Entrepreneurs are Everywhere Show No. 8: Phil Randazzo and Derek Andersen

Successful entrepreneurs show up a lot and make their own luck. And they are resilient – they’re able to bounce back after failure.  Both of these traits made all the difference for the two latest guests on Entrepreneurs are Everywhere, my radio show on Sirius XM Channel 111.

Phil Randazzo

Phil Randazzo

Joining me in the Stanford University studio were

  • Phil Randazzo, is the founder of American Dream U, a national entrepreneurship and coaching program that helps transitioning soldiers find work or start their own business
  • Derek Andersen, is the founder of Startup Grind, a 200,000-person entrepreneurial community with chapters in 75 countries run by more than 1,000 volunteers
Derek Andersen

Derek Andersen

Listen to the full interviews by downloading them from SoundCloud here and here (And download any of the past shows here.)

Clips from their interviews are below, but first a word about the show:

Entrepreneurs are Everywhere airs Thursdays at 1 pm Pacific, 4 pm Eastern on Sirius XM Channel 111. It follows the entrepreneurial journeys of founders sharing their experiences of what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries to entrepreneurial education and more.

The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs, lows and pivots that pushed them forward.

Phil Randazzo is a serial entrepreneur and the founder of American Dream U, a nonprofit that helps soldiers transition to civilian life. Phil also owns Nevada Benefits Corp; and is the co-founder of Drive Safe Mode, an app that prevents teens from texting while driving. In addition, he started Capital MD, Inc., a medical billing and financial company; and owns interest in 44 Subway Sandwich shops and in Source Intelligence compliance firm.

In short, Phil has a lot of ideas and is eager to make them work.

I get bored really easy. … (so) I just start new things. (The) first thing was I wanted to be a land developer because I wanted to be my own builder. What did I know about land development? (But) someone told me it’s better to own than to rent. … (So) I bought some land. I had a meeting with a guy who lived (next to) the land and I said, “Hey. I can’t buy this whole piece. You want to go in with me?” He went in with me. … I’m still in that building today. 

… I bought several buildings. People think I’m smart because I sold a lot of (buildings) in Las Vegas (at the peak) in ’04 and ’05, before the big crash. I just was lucky. 

Steve: … entrepreneurs make their own luck. … I’ll contend that showing up a lot, trying a lot of things (makes a big difference). If you’re just sitting at home saying, “Woe is me,” that’s pretty different than, “Hey, I tried X, I tried Y, and I tried whoa!” That’s not luck. … 80% of entrepreneurship, I’ll contend, is (showing up so you can be) in the game.

Phil: For sure. There’s that movie, The Secret, where you wish and hope things happen to you. (The reality is that) if you don’t act and there’s no movement, nothing happens.

If you can’t hear the clip, click here

Before founding Startup Grind, Derek Andersen spent four years in product management at Electronic Arts working on games like The Godfather, Burnout, The Sims 3, and Mirror’s Edge. He left EA in 2009 to start Vaporware Labs, a product incubator that mostly failed, but also created products including Commonred, which was acquired by Income.com in 2012. His first startup, built soon after the birth of his son, was advertising on trucks. Here’s what happened:

… It was a bad idea, because … in spite of all my efforts I couldn’t beg anyone to buy it. I worked for months on it and eventually realized I was just spinning my tires. … It was the wrong product and people didn’t want it. …

… I felt awful because I just quit my job. Not only that, but when I told Electronic Arts I was going to quit, this is in the summer of ’09… the middle of … the Great Recession. My boss called me and said, “Look, if you’ll stay we’ll give you a double promotion and a 25 percent raise.” … 

…. Here I am. I’ve just quit and I’ve turned down this huge thing and … my brilliant idea is nothing. … It was heartbreaking. …

Steve: So why didn’t you go back to EA?

Derek: Like every great entrepreneur I would’ve been too embarrassed to go back.  

Steve: So that’s a big idea … a little hubris. You said no, I’m right, just wrong idea. I’d do it again.

Derek: Yeah. …

… (And when a friend with a new startup called asking me to do some marketing for him) I said, I’m totally focused on on this truck idea. I can’t deviate from that. He said, “Well, why don’t you (work for me for) 20 hours a week?”

I said, “How much would you pay me?” He said, “Well, how about 80 bucks an hour? 

It’s one of those moments where you remember exactly where you were. … I looked at the phone and my jaw dropped. I put it back to my ear and said, “I couldn’t do it for anything less than 85. … So for those 20 hours a week, I could pay all of our bills, and that felt really good. 

If you can’t hear the clip, click here.

Here’s why working at big companies wasn’t for Derek:

I was working really hard. I was the first person in. I was the last person out every day. I was rated in the top 2 percent of the entire organization. One day I was having lunch with my boss and I’d worked really hard on the weekend, and he said, “Hey. You need to do XYZ more.”

I said, “Look. I’m not getting paid like an investment banker. I’m working as hard as I can. I’m already working harder than everyone.”

…A few hours later, he pulled me into his office and he said, “Hey. I’ve rallied for you. I’ve really worked hard and I’ve gotten you a … $4,000 raise.”

The biggest thing that bothered me about it was, not that it was only $4,000, which was laughable, but I said to myself, if it takes me complaining or, if people don’t notice my work, then it’s just not worth it to me.

I didn’t want to be a cog in the system. Then I realized, if I worked 110 percent, I was in the top 2 percent. Then I had this great epiphany. … I realized if I worked about 70 percent, I would still be rated in the top 90 percent. I started going to Starbucks in the morning and working for an hour and half. Then I’d come in, I’d be like the third person in. Then at night, I would go home earlier and I would just work on my own projects.

If you can’t hear the clip, click here.

Like many founders, Phil was not academically inclined:

My senior year, I finished with a whopping 1.8 GPA … I was ineligible to play sports. I was not a great student to say the least. I didn’t even like attending class. …

…The good thing was, back in the day when I went to school, they didn’t have online reporting. I used to run home and take all the notices out of the mailbox before my parents would see them whether it was poor grades or I think I set the record for the most absentees.

My dad was an immigrant from Italy. He was born in Sicily. … He was a smart kid as well. … (and went) to University of Chicago as a junior in high school. He skipped through. School is really important to him so I think I was a little bit of disappointment. …

If you can’t hear the clip, click here.

But Phil has an incredible work ethic:

(My) wife of 24 years … got pregnant, while I was still in college. …I had to grow up pretty quick, and figure out how to support a family. … I worked my way through it. I did odd jobs.

I ended up getting a job as 100 percent commission salesperson selling insurance. It built both (character and desperation).

Then I had two other …. jobs, and my wife worked two jobs. … I delivered newspapers at night … for the Las Vegas Review Journal. Then I helped write parole and probation reports for first-time offenders. …My wife had a daycare in our apartment, and worked at SafeKey in the school district. …

(The work ethic) definitely (came) from my father … he really instilled in me, (that) hard work solves a lot of problems.

If you can’t hear the clip, click here.

And a resilient spirit

… if you look at my background and look at my education, I would not be .. one that (you might guess) would be (an entrepreneur) …. I did not drop out of Stanford to start (a company). … Anyone can be an entrepreneur…

… I think we are either winning or learning, and I have a lot of failures. I considered those learning experiences, some of them are really expensive learning experiences.

… You are going to hear a lot of chatter from friends and naysayers. …

Probably the biggest thing was, “Ah, Phil, you can’t possibly do that.” Right?

I was voted second class clown in high school. And I was actually funnier… than first guy. My whole life it was like, the joke of my house, was my dad would say I was going to be the head dishwasher and my sister was going to be the assistant head dishwasher. …

Resilience, is not listening to all the noise going around – that’s big.  

If you can’t hear the clip, click here.

World-class entrepreneurs are comfortable in chaos, and Derek is no exception. Here’s how he learned to embrace new experiences:

When I was young my family moved to Europe. My dad was working over there, and we spent six years moving across Europe and then back across the United States. I was, at one point, in 10 schools in 10 years. …

(The travel) affected us a lot. … it either makes you stronger or it kind of turns you into a mess. I don’t know which one I ended up being, but it brought our family very close together. At times the only friends we had were our brothers and sisters. …

It was interesting because every year was … in some ways … a new startup because I knew every year I would be saying goodbye to everyone, and so I would start fresh somewhere new. Each summer as I started the new year I would say, “OK, this didn’t work last year. This didn’t work. I’m going to try this. I’m going try this.” You try to make friends as quickly as you could, or you cry yourself to sleep.

If you can’t hear the clip, click here.

Startup Grind evolved from an effort to help fellow entrepreneurs, but didn’t take off immediately. Here’s how Derek made it work:

We tried … all these different platforms. Every month … kind of like school, it became a new cycle. … We tried apps, we tried different technologies, we tried different formats, and nothing really worked. I had this event where we had four people come, and I got in the car and I remember saying to myself, “What a freaking waste of time.”

… This is four years ago. (It) was a one night a month thing… a side project just for fun, and I’m building the game and then I was building Commonred, these were the things that I was really focused on building.

(But then) I decided that even if it was a side project, I was either going to do a job I was really proud with, or I was going to shut it down and stop wasting my time. …

Six weeks later, we got a speaker who had sold his company to Oracle. We brought him in, he was a friend of Spencer’s, the guy who started with me, and we had 40 people show up. No one was more shocked than me. I didn’t know hardly any of them. They weren’t my friends who I had been begging to come. We … had our epiphany of “Wow, we need speakers. We need people who have their own brand who can share. We need to raise the education bar of these events.” The next month we had a bigger speaker who’s a friend, and we had 55 people. …

Then the next week, or the next month, we had 80, and the next month we had 100, and then the next month after that, which was our 1-year anniversary, I invited Jason Calcanis to speak, who’s a fairly well-known investor and entrepreneur in technology, and he said, “Look, I don’t have time to prepare a talk. … But if you want to interview me, I’ll just show up for an hour and then I’m going to leave.”

And I said, “Great, no problem. I can interview you. That’s easy.” So I prepared an interview, we filmed it, it’s still online, our very first interview. (People can see it on) …Youtube.com/startupgrind

People really liked it, and it was so easy for the speakers, so the value proposition kind of aligned that night, where the speaker could come in and they just had to share their knowledge. They didn’t have to prepare anything, and they could leave. They get a really great hour of mentorship. The audience had this really great value proposition because they got to really get close to the speaker (and network with themselves), and then it was great for me as the organizer, because I got to get to know this guy.

If you can’t hear the clip, click here.

Listen to my full interviews with Phil and Derek by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Jered Lawson, co-founder of Pie Ranch, and Chase Adam, founder of Watsi.

Tune in today at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Pixar, Artists, Founders and Corporate Innovation

I’m still surprised when I find unexpected connections with innovation in different industries.

—–

In a recent workshop with a large company focused on the Innovation@50x process, I mentioned that founders and intraprenuers operate more like artists than accountants – on day one they see something no one else does. One of the innovators in the room said, “It sounds like you’re describing exactly what Ed Catmull the CEO of Pixar wrote in Creativity, Inc.”creativity inc

Say what?  I kicked myself knowing that I should have thought of Pixar.

While I’m sure Ed Catmull doesn’t remember, when Pixar was a startup selling the Image Computer, their VP of Sales and Marketing brought me in to put together their marketing strategy. John Lassiter was just beginning to make commercials, Alvy Ray Smith was building Iceman and Loren Carpenter and Rob Cook were writing Renderman.

I should have realized there was a ton I could learn about corporate creativity by looking at Pixar.

So I bought the book.

——-

I always thought that when I used the “founders as artists” analogy, the “artists” I was describing were painters, writers, sculptors and composers. I wondered what lessons Pixar, an animation studio, could have for founders. What were the parallels? Startup founders operate in chaos and uncertainty. Founders get out of the building to talk to customers. We create minimal viable products to test hypotheses/our vision, and we build a culture that supports innovation. It never occurred to me that the directors of 3D animated movies at Pixar could be the same “founders as artists.”

It turns out that they are. And in fact, the creative process at Pixar has a ton of lessons for both startup founders and corporate innovators.

Directors = Startup Founder
Pixar is a filmmaker-driven studio. That means the entire company is driven by directors – the artists – not by corporate executives in management with MBA’s or financial models or a development department.

A director at Pixar is the equivalent of a startup founder. At Pixar a director’s vision for a film is much like a founder’s vision for a startup. The director starts with a vision of a great story he wants to turn into an animated movie. On day one, all a director has is his vision – she doesn’t yet know the exact path to get to the final movie. (Like a startup founder.) Pixar directors use their ability to tell a compelling story to convince management that their initial idea is powerful enough to be a great movie. (Like a startup.) They get approval, build and rally a team, get their team out of the building and do research and iterate and at times pivot the story/film as they refine the vision of the movie. (Like a startup.) Once their idea is approved, the company organizes its technical and production resources (hundreds of people on each movie) behind those directors to turn their vision into a great movie that lots of people will go see. (Like a startup.)

It Starts With a Vision
While the parallels between a director and a startup founder are striking, what’s even more surprising is the match between the creative process Pixar uses to make its movies and our implementation of Lean for startups in the Lean LaunchPad and I-Corps incubators.

When Pixar begins a new movie the movie doesn’t exist yet. It’s only an idea in the head of the director (or in the case of a startup, the founder.) How the director crafts reality out of this vision is exactly like how a founder creates a startup – it’s a combination of vision, reality distortion field, tenacity and persuasion.

pixarDirectors, like founders, develop mental models for how they search for an unseen destination – they “get in the zone.” Some directors view it as finding a way out of a maze, or looking for a light at the end of a tunnel or uncovering a buried mountain.

Greenlight = VC Funding
At Pixar, if you’re a director with a passion for a project you pitch a very simple minimum viable product – in this case storyboards which are just rough illustrations that help to tell the story page by page. If you can convince John Lasseter, Pixar’s chief creative officer, the film will be greenlit – it gets funding. The process is akin to pitching a VC firm.

Braintrust = Continual Feedback
One of the systems that Pixar has put in place to keep the development of a movie on track is regular doses of open and honest feedback from other experienced directors in regularly scheduled meetings called the “Braintrust.” A director shares his latest progress in the the form of storyboards, demo reels, etc. (what we in startup world would call the minimum viable product) and the critiques from other directors take the the form of comments like, “Have you considered x or thought about y?” Directors are free to come up with their own solutions. But if feedback from the Braintrust is given and nothing changes… that’s a problem. And if the director loses the confidence of his crew, Pixar management steps in.

In the Lean LaunchPad/I-Corps our equivalent to the Braintrust are weekly meetings where teams present what they learned from talking to customers and show their latest minimum viable products, and instructors provide continuous feedback.

I found other parallels between Pixar’s method for managing innovation and what we built in the Lean LaunchPad/I-Corps incubators. (Oren Jacob, Pixar’s ex CTO has been teaching with us at Berkeley and Stanford and has been trying to point out this connection for years!)

Innovation Management – Animation and Startups
Dailies are the way animators (and movie makers) show and measure progress. Everyone can comment but the director decides what changes, if any, to make. Dailies are Pixar equivalents of showing your incremental MVP’s- minimum viable products. In the Lean LaunchPad/I-Corps, we make our teams show us MVP’s weekly to measure progress.

Research trips – Pixar wanted to avoid the trap of cutting up and reassembling what was done in previous movies so they instituted research trips – “getting out of the building” to get authenticity and keep clichés at bay. Pixar animators flew to Hawaii and went scuba diving for Finding Nemo, to Scotland while they were making Brave and drove Route 66 when making Cars. Pixar movies feel authentic because they’re modeled after the real world.

Lean Startups are built around the same notion as Pixar research trips. With startups, there are no facts inside your building so founders have to get the heck outside. Entrepreneurs work hard at becoming the customer, so they can understand customers needs and wants and experience the customer’s the day-in-the-life.

Pivots – Directors can pivot as long as their team can believe the reasons for changing course. When you lose your team’s trust, the team will bail. Same is true for startup founders. And if pivots don’t work or the Pixar Braintrust feels that after lots of feedback, the movie still is heading in the wrong direction, they replace the director – identical when a founder loses the the board’s confidence and gets replaced.

The power of limits – Although Pixar movies are incredibly detailed, one of their strengths is knowing when to stop.  In a startup knowing that every feature isn’t necessary and knowing what not to ship, is the art of a founder.

Postmortems – After a film is completed, Pixar holds a postmortem, a meeting to summarize what worked, what didn’t and what they could do better next time.  In the Lean LaunchPad/I-Corps classes, the teaching team does post mortems weekly and then a final wrap-up after class. More importantly, our teams’ final presentation are not a Demo Day, but a Lesson Learned presentation summarizing what they hypothesized, what they did and what they learned. 

Artists and Founders

Pixar            Startups
Visionary Director Founder
Discovery Research Trips Customer Development
Outside Feedback Braintrust feedback Weekly team feedback in
Lean LaunchPad/I-Corps
Progress Dailies Minimum Viable Products
Continuous Learning Post mortems Lessons Learned Day &
Instructor Post Mortems

Continuous corporate innovation @ Pixar
While the parallels between individual Pixar movies and startups is striking, Pixar’s CEO Ed Catmull has built is a company that has continued to innovate, making hit after hit.  While part of Pixar’s success has been built on a series of world class directors (John Lasseter, Pete Docter, Brad Bird, Andrew Stanton, Lee Unkrich), what makes Pixar unique is that in a “hits-based business” they’ve figured out how to turn directors’ visions into blockbuster movies repeatedly. Pixar has built a process of continuous corporate innovation.

Innovation Killers – Pixar Lessons for Corporate Innovation
Ed Catmull points than one of the impediments to innovation in a large company is the “fear of failure”. In a fear-based culture people avoid risk. They repeat things that are safe and have worked in the past. His solution at Pixar was to get directors to talk about mistakes and their part in them.  Surfacing failure publically by the most respected innovators makes it safe for others to do the same. (Getting middle management to tolerate and not feel threatened by problems and surprises is one of the biggest jobs of Pixar’s CEO and senior leadership.)

The second innovation insight at Pixar is the power of iterative trial and error – the notion of being wrong fast. (One of the key tenets of the Lean Startup.) Catmull observed that even the smartest person can’t consider all possible outcomes. Managers who over-plan just take longer to be wrong. Managers see change as a threat to their existing business model – and it is. Self-interest motivates opposition to change but lack of self awareness fuels it even more.

Finally, Catmull’s observation that “originality is fragile” speaks to the startup process as well as to making movies. At Pixar in it’s first moments, originality is often far from pretty. Early mockups of Pixar films are called “ugly babies.”  However, while it may be ugly, it’s the opposite of the established and entrenched. (We remind large companies that version 1.0 of disruption – these ugly babies – coming their way always looks like a toy.)

——

Lessons Learned

  • Founders are closer to artists than any other profession
  • Founders and Pixar directors have uncanny parallels
  • Pixar, more than Apple, Google, Amazon or any other large company, holds the record for continuous innovation
  • Pixar and the Lean LaunchPad/I-Corps share common ways to support repeatable innovation and market success

 

Entrepreneurs are Everywhere Show No. 7: Betsy Corcoran and Miriam Altman

Startup success starts with passion for a job you want to spend your life doing. And great founders never stop to wonder if they’re qualified to do a startup.

Passion and fearlessness — two key ingredients the latest guests on Entrepreneurs are Everywhere, my radio show on Sirius XM Channel 111, leveraged to build their companies.

Betsy Corcoran

Betsy Corcoran

Joining me in the Stanford University studio were:

  • Betsy Corcoran, co-founder and CEO of the education technology news site EdSurge
  • Miriam Altman, co-founder and chief business officer of Kinvolved, which is working to improve high school graduation rates by increasing student attendance
Miriam Altman

Miriam Altman

Listen to the full interviews by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Clips from their interviews are below, but first a word about the show:

Entrepreneurs are Everywhere airs Thursdays at 1 pm Pacific, 4 pm Eastern on Sirius XM Channel 111. It follows the entrepreneurial journeys of founders sharing their experiences of what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries to entrepreneurial education and more.

The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs, lows and pivots that pushed them forward.

Betsy Corcoran was a science and technology journalist for many years, working at Scientific American, The Washington Post and Forbes. While at The Washington Post, she broke stories on the Microsoft antitrust case from Washington before establishing the paper’s Silicon Valley office. She left journalism in 2009 seeking a way to bridge the education and technology spaces, and went on to co-found EdSurge.

She told me that she received the best career advice of her life as she looked for her first job out of college:

As I was graduating, I was coming out of Georgetown with a degree in economics and math and all this weird stuff in the background. I did a number of different interviews for jobs … with people who came to school and that included banks. I would have these interviews and the bank would say to me, “So why do you want to work for Irving Trust?” 

… I’m a terrible liar, so I would say things like, “Well … I have an economics degree, we have a lot in common, right?” These were by far the worst interviews of my life and it was so bad … that some guy leaned across the desk and said, “I’ve got an idea for you. Why don’t you apply for a job you’d like to have? … It was the single best piece of career advice I’ve ever received.”

If you can’t hear the clip, click here.

Miriam Altman got her career start through Teach for America teaching in the New York City public schools. There she saw inequities in the education system that inspired her to act.

Her first idea for a startup was not Kinvolved, but was also education-based. She never paused to consider whether she was qualified to do it.

My idea, and what I wrote about in my application to go to grad school, was to start a school. That was my plan. … charter or public, either one, but I really wanted to stay in education, so the experience of the classroom had gotten me hooked. And I wanted to do something entrepreneurial. … 

Steve: What make you think you were qualified to do this?

Miriam: … I don’t know if I ever thought about qualification. … I don’t really know if I ever really thought about that in particular.

Steve: I want you to know that’s one of the key characteristics of a great entrepreneur. My wife used to explain to me that I was too dumb to know I wasn’t qualified for whatever job I was attempting to do. And I’ve heard that implicitly or explicitly from a number of entrepreneurs, but I think you just nailed it. Right, it’s like well, if I would have thought about what’s required, I never would have started that company, right?

If you can’t hear the clip, click here.

Both women cultivated a love for entrepreneurship from an early age.

Betsy enjoyed participating in Junior Achievement, a hands-on program that introduces high school students to entrepreneurship:

… I was in Junior Achievement like so many kids, and I went out and I hit the streets, I sold plant hangers. …

Junior Achievement is a program for high school kids to start companies. … It’s been around forever and what you do is come together, create a product. In those days, we made things out of wood, so we made wooden plant hangers and we made these really really awful wall hanging things that you could use as a cork board and chalkboard. They were terrible looking. And then you’d go out and sell the thing. And you created a full company and you ran it, and competed in sales competitions. … 

The astounding thing is that I sold more plant hangers than anyone in their right mind should have sold. … I was the best salesperson in the Northeast corridor one year. … Those plant hangers were moving like crazy. … 

… I did Junior Achievement for a couple of years and I did wind up as CEO of my little Junior Achievement company and I loved running the company. I think what I took away from that experience (was that) I loved coming up with an idea, I loved making something, and then I loved getting it in the hands of people who got excited about it. 

If you can’t hear the clip, click here.

That passion for starting things grew during her work as a journalist, particularly when she was at IEEE Spectrum, where she created a new section:

What I found most fascinating and what maybe kind of does go back to the early days of Junior Achievement was the chance to create something. I was creating it within a framework, within the context of the magazine, that I was creating my own section, I was creating kind of new types of ways of talking about things. (It felt) great. I loved it …(although it was) very scary.

If you can’t hear the clip, click here.

Miriam was similarly introduced to entrepreneurship at a young age:

My father, Frank Altman, is the founder and CEO of an organization called Community Reinvestment Fund. They … work to … help get capital to communities that typically can’t receive traditional capital to grow small businesses and fund  charter schools …  

When a lot of other kids during breaks from school were playing or doing other fun activities, I was going to work with my dad, which maybe didn’t seem that fun at the time but I actually thought it was a pretty cool experience. …

Lots and lots of filing and lots of uploading business cards. At the time it wasn’t really that simple to digitize. …

It definitely built character. It was fun to see how an office operated and really from an early age learn about he mission and be surrounded by professionals who were really focused on social impact work. 

If you can’t hear the clip, click here.

Betsy shared why she created EdSurge:

I quit a very well paying, very prestigious job in the middle of what will hopefully be the biggest economic downturn we will experience in our lifetimes. 2009. And I took a deep breath and said the only way I’m going to figure this out is if I really set aside time to do it. 

And so I quit and then I devoted the next year to really understanding what was going on in education, what was happening in the schools. I worked as an IT person in the local public school, and plugged in computers and did professional development for teachers and learned a lot about what the problems were that were going onin the schools as well as what’s emerging in technology. And around that time, I started to see new technology companies starting to pop up and at that moment I realized what I could do. … When a new industry is emerging, there needs to be some way of pulling people together, some sort of information source, some sort of water cooler, because people who are coming into an industry have several characteristics in my opinion. …  

… No. 1 when they are really, really smart and really talented and critically don’t actually know very much about the business they are starting to get into, because if they really understood it and they really understood how hard it was, they’d probably choose not to do this. So they need someone … who helps introduce them to other people in the industry, who shows them what’s going on in the landscape. So that was one idea.  

The second, really powerful idea in education which is that this is a marketplace where people — schools — were starting to buy millions of dollars worth of technology without any kind of outside commentary, without any third voice, without any independent analysis of was this stuff the right stuff for them.

So we started EdSurge with two very strong ideas. No 1: support this emerging ecosystem of companies, but No. 2, help the buyers, help the schools get an idea of what they are getting themselves into and make smarter choices.

If you can’t hear the clip, click here.

A grad school competition got Miriam and her co-founder, Alex Meis, started building Kinvolved:

We saw an email on the Student ListServe, (and said) why not enter this competition? It sounds like fun. It was open-ended what you selected as your issue area, and I said I definitely want to do education. I threw out a couple of ideas. Alex said parent engagement is something I really am concerned about and focused on. We had that in common so decided to put together just a one-pager and advance through the process, really talk to 100s of people. 

… I definitely think that’s a huge part of the process,, not keeping your idea within your own head, but talking to people in a variety of different areas — potential customers, school leadership, administrators, district leadership, teachers, colleagues, but also researchers, people who develop technology and really understand how you can put this kind of idea into action.

… We wanted to focus on improving family engagement, which is a very broad goal. As we wee talking to more and more people, we said, ‘So how are we going to do that?’ and what does that mean? We decided to really target the issue of absenteeism and try to engage families more towards the end goal of trying to improve student attendance rates. And decided, again through conversations with people, that developing an app was the best tactical way to do that. Certainly we tightened our business model by talking to many different people. 

… Neither Alex nor I have technical background. We have a lot of deep passion for the issue areas and experience in the community, but not a technical expertise. So we found ourselves at a hackathon at Pace University one nice Friday night. We had no idea what a hackathon was. We sort of found it in an email and said, Let’s try and see if we can get someone to develop a prototype that we can present at this competition and sure enough, we go the prototype developed. It was like a 48-hour thing adn there was also a competition associated with that particular hackathon, which our team won. So I guess that was our first success early on.  

If you can’t hear the clip, click here.

Miriam also shared her startup lessons learned and advice for other founders:

I think most broadly no matter how you think things are going to go, they never go that way, so being flexible and comfortable with uncertainty is necessary. 

Steve: You mean no business plan survives first contact with customers?

Miriam: That’s true! … we developed our business model canvas … through NYU’s Summer LaunchPad — the accelerator program that we participated in — that really practices and enforces Lean Startup (methods). Every single week within that 10-week program, we were going back and revising our business model canvas… and I would say that is a practice we’ve taken on with us since 2013. …

… Being able to talk to customers, realize that nothing is static is also an important lesson we learned, and always being as nimble as possible … and really taking data from your customers to understand what’s working, what’s not working, what needs improvement, and implementing that in the product roadmap. 

Steve: What’s the one piece of advice you would tell aspiring entrepreneurs?

Miriam: … Don’t worry if you’re qualified or not. … Don’t be afraid of taking risks. Don’t be afraid of failure. You’re certainly going to along the way. And take a moment to celebrate the successes, because they are all so easy to overlook but really important to your team. 

If you can’t hear the clip, click here.

Listen to my full interviews with Betsy and Miriam by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Phil Randazzo, founder of American Dream U; and Derek Andersen, Founder of Startup Grind.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111

Entrepreneurs are Everywhere Show No. 6: Al Milukas, and Zahra Aljabri and James Faghmous

Sometimes your passion is what you think about outside your day job. And sometimes solving your own needs turns into a startup opportunity.

Passion and need — two ingredients that help drive success for startups. The latest guests on Entrepreneurs are Everywhere, my radio show on Sirius XM Channel 111, shared how a passion for food, and a personal need for modest but fashionable clothing fueled decisions to begin second careers as startup founders.

Joining me in Sirius’ New York studio were:

Listen to the full interviews by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Clips from their interviews are below, but first a word about the show:

Entrepreneurs are Everywhere airs Thursdays at 1 pm Pacific, 4 pm Eastern on Sirius XM Channel 111. It follows the entrepreneurial journeys of founders sharing their experiences of what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries to entrepreneurial education and more.

The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs, lows and pivots that pushed them forward.

Channeling a passion

Al Milukas

Al Milukas

Al Milukas has been in the radio business for 35 years and currently co-hosts The Paul & Al Show in Providence, RI. In addition to his day job, Al is a Master Gardener, self-proclaimed foodie, and writes a food and travel blog called Live the Live. He also makes krupnikas, a family-recipe Lithuanian honey liqueur. He is now turning his passion for food and spirits into a business.

Making the leap from radio mic to startup founder means channeling his passion, much as he did as a young man breaking into radio.

I have two sisters who are both math majors, so my dad, who was an electrical engineer, was thrilled with the fact that they wanted to major in that. And for me it was really all about radio from the beginning and he really wasn’t happy with my career choice at all. (He) kind of gave me that line of, “What makes you think you’re so special that you’re going to get into radio when thousands of other people fail?” 

I think that’s kind of in line with what entrepreneurs face, the fact that people may tell you along the way that what you’re doing is really impossible, why are you doing it? It’s such a risk, etc., etc., and (yet) it’s a passion of yours you need to follow. 

If you can’t hear the clip, click here.

As a new founder, Al will be calling the perseverance he used to make it in radio. Here’s how he knew he’d finally won his father over:

Probably when I got the New York City job, because he knew what a big market it was. … He basically started telling his friends that his son was in radio. And when I overheard that, that’s when I knew I had made it in my dad’s eyes. 

And then I was unemployed actually, when they blew everybody out of New York. … He never told me, “I told you so” to his credit. …

 … You had to search for (a) job yourself. Nobody was going to give you your new job. … And he saw me do that for a year and not succeed, which is why I went to Cape Cod. It was the first job that somebody offered me.

And again, he was just shaking his head (saying), “I’d never be able to do that.”

If you can’t hear the clip, click here.

Fulfilling a need

Zahra Aljabri

Zahra Aljabri

Zahra Aljabri is an estate planning attorney and civil rights advocate who struggled to find modest, but fashionable, clothing styles that reflected her Muslim values. With encouragement from her husband, data scientist James Faghmous, she decided to fill the need herself. She and James founded Mode-sty in 2012.

James Faghmous

James Faghmous

Zahra explained that many women seek conservative, but fashionable clothing that allows them to stay true to their religious values, but finding styles that offer the right amount of coverage and are on-trend is difficult.

… There’s about 10 million women who dress modestly in the United States (for religious reasons). …

And then we get some many customers who, for other reasons, want modest clothing. Older women who want to be on trend but can’t be dressing like younger women anymore or don’t feel comfortable dressing like young women any more. …

There’s lots of holidays in many of those faith groups and they need occasion wear. …they need the clothing for all the categories. So think activewear; these women still want to dress conservatively when they’re running, when they’re swimming. Maternity. When they’re having a baby they still need their clothing to be modest. 

If you can’t hear the clip, click here.

Zahra discovered the opportunity for creating Mode-sty while living overseas.

It was (in Norway) that this idea started percolating, because over there the shopping was so much better to find things that met my needs, that were modest, and I was trying to explain to James why the shopping was so much better.

Through the course of the discussions he kept pushing, “I don’t understand why it’s so hard in the US and what could you do there to replicate this experience or make it better. …” 

At first it was like, “You could totally do something like this,” and I was like, “No, no, no. Maybe somebody is already working on it.” So it started with research to find out if somebody else was already working on it and I hadn’t searched hard enough. … Almost the whole time when I was in Norway (I) was looking and searching for companies, physical and online, that were providing a solution, and there was not.

So when we came back, push came to shove and we said, “OK we’ll take this leap.”

If you can’t hear the clip, click here.

Al’s startup journey began with a personal project:

We took a family trip to New Zealand and I wanted a place where I could log what we were doing, day by day — photos, food, all that kind of stuff. So I started Livethelive.com for myself … and from that I started featuring every bit of travel that we did and all the food that I cooked. I started posting recipes… and it … blossomed … 

(It began) personally for me, but then I started getting into the fact that other people were reading it and enjoy it as well and that was kind of fun. You put something on Facebook or Twitter or on the webpage and you get a response from somebody saying, “Hey, wow that looks really great, I’m going to try it today.” So that eggs you on to do more.

And I’ve always been kind of a crazy cook. Even when I was single I had parties at my house with 80 people and I used to cook all the food. People looked at me like, “You’re nuts,” but I just enjoyed doing that.

If you can’t hear the clip, click here.

Al is writing a cookbook:

Originally the goal of the website was just to have fun … and share ideas with other people. I started recently putting together my recipes for a cookbook. … Now the focus of the website is to get a cookbook together that … features some of these recipes. … 

I’d love to find a publisher. (But) these days you can do a lot of self-publishing. Because my wife is in the art world, we have a couple of friends who are extremely talented food photographers … so we can almost do it all ourselves.

If you can’t hear the clip, click here.

And he’s researching the best way to sell the krupnikas honey liqueur he makes and gifts to friends and relatives each Christmas:

Al: There’s a lot of legalities to go through. I have friends that have done similar things and we also have some local distilleries that are popping up in Rhode Island. … It’s all the rage now. They have all these craft breweries popping up for beer…  so now a distillery is the next step. They make a rum in Rhode Island called Thomas Tew, and … Sons of Liberty is one of the distillers in Rhode Island as well. They make whiskey. …

I’m talking to those guys to get an idea of what the business is all about, what’s required. And they all just kind of roll their eyes and say. “Paperwork. Get the right lawyer.” …

…You can (run a still in your basement), but not for sale. … I make a ton of (krupnikas) every year. … I use a case of grain alcohol per batch that I make. I make small batches, but over the course of a week, I use the whole case. … I get about 30 liters out of it. 

At Christmastime, I ask (everybody) what they want … and they say, “Give me a bottle.”

Steve: I don’t know if you’re listening to yourself, but I’m listening to you describe the basis of a really interesting business. … Not the only the honey liqueur, but the website and the food… there’s something here, don’t you think?

Al: I think so. They’re tied in a bit to each other … I’ve written about my honey liqueur on livethelive.com, but of course I didn’t give the recipe out. …

Steve: If they’re already these people making hard liquor in Rhode Island, any of them want to carry your line?

Al: That’s what I’m working on… 

If you can’t hear the clip, click here.

Here’s how Zahra and James tested their idea for Mode-sty:

James: All we did was put up a webpage with a dress that we thought met Zahra’s aesthetics and function, so the coverage and the style.”

Zahra: A landing page. …

Steve: Was it designed to be a Minimum Viable Product?

Zahra: It was, it was just to collect email addresses and to see if anyone else saw the need that I saw. … (We used) social media (to create demand) … mostly Facebook. … We got a lot of signups and people emailing us, “When are you going to launch? I have something coming up soon.”

Then we had been reading your books so we started to ask people if we could call them and talk to them. … I found a lot of women who were feeling how I was feeling. So that was reassuring. I think my husband, now he’s a believer, but initially he was like, “I don’t think there’s going to be that much. There can’t be that be that many.” It was my job to prove to him that there are a lot of women who are looking for the fashion and the coverage, because we thought more would be just concerned with the function and the price.

James: And ironically… about 24 to 48 hours after we put up the landing page, Refinery 29 reached out to write a story about us (even though) we had nothing … but this landing page. …

If you can’t hear the clip, click here.

Zahra concedes that doing a startup is much harder than being a lawyer:

Being an entrepreneur is the hardest thing. … You really test yourself. You learn a lot more about yourself. You have to rely on your own instincts. …

(Working with James) has made it easier. …There’s that level of trust, the honestly we can have with each other and in our relationship we want to reach good outcomes, so there’s that incentive to … discuss this and argue it until we get the best outcome. 

If you can’t hear the clip, click here.

And yet the experience has been empowering. Knowing what she knows now, here’s what Zahra would have told herself when she first took that leap:

I’d just say, “You can do it.” I think that’s probably the biggest thing is (that) before (I thought), Who am I to do this? I have no fashion background, I have no business experience. … Who do I think I am? 

Steve: Who convinced you?

Zahra: Reading about other entrepreneurs who just started and said no one else is solving this problem. I’m going to take it on, and also the encouragement from James. …

James: Zahra’s a brilliant person, so I just saw it in her and I knew that she could do it. I was convinced from the get-go. … For me I think I was more entrepreneurial from a younger age, so to me … it’s very similar to going to graduate school and doing a Ph.D. I always look for problems, for gaps. Where are the gaps in the world. And once Zahra showed me the gaps, and I saw these emails from people (saying) … “We love you. Thanks so much. We need this so much.” I just knew that this could be done if we were thoughtful … 

We want to move forward. It’s like experiential learning going though this. You can read as much as you want, you can watch how to start a startup videos as much as you want, but being on the ground and doing it, and knowing that no, we don’t have anything to lose so much, so no mistake can really be fatal, just try to do and learn and do as you go without being too outlandish was the way that … got us where we are today. 

If you can’t hear the clip, click here.

Listen to my full interviews with Al, and with Zahra and James’ by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Betsy Corcoran, co-founder and CEO of EdSurge and Miriam Altman, co-founder of Kinvolved.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111

Entrepreneurs are Everywhere show No. 5: Daniella Yacobovsky and Jane Moritz

Nature and nurture together shape successful entrepreneurs. And it’s possible to balance work and family when doing a startup.

Family relationships influence founders and their startups. That was the message from the two latest guests on Entrepreneurs are Everywhere, my radio show on Sirius XM Channel 111.

Daniella Yacobovsky

Daniella Yacobovsky, co-founder of online jewelry retailer BaubleBar, and Jane Moritz. a food entrepreneur who owns Challah Connection, an ecommerce site specializing in Jewish gift baskets, joined me in Sirius’ New York studio.

Listen to the full interviews by downloading them from SoundCloud here and here(And download any of the past shows here.)

Clips from their interviews are below, but first a word about the show:

Jane Moritz

Entrepreneurs are Everywhere airs Thursdays at 1 pm Pacific, 4 pm Eastern on Sirius XM Channel 111. It follows the entrepreneurial journeys of founders sharing their experiences of what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries to entrepreneurial education and more.

The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs, lows and pivots that pushed them forward.

Daniella Yacobovsky, co-founder of BaubleBar, previously worked at American Capital Securities and UBS Investment Bank. She discovered that investment banking wasn’t for her, and chose to do a startup instead.

She told me she was born with an entrepreneurial streak that her parents fostered.

It’s probably a mix of nature and nurture. You have to be born with a little bit of (an entrepreneurial) streak. … I definitely have friends who I meet who I think, “I cannot ever see you doing this type of a job,” and there are elements of personality they think are ingrained in you and that you’re born with. Then I think there are some that you learn and that are honed in you in terms of having life experience whether it’s in school or whether it’s in some of your early jobs or early parts of your career.

My parents definitely pushed me to work hard and to be independent, and definitely pushed me to be an independent thinker. That’s something that they really taught… all three of us from a very, very early age, whether it was encouraging reading or having conversations at the dinner table, whether it’s about politics or current events, really encouraging us to think for ourselves and have our own opinions, and really pushing us to be thoughtful about how we approached the world. I think that that’s a really valuable skillset to take to starting your own company or having your own venture.

If you can’t hear the clip, click here.

She explained that working as an investment banker didn’t allow her to use the skills her parents had encouraged.

I wasn’t challenged. I felt like I was constantly doing a lot of the same work. … At a young age I still felt that I had really great ideas that I wanted to bring to the table, and it’s just very hierarchical. (At a big company) it’s really hard to make your voice known and be able to have a seat at the table.  

If you can’t hear the clip, click here.

Jane Moritz owns Challah Connection now, but previously founded her own direct marketing agency, DMTG, which she ran with her husband. They had a young family at the time.

Jane shared how she and her husband worked together to achieve a work-life balance.

This is a good lesson for entrepreneurs: Be careful what you wish for. (When) I started (DMTG) my (future) husband (Josh) and I were engaged at the time, but I knew we were going to get married. I had this idea for this business where I was going to be able to work … part-time, like three days a week or something like that.

… Very quickly, I got a lot of business. We got married and then I had my first child. I had so much business, it was way beyond what I could handle.

… Just as I was pregnant with my second son — we have three sons — I said to Josh, “I just can’t handle this. This is way too much.” While I wanted to work, (being a mother) was very important to me, I didn’t want my kids being raised exclusively by our beloved babysitter. I wanted to be there.  

Maybe a month or so before my second son was born, Josh was very unhappy in a job … at another direct marketing agency in (New York) city. We decided, you know what, let’s just take the plunge. You join my company and together we’ll grow it. We did. It was very scary at the beginning because here we were both self-employed doing this together.

… We built that company up together for about another eight years and then we sold it to Earle Palmer Brown.

Now the very great thing about that period, though, was that Josh and I really shared the company and we shared kids. We had a great setup where we both worked four days a week and one day he was home with the kids and one day I was home with the kids. Our clients understood that.

If you can’t hear the clip, click here. 

When Jane purchased Challah Connection, it was a local challah delivery service for the Jewish Sabbath. She initially planned to grow the service nationwide, in a model similar to the cosmetic and food subscription services popular today. Customer feedback pointed her in a different direction:

This was 2002. The Internet e-commerce was really just getting going and I thought I would build (the business) up using the Internet and UPS, etc. …

One day I picked up the phone and called Florence Fabricant (food critic at) the New York Times and I said, “I just want to tell you about my company.” It was a stroke of luck that she answered the phone. … 

She loved the idea … and in February 2003 (the Times published an article about Challah Connection). … We were inundated with orders that day and phone calls. …

That did not make our business, but it did put us on the path that we’re on now. In the article … Florence talked about the Challah subscription program and said that we also sold babka and Russian coffee cake. … Ninety percent of the people that called that day and for the next few weeks said, “Can you take those three things and put them in a gift basket?” … I’d never even thought of gift baskets. … of course I said, “Absolutely!” …

That turned on the light bulb in my head that said, “Oh, this is really interesting. This is what they want.” And also that… was a whole lot more profitable than selling challah subscriptions. …

If you can’t hear the clip, click here.

The idea for BaubleBar originated during one of the midday shopping trips Daniella and her co-founder, Amy Jain, had a habit of making. Here’s how they got to know their customers:

The first thing we said was, We know we would love this, but will other women love this? So we started doing surveys and … testing selling product. We would buy a product from wholesalers because we obviously didn’t want to go out and invest in a whole production arm and we started testing: Would women buy this product at a $20 price point, a $30 price point, a $50 price point, a $70 price point? We sold product literally out of our apartment. …

… We learned a lot about the type of product that (the customer) wanted and the price point that she wanted it at, and we learned a lot about merchandising assortment, which was incredibly helpful. … We had this thesis that jewelry is a category where women are really experimental in terms of their style. They want a really broad range and a broad selection, but that’s obviously expensive to produce against, so we needed to test that a little bit. 

…Every time we did these shopping parties… in our apartments … we would really monitor what women were buying and we found they were buying a really broad range. 

If you can’t hear the clip, click here.

Here’s how they knew they were on to something:

We wanted to really to get an understanding for, OK, well, this customer group that we know really well because they’re our peers and they go to school with us, they like it. What about total strangers? What are they going to do?

We put up this website. … It was a closed site, meaning you had to sign up for an account and be invited to shop. … We could not afford (to advertise, so) we sent emails out to all of our friend groups (tens of thousands of people), and we really pushed people.

… a lot of people shared (the invitation) with friends. People started forwarding it, and it … picked up steam. We got a lot of traffic to our little testing site (and) we started selling product. 

(But) what was most exciting is not only did we sell product, but as we were putting new products up people we didn’t know kept coming back. What we got most excited about was … we had women coming back and buying from us four or five times within the first three to four months of being up as a site. I think at that point Amy and I looked at it and said, “We think we’re really onto something.” That kind of sticky behavior for us really validated this idea that there is a consumer need.

If you can’t hear the clip, click here.

Listen to Daniella’s full interview here

If you can’t hear the clip, click here

Jane initially ran Challah Connection from her house:

(In the early days), we did all the (order) fulfillment in my basement. Our living room was our customer service center. For holidays we would have to take over the dining room, the family room for other packing and outbound calling, but we basically took over the whole house. In February 2014 (having acquired thousands of customers) we moved to a warehouse. 

If you can’t hear the clip, click here. 

And as was the case for Daniella, Jane’s family support was key in shaping her entrepreneurial path:

Both my parents were very entrepreneurial. My father was a dentist, a very prominent dentist in Stanford and he also developed real estate on the side. My mother … created a line of cosmetic organizers that she was selling into all kinds of large department stores. She also sold direct to consumer, this was back in the ’70s when there was no Internet, but she did those small ads in the back of the New York Times.

… Also, my father was very prominent in our lives and my mother as well, but my father had some lessons that he taught myself and my 4 siblings. One of those lessons was that self-employment and entrepreneurism was the ticket to freedom. … that that really stuck in my mind. … My father was actually very progressive and he felt that even in his day, again, in the ’60s and ’70s … that women should have a fair shot at everything. He taught us a lot about empowerment and wanting us to go on to be successful and so on. He was very cool. 

If you can’t hear the clip, click here.

Listen to Jane’s full interview here.

If you can’t hear the clip, click here.

Listen to the Daniella and Jane’s full interviews by downloading them from SoundCloud here and here(And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: radio personality and food entrepreneur Al Milukas of Live the Live, and Zahra Aljabri and James Faghmous of Mode-sty, an online clothing retailer of modest styles.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111

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