The Entrepreneur Mind: A Guide to Thinking Big and Achieving Success, Summaries of Advanced Education

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The Entrepreneur Mind

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100 Essential Beliefs, Characteristics, and Habits of Elite Entrepreneurs

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Kevin D. Johnson

JOHNSON MEDIA INC.

Foreword

The secret of success in life is for a man to be ready for his opportunity when it comes. —Benjamin Disraeli, prime minister, United Kingdom (1868, 1874-1880)

hile finishing this book, Johnson Media Inc., the small company that I started as a college sophomore in 2000, beat two other companies in a bid for a $40 mil- lion project. The project, which spans three years, is the largest ac- count that my company has ever won. Johnson Media Inc. will now be one of the most prominent companies in the marketing in- dustry. In late July 2012 I received an e-mail and phone call from the vice president of a national organization who was impressed with my company’s work in the financial services industry. The vice president asked us to submit a proposal for the organization’s ma- jor project. I agreed without hesitation. Although I was on vacation visiting my family in Chicago, I went right to work, summoning my team to focus all efforts on winning this project. Also, I immediately reached out to two men-

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tors whose companies have made millions to get their support and guidance. My team and I finished our winning proposal weeks be- fore the deadline, giving the client the impression that we were all business and that we made their project top priority. It paid off. I mention this major accomplishment because it is a testament to the effectiveness of the principles discussed in this book. In The Entrepreneur Mind I detail how elite entrepreneurs respond quick- ly, put their business first, consult with mentors often, hire the best team, create an environment of stressful urgency, use time wisely, and so on. The one hundred lessons in this book are precisely the basic principles that I have used to build a multimillion-dollar company at a young age. This is not just another book on entrepreneurship that focuses on high-level theory or popular thought, but a pragmatic approach that will get you results. In your hands, you have a real playbook to help you accomplish your entrepreneurial dream, whether being able to determine your own destiny or winning a multimillion- dollar account. If you learn from my experiences and the lessons of high-performing entrepreneurs, then you are on the path to success. If you adopt these principles and believe in them wholeheartedly, then success awaits you.

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The idea that entrepreneurs are born, not made, is ridiculous. Contrary to what many erroneously believe, entrepreneurship can be taught and learned. The fact that over six hundred thousand col- lege students were enrolled in some type of entrepreneurship cur- riculum in 2011, up from less than 1 percent of that amount a dec- ade before, is a testament to the growing belief that entrepreneur- ship has a respectable place in academia. In many ways, entrepre- neurship is like any other major discipline that requires intense study and practical experience. Although I didn’t have the benefit of studying entrepreneurship in a formal classroom setting, I did learn by reading books, many of which I still have in my library and use as references. Trips to the bookstore were a natural first step once I decided to go into business. With teeming excitement and eagerness I bought and read High-Tech Start Up: The Complete Handbook for Creating Successful New High-Tech Companies by John L. Nesheim. One of my favorite books was Netscape Time: The Making of the Bil- lion-Dollar Start-Up That Took on Microsoft by Jim Clark. Books like these formed the foundation of my education in entrepreneur- ship. Without them, I would have probably given up from the frus- tration of trying to figure out everything on my own and to moti- vate myself. This book is an attempt to add a fresh and practical perspective to the wealth of knowledge available about how to be an entrepre- neur. As I developed as a young entrepreneur and experienced dif- ferent situations, I realized that few books offered the kind of suc- cinct advice that I now give to my mentees. By telling my personal stories and relating those of other successful entrepreneurs, I set out to write a book that focuses on one hundred core lessons that teach entrepreneurs what they may not find in a textbook, maga- zine, or online. These lessons range from how to think big to why you should use multiple banks, and even include whom you should choose as a spouse.

Introduction

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Furthermore, my goal in writing this book is to help young en- trepreneurs avoid the mistakes I made. Mistakes during the early days of a business can be devastating. A bad decision such as spending too much money or choosing a bad business partner can lead to an entrepreneur having to shut down operations completely. After making some of my biggest mistakes, I would often think, I wish there were a book out there that would have warned me about this. Now that book exists, and I can help people who may have that same wish. This book is divided into seven parts: Strategy, Education, Peo- ple, Finance, Marketing and Sales, Leadership, and Motivation. Each part contains relevant nuggets of wisdom that you can read separately or sequentially. Feel free to jump around based on your interests or read the book from beginning to end. Whether you are thinking of starting a business, celebrating your first year in business, or approaching ten years in business, you’ll find tremendous value in reading this book. Simply put, it will help you to develop the Entrepreneur Mind.

Strategy

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1) Think Big

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It must be borne in mind that the tragedy in life doesn’t lie in not reaching your goal. The tragedy lies in having no goal to reach.... It is not a disgrace not to reach the stars, but it is a disgrace to have no stars to reach for. Not failure, but low aim is sin. —Benjamin E. Mays, minister, educator, scholar, social activist

The Two Types of Failure in Business

A business can fail in two ways: not surviving beyond its start and not reaching its full potential. While shutdowns receive the most attention, failure to reach full potential is much more cata- strophic. On the one hand, measuring and understanding why so many businesses fail in the traditional sense is relatively easy. We have the data. Organizations ranging from the Kauffman Foundation to the U.S. Chamber of Commerce have analyzed years of statistics, giving us a solid idea of why about 75 percent of businesses do not survive fifteen years or more. Some of the reasons for failure in- clude undercapitalization, overexpansion, poor planning, and a de- clining market. On the other hand, measuring and understanding why a business fails to maximize its potential is quite difficult. Studies and statis- tics aren’t readily available. Also, the default measuring stick for success in business is often the very existence of the business it- self. I am guilty of perpetuating this low expectation, frequently congratulating business owners for having survived their first five years. While this accomplishment is honorable, it’s more impres- sive to have a profitable and a high-growth business after five years. Instead of flattering business owners who have reached a certain number of years, the goal should be to challenge and to help solid businesses ascend to the next level—to think big.

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“Thinking Big” Defined

The phrase ―Think big‖ is ubiquitous, whether it’s from an ESPN commentator or Donald Trump. Likewise, a popular T-shirt carries the phrase, ―Go big or go home!‖ Apparently, we have an epidemic of small thinkers, and we must be cured of this conta- gious inability to think big. Despite its popularity and ascendancy to pop culture status, the saying has no clear meaning, especially as it relates to business. In business, ―thinking big‖ simply means pursuing ideas that maximize the scope of your potential. Likewise, it can mean pursu- ing ideas that have maximum impact in the world. Despite its sim- ple definition, thinking big is difficult to do for many reasons, but if you are aware of the obstacles you can avoid them altogether.

1. One of the main obstacles to thinking big is the inability to outgrow your environment. I am a mentor to several young entre- preneurs, and one of the common disappointments I have about my mentees is their inability to create businesses that go beyond the confines of their reality or environment. In other words, their envi- ronment restricts their thinking to the point that their business suf- fers limited growth or even death. To counter this effect I provide examples of entrepreneurs who have gone outside their environment to succeed. For example, many college students wish to start a business that targets only col- lege students on their own campus. Instead, I encourage them to expand their markets by applying their product or service to addi- tional segments. Students, for instance, could sell their product or service to colleges across the nation or the world. If the idea has broad appeal, it could be even larger. Also, I share with my college mentees how Facebook, originally for college students only, was founded on an ideology that appeals to people all around the world. It was just a matter of time before Facebook’s cofounder Mark Zuckerberg expanded his company’s target from college students to everyone on the planet.

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instead of selling it to individual retailers, an arduous process. The entrepreneur had not thought about licensing his product, a strategy that would yield him profits faster and minimize risk. In this case like so many others, the founder needed the experience and influ- ence of seasoned entrepreneurs to maximize the potential of a business idea. To jump this hurdle, you must establish a diverse network of individuals who think big and understand what it takes to arrive at that level. Likewise, they can help you to vet and improve your idea. Reid Hoffman, founder of LinkedIn, recently told a group of aspiring entrepreneurs in Cambridge, England, ―Talk to as many people as you can. What you want are the people who will tell you what’s wrong with your idea. They are the ones you can learn from.‖

My First Big Idea

Like many of my college mentees today, I was unable to think big during my early start-up days, because I was limited by my en- vironment. Also, my network at the time didn’t include older en- trepreneurs who could help me translate the value of my college website to a larger, more profitable audience. By the time I real- ized the great potential of my idea, it was too late. Well-funded and talented competitors seized the larger market aggressively while I focused on increasing my success in my small-college microcosm. Had circumstances been different, I could have been a formidable competitor to companies like CollegeClub.com, or even Facebook itself. Despite the missed opportunity of becoming a national or even global college web portal, all was not lost. Eager to move on from serving the college market and making my mark in a bigger area, I stumbled upon an opportunity that would forever change how I pursue business ideas. I decided to focus on commercializing an internal tool that I created to help my staff update web pages with-

Strategy

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out having to know computer programming languages. Om- niPublisher, one of the first online content management systems— similar to an early WordPress—was my first product with global appeal. From that point I began to think big and never returned to thinking small. We sold OmniPublisher to local community newspapers and other publishers to simplify making frequent updates to their web- sites and to automate archiving with a portable database. Om- niPublisher also helped users with small budgets to obtain enter- prise-like software that normally would cost them much more to build or to purchase from an established vendor. My company had regional success with the project and eventually sold Om- niPublisher to a small publishing company. During an early con- solidation period, companies with software similar to my compa- ny’s were acquired for millions of dollars. My dream of selling to a large media conglomerate at a higher valuation didn’t come through, but I sleep well at night knowing that I dreamed big and went for it.

Where Thinking Big Helps the Most

I contend that the aggregate loss of value by businesses that fail to reach their potential is much greater than the value lost by busi- nesses that cease to exist. Some compelling statistics support this position, as reported in a recent Technology Association of Geor- gia (TAG) proposal: According to the YourEconomy.org website (created by the Edward Lowe Foundation from Dun and Bradstreet data), from 2000 – 2007, most new job creations in the United States were provided by Stage I (1–9 employees) companies (approximately 5.7 million). However, over this period of time, new jobs by Stage I companies were created at a rate of 1.5 per new compa- ny, whereas Stage II (10–99 employees) companies created new jobs at a rate of 26 per new company. The website further indi-

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2) Create New Markets

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If I had asked people what they wanted, they would have said faster horses. —Henry Ford, founder, Ford Motor Company

The two kinds of entrepreneurs are those who create markets and those who do not. On the one hand, the entrepreneur who creates markets is considered a revolutionary. On the other hand, the en- trepreneur who competes in well-established markets is considered ordinary. Both approaches can lead to success in business, but re- search indicates that the creative entrepreneur has a better strategic position. Blue Ocean Strategy , a best-selling business book, makes a co- gent argument that creating new markets known as ―blue oceans‖ is better than competing in overcrowded industries known as ―red oceans.‖ The authors, W. Chan Kim and Renée Mauborgne, stud- ied 150 strategic moves spanning more than one hundred years and 30 industries for their book. They also looked at 108 companies that launched new businesses to quantify the impact on revenue growth and profits of creating blue oceans. Kim and Mauborgne’s findings are remarkable: We found that 86 percent of the launches were line extensions, that is, incremental improvements within the red ocean of exist- ing market space. Yet they accounted for only 62 percent of to- tal revenues and a mere 39 percent of total profits. The remain- ing 14 percent of the launches were aimed at creating blue oceans. They generated 38 percent of total revenues and 61 per- cent of total profits. According to these data, it pays to create blue oceans. The book gives solid examples of successful companies that created new markets, including Yellow Tail, Cirque du Soleil, Ralph Lauren, and Lexus. It also provides a step-by-step process for executing

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blue ocean strategy. I highly recommend that you buy a copy of the book. As a mentor to young entrepreneurs, I encourage my mentees to seek new markets rather than to go into well-established ones. The potential for attaining greatness is in creating new markets. My first start-up was a blue ocean, or a blue pond considering the size of my market. In my microcosm of a college campus, I created a web portal that enabled students to interact in ways like never be- fore. As a result, advertisers flocked to take advantage of my plat- form. Moreover, I encourage my mentees to study some of our greatest and wealthiest entrepreneurs to learn how they were able to identify and to dominate new markets. Going down the list of Forbes magazine’s wealthiest four hun- dred Americans, you read the names of many entrepreneurs who have created and led in markets that before were nonexistent. Mi- chael Bloomberg, for example, started his company after being fired from an investment bank in 1981 and was a pioneer in providing high-quality financial data to Wall Street banks and traders. Before Bloomberg L.P., no company provided this valua- ble data quickly and in several different formats. Likewise, Jeff Bezos’s Amazon.com revolutionized the way consumers buy books and other products. The list continues with names like Mi- chael Dell, Phil Knight (cofounder of Nike), George Lucas, and more. Which kind of entrepreneur are you? If you have a blue ocean, you are on your way to tremendous success. However, if you are competing in a red ocean, it’s time to adopt strategies to spawn in- novation, leading your company to significant profits and to a sus- tainable competitive advantage.