Why do so many startups fail in the early stages? How can we position our business for success from the beginning? This week, we continued the discussion on Colin C. Campbell’s Forbes article, highlighting common pitfalls that inhibit business growth.
“Delegate responsibilities, not tasks.”
Colin C. Campbell
- The Entrepreneur Is a Bottleneck
It’s not uncommon for entrepreneurs to attempt to shoulder all responsibilities and take on too many roles within the company early on, without realizing this could be inhibiting business growth and expansion. The entrepreneur’s time is best utilized when focusing on strategic aspects of the business, rather than the minutiae of daily operations.
To facilitate scalable growth, entrepreneurs must be willing to delegate responsibilities. Hiring talented individuals who possess the skill sets required for particular roles is essential. And when the entrepreneur empowers these individuals to make decisions, they can focus on their core goals, consequently driving business growth more effectively.
- Not Hiring for Growth
The success of a startup hinges on the quality of its employees. However, many startups fail to recruit individuals who can effectively propel the company towards its growth objectives. It’s crucial for businesses to hire not just based on skills, but also with an eye towards complementing existing weaknesses in the organization.
Additionally, implementing robust systems to track progress can ensure all employees are aligned with the company’s growth strategy. This approach helps create a coherent roadmap for the company, which in turn can drive productivity and facilitate efficient scaling.
- Not Expanding in the Right Ways
Often, as a startup grows, early employees may find it difficult to adapt to the changing demands of the company. Sometimes, they are not the right fit for the enterprise as it starts to scale exponentially.
Hence, startups should consider expanding their hiring pool. Look for seasoned professionals with a proven track record in managing growth. These individuals can bring invaluable experience and industry insights to the table, effectively steering the company towards its intended goals.
- Too Much Funding
While underfunding is a well-known cause of startup failure, an excess of capital can also lead to disaster. As Colin pointed out, excessive funding can encourage irresponsible and risky decision-making.
Founders may become less cautious in their spending, often lacking a solid plan on how to effectively utilize the resources at hand which can lead to unsustainable growth. It’s imperative that startups maintain a disciplined approach to capital allocation, ensuring every dollar spent contributes to strategic growth and long-term stability.
By recognizing and addressing these obstacles head-on, startups can increase their chances of transitioning from a small enterprise to a large, successful corporation. Listen to the full session above for more!
- Read the Transcript
Serial Entrepreneur EP109 8 Reasons Startups Fail to Scale pt 2
Eight reasons why startups fail. This is a, this is a show where you can come on stage and talk live about the current issues we talk about or even ask questions of experts. We have a number of great authors coming on. Michele, do you wanna talk a little bit about who’s coming next Friday?
We have amazing members coming into the house right now. We have a very cool session with Colin C. Campbell, who’s on the stage right now.
Um, he has a book coming out that is a Forbes book that’s called Start. Scale. Exit. Repeat. Serial Entrepreneur Secrets Revealed. But today, He has, um, is going to talk with us about eight reasons why, why startups failed to scale. This is actually an article that was recently published on Forbes website and the link is above.[00:01:00]
We did the part one last week and it went so well. And, uh, we had so many amazing questions and stories from our members. So we decided to come back for part two and finish off the first four on the list.
Colin, we should just jump into it and maybe, I think you kind of review, just, just why don’t we state the four that we went through last week and then I’ll state each one, the new ones we haven’t gone through, and we’ll have a nice discussion.
Absolutely. I, I really enjoy this. This is, this is a, I get a kick outta this now. When I say why startups fail to scale, I’m not suggesting that we focus on the failure. I’m suggesting we focus on why they fail and figure out how we can succeed. By the way, if you like this topic, Again, please join us on stage as Michele talked about, but also sh feel free to share the room and, and me be Kyle and Michele.
Feel free to share the room as well. I’m gonna share it right now myself, [00:02:00] share on clubhouse that’ll get us some more members in the room and it makes it very interactive. We love having people on stage and talking about, you know, the topics that we talk about here on this show, why startups fail. So why startups fail to scale.
If you think about it, you know, the vast majority of startups, about 30 million businesses in the United States, in less than 1% actually fail to scale. Yet there actually is a code. There isn’t method you can actually follow and study how companies scale and figure out what it is that they do to grow their companies.
So I had the opportunity to write an article for Forbes, and last week we started that, as Michele mentioned, and I started, the very first thing I talked about, we went backwards actually eight to one. I thought number one’s the most important of all of them, but we went backwards. And you can see the link on the top of the screen.
You can actually click it and check out the article. But we started with they don’t use systems to scale. See, the fact of the matter is entrepreneurs we’re all come from a certain [00:03:00] breed. You know, we have this sort of, I don’t know, like cowgirl, cowboy instinct that just takes over and we just sort of go with the flow and, and you know, we’re ad hoc and it works really well in a startup.
The Wild West. I was say the wild West. Yeah, I know. I was, I was trying to keep that gender neutral. But, but the fact of the matter is, we do have that in US and as entrepreneurs and we don’t have operational understanding or systems, we’ve never been trained how to actually do this. There’s no school that can tell you how to scale your startup.
The fact of the matter is you can scale that startup. You can follow a set of rules. Now let me tell you this, like. Back in 2005, I was running a publicly traded company, uh, relatively, you know, medium size company. And, uh, I had the, uh, shareholder turn against me. I was a business partner of mine and went against me and I lost control of the board of [00:04:00] directors.
And I was CEO of the company. A board of director came to me and he says, look, we gotta look at replacing you. And I was all shocked, like, why you can you do this, blah, blah, blah, or whatever. And I was like, very, very panicky. Um, so I picked up the phone and I called a friend. He says, look, why don’t you bring in a coach?
And, and this coach, what he does, he, he runs a company called Rhythm Systems, and he sets up goal setting. And with goal setting, you can actually lay out the goals for your quarter, weekly, daily huddles, like hit a whole system structure he put in place. So I did that and I called him up and I, I met him in Vegas and I’m, I’m, I’m sitting down with him and he says, Colin, you need to follow this.
Two days of strategic planning. All these systems. I said, I, I don’t need all this, I just need to get the board off my back. And he says, okay, I’m not gonna work with you then. And he literally said he wasn’t gonna work with me. So at that point I said, okay, what do I need to do? I’m like, the doctor going to, I’m the patient, gonna the doctor who’s not listening to the doctor, right?
I know I need to lose weight. Okay, I know I need to cut, cut smoking. I know I need to do these things, [00:05:00] but I’m not gonna do it. Right? Literally the patient, because, so I said, what do I need to do? And he says, okay, you need to implement systems. See, as entrepreneurs, we are ad hoc. We do what we do. We are, we are just like a ball of energy, enthusiasm, and all of that.
And that works for your startup, especially when it’s a one-man show. But if you wanna scale beyond yourself, we need to implement systems. So number eight was that entrepreneurs fail to use systems to scale. Now I’m not gonna focus too much on, on on systems, cause we did talk about that last week. If you want to catch up on that episode, you can go back and listen to it on your favorite podcast network.
Under the podcast name, serial Entrepreneur Secrets Revealed number seven, they don’t kill failures fast enough. Now, let me be clear here. There is a methodology in business where if you contest and fail more cut losers quickly and scale winners big, you can be very successful. pot.com, [00:06:00] three years in a row, one of the fastest growing companies in the United States, we have three years in a row in Inc.
Magazine for, uh, the fastest growing one of the fastest growing companies. This company failed a lot. It continues to fail a lot of products. But here’s what we do. We test those products out and if they don’t work well, we can’t sell ’em through advertising, through Facebook or whatever. It’s, then we close ’em down.
We shut ’em down. Here’s what we do. If they work well, we scale the heck out of it. We go to, not only are we now on. Um, pot.com. We are on Amazon. We are on, uh, a number of drop ship sites, chewy and Wayfair. We are on qvc. We’re in Canada. We scale it big, so when we have a winner, we scale it and we have a new car seat that just came out that’s absolutely huge and we’ve ordered 5,000 units of those and are coming in.
That’s car seat for your dogs. Number six, [00:07:00] failures to expand the story. So this was in like a concept of like Amazon. If you go back, many of you are probably too young to remember this, but Amazon used to only sell books, physical books. Netflix used to only sell or distribute, um, rental DVDs through the mail.
Netflix was not in the business of distributing DVDs. Blockbuster was in the dis, the business of renting DVDs. And, uh, Amazon was not in the business of distributing books. Barnes and Noble was in the business of distributing books. Amazon was a distribution company. The fact of the matter is they expanded their story.
They never got, they, they, they learned that their story was more than just their current vision of their company. Number five, misaligned around the vision. If you really are not all on the same page, you’re not heading the same direction. Your business partner’s going one way, you’re going the other. It’s like pulling a rubber band and [00:08:00] just snap it, yank moving forward.
That’s the fact of the matter is, and your team, everyone has to understand what your vision is. So it’s important to articulate that vision that I talked about last week. Too much funding, which I really make fun of a little bit here, because the reality is the vast majority of comp startups that fail is related to the fact that they haven’t had enough funding.
But I’ve been involved in a number of companies where they’ve gotten too much funding and that is. Destroyed the culture of the company. They lost that scrappy startup feel. I think even Clubhouse, we’re on Clubhouse now about a month ago, laid off half their staff, and yet they still were well funded.
And I was like, what are they doing? Like, why are they doing that? And they, they, they made a statement that they just had too much staff, it was too bureaucratic. They were not able to maneuver very quickly. And, uh, and I, I actually nicknamed the Silicon Valley disease, Michele number three. No, it’s a great name for it.
Yeah. It’s like all [00:09:00] the Silicon Valley carnage out there. And, and we talk a lot about that in the book up and coming book start scale, exit, repeat. Uh, we really get deep into the Silicon Valley culture and venture capital and, you know, whether or not it’s appropriate for your startup. So today we’re gonna talk about three more, the three we did not cover last week.
Uh, all right. So one number three is, okay, I’ll just, I’ll list them and then, and then, and then we’ll open up to conversations for each one. And you, you, you moderate this, right? Yes. So they keep their original staff too long. A lot of, you know, a lot of people start out and they have a startup. The company grows to, let’s say a million dollars and, and now the staff that got them from zero million can’t get them from one to 10 million.
You know, Jack Welch once said that the the best person to hi, hire people with runway. That’s it. Hire people with runway. And the fact of the matter is, um, when your startup needs to grow, you need to start hiring that outside talent and sometimes replace those around you. The other one is they failed to find the people to grow [00:10:00] and the entrepreneurs in the way.
So I don’t know how, I like the way you did it last week, Michele, where we sort of like dig deep into Yes. Each one of those issues. So let’s talk about, let’s start with that the first. Yeah. Yeah. They keep the staff free for too long. Yeah. They keep the staff original, original staff for too long. I mean, how can you not, I mean these are people who devoted their life year company.
They sacrificed salary that gave up on. Other options and things, and then now you become successful and you’re gonna replace them. Well, that’s one of those necessary steps in order to scale. And it sounds cruel, but it’s a fact. Edna, we love having you on stage. I know Michele’s moderating, so I’ll let you take it.
Michele or that one? Yep. Can you hear me? Yeah, I hear you now. Yeah. I’m just gonna challenge you a little bit. Okay. I have also seen Colin, and then, yes, let’s get right to our members on the state. A problem [00:11:00] where sometimes, you know, at a startup, they don’t appreciate the original staff, or that they may have been overkilled when they accepted the job and they don’t get the promotion, and then they bring in a bunch of new people in, oh my gosh, all hell.
Breaks through. So I would say, you know, it, it’s not always that the staff, original staff has kept too long, but sometimes we fail to recognize the talent right in front of us that is, uh, very promotable and very anxious and very willing to take on its additional responsibilities. What, what do you think about that, Colin?
Oh, sorry about the background noise. I didn’t realize off mute. Um, the, uh, yeah, the fact is, you know, I would say about 50% of your staff, that’s been my general experience, will make it from one zero to the next, will make it from a million to 10 or 10 to a hundred. Um, the fact [00:12:00] is a lot won’t, and it, you just have to recognize it.
You have to be careful that you first set the goal, the mountain that you’re gonna climb. Once you set that target. What’s it gonna take to deliver on that target? And who are the people you have to deliver on that target? So I call it thinking in zeros. So how, or scaling in tens, right? So if we are gonna go from a hundred thousand to a million, a million to 10 million, then we’re gonna want to think about how can we scale this company from a, from 100 to a million or a million to 10 million?
And we’re gonna hire people who’ve done it already before. That’s gonna make our job a lot easier. Now, I’m not saying to fire all your staff once you hit a hundred thousand, when you’re going to go to a million, what I’m suggesting is that there are some staff that will adjust and we’ll change and we’ll by the way, and we’ll accept others who come in the organization and actually [00:13:00] manage them.
You’re right, Michele. Every startup story has got a different angle or whatever. The fact is, uh, there are companies out there. They do a great job starting up and they blow it up because they do hire in these, the, the wrong type of people. I’m talking about hiring the right type of people to scale your company in zeros.
Let’s get a mind scale of sailing and scaling in zeros. Excellent. All right. I wanna go right to the members. Edna, it’s great to see you on the stage. Um, and I, I know you’ve scaled and grown a lot of businesses. We, we’d love to hear a story or, or your take on this one, Edna.
All right, Edna is on mute. So while we wait for Edna, let’s go to Paul. Paul, thank you so much for joining the stage. Love to hear your take or [00:14:00] story on this one. Thank you. See, I’m seeing Paul on the phone there. Yeah. Uh, funnel. Oh, okay. That’s what happened. Funnel funnel. Hello. Hey guys. I hope you’re doing good.
And I will tell you, I, I was just going through this, uh, piece of article about eight reasons why startups fail. I’ll also add one more reason and, uh, I will tell you my story. You know, I created a product first. So I had a target market in my mind, and that target niche was about, uh, 25,000 people. So when I researched it on LinkedIn, it was about 25,000 people.
So what I did, I used a cold approach. I sent an email to all of these 25,000 people. I hired a very nice copywriter, and he created amazing emails for me, and I [00:15:00] sent the email to these people, and you know what happened? Out of these 25,000 people, few signups and few people subscribed, I was happy I thought.
It’s working well, but you know what happened after that? I was not able to find my target market again because I lost all these 25,000 people. Out of these 25,000 people, only the 150 people subscribe it with me. So I lost about 90% of my target market, and that’s also one reason why businesses fail because we always use a cold approach.
We, we think that we are going to send an email to all the 25,000, 30,000 people in just 10 days, and we will get some signups. People are going to like our product. It doesn’t work like that, you know? Then we created funnel. The reason why I created funnel is because I knew what mistakes I made when I started my business.
The best way to approach a [00:16:00] target market is using a personalized approach. Let’s say if your target market is 25,000 people, Decision makers, we have to just take care. Um, let’s say I will approach 1000 people in this month, and what I will do is I will personalize the communication with them, develop and connect with all these people, develop that network of 1000 people.
I don’t need to approach all the 25,000 people at once. I just had to reach these thousand people in a very nice manner, develop a, connect with them, then pitch my services and outta these thousand people. Even if, uh, 50 people, a hundred people, 200 people show interest, that’s good. But do you know what’s the beauty of it?
I still have 90% of my target market out there. But if I use a cold approach, even if I get a hundred sales in one month, I will lose all that target market. I will not be able to create a good brand impression. So it’s really important to create a great brand impression. Start slowly target these people at start because [00:17:00] they are the people who, who are actually your target market, who actually need your service.
Mm-hmm. So we can easily generate that intent in these people. All right. In, yeah, I just, so that is keep us, uh, focused here a little bit. Yeah. So do you have any, um, questions or input about keeping the wrong people? And your business. Right, right. You know, it’s very company is made up of, uh, people. It’s not made up of assets.
Mm-hmm. So it’s really important to how right people, if we have right people on board, if we have people with experience working with us and people, let’s say, if there’s a person, we have to first of all see what his expertise are in which field, whether he is good in sales, whether he is good in marketing.
Then we have to make sure that that person fits in that role. Sometimes what happens, we may have a person who’s good in technology and we give him some other responsibility. I think it’s, [00:18:00] that’s also very important. That’s a great point about, um, you know, really understanding your employees so you don’t get caught in this conundrum, because I know that’s one thing we’re exploring here.
And, and if you can, you know, putting ’em somewhere else in the organization that I, I think that is a, a brilliant way to, um, face this. All right, let’s go back to Edna. Thank you, Michael. Thank you everyone. Goodbye. Bye-bye. Edna, if you’re there. All right. It looks like Edna is not there right now, and that’s okay.
We’ll come back to Edna, but Colin, I wanna get to this, um, next one. So what do you, yeah, so I think number two is they fail to find people to grow. Well, I think that’s exactly what. Funnel was talking about, [00:19:00] right? Is that you, it’s organizations are made up of people and that’s the key to all of it, is how do you get the right people?
And generally, if you get the people’s part right, the rest falls in place. You know, the book that I I, I, I wrote took 10 years to write and, uh, over hundreds of interviews, um, the book has four sections. Start, scale, exit, repeat. And within each section we talk about the four ingredients, the people, the money, the story, and the systems.
You have to have a good story, right? Coming outta the gate. You have to have a good story. So we talked a little bit about that. You have to have the funding. We talked a little bit about that earlier and we talked about how most companies do fail cause they don’t get the funding. And you have to have the right systems cuz you know, a lot of entrepreneurs, they got the energy, but we don’t really have the systems to scale.
Now if you apply all those. But you don’t have the people, [00:20:00] you’re dead in the water. It’s all about the people. So I’m very big on this concept of being able to replace people, but at the same time, you need people. And I spent a lot of time talking about how important that is to get the right people in the right situation.
Now let’s cut to the chase here. The fact of the matter is we’re startups and we don’t have the budgets that Fortune 500 companies have, or Fortune 5,000 for that matter. So we’ve gotta be innovative. We gotta come up with ways that we can hire people. And one of my companies that I’m working with right now, we hired a cto.
I won’t mention the company, probably should be careful how I talk about this, but the fact is we hired a CTO for $100,000 and he was being paid $250,000 at his prior job. How did we do it? And by the way, he’s phenomenal. Right. First of all, recognizing that somebody is really good is, is, is important. And, and, [00:21:00] and they know they’re good.
So don’t try to like say, oh, well you’re not that good, so we’re gonna give you a lower wage. No. Pay your people with love, freedom, and ownership. What do I mean by that? When I say love, I mean recognize the greatness that they, that are within them, help them, help them, uh, become better people. Um, further their career, their their com, they come first.
Second freedom. I know with now it’s the pandemic. A lot of big companies are doing this, but it doesn’t matter where they work. It’s about performance. You know, at Startup Club, we have people who work on this club in different states and in countries. Actually. We have someone in Philippines, we have somebody in India, we have somebody in Chicago, we have some, a couple of us in Fort Lauderdale.
Doesn’t matter where you work, when you work, you know, we want to provide freedom for them. And then the loss is ownership. So how do we get that individual to work for this scrappy startup, [00:22:00] the cto, we gave ’em 5% of the company right outta the gate. Bam. Here you go. 5% of the company and options, we gave ’em 5% of the company.
So payer people in ownership as well. We don’t have cash, but we have his stock and we have a belief in a concept that is gonna scale and become very successful. And we’re gonna want sell that vision, like we’d never sold it before because we want great people to work for our startup. And so payer people would love freedom and ownership.
What do you think, Michele? I, I, I love it. And of course we do still pay them. I, I would say, you know, fairly, but, ah, Mimi’s here. Mimi’s here and Kyle’s here. So we have two. Uh, but you know, it’s, it’s, it’s a struggling startup. Like it’s Wait, wait, wait, wait, wait. It’s not like we have a big budget though.
Let’s put it in, in context. We do give other benefits, you know, such as [00:23:00] flexibility and schedule and workplace. And then as, um, Colin saying, as the companies start to do better, we always compensate more. So I would say that, and I would also say, you know, studies show that if you just thank your employees and make a good working environment, that does go for a lot.
Obviously it’s not paying their bills, but it does count. But I wanna roll right over to Edna, but I do wanna, I do wanna clarify though, first, what, uh, it, it doesn’t have to necessarily be options. It could also be a bonus, right? So when we sell a million copies of start scale, exit, repeat, everybody will benefit from that in startup club.
All right? Absolutely. If we saw a hundred thousand copies, everyone’s gonna benefit. We have to, we, we, what we haven’t done really in Startup Club is really articulate those goals and bonuses for the team. And that’s important as well, cuz ambiguity is your enemy. You really wanna really, you really want to articulate and document very specific goals and opportunities for your people.
It [00:24:00] is funny in h in sight, having Kyle and Mimi on the stage here, how we haven’t really done this, um, at Startup Club, but Startup Club is new, so hold, you know, please bear with us and uh, stick with us. Right? All right, Michele. Absolutely. But I wanna go to Edna if she’s there yet. Edna, hi. There’s, hi, Michele.
You know, I, I love what you guys are saying and, and there’s something that, that, I mean, you guys were spot on, but there’s something else that people fail to look at when you join a leadership team, like the one that you and Colin have built. There’s a lot to be said when you join a team that has. iPod, multiple companies, the invaluable resources and knowledge that you gain just from being in close proximity to greatness, benefits you tremendously.
So sometimes it’s not about the pay, but it’s about [00:25:00] the opportunity to get a front row seat to see how things operate, function, and move. A good example is that is people that work for Google X Googlers leave Google and go on to do phenomenal things. So you know anybody that has an opportunity to work with y’all at Startup Club and build the things that y’all are building.
That’s also a Oh yeah, did bonus. Oh yeah. Oh yeah. What is that? Oh yeah, Lord. I think it was a bot or something. He was a bot. Yeah. I was about to say greatness. I removed them from the room. It’s the fun of a live show. It’s the fun clubhouse. Go ahead. Yeah, exactly. I was about to say greatness clusters just before.
That that lady came on stage or whatever that bot was came on stage. Yeah. But because you’re right about, like I just, every time I connect with you or you’re on stage and we connect and we talk about stuff, we learn from each other, we learn a lot. And I do believe it. Greatness clusters. So [00:26:00] absolutely.
Absolutely. If you get an opportunity to work at a startup and there’s a lot of great people, a lot of good things can come from that. And sometimes, you know, you taking a, taking a hit and pay or taking a cut and pay is not a bad thing because if you get an opportunity to work with a team like yours, I mean, it’d be worth it.
It’s invaluable. And I think that’s something that people don’t look at, right? You’ve got the salary, you know, you’re giving ’em some skin in the game and that’s very helpful. Um, but at the end of the day, to get the opportunity to work with. People that are brilliant in that industry and getting an opportunity to learn and you take that skillset and you can continue to grow and evolve as an individual.
I think that’s worth a lot as well. That has a lot of value. And I, and I keep coming back to when you do succeed, share that success, right? A very company we’ve had, um, we would give options in the company, whether it’s pod.com or.club, which we just sold to GoDaddy. The employees own big chunks of the company.
And I think that’s [00:27:00] important because this startup is not for the founder, it’s for the founder and the employees and the customers and everybody around that startup. It’s an ecosystem. You know, I know there are some founders out there, startups who are very greedy and they hold onto every penny they can or whatever and whatnot.
But reputation will catch up to you. If you wanna start scale, exit, repeat. You’re gonna need to have a great reputation in order to have that great reputation, you’re gonna want to share that wealth as you begin to start scale and exit, repeat your company. So I think that’s absolutely important, Edna, stay, stay.
Stay with us here, Edna, cuz our next topic on this eight reasons why startups fail to scale. Our next topic is The Entrepreneur is in the way, and this is in my opinion, number one reason. I know I said earlier that if you look at studies that the number one [00:28:00] reason why startups fail is because they couldn’t raise enough money.
Well, the fact of the matter is the entrepreneur is in the way. And if the entrepreneur wasn’t in the way, they could raise that money. Now, what am I talking about here? I’m talking about the personality of the entrepreneur. I’m talking about the dominant instinct of the entrepreneur who wants to control everything in the company and doesn’t want to let go.
I’m talking about the ego of the entrepreneur. I’m talking about the entrepreneur is the number one reason you are. Yes. 99% of you, okay, 1% of you, I’ll let you off the hook. But 99% of you in this audience, 99% of you who run startups, you are your biggest problem. You are in the way and it’s because of your ego and it’s because of your personality and it’s because of your, your control.
You trying to try to control too much. Now how do [00:29:00] I know this? Cuz I’m the same. I was the same way. It took a lot of coaching, it took a lot to go from being this dominant entrepreneur controlling everything to letting others run the company and to today having 10 companies and are allowing 10 different CEOs run those companies.
That took an enormous amount of strength to go through that process. And every one of you here in this audience, that’s your number one reason why you’re failing to scale. Edna, what do you think,
Colin? You couldn’t have said it better. Um, having been there, done that myself, I’ve struggled with control issues as well. And I’ll tell you what, and and you’re right, it does take coaching. It does take a li, it takes a village, right? And once you can wrap your head around the idea that, you know, at first when I started delegating and giving responsibility to other people, uh, and then holding them accountable for what they were doing, I knew in the back of my head that [00:30:00] if I gave them a task and they just got it, 50% of the way done, this is how I, this is how I approached it.
If they just got 50% of it done correctly, Then that’s 50% that I had free time to go do something else, and then I would just problem solve for the other 50%. And then if they were, if they were people that had enough talent, I’d continue to cultivate the talent so that eventually I could work my way out of whatever it was that I was doing.
And so it’s extremely important to surround yourself with people and understand that sometimes people are gonna make mistakes and that not everybody’s perfect, but, you know, I, I, I, I’ll give you an example of a situation I had. I had one, I had one person that made a, uh, a, I think it was like a $10,000 mistake, which, you know, it hurts a small business, right?
And at the end of the day, you know, she came back and said, Hey, I’m really sorry I made a mistake and thought I was gonna fire her. And I, and I said, no, the contrary. I just made an investment in you. I invested that money. You’ll never make that mistake again. You’ll learn from it and grow. And because [00:31:00] of that mistake, we implemented other processes and procedures.
So sometimes people are afraid to delegate and give up control because they’re afraid it’s gonna cost them money. But at the end of the day, it’s the best money you’ll ever spend cuz you’re gonna get stronger. So I totally agree with that, Colin. Oh, I just love that story. I, I, I love the fact that you can allow others to make a mistake.
It’s not easy, is it? You know, when you get into that environment, you’re seeing others do your job that you used to do better, but guess what? You can’t keep doing that job if you wanna scale. So even if they can’t perform at your level, it’s better that they are doing that job versus yourself because you gotta do seven other jobs.
But then obviously if we can find people who are better than us at a particular job, and that, by the way, it’s not that hard. I know [00:32:00] I’m not very good at much, so I’m pretty good at finding people who are better at me at doing things right. Then obviously it becomes a lot easier and the, you begin to scale and here’s the reward.
Imagine this, you go away, you’re, I don’t know, let’s do some, I was trying to think of, you know, you’re get in a coma for a year, so horrible. That sounds horrible, but let’s just say, let’s go with that. Okay? You get in a coma for a year, you wake up and guess what? You just made $10 million. How’d you do it?
Yes. You had great people around you. You put them in place, they deliver. Now we’re gonna look for profile. If we want, we can start talking about the profile, the types of people that we want to do this, that want to help us grow, but guess what? They’re not the A, they’re not the naysayers. They’re not the ones who you’re gonna sit there and just agree with you all the time.
They’re gonna be the ones. Who are gonna disagree with you? Case in point, Elliot Nas, he, I was one of the co-founders of two cows. I hired Elliot in 1998. [00:33:00] He drove me absolutely nuts. We fought and fought and fought over so many things. He was lawyer by trade, fought and fought. He ran the division for us to, to two cows division.
We fought and fought, and fought. Thankfully though he wasn’t a yaysayer, he was somebody who could challenge me. We did develop a better product, and you know what? I made a heck of a lot of money from that. We sold the company for tens of millions of dollars, and then after that, he stayed with the company.
He’s still with the company today. It’s now worth over a half billion dollars. He’s made me a lot of money. Did I enjoy working with somebody? No half it’s worth, it’s worth a half billion right now. Billion? Yes. Yeah, billion. Yeah. So sorry, say half million. Sorry. Half billion. The fact of the matter is the people you want to hire, the people who can help you scale your company, you might not nec.
They’re not [00:34:00] people who are gonna be surrounded by you, who are gonna listen to you all the time and agree with you. Michele, she is the opposite of that. She hammers me nonstop. She’s amazing, as you all know. She runs startup club. She’s very good at it, but she’s like, Colin, get this. Get to work here.
She’s pushing me. It’s not the other way around. By the way, it’s a lot easier to pull someone back than it is to push ’em. It takes a lot less energy. Did you ever try that? Pushing somebody forward, pushing somebody forward, pushing somebody forward. Go get more contracts. Go get more contracts. It’s a lot easier to pull people back than to push ’em forward.
I feel like I’ve been talking way too much mu time today. I love this topic. You can tell I’m passionate about it. Well, we, well, we’ve got Jose on the stage, and Jose, thank you for coming up and we want to hear your input, your story, or any questions you have. Tell us your thoughts on founders getting in the way, not getting out of the way.
What do [00:35:00] you think
are all right, you’re on mute, Jose, on the right hand corner if you would like to speak.
All right, let’s go. Edna, oh, here’s Jose. Here’s No, I’m here. I’m sorry. No, no, no. I’m, I’m sorry. You, you know what? I’m, I’m kind of new on Clubhouse. I didn’t, I didn’t, uh, join the clubhouse for, for a while. Now it’s, uh, different. I’m sorry about that. First of all, um, thank you so much for having this type of conversations.
I’m really enjoying, uh, the podcast. And also I’m enjoying tremendously this, these conversations from all of you and learning and listening carefully about this. Thank you for that. And, um, as, uh, uh, I, I, I agree a lot with calling on, on that. We, as a leaders or the [00:36:00] entre entrepreneurs, we are our worst enemies, right?
Uh, because. Your company will never outgrow your mindset as a leader or as a founder of the company. And I found that very challenging. I see a lot, I talk with a lot of entrepreneurs and I see that a lot. I mean, guys are founders that, uh, dream a lot about growing and, and, um, And, uh, having dreams of scaling the company and everything, but the actions says, uh, the complete opposite.
Uh, they think on scarcity and they don’t like to empower people to create systems, and they don’t give, uh, the necessary scope to others on the team. And, um, at, at, at the beginning, I have 15, 15, 16 years as an entrepreneur. And I remember as, uh, in the, in my very [00:37:00] beginnings, my customers used to, uh, call it me, the orchestra men, because I used to play all the roles, right?
Invoicing, shipping, receiving, coding, I mean, everything. And I was driving myself crazy. So when I, when I have enough income, I start adding members on my team. On the, on, on, uh, to cover my weaknesses, right? So I say, okay, I’m good on sales, but I, but I’m, I’m very bad on, on, on accounting or in shipping or in receiving.
So I was covering little by little, uh, those areas of weaknesses. And then you have to have a lot of respect for the time that those players are freeing for you and utilize that time to do what you do best for the company, which in my case was [00:38:00] selling and, and, and putting together a strategy or vision for the next step.
Because I, I see very often that founders, when they start having, uh, freeing a lot of, uh, I mean sometime because they add players, guess what? They utilize that. Time, uh, to play golf or to go shopping or have vacation or things like that. And, uh, so there’s no, um, um, enlightenment between what you are dreaming and your actions.
So I see that a lot. And, um, I just, I just wanna say that and, uh, thank you for the opportunity to, uh, to open the door for me on this conversation. Excellent. You know, there’s so many ways and so many functions that founders. Play throughout the life of a company. But [00:39:00] I like what you said, and you know, it really does have to change.
And we see that time and time again as a company becomes successful or even if it doesn’t become successful. I think of Steve Jobs as one of them. What amazing case study in this. He actually had to get out of the way and then he took a break and he came back and made that company even better. That that’s I think, an amazing story too, Colin, about a leader who realized they had to step back.
They went and did what they needed to do and then they came back and made that company iconic. Oh, okay. I don’t think that’s how it worked. He got kicked out. Well, he had to leave the company, but he came back. Well, he had to leave. Well, he came back. Yeah. I think that’s, That’s all. Okay. Steve Jobs has his own, had his own issues.
I I, he’s truly one of the best entrepreneurs I’ve known in my lifetime. Uh, and [00:40:00] you know, I call him, if you follow Good to Great Jim Colins, I call him the Ultimate Level four leader. Okay? So that’s actually an insult to Steve Jobs, given his success and what he’s done. Few have that ability. Uh, but the fact of the matter is, what we want to do is what Jim Colins talks about is create an environment where the company can do better after we leave versus when we’re there.
So we wanna hire great people around us. We want it to succeed at a better rate. We are not the company, the company is the company. We are simply the steward of that company for a period of time. And we want it to succeed. We want it to do well. Jose, I I really like a lot of what you’re talking about here.
You’re a serial entrepreneur. Uh, you are, uh, a, a bit of a celebrity in your own [00:41:00] right. We, we really appreciate you coming on, on stage here. Um, one of the things that I see with a lot of entrepreneurs, and this by the way, comes from the beginning to even the exit, is their ego gets in their way. Jose, and I was just curious if you wanna just talk about how do you check your ego at the door?
Wow, that’s, um, I know I’m putting you on the spot there, right? I’m really like, this is not prescripted, this is live stuff. We’re just chatting. Right. But isn’t it so true that so many entrepreneurs have such egos that they can’t get around their ego? I mean, yeah. You think of, I hate to use this example, but President Trump, I mean, here’s the guy that’s biggest ego I’ve ever seen in my life.
You know, if he could just get around his freaking ego, he could probably do a much better job and get elected. Point is, this guy’s got a problem. He’s an extreme narcissist. Now, I’m not saying all entrepreneurs are narcissists or, or I don’t wanna compare [00:42:00] them to Donald Trump. Let’s not do that. But the fact of the matter is, he’s an example of one of the worst cases in the histories of a person who cannot check their ego at the door.
Come on, we need to do this. And it’s important we do this. Why? Because we want to be humble around the people we work with. Jim Colins says it best. The level five leaders are those who, those level five leaders, when they studied them, they were humble people. They weren’t the charismatic Steve Jobs types, you know, Donald Trump types.
They were the humble people who motivated and inspired others who recognized reality. The challenges, but also had a, an optimism within them and they could share that vision. That’s what good to Great Jim Colins was all about. All right, Jose, can I give you some time to think about the answer? Yeah, I’m good.
I’m [00:43:00] good. Yeah. You know what? I think on my personal case, I believe it was a process of, uh, utilizing my ego as a tool and not as my enemy. And, um, and realizing and understanding that in order to have, uh, a better life for me as a founder and my team, and not to establish a miserable journey for everyone, I need to accept that I need to give up on control.
So I learned that lesson years, years ago by little, by little, giving power to. My organization, for example, uh, right now I work remotely like 90% of the time because I was, I was in, in Georgia in a meeting, uh, like 10 years ago. And [00:44:00] one, uh, very, very smart guy was trying to, uh, acquire my company and a big organization on my same, same market of packaging and logistics.
And, uh, after a due diligence and, and several things, uh, this gentleman told me, you know what, Jose? I love your company. I love it. I love your cult company culture and everything, but thi this is a big mistake that you are doing. Every team that we review smells to Jose choa. So our investors are afraid that the moment that we buy you out, A lot of things will fall apart because everything have the stamp and the, and the brand of Jose Ochoa.
So my advice to you, it’s from this moment on build a company and build a company that is unattached to you. The [00:45:00] more attached you are to the company, the less the value of your organization. Right? So I, I clearly see that. And, and from there I start, uh, little by little for years empowering others. So they run the show and I, and I very often, I told them, Hey guys, I, I need.
A business, not an employment here. Okay? So if, if that’s the case, I should be staying on the automotive industry as an engineer, as I was performing. Good salary, all the, I mean, insurance and everything, happy life, but no. Since I want a company, I want a business. That’s why I’m doing this. And, and I want you to be happy as well with me and be my partners.
So they run the show. They know, um, I mean they, they, they follow mistakes, but we all learn together. So I give them [00:46:00] the scope to take their own calls, their own decisions, and we learn together. So that’s the type of philosophy that I. I apply in my companies because, uh, I know it’s what give you freedom and give a happy life to your, to your team.
Of course, not everyone performs on on the same level when you give the scope, but you have to be, I mean, uh, purging or, or, or clearing the company, uh, from the, the persons that are not, uh, on that mindset of freedom, right? So I give them the freedom and they, and they take the responsibility so that, that’s why they give me the freedom to do other stuff.
Like, for example, on, on my book, that’s how I publish my book and my passion, right? Because they give me freedom. They gimme freedom to look for, I mean, bigger and better contracts with government or with Nike or Macy’s [00:47:00] and target those guys because they give me the freedom, right? And, and, and they don’t.
Pull me to be on the day-to-day operation that drains my, my, my talent of as a visionary to perform and to look for opportunities. So that’s kind of the game that I, that I like to play. And so far, see,
so I don’t know if it’s me or Jose, whoever lost it, it’s, uh, Jose. Oh yeah, yeah. We lost, we lost you, Jose there for, but, but I wanted to, uh, what’s the name of the book? I know we’re doing a show up and coming show around that book. What’s the name of it and, uh, what’s the message that people can learn from it?
Oh, well, the, the name of the book, it’s getting the ring. Which it, it’s kind of like, uh, [00:48:00] uh, looking, the par the parallel, uh, whole similar is boxing with, uh, business life, right? It takes a team, it takes a strategy, it takes a lot of risk. And, um, I, I, I love boxing because my father was a world champion of boxing in, uh, in Mexico in 1958.
So when I coach and mentor entrepreneurs, I, I always hear, uh, very often that the same thing, the same question. Like, oh, you know what I, I’m not sure about to go on, on business or to keep my job. And I always say, I’m very bold. I mean, I don’t sure code anything. I say, well, if you really wanna try, you gotta get in the ring.
And then try it. And I see myself as a sparring of those guys. And so that’s why we, how we come up with, with this, uh, real life guide for [00:49:00] Entrepreneurs of the real life. So the book is very friendly. It’s less than 40,000 words, and it’s very, uh, very friendly. And I, and I did it, uh, because of my passion to share my experience.
And one of the chapters is a million dollar. Uh, business degree because, uh, I suffer it in 2018, a setback when I lost overnight, a million dollar catch because of the bankruptcy of one of my customers. So I learn a ton of things. So I see that event as a master degree on business. So I’m trying to share that with other entrepreneurs.
I mean new entrepreneurs or entrepreneurs already. I mean, successful because I mean, we, we can always learn from others. So that’s my passion to share. And actually the person that push me to the limit to publish my book was Joe Foster, the founder of Rebook, which is your [00:50:00] friend, my friend, and he told me in Mexico City, Hey Jose.
If you, you, how many entrepreneurs are you currently helping by, by coaching maybe 10, maybe maybe 100. But if you publish your book and you share through your book, you can help daon of entrepreneurs, and I will love to see that. So that’s how I have to thank Joe Foster, uh, for that. Actually, he, he written the forward of the book for me.
I feel very honored that to a gentleman, a juggernaut on business that size, uh, blessing me with, uh, or endorsing me on my book on that. So yeah, so that’s, that’s the thing about the book. Yeah. We had a, a great interview at Joe Foster on this show. You can go to your, go to the, your favorite podcast channel and just search for Serial Entrepreneur Secrets Field or just type in Joe Foster Startup Club to probably get it that way.
Or, um, Joe Foster [00:51:00] Serial Entrepreneur Secrets Revealed. Uh, I, I remember the scene in Rocky two where Apollo Creed was just knocking him down, knocking him down, and the coach says, what are you doing? What are you doing? And he’s like, his face is bloody. And he is like, duh. He goes, I’m tiring him out. And sometimes as a startup, I think that we just keep getting beat up and beat up and beat up.
Whether it’s a hurricane, a war, interest rates, we’re just gonna tire them all out. We’re gonna survive. We have that tenacity to survive. I think that show, and I love your parallel around boxing and the idea of an entrepreneur and how you connect those two concepts, I think that’s gonna be a great show.
Thank you Jose for that. Thank you. Thank you so much. And the book is on Amazon. You can find it on Amazon, and it’s called Getting in the Ring. Is that what you said? Yeah. Getting the, getting the ring [00:52:00] by Jose, getting the ring oa and it’s in Spanish and an out audible as well. Is it in English? Thank you, or no?
Yes, in English. Yeah. All right. All right. I’m teasing you, Edna. She’s, he’s, oh, Jose’s from your part of town? He’s from Texas. I’m from in El Paso, Texas. He’s in, he’s in El Paso. So am I I’m over by, I mean, I live in the current area by, uh, oh my God, medicals center I live up on, I, I had a house on Crazy Cat Mountain.
I’m now at the bottom in Kern. But, um, I, I love, I love what he said, Colin. You know, egos for men and egos for women are totally different. Alpha men, alpha women, we’re just wired differently. There’s just, people say, what’s wrong with you, Edna? When are you gonna stop? I don’t know. I’ll let you know when to stop.
When is enough enough? I think when you have that burning desire within to constantly be evolving, growing, and, and, and sc and scaling and starting a business. I mean, I, as a serial entrepreneur, let me tell you something, it takes gut. It takes grit and more than anything [00:53:00] else, it takes heart. You have to be so committed to what you’re doing that nothing will stop you.
And if you cannot get, you’re, you’re absolutely right when you’re talking about the heart and and the people. If you cannot get the people and your team to buy into your mission and your vision, you won’t scale. You will not scale. You will not grow because you’ve got to get everyone around you to buy into your mission and your vision and have the same, they may not have the same heart that you do, but getting in the ring takes a lot of cuts, takes a lot of grit, and it takes a lot of heart, sometimes very skilled boxers.
And I love the parallel that you made, Jose, because a lot of times you can have a very skilled boxer and you watch him lose a fight, but you see that the skillset was there, but the heart wasn’t. And so the heart of a fighter, the heart of an entrepreneur, um, is so, so important. A lot of times it takes more heart than anything else [00:54:00] to keep you going and to push you forward.
And, and a lot of times when you wake up, maybe you’re having a bad day, but if you’ve got a good team around you, they’ll push you forward. And, and like you said, Colin, it’s hard. It’s, it’s easier to pull someone back than it is to push them forward. So, you know, I, I love everything that you guys are sharing, sharing here.
It’s so awesome and so on point. And that’s mutual too, right? And you, you two Texans, Jose and Edna. Great. We really appreciate you joining at the show. Yes. And I’m looking forward to that whole episode. And we could have some fun with the graphics, Mimi, with the boxer and the whole thing, Jose, and it’ll be a fun show to put on.
I don’t know what date that’s gonna come out. If you want to know when Jose’s gonna be coming on for that show, go to startup.club and snap.email list. Uh, on that email list, all we do is announce speakers and. We’re gonna try to give some other benefits. There’s gonna be some discounts to the book, uh, that’s coming out.
Start scale, exit, repeat. That will come out. There’s gonna be other free giveaways that we’re gonna start to do, but right now [00:55:00] it’s just about the speakers next week. Oh my gosh. I know you too, have to hear about this. Jose Edna. Michele, do you wanna tee that one up? Yes. Yes. I’m so excited that we are able to bring this amazing man and everything he represents, the team he represents to the stage.
Next week here, Friday at 2:00 PM Eastern. His name is Manny Holmay. He is from Nigeria. This man is one of the most inspiring people I think that I’ve ever met. Colin. He had a goal. Manny had a goal. His goal was to put 10 million pairs of shoes. On shoeless people, and it started in Africa and it’s become a global passion and endeavor.
Like nothing I’ve ever seen or known someone to accomplish so much, he even invented a special shoe for [00:56:00] this cause of, the name of the organization is Samaritan’s Feet. So Manny is going to come on and he’s gonna share his story. And by the way, he’s an amazing entrepreneur. Uh, like we were saying, I mean, you can imagine the amount of effort it takes to do what he’s done.
He literally has, him and his team have invented a shoe. They now the factory, they have distribution and all of that just to support his mission. And just to hear like, I never even thought like the negative impact it has on people when they don’t have shoes, they don’t go to school. Because they are not allowed in schools.
They die early because they get parasites and infestations and the list goes on and on. So Manny’s gonna come on and he is going to tell us his entrepreneur journey as a nonprofit and what drives him and what keeps him going [00:57:00] and what’s made him accomplish his bhag, which is a big carry audacious goal, which is to put 10 million people in shoes, which he is doing this year in 2023.
So it’s gonna be an amazing story and we sure hope you can, uh, attend that. Everyone here. Thank you Colin. And I’m gonna roll it back to you and Yeah, just think about that. It’s that time. It’s that time. Yo, it is that time. And, and it took him 19 years. He set a goal 19 years ago and he’s gonna cross over in October, 10 million pairs of shoes.
And the show is not just vote a k not-for-profit. It’s about how do entrepreneurs climb a mountain? How do we climb the mountain? How do we conquer the mountain? Sorry, I’m gonna get the title right here. Conquer the Mountain. He does it one step at a time and he’s gonna tell us exactly how we did it. 10 million pairs of shoes, phenomenal success story.
Phenomenal guy, best speaker I’ve ever seen in my life. We manage to book ’em next [00:58:00] Friday, absolutely free. Doesn’t cost you cent. Come and see History of being made, but it’s gonna happen next Friday. Thank you very much everyone. If you haven’t already done so, please follow Startup Club. If you’re on the podcast, you might not know this, but this is a live show on Clubhouse.
You can go to Clubhouse, sign up to Startup Club, or enjoy our show every Friday, two o’clock Eastern. Uh, you’ve been listening to Jose ocha, Jose ocha, Edna Bib, and we have Kyle and Mimi is on here as well. And Michele Van Tilburg, my co-host, and I’m calling c Campbell. Thank you for joining. Startup Startup Club Siri, entrepreneur Secrets revealed.
We’ll see you next week. Have an amazing week everyone. Thank you. Thank you. Be well.