John Chisholm’s Advice for Unleashing Your Inner Company
2015-10-17 · Guest: John Chisholm (Entrepreneur and MIT Alumni Association President) · 52:11
Entrepreneurship and Unleashing Your Inner Company
Bob Zadek interviews serial entrepreneur and investor John Chisholm about his book, Unleash Your Inner Company. They discuss the core tenets of entrepreneurship, including the necessity of passion and perseverance, the importance of identifying unmet customer needs, and why being “different” is often more successful than simply being “better.”
Topics: Entrepreneurship, Business Strategy, Innovation, Venture Capital, Startups, Marketing, Leadership
Speakers: Bob Zadek, John Chisholm
Introduction to Entrepreneurship [00:00]
Bob Zadek: Hello everyone, welcome to the Bob Zadek Show. We are on the air every Sunday at 9:00 AM, the only live libertarian talk radio show on the air all weekend. 800-345-5639, as you well know, is the way to join my conversation at any time. And what a conversation it will be. I’m happy to welcome into my studios—always a treat to have a real live guest in the studio—I’m happy to welcome John Chisholm. John is a serial, as they say, entrepreneur. John has successfully started and sold many Silicon Valley ventures quite successfully. He’s now a Silicon Valley investor in other startup companies. He is president and chairman of the worldwide, maybe intergalactic, MIT Alumni Association. Most importantly for today’s show, John has written a must-read book, Unleash Your Inner Company. The subject this morning is entrepreneurship. Entrepreneurship is the lifeblood of American business, and entrepreneurs have done so much to make our lives happier, better, more fun, more prosperous, and healthier. So John, you have contributed in all of those aspects of every one of our listeners’ lives. Welcome to the show this morning.
John Chisholm: Thank you, Bob.
Bob Zadek: Now John, we are talking about entrepreneurship. That’s a multi-syllabic word, a lot to start a Sunday morning with. What is entrepreneurship? What is an entrepreneur? And how is an entrepreneur different from, and how are they the same as, simply somebody employed in business?
John Chisholm: Well, by entrepreneur, I just mean somebody who starts their own business.
Bob Zadek: From scratch.
John Chisholm: From scratch. With nothing but a dream. Somebody who recognizes a customer need, who figures out a way to satisfy it and delivers it, and keeps doing so and turns that into a business. Yes, the requirements of an entrepreneur are different than being a manager or an executive in a well-established company. There, things like collaboration with other departments and teamwork and fulfilling the mission of the larger company are all critical. And of course, teamwork is critical in a startup as well.
Bob Zadek: But of course, an entrepreneur, a business person engaged in business, as you have just said, is fulfilling the goals or the needs of the business. An entrepreneur gets to design the goals of the business. You’re not fulfilling somebody else’s needs; other people are satisfying your goal and are operating according to your design. So the difference is, an entrepreneur is enjoying the benefits of almost total freedom in the mini-universe of the business they are creating.
John Chisholm: I think it’s fair to say that initiative and creativity are even more important in entrepreneurship than they are in a well-established company, because you’re building something from scratch. You’re figuring out what may be a brand new solution to a new customer need that hasn’t been satisfied before. So those are two qualities.
Identifying Unmet Needs [03:58]
Bob Zadek: Now what’s interesting in what you said a second ago, you said an entrepreneur starts with an idea, starts with identifying a need of a customer or who will be the customers, and then figuring out how to fill that need. Now those words, John, are profound because the collective result of zillions of entrepreneurs is our needs get met. If that’s the goal, if we have a bunch of highly motivated, really smart people who spend every minute of every day figuring out how to satisfy my needs, oh my goodness, it doesn’t get any better than that. So you have just in that straightforward answer, you have explained and substantiated what I said in my opening comments, is that’s why we are so much better off. Because there are needs I don’t even know that I have, but I really have them. And there’s somebody out there smarter than me who knows I need something and then fills that need. How much better can it be than that?
John Chisholm: Sometimes I hear from new entrepreneurs in particular or aspiring entrepreneurs that all the customer needs have already been satisfied. Nonsense. Every time a new product or service comes to market, new customer needs are created in any of three ways. One is the product or service itself can be made better. Two is the companies that are providing that new product or service have needs: marketing, sales, PR, and so forth. And three, new products create needs around them. So for example, the iPhone creates a need for a carrying case or a battery pack.
Bob Zadek: And the apps.
John Chisholm: And all the apps. So there have never been more opportunities to start businesses than today. And I’m reminded, John, of that famous story in or around 1910, the then Commissioner of Patents in the United States government suggested publicly that he thought the patent office should be closed down because everything that was going to be invented had already been invented. This is in 1910, and this was a guy who lived in the world of patents. So when you say discovering new needs, here was a guy who thought—and no coincidence he was a government worker—he was a guy who thought it’s all over, close up the patent office, we’re done, when we had calling the operator to make a phone call. So you’re quite right that all of these needs continue to be discovered.
John Chisholm: Yes, similarly back in the 50s, the total forecast for computers was one or two dozen computers in the world by somebody.
Passion and Perseverance [07:16]
Bob Zadek: Now John, one of the qualities that makes entrepreneurship so exciting is that an entrepreneur, almost by definition, is willing to forge ahead into the unknown, to go into an area, into an activity where the result is not yet known, it’s not yet predicted. You have to have enough courage and confidence in your own ideas to go forward despite the fact that it’s an unknown. It is a profound level of risk-taking, but the risk is mitigated by the fact that high level of confidence. You know you’re right and the confidence will compensate for the risk. You believe you can overcome it. So tell us about the relationship. Am I overemphasizing the courage of an entrepreneur, or is there a high level of risk-taking and self-confidence?
John Chisholm: Well, it does take self-confidence, and in the book, I have a whole chapter dedicated to how to build your self-confidence. But I don’t think entrepreneurs are inherently more willing to take risks or oriented towards taking risks than other people. What they do is, at least many of them and maybe most of them, they look at the situation from every possible angle. First of all, the area they’re working in is typically or should ideally be something they’re deeply passionate about. If it is, they will be most likely to be successful. And then since they’re so…
Bob Zadek: So when you say passion, John, in other words, entrepreneurship is not just an academic exercise. It’s not just the rational mind making a calculation. There’s more than that, and you emphasize that in your book.
John Chisholm: I do. I say there are two things to get started: passion and perseverance. And the two reinforce each other. If I’m so deeply engaged with something that the hours go by like minutes, it’s easy to persevere. That’s an example of passion driving perseverance. Or if I just stick with something long enough so that I get good enough at it that I start to love it, that’s an example of perseverance driving passion. You want both, and you need both. The person who is passionate about something will bump up against the boundaries of currently available products and services before other people do, because they’re so into that field, whatever it is. And so they will recognize those customer needs before other people. And then you also need the perseverance because you will come up against roadblocks and you’ll need a way to break through them, and perseverance gives you that. So how does all of this have to do with risk? Well, since you’re so into it, you’re looking at the customer need from so many different angles, understanding it better than most people do who are not that into whatever it is you’re looking at, that you find ways to manage those risks. So when you finally launch your product or service, you understand it pretty well, so much better than other people do. So what looks like a very risky proposition to other people doesn’t look like that risky a proposition to you as the entrepreneur.
Bob Zadek: In other words, the risk is there, but you don’t perceive it as a risk because you’re confident that that can be overcome. So the risk is the same, but what’s different is an entrepreneur has something within themselves—confidence and a well-thought-out plan—which will overcome that risk of the unknown. And I find entrepreneurship or starting a business, the word I like to describe it, and I think it really fits, is it’s an adventure. There’s an adrenaline rush. You can drown in your own adrenaline when you’re starting a business. There’s an adrenaline rush, there are, like any adventure, like a backpacking trip, things happen that no one expected and you have to deal with it. The days go by like seconds, and the satisfaction at the end of the trail, at the end of the journey, the satisfaction is unique to that activity and it’s irreplaceable. You can’t get the same level of satisfaction from a successful round of golf or tennis because in tennis you’re proud of yourself, you had a good game. In entrepreneurship, you have enriched your own life profoundly, but so many other people have benefited, and you can take a step back and just look at all the lives you have made better because of your own perseverance and guts.
The Highs and Lows of the Startup Life [12:41]
John Chisholm: I do think the highs and lows both are amplified relative to working at an established company. You’re doing something you love, you are creating something that’s new potentially. The moment that you get your first customer, that’s an exciting high. The moment that somebody first indicates they’re interested in acquiring what you have, what you’ve built, that’s exciting. The moment you realize that even if you disappeared from the face of the earth today, this entity that you’ve created would keep going without you, all of that are very exciting highs. The lows are also amplified though. When you lose a customer, when a competitor takes your best customer away from you, these are…
Bob Zadek: Or you make a mistake and other people are affected.
John Chisholm: Yeah. When you’re close to running out of cash. When there’s a huge downturn in the economy like there was during the dot-com bust of 2001, which is the story I start the book out with. And within a six-week period, I had to lay off 40% of my workforce, cut back salaries, factor receivables, and move to smaller offices. That’s really hard. So it’s kind of like riding without shock absorbers.
Bob Zadek: And you know, it’s interesting that you mentioned, and I may ask you to expand a little bit about that story you tell in the book—I think you start the book with it—about those dark days in your first startup right around the dot-com bust. But what I find so interesting when I talk to entrepreneurs, and in my law practice I interact only with entrepreneurs, I don’t interact with big companies, and what’s so interesting to me is when you talk to an entrepreneur, when an entrepreneur is just hanging out and we’re talking, the first thing entrepreneurs will talk about is the tough stuff, the failures. No one talks about how much money they’re making. It’s like that’s not the deal. What they talk about is how hard it was and what they had to overcome. And the overcoming of the obstacles is the source of profound pride. People have more pride in overcoming obstacles than in making buckets of money, if that’s what they have done. And that says something about the character—and character is important, we’ll talk about that—but the character of entrepreneurs is to me so special because they’re so quick to talk about their mistakes and overcoming obstacles and so almost reluctant to talk about how successful they are. Like that’s not the great source of the pride. And you start your book, and therefore I find you’re the same way, you start your book with what you had to overcome. So overcoming obstacles is a really big deal in entrepreneurship.
John Chisholm: In the first quarter of 2001, I would often wake up at 2:00 in the morning in sweat-soaked sheets sticking to my skin. Our second round of financing—and this was my second company, not my first, CustomerSat—refused to close as we ran out of cash despite a flurry of meetings. And then when we finally realized it simply was not going to close, we huddled, I brought my management team together, and that’s when we took the actions I mentioned before: cut back our own salaries first by 10%, then everybody else’s, then laid off 40% of our workforce. When I had to stand up in front of our remaining employees and explain to them that this was the only way we could stay afloat and stay together, I felt my composure collapsing and I broke down sobbing in front of my employees. They stood there stunned, sympathetic, and embarrassed. That’s an example of one of those low-lows, the lowest low. But that year, the year of 2001, just getting through it at the dot-com bust was unquestionably the single year in my entire career that I’ve learned the most. In my view, that’s the year I earned my executive stripes. And so I encourage young people who ask me, “When should I start a company? Should I do it right away? Should I wait till I have more experience?” Do whatever you think will add the most value to yourself the fastest, where you’ll learn the most the fastest. And most likely that’s by actually doing it. So I encourage people to start a new business as early as possible.
Different is Better than Better [17:36]
Bob Zadek: Now, so your encouragement is, and I know you make this point in your book, younger people or young people trying to figure out where they fit into the world might be tempted to start a business without having any other experience. Others might start working for another company to sort of learn how things work. And you caution entrepreneurs about spending too much time in business because you might get stuck there. You mentioned that in your book, but help us understand that issue.
John Chisholm: Well, I do think there’s a key advantage for somebody to get work experience in an established company first, and that is you get to learn the customer needs of a company. The entrepreneurs that I’ve met who’ve never worked for an established company only tend to know consumer needs rather than business needs. And there are relatively fewer entrepreneurs who are focused on business needs, and so you’ll have less competition there. So think about, as you think about your life and work experience, one possible approach is work for a big company long enough to discover a significant business need there that you could satisfy and then go off and do it.
Bob Zadek: And what’s the word of caution I would give to would-be entrepreneurs is—and I’m speaking from my own experience—you enter a world as a young business person, and to your eyes and to your senses, it seems like all the needs have been met. Everything is working fine without you. I remember starting in law as a baby lawyer in whenever I started in the late 1960s, 1970s, and I was a young associate at a law firm, and I knew that sooner or later my success would be based upon getting my own clients. And I said, “Everybody has a lawyer, and they seem to like their lawyer. So how can I possibly get even one client if the entire universe of people who need lawyers have them? There’s no room for me.” I said, “I’m packing it in, it’s impossible.” And then I discovered that first of all, everybody had a lawyer, but most of them couldn’t stand their lawyer. And second of all, the lawyers they had weren’t that good anyway. And you learn that over time. So it’s very easy to see a world where it seems that the collective needs of the planet are already met, and then you say, “Okay, I’m just going to be a salary person for the rest of my life because all the needs have been met,” like the Patent Commissioner in 1910. Or as you said, John, you enter the world, including business, and you hunt around and you will find so many unmet needs, it’s as if the world is starting from scratch.
John Chisholm: One of the things I say in Unleash Your Inner Company is “different is better than better.” What do I mean by that? Well, let’s take Apple and IBM and Dell and other laptops. Lenovo, IBM, Dell, and HP all make laptops that run Microsoft Windows. Each one is better than the other: a 20% bigger screen, a 20% faster processor, what have you. In contrast, Apple is different. Apple designed the hardware and the software together. They made it easier to use. They focused on user interface. It was good for publishing early on, then music, then video. And they established a small base that really liked the Mac, and the requirements, the things they did well, became mainstream. And over time, Apple and the Mac gradually took market share away from Windows. And today, Apple, as we know, is the most valuable company in the world.
Bob Zadek: By market cap.
John Chisholm: By market capitalization. So different is better than better. Look for a way that… it’s hard to be better than your competitors because your competitors will be well-established and they’ll have more resources than you. Find a niche that they’re not focused on, serve a small, potentially perhaps even a small customer base really well, let them say good things about you, buy from you again and again, and you will grow with them. And that will give you time and space to get established.
Bob Zadek: John, you know, it’s so exciting to have this conversation because you say things that I had been thinking. You say them much better than my thoughts. When you said “new or different is better than just being better than something else,” I’ve fashioned my life around looking for businesses and activities that other people aren’t aware of or don’t know about or maybe that I have created, because it’s too exhausting to compete. I’d rather… rather than confront competition head-on, I would rather do something for which there is little or no competition. And the risks are lower because you’re gambling less, and there’s no competition. I don’t have to… I just have to persuade somebody that my whatever it is makes sense in their lives. So you’re exactly right. Different is so much better, and mostly because there’s no competition. Let them chase you rather than you try to chase them.
John Chisholm: One of the chapters of Unleash Your Inner Company is called “Avoiding Competition.” And one of the case studies is my friend Carol McKenna, who runs West Hawaii Pools and Spas. Carol is into natural food and found a way to maintain swimming pools using all-natural chemicals so that it didn’t harm the skin.
Funding and Bootstrapping [24:12]
Bob Zadek: Another way to invent a new product. This is Bob Zadek. I’m spending a wonderful hour talking with John Chisholm, who has just published Unleash Your Inner Company. We are talking about entrepreneurship. 800-345-5639. Welcome back to the Bob Zadek Show, where the only live libertarian talk radio show on the air all weekend. I’m happy to be back with you after a short vacation period. Hope you didn’t miss me all that much. I’m spending the morning talking with John Chisholm. John has written Unleash Your Inner Company. John is a serial entrepreneur, I should say successful serial entrepreneur. He’s less likely to have been on my show if he was a serial entrepreneurial failure. So John has been quite successful. He’s now an investor in startups in the Silicon Valley community. John’s book, Unleash Your Inner Company, is a must-read for anybody who is curious about entrepreneurship, believes they have, as they say, the right stuff to be an entrepreneur. 800-345-5639 to join my conversation with John.
Now John, probably most of our friends out there listening to the show are not entrepreneurs, and probably some of them believe they have an idea or they have a concept for a good or a service that there might be a market for. Now, to be a successful entrepreneur takes a lot more than just the germ of an idea. How does one know if this germ of an idea is worth pursuing? And what kind of personal inventory should a would-be entrepreneur take to see if they should just let go of the idea and go about their life or pursue it? And how can they tell if they have the right personal inventory to succeed in the activity? What’s in store for an entrepreneur as they embark upon their first new venture?
John Chisholm: Great questions, Bob. The book lays out a 10-step process starting with where in your life have you been passionate and persevered about something, and goes all the way to scaling up your business, which is step number 10.
Bob Zadek: Scaling up means growing it from a very small business to a large, profitable, successful business.
John Chisholm: Yeah, to a larger business at least. And in between are lots of steps. As I’ve said before, you’ll have a natural advantage in areas that you’re deeply engaged with, passionate about, and willing to spend lots of time on. In those areas, look for unsatisfied customer needs. One of the key points in the book is entrepreneurs are not interchangeable like light bulbs or batteries. The opportunity that’s right for you is absolutely unique to you. It’s based on your passions on the one hand—that will determine the customer needs that you satisfy—and it also depends upon all the resources that you bring to bear. Another key point of the book is you have many more resources to starting a company than you realize. And it’s the whole 10 steps are a process of inventorying your resources: skills, technologies, knowledge, relationships, and the requirements of all the customer needs that you’ve identified. The book shows you how to come up with dozens of them, see where the fits are the best, make those fits as strong as possible, then choose just one, the one where the fit is the best, and then make it stronger by acquiring more resources: finding the right co-founder, finding the right team members, developing prototypes, refining the customer need by talking to people and actually doing trial sales of your product or service to them. That is where you’ll be most likely to be successful, where those two fit the best.
Bob Zadek: Do you watch Shark Tank?
John Chisholm: I do, I like Shark Tank.
Bob Zadek: I do too. And what… as you watch… now Shark Tank, of course, is usually three in a segment of the show, three entrepreneurs or would-be entrepreneurs or people who believe they are entrepreneurs—they may not be successful. When you watch that show, you could literally watch that show and point to chapters in your book when these would-be entrepreneurs are making it or not going to make it. What do you say to yourself when you see entrepreneurs who are not going to make a deal with the sharks? What do you say to yourself? What do you find they are missing? Do you talk to yourself during Shark Tank and do you ask yourself whether you would be an investor in their company, or can you tell from the beginning they’re not going to make it? Is it more than just the idea, or is there something that you can perceive in the entrepreneur him or herself?
John Chisholm: Let me say this. Just because the Shark Tank investors don’t want to invest in a business doesn’t mean it’s not a good business and doesn’t mean it’s not a good business for that entrepreneur. It might be a wonderful business for a homemaker as a part-time gig. The reason the Shark Tank folks aren’t likely to invest is because it’s not scalable and they don’t see an opportunity for the company to really grow and for them to get a big return on their investment. But it could be a very attractive business for the entrepreneur themselves. So I would say to your radio audience, don’t be discouraged if you can’t find investors for your business. Look for a way to run your business and to launch it and to get it off the ground so that you can fund it yourself. In the book, I offer three ways for funding your business without external capital. One is friends and family, two is living frugally, and three is providing services that relate to your business so that you can get paid as you’re building the business and you can use those funds to grow the business.
Bob Zadek: Funding is of course crucial, obviously. I’m saying it’s like saying blood is important for life. Funding is the blood of a business. And of course, most entrepreneurs have to start, as you pointed out, with either internally their own funds—it is very often the case that personal assets, homes, are mortgaged. Talk about betting the ranch, literally, on the success of the product. And statistics are that personal credit cards and personal lines of credit are used a lot in a business. Now that of course requires, to say commitment is to understate it. You are literally betting everything on the success of the venture. So is that… it’s very hard to get financing for a dream. It may be your dream, but it’s not somebody else’s. And to get somebody to finance your dream is quite difficult unless it’s a family member. So what are the struggles one has in just starting out to get financing? Because it’s very difficult for a middle-class person to bet everything on an idea. It’s just often not worth the risk.
John Chisholm: Well, I’ve mortgaged my house twice in my career, once for each of my first two companies. And I had no reservations about doing it at all. I was just hoping and praying that the bank would approve the mortgage so that I could make it happen. I mentioned the three ways to get started with funding. Again, you have a lot more resources to start a business than you tend to realize. For example, can you work out of a garage or an extra bedroom and avoid office space? I started my second company, well actually both of my first two companies, out of my townhouse in Menlo Park. And we had probably two dozen people working out of that townhouse before we moved to real offices—not all at the same time. But I finally got a letter from the Homeowners Association saying that we were taking up all the parking on Sand Hill Circle and that you weren’t allowed to be running a business here anyway, thank you, and so would you please cease and desist. When we got that letter, we finally had to move to real offices.
The Art of Selling [43:14]
Bob Zadek: One of the important skills that gets somewhat devalued—and you mention this in your book in several different contexts—which is the concept of selling. Now, I remember when I was in B-school, undergraduate B-school, I was an accounting major, and accounting was sort of then the elite major. And the opposite was sales and marketing. That was for people who were dragged kicking and screaming into B-school because that’s what their parents wanted them to do and they had no focus. In other words, sales and marketing was devalued. I have learned, being in business for half a century, that everybody, everybody, everybody listening to the show has to sell something all the time. Whether you’re competing to get a raise or a promotion, you’re selling yourself. Whatever you’re doing in life, when you’re a professional as a lawyer, I am making… I am trying to make a sale all the time. I walk into the supermarket, I’m trying to make sales. That’s what you do. So tell us—and I’m making this point because our audience doesn’t realize how they are already in the business or in the activity of selling. So the need to sell as an entrepreneur, while it’s crucial, we all have much more experience in selling than we realize. So tell us about the making of the sale and the importance of that and what’s required to make the sale.
John Chisholm: Well, I think one of the misconceptions about selling is that it’s mostly about the product or service. No, it’s mostly about the customer, and it’s mostly about the customer’s needs, goals. One of the chapters in Unleash Your Inner Company is “Don’t Listen to Your Customers, Discover Their Goals.” Discover what they want to accomplish, where they want to get to, and try to understand as best you can the gap between where they’d like to be and where they currently are. That gap is their need, and if you can find a way to satisfy that, then you’ve got a customer. The product or service is just the solution that you offer to fill that gap. But that gap will change and evolve over time, it’ll be different for every customer. That’s the most important thing to understand.
Qualities of an Entrepreneur [37:00]
Bob Zadek: What are the qualities—while humans are complex, of course, and all different—but what are the temperamental qualities that one would need to have somewhat in abundance to succeed as an entrepreneur? And what are the qualities that might doom the activity even if the product is a good idea? How could one take a personal inventory and decide whether the activity of entrepreneurship fits for them?
John Chisholm: Well, I think there are lots of ways to be successful. The most important thing may be desire, a deep, abiding desire to satisfy a customer need, make the world a better place, whatever it is that even making money—although as I say in the book, be cautious of that because the need that you’re satisfying and the thing that’s driving you needs to be sustainable in the long term, and it needs to be something that other people can get excited about too, your fellow teammates as they come on board. And often just making money isn’t as sustainable an incentive or motivation as things like making the world a better place.
Bob Zadek: You know, it’s strange, John, I want to ask you to finish my question, but you make such a profound and important point. Of all the entrepreneurs that I know, to my knowledge, making money to them is a byproduct, not the goal. Yes, it’s good to make money, but I don’t know anybody who is just in the activity for the money or even primarily for the money. It’s what it does to your soul, to your head, when you are successful, and indeed when you’re trying to succeed. There’s something so profoundly healthy about exposing yourself to unanticipated problems, solving them, going forward to the next day, making it through, enriching your employees and your customers. Those psychic benefits are really what drives entrepreneurs. The money takes care of itself, but no one’s ever… there’s probably a better way to make tons of money than that. So that’s not really the driver in most cases. It’s the satisfaction, the challenge, and the risk-taking.
John Chisholm: I talk in the book of companies that lost their way when the original founders like Hewlett-Packard, Bill Hewlett and Dave Packard, or Steve Jobs were replaced by professional managers whose only interest was ROI, return on investment, making a profit. And generally, those companies went through periods of decline when that happened. I remember very well when that happened in between the years that Steve Jobs was CEO of Apple. So I say that making money might be an initial incentive, but unless it evolves fairly quickly into something that is doing good, it probably won’t be sustainable for the long term.
Bob Zadek: So what are the personal qualities that will serve you the best and that will, on the other side, harm you the most as you undertake starting a business from scratch?
John Chisholm: Well, there are so many. As I said, a deep, abiding desire that is driving you is at the core, I think, of any entrepreneurial success. Being a good listener and understanding customer needs and listening between the lines. In one of the chapters, I talk about how you can’t accept at face value what the customer is telling you. Customers will offer their ideas about what a solution to their need is, like a better mousetrap, but the solution may not be a mousetrap at all. It may be finding a way to repel mice from coming into the home in the first place so you don’t have to catch them and dispose of them. That kind of thinking out of the box is what you need.
Choosing a Co-Founder [41:59]
John Chisholm: One of the things I talk about in the book is what to look for in a co-founder for your business. And I suggest three things. One is character, fundamental character, and there are lots of elements to that, and that includes honesty, integrity, perseverance—a mix of different skills are included in the term character. And that’s sort of the person’s absolute value that as your company changes determines how valuable they’ll be no matter which direction your company takes. The second is complementarity with you, and that has two elements: one is how much you trust each other, and two is how complementary your skills and capabilities are to each other. So maybe one person is good in product delivery side and one person is good in the sales and marketing side. Maybe one good if it’s a computer-like product, maybe one person does hardware and one person does software. Whatever, there needs to be some complementarity there. And third, and that one is relative to you. And the third one is co-developed with you, and that is a shared vision for the business. And that is if you’re bringing on a co-founder, expect that that person will contribute something to the vision for the business. They need to so that they’re engaged with it, and they should because the vision should be larger now that it includes both of you. So one part is independent of you, the second part is relative to you, and the third part is co-developed with you.
Bob Zadek: This is Bob Zadek. I’m talking with John Chisholm. John has written Unleash Your Inner Company, a must-read for anybody who wonders if they have what it takes to attempt the activity of entrepreneurship. Entrepreneurship is, of course, the starting of a new venture from scratch. It may be an activity that others are doing and you believe you can do it better, or it might be a new activity that nobody ever thought of. But everybody, I dare say, or most of our listeners out there, believe there is something that they can do a bit better than somebody else. And rather than go to the grave wondering if you were right about whether you could do it better, don’t go to the grave wondering. Try it yourself. And this book provides the roadmap as to how you might try it yourself to see if you’re as good as you think you are and to tell you how to do it. It’s a Bible on how to go from the vision to selling the product that you created with the employees that you hired and that you trained.
Now John, we talked about the positive. What are the qualities that might ill-serve a would-be entrepreneur?
John Chisholm: Well, arrogance is the first thing that comes to my mind. It’ll vary from person to person, but you know, not listening to your customer, not listening to your fellow team members, thinking you already know it. That’s one great danger.
Bob Zadek: What about impatience? The timeline that you envision will never be the timeline that actually happens. Nothing will happen when you want it to.
John Chisholm: Well, yes, things often take longer than you expect. Let me just say, we often start out—and this was the case for me when we have little experience—often we’re more arrogant, and the more experience we gain, the humbler we get because we realize how much we don’t know and how much there still is out there to learn and that we don’t know. So that’s I think one key risk factor.
Bob Zadek: Was there ever a period that you said to yourself, “Am I crazy? Why am I doing this?” That you really had the most doubt, or did you ever lose the confidence in the wisdom of the business you were trying to build?
John Chisholm: Probably, Bob. I don’t specifically remember any instances like that. I’ll tell you the instances I do remember were, for example, in my first company, I was into it for about six months, we’d just moved to real offices, and I remember feeling with absolute certainty, “This is what I’m supposed to be doing right now,” and feeling very, very good that I was doing what I was supposed to be doing. Now there were plenty of challenges in that company. I like to say that I made every mistake possible in my first company so I could start a clean slate with my second company. And of course, I continued to make other mistakes in my second company. But in again, in one of the chapters, I mention ways to build your self-confidence. For example, never say anything negative about yourself. I’m not worried about what other people think about you. I’m worried about your unconscious mind. That’s your most important audience. And if you repeat negative things about yourself, whatever they are, your unconscious mind will eventually accept them as fact. You don’t want to go there. So think of positive things, no matter how small, where you’ve been successful, where you were the star of the team, where you figured all the math in your head, where you put everybody at ease, whatever, and use those tiny moments to build your self-confidence, and they will become a reality.
Bob Zadek: Now you are an investor in other startups, which means entrepreneurs come to you and make a pitch and try to persuade you to give them some of your money because you believe they’re going to be successful. I’m sure there are some entrepreneurs that shortly into the presentation you say to yourself, “Uh-uh, this is not going to work.” Tell us what are the—and we only have a couple of minutes left—but what are some of the really glaring indicators that this venture or this entrepreneur will not make it?
John Chisholm: Broad generalities rather than specifics: working on a product without any awareness of who the customer will be or what need it will serve. I like to say I started my first company with a really cool technology for which there was no market need. And it took me six months to discover that and evolve it to something for which there was a market need, namely online surveys.
Bob Zadek: So you detected the total absence of a need and then you filled it.
John Chisholm: Yeah, it took a while to get there, but finally we did. So the best advice I generally have for entrepreneurs today is read the book. If it’ll give you a step-by-step process, if you follow the steps in the book, your probability of success will be hugely increased.
Bob Zadek: The book is Unleash Your Inner Company, subtitled Use Passion and Perseverance to Build Your Ideal Business. Ideal business, of course, is quite a laudable goal. The author of the book is my guest, John Chisholm. Now John, how could our friends out there follow your writings? Do you blog? Do you have a website? How could our friends learn about your thoughts and read what you have in mind?
John Chisholm: Two websites: www.unleashyourinnercompany.com and www.johnchisholmventures.com. And John Chisholm Ventures has a link to my blogs on Forbes, and you’ll be able to read more there.
Bob Zadek: Entrepreneurship is sort of, in my view, I close with this thought: entrepreneurship is building your own mini-world of total freedom. It is a world of freedom where you can build a company by your rules, by your standards, by your ethical rules, and nobody else can interfere with that world. Within your company, it’s you for better or for worse. But the goals or the benefits are worth the struggle. Please give it a shot and by all means read the book, Unleash Your Inner Company by John Chisholm. Bob Zadek saying so long for now. I’ll be back next Sunday. Thanks so much for listening and have a good rest of the week.