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Oct. 25, 2008 - Freedomain Radio - Stefan Molyneux
01:25:25
1185 Entrepreneurship - The Conference
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So, welcome. I guess, uh...
Questions for entrepreneurs, I suppose.
There's no speech up front, right?
Um... Not really, just, um...
I'm sort of, um...
Planning on, um...
Um... I guess planning on going solo myself in the midterm.
I suppose in the next year to two years.
And I'm not looking for really...
Anyone to tell me how to do it?
I'm not looking for a how-to.
What I'm looking for is just...
I just have a bunch of questions about what people's experiences have been like just to get kind of a lay of the land, as it were.
If that makes any sense.
Sure, sure. Go for it.
So all these questions are pretty much directed at anyone and everyone who's started their own business in any industry, I guess. It's not content-specific, so it should be answerable to just about everybody, I would think.
Yeah. First would be, well, how did you prepare for it, or did you even prepare for it, and what did you do?
Well, I didn't, so I'll let some other entrepreneur.
I just sort of more or less fell into it, so to speak, so I'm sure other people would have better answers for that.
Hey Greg, it's Rich. Hey Rich.
I went through business school, but I didn't find it particularly helpful for being an entrepreneur.
What I did find helpful was the one class that I took, which was entrepreneur intrapreneurship.
It just helped stimulate the planning process, kind of brainstorming and beyond.
And I think that was definitely the most helpful class in starting a business because it helped me organize all of my ideas before I went into it.
It helped me come up with a business plan because we had to write three or four business plans in that class.
And they have those at community colleges.
And the business plan helps you do what?
Well, first of all, just kind of organize your thoughts about the business and just show if it's viable or not.
And then if you need to get investment dollars, business plans are usually required.
Okay. How does a business plan demonstrate viability?
You kind of set a mission for yourself and you basically project five years out what your financials are going to be and really just describe every detail of the business.
It also describes your audience, your potential customers, the size of the market, why your product is different, all that kind of stuff.
Oh, I see. I see.
I mean, you have to prove to investors, not that you're going to go for investment, you have to prove to them that you were not just shooting an arrow over a house hoping to hit a target.
Well, but even if you weren't shooting for investors, this could be a helpful exercise?
Yeah, I mean, I certainly had some plans for FDR, but nothing particularly specific that way.
Sorry, go ahead. Yeah, I didn't actually seek investment for my own business.
I just, you know, I was basically a freelancer, so it really just helped me organize my thoughts and, you know, made it more real for me, you know, so I wasn't just going into it blind and, you know, that planning process kind of takes away a lot of anxiety because you can get a good feel of what you're getting into.
Now, Rich, your business was more, was it more of a, was it like a full service business or was it more of like a contracting slash consulting type thing?
Yeah, it was more contracting consulting and, you know, to be fair, it wasn't successful ultimately and I think that's, you know, partially because I started to, you The history and everything, and so that kind of shifted my energy away from it for a while.
And also, I was never very enthusiastic about sales, and so I was unable to generate new business for myself.
Right, that's another question I kind of had too, was how that would work.
But is there a different approach to starting or maintaining a consulting practice versus a small business that's more either service or product oriented?
And I guess maybe this, I don't know if Christina is actually there, but what would be the difference between her starting her practice private and you starting your business stuff?
Well, she's not here, but the key differentiator is very low startup costs, right?
So there's nothing sort of structurally different about those two things as businesses?
You mean by nothing structurally different?
Well, yeah, that's a good...
What am I trying to say?
Well, you're looking to start a service business, right?
Right, like Christina would still need a business plan, right?
Yeah, I mean, if it's just you and you don't need investment, to me it seems kind of like you need a kind of idea of what you're doing, but no, you don't need a full business plan if it's just you and you're not taking investment.
It doesn't hurt, right? Right.
Sorry, business plans in many ways are wild-ass guesses anyway, right?
Well, I don't know. I've never done one.
Well, I mean, just to look at something like Christina's business.
So there's stuff that we had to do.
Like we had to have business cards.
We had to have an online presence.
We had to have letterhead.
And we had to create letters of introduction for the doctors, right?
Because it's the doctors who refer.
You have to know where your business is coming from, right?
How are you going to get your business?
And she gets referred, patients referred from doctors for the most part.
So we had to go and meet and greet all the doctors, but we had no idea how it was going to go, right?
Right, right.
Okay, that's true. Like, actually, when you face them, what would happen?
Well, no, I mean, but whether they already had ten therapists they referred to.
Oops, I think you broke up there.
Well, whether they had already therapists they were referring to.
Yeah, you're completely unintelligible at this point, Steph.
Okay, we'll just wait.
Just let me know when it's coming back.
There we go, you're back.
We didn't know whether they already have therapists they refer to, whether they have 10 therapists a day coming in saying, give me patients, right?
Right, right.
So we obviously had some guesses, but we didn't know until we did it.
So sort of doing your own market research, too, at the same time.
No, but we couldn't even do market research because that's not available.
How many therapists are associated with how many doctors, right?
So you can't find those numbers anywhere?
No, not in Canada, for sure.
Wow. Well, but where would you look, right?
I mean, how would you know which doctors have relationships with which therapists?
Yeah, that's a good point. That's a good point.
Because they're not really required to kind of publish that anywhere either.
No, no. Jake, you had to...
Yeah, I was just going to say on the business plan, I mean, I wouldn't sort of imagine it to be anything mysterious.
It's just a plan.
In that sense, you know, it has all the limitations of any plan that you're going to have for any project, right?
Obviously, there are much better and much worse business plans, but the idea of the business plan is just to give you a plan.
There's a lot of things that go in a business plan, the kind of things that Steph and Rich were talking about, but there's nothing It's just a plan.
My one was very, very non-existent at first.
I just saw that there were a lot of people setting up companies in the mid-90s and thought that I could definitely do that and so decided to try and make a widget and sell it.
I just started.
The planning at the beginning with me was almost non-existent.
But as you go along, you continue doing more and more effective planning because you start to understand what the main variables are and what you need to know and what you're trying to do.
Now, did you have to Did you have to eventually find investors, or did you go entirely solo from the beginning?
I took loans, so I did find investment, if you like, but it wasn't equity, it was loans.
Just like personal loans?
Personal loans, yeah.
Wow, okay. That's interesting.
Yeah, commonly referred to as debt-based financing.
Yes. Yeah, we started off with some investment, about 80K in investment in Caribou, but a lot of personal loans as well.
Interesting. And is that the same with, if you don't mind my asking, with Christina as well, or...
Well, she didn't require any startup capital, really.
Oh, just the office, right?
Nothing. We couldn't fund ourselves.
Okay. Okay. In a sense, the investment has already gone in in the education.
If you're doing a consulting service like that, then, you know, Christine has spent years and years training.
Right. But at the end of the day, if it's a consulting service, it's really you advising someone.
So, you know, it's just essentially it's you are the You're the capital and so you may need an office or you may need some kind of environment, but it's very different to a software company or something where you actually want to build a widget which is going to take money before you can actually sell.
In consulting, you could more or less just put on a tie and start selling.
Yeah, in that case, it's pretty much all selling, right?
Well, entrepreneurship in general is pretty much all-selling when you get to it.
This is the other thing that I didn't really understand in the beginning is just how absolutely crucial selling is, especially with a new business and if you're starting and establishing maybe a new kind of service or product or something.
Personally, I was very focused on what we would do in the beginning.
I was thinking about the R&D and the technology and how interesting that was.
And I wasn't focused on selling.
And that is something that you really learn very, very quickly is what's going to make or break the business.
That and a couple of other things which we can go into as we go along, I guess.
Well, that's actually kind of an interesting point, Jake, because in a sense...
You were selling at the beginning, right?
But it was just all pure enthusiasm for the thing you were building, right?
Sure, sure. And obviously, with entrepreneurship, that's definitely an ongoing thing.
But actual selling as in getting people to pay money for your product or service It's really just such an essential part of making the business work.
But that has a lot to do with how much you love your product, right?
There's an infectious, right?
So building a great product is really essential to say it.
Yes, that's true.
That's true. But I think that there is also, at least for me, I was really enthusiastic about the software and about the product, and that's certainly true, but I was definitely trying to do the last log of selling which is an integral part of it.
It doesn't matter in a sense if you're sitting in a basement sort of working on the software and definitely the temptation for me was to just continue improving it and developing it and adding nice bells and whistles and at the end of the day That's great fun, but it actually doesn't mean anything if it doesn't sort of get out there and get used by people.
And then as soon as you do that, obviously then you start getting more and more customer feedback and then you start realizing what it really is that people need and the product itself becomes something much more useful and much more sort of out there in the world.
Was there a high kind of Psychological hurdle to get over in terms of...
Like Rich was saying, he really had a hard time with the sales aspect of it.
There are lots of psychological hurdles to get over, I find.
Well, what lists them off?
Well, it's everything.
I mean, it's... For Christina, it was going to talk to the doctors.
It was very hard for her.
Because? Because they don't want to talk to her, right?
See, nobody wants to talk to you when you're an entrepreneur, right?
Oh, because they know you're going to try and sell them something.
Yeah, and they don't know.
I mean, if they wanted it, they'd come to you, right?
Yeah. Right.
That's the attitude with most people, sure.
And it's what we feel as well.
So people view you, at least at the beginning, like a telemarketer at dinnertime.
Yeah, that's true.
It's hard. It's hard to overcome that.
Sure. Sure.
And getting beyond the stereotypes, right?
So, what did you do to do that?
You just have to power through and deal with the feelings.
There's no secret sauce.
I mean, Christina Korman, she's in tears in the parking lot because she was so afraid of going in.
Plus, she'd worked in a hospital where the doctors were kind of mean, right?
Oh, wow. So it's hard.
I've definitely had lots of emotional meetings.
You really have to work on the feelings.
But you just have to do it, right?
And then deal with the fall app.
There's no magic. Right.
So it really all comes down to just how much you're willing to tolerate for the sake of the...
For the sake of the idea, right?
Yeah, sales is 99.9% failure and rejection.
It's just a numbers game, right?
Yeah, it's basically a huge rejection sandwich again and again and again.
Oh, wow. And that's tough.
And it's inevitable. Yeah, yeah, that's true.
I mean, just look at StumbleUpon, right?
Nine times out of ten, they don't care at all about the site, let alone listen to become donators.
Yeah, and the trap with something like StumbleUpon, though, is that you don't actually have to feel it.
Oh, I feel it.
Really? I think when the dollars go out, you feel it, Greg.
You feel it. Because people won't call you back, or they put you off.
You get these really annoying people who won't say no, but won't say yes either.
It just wastes your time. Yeah, they're awful.
Yeah, those are the worst.
Someone telling you to fuck off is a relief, right?
I used to have the approach or we used to have the approach that basically, you know, there's a lot of people who will just not be interested and you can Sort of get rid of that group.
Then there is a group who, when you find them, they're just really enthusiastic and they can see the value and they really want it, right?
And then there's the group in between who might be persuaded and might not and everything.
And I just used to keep looking for those enthusiastic ones because everyone else is so...
Right, pouring all their...
Pouring all their effort into the people in the middle, thinking they can pull them over.
Steph is saying they just waste your time.
Maybe they're going to buy it, maybe they're not, and then you've got to go meet them again.
It just goes on and on and on.
The ones who say no, at least you can move on.
You know, there are people who will, if you have something good to sell, then there will be people who will need it, and they'll really value it.
You just have to realize that it's a numbers game.
So for you, you just completely discarded the people in the middle?
Well, until you run out of others, right?
But you have to prioritize.
Yeah, it's not that you completely discard them, but you just heavily prioritize going after people who are going to get it and understand the value.
And with the folks in the middle, did you have any kind of, did you set any kind of limit, like, you know, three meetings, that's it, we're done, kind of a thing, or...
Well, yeah, I don't think it was sort of literally, it's all a little bit more fluid than that.
Normally, it's with the ones in the middle, it's constant phone calls, and then they want another proposal sent to them, and they want more details, and then they're going to get back to you next month.
And so, I mean, it's a little bit more fluid, but yeah, basically, when you get the feeling that this is just messing about, then, you know, it sort of becomes a bit more obvious after a while.
And I would just chase it up, and then when it was clear that they weren't getting back to me, if I'd done a few chases and I hadn't had a response, I would just say, well, I'm getting that this isn't something that's relevant at the moment, but if it is in the future, then please let me know, and I'll just move on.
Okay. Yeah, that makes sense, I guess.
Going back to the earlier question, how much would have been too much?
What I mean is, Steph, you were describing Christina's experience in the parking lot there.
At what point do you say to yourself, it's not worth it?
Well, there's no point. You have to do it.
It's not optional. So...
I mean, you can't get patients except through the doctor.
I mean, you can, but it's pointless, right?
I mean, there's no option.
Right, right. No, yeah, I see what you're saying.
So, in other words, once you've decided that whatever...
This thing is that you're pursuing, once you've decided that that's sort of essential to your long-term goals, your long-term happiness, then there really is nothing in between that's too much.
Well, no. It's not nothing.
It's just that whatever is...
I mean, you have to get customers, right?
You have to get customers so you're not a business, right?
Right. So...
I mean, whatever you have to do to get the customers, you have to do, right?
Whether that's cold calling or talking to doctors or taking out, we took out ads in the yellow pages that were expensive.
You just have to do it, right?
Right. Or selling to the government.
Well, let's try and stay on one topic at a time.
Well, that's what I'm asking is, you know, at what point would you have said, you know, as much as I want to be in business for myself, I'm not doing X? Well, I mean, there's a lot of personal choices around that, right?
I mean, it's hard to say.
There's an objective line. Okay, so that's more of a personal choice then.
Yeah, I would not have failed.
I would have not let my business fail because of a government contract.
I wouldn't have done it. I'm not giving up years of 80 hours a week work and so on, you know, for the sake of something that will never change the system.
I mean, that's just me, right? But other people may feel differently.
Right, right, right.
Somebody else had a comment?
Yeah, I was just going to ask, what type of consulting service are you thinking about?
Private dispute resolution?
Mediation? I'm actually taking a course right now in mediation, and I'm not certain that I would actually start out right out of the box on my own, but that's definitely a A goal beyond the midterm.
Have you spoken?
Say again? I was going to say, have you spoken to anybody in that field?
Yeah, actually I've been talking to a bunch of people involved in it.
Mostly through, there's a professional association that has these conference calls every other Wednesday, and I've been chatting with those folks about it.
Oh, cool. Technically, I'm not supposed to be part of that association, but...
They have such a small group of people involved in it at the moment that they pretty much will take anything.
Lying, faking, and exploiting, it's like you're an entrepreneur already.
Lying faking faking and exploiting it's like you're an entrepreneur already Oh, oh, okay, all right Alright. Sorry.
I was a little slow on the uptake there.
Don't worry. It'll all become clear as you move forward.
I think, Greg, that the social connections are really important.
That's what I've been finding lately, is I've been strengthening my professional connections, is that I don't have to look for as much work anymore because I've helped my friends get work, so they help me get work, too.
So it's like I don't have to hunt everywhere.
You invest in those relationships, you see which ones pay off and which don't.
Well, that's an interesting point.
Right. You're freelance writing right now, is that right?
Yeah, that's right. So, I mean, that's still basically contract work.
I'm in business for myself, so...
Right. Right.
But for you, it was a lot less...
Well...
Let me ask you, did you actually have a plan or was it more just sort of, I want to do this and I'm going to?
For me, just when I just started, I saw an opportunity that was freelance writing for money.
I just noticed it and jumped on it, sent in some clips and went into it.
But in terms of planning for it, my whole life has been planning to do this stuff, so it's not...
Yeah, it's like I've been training for this by keeping my nose in books and newspapers and stuff since I was a kid.
Oh, I see.
So for you it was more of a kind of a life's goal.
Yeah, and I more or less also set up my life so that I didn't really have any other...
I mean, this is such a solid thing for me that there were no other choices that made sense to make.
Right. And did you have...
And this is a question for anybody on the call.
Did you have any kind of backups in mind?
Or were you just hell-bent on...
This is going to succeed, period.
In July, I was frightened that I'd have more trouble finding work than it turned out being.
It turned out way to be much easier to find quality contracts than I thought.
But at that time, at the same time, I was applying for labor, jobs, anything, basically.
Whatever would stick.
But it's funny. All those jobs totally rejected me, and all the writing jobs said yes.
So at this point, it's like, you know...
It doesn't make any sense to do anything else.
Right.
Steph, when you started Caribou, was it just sort of an all-or-nothing kind of a deal for you?
For the first while, I had a day job, like FDR. Oh, I see.
But Christina was all-or-nothing.
She quit and then started.
Without getting into too many details, what was the difference in the decision making?
Well, she had a plan B, which was my income, so to speak, right?
Oh, right, right.
That's a good point. Right, so...
So if you're kind of working on your own, it's good to have a plan B, I guess.
Well, some savings, low costs, you know, whatever it is that it takes to...
Because if you get too stressed, you can't be effective, right?
You have to manage your stress as an entrepreneur.
Right? When you get too stressed, you make bad decisions, you take on clients you shouldn't take on, right?
Rich, we talked about this once, right?
Like, you end up not enjoying it, and it ends up being kind of a death spiral.
Yeah, don't make that mistake.
Yeah. It's not worth taking on these clients that just suck the life out of you because you end up doing that over and over and over again until I just couldn't do it anymore.
Maybe I'm getting overcomplicated here, but what's the difference between that and the anxiety around selling?
Um, I'm not sure I understand what you mean.
Well... Yeah, let me see if I can...
Like, well, let me ask you, Rich, why did you find that why did you find that the sales work was too much to bear?
Because, well, these bad clients were kind of a safe thing for me.
You know, I already had them.
They had other contacts which I made money off of.
But, you know, one bad client It refers me to another bad client, refers me to another one.
I could have kept making money if, you know, I guess I couldn't have because I became too depressed to do it.
But, you know, it was just a network of, you know, clients that I had created bad relationships with.
Oh, wow.
Okay, so...
It would be...
I think my future relationships, that I let that overcome my comfort in having these people get bad clients.
okay it's like that thing so rights where you you steal a banana because you're starving but a banana just whatever will fill your belly Yeah, I mean, that's why it's important to manage your stress and keep yourself with options financially so you don't end up having to just take whatever.
Right, right.
Oh, yeah, and you kind of did that with FDR as well, right?
Yes. I mean, I waited until there was at least a possibility of a stable income through FDR. So that I wouldn't feel that I had to pander, right?
Or I could make it without the libertarians, so to speak, without politics.
Right, right. Right, so you could be more selective about your clientele, right?
Yeah. Yeah, that makes sense.
Because you can own a business through that kind of stress, right?
Where you end up saying, well, I've got to keep the business, so I'll take these customers, and then you end up hating your business, right?
You know, that's an excellent point.
I sort of recognize that from my work in operations in both the companies that I've worked for now.
It's the strangest thing.
I mean, I've worked for giant corporations.
But when you get down to the operations level, every Tom, Dick, and Harry that would call and complain would just consume...
Entire days in the data center because they were a customer.
No matter who they were, no matter what they wanted, no matter how much revenue they generated, we would just service them whatever they asked for.
And it always irked me because as big a company as these companies were, You would think that they would be able to sort of prioritize and allow us to prioritize.
There's Harvard Business Review studies that 20% of your customers eat up 80% of your costs and are negatives.
Knowing when to fire your customers is very, very, very important.
Yeah, that's an excellent point.
It's the point of being an entrepreneur and then never being able to say no.
I mean, it's like being an employee without any security, right?
Right, right. Yeah, at some points, I just felt like I had six really bad bosses.
Right. And that was all my fault.
No, it wasn't all your fault.
Nice try. Well, not all my fault, but I mean, it was partly my fault for not saying no, for not having the courage to say no.
Right. And, I mean, obviously I say no to FDR people from time to time as well, right?
Yeah, that's a good point.
That's a very good point.
And you just know that emotionally when you just don't want to talk to them anymore, right?
When you look upon calls with dread, right?
Well, and being able to distinguish that dread from the dread of just taking a call at all.
Yeah. In my case.
Well, see, an entrepreneur is not about taking calls, it's about making calls, right?
It's even worse. Right.
Reaching out and having to prove your value, right?
You're not going to be sitting there waiting for the phone to ring.
That's a dream.
Alright, that makes sense.
So, the stability to be able to say no is kind of essential.
Yeah, if you...
Yeah, that's one of the... If you're totally, like, you can't live without this next customer and you know that they're not good, then that's not a good planning as an entrepreneur.
Alright, that makes sense.
Like, if I had to get articles published on Lou Rockwell in order to get listeners...
That would affect what I'm doing, right?
Well, at one point that was sort of true.
Yeah, absolutely. At the beginning it was true, but it wasn't my income.
Whoops, you're cutting out. Hold still for a second.
It was true.
Am I back? Am I back?
Testing, one, two, three. Testing, one, two, three.
Hello? Hello? Yep, you're back now.
Steph sounds like a transformer.
It's true, but it wasn't my income, right?
Um... Not at first?
It wasn't my income at the beginning.
It was a hobby, right?
Oh, right, right, right.
Right, that's true.
And you were just sort of drumming up interest at the time.
Well, and I didn't know what I didn't know about libertarianism.
Right, right, that's true.
Yeah, it would be different now, right?
Yeah, yeah. If I was dependent upon Mises and the goodwill of religious, it would just condition everything I did.
Yeah, yeah, that's an excellent point.
So the use of those resources back then was more – it wasn't a question of dependency.
It was just – it was more of an experiment, right?
Right. Well, it's like, I like these articles.
I wonder if they'll publish mine.
I mean, there was no plan. There was no business plan.
It was just, hey, you know, I got some stuff to say.
Right, that makes sense.
And it's the same thing with, you know, you don't want to be so dependent on your customers that you can't discriminate.
Right, well, was that the case for you with Caribou at any point?
Oh, yeah, absolutely. Absolutely.
Yeah? Absolutely, yeah.
I mean, it wasn't Michael, but we had some customers, it's like, you know, we have to make payroll, we have to make the sale, whatever it takes to make the sale.
I mean, there are a couple of times where if the fax hadn't come in that day with the purchase order, we'd have been done.
Yikes. So those you take, right?
But you try and weed those out and build a stable base and so on.
So... So, yeah, so if you're going whole hog, all or nothing, at some point in time, you have to be willing to take whatever you can get?
Well, the thing is, though, see, and this is one of the very...
Cash flow is king in business, and what that means is that businesses have fixed expenses, right?
Rent, payroll, whatever, right?
Right. Every month, it's like Pac-Man, waka-waka-waka, right?
Right. Sure.
And you can have a million dollars of sales in the pipe, but you can't make payroll this month, right?
And you're done. Yeah, until those sales go through, right?
No, no. You're done. Because you can't make payroll.
That's it. People walk home, Greg.
And you get kicked out of the office and the landlord takes it back.
Yeah, you're done. And you're liable for a whole bunch of stuff because you've got leases and shit, right?
Oh, man. And your employees ruin your reputation.
Oh, it's horrible, right?
I mean, that's why, you know, you don't want to go there, right?
But you're doing a one-man shop, right?
So it's going to be less stressful, right?
But you're going to have fixed expenses, right?
So the expenses, just whack, whack, whack, they just keep chewing away at your pie, right?
You just got to keep making more pie.
And if there's a mismatch, then that's it, right?
Right, right, right.
That's right. That's a good point.
I mean, the two sort of experiences I guess I would say that I learned very quickly doing a consulting gig is, number one, you can never predict your income.
So it's always good to have...
I would say, personally, six months of revenue for your entire expense, rent and food and living and all that stuff.
But the other thing is you get to pick your business, so you have that flexibility as well.
And that's why working out of your home is such an ideal thing at the beginning.
Bye.
Thank you.
Thank you.
Say again? Well, that's why working out of your home is so ideal at the beginning, because you're not adding to your costs.
Right, it's like the costs are invisible.
Right. You've got to have a place to sleep anyway, right?
Right, exactly. Yeah, I mean, you're already living there, so the expense is already a necessity.
Well, and you end up with tax deductions and all those kinds of good things, right?
Oh, sure, yeah, the home office thing, right.
Yeah. Oh, that's a good point.
Yeah, write as much as you can off, I mean, you know, to the point where you're not going to be audited, but just figure out exactly what parts of your, you know, I get CPA, actually.
CPAs can tell you a lot about that.
Yeah, I would also say that since you are going into a mediation type business, you really want to have your legal I's dotted and T's crossed because, you know, one lawsuit and you could be wiped out for the rest of your life.
So you really want to make sure and be on the up and up regarding that stuff.
And insurance. I mean, because people were coming to our house, we had insurance like if they slept on our walk, that kind of stuff.
But that's not going to be probably the same for you.
That's a good point. But yeah, you have to have an accountant.
I mean, you just have to.
Yeah, I don't know the first thing about any of that.
There's no way to learn and keep up on the laws, right?
And I think people get audited less if they have an accountant, right?
Yeah, I don't know, actually.
Well, my accountant's deal is if I ever get audited, he works for free, right?
So he'll be all over them. So they don't want that.
That's not easy, right? That doesn't help them make their numbers.
No, that's true. That's a good point.
Yeah. That's a very good point.
So, just a couple of other questions, I guess.
For... Those of you who are no longer entrepreneurs or rather, I guess I should say...
Pitiful begging charities?
Had a business and don't now or had a business and sold it or what have you.
Why did you decide to...
Or maybe it decided to get rid of you.
Why did you decide to sell it or get rid of it?
Well, in my experience, it was just because I just wasn't making the numbers.
You have... More expenses than you have income.
There comes a time when you can only go into debt so much more when you just have to pull the plug.
You pull the plug and you get a job or you do whatever, and then you work on the next idea.
Most successful entrepreneurs, they failed 20 times before they got that hit.
For me, it was just basically looking at the math and saying, well, this is not sustainable for another two months.
Pull the plug. Start over.
Sorry, I personally would never start another software company because I just don't have big ideas that way.
I mean, I didn't have a big idea for the one that I was in.
It's just that that was the business we had.
But I just don't have big ideas for killer apps or whatever.
For me, I think I needed some stability and some time to take to myself.
I didn't have the energy to focus on myself and focus on running my own business at the same time.
just too much energy I think for me yeah don't don't plan on having any sort of any sort of social life or family time or anything like that for the first year or you won't be very successful yeah Interesting. Well, that's an interesting point.
Go ahead, Jake. I think, for me, that was always the end goal was to sell because, I mean, there's two...
In a sense, that was what I consider to be the sort of the end of the project, if you like, because otherwise it would be like a lifestyle company where I would want to do that all my life and You know, that would just be a sort of vehicle to support me in income for the rest of my life.
But I think even in the very beginning of setting it up, I wanted it to be something that would last for, initially, I thought, five years.
And then I wanted to go and do something else.
And I didn't have a good idea about what that would be.
But in the end, it took more like eight or Yes, but...
It's good to know what your strategy...
Like, what's your long-term goal as an entrepreneur, right?
So for Jake, it was to sell out and become a corporate fat cat.
But it's good to know.
Christina is not doing this to be bought out, right?
Hello. Yeah, it's good to know what your exit goal or exit strategy is.
Long-term goal, right?
Right. She's not building her business in order to sell it to ABC Psychology Corporation.
She's building it to start a movement and all that kind of stuff.
I'm not building FDR to be bought out by CNN, obviously.
But it's important to know what your goals are, because that will also help measure how much you put into it.
If your goal is to pump and dump, make a lot of money and sell it, then you'll work much harder.
With, you know, you'll burn out at some point if you don't make it.
Right. In that case, it would be all work in the short term, right?
Yeah. Whereas something you're planning on hanging on to would be something you'd invest more steadily, maybe less hysterical.
Right. Going more for endurance than high performance.
Exactly. That makes sense.
Although, you know, the people who are going to buy a company are not stupid, and you can't...
You may be able to do this...
In my field, in a consultancy, you can't really fake massive growth.
It would be obvious if it's not sustainable.
At the end of the day, if it's a solid business, whether or not you want to sell it or maintain it, you still have to have good fundamentals if you want to sell it.
That makes sense.
It's a little different if it's floated.
If you're looking at the share price, then you're into a whole different ballgame.
But if it's a privately owned company, Then you've got to have strong, fundamental, long-term prospects for growth in order to sell it.
You just can't fake that.
If it's already floated, that's a whole different ballgame because then there are all sorts of forces at play.
Yeah, companies don't buy for revenue, they buy for growth.
Exactly. Okay.
That's good information right there.
If there was anything you could have done differently about the companies you've run in the past or are running now, if there was anything you could have done differently up to now, what would it be? I can't.
I mean, because when you're embedded, you're always trying to make the best decisions at the time, and I don't think I tried to avoid or sleaze myself with decisions.
I don't know what I would have or could have done differently, so I'm sort of satisfied with that, but maybe there's something I'm missing.
Maybe other people have thoughts. No, I go back to that saying no to people.
I'd go back to that saying no to people who are not going to be worth your time, because that is really, really hard to do at the beginning, but it's one of the most important things to learn, because then you can just save yourself a lot of headaches, and that's about all I can think of.
Oh yeah, I would have detrolled FDR a little sooner in the past, for sure.
sure.
I think that's an excellent point.
And I would have tried to overcome my fear of sales.
Maybe take some courses, you know, get into it a little more so I have the knowledge.
I think the anything...
Go ahead, Jake.
The only thing I would say is that you know, with regard to this sort of business knowledge, things that you need to learn and so forth, You really can give a huge amount of that to your accountant to take care of, except for cash flow.
You really have got to completely understand cash flow and to be on top of it all the time with your business.
That's something that It would have been good to just really understand that a little bit sooner.
I learned it the hard way and pretty fast when you have to.
You've absolutely got to be on top of cash flow.
You also have got to just get out there and get selling as soon as possible and talk to clients.
It's so important to just engage with people who are actually going to buy this as soon as you can.
I think everything else, I feel the same way as Steph.
It's hard to know exactly what you'd do differently because you just crack on basically.
So, what I'm sort of hearing here is three things.
Sort of the three most important things talked about so far tonight.
And maybe you guys can chime in where you think I might be right or wrong about this, but...
Developing relationships with customers.
First of all, finding customers and working them and finding the best way to work them would be one.
The second would be just networking professionally.
And the third would be Making sure your financial ducks are in a row, both in terms of supporting yourself and in terms of supporting the business.
Is that right? Well, Jake, how important did you find the networking aspect?
Well... It's hard to say because a huge amount of it was entirely wasted, but some of it did bring us the contracts that got us, so it's a bit like advertising in that respect.
I would say that just in terms of what you just said, Greg, it's not so much working the contacts.
I think what you have to try and do is empathize with the people you're trying to sell to.
Understand what it is that they really need and get on the other side from your client's perspective.
Look at yourself from your client's perspective and try and understand whether or not you're actually doing what they need.
I mean, for example, what I was trying to sell was quite sort of jargony and academic in the beginning, and some of the value wasn't entirely clear.
But, you know, networking, I would say that the way in which networking was important for me, the two things that were really important in getting started was that we did some contracts.
We went out, we found the best possible clients that we could imagine, like the most high-level, high-profile developers who are really, really sort of on the enlightened end of the spectrum, right?
And we basically offered to do work for them at almost free.
And that was really hard to do.
And that was also quite scary in cash flow terms.
But it gave us a couple of projects that were demonstrations of value.
And that was hugely important.
The second thing that was really, really important And this is where networking is not...
By networking I don't mean, you know, going to meetups where you all sort of, you know, eat cheese and drink wine and sort of look over each other's shoulders.
It's not this type of networking.
But the networking that really mattered and really played a huge role for me is basically partnering.
And what that was was rather than cold calling the clients who were, in my case, developers and saying we would like to sell you this type of computer modeling service, What we would do is we would approach architects and engineers who we would not be selling to because they wouldn't ultimately be paying for this, but they would be a route to the people who would be paying for it.
So what we would essentially be saying is, why don't you let us come onto your bid as a sort of added value and that will really show you to be a better design team for this job or whatever.
And that got us in to projects with the real clients who we wanted to work for.
So that type of networking was really, really important.
Actually, that's an interesting point because that's almost exactly...
That's sort of exactly what Steph was saying about Christina approaching doctors, right?
Just sort of partnering with the doctors for customers.
Yeah, and this, I mean, how do you differentiate entry into a market?
You have to offer something that's not around.
I mean, the system, I guess the most expensive system that I built when sold was about $1.2 million, but the very first one was $5,000, right?
And it was like we ate our toenails on that one, right?
So... And of course, FDR is all about free samples, right?
So, you know, why would someone go with you rather than with someone who's established, right?
Well, because if they go with you, they'll get it for less, right?
At least at first, right?
So you have to figure out why you as opposed to everyone else, right?
Right. Well, for less and for, you know, I mean, you get all the added benefit of a consistent philosophy, right?
Yeah. Now, Christina's right below average for sure.
And all that means is we had to look for cheaper offices, right?
But both in terms of market differentiation and in terms of not wanting to price certain clientele out of the market, I guess we both have that philosophy, right?
Yeah. You wouldn't say that that's necessarily an estimation of the value of her services, though.
That's just a... That's a tactical move, right?
To attract clients.
She's the best therapist on the planet.
I mean, she's the best therapist on the planet, no doubt.
But, you know, once we have...
It's the FDR philosophy, right?
Once you have enough to live on and you can do good, what does more get you, right?
Right, right. Exactly.
Exactly. I mean, unless you've got some long-term planning in mind where the additional revenue would be useful, but then also limiting, you know, you lose in volume what you gain in the individual, right?
I'm not sure what that means, but I would just say that it's just a matter of what you want to do with your business.
Do you want to make money or do you want to help people?
And those two aren't mutually exclusive, of course, right?
But, I mean, Christina could charge more and she would get certain types of different clients and there'd be more money, but she wouldn't be helping some of the people she really wants to help.
Right, right, right, right.
So it's more a question of just targeting who it is you're trying to reach.
Right. Right.
And when you charge more, all that happens is you have to have a fancier office, right?
It doesn't actually change anything in the end, right?
Right. Because this is not a widget business, right?
It's an hourly business.
Right. It's a service.
Yeah. Right.
Well, that makes sense. That makes sense.
So it all really kind of comes down to relationships.
Yeah, I mean, and how is it that you want to spread out your costs, right?
I mean, I could charge a dime for FDR podcasts.
Maybe I'd make the same amount that I'm making through donations, or maybe I'd make more, but I wouldn't be doing what I want to do with the skills that I have.
Right. Right. Right, and you're able to sustain yourself basically on the relationships that you're developing with your audience, right?
Right, right. So that kind of matters.
Yeah, I'm rolling the dice on relationships, not on income, right?
Because that's how the growth, as we've talked about recently, that's how the growth of the business is going to go.
I don't want to make this about FDR, but it's based on the relationships and people's passion about what we're doing.
Right. Not based on, I will fund big advertising through charging X or whatever.
Right, and the relationship is sort of based on the mutual exchange of value.
Right, right.
And sometimes you give first and sometimes the customer gives first.
Right. In what sense do you mean that?
Well, I was just thinking about, like in your example, Jake, right?
Sometimes, like establishing relationships with partners, your partner's customers already sort of are invested in In the partner, right? By the time they get to you?
So that's sort of what I meant by that.
I'm not sure where I was going with that That's pretty much all the questions I had I mean, I don't know if anyone else has any questions or...
Well, I would just say about the consulting business, I mean, I mean, you don't really start a consulting business unless you have some relationship as far as networking goes, because it's going to be really, really tough to just open your doors as Joe's consulting business.
And you're going to spend all your money on advertising.
I mean, you really need to have at least some basis to start with to get the ball rolling.
And the good thing about consulting is you can do it while you're doing other things.
So you can still have an income stream from a secondary source.
So I would just, you know, if it was me doing it again, I would concentrate much more on developing my relationships first before putting up the sign because it would save a lot of headaches and money in the long run.
And when you say that, just in concrete terms, what does that mean, developing the relationships more?
Well, for example, if you, let's just take software and IT, I guess, for an example.
If you already work in an IT shop or you're already a developer, chances are you know some people who are looking for the type of work that you can do, and getting those jobs is a lot easier because you already have an in versus You know, just taking an ad out somewhere and saying, you know, Joe's IT services, you're probably not going to get the bytes because you don't have a reputation.
Whereas if you start with your internal networks, you probably already have the reputation enough to get the jobs.
Right. That makes sense.
So credibility is sort of required for...
Well, yeah, I mean, the whole idea of consulting is the person is buying your opinion.
Well, I don't know if they're buying your opinion, but they're supposedly buying your expertise in something, right?
Your knowledge or your skill or your insight or something tangible beyond just opinion, right?
Because everybody has opinions.
I have a question for you, Greg.
Um, so...
Why do you want to, um, set up a business?
Uh, why...
Why do I want to?
Um... I would say because, um...
Well, long term, I'd like to be working for myself.
I'd like to be in a situation where I'm answering to me and not to someone else, I guess.
Where... I get to decide what it is that I'm...
Where I get to decide what my value is and how I'm going to put it out there and Who I'm going to offer it to and all of those things.
Does that make any sense?
Working for somebody else.
I mean, it's not an either-or kind of situation.
I mean, like I say, I might, for the first year or so, or maybe a little longer, be working for somebody else initially.
But long term, I'd like to be able to sort of put my fate in my own hands.
Right, right. No, I totally understand that.
And I guess my follow-up question would be, how much is that worth to you?
How much are you willing to pay for it?
Well, Jake, at this point, I've done pretty much everything I have.
I've paid pretty much everything I have.
And then some. So it's worth everything to me.
Now, I just sort of wanted to mention that in your field, it's not like you're going to be in the same thing as you are with IT, right?
So Christina's employees are pretty independent.
Right. I'm not sure what you mean by that.
Sorry, who? You?
Oh, well, so she does the advertising, she has the offices, she has the relationships.
And then her therapists get, like she refers a patient to one of her therapists, right?
And they call them back, they set up the appointment, they go meet them, right?
It's unsupervised.
There's no punch clock, right?
Oh, I see. I see.
Sure, sure. So what I mean by that is that your field, I mean, there's just you in the room, right?
Yeah, that's true. That's true.
So it may not be quite as restrictive as, well, I know for sure it won't be sitting doing what you're doing or what you've ever been doing.
Right, right. It'll definitely be a total departure from what I'm doing now.
There's no question about that.
I have no illusions about it.
Or at least I'm trying not to have.
Just to clarify also, Greg, I wasn't asking you how much it was important, how important it was for you to change your field and go into dispute resolution.
I totally get that.
I was just specifically asking about the working for yourself part.
No, that's an interesting point.
Just to sort of put that in perspective, if you were to think of all the things that you want, including time to do other things, your social life, All the things that may be important to you, and not dispute resolution as a subject area, but specifically the idea of working for yourself.
How important is that to you?
Well, let me tell you.
What it is that I want is this.
I want...
In general terms, I guess, what I want is to be able to offer...
I want to be able to help people in such a way that it teaches them the value of the philosophy of nonviolence,
right? Sort of an extension of what Is going on at FDR, right?
I want to be able to do something that is going to help people solve their problems.
I like problem solving.
But also, at the same time, showing people what the world could be like, right?
And the mediation...
That concept to me seemed to fit that bill.
And so, you know, however I can do that, I'm going to do it.
And my thinking was that Doing it privately on my own as a private practice would be ideal because then I could tailor what I'm doing to be the most effective at that end goal of teaching peace and freedom on a personal level as well as simultaneously helping them Solve their problems,
resolve disputes, and that sort of thing, right?
That's sort of the long-term vision of it.
And so I don't know, like Steph was saying, you have a lot more autonomy in something like What she's doing, like her employees, but you still have to sort of...
You have rules of...
I mean, Steph, let me ask you.
I mean, a therapist wouldn't be able to come into her practice and just kind of do whatever they wanted to.
She has a certain standard in mind, right?
Well, sure, but you worked that out in the interview, right?
Right, so she will ask in an interview something like, have you ever counseled someone to separate people?
From his or her family. And if the guy says, are you kidding?
I would never do that. Family is everything, right?
Then that wouldn't be someone she would, right?
Wait, uh...
At that point, they are pretty much doing whatever they want, right?
As long as they can meet that standard of quality, it sounds like they do have a ton of autonomy.
I don't know if that's what Greg's asking.
There is autonomy, but only if the values are compatible, right?
And if the values aren't compatible, then I'm free to spend my day picking my nose if I want, right?
But I have the commitment to this.
This conversation, right? So that's what I do.
So you have autonomy if your values are compatible, right?
If that makes sense. Oh, yeah, yeah, yeah.
I see. That's true.
So she's not just going to hire someone, you know, off the streets and say, do whatever you want, right?
Right. That's all dealt with during the interview process.
Yeah, that's kind of a false dichotomy.
That's for sure. Yeah, so...
So, yeah, so I guess, you know, that's an interesting observation, Jake.
I guess...
But you'll figure that out as you, you know, you say you're not going to start as an entrepreneur, which I think is quite wise.
Right. But so you'll work for someone and maybe you get 95% of the gain with 0% of the risk, right?
Right, that's true. I have this fear that if I don't jump in all or nothing that I'm not really...
I'm sorry, I'm losing you there?
You're not really what? To put it the way you just put it, if I... Are we back on?
Sorry, Greg, you were just to add a bit at the end there?
Yeah, what I was saying was, you know, if I'm not willing to take any risk initially, what does that say about my commitment to this endeavor?
I think that by switching professions in midlife to something that's completely unrelated, you're okay for risk.
That's a good point. I mean, you don't have to take out your own appendix while skydiving to qualify for risk, right?
One or the other. It's okay, right?
Right. No, that's a good point.
And that was actually one of the...
That was sort of the question I was asking earlier, but you got...
How much risk and how much personal pain would be...
You know, too much to actually bother doing it.
Well, I would never have said no to the opportunities that I had, and it was given, or earned and was given.
I would never have said no to, do you want to co-found a business?
I mean, to do what, right?
I was a junior COBOL programmer, right?
Of course I'm going to do it, right?
Oh, right, relative to what you were doing, right?
Yeah, yeah, it's like, yes, I will do it, right?
And I never would have, I mean, obviously I'm completely thrilled about FDR and so on.
So I'm very glad I took those opportunities.
I don't think you could pay me enough to go back to being a software entrepreneur, frankly.
I think it would be a fate worse than death, right?
So I'm very glad that I did it.
I'm very glad I spent all those years doing it, and I'm happy to never do it again.
Yeah, I don't know if this gets to what you're talking about, Greg, but I mean, is there a way to find maybe an older, more established person who does what you want to do?
You maybe join their office.
They start handing off clients to you as they get too busy or maybe smaller clients.
So you're, you know, you own that business.
And then eventually you either take over that older person's business or you build up so much clientele of your own that you're off and running.
I mean, is that along the lines of what you're getting at?
And in fact, there are actually consultancies that do this now that take on employees.
I mean, it would be a challenge, but it wouldn't be impossible to find an office that I could hook up with that is already doing this, which is one of the reasons why that idea was so appealing to me, because you get a chance to sort of Just sort of see how people are doing it now in practice, right?
And kind of have a model from that you can then tinker with and modify and explore on your own as well.
And you can go on the coattails of that other person's credibility and sort of helps you get up and running.
Well, you have to kind of be careful of that, too, because with – I mean, like with – I don't know if this is true for mediators, but with lawyers, like for example, I mean, you sign on with an office, you're going to end up signing a non-competition agreement at some point, right?
So I couldn't just – Yes, sorry.
A non-competition agreement, it cannot take away your livelihood, right?
Right. No, that's true.
So they can't say, after you work here, you can't be a mediator, right?
Right. I mean, I had this battle with this.
So, obviously, a non-solicitation, you can't take existing clients.
That is obviously perfectly reasonable and sensible.
But this non-compete thing, I think what they mean is you can't set up an office next door with a name that's one letter different.
But they can't ever say, and you can't go and start up your own shop and be a mediator.
No non-compete can take away your livelihood.
That's what I'm saying.
Right.
And the practice is so small right now that they would have to make a really good case to say that you couldn't practice in the same town or the same city.
No, they couldn't do that.
I mean they just couldn't. But that's all negotiation, right?
So what you can do is – You can set up a cross-referral system, right?
So if I'm too busy, I'll send my overflow to you.
If you're too busy, you can send them to me.
If you have expertise and I don't, I'll send them.
Christina does this, right?
So if she doesn't do some particular form of therapy, she'll send them to someone else and they'll do the same, right?
Oh, that's an interesting idea.
This coopetition thing is very essential in terms of business.
Yeah, that's a good point. I hadn't even thought of that.
I mean, I do it all the time, right?
I don't do therapy because I'm not a therapist.
So I say to people, you know, if you want therapy, and I think you should, then you should go to this person, right?
Right. Yeah, they might want you to succeed.
Say again? Well, I said they might want you to succeed.
They might want you to have your own line of business.
So non-compete might be the total opposite of what's going to happen.
And especially in a new field, the more practitioners there are, the better.
Because then that way people have even heard about mediation or dispute resolution.
Yeah, that's a good point.
So, there should be, like, there's no way that a podcast is going to take away from what I do, right?
The fact that there are philosophical podcasts that are out there, great.
You know, more people will search for them, more people will be interested in them, and people will come to me, they'll maybe go to other people.
But it's such a, if you're the first two guys in the gold rush, you don't fight over claims, right?
Right, right. That's a big river.
There's plenty of room for everybody, right?
Yeah, yeah. You know, hey, I'll make you some coffee.
You make me some soup, right?
Right. Yeah, that's an excellent point.
That's an excellent point.
Yeah. All right.
Well, my dinner, she is settling on the table, so I'm going to jump off.
Was there anything else that you wanted to talk about just now?
No, I think that pretty much covers it.
But I'm willing to hang around if anyone wants to chit-chat.
Okay, well, I'll close the server down then.
And if you can, obviously, if you want to, then chit-chat away.
But I'll turn this on to the server.
Yeah, that's fine. Alright, thanks guys.
Great call. Thank you so much for everyone for participating.
I think it was really helpful. Thanks.
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