{"id":"5f802b3b6cee07000646ad41","slug":"how-i-built-this-en","title":"How I Built This","audio_url":"https://hls.blinkist.io/bibs/5f802b3b6cee07000646ad41/5f802b3b6cee07000646ad43-T1602235334.m4a?Expires=1656846490&Signature=Wboky5r7KdvoAG9F2agPaaNRo4~dFdW1CMZYMPKVHmEwZ9G5-wqiXh5bLw7xtmfpxrUoxaQ-ga1X6T2oG~sBC58X7j7H~VhmIZvX5FhBRN6WyjG92F8b6IhL99jOvWrqdr~t5fmdDt5F6yztaYq-Ax1XFmEBd8trIfQKZRnz4~nYpC7xhCydil1Bc1UW99nWyA-eTuNOJjiC6sB~iFgqw511LB4cN~HAexCY~-MGCrXNRd8K43yDJmPRtB7A3qDnpotHLpqvpXyiB4uesWSwEYvqrDzsbBOwz~mnuZM3sdXTx~sQakl7yEe5OxO7SD9qiKEXR1pHFgoqkv2KKKg5QA__&Key-Pair-Id=APKAJXJM6BB7FFZXUB4A","chapters":[{"id":"5f802b3b6cee07000646ad43","title":"Some opportunities are simply too great to pass up. But look before you leap.","text":"

In the world of entrepreneurship, you often hear that success isn’t about the idea – it’s about the execution. That’s true. But it’s not the whole truth.

Without a good idea, you can have all the funding and work ethic in the world – but you won’t get anywhere. But where do good ideas come from? Can you look for one, or do you have to wait for the proverbial light bulb over your head to come on? The answer, according to restaurateur and chef José Andrés, is both: Ideas happen, he says, “when you are actively moving and searching.”

So what’s the trick to knowing whether an idea is good enough? If you think it’s worth upending your whole life to pursue, it’s probably a good one.

The key message here is: Some opportunities are simply too great to pass up. But look before you leap.

In 1984, life was going great for Jim Koch. He was a big-shot management consultant, on track to becoming the kind of rich that means your kids will never have to worry about money. But he was unhappy in his work, and he had a nagging feeling that there was a gap in the market for European-style craft beer – which happened to be his family’s longtime business.

Jim’s family was horrified at the thought of him leaving his job. But for Jim, the choice was clear. Leaving may have been scary – but the prospect of bitterness in his old age if he missed his chance was dangerous.

Luckily for Jim, regret isn’t an issue for him today. He founded the Boston Beer Company, which in 2019 pulled in $1.3 billion in revenue.

Those numbers are enough to make anyone want to take the leap of faith and follow a passion. Go ahead! But don’t jump without a parachute.

For Daymond John, founder of hip-hop apparel company FUBU, the parachute was a job waiting tables at a Red Lobster in Queens, New York. Despite the brand’s popularity, Daymond knew he was never far from insolvency. The job, however unglamorous, kept the wolves from the door – and ultimately made it possible for FUBU to move to the next level.

In 1995, six years after its founding, FUBU got a multimillion-dollar round of financing, after Daymond’s mother took out a classified ad in the New York Times. That ad cost $2000, the equivalent of a month’s pay at Red Lobster. But with the investment safely in the bank, Daymond could finally devote himself full-time to his dream.

"},{"id":"5f802b3b6cee07000646ad44","title":"Build your support network carefully, and don’t be afraid to lean on others.","text":"

Daymond John’s mother booking the ad in the New York Times that ultimately led to FUBU’s financing round is just one example of how critical your support network can be to your start-up’s success.

Humans just don’t do as well on their own. We’re social animals. We live in groups and we work in teams. Ideas go farther when we work on them collectively, involving everyone who loves us, from our family to our friends – and especially our cofounders.

Startups are way too hard to do on your own. It’s a lonely road, full of far more crushing lows than soaring highs. Even the giants of entrepreneurship – names like Zuckerberg, Musk, and Bezos – started their companies with partners. So should you. In fact, who you pick as your cofounder can determine whether or not your idea succeeds.

This is the key message: Build your support network carefully, and don’t be afraid to lean on others.

When picking a cofounder, you should look for someone who complements your skillset. When fashion marketing executive Jen Rubio had the idea for a new kind of luggage in 2015, she didn’t need a cofounder to market the first Away bag. But she wouldn’t have been able to get it manufactured at scale without supply-chain specialist Steph Korey. Together they raised $2.5 million for their startup – before their first line of suitcases even launched!

You probably won’t be surprised to learn that most startups don’t succeed that fast– if they succeed at all. For Eric Ryan and Adam Lowry, founders of Method cleaning products, the payoff came a bit later. It took a year from founding for their products to land on Target shelves. They lived together in the same room, stayed up till all hours working, maxed out all their credit cards, and subsisted largely on instant ramen noodles. They bickered, but they also laughed and trusted each other. It’s this type of relationship that serves as the foundation for a solid business.

You can’t start a successful business with just friendship, though. You need money, too. But before you go to professional investors, look first to your nearest and dearest. Swallow your pride and ask them for money. Answer all their questions about why your idea can’t lose. Do it again and again. By the time you get really good at selling your company, you’ll probably have some money to play with.

What makes this even better? It’s not your money – it’s money that belongs to people you don’t want to let down. You’ll work twice as hard to make their investment worthwhile.

"},{"id":"5f802b3b6cee07000646ad45","title":"As an entrepreneur, it’s your job to position your brand creatively.","text":"

So you scored a check for $1,500 from your Aunt Karen, and a bit more from your cofounder’s sister, an investment banker. Great work.

But that’s not enough. Not nearly. No offense, but you probably also don’t have all the smarts, experience, support, and mentors you need. There’s no need to throw in the towel, though. It just means you’ll have to get crafty.

Here’s the key message: As an entrepreneur, it’s your job to position your brand creatively.

You probably know that knocking on the front door of a crowded marketplace and asking politely for a seat at the table isn’t usually how it works. Just ask Manoj Bharghava, the founder of 5-hour Energy shots. Big Soda wasn’t about to let an upstart compete with them, especially with a product that actually did what it claimed. Instead of tiring himself out pounding the door down, Bharghava snuck around the side.

Bharghava’s heart sank every time he walked into convenience stores and saw the refrigerators stocked floor to ceiling with energy drinks. How could he compete? But he had a trick up his sleeve: instead of going toe-to-toe with the heavyweight sixteen-ouncers, he shrank his drink down to a two-ounce shot. The new petite size also meant that 5-hour Energy could be sold right off a store’s countertop, next to the disposable lighters and Slim Jims. It worked: six months after launch, Bharghava was selling 10,000 bottles per week.

You can get eyes on your brand in other ways, too. Pitching to tastemakers can build serious buzz. Steph Korey and Jen Rubio did this to great success with their Away suitcases. Before they even had a suitcase on the market, they hired a public relations firm to get their luggage in the pages of Vogue. They subsequently sold out their first production run.

But the best way to get attention is to get normal people talking. In the words of Facebook CEO Mark Zuckerberg, “nothing influences people more than a recommendation from a trusted friend.”

This kind of buzz – the kind that prompts people to pick up their phones and text, “You’ve gotta try this!” – is harder to come by. But not because no one knows how to get it. The way to do that is to build a great product – so good that people can’t help but recommend it.

But even with a great product, you’ll still have hurdles to overcome. We’ll learn more about that in the next blink.

"},{"id":"5f802b3c6cee07000646ad46","title":"Stay focused on the big picture as things get complicated.","text":"

Maybe you think entrepreneurship sounds OK so far. You start a company with your best friend, get some money from Aunt Karen, eat a bunch of ramen, and the next thing you know you’re Elon Musk.

That’s simply not how it works. Entrepreneurship is far harder than it is easy. It’s unnatural for most people. But there’s one point at which it’s harder than all the others: when investors aren’t calling you back and no one is buying your product. When the uncertainty just gets to be too much. This is what Y Combinator cofounder Paul Graham calls the trough of sorrow. Most entrepreneurs don’t make it through.

The trick is simple: just keep going. Zoom out from the minutiae of your startup’s problems, and look at the big picture. You have to keep hoping that one last push will get you through to the other side.

The key message here is: Stay focused on the big picture as things get complicated.

For many startup founders, the way out of the trough of sorrow is investment. In fact, many think of investment as an endgame – the point at which they can finally sit back and take a reasonable salary for the first time in years. But the money comes at a great cost: venture capitalists exist to take as much of your precious company as they can. It’s their sole job. And signing a term sheet is only the beginning of your relationship with a VC.

But just because you get VC money doesn’t mean you’re home free. And not getting attention from VCs doesn’t mean your business is bad or doomed. VCs know money, but they don’t know your business better than you do, and sometimes they don’t even know your industry. Your job is to build a great product and sell it to customers. If you do that well enough, the money will come.

Staying focused on your product doesn't mean putting on blinders. You also have to be open and realistic about the opportunities around you, like Stacy Madison and her then-boyfriend Mark Andrus. They were running a successful sandwich-cart business in Boston, passing out baked pita chips to people waiting in line. People went wild over the chips, so in 1998 the couple pivoted to focus on chips instead of sandwiches. By 2006, Stacy’s was doing $65 million in revenue, and was subsequently acquired by PepsiCo.

Giving up on your original idea takes humility. As we’ll see in the next blink, humility is also key when managing a crisis.

"},{"id":"5f802b3c6cee07000646ad47","title":"Resilience in the face of crisis means shelving your pride.","text":"

No one is immune to catastrophe, especially people in charge of companies that are doing well. Increasing success and sales numbers mean taking on more risk. No matter how careful you are, something unpleasant is bound to happen. And regardless of whether it’s a mistake you made or an act of God, as the company founder, you’re going to have to deal with the fallout.

In 1981, Tylenol accounted for nearly 20 percent of the profits of its parent company Johnson & Johnson. Both brands were thriving. But then, in 1982, someone in Chicago tampered with Tylenol bottles, ultimately poisoning seven people with cyanide.

It was an absolute disaster for Johnson & Johnson. Tylenol sales plummeted. But what happened next was a masterwork in crisis response, one that continues to be taught in business schools today.

This is the key message: Resilience in the face of crisis means shelving your pride.

Back in the early 1980s, no product aside from cars had ever been recalled in the United States. The FDA and FBI were both against the idea when Johnson & Johnson CEO James Burke floated it. But Burke humbly recognized his responsibility to the people who trusted Johnson & Johnson with their health. He knew that their trust was all that mattered. So he made the decision to recall every Tylenol capsule on every shelf in America – over 31 million bottles. What’s more, the product would relaunch with new tamper-proof packaging. The whole recall cost upwards of $100 million.

But Burke’s decisive, transparent action was priceless. Within two months, Johnson & Johnson’s stock price had returned to its pre-crisis high. By the end of 1983, Tylenol had recaptured nearly all of the pain-reliever market.

Good leadership can save a business when catastrophe strikes. But what happens if the leaders are in disarray?

Remember Method founders Eric Ryan and Adam Lowry from blink 2? The ones with the shared office, bickering over their daily ramen? If you thought that sounded a lot like a marriage, well, Eric himself said it first. After Eric and Adam launched a new product line in 2008 that failed to take off, the partners took it out on each other. Eric says they were at each other’s throats – for a few years! The partnership was in serious jeopardy.

But they were more committed to their broader purpose than they were to their petty feud. In the end, with patience and sensitivity, they made it through the rough patch, and sold Method in 2012 for an undisclosed sum.

"},{"id":"5f802b3c6cee07000646ad48","title":"Mission-first businesses find success more easily.","text":"

The scariest part of entrepreneurship isn’t what you think it might be. It’s not failure. Actually, it’s success.

This might sound counterintuitive. But think about it: If you’re constantly striving for something, at least you have that vision to work toward. Every day feels like a battle for survival, so you’re not thinking so much about the long game.

But once you achieve success, continuity and legacy become the central issues. If you want to build a company that stands the test of time, you’ll have to return to the impulse that got you started in the first place – whatever it was. Success in business isn’t purely about profit. It’s also about purpose.

The key message here is: Mission-first businesses find success more easily.

But just because you’re not raking in profit yet doesn’t mean you shouldn’t be thinking about your purpose. Mission-first companies fare better both in lean times and once they’ve succeeded. That’s because their founders and employees are motivated by something other than money, and are hence less likely to jump ship when the waters get rough.

Jenn Hyman had plenty of reasons to quit her start-up, Rent the Runway, the online designer-rental service. For one thing, the sexism and chauvinism she endured when pitching her business to male venture capitalists were exhausting and demoralizing. At one point, a partner at a prestigious VC firm took her hand and said “This is so adorable. You’re going to get to wear such pretty dresses. This must be so fun for you.”

Anyone would be perfectly justified in being infuriated. But Jenn Hyman didn’t let herself get distracted by anger. She wasn’t meeting with these VCs to get rich. She was doing it because she believed in her company’s purpose, which was to make women feel great. Hyman’s mission was her armor against all the sexism, negativity, disappointment, and uncertainty. In the end, Hyman’s mission helped Rent the Runway hit a $1 billion valuation in 2019.

Staying true to your mission, and your values, makes decision-making a lot simpler, too. Knowing what you stand for helps you remember the business you’re in – and why you’re in it – once the choices and opportunities start swirling. As many successful entrepreneurs have learned, there’s power in being authentically yourself. The faster you isolate your mission, the faster you’ll find success.

"}]}

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