Smallbizlady: What gave you the idea for this book?
Robert Jordan: I was waiting in the SeaTac airport in Seattle for a flight, reading a book of quotes I found in a bookstore (it’s a great airport). I had a thought – wouldn’t it be great to read a book of quotes from entrepreneurs who had hit home runs — and learn how they did it. The generic quote book I was reading was ok, but not specific for what would have really inspired me as an entrepreneur. So when I came home I approached some VC investor friends with the idea (not asking them for money, just wanted their opinion because they knew lots of entrepreneurs), and the added idea that I’d like to invite these champion company founders to an event where we would multi-author the book in 90 minutes. It didn’t work out quite that neatly in the end, but the event did occur, at the Four Seasons Hotel in Chicago, and 21 of the 45 founders were there.
SmallBizlady: How did you pick the company founders you spoke to and was there criteria you used for the companies you included?
Robert Jordan: I set criteria that a founder had to launch/grow/sell for $100mm or more or go public for $300mm or more. I did this with the help of an informal committee of these VC friends. I went to Goldman Sachs, William Blair and Dow Jones to ask them to help screen companies, and from their databases I then hired a bunch of Northwestern University undergrads to help me screen founders. After a year of that we had a list of folks to invite to the Four Seasons event. This was not a rigorous/academic approach – I broke my own rules. For example, Viresh Bhatia from Installshield sold for $78mm. And we decided to not include a number of founders who were, frankly, not inspiring. The emphasis was on technology and innovation; we did not consider real estate, hedge funds, that sort of thing. Nothing against those home run hitters — we just wanted to focus on very hard stuff not expected outside of Silicon Valley.
Smallbizlady: Many of the interviewees aren’t well-known and, you point out yourself, some are actually reclusive. Is there any insight in that about people who really score success?
Robert Jordan: I think so. There seems to be a pattern of quietly going about your work, be great at execution, don’t focus on self and ego. Mahendra Vora said of course you have to have ego to do these great things, but not to the point that you cannot see and act on your mistakes, or recognize other people for their own great work. Also: one of my biggest conclusions is that none of these founders did it alone. Success is never a solo act. Even for solitary founders, the only way they hit it big was by developing partners and/or incredibly capable management teams.
Smallbizlady: Why did you choose to focus on technology businesses?
Robert Jordan: Because there could be a perception in the world that the only valuable tech development has to or must occur in Silicon Valley. And that just is not true. And it becomes more interesting to learn from quiet, unsung heroes than the usual subjects. And because most aspiring entrepreneurs in the world are not in SV and never will be — it becomes another facet on inspiration. You can see other people in obscure places who didn’t give up, didn’t blame their surroundings (Mary Engelbreit’s line from her greeting cards — bloom where you are planted). The number one billionaire in the book, Dane Miller (Biomet, $12 billion company value when taken private in 2007) started Biomet in Warsaw, Indiana, and he’s still there, and he’s still unknown. On USA Today’s 25th anniversary they ranked the 25 best performing companies over the past 25 years. Dane is #7: 30,000% growth. Warren Buffet is #20: 19,600%. Dane almost doubled Berkshire Hathaway’s performance. Not on a whim…but over the course of 25 years.
My guess is that most people consider Google and Facebook the 2 most important tech companies in the world at the moment. The next 2 could be Twitter and Groupon, and Twitter’s CEO Dick Costolo is in the book, as is Groupon’s co-founder Eric Lefkofsky. (Costolo was not the founder of Twitter but even the quiet guys can score home runs.)
Smallbizlady: Is there one core value you feel is the strongest and most important factor in your personal achievements.
Robert Jordan: Integrity.
Smallbizlady: Do you believe there are some unique qualities that are inherent in all of those individuals who built a great fortune for themselves?
Robert Jordan: My biggest conclusion from this is that for massive success you have to take a leap. You have to take risk. This sounds obvious, but in reality, what most of us do is avoid failure. We think we’re taking risk when we do small things, and act incrementally. These folks did not get to multi-million and billion dollar valuations by failure avoidance. It just doesn’t work. They each have one or more points when there was a distinct decision to make a leap, and the results were not known upfront. Actually I think overall these founders struck out far more than most business people. They just did something very different from most people with those failures. A related quality: they are all very passionate about what they do.
Smallbizlady: What advice did you glean from your interviews about how to best go about funding a business?
Robert Jordan: To be more patient (Joe Mansueto’s advice).
– To stop thinking that anyone could become a success overnight, because that is completely a false notion, and in fact all self-made founders hit the wall one or more times.
– To not take money at any price, because once you are diluted down by selling equity too cheap, you can’t get it back (Michael Polsky).
– To think about more options for funding, to never rely on one source alone (Vince Pettinelli; and Jim Dolan talking about always doing one more thing; always have a “hot standby”).
Smallbizlady: Another key issue is hiring. What was some of the best advice you heard about that?
Robert Jordan: Joe Piscopo (Pansophic) said if he could have hired better he could have been 10x bigger, and that 75% of failures relate to poor hiring.
– Mahendra Vora (Intelliseek) said you first train your core team of 5 managers, and when you do that well, they train the next 25, and when they do that well they train the next 125, and that’s how success occurs.
– Raj Soin (MTC) said he trained his managers to not think first of their customers but to primarily think of the employees, because the employees would create success with the customers — not the managers.
– David Becker (First Internet Bank) said it was hard because sometimes early employees could not stay at fast growth companies — just no longer a fit. But when he developed a core team that was outstanding, he took them from one startup to the next. Becker’s line reminded me of Andrew Carnegie’s quote about taking away all his steel mills, it wouldn’t matter, just give him his team and he could reproduce the same success in any other industry.
Smallbizlady: What are the most common mistakes start-ups make, and how can we avoid them?
Robert Jordan: 1) Trying to avoid failing is a mistake. Instead: look at each failure and see if that could be the source of the real home run. Another big revelation: most home runs were because of Plan B, not the original plan! Bill Merchantz’s software company had a spectacular failure, software that crashed on a big client. They worked feverishly to restore functionality and invent disaster recovery software. In the end the client left. But the big win? The disaster recovery software was, not the original product.
2) Hiring the wrong people is a mistake. One piece of advice from Howard Tullman: founders should never do the hiring, because we entrepreneurs are in love with our products and can’t stop talking. Smart candidates sit there, nod, don’t say a word, entrepreneur falls in love with them, they get hired. Big mistake. Delegate hiring. Joe Piscopo said first order of business for a CEO: take up to date courses on hiring.
3) Not being willing to give up control is a mistake. This is NOT the same thing as giving up equity. Big success is never a solo act. Great founders develop partners and/or great management teams without fail.
4) Complacency is a mistake. Champions always do one more thing; have one more backup, one more Plan B. How many times have you heard about a company that, gee, they came so close! But they just missed because of the Internet bubble bursting, or the recession, or… The experience of these founders is not that they didn’t hit obstacles — they did. They just kept moving.
5) Designing the “perfect” product is a mistake. Especially in technology, things move too fast, and the attempt for perfection can mean completely missing the market. Only by being in the market can you improve, learn, and eventually make something great.
Smallbizlady: What practical advice do your founders offer for the average person to do well in life?
Robert Jordan: Be passionate about what you are doing! I realize that may sound idealistic, but I noticed throughout the interviews a near-total lack of cynicism. And my own experience with a lot of startups is that passion is the first determining characteristic of founders who get funded. Being passionate is contagious.
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Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business