Each week at TakeLessons.com, I ask my employees a question. This activity gives us time together as a group and helps us all get to know each other better. We always ask questions that are structured around developing community within the company. Last week, I asked “What’s the best advice you’ve ever heard?” Here were some of their responses:
“Back in elementary and middle school, I used to compete a lot in speech and poetry reading contests. My dad, who was my speech coach, always advised me not to fixate on my competitors and instead focus on myself. For this reason, during the competition, once someone completed an excellent performance, my mantra before taking the stage was: ‘while they are good, I’m better.’ As an adult, I cherish his advice more than ever as it is easy to get distracted by your surroundings”
“Aside from the common ‘invest and diversify’ (I think over the next 10 to 20 years Quantum dots and MRAM are going to become very important technologies), an insightful friend of mine once said (and I hope I don’t misrepresent this) that he believes that everyone always makes the best decisions based on what they know at the time.
He was describing some of the stupid decisions I’ve made in the past, but I still think it’s an important message of understanding and forgiveness.”
“Don’t take things too seriously.”
“Don’t try to get every single person you meet to like you. Just like you don’t naturally like everyone you meet, everyone won’t necessarily like you. Save time and energy by just being yourself. (Of course, rules of civility still apply).”
“To quote Conan O’Brien..”
“Sometimes you have to be small to be BIG.”
“Todo a su tiempo, meaning everything at it’s time.”
“Start saving your money early.”
Personally, some of the best advice I have ever received were the following:
“Thoughts ARE things. What you think about, you manifest.”
“The past and the future don’t exist..only the present matters.”
In February 2014 Christy Wang, a student at MIT Sloan School of Management, interviewed Steven Cox, CEO and Founder of TakeLessons.com for her Entrepreneurship class. Here is the transcript of the interview.
4. What makes a good startup business partner? Where can you find them?
There’s a line that I read from Stephen Covey, who wrote many successful books, including the “The 7 Habits,” but he also wrote a few business books. One of those things he talked about was developing a world-class staff. When you build your business, this is the number one thing you’re looking for – building the right team. Even if it’s just a two-man operation, you look for people whose strengths offset your own weaknesses. If it’s a team environment, you look for the weaknesses, and say, “Where do I play so that the strengths of one person make the weaknesses of another obsolete?” If you can find that and keep building that sort of team, over time, it becomes easier and easier for you to solve the problems.
Now, along those lines, I would also add that, in addition to finding people who have offsetting strengths and weakness, you need to find people who have a shared value system. While you’re not looking for robots, you are looking for someone that, when push comes to shove, your values are aligned. Second of all, your work ethic needs to be aligned as well. I think those two keys are critical, specifically in a very young company. Otherwise, you’ll just run into more problems later on.
5. What is the best way to find investors, and what is the most valued lesson you’ve learned from successful pitches?
I would say that the best way to find investors is through a pecking order, if you will. The first place to look is yourself. There are many people who have taken out money on their house, credit cards, or savings and started investing in their own startup; I think that’s one of the best investments that one can make. It is risky, and there is a high probability of failure, so one has to take that into account in trying to figure out if they should be their own investor. I funded TakeLessons.com right out of the gate, and it was my money on the line. I think that entrepreneurs have a tendency to work a little bit harder when it’s all of their own money on the line at the beginning. That money should be used to get some traction within the business, and from there, the place you look is for people who believe in you.
Instead of going out and trying to convince someone that, not only that your idea is good, but also that you are investment-worthy, find people who already believe in you. Finding money becomes much easier because they already believe in you.. You’re a go-getter and a hustler. You’ve proven that you can turn a dollar into ten bucks. That’s the next set of people. From there, once they’ve invested, ask them who else they know and whom they vouch for that could also listen to your pitch. I find that that’s the next best group to go after. It’s all through referrals.
In this business, the people who invested early with me were people that I just knew personally. Some of them, I had never done business with before, but they knew my character. My very first investor’s name was Steve Martini, a San Diego commercial real estate broker, and I had bought a car off of him three or four years before he invested. We just kind of got to know each other and hung out and took a look at a couple of deals together, but we never ended up doing something together. But, when the time came for me to raise money, I told him that I had already put my money in, and I showed him what we were doing. His words were: “Well, listen, I have no idea what you’re doing, and I have no idea if it will work, but I believe in you, so here’s a check.”
That’s normally the best way to get the deal done; it’s through people that believe in you. I will also preface that by saying that, in order to get those people, you have to be the type of person that other people want to do business with. Your character has to precede you asking for the money. If you’re a crappy guy or girl or you shyster people or you’re dishonest, good luck. You shouldn’t be in business to start with. Integrity is the key. There are no promises in start-ups, but these investors think, “I know this a gamble, but I’m willing to gamble on this guy.”
[Have you ever encountered any investors who also wanted to take control and make decisions?]
There are two kinds of investors. The first are what we call “passive investors,” and those are people who simply put their money in and don’t have much input in the business. The second are people known as “active investors,” and those are people who truly do add value to the company. They have a wealth of knowledge within the space that you play in, and it would be a crime to not use them to try to grow the business. Sometimes, we add those people on purpose as an investor or an advisor in order to grow the business. They become very, very useful within the context of what the business needs.
The issue and pain comes from investors who should be passive, but try to become active. These sorts of investors do not have higher amounts of knowledge or skill than the entrepreneur and may get in the way. I find that if you are clear upfront with the investor about their role, it helps manage expectations of what you can expect from them, and they can expect from you.
6. What is the biggest challenge of being an entrepreneur, both in personal and business life?
I read somewhere that, unless you have a high threshold of pain and are comfortable knowing that there’s a 90% failure rate, don’t be an entrepreneur. In fact, go work for someone else because it’s much more safe and secure. I think that’s true. There is a high risk of failure. There is a lot of competition. You have to have an incredible amount of persistence, drive, and belief that you can add value in the world. It’s got to be something inside you that drives you because it’s extremely difficult; it’s tough.
There will probably be days when you don’t know if you’re going to make it, and there are days when you’re down to not knowing if you can pay the bills. There’s a lot of pressure to build something out of nothing. Some people are built for that. Some people get a high off of that, and some people don’t. People should be very honest with themselves; there is equal nobility in both building a company as an employee as well as a founder or entrepreneur. The key is finding out what is right for you.
For me, I had to learn balance. I have lost friends and girlfriends over my business. I did not balance my life correctly. I’ve gotten physically run down and sick from the stress and pressure. But I’ve decided not to do that anymore. I needed to make sure that I took care of myself – and those important to me – just as much as I took care of the business.
If you’re going to do a start-up, it is going to require a lot of time and a ton of effort. What you might learn over time is that your business is not you. It is a separate entity from you. That’s a key distinction. This allows you to tether the spikes and ride out the drops. It allows you to find a good balance so your personal life doesn’t experience the same torrid whipsaws of your business.
There will be days in business where it is incredibly horrible and other days where it is incredibly high. You learn over time not let the lows get you low and to not let the highs get you too high. You acclimate to both the struggles and victories, and you learn to move forward no matter what. I think there’s a peaceful understanding that comes over time with knowing how to achieve that balance of emotional security with the imbalance of entrepreneurship.
I learned from a good friend of mine when I was starting my business. I think we had raised maybe $1.5 million or something like that—just a small amount. His business had raised $80 million. It went bankrupt after about five or six years, and his dream ended. I called him on the phone and said, “Hey, I read about your business, and I’m sorry about that, man. How do you feel?” He said, “I feel fine.” I then asked, “What do you mean you feel fine?” He said, “We gave it our best shot. We knew there was big risk going in. I would have liked it to have worked, but it didn’t. I’ll move on.” I asked him, “Isn’t it your baby? Don’t you feel crushed by it?” He said, “No. I’m not defined by the success of my business. I am the same person with or without the success of my business. I wanted it to be a huge success, but I am not defined by that success.”
I would ask this simple question when looking back over life: if an entrepreneur has a very successful business, but his family falls apart and his kids won’t talk to him, is he or she a success?
That’s something that each person has to answer separately. That’s a question I’m not sure too many entrepreneurs ask, but it’s important.
For me, I ask, “How do I have a wonderful life that entrepreneurship is a part of?” There is a tradeoff in life. That tradeoff is this: how much money, satisfaction, or happiness are you willing to trade your life for? Because that is what you’re doing every single day that you go to work.
Entrepreneurship is one of the best ways to make a living and to make an impact on people. For me, that’s what the juice of life is about. How do I make a great living for my family as well as make a difference in the world? If it’s used as a tool to create a higher objective, it’s a wonderful experience. If you can combine your work into your mission and into your long term goals in each aspect of your life, then you’ve got an incredible formula for life.
7. Have you ever had a moment of self-doubt? If you did, what was it and how did you deal with it?
I can only speak for myself. I do have self-doubt, but here’s the key: I believe in my team. I believe that we’re making a difference. I believe in myself. In addition to that, I also have days where I doubt myself, and I wonder, “Am I growing as quickly as I want?” There are times when I screw up. Honestly, I screw up a lot, but I don’t mind it. I used to think, “Oh man, if I screw up then that’s the end of the world, and I’m a horrible person.” I used to think all of these things, but what I got very comfortable with was knowing that life and business is full of potholes. I got very comfortable with moving quickly and not making the right decisions all of the time. That’s called life. When I have those doubts and I don’t know for sure that I’m making the right decision, I am confident it’s the best with the information I have.
For me, I have confidence in knowing that I can improve, and that goes back to our core values. I know that I’m constantly getting better, and that we’re constantly improving. As long as we’re doing that, I feel like we’re being successful. When those moments of self-doubt come in, I’m able to see a bigger picture in knowing that we are making a difference and knowing that there are people out there who are able to make a better living because of what we do. That gives me a great sense of pride and a great sense of humility at the same time because I know that what we’re doing is working. A lot of it has to do with what you tend to focus on as well. Self-doubt comes from your current state of what you’re focusing on. If you focus on all of the negatives and what is going wrong, doubt will continue to grow. If you focus on asking yourself better questions, things can go right. For instance, instead of asking, “Why did this happen?” or “How can I be such an idiot?” I ask questions such as “What did I learn, and how can I become better and not make the same mistake anymore?” By simply focusing on a different set of questions, you get different outcomes in your life.
[Have you ever had a dilemma between making your own decision and listening to your team’s decision?]
Of course. I think that’s a key for good leadership—admitting that I don’t have all of the answers. I try to put a team around me that’s smarter I am in many areas. If that is so, I should not be coming up with all of the right decisions. If I can come up with all of the right decisions, I don’t have a strong enough team. That’s absolutely what I believe. To counter that, there’s also times that when push comes to shove, I make the call. With those calls, I don’t necessarily agree with my team, but I feel like we’re making the right decision for the business. It’s never about who comes forth with the idea; it’s about choosing the right idea.
This data was provided to me by Randy Smith, CPA, of CFO Innovations San Diego Companies receiving venture funding in Q4 2013. Thanks Randy!
21 deals were completed locally in Q4 of 2013, down from 23 in Q3 of 2013. Average deal size decreased from $8.9 million in Q3 2013 to $6.9 million in Q4 of 2013. Biotechnology continues its lead with $91 million in new capital, followed by Industrial and Energy of $35 million, San Diego Software companies at $7 million, Medical Devices ($3 million), Media ($3 million), Healthcare Services ($2 million), Financial Services ($2 million), and IT Services ($1 million).
Adams Street Partners – (really smart dudes. Robin Murray is the best!)
Alta Partners Anthem Venture Partners – (Brian Mesic is a big supporter of the SD tech scene)
ARCH Venture Partners
Bay City Capital
City Hill Ventures
Frazier Healthcare InterWest Partners – (good people here. I know them)
Madrone Capital Partners
Montreux Equity Partners
Pappas Ventures Polaris Ventures (Great firm, smart people)
Right Side Capital
Rockport Capital Partners
Silicon Valley Bancventures
SV Life Science Advisers
Tech Coast Angels
Thomas McNerney Triangle Peak Partners (also invested in TakeLessons.com)
UPS Strategic Enterprise
1. How did you come up with the idea about TakeLessons? What made you set your mind to go into this business?
I’ve done start-ups for a little over ten years now. A few years ago, in addition to working at a startup, I was playing in rock bands. My drummer, Enrique Platas, was an incredible musician as well as an incredible person. Enrique was playing music to make a living, whereas I was playing music to kind of have fun. This was his livelihood and everything that he had studied. He had gotten a master’s degree in music performance, and everything he had built his life on was around music.
He had just gotten married very recently, and he and his wife were trying to buy their first house in San Diego, which was really expensive. He was talking to me and after a show one night, he said, “Hey, listen, I think I have to quit the band and go try to find another job.” I asked him why, and he replied, “I can’t make enough money playing music to support my life, and I just found out that my wife and I are going to have our first baby. What I’ve decided to do is give up my dream and give up playing music. Instead, I’m going to just find a job.”
That, for me, really hit home. It felt horrible that here’s a guy who had struggled all of his life to do something he wanted to do and couldn’t make a living doing it. So, we really set out from there to help him not take that job and see if he could make more money teaching. We built out the site and contacted other instructors in the area and found out that they had the same problems that Enrique had. “How do I find enough students? How do I market myself? How do I manage my business in such a way that allows me to make a living?” That’s kind of how the idea was started. We really based it on helping instructors and service providers find income so they could keep doing what they loved. In fact, Enrique never took that day job and still teaches for us today.
2. What are the vision and core values of your start-up?
I believe both values and visions are shaped over time. We didn’t sit down one day, and say “Oh, I read a book, and it said we need our core values, so let’s create some!” I think it was probably a year or year and a half after we had started the business before we had sat down as a group and asked ourselves, “How and what do we value as a company?” Our values really came from the way we acted on a day by day basis. They were congruent with the way the founders thought about the business. We have five core values in the company.
The first one is an ownership mentality, and what that means for us is that owners are self-motivated, self-aware, self-disciplined, and self-improving people. We look to hire those people first because that’s the way they treat the business. They’re the type of people who never feel “It’s not my job.” They’re the ones who take out the trash when the bag is full without being asked. They do what is in the best interest of the company without being asked and without their own self-interest. They make decisions in a way that even if it’s painful, those decisions are made based on what is best for the company.
Our second core value is respecting yourself and others. What that means for us is that we have a positive view of ourselves, and we feel like we can succeed. We hire people that we feel have levels of mutual respect to where we can acknowledge and listen to our teammates’ thoughts and opinions—even if we disagree with them. The truth is that we are looking for the right answer instead of the answer that we might have particularly came up with. It’s truly a collaborative environment.
The third core value is called building stuff we’re proud of. Basically, that means that when we are getting involved in new products or when we’re looking at new business opportunities, we want to be able to be involved with products, services, and partnerships that we can look back on with a sense of pride and integrity. We can wake up each morning and go to bed each night with a clear conscious that we’re honest and fair in our actions and that we do our job with integrity, humility, and transparency.
The fourth core value that we have is called constant and never-ending improvement, or CANI for short. For us, that simply means that first and foremost, we’re good today, but we can be much, much better tomorrow. Because we believe we can be better tomorrow, we feel responsible for our own personal growth and believe in having a plan to constantly grow and get better. We open ourselves up to curiosity and making mistakes because we know that’s part of getting better at what we do.
The final core value is persistence, and basically, that means that we believe that we can win. We will persist even when there are rocks in the road and walls in our paths. It doesn’t mean we’re fearless because we have fear every day, but it means that we have certainty that we can win, even in the face of those obstacles.
3. What is the most difficult part of growing your business? How do you choose the right partners in the beginning, and what makes a good business partner?
Start-ups go through different phases within their lifetime, and each phase will be riddled with different sorts of difficulties. Very early on, we’re trying to find the right set of co-founders as well as the product market fit, which means answering the question, “Is there something the product solves in the mind of the customer that the customer will end up paying for?”
Once you accomplish those things, it shifts to a different phase of the business and keeps shifting to different sets of problems. The problems never go away. For me, I focus on is “PCP,” and that stands for people, capital, and process. I want to make sure I find the right people to not only accomplish the job today but to be able to lead tomorrow. Second is capital. I have to make sure we have enough capital and money in the bank to exercise properly against the plan we have in place. Third is process which means that we keep building systems in such a way that we can duplicate the systems and replicate the systems so that way the business scales. That’s a very important third part of the business once you’ve started getting traction.
** More of the interview will be posted next week **
One of our core values at TakeLessons.com is CANI – Constant And Never-ending Improvement.
In addition to putting things in motion to become better at what we do, we wanted to change the company to make it a place where talented people can thrive. It’s good to see (from the pic below) we’re making progress towards that goal.
The only way to constantly get better is (1) know where you are (2) decide where you want to be, (3) commit to getting there, and (4) measure your results.
Today’s post is a guest post by Tim Owens. Tim helps guide, advise, and accelerate the growth of talented professionals and entrepreneurs. I read the post and asked Tim if I could re-post since I thought it was a perfect analogy to getting the most out of life.
I’d like to share with you some thoughts I had bouncing around my ‘brain-housing group’ this past weekend. As I watched numerous NFL football games, (much to the chagrin of my wife) something struck me as fascinating. It’s the phenomenon called the ‘No Huddle, Hurry Up Offense.” Often, football teams employ this 1-2 punch tactic when they are losing the game and the clock is running down in the fourth quarter.
With pressure on to score tying or winning points in the last few minutes of the game, the offense rus
hes to the line of scrimmage without jumping into huddles between plays. The hope is to deliver a barrage of rapid knock-out blows which bewilder their opponent and ultimately score the needed points.
It’s fascinating that the team deploying this tactic hasn’t played particularly well in the minutes preceding. However, when the pressure is intensified by the ticking game clock and the stakes of losing are evident, through some divine inspiration the offensive team is able to sync up and plough down the field. The quarterback and receivers seem mentally connected as if they possess clairvoyant abilities.
Why don’t they play like this the entire game? Why is it that through this duress they are able to find the necessary brilliance to succeed? Why can’t they play every minute of the game with the intensity of the ‘No Huddle, Hurry Up Offense?” Certainly, the team doesn’t always succeed to win the game but most of the time they play much better than they had earlier.
It got me thinking about my life. Do I employ the same tactics? Do I live my life the same way? Do I play full out every day? Or, do I have a game plan that I follow and when it comes to the end of the year, I rush to complete projects? Is it when I finally realize the stakes involved that I employ the no huddle, hurry up offense?
I then ask, do I want to live my life like that? Do you want to live your life that way?
Pic by USAToday
The difference between our lives and a football game is that we aren’t guaranteed our next plays. We aren’t promised tomorrow. We could be in the second or third quarter of our lives and unfortunately, be taken out of the game at any time. We may never be able to finish our game.
Doesn’t it make sense then, to play full-out every moment of every day? And run your No Huddle, Hurry Up Offense NOW.
I wonder how different life would look if we approached it with this kind of intensity. What if we cranked up our efforts and realized what’s at stake. So, if our game ends short, we can confidently pass to the next stadium knowing we gave 100% of ourselves and left everything on the field.
It’s a courageous journey to take if you choose it. The work is mental. Great leaders have a crystal clear vision and IMAGINE themselves accomplishing their dreams in their minds first. With this clarity they are able to achieve the seemingly impossible.
Here are some questions you may find helpful to find your path too:
*Grab a pen and paper, write down your answers – this is a powerful excercise!
• What do you want? Do you really want it? Why? How do you know you want it?
• Why don’t you have it now?
• What does it mean to you that you don’t have it?
• What’s stopping you from employing your No Huddle, Hurry Up Offense? Again, do you really want it?
• What’s at stake and what happens if you don’t have it?
Now, here’s a question that always digs deep- If you knew WHEN your life would end, how would you live today? What would you do? Who would you do it with? Where would you do it? How would you do it? Would you still want to have or accomplish the things you said you wanted in the above questions? Would those things really matter to you? When you truly know the answers to these questions you’ll discover clarity of purpose which will develop into a state of certainty that will guide you to FOCUS, so you can live as you were intended.
We don’t have to wait until the last few minutes of the game to play full-out. It IS about WINNING the moments! You don’t have to beat the other team to win but you do need to play full-out so you can say you did everything you could. Of course, that is if you want to choose to live that way.
Moments make up minutes which turn to hours, days, weeks, years and in the end a lifetime.
What if you lived as if every evening was your last and every morning was your first.
All my best wishes to you for a happy and successful 2014!