EP #33 The Entrepreneur Mindset w/ Dan Sullivan

In this episode, Dan and Peter discuss their own entrepreneurial journey, how to be a successful entrepreneur, and the process of building a business. You will learn about: 14:57 | Cash Flow Is Critical 31:56 | Follow Your Interests When Investing 51:07 | Entrepreneurship Is One Of The Highest Forms Of Creativity Dan Sullivan is the Founder & President of Strategic Coach Inc. He has over 40 years of experience as a highly regarded speaker, consultant, strategic planner, and coach to entrepreneurial individuals and groups. Learn more about Strategic Coach. _____________ I only endorse products and services I personally use. To see what they are, please support this podcast by checking out our sponsor: Levels: Real-time feedback on how diet impacts your health. levels.link/peter _____________ I send weekly emails with the latest insights and trends on today’s and tomorrow’s exponential technologies. Stay ahead of the curve, and sign up now: Tech Blog _____________ Connect With Peter: Twitter Instagram Youtube Moonshots and Mindsets Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

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• 0:30Speaker 01

  I talk to people as if it's a career choice. It's not a career choice. It's a lifetime choice. Okay. And I said, you have to understand that if you've been at it for five or 10 years, this is a life sentence.

• 0:46Peter Diamandis?

  And a massive transformative purpose is what you're telling the world. It's like, this is who I am. This is what I'm going to do. This is the dent I'm going to make in the universe.

• 0:59Peter Diamandis?

  Everybody, welcome to Moonshots and Mindsets. I am here with Dan Sullivan, and we're going to be talking about what it takes to be an entrepreneur. What are the most important attributes of an entrepreneur? What does it take to succeed? How do you know if you're an entrepreneur? And what does it mean once you become an entrepreneur? So stay tuned for an extraordinary conversation with the head of Strategic Coach, the founder, a dear friend, the man who inspired me to create Abundance 360, my coach, Dan Sullivan. Everybody, Peter Diamandis here. Welcome to our next episode of Exponential Wisdom. I'm here with my dear friend, Dan Sullivan. And today, we're going to talk about something that is near and dear to both of our hearts, and it's the entrepreneurial journey.

• 1:42Peter Diamandis?

  We haven't had a chance to talk about this, Dan, but like, what makes an entrepreneur? What are the highs and lows, the pros, the cons of being an entrepreneur? What does it mean to be an entrepreneur? How do you succeed at it? And how do you know if it's right for you? So this is a subject that both you and I exude from our pores and excited to jump in.

• 2:03Speaker 01

  Well, it's a very recent concept, because if you go back and check the dictionary...

• 2:10Speaker 01

  The best definition was 1804. And that was a Frenchman by the name of Jean Baptiste Say. And he said entrepreneurs are someone who takes resources from a lower level of productivity to a higher level of productivity. So entrepreneurs improve things. They take existing things, they create new things, but they take resources. And he was asked, what kind of resource? And he said, any kind of resource. And just a little note, and then I'll pass it on to you, whether you've heard other definitions. But he was asked, and there was no such thing as entrepreneur

• 2:53Speaker 01

  was a really new term as we use it today. And his whole belief was that it was the industrial revolution that really created a whole new class of individuals who could literally come from nowhere and become major economic players, unlike anything that had happened before. And so he was the, I think that technically the industrial revolution starts in 1776, in March of 1776. And it's when James Watt introduced an improved steam engine

• 3:35Speaker 01

  that got a 25% energy return, which was phenomenal. It'd probably still be phenomenal in some centers, but it was that sudden where almost any individual who was ambitious, who was enterprising, who was ingenious, could now use a new technology to massively transform productivity in all existing industries, starting with basically the fabric industry was where it was first used. And I mean, as a real productive, it was used to get water out of coal mines in Great Britain. That was the main purpose. But it created two classes. It created the entrepreneurs,

• 4:20Speaker 01

  who were the people who could come from nowhere and create great enterprises and great fortunes. And it created the intellectual class. There was no class called the intellectual class. And these are the people who hated entrepreneurs.

• 4:37Speaker 01

  Because they didn't deserve their status. They weren't educated. They weren't, you know, they didn't have aristocracy. They hadn't come up the normal way. So, and I think it starts there. And then you see the 19th century was a phenomenal entrepreneurial decade. And of course, it's gotten exponentially larger.

• 4:58Peter Diamandis?

  You know, I define an entrepreneur as someone who finds a juicy problem and solves it. That's my definition. And I think today, more than ever, especially during this exponential age, the ability for a single individual to make a dent in the universe, to find a problem, solve a problem, is greater than ever before. Yeah, if you think about what it takes to become an entrepreneur, and I'm curious, for those who are entrepreneurs, you know it, you thrive on it. I'm on my 26th or 27th company. Some really good ones, some spectacular failures and everything in between. But I think I would, if I were to rattle off the list of things,

• 5:41Peter Diamandis?

  first of all, it requires passion or obsession with a subject because it's not easy. It's much easier just get a job and do what you're told. So that's the first thing. I think it requires a reasonably high risk tolerance. Because if you're really doing something on your own that hasn't been done before, and you could lose it all, and you're not sure where your next paycheck is coming, which is some part of the early entrepreneurial journey, risk is there. And then I think there's a certain amount of self-confidence, I would say, having an understanding of the problem you want to solve, and possibly not

• 6:24Peter Diamandis?

  required an expertise you're bringing to the table. Because a true entrepreneur will not ask how, but who, right? As you famously said, they'll pull together a team. What are the other elements that you think of an entrepreneur needs to have?

• 6:39Speaker 01

  Well, I think the one that I've noticed because I am fascinated in people's histories. So whenever I meet an entrepreneur, I said, you know, when you think about the entrepreneurial path, which is definitely a fork in the road from, you know, from the way that most people think about their future, when did you notice it showing up? If you had to go back to the earliest age, that you were doing things different than your peer group was doing, you were doing something different than them and you were, you wanted to have a direct relationship with the marketplace. Okay. You didn't want a buffer of someone who guaranteed you income, didn't guarantee you security. You wanted to hit the marketplace.

• 7:23Speaker 01

  So, uh, do you remember?

• 7:25Peter Diamandis?

  I, I, I do, I do. I remember, uh, I was in high school, I started a, a snow removal service, uh, in my, in, uh, between my house and my friend's house a few miles away. We went door to door and sold snow removal for 20 bucks a shot.

• 7:43Speaker 01

  Wow. That was good because that, that would have been the late seventies.

• 7:47Peter Diamandis?

  Yeah. The problem was we had a record three foot snowfall on one day and destroyed the business because I couldn't take care of it. Uh, but, but, you know, that was my, my first, uh, effort. But my real entrepreneurial journey was my first year at MIT, when I started a, um, a national, international student space organization called Students for Exploration and Development of Space. And it was this bold, crazy vision that actually came true. And I was like, wow, this is cool. And there's like this, this element of surprise and delight when you start a business and people, and it was a nonprofit, but, uh, and, and I got it, I got hooked, I got addicted

• 8:30Peter Diamandis?

  on the idea of an idea and creating something that people would participate. How about you, Dan? What was yours?

• 8:36Speaker 01

  Well, I grew up on a farm, so farming is a very risky entrepreneurial business and our farm failed. And my father recreated himself at age 60 as a landscaper and had his best, he worked right till he was 82 and he had his best business here and he left, you know, my mother, he died at 83, but he worked full-time when he was 82 and then he packed it in. He packed it in, he said, "I can't do it anymore." And my feeling is that the day my father wasn't doing business, he didn't know what he, who he was.

• 9:18Peter Diamandis?

  Yeah.

• 9:19Speaker 01

  And he just, he said, "I'm out of here," you know. And that, that joy that you talk about, the excitement, and a lot of it is just the applause. I think applause really keeps people in the game. Teamwork, deadlines, you know, having to create new solutions, but you're doing it face-to-face with the marketplace. So, you know, you're, you're, you're, you're really getting the best kind of research for the development of what you're doing. And it's check writers. Check writers are crucial and you want to be paid directly. You don't want to go through a third party. You don't want to have five levels of money coming down to you.

• 10:01Speaker 01

  And what I noticed, just to finish this topic, that it shows up very early. I mean, the, the instinct for it shows up where it's chosen. I, I think there are people who are forced into it because of the failure of a large employer and that happens. But I noticed the ones who started early tend to create new things more than the people who are forced into it. And, yeah, and, yeah, and, and you had a very divided, not only postgraduate, but you had, you were already at it in undergraduate because you have your famous, getting your

• 10:41Speaker 01

  medical, medical degree because, because it received, your medical school received the least amount of your passion and.

• 10:49Peter Diamandis?

  Yes, very true. I mean, when you're hooked as an entrepreneur, you, you love what you're doing and you're excited to jump out of bed in the morning and go and see, what are the results of what I did yesterday and what can I do different today? Yeah, Dan, I think it'd be interesting to ask a question and get your insights. And I have a few to add of what don't people realize about entrepreneurship? Like, what are some of the surprises that if you haven't been an entrepreneur and you become an entrepreneur, what are the surprises that that most people don't know about?

• 11:31Speaker 01

  No, go ahead.

• 11:32Peter Diamandis?

  I have one, I have one I'm gonna say. The surprise is you're gonna spend more time with your coworkers and your co-founders than you will your family or your kids. You know, it's a, the reality is, starting a company is never easy. Most companies are, you know, overnight successes after 10 years of hard work. And so, pick your co-founder and your employee team that you're working with carefully because they're gonna be as close to you and sometimes closer than family. What about you, Dan? What else?

• 12:10Speaker 01

  Yeah, I think the biggest thing I often said, if there's a God in the entrepreneurial heaven, the name of that God is cash flow.

• 12:17Peter Diamandis?

  Yeah.

• 12:18Speaker 01

  Yeah, the getting the cash flow routine because you're, you have to market and you have to create, in other words. And it takes a while for you to get these two together that you can't just create and solve problems and then start marketing. You have to do both of them at the same time. And I think that's the hardest thing. I see more bankruptcies, I see more failed businesses, just because they didn't get cash flow down. I went bankrupt twice in the late 70s and early 80s, and it was strictly receivables that killed me, you know?

• 12:57Speaker 01

  So, in 84, we made a decision that we, me talking to myself, that I would never have another receivable, that what I was doing would get paid for upfront. And, and people said, well, people just won't do that. And I said, well, I'm just gonna find the check writers who would be willing to do it. But there, you really have to be thinking in terms of their goals. You have to really be thinking. And I think that's the next thing. That you have to understand that all of your money is in the aspirational future of your best clients.

• 13:37Peter Diamandis?

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• 14:17Peter Diamandis?

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• 14:59Peter Diamandis?

  use not only for myself, but my friends and my family, that I think are high quality and safe and really impact a person's life. So, check it out. Levels.link/peter. Give you two additional months of membership, and it's something that I think everyone should be doing. Eventually, this stuff is going to be in your body, on your body, part of our future of medicine today. It's a product that I think I'm going to be using for the years ahead and hope you'll consider as well. You said something really important about cash flow being critical. You know, as an entrepreneur, you're going to make a decision early on. On if you're going to use your own money and your own blood, sweat and tear to get the

• 15:43Peter Diamandis?

  company going, are you planning at the end of this to own 100% of your own company? Or are you going to go out there and raise money from, you know, friends, families, angel investors, venture capitalists, and slowly, you know, dilute yourself from 100% ownership down to many times, it may be down to 20% or 10%. And I've done both, and some of the crazy moonshot ideas require massive amounts of outside capital. But the companies that I've started and owned myself, and I started the company based upon

• 16:24Peter Diamandis?

  making the first sales and building it on cash flow, have been the most fulfilling. Do you want to speak to that, Dan?

• 16:34Speaker 01

  Well, I can remember when, you know, we started collaborating and A360 got created, and it was at the first really big one, we did a sample version and

• 16:47Peter Diamandis?

  At SU's in Silicon Valley, right?

• 16:50Speaker 01

  Yeah, yeah, and, and that's when I became fully human in your eyes, because

• 16:57Peter Diamandis?

  You brought check writers.

• 16:59Speaker 01

  I brought, I felt, I put butts in seats, you know. And I said, I don't think, I, I, I think I was more of an abstraction or a theory before, before that. And I remember the day before we did that first event, which was incredibly successful and has been ever since, all the money was already in, you hadn't put any, you hadn't put the presentation on. And I said, he said,

• 17:32Speaker 01

  Boy, all the money, I haven't, I haven't actually presented anything yet.

• 17:36Peter Diamandis?

  Everybody bought the tickets in advance.

• 17:38Speaker 01

  Everybody bought the tickets and, and so I've taken, I've just stuck with that one model for our whole life and we're up, you know, the real program, Strategic Coach Program. I had 15 years of one-on-one and then I, we went to a workshop for him and the reason was that Babs and I are Americans who live in Canada and when we moved to Canada, they said that the tax system is voluntary and I thought it meant optional. And then I had this true Canadian called me up with a distinctly Indian voice and said,

• 18:21Speaker 01

  "Oh, Mr. Sullivan, you've been a very, very naughty boy. You do not want to own the government money because we'll tax you on the money you pay us for..." And so the one-on-one career was over and I said, "We're going to have to do a workshop to pay our taxes." And I, and I say that because there's the story that entrepreneurs tell about how their business, you know, they were very systematic, they were very strategic, and then there's the actual story that actually got you started. And we were scared silly because we didn't think we could coach a room full of people

• 19:02Speaker 01

  and we had six people in the first group and we weren't charging, same as if I was charging for a whole year for a single individual, but it was 80% times six, so it was five times bigger.

• 19:15Peter Diamandis?

  Yes.

• 19:16Speaker 01

  And I died and went to heaven on that day.

• 19:18Peter Diamandis?

  I tell you, and I agree with that.

• 19:20Speaker 01

  I mean, we both, when you get entrepreneurs and they're talking to each other, they love the failure stories.

• 19:27Peter Diamandis?

  Yes.

• 19:28Speaker 01

  That's the thing about entrepreneurs, entrepreneurs are the only people who thrive on, on failure stories. Corporate execs, you can never get people to talk about that, you know, government bureaucrats, nobody talks about their failures because they're swimming among sharks and it's blood in the water.

• 19:45Peter Diamandis?

  For sure, for sure. So other truisms about being an entrepreneur, if you step into that lifestyle, the first...

• 19:54Peter Diamandis?

  You know, the result is the buck stops with you and everybody looks to you.

• 20:01Peter Diamandis?

  Something that we talked about in, in, in conversation before, before this podcast was the notion that, and it's a distinction people need to realize is entrepreneurs don't need to be the CEO of the company. Entrepreneurs hire CEOs many times. And there are different phases of a company, right? In the beginning, it is N of one, it's you. And you're responsible for everything and you'll bring in a team. And then ultimately, you know, the thing I love is taking a role as founder and chairman, or founder and executive chairman, and hiring a great CEO to run all the day-to-day operations.

• 20:42Peter Diamandis?

  The stuff that I don't love doing. I love the creative, I love the teaching, I love the strategy, I love all of that. You want to speak about the idea of entrepreneurs hiring CEOs?

• 20:53Speaker 01

  Yeah, well, in my case, I married my CEO.

• 20:59Speaker 01

  Or she married me, I'm not quite sure how it went. But Babs, who's my lifetime partner in personal life and business life, she was really great at creating teams and to this day has a real gift for putting teams together. Okay, and she just looked at me and she says, "You're just doing so much, one, that you're no good at, and the other thing is, some of the things that you're no good at, you just don't do, like filing with the government and, you know, paying attention to, to that. And, and so from probably the year before we actually started the program,

• 21:42Speaker 01

  she was just freeing me up and there's one rule that she has in the company. And this goes back thirty-four, thirty-four years. And it's, "Free up Dan. You free up Dan to what he's doing and you don't have Dan like..." We have business meetings to run the company and if there's more than three per year, I ask for an investigation. Why am I sitting in more meetings? But the way we look at it, it's like a live theater. If you think about the business of a live theater, there's the whole business of the theater, you know, which is, you know,

• 22:23Speaker 01

  all the backstage that has to go in to fill up an audience and I'm responsible for what goes on stage. I'm the front stage guy and it's all my creativity that constitutes the front stage, but everything backstage I have no part of.

• 22:40Peter Diamandis?

  So is a concept in Coach?

• 22:42Speaker 01

  No, what I say, there's no rule for this. There's no rule for this. It's how you want to have it. I mean, you created your entrepreneurial business for freedom. You want to be freed up to just do what you're passionate about, what you started the podcast with. It's about passion, but I think it's passion for freedom.

• 23:03Peter Diamandis?

  Yes, I mean, I think a true entrepreneur loves to do what they love to do. I would say if it's just about making money, you picked the wrong topic. You know, money comes as a result of doing what you love to do and what people need. But I was going to get to the idea that you speak about in Coach, which I love, which is unique ability. And as an entrepreneur, it's understanding what your unique ability is. It could be that you're a coder. It could be that you're a coach. It could be that you're a writer. It could be anything. You can build businesses around any unique abilities. And it's also knowing what you don't love doing and finding people, the who's to partner with to do those things you don't love doing.

• 23:46Speaker 01

  Yeah, I mean, unique ability is really the concept. The cornerstone concept for what we've done. And my whole point is there that everybody's born, and I think this is factory, factory installed. People are born with a particular passionate interest in some sort of activity. And I think we've talked before about the school system. The school system, I think, tries to educate you out of a passion and wants you to be a generalist. You know, that you have to take everything. And it's very, very interesting. And we've had about 22,000 entrepreneurs who have, on average, spent three years,

• 24:30Speaker 01

  three years in the coaching program. And I can remember, on one hand, the number of entrepreneurs in 34 years. Well, actually, 48 years, because I started working with entrepreneurs in 1974. And I can't remember any of them saying that their formal education had really anything to do with their entrepreneurism. It's not that they're opposed to it or they're a thing. They just don't see it as a crucial factor to who they are as an entrepreneur.

• 25:10Peter Diamandis?

  Yeah, no, it's, if it does have something to do with you, you became an entrepreneur during school and then school became a distraction for you along the way. So I have like, one of the speakers at Abundance 360 this year, Alexander Wang, who's the CEO of Scale AI, which is a multi-billion dollar company. He became the youngest self-made billionaire. And he tells the story that he was at MIT. And over the summer, he went to go work on AI. And he told his parents it was going to be just a summer thing. And he never went back.

• 25:44Speaker 01

  That was the end of school.

• 25:46Peter Diamandis?

  That was the end of school.

• 25:47Speaker 01

  Yeah, and I mean, I think it's so, it's so, happened so frequently. Certainly during the microchip revolution. It happened so frequently that it's almost become a cliche, you know. I think it was, you know, she's in prison now, but, you know, Elizabeth Holmes. Her big thing was that she followed, you know, she went to Stanford and, you know, got everything she needed and I think not even a year and then she went out. But that had become sort of a model that Steve Jobs.

• 26:20Peter Diamandis?

  It was a badge, it was a badge of honor to drop out of school.

• 26:23Speaker 01

  Oh, yeah, yeah. You obviously didn't have what it took to, I mean, she had some other interesting issues with her whole presentation, but the thing was that she was following something that had been very, very dominant, especially in the seventies, I think it was. But, you know, I mean, it's, it's an interesting thing, but it's almost like folklore, you know. Well, if you go to university, then you have to drop out at a certain point or start your business and everything else. And, you know, but, but the vast majority of people do get an education, but it just,

• 27:04Speaker 01

  they got an education because it was what you had to do, but it, it didn't figure prominently in the crucial center of why they're a successful entrepreneur.

• 27:17Peter Diamandis?

  Yeah, it wasn't like going to medical school to be a doctor, going to law school to become a lawyer. And, you know, I don't actually know whether getting an MBA is that, you know, I, there's one reason to go to get your business degree is to meet a lot of other people. It's like the network that you get.

• 27:33Speaker 01

  I would say network is the crucial.

• 27:35Peter Diamandis?

  Yeah, but I, I've written some blogs about the idea, instead of going and spending hundreds of thousands of dollars and getting your MBA, find a great network and plug into it or become an apprentice for someone you want to apprentice for. Let me mention another-

• 27:51Speaker 01

  How does that work for you? I mean, if you go back to your Harvard and your MIT days, I mean-

• 27:57Peter Diamandis?

  I, I didn't-

• 27:58Speaker 01

  But it seems to me that you were making your network outside of both of them.

• 28:02Peter Diamandis?

  Yeah, it was all outside. My, you know, I built my space network through that first group I met. I, I started and founded Students of Exploration and Development of Space. You know, Jeff Bezos was the president of the Princeton chapter and I met a lot of amazing people. But outside of school, and same thing for medical school. I was, I was, I was checking the boxes and surviving in medical school to get that, that diploma and send it to my parents at the end. But my network was outside. Here's another attribute I think is important for entrepreneurs. And I'm curious your thoughts. I think to be a successful entrepreneur, you need to be a great communicator. You need to be a, effectively a salesman, a saleswoman.

• 28:47Peter Diamandis?

  You need to have, be able to compel your idea and get people to, to get it, believe it. Cause you're, in the beginning, you're selling yourself and you're selling your idea. A brief note from our sponsors. Let's talk about sleep. Sleep has become one of my number one longevity priorities in life. You know, getting eight deep uninterrupted hours of sleep is one of the most important things you can do to increase your vitality and energy and increase the health span that you have here on earth. You know, when I was in medical school years ago, I used to pride myself on how little sleep I could get. You know, it used to be five, five and a half hours. Today, I pride myself on how much sleep I can get and I shoot for eight hours every single night. Now, usually I'm great at going to sleep.

• 29:31Peter Diamandis?

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• 30:12Peter Diamandis?

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• 30:37Speaker 01

  Can I ask you a question about that? What gets communicated? You say a great salesperson, but from your experience, because you've really been heavily into the venture capital community for a lot of your different ventures. And what are they betting on? Are they betting on the idea or are they betting on the person?

• 31:01Peter Diamandis?

  So I think about funding in phases, right? In the beginning, there's the friends and family round. When you have an idea and you're going out and pitching to get some capital. And the friends and family round of any capitalization, if you're raising capital, they're only in betting on you. And because you don't really have a track record that you really don't have a fundamental idea. And what you want is people putting small amounts of money on you and then following how you succeed. And if you are able to succeed and you keep that community of investors informed, then as they see you succeed or fail and learn something and then succeed,

• 31:47Peter Diamandis?

  they're going to be willing to put additional money in. And then, you know, there's the jockey or the horse, obviously, is the conversation. But at the end of the day, a great entrepreneur with a mediocre business will reinvent it into a great business. You know, a great business with a mediocre entrepreneur will fail. And so it needs to have. That that level of a great, a great person. But people in the early days are investing in you and the promise of the idea.

• 32:22Speaker 01

  Well, it's the only thing real.

• 32:23Peter Diamandis?

  Yeah, it's the only thing real. Yeah.

• 32:25Speaker 01

  Yeah. Yeah. Another, another question about that is really the

• 32:32Speaker 01

  the, the failure, because failure has a totally different meaning in the entrepreneurial world than it does in all other worlds. I mean, I can't think of another world. Maybe even where, where like in the entertainment industry, it's still, it's still the same model. Babs and I are, I think you may know him or have met him, Jeff Madoff.

• 32:56Peter Diamandis?

  Yes, I know him.

• 32:57Speaker 01

  And Jeff, at age 73, decided to write a Broadway play, a Broadway musical play. It started five years ago and it opens in Chicago. It's gone through the first route to open outside of New York City. They had workshops in New York and then started in Philadelphia. And they had a three, three week run and it was spectacular. I mean, they got rave reviews and sellout audiences and now they've gone. But at each level, who was doing the funding moved up a level. You started off with people you knew when you began and now it's big, big money coming in.

• 33:38Speaker 01

  And they have a 12 week run in Chicago right in the center of the, it's called Personality. And it's the musical history of Lloyd Price, who was the real first crossover rock and roll, 1951, 1952. And so Babs, I, Babs and I just invested because my first thought in life is I wanted to go into theater. You know, and I've got good skills. I've got good theater skills, but I don't have the passion. You know, I wouldn't stick with, I wouldn't stick with it. And I said, Jeff, we'll pay for the coffee. We'll pay for the coffee.

• 34:17Peter Diamandis?

  [laughing]

• 34:18Speaker 01

  And we put in, we're on our third round, we put in, you know, not insignificant, but certainly not the top investor. But now you're, you're talking about millions have to come in. And, you know, it's coming in from foundations. It's coming in from people who are strangers.

• 34:39Peter Diamandis?

  There's also a different world today as an entrepreneur where capital, you know, capital goes through cycles of being restrictive and hard to get, and capital becomes open and available. You know, in the late dot com revolution, you know, there was like, I remember a friend of mine describing Silicon Valley as rivers of gold flowing. All you do is put your ladle and pick it up. And then all of a sudden it's shut off instantly. And so it's, I, when I think about, you know, guidance to an entrepreneur, it's okay to have a big, passionate moonshot where you want to impact, you know, millions or billions of people. But I think it's really important to have a business plan that delivers dollar one

• 35:24Peter Diamandis?

  to a customer in the beginning. Like you say, check writers, right? Because you learn a lot when you actually have to generate revenue at the start versus, versus, you know, theory. How do you, how do you think about that? What's your advice to entrepreneurs who are getting started now?

• 35:41Speaker 01

  Well, I think the faster you can, one, I mean, dollar one for the customer, for the investor, but dollar one for yourself. So Babs and I put in a policy right from the beginning that 15% of gross was ours, right off the top every year. And we've done, and we've done that since. Well, since we started, okay? And we've, you know, I mean, we started off with two employees and now we have 130. Yeah, we were just in Toronto and now we're in three countries. And I have 16 other coaches and we've just had that constant model.

• 36:22Speaker 01

  The other thing, and this is a trick of borders, is that we're Americans and Canadians, for the most part, don't know there's another country south of Canada. You know, there's this big space on the map. And being an American in Toronto is like being a shark at a beach party, you know? Yeah, I mean, there's an aggressiveness to the American marketplace. That's, I mean, you can freeze to death up here and I think it has something to do up there. And, but we've arranged it so that 80% of our revenue is always in American dollars, but repatriated to Toronto.

• 37:04Speaker 01

  I mean, there's a certain amount of money that we have to keep in our American company in Chicago, you know, but it just satisfies the requirements to have a company and same thing in the UK. But it comes back, but we pay almost all of our expenses with Canadian dollars and for 34 years, it's been a dollar 26 difference. So we're getting 26 cents on every dollar. So one of the things, I'm always saying that, is that every entrepreneur works out unique formulas, you know, that that's a unique formula. And people say, well, why do you live in Canada? It's so expensive up there. And I say, oh, there's some hedges, you know, there's, there's some offsets.

• 37:48Speaker 01

  It's also easier to put a team together in Canada than the United States because Canadians are not nearly as mobile as people in the States. There's about 20, there's about 20 big centers that you could find opportunity. And Toronto, it's Toronto, you know, Canada, it's basically Toronto or maybe Calgary.

• 38:08Peter Diamandis?

  Means people stick around for their job for a little bit longer than...

• 38:11Speaker 01

  Yeah, so we have 70 who have been more than 10 years. We have 25 that are more than 20 years. And the payoff for that, if they're good people... And you're operating according to unique ability and unique ability teamwork. There's an enormous institutional wisdom that grows up in the company.

• 38:29Peter Diamandis?

  Hey everybody, this is Peter. A quick break from the episode. I'm a firm believer that science and technology and how entrepreneurs can change the world is the only real news out there worth consuming. I don't watch the crisis news network, I call CNN or Fox and hear every devastating piece of news on the planet. I spend my time training my neural net, the way I see the world, by looking at the incredible breakthroughs in science and technology, how entrepreneurs are solving the world's grand challenges, what the breakthroughs are in longevity, how exponential technologies are transforming our world. So twice a week, I put out a blog. One blog is looking at the future of longevity,

• 39:12Peter Diamandis?

  age reversal, biotech, increasing your health span. The other blog looks at exponential technologies, AI, 3D printing, synthetic biology, AR, VR, blockchain. These technologies are transforming what you as an entrepreneur can do. If this is the kind of news you want to learn about and shape your neural nets with, go to dmandis.com/blog and learn more. Now back to the episode. Dan, when you're hearing the pitch from a young entrepreneur, whether they're joining Coach or they're at a Butted 360 or you just meet them someplace, are there elements that you say, wow, this guy or gal is going to be a great entrepreneur? Or this person's dreaming?

• 39:56Peter Diamandis?

  Is there a way that, elements that make you put them in one or the other bucket?

• 40:02Speaker 01

  That the pitch is totally how the check writers benefit from this new idea, that there's problems that the customer has that are not being solved or there's better ways to solve the dangers they have, the opportunities they have, the strengths they have. And you've got a unique take on how they're immediately going to experience benefit. So, and if they don't have a handle on who the customer is, then they're making up...

• 40:34Speaker 01

  Uh, you know, they're, they're making up fancy futures.

• 40:37Peter Diamandis?

  Yeah, that's a real important point. I would, I would say it a slightly different way. If you've got someone who's got a neat technology that's searching for a problem, uh, that's a failure mode over and over again versus.

• 40:48Speaker 01

  Yeah, I mean, I think probably the, you know, the microchip, I, I, I think this all starts when Gordon Moore, you know, put together a prediction line, you know, in nineteen sixty five, wasn't even called microchips. I think seventy three is when the term hit on. And um, it was very, very clear that this was a historic game changer, that there was going to be something. And um, I think there was a lot of um, uh, people throwing solutions at non-problems because people were throwing money at uh, new solutions. But I suspect if you go back to any other, um, you know, since the industrial revolution, that was

• 41:33Speaker 01

  the case, you know, people, you know, a lot of people have money that they don't need and they just wanna throw it at somebody, you know?

• 41:44Peter Diamandis?

  Or, or at some, at some problem to learn about. If you, if you go back, you know, into late eighteen hundreds and early nineteen hundreds, um, when electricity first became uh, viable, the, the entrepreneur de jour, or the invention de jour was taking a mechanical thing and adding electricity to it.

• 42:03Speaker 01

  Oh, yeah.

• 42:03Peter Diamandis?

  Right? You know, the electric dishwasher.

• 42:06Speaker 01

  Well, in nineteen ten, there were three thousand car companies in the United States.

• 42:10Peter Diamandis?

  Crazy.

• 42:10Speaker 01

  And uh, forty percent of them were electric cars.

• 42:13Peter Diamandis?

  Yeah, that's even crazier. And, and now, of course, we're in the midst of the generative AI revolution, where everybody's throwing generative AI at their favorite, their favorite problem.

• 42:23Speaker 01

  It's uh, I mean, it's, it's new, but it's classic, there's a classical, a classic pattern on what happens during the early days. People are betting on the bet, they're not actually betting on the, you know, they're, in some ways, they're not even betting on the thing. They just wanna see. You know, I mean, there was the recent example, not naming names here of, you know, the in the crypto crypto world and the guy got 220 million and he was in shorts and somebody said, I love the founder. I love the founder. 220. I just want to give him 220 million.

• 43:03Peter Diamandis?

  I could not imagine who that could possibly be. So I want to, I want to maybe wrap with a rapid fire session on this podcast of like advice to someone who wants to be an entrepreneur or thinks they might want to be an entrepreneur. It's like, what do you need to think about? I'm going to throw out the first one. Choose your co-founders wisely. You're going to, you're going to live with them, spend time with them, make sure they bring a different, unique ability than you do and that you talk about, you're talking all the time and sharing your ideas and your challenges and you have respect to their person. What's another piece of advice?

• 43:46Speaker 01

  Yeah, I would say the other thing is make your first hire an artist.

• 43:52Peter Diamandis?

  Really? That's unusual. Tell me about that.

• 43:55Speaker 01

  Yeah, because they can take your ideas and put them into graphic form and

• 43:59Peter Diamandis?

  Can it be Dolly 2 or a stable diffusion?

• 44:02Speaker 01

  Well, I mean, I, my rule is I always keep a smart human between me and the technology.

• 44:09Peter Diamandis?

  Okay.

• 44:10Speaker 01

  And so, but my first hire was an artist. He was 16 years old and he had, he was into computers, you know, so this was 1987, 1988. And I promised him a Mac 2 if he came aboard. The Mac 2, yeah, it was the little Mac to start with, you know, the little box like Mac.

• 44:34Peter Diamandis?

  Yeah.

• 44:34Speaker 01

  But we told him that when the Mac 2 came in, they'd get the, you know, I mean, he was a dream. And when I have artistic skills, I was a layout artist in the advertising world. So I knew the basics. And he said, how come? He says, how come we always use Helvetica? And I says, because everybody uses Helvetica. I know, but we should be different. And I said, there's a reason everybody uses Helvetica, you know? And, and you know, and so I hired an artist and because we had fantastic slides in those days and you could tell your whole story.

• 45:11Peter Diamandis?

  Dan, you're dating yourself way back where?

• 45:14Speaker 01

  Late nineteen eight. I mean, I was old in nineteen eighties. I mean, I'm I'm timeless now.

• 45:21Peter Diamandis?

  Yes, you are. You are. You're only halfway done with life at, at, at, at least.

• 45:25Speaker 01

  Seventy eight.

• 45:28Peter Diamandis?

  The next.

• 45:29Speaker 01

  That was my first and I, people said, well, why not a secretary? And I said, first of all, you can hire them by the hour. But you want to get your image of what you're doing in picture form as fast as you can.

• 45:43Peter Diamandis?

  We now have generative AI to help us on that. I'm going to throw out another one. Pick a subject you're obsessed by, not interested in. That is like, that you pick a topic for your business or company that you're is your passion about, you're obsessed by, and it's not a passing fancy.

• 46:02Speaker 01

  It's a passion for or a passion against?

• 46:06Peter Diamandis?

  No, well, it could be a passion for or a passion against, right? It could be, it could be a problem that you refuse to let go on any further. I'm going to solve this no matter what it takes. Or I'm, I'm going to create this because

• 46:20Peter Diamandis?

  what's another piece of advice?

• 46:21Speaker 01

  Well, mine is talented, successful, ambitious entrepreneurs who don't have any lifestyle goals that they're heading towards and don't have any status goals. They just have growth goals.

• 46:36Peter Diamandis?

  Okay, I, I, I buy that.

• 46:41Peter Diamandis?

  Understand your unique ability and, and do that which you're great at and you love doing. And then bring in partners or employees who do the other stuff for you and support you.

• 46:57Peter Diamandis?

  Yeah. Oh, another one you mentioned, we mentioned earlier, generate dollars on day one if you can. Get to check writers.

• 47:05Speaker 01

  Get a fast turnaround on your first. So I have a 90 day turnaround on anything new that I create. It's all, it's in the profit after 90 days. You know, and mind you, I'm dealing with ideas. It's not with stuff, you know, so I can do that. But I remember when we, when A360 got created and, you know, I said, you know, you're going to have enormous amount of money before the first day of this. And we did, we did. And you were able to grow your team from that. And, and, you know,

• 47:42Peter Diamandis?

  For, for sure. I mean, the equivalent here is build a mind, a mentally viable product, an MVP. You can prototype it. You can start selling it. You can start taking out Google AdWords and testing it. You can throw up Shopify page and see if anybody wants it. You can go to, you know, a variety of platforms and, and get

• 48:05Speaker 01

  Hey, yeah, today.

• 48:07Peter Diamandis?

  Get customer feedback, get customer feedback.

• 48:10Speaker 01

  Yeah. And there's only, the only person who can tell you it's a good idea is somebody who would write a check for it. They're, they're not, nobody else's, your friends, your family, especially not your staff. You're paying them. They, they don't think any new idea is that good.

• 48:27Peter Diamandis?

  I, you know, it's, well, it's interesting, right? On the flip side, sometimes your staff will tell you it is a good idea when it isn't. I remember I was interviewing Elon Musk on a, on a Goldman Sachs, uh, stage and, and he said something I'll never forget. He said, your friends tell you how great everything is. Your best friends tell you what suck. So make sure you've got people.

• 48:47Speaker 01

  Yeah, but check writers will just tell you that they wouldn't, they wouldn't pay for it the way it is. But if you've made some adjustments, then that's great market research, you know? And I think you mentioned Elon, and I think Elon is the, from my perspective, you know, which is not close like yours is, he is, of all the big tech people, I think he's the truest entrepreneur of them all.

• 49:13Peter Diamandis?

  Yeah, for sure. Sees a problem, jumps on it.

• 49:15Speaker 01

  Well, not only that, but he continually takes big risks, okay?

• 49:19Peter Diamandis?

  Yes.

• 49:20Speaker 01

  And the other thing, he's got a very interesting, which I totally agree with, is fail as fast as you can and as often as you can. And pretty soon, you're gonna get to something that nobody else could possibly have created.

• 49:33Peter Diamandis?

  Yeah, it's amazing.

• 49:34Speaker 01

  I mean, he's got a different kind of nervous system, I think.

• 49:38Peter Diamandis?

  He does. He's also one of the most extraordinarily intelligent individuals I've ever met in my life, who has a first principle thinking mindset, yeah.

• 49:47Speaker 01

  He read and almost memorized whole encyclopedias when he was a kid. And, no, no, I mean, his understanding of geopolitics and everything. I mean, when Elon makes a big decisions like a $10 million factory in Mexico.

• 50:05Peter Diamandis?

  10 billion, right, yeah.

• 50:06Speaker 01

  10 billion, 10 million, 10 million. Yeah, you can't round off with 10 million. But $10 billion factory, he's sensing something in the wind. And the thing is, that, you know, that there's a shift on and where the, you know, North America, the United States, Canada and Mexico have just tested out, you know, supply chains from all over the world that aren't dependable. And he said, one of the things everybody's decided, it can be in Mexico, but it has to be on the continent. You can do it by truck, you can do it by train, you can do,

• 50:48Speaker 01

  you know, and everything. But the other thing, the pay scales in Mexico are about one-sixth the pay scales in the United States. At almost every level, the US is six times the pay scale. And you have to have that with high technology. You gotta have this spectrum of pay scales, you know, for it. I just think, you know...

• 51:12Speaker 01

  I mean, he bought Twitter and everybody says, you know, he's just fooling around. It's like buying, buying, somebody buying a baseball team. And I said, no, no, no, no. I said, I mean, it's really dangerous to second, second guess Elon Musk.

• 51:27Peter Diamandis?

  Yeah, no, my, my guess is that when he takes it public again, it'll be at least 5X what he bought it for, um, with a number of revenue streams. All right. Uh, my last thought, uh, uh, on, on entrepreneurship here to close out our podcast here, buddy. Um, is it is one of the highest forms of artistic creativity. You're creating something that can change the world. If you've got a bent for it, if you're interested in it, I could not commend it more than, you know, a way of life. It is extraordinary. I love being an entrepreneur and I love hanging out with entrepreneurs and I think they're the most important forces of, of making the world a better place.

• 52:10Speaker 01

  Yeah. And the, I talk to people as if it's a career choice. It's not a career choice. It's a lifetime choice. Okay. And I said, you have to understand that if you've been at it for five or 10 years, this is a life sentence.

• 52:26Peter Diamandis?

  There's no going back.

• 52:29Speaker 01

  They won't have you back. And what are you going to show them for the 10 years, you know? Well, who did you work for? I mean, you know, uh, who withheld your tax at, uh, you know, at Source and everything like that, you know?

• 52:41Peter Diamandis?

  You be, you become unemployable after, after a year or two.

• 52:45Speaker 01

  Yeah. I would say that that's, that's the actual decision that takes the greatest commitment. This is for life, you know, your whole, your whole life. Certainly mine. I mean, uh, uh, the day I quit will be the day after I die.

• 52:59Peter Diamandis?

  Yes. Uh, for sure. All right, buddy. As always, a pleasure to spend time with you.

• 53:07Speaker 01

  That was a good riff. That was a good.

• 53:08Peter Diamandis?

  That was, that was fun. All right. See, see you soon. See you next time.

• 53:13Speaker 01

  Okay. Thank you, Peter.

• 53:26Speaker 00

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