Saras Sarasvasthy’s from the University of Virginia, shows that it helps us focus on what we can afford to lose, instead of on what we might gain, known as the “affordable loss principle”.
The Growth Mind-set
Taking little bets doesn’t mean you shouldn’t be ambitious. You can set big goals, but accept that there will be inevitable failures along the way. Failure is important since without it, you would never learn to make changes. Dr. Carol Dweck, a social psychology professor at Stanford University, found that there are 2 types of mindsets people tend to have:
Fixed Mindset: You blame others for your setbacks and treat failure as a threat to your self-worth. You focus on your natural ability to accomplish tasks, not on the effort required.
Growth Mindset: You learn from your mistakes, and work at your weaknesses, placing importance on effort, not innate ability.
Pixar’s making of the animated film The Incredibles perfectly exemplifies a growth mindset. Pixar made some risky decisions, such as hiring Brad Bird to direct the film, despite the fact that his last animated film was a huge disappointed at the box office. However, it was Bird who ensured the success of The Incredibles. When faced with obstacles, he took to asking Pixar’s so-called “black sheep” employees for their solutions. The Incredibles ended up costing less than Finding Nemo, and turned out to be a huge success.
Failing Quickly to Learn Fast
There are 2 kinds of perfectionism:
Healthy perfectionists are internally driven and motivated by values (e.g. quality and excellence).
Unhealthy perfectionists are externally driven, dwell on past mistakes, intensely fear failing.
In order to switch to healthy perfectionism, use “prototyping,” which allows you to learn fast by failing quickly, but without any huge failures. For example, novelist Anne Lamott writes terrible first drafts, and then iterate it multiple times.
The author also witnessed prototyping firsthand in Obama’s presidential campaign. The campaign team constantly threw out ideas and tactics. Even ridiculous ideas were considered, and quickly thrown out if they failed. Without having a strong attachment to any one idea, they learned quickly from their mistakes.
Prototyping’s benefits can also be seen in Procter & Gamble. Chris Thoen, the managing director of Global Open Innovation at P&G, states that people are more comfortable giving their honest opinions when these ideas are very rough, when neither workers nor customers are emotionally invested.
The Genius of Play
Dr. Charles Limb, a medical doctor and Associate Professor at Johns Hopkins University, took MRI scans of musicians’ brains as they played around with small piano keyboards. They were instructed to either play structured music or to improvise melodies whilst simultaneously listening to a jazz quartet. When the musicians switched from playing structured melodies to improvised ones, the part of their brain in charge of making judgments (primarily between self and others) and of self-censoring switched off. When the musicians were improvising, they were in a state of “flow,” completely absorbed in the activity (further described in Flow). They focused only on the activity itself, ignoring barriers that would typically hinder creativity.
To help counteract such barriers, you can “accept every offer”, using the phrase “yes…and,” as opposed to “yes…but”. The latter implies there is something wrong with the idea, which could hinder the idea-sharer from giving further suggestions.
Pixar’s version of using this principle is called “plussing.” When brainstorming, Pixar creates a lighthearted atmosphere where all the animators are encouraged to share their ideas, no matter how crazy. Everyone must refrain from trying to control every little detail. Their ideas are “plussed,” as each one is followed up with the word “and”. Each following idea must improve upon the previous one. “Plussing” ultimately allows Pixar workers to move from unhealthy to healthy perfectionism.
The leader of a group sets the tone for the group. The leaders of Pixar have created a work environment in which the hierarchy of employees is not of the utmost importance. When a group leader asserts dominance over everyone else, this is known as the “HiPPo” phenomenon, which is the belief that the Highest Paid Person’s opinion is the most important one.
Problems are the New Solutions
Architect Frank Gehry relied heavily on constraints when designing Disney Hall in downtown Los Angeles. Gehry designed Disney Hall with the main goal of creating premium acoustics for orchestral performances. He partnered with Yasuhisa Toyota, chief acoustician at Disney Hall, to set specific constraints, which allowed the pair to stay focused.
The process of breaking down one large problem into smaller, more solvable ones is called “smallifying” – a term coined by Bing Gordon, cofounder of video game company Electronic Arts. During his time at EA, Gordon noticed that when employees worked on longer projects, they were often inefficient. When these projects were broken down into smaller ones, the workers were more efficient and creative.
“Smallifying” is also often carried out in Silicon Valley in the form of agile software development. The traditional “waterfall” software development requires that all the problems and requirements be determined upfront. One of the major flaws of the waterfall method is that developers are constantly trying to anticipate user needs at the outset. In the fast-paced world of technology, this is risky because by the time a program is completed, the user needs may be nonexistent by the time development is done. Agile developers “smallify” software projects and then release them based on current user needs. One of the founders of agile development, Jeff Sutherland, took pointers from an article, written by Hirotaka Takeuchi and Ikujiro Nonaka. Takeuchi and Nonaka discussed how Japanese product development teams function similarly to how rugby players operate on the field, self-organizing to creatively work around obstacles.
The benefits of “smallifying” can even be seen in war strategy. U.S. Army Brigadier General H.R. McMaster was tasked with securing and holding Tal Afar, a city located near the Syrian border that had become overrun by Al-Qaeda. By conducting thorough reconnaissance, rather than taking immediate action, McMaster discovered an easier problem to tackle before taking on Tal Afar. McMaster focused his efforts on Biaj, a nearby town being used by al-Qaeda for training and smuggling. His successful attack on Biaj was a “rehearsal” for taking Tal Afar.
Questions are the New Answers
Immersion is one of the fundamentals for the little bets approach. During Muhammad Yunus’s time as a professor of economics at Chittagong University in Bangladesh, a severe famine spread throughout the country. Yunus decided to interact directly with those suffering. When he spoke to Sufiya Begum, a woman who sold bamboo stools to survive, Yunus found out that she paid 22¢ for the bamboo, but only profited 2¢. He began making small “micro-loans” to people, and in 1977 founded the Grameen Bank, which gave out tiny loans to those living in extreme poverty. This practice of “microfinancing” would become so globally influential that Yunus would earn a Nobel Peace Prize for solving an overlooked problem. It was his deep immersion which made all this possible.
In a 6-year study by Professors Jeffrey Dyer of Brigham Young University and Hal Gregersen of INSEAD, they found a strong connection between inquisitiveness and creative productivity. The “innovators” who took part in the study demonstrated keen attention to detail, especially with people’s behaviors. Steve Jobs used keen insight from a former calligraphy class to develop the first Apple Macintosh computer, Jerry Seinfeld uses his keen observations of people to write comedy, and John Legend uses his observational skills to write lyrics.
Successful innovators are also noticeably inquisitive, always asking “why,” “why not,” or “what if” questions. One example is Chet Pipkin, founder and CEO of Belkin. During the 1980s, Pipkin spent his weekdays boxing computer connectors, and his weekends asking questions at computer stores. He uncovered a problem many customers faced with a new computer: they needed a printer cable! Pipkin started making his own cables, and eventually his business boomed into the Belkin Corporation.
Researchers Gregersen and Dyer have found evidence that when children are constantly encouraged to ask questions, then they will keep that inquisitiveness long into adulthood. Many famous innovators have attributed their success to such early encouragement from friends, family, and teachers. When you learn to ask the right questions, your inquisitiveness will eventually pay dividends when you discover a specific problem in desperate need of fixing. Immerse yourself in your environment and ask the right questions.
Learning a Little from a Lot
Dr. Richard Wiseman from the University of Hertfordshire conducted extensive research on what sets lucky people apart from unlucky people. Wiseman surveyed 400 random people asking if they considered themselves lucky or unlucky. He discovered that…
Lucky people were more open to different insights and opportunities. They were more likely to form close relationships with a wide range of people, exposing them to more chance opportunities.
Unlucky people tended to fixate on specific outcomes and to stick to routine.
Wiseman took his findings a step further and attempted to teach the unlucky participants to change their habits to match the lucky participants. The results were overwhelming: 80% of the unlucky people became much happier after they learned to break routine, and learned to deal with unfortunate events by imagining that things could’ve been worse.
Tim Russert, one of the most prominent American political journalists and commentators, ultimately created his own luck by asking anybody and everybody for their thoughts on politics. One person’s opinion on the possibility of Senator Barack Obama running for president intrigued Russert enough to ask Obama himself. If Russert had not heard this one chance opinion, he would not have thought to ask Obama and subsequently make waves with this breaking news.
Learning a Lot from a Little
Quite the opposite of learning a little from a lot is seeking out a select group and focusing on it. In the 1950s, Professor Everett Rogers from Ohio State University began researching how new ideas originate and then spread to the masses. Rogers coined the term “early adopters” for the early trendsetters. He created an S-curve to show how innovations spread:
They begin with the early adopters.
They reach a tipping point of popularity.
They become popular with the masses.
Popularity declines, reaching “late adopters”.
Professor Eric von Hippel from MIT furthered Rogers’s research, studying how the most active early adopters had the most influence on the early stages of an idea’s development. This select group is subconsciously, yet proactively, creating new ideas and constantly trying to understand and anticipate what the masses will like.
Wise innovators take the opinions of these early adopters into serious consideration. For example, in the early stages of songwriting, John Legend will work closely with a small number of trusted music producers (his early adopters), as these producers have a knack for knowing what listeners will like. His research influenced the world of mainstream market research as well, as many companies started using the von Hippel Strategy to anticipate customer preferences.
While taking the little bets approach, you inevitably get some small wins. Organizational psychologist Karl Weick defines a small win as “a concrete, complete, implemented outcome of moderate importance.” Saras D. Sarasvathy further explains that a small win can either reveal that we are headed in the right direction, or that we need to change course. Pixar, for example, made animated commercials and short films, thus allowing them to hone their animation and storytelling skills before moving on to feature-length films. Another example of small wins leading the way is how Starbucks founder Howard Schultz modified his initial vision multiple times, for example by switching from regular to nonfat milk, and designing the perfect coffee-shop experience. Small wins have 2 crucial benefits:
Momentum: They help build momentum, and can help handle the frustrations of a creative endeavor.
Skill-Building: They allow you to develop your skills to move closer to achieving your main goal.
Yet small wins are often tricky, as they rarely emerge in a linear fashion and therefore can be neither predicted nor planned for. For this reason, small wins are not just for encouragement. In actuality, they usually reveal that we need to change direction a bit to achieve our goals, realigning ourselves to what created the small win. Recognize it as a sign to stop making decisions and instead refocus your attention.
It can be difficult to train oneself to be creative since our educational system, which was designed during the industrial era, emphasizes consuming knowledge rather than creating it ourselves. Our innate curiosity is often squelched as a result.
The success stories presented here have something in common: everyone who achieved success had to “do things to discover what to do.” Each successful person undoubtedly experienced frustration and “dark valleys,” times where they’re moving forward but without a clear picture of the end in sight.
Richard Tait, creator of the board game Cranium, was stuck in a dark valley for a long time trying to brainstorm business ideas. It wasn’t until he attended a game night that he decided to create a game where everybody wins. After a series of small wins and more dark valleys, Tait’s Cranium ultimately became a success. Tait, along with many others, learned what works and what doesn’t through a series of experiments, honing and developing their skills along the way. And it’s a process that anyone can learn to do.
The Height Requirement
To be an entrepreneur, you must be filled with love. You must love your idea because, as Elon Musk said, starting a business is "like staring into the abyss and eating glass." In order to persevere through such a tumultuous journey, you must have passion for at least one of the following four aspects:
1. What: You can't have uninterrupted passion all day. 95% of the time is going to be grueling, hard, behind- the-scenes work. Looking at successful happy people, you only see them 5% of the time. Yet that 5% makes it all worth it.
2. Why: If you achieved your goals, how would the world change? You can love your "why", which is simply the motivation behind your endeavor.
3. How: You can love the meticulousness of your work. Lawyers, accountants, and CEO's, all take current task. They love the “how".
4. Who: Who is going to benefit from your idea? Will your family benefit? Will your customers' lives improve? Fall in love with "who" benefits.
Many people erroneously believe that you need to have innate skill to succeed. That your DNA determines all, or at least most, of your success.
Having innate skill does not come into play. Yet most people want to believe that success is in one's DNA. Because if that is true, then you simply have to check if your DNA is built for success; if not, your burden of expectation is nil.
Most people do not wish to admit the painful truth: they simply aren't working hard or smart enough, or are not obsessed enough, to succeed. It's easier to avoid the risk of disappointment, and just claim that you're not built to be successful.
The only question is: do you have the drive to put in the necessary 10,000 hours of deliberate practice
Secure Your Shoulder Harness
You must be a freak to want to start your own business. Freaks are the ones who are "unusually enthusiastic" about their endeavors; normal people on the other hand want nothing more than to conform.
Non-conformity threatens normal people. When you do not conform, it "challenges their choices and identity." They will scorn you. They will pull you back down like crabs in a bucket.
Your friends, family, and colleagues, will use subtle innuendo, doubt, belittlement, and sarcasm to hold you back. Why would these people be so subtly unsupportive of your endeavor?. You make them look bad. You are a mirror reflecting their own cowardice. They will hide behind claims that what you are doing is foolish, or risky. Yet it is their own cowardice they fear. They are not as courageous as you. They desperately love their "corporate bosom" with their "meager “benefits'".
They are not brave enough, and they know it, so will subconsciously hold you back. Such doubts can be painful to an entrepreneur. This is your idea, your vision, your business, and thus it's easy to take such subtle critiques personally.
There are five strategies to deal with this belittlement:
1. Stop worrying about being liked. Every elected president is disliked by nearly half the country. Take their scorn as a sign that you are doing something right. Progress and change are naturally disruptive.
2. Be laughable. Many of the greatest ideas from SpaceX to Disneyland to Jet Blue were laughable before they were accomplished. Embrace that.
3. Define success for yourself. Why are you starting a business? Is it to please your father? To get a title on a business card? Be clear about your "why".
4. Get a grip. There are likely only 10 or so people who will cry at your funeral. Is this person really one of those people? Does their opinion actually matter? Embrace the 18-40-65 rule: At 18-years-old, you care what others think. At 40-years-old, you stop caring. At 65-years-old you realize everyone is so self- absorbed that nobody was thinking about you.
5. Reduce your recovery time. You will get knocked down and disappointed. If you don't fall down, you don't improve.
This Time With Feeling
Entrepreneurship is like being a child thrown into the ocean and told to swim. It's a brutal test of
survival of the fittest. Figuring out the right product is actually the innovator's job, not the
customer's job, despite what others may teach.
You're not going to hit every single target, but your job is to figure out exactly what the other party really wants at their core (whether it's a supplier, customer, investor, etc.)
Passion for the Product
A company requires a leader with passion, who in turn instills passion amongst his employees. Jobs’ zeal for product perfection initially drove some leaders at Apple away. Jobs then formed his own internal team to develop a rival computer: the Macintosh. Instead of dwelling on negativity, Jobs focused on bringing inspiration to his team, hiring “high achievers” and refusing to accept objections. Meanwhile, Jay Elliot continued to serve as an advisor to Jobs, both bouncing ideas off one another and helping keep each other calm in times of tension.
Apple cofounder, Steve Wozniak (Woz) was quite different from Jobs with his more modest personality and technical knowledge. While Jobs’ computer skills paled in comparison to those of Woz, Jobs still became known as an “astute technowizard” because of his meticulousness. Jobs’ passion was not limited to the product; he obsessed over the sense of convenience, elegance, and power in the hand of the consumer.
Find a problem, then solve it.
- One of the most common mistakes amongst entrepreneurs is to start with the solutions, and the try to fit the solution to a problem.
- Many business school student incorrectly believe that general knowledge is applicable to any industry.
- There is some merit in possibly taking a job before becoming an entrepreneur to discover your interest and skills.
- After several successful startups, serial entrepreneurs can develop a skill at “identifying ans exploiting promising new markets”. They also are able to quickly pivot when necessary instead of being bogged by an initial idea.
Find the gap
Plenty of people with plenty of “connections, expertise, talent, and resources” consistently fail to capitalize on opportunities; rather, it's a unique way of thinking which separates creators from the rest.
They take solutions to problems devised in other fields, and apply them to the problem at hand.
There are three major categories of creators, all of whom focus on curiosity:
They cross-pollinate ideas, like birds taking nectar from one flower and pollinating others.
They are able to move concepts across industries and geographies, thereby transporting solutions. They use analogies and metaphors reflecting the underlying pattern in various industries.
They are problem-finders, forming new logical designs from existing components, wondering what's missing, and "why" something is as it is.
"They believe rigorous questioning is the hallmark of discovery, and they retain a certain childlike naïveté, a beginner's mind." For any idea in its infancy, there are a plethora of reasons why it will fail; architects don't necessarily benefit from the objections of their "friends".
They wonder how they would achieve something if nobody showed them how.
They are always thinking.
They do not have many hobbies nor do they watch much TV.
They are detectives looking for inconsistencies and asking questions,
They combine existing concepts for novel amalgams (described in Better & Faster).
They focus on fusing elements with a purpose.
More Value from Less Work
Agile is not about working more in less time. It’s about getting more value from less work. While many believe Agile is a technological solution, it is actually a management one. Agile workplaces encourage frequent collaboration with coworkers and customers. This is a huge departure from traditional chains of command. Agile workplaces have 3 core characteristics:
The Law of the Small Team: Break large tasks into manageable pieces and assign them to small, autonomous, cross-functional teams working in short cycles with continuous feedback.
The Law of the Customer: This is often confused for “the customer is number one.” In Agile organizations, this changes to “customer focus.”
The Law of the Network: Traditional workplaces expect employees to quietly and obediently perform repetitive tasks. Agile organizations encourage employees to take initiative and solve problems independently.
Drive for daylight
Goal-oriented people tend to have "to-go" thinking (focusing on where they are going) as compared to "to- date" thinking (thinking about how far they've come). To-go thinkers see where they want to go, they see reality, and they notice what is different between the two. When you run a marathon, you focus on the next few miles to go until the end, not how many miles you've already exhaustingly ran.
Always scan the edges for new ideas, rarely glance in the rearview mirror, but quickly dismiss poor strategies and ideas. Avoid nostalgia. Learn from mistakes, but don't "regret or fret over the past."
Don't worry about missed opportunities or bad choices; just focus on the next task.
The Door Opener: Branding
It is true that for a business to achieve major success, it must reach brand-name recognition. Before Apple took off, Jobs insisted on using effective advertising, which landed Apple a deal with master advertiser Regis McKenna. McKenna only opened up to Apple after Jobs’ 4 daily phone calls and dogged persistence. The resulting “in-your-face” approach to advertising proved to be widely successful in capturing people’s attention.
Consistently shining positive light on products builds awareness in the minds of customers, a technique crucial to branding that Apple successfully employed. Jobs rewarded Apple’s designers and advertisers with loyalty and admiration which, in turn, fostered creativity, intensity, and success. When Jobs left Apple, the commitment to innovation over profit unfortunately disappeared with him. Apple was sinking to the status of its failing competitors.
Fly the OODA loop.
-Observe all the data you can about the situation. A crucial part of improving one's OODA loop is to quickly notice inconsistencies between reality and your expectations.
-Orient by sifting the signal from the noise, focusing on the relevant information.
-Decide on a solid course of action. Making rapid decisions is crucial.
-Act, then Observe. Acting quickly & unexpectedly trips up your competitor's OODA loop.
OODA loop flyers realize they must continuously move through the loop and always improve, lest they become obviated. While most things either work or don't work, building a business is actually more of an iterative process. The lessons from the past are not always obvious, but flying the OODA loop can give you a significant edge against competitors.
Aim to create a series of trial-and-error experiments with small bets, so that each “error” doesn't cost too much. Little tests that fail can be reinterpreted as simple data-gathering experiments.
Creators quickly accept the present situation as it is and move forward with it.
Creating networked minds is about capturing the "cognitive diversity" of various perspectives on a given problem. Diversity is not necessarily race or gender, but rather various backgrounds and talents that can be brought to bear upon a problem.
Creators realize that an idea alone isn't typically given useful feedback. But once it is made into a prototype, the iteration process can begin, as people are happy to point out flaws and features of physical products.
Creators aim to create spaces, whether physical or virtual, to connect different-minded people. To keep a diverse team in sync, make sure the immediate goal or problem is clearly defined. The advantage of networked minds isn't necessarily due to the most "unique" individual providing novel ideas. Instead, the fact that members must describe their ideas to different people forces members to better prepare and think through their own ideas.
With homogeneous groups, people tend to maintain the status quo, but with heterogeneous groups, people are forced to explain their own ideas more explicitly.
Specific types of networked minds include:
Flash Teams are a special type of group which is quickly formed to solve a problem, and then quickly disbanded (like a group of lawyers at a firm working together for a specific case). Flash Teams need to have both veteran and newcomer members to work well, as newcomers bring fresh ideas and veterans have a stronger handle on the situation.
Prize Competitions for solving business engineering problems will encourage multiple people to attack a problem, for some sort of reward.
Gamifying is the process of turning a problem into a game of some sort, creating "levels" that players complete. Such a game offers points for helping the business or researcher solve the given problem.
Think big, think new, think again.
There will be tremendously wild swings of emotions alongside incredible stress and pressure when becoming an entrepreneur. Fear of failure will consume you at times. To fight off a fear of failure, sometimes you must “put blinders on and drive forward”. Resolve, determination and an inner fire can you persist through these inevitable struggles.
- The concept of not thinking big would be ridiculous in the mind of an entrepreneur.
- Once you understand and internalize the fact that other successful entrepreneurs are just other human beings with an idea, you being to ask “Why not me?”.
- Difficulty pushes you to take on larger challenges.
- People use “experiences” as an excuse for failure.
- Companies who fail to continuously innovate will inevitably wither and die.
- Innovation can be regarding a new technology but it can also be creating a new business model.
- Beware of confusing “thinking big” with overcomplicating an idea.
Most companies use "learning" as an excuse for a lack of successful execution. Most "learning" in corporations is actually just meant to hide failure.
Validated learning, which is to learn as you build, by defining "actionable metrics." The goal is to quickly determine whether the customer actually wants the new feature or new product by measuring changes in sales.
The overarching goal is to quickly determine if company resources are being spent towards products which customers will actually pay for. While one might assume this means asking the customer what he wants, this is not entirely accurate. Customers don't necessarily know what they want before they've seen it. Instead of simply “pulling" from the market, a more nuanced method is to "push" new features onto the market quickly and test the response
The method to implement validated learning is to split your potential customers into groups, and showcase different versions of the product to these groups (split- testing). Determine which features are useful by measuring the actual response from the customer groups (in terms of actual sales, for example).
By not releasing anything, it's "safe" in that you haven't heard a "no" yet. This creates the incentive to postpone gathering any data until you are guaranteed to succeed. However, this actually increases the risk that the customer will not actually purchase the product when it is finally released.
You can’t do it alone.
Investors typically care as much as the people in a startup as they do the product idea. They will look at the management team as a major consideration regarding whether or nor to invest.
Entrepreneurs need to organize their own strengths and weaknesses and supplement skills with other teammates.
- Successful entrepreneurs typically have a unique blend of: creative idealism and a dispassionate analytic mind.
- Founders should ideally encompass having big ideas, with the diligent execution necessary to make those ideas a reality.
- People are drawn to entrepreneur’s excitement and passion. That passion is an entrepreneur’s best networking tool.
- Competition is the business arena can be crucial. It spurts an entrepreneur to improve you skills and forces you to be more innovative.
You must do it alone
There are going to be enormous challenges of confidence and self-belief along the entrepreneurial journey. Many entrepreneurs must face the psychological challenge of being seen as a failure if their venture does not succeed.
To counteract such challenges requires an inordinate amount of stubbornness and self-assuredness. The entrepreneurship roller coaster consists emotionally of extreme highs and lows, and is not for the faint of heart. Self-doubt and loneliness will plague every entrepreneur, and your self-confidence and courage must be sufficient to quell such doubts.
- If the entrepreneur doesn’t fully believe in his idea, he will have difficulty convincing investors and customers of the idea.
- An entrepreneur should enjoy the creative process, while also being extremely diligent and organize.
- Entrepreneurs must learn how to balance handling the responsibility of the journey alone, while also being good team players.
- If you look for flaws in any startup’s business plan, you will be able to find them. To overanalyze is risky, since you can get paralyzed by all the risks. Do not become too cautious to seize the moment.
An Advance-And-Conquer Attitude
While optimism does not guarantee a positive outcome, it will not hurt! And it will give you an
edge over those who fall victim to pessimism. Shift your focus away from mainstream media and
news. Seek alternatives that have a positive outlook or give raw information without commentary.
Write daily positive reminders, exercise, read positive books, and replace negative thoughts with
When Things Fall Apart
If you are going to be an entrepreneur, you will have to face The Struggle. The Struggle has no
mercy. It is when you start doubting why you wanted to do this in the first place. You are going to doubt if you're smart enough to figure out these soul-crushing problems that every startup deals with. You are going to have many sleepless nights. Deeply ingrained, fearful, self-loathing emotions will come to the surface.
But The Struggle is wom says the renowned from the girls. You may actually tail. But it's a test of the fittest and strongest amongst the entrepreneurs. Try not to put it all on your shoulders or take it personally, and hope. that you're one of the lucky few who will prevail.
Business needs to be thought of like calculus rather than like statistics. While there are probabilities of risk everywhere, as CEO your goal is to find the one deterministic solution amidst the chaos of risks. There will be pressure to be overly optimistic. Yet instead of having delusional optimism, it's better to “tell it like it is”, analyze the problems with your coworkers, and find solutions together. You want to structure your culture to encourage the flow of negative information reaching the right
people. The more brains you have attacking a pessimistic problem, the better.
When laying people off, be clear in your own mind the reasons "why". Don't hesitate, come clean, and be visible when telling the entire company the reason for the layoffs. Make sure your managers have the gumption to lay off their own people. When firing an executive, take ownership and realize you're the one who vetted him. Realize why you failed to properly vet him (perhaps you hired
him for a lack of weakness rather than specific strength, or perhaps he wasn't a good cultural fit).
Inform your board, and be clear about your own reasons "why". Make sure the employees know who to report to so there is no interruption in business, When demoting a loyal friend, face the
embarrassment and betrayal. She'll probably tell you that you're not that great yourself, and she's
right! Take ownership and admit it's your fault as CEO. Make sure to acknowledge her contributions.
Stop looking for a silver bullet to solve all your problems. Instead, look for many lead bullets. You ho must be strong enough to embrace the battle if you are going to lead a company.
When losers are let go, they will make excuses like "Well I didn't want to work there anyway!" They will shift responsibility away from themselves to protect their fragile egos. They will create narratives in their own head which is more about lying to themselves than anything else, in order to boost their own emotions.
Whining about the reasons for your company's failures does not change the financial situation for
employees. Nobody cares why things went sour; they only care about the financial situations they find themselves in.
The Power Of Broke
The Power of Broke is inside each of us if we can but recognize it. It rarely exists when resources are abundant. The real ground breakers are not the rich Hollywood stars but rather the indie movie underdogs whose work is genuinely full of personality.
Success all too often breeds complacency and makes people lose their edge. Return to your success-starved roots and remember what drove you to fight in the first place. If you do not let losses get you down, but rather absorb them as fuel for your fire, victory thus becomes inevitable. Throwing money at complex, core problems just sweeps them under the rug for tomorrow, so dig in and face your obstacles head on. Become a S.H.A.R.K.:
Set an ambitious yet realistic goal, and know the best and worst case scenarios.
Homework is necessary – study your market, products, and competitors in depth.
Adore what you do to maintain an invigorating amount of energy and passion for your venture.
Remember that you are the brand. People are investing your authentic vision and vibe.
Keep swimming forward relentlessly.
Rise and Grind
A key principle of the Power of Broke is making use of what you already have. Daymond started his career by landscaping. When he later secured a 9-5 job, he saved up for a used van and ran a proto-Uber service. It was old and required upkeep, but it was still cheaper than a new van. This is what “using what you have” means: finish your serving before you reach for more.
The Power of Broke is amplified through today’s digital platforms. For instance, one man gained 100,000 Instagram followers and made $1.3 million by offering a 24-hour limited availability of pre-orders, and then using the pre-order money for his expenses. Another example is an elderly couple who made dog houses for wealthy pet owners. They made $2.5 million in a year.
Steve Aoki’s father founded Benihana, but Steve gravitated towards the punk indie scene. Steve went from $90,000 in debt to signing his first major act. His relentless drive, and spirited determination garnered him a genuine reputation amongst the indie scene. This level of authenticity is not achievable by throwing money at problems. It skyrocketed him to becoming one of the biggest EDM producers ever.
Get your vision out there using technology. Daymond utilized hip-hop music videos as intimate advertising for his FUBU clothing brand. Another example is Acacia Brinley who became one of the first social media sensations as the “Selfie Queen”. She stayed authentic and only promoted products she’d use.
Rob Dyrdek skateboarded for fun, but later became a skilled skater. His father could not afford the entry fee for a competition, so in a young act of entrepreneurship Rob struck a deal, getting 10 friends to sign up in exchange for waiving his entry fee. Rob claims you need neither big publicity nor big dollars for a successful campaign. The brand is who you are, and authenticity doesn’t cost a penny. Also, while passion is necessary, do your homework and properly research your business, competitors, market, and field. Define yourself clearly in a few words, as first impressions are do-or-die and successful people define themselves before giving others a chance to. Rob describes himself as “relentlessly living amazing,” in his personal life and “relentlessly manufacturing amazing” for his business.
When Christopher Gray couldn’t afford his favorite schools, he accumulated $1.3 million in scholarships. Chris then developed Scholly, an app that helps find scholarships. It had over 500,000 downloads as of 2015. His own homework made him an expert on the scholarship process, which he successfully monetized.
Money Changes Everything
Daymond believes one of the biggest reasons that businesses fail is overfunding. Loans, credit, and investments are so deeply ingrained in the business culture that it’s difficult to break from the herd and see them as detrimental. Loans are the artificial (and dangerous) growth hormones of the business world. It is far better to let your business grow organically, patiently reaping the benefits over time and making tweaks along the way. Once the company is on stable financial footing from organic growth, then an investment or loan will not be such a shock to its operations. Thus, contrary to popular entrepreneurial advice, Daymond recommends not seeking funding and instead bootstrapping from the ground up, letting it prove its mettle over time in the harsh marketplace.
When Mark Zuckerberg started Facebook, he gradually expanded from Harvard to nearby Boston colleges, making small tweaks along the way. Facebook went slow and steady, refining their concept and making proper adjustments at proportionally larger scales. Your friends and family won’t give you honest feedback, so be like Mark and let your customers be your research.
After the business is a healthy entity, the work changes into managing it with good financial habits. Unfortunately, most people don’t save their money. Nearly 60% of NBA players, 78% of NFL players, and 70% of lottery winners go bankrupt. An unstable spike of income without proper habits can turn ugly, fast.
Gigi Butler wanted to be a country singer, but instead ended up waitressing at Red Lobster. Gigi started a cleaning business for the celebrities she served. One day, her brother told Gigi that she makes better cupcakes than the gourmet cupcake shop he was visiting. Gigi did her homework on high-end cupcake shops and saw an opportunity. When the bank scoffed at her request for a loan, she used her excellent credit to take out $100,000 from her credit cards. She then offered her cupcakes to her wealthy cleaning clients. She paid off a large chunk of her credit card debt and stockpiled $26,000. In 6 years, her shops had spread to 24 states.
Jay Abraham is now a leading strategist and marketing consultant but had humble beginnings. As a bdding entrepreneur, he made business cards saying things like, “Jay Abraham, struggling, young entrepreneur who suffers from acute sinus infections.” When Jay started selling 8-track tapes, he offered to stock store shelves at no cost. He then found a distributor who agreed to send him $200,000 worth of tapes at no upfront cost. This created a win-win-win scenario in which the store, the distributor, and Jay all profited.
Jay then bought a mail-order arthritis company on the brink of bankruptcy for $20,000. Since they couldn’t afford ads, he made deals offering radio stations 15% discount and a share of the revenue. Today, that product is the popular Icy Hot brand. When asked about the source of his success, Jay points to his 2 failed marriages. He learned that the key to life is not success but rather the process of building the success.
Kevin Plank was a college football player in the 1990s when he realized that the sweat-soaked cotton under-shirts were a major problem for athletes. With no experience, Kevin payed for 7 prototypes. He offered them to his teammates, slowly perfecting the design over time. Before long, friends of friends were asking for shirts. When he graduated, Kevin only had a budget of $16,000, a warehouse at his grandmother’s place, and a can-do attitude. From $17,000 in revenue in the first year to $400,000 a few years later, Under Armour soon became worth $300 million. By 2018, it would be raking in $5 billion/year with a market cap of $11 billion.
Kevin's key point is to “keep swimming” and leave the negative speculation to others. Focusing on what you can do rather than what you can’t do to overcome the challenges, scarcity, and doubt. Today, that underdog perseverance is what Under Armour stands for.
What It Is
The Power of Broke isn’t necessarily monetary. “Broke” could be a minority opening business in a white community, a woman in a male-dominated industry, or a young company up against a giant.
When marketing FUBU, advertising on hip-hop music videos eventually grew stagnant. Daymond then advertised on BET, which had rock-bottom prices due to inaccurate viewership numbers (few Nielson boxes had been placed in black communities). He learned the costliest option is not always the wisest option.
Moziah “Mo” Bridges became an entrepreneur in middle school when he asked his great grandmother to sew him a bowtie which his classmates also wanted. Mo priced his bowties at $20. News of his business was picked up by the Steve Harvey Show, O Magazine, and The Today Show. As orders flooded in, Mo and his great grandmother hired two more sewers and brought Mo’s mother Tramica into the business. Mo’s key point is to “adore what you do” while Tramica’s key point is to “keep swimming”. Mo and Tramica found their way onto Shark Tank and asked for a $50,000 investment for 15% equity. Kevin O’Leary struck first, but Daymond knew Mo needed not just money but a mentor.
One study showed that those who participated in a mentor relationship had 106% increased revenues while those without mentors only saw 14% growth. Additional studies showed that 75% of executives say mentorship was crucial to their careers, and 95% of mentees say their experience was “greatly motivating”.
Tim Ferris was neither financially nor intellectually broke, but he craved a way to spread his business knowledge. He wrote a book and began volunteering at a local non-profit in Silicon Valley. When the organizers asked Tim to lead an event, he seized on the opportunity and recruited guest speakers whom Tim himself wanted to meet. He did not come across as greedy or selfish, but instead focused on giving rather than taking and developed important friendships. As he shopped around his own book, Tim was rejected a total of 27 times until a publisher finally gave him a deal.
Blogging was on the rise, and Tim wanted in. He attended the Consumer Electronics Show hoping to meet blogger Robert Scroble. Tim mentioned this to a woman who, unbeknownst to him, was Robert’s wife. Robert took a liking to Tim and helped him with publicity.
Daymond highlights Tim's ability to put himself out there. The key is to never come across as fake, selfish, or unwelcomed, just genuine. By being kind to everyone, not only do you have a better conscience, but you may be surprised by the financial benefits!
Growing up as a chubby kid, Josh Peck learned early on the art and defense of humor. Later in life, he found himself unhappy with his career direction and switched gears to doing short, online comedy videos. Since he was returning to his roots, everything he did was genuine. He gained traction fast and never lost his genuine passion for comedy. He never “sold out” and only produced what he had always loved. When asked about his success, Josh points to his consistency. He believes that having a reliable upload schedule with a specific release time was vital to his online success.
Broke Isn’t Just Personal
Large companies can also utilize the Power of Broke to stay lean and versatile. For instance, General Mills hired a young product manager for their failing Nature Valley brand. She turned it around by offering free samples at ski resorts.
Another example is The Girl Scouts of America who sell over $700 million in cookies yearly. The Girl Scouts are forced to be creative due to only selling cookies once a year. One troop set up shop outside of a medical marijuana clinic, and another troop sold their entire inventory by going to the financial district of New York.
Linda Johansen-James owns American Kiosk Management, which owns, operates, and provides kiosks to malls across America. He kiosks sell Proactiv, which she describes as a “one of” product (people will only buy “one of” them at a time). But since acne is incurable, her customers become repeat customers.
Ryan strongly believed there was consistent money to be made on the internet. He taught himself how to design websites and listed other websites’ products as an affiliate partner. He eventually had 500 products and e-books, with over $100,000 in revenue. Yet Ryan was financially naïve, accumulating $250,000 in overdraft fees and owing the IRS another $250,000. Ryan gave himself only one day to wallow in his failures and then took drastic action. He cut the products that were not selling and launched promotions for all six websites. He generated the $500,000 within a week. Ryan's key point is to “set a goal” at each junction in your career.
When Loren Ridinger met her husband, he had just come out of bankruptcy. They created Market America, a multi-level marketing business. After watching her snake-oil eventually fail, Loren realized that selling quality products was vital for her company’s credibility. One product was Thermochrome, a weight-loss supplement that sold 60 million units in 18 months.
Loren didn’t trust the sudden influx of revenue so reinvested it in the products and salespeople. Her company eventually became SHOP.COM, with in 2015 had over 180,000 sales reps and $6.5 billion in revenue.
Lauren credits her success to her early struggles. She appreciates being forced her to improve her pitch, be more selective with her product selection, and research her consumers. Loren’s key point echoes the others’ with “do your homework” advice, as genuinely getting to know her customers allowed her business to take off.
Be the Change
During a brainstorming “jam session” created by Gary Vaynerchuck, Daymond noticed that everyone was selling time in some way. They were either selling a good time, maximizing time, or saving time. To thrive in this ever-changing market, you must be driven, passionate, adaptive, and genuine – in a word, Broke. The abundance of products online forces creators to be smart, better, and hungrier. Customers now have endless options, which allows them to ask questions they previously had been unable to, such as:
“What was the inspiration behind it?”
“What is the organization passionate about?”
“What’s in store for the future of the organization?”
In the act of answering these questions, consumers gain the power to tell creators what they want in a product, instead of the other way around. The customer is always right has never been truer, so embrace it in order to survive. Harley Finkelstein of Shopify calls this the “democratization of retail.”
Crowdfunding is an interesting online phenomenon with a tri-part benefit: finding investors, stirring interest, and creating a customer base prior to product release. It also establishes a trial and error arena before the product hits the market. It is low stakes and high impact and customers love it! American money generated via crowdfunding surpassed $32 billion in 2015. Still, it is not without challenges, as convincing people to invest in an idea that has yet to come to fruition takes creativity, vision, and persistence.
Daymond also recommends taking classes to stay up to date with rapidly changing technology. He also advocates setting goals and visualizing them. Write it down, set a timeline, and decide what you will and won’t do, for all aspects your life. But be prepared for other people trying to redefine them or place their own expectations upon them. Naysayers may try to tell you what you can and can’t achieve. Counteract this by focusing even more deeply on your own positive goals.
Mark Burnett, television producer and Daymond John’s boss on Shark Tank, found his Power of Broke in his working-class parents who held down 2-3 jobs just to survive. They spoke of missed opportunities, which greatly influenced Mark’s choice to go from the British military to becoming a live-in nanny in Beverly Hills. This position gave him everything he needed: a room, a car, and an income. That was his Power of Broke.
Mark then started selling t-shirts on Venice beach, which became so lucrative that he dropped his day job completely. Business was good, but t-shirt sales could only go so far. He then entered a race in Costa Rica which inspired him to create a similar event in North America, putting 5-person teams through kayaking, horseback riding, trekking, and mountain biking.
Mark became producer for the popular show Survivor and used the Power of Broke to work with the Malaysian government, offering them primetime publicity in return for free airfare, hotel, a helicopter, and a tour guide. Mark's key point is, “adore what you do.”
A Final Thought: Bringing It All Home
Broke can break you or it can be an enormous force of momentum on your path of success. When your back is against the wall, financial adrenaline kicks in and creates the strength, creativity, and resourcefulness that would be unavailable in a more abundant situation. Adopt these 8 Broke Power Principles today:
Use resources optimally. Get them to work for you.
Authenticity cannot be underestimated. It will help you find those who want to see you succeed.
Optimize time, energy, resources, & opportunities.
You will be rewarded for innovating systems or finding solutions for problems in people’s lives.
Embrace the full force of your passion. Be both reasonable and relentless. If you don’t believe in yourself, how can you expect anyone else to?
Connect and get to know the people around you on your journey. Show others you are sensitive to their interests and they will want to help you.
Always think ahead and make sure logic, data, research, and reality are on your side.
Be able to visualize your success. Keep your eye on the prize. Keep success within your mind’s eye and think of it as inevitable if you follow the right steps.
The End of the Beginning
Entrepreneurship, is a bit of a "black art". Why do investors expect CEO's to prove they can
run a company? Rather, investors should attempt to help founders bridge their skills gaps, rather than replacing the founders.
The CEO can't always say what's on his mind – he has to always think of the public perception, if his behaviour shows weakness, and the impressions of his employees. Unrelenting confidence is necessary as CEO, but moments of genuineness can occur after exiting the company. It's difficult to ask for help without showing weakness, but that's precisely what CEO's should be doing as they learn.