Multi-Billionaire Marc Lore on How to Find Your Big Opportunity | Impact Theory | Transcription

Transcription for the video titled "Multi-Billionaire Marc Lore on How to Find Your Big Opportunity | Impact Theory".

1970-01-02T08:42:24.000Z

Note: This transcription is split and grouped by topics and subtopics. You can navigate through the Table of Contents on the left. It's interactive. All paragraphs are timed to the original video. Click on the time (e.g., 01:53) to jump to the specific portion of the video.


Introduction

Intro (00:00)

I'm not going to accept that it can't be done unless somebody proves it's a zero probability and often the case you can't prove it's zero. There's always some non-zero probability and it's typically the stuff that has that's really close to non-zero nobody else is touching that's where the big opportunities are. Hey everybody welcome to Impact Theory. Today's guest is a profoundly successful serial entrepreneur who has gone head to head with some of the largest companies on the planet and won. Fortune Magazine named him one of the smartest people in technology and given his unprecedented string of successes it is not hard to understand why. He's founded and sold for massively disruptive companies including The Pit which challenged online giant eBay and had a successful exit just two years after beginning. He also co-founded Diapers.com destroying the myth that people would never buy diapers online and establishing it as such a powerful player in the industry that it was acquired by Amazon for a staggering $550 million. Most recently he founded Jet.com which proved that it is possible to compete directly with the juggernaut Amazon and build an enormous business in the process. Under his leadership Jet.com raced at breakneck speed to a billion dollars in sales and subsequently sold to Walmart for a dizzying $3.3 billion. Again after just two years in business. Now the CEO of Walmart e-commerce this Wharton Business School grad is once again demonstrating that the right idea executed well can thrive against any competitor. So please help me in welcoming the man Ernst & Young named regional entrepreneur of the year the former wannabe farmer and now storied entrepreneur Mark Lorry. Welcome man. Good to have you on the show. Mark - Great to be here. Tom - And dude the fact that you did it once already amazing. To do it two, three, four times is pretty crazy. What is it that you understand that makes you so successful that you think other people are missing? Mark - I don't know if necessarily other people are missing it. I'm willing to do whatever it takes like create a situation where it feels like life or death.

Intro (02:47)

Tom - Billions or body bags. Mark - Billions or body bags. Yeah. No but in all seriousness that I think is distinguishing characteristic because all four of the businesses they were all turned out to be successes but if I didn't put it into that extra gear I think none of them would have made it. I really think that you have to be willing to go all the way. Tom - How do you pull that off though? The first time I get it because it really is I know you left the banking. You didn't exactly have a safety net and so the first one really is sort of billions or body bags but after that I mean you've had some huge wins. How do you recapture that? Mark - I always figure out a way to put myself in a position where it can't not work and so the first one it was not only quitting but I also put every dollar in my bank account into that first company. Tom - Did you have kids at that point? Mark - Yeah. I just had a kid. Tom - What do you tell people? Like the number of people that want to be entrepreneurs that come up to me and they say, "Look, I've got this litany of things. I'm married now. I have kids. I can't really do this." How did you position yourself financially and emotionally to pull that one off? Mark - I just convinced myself that I would do this for a year or two, give it a real go. Tom - Because you had that much saved up or? Mark - The idea was to take everything I saved, invest it in the company, take a salary but I still needed to raise capital to kind of continue on and so I hope that I'd be able to do that and if I was able to then I'd be able to sustain. Worst case, wasn't able to raise money, had no more money in savings and had to go back into the workforce, did I think that I can get back in? Was I past the point of no return and I thought, "No. I'm seven years into my career. Worst case, I can go back and get a normal job again." That was too much of a safety net. You could always go back. It was investing every penny of savings into the business that was the real catalyst for making sure that it worked. In the subsequent business, it was less about the money that was at risk and more friends and family money. Every relative, every friend, everybody I knew pretty much had a stake in the startup and I just didn't want to disappoint all the people that I love and care about. That drove me more than anything. for people or can be really destructive. Do you think about framing it in a certain way that makes it powerful for you?


Leadership And Personal Empowerment

Intro (00:00)

I'm not going to accept that it can't be done unless somebody proves it's a zero probability and often the case you can't prove it's zero. There's always some non-zero probability and it's typically the stuff that has that's really close to non-zero nobody else is touching that's where the big opportunities are. Hey everybody welcome to Impact Theory. Today's guest is a profoundly successful serial entrepreneur who has gone head to head with some of the largest companies on the planet and won. Fortune Magazine named him one of the smartest people in technology and given his unprecedented string of successes it is not hard to understand why. He's founded and sold for massively disruptive companies including The Pit which challenged online giant eBay and had a successful exit just two years after beginning. He also co-founded Diapers.com destroying the myth that people would never buy diapers online and establishing it as such a powerful player in the industry that it was acquired by Amazon for a staggering $550 million. Most recently he founded Jet.com which proved that it is possible to compete directly with the juggernaut Amazon and build an enormous business in the process. Under his leadership Jet.com raced at breakneck speed to a billion dollars in sales and subsequently sold to Walmart for a dizzying $3.3 billion. Again after just two years in business. Now the CEO of Walmart e-commerce this Wharton Business School grad is once again demonstrating that the right idea executed well can thrive against any competitor. So please help me in welcoming the man Ernst & Young named regional entrepreneur of the year the former wannabe farmer and now storied entrepreneur Mark Lorry. Welcome man. Good to have you on the show. Mark - Great to be here. Tom - And dude the fact that you did it once already amazing. To do it two, three, four times is pretty crazy. What is it that you understand that makes you so successful that you think other people are missing? Mark - I don't know if necessarily other people are missing it. I'm willing to do whatever it takes like create a situation where it feels like life or death.


Intro (02:47)

Tom - Billions or body bags. Mark - Billions or body bags. Yeah. No but in all seriousness that I think is distinguishing characteristic because all four of the businesses they were all turned out to be successes but if I didn't put it into that extra gear I think none of them would have made it. I really think that you have to be willing to go all the way. Tom - How do you pull that off though? The first time I get it because it really is I know you left the banking. You didn't exactly have a safety net and so the first one really is sort of billions or body bags but after that I mean you've had some huge wins. How do you recapture that? Mark - I always figure out a way to put myself in a position where it can't not work and so the first one it was not only quitting but I also put every dollar in my bank account into that first company. Tom - Did you have kids at that point? Mark - Yeah. I just had a kid. Tom - What do you tell people? Like the number of people that want to be entrepreneurs that come up to me and they say, "Look, I've got this litany of things. I'm married now. I have kids. I can't really do this." How did you position yourself financially and emotionally to pull that one off? Mark - I just convinced myself that I would do this for a year or two, give it a real go. Tom - Because you had that much saved up or? Mark - The idea was to take everything I saved, invest it in the company, take a salary but I still needed to raise capital to kind of continue on and so I hope that I'd be able to do that and if I was able to then I'd be able to sustain. Worst case, wasn't able to raise money, had no more money in savings and had to go back into the workforce, did I think that I can get back in? Was I past the point of no return and I thought, "No. I'm seven years into my career. Worst case, I can go back and get a normal job again." That was too much of a safety net. You could always go back. It was investing every penny of savings into the business that was the real catalyst for making sure that it worked. In the subsequent business, it was less about the money that was at risk and more friends and family money. Every relative, every friend, everybody I knew pretty much had a stake in the startup and I just didn't want to disappoint all the people that I love and care about. That drove me more than anything. for people or can be really destructive. Do you think about framing it in a certain way that makes it powerful for you?


Overwhelming sense I can't fuck this up (05:29)

Are you sitting there putting actual words behind the idea or is it just this overwhelming sense of like, "I can't fuck this up?" It just brings out abilities you didn't know you had basically. Just knowing that you need to go all in here and do everything you possibly can and work as hard as possible to make it happen. It wasn't an anxiety like, "Oh, I can't fail. I can't fail." It wasn't like that. It was more just ... It's like you don't really think about it. You just go. It's sort of, if something were to happen in the moment that was life threatening, you'd react in a certain way that you needed to react without having to think about it. That's sort of the way it is. Tom Bilyeu Do you consider yourself an aggressive person? Tom Bilyeu It's interesting. I'm not aggressive either, not by nature, but I have found in business it is ... When I think about that story of you really backing yourself against the wall or having your friends and families money in the business and you're like, "I really don't want to mess this up." For me to tap into the aggression, that's what I had to learn. For me to go from an employee to an entrepreneur, it was a game of learning to be aggressive. It was being bold, striking, even if I was the youngest person or the least educated that I had to be able to step up to the plate to learn, to try something, to be willing to fail, all that. For me, I really had to cultivate an aggressiveness about myself to be able to do that. Taking things like family money or whatever, which is not my story, but things like that and saying, "All right, look," like actually talking to myself, "Look, man, you're not going to fuck this up. You're not going to let these people down. You're going to do it, but it's not going to weaken you. This is going to make you stronger. You got this. Stay focused." Do you have an internal dialogue like that or do you have a different approach to it? Dave: I didn't really think about it day to day. It was more just ... I can imagine if it were the equivalent, the analogy of being in some sort of bike race or marathon or something and you basically just bike as hard and as fast as you can for as long as your body will allow you to do it. Just push yourself so that when you get across the finish line, you're like, "I couldn't have gone any faster on this day. Just everything I had went into it." Once you put yourself into that gear, you're in that gear. You're not really thinking about it. I'm just running as hard as I possibly can to leave nothing on the table. How do you instill that in your teams or do you?


Is your leadership style of personal empowerment and trust uniquely about you? (07:59)

Dave I look to hire people that are self-motivated, who are more missionary than mercenary. It's not about ... Tom Bilyeu What do you mean by that? Dave I mean the primary motivation is not money. The primary motivation is to make an impact on the world. The company has a mission. It's got a vision. It's typically bold. You want to find people that really believe in it and want to make a contribution and be a part of something bigger than themselves and they're willing to work hard at it. Yes, money will come and they want money, but it's secondary. Some people, having worked in banking for seven years, it's very different. It's, "I'll do whatever you want. Just pay me." Find people that are really self-motivated, get them in the right position, and then empower them. Give them all the information, be transparent, trust them, and then just empower them to run and not micromanage or get in their way. I find you have incredible leverage when you have great people and you let them do their thing. Tom Bilyeu If you had to give a few key characteristics to what makes somebody great, one thing I'll say is very difficult is hiring, especially in a hypergrowth company.


How do you find/hire people who are smart, tenacious, etc.? (09:02)

You're having to hire so fast. What are some key elements that you look for? Is it personality traits? Do you look for different personality traits for different jobs? How do you go about that? Dave Yeah, I've learned so many lessons along the way. Where I come out is, and I see this happen in a lot of startups, you'll be looking for a certain position like, "I need a supply chain person to do X." The initial ... You start from this place of trying to find someone that's done that before. The chances of finding somebody that's actually done it before, that's in the top 10% for that job, and get that person to quit their job and come work and take the risk of a startup, I found that that's too hard, too much of a unicorn. Certainly, like you said, if you're hiring lots of people, you're not going to get lots of people like that. Then does that mean you just go after mediocre people? How do you solve the problem? What I've done is I say, "Okay, find the smartest person I can that exhibits the traits that I look to hire for." The traits would be I use the SPOTAC, which is smart, passionate, optimistic, tenacious, adaptable, kind, and empathetic. Those are the traits that I look for. The entire interview process is trying to make sure that people align to those traits because I find that those people are more missionary, they are more self-motivated, they want to be empowered, they want to do big things. If you find great people like that after six months or 12 months or 24 months, they want to be becoming some of the top people in their field because they learn it and they've got all these other traits there. That's what I found.


How to figure out if people are adaptable (10:55)

Tom Bilyeu: I am desperate to know what your interview process looks like. How the hell in an interview do you figure out SPOTAC? SPOTAC? How do you suss that out? What are some key questions? Do you have them walk in and it's amazing? How do you figure out if people are adaptable? Jay Samit: Here's the secret to interviewing, for me at least, is never to ask a question that somebody could have already prepared in advance. It levels the playing field. Nothing like what's your strength, what's your weakness, tell me about some great thing you've done. A lot of that is just people that prepare and they have good answers. Some people have mentors or other people that have been through it and say, "Hey, listen. Let's prepare. Let's go through it." I do it with my daughter. My daughter had an interview. I'm like, "Okay. We're going to prepare for this. There you go. Give me your strength. Give me your weakness." I'm like, "Okay. Give me your strength." She did an interview. She nailed it. It was the same questions. I don't like that. I don't think you could in an hour, which is typical length of an interview, suss out whether somebody has these traits if you're just asking. The other thing that happens too, I find, is that there's also an unconscious bias toward people that do have more connections, do have parents that have been there, done that before. I was the first person in my family to go to college, very different than my daughters now. To avoid the unconscious bias and also to make sure that you take level playing field, I ask questions that basically you couldn't prepare for and really trying to open people up to see who they are. Tom Bilyeu, Ph.D. You have many examples. Richard D.: Yeah. I'll give you a great example. One that I ask is, "What's the minimum amount of money that you would take to walk backwards everywhere you go for a week?" Can't tell anybody why you're doing it. If they ask you to say, "I can't tell you," you have to go to work. You have to go out on the weekend. It has to be a normal week, backwards everywhere. The only thing I'll do is I'll guarantee you safety. It's after-tax dollars. What's the minimum amount of money that you would actually take? If I wrote you a check right now, you would go and do it, but the minimum. People will come up with numbers and I'll just press them. I'll say, "Somebody says I would do it for five grand." I'm like, "I don't believe you do it for five grand. This has to be actually ... I would, I would." Then I go and leave the room and come back with a check. I start writing it out. I'm like, "Whoa, whoa, whoa, whoa, whoa. No, no. I didn't know you would actually ... I said, I gave you ... I told you. I told you." Basically just having the discussion like this is good. I ask people questions like, "If you could only be one of the two, what would you be?" You'd be known to be very nice but not very smart or very smart and not very nice. You can only pick one. I find it's kind of interesting. Some people are like, "Oh, of course. I can never not be nice to people. Even though I don't want to be smart, I'll pick very nice and not that smart." Other people are like, "There's no way I'm going to be that smart." It's kind of interesting. It's probably like ... I'd say it's probably 60/40 asking that question. Tom Bilyeu: Which is a 60? Jay Bhattacharya, Jr. I don't know how many people are lying or just think that's what I want to hear. Probably 60 will say the nice. That's one of the things I'm looking for. I definitely want people, given the choice, to prioritize being nice over being smart. It's more just to get people opening up, get them talking about real things and seeing how they problem solve, how they approach situations. Tom Bilyeu, Jr. How do you deal with employees that have a real different tolerance for risk when you're asking them to take a big swing or to take a chance with you on a new business?


How do deal with employees that have a real different tolerance for risk (14:21)

Jay Bhattacharya, Jr. I think it's really tough to ask people that are already in the organization that haven't been vetted through a process of, "Are you comfortable taking risk?" and ask them to take risk. No, it doesn't work. You don't want somebody to do something that's contradictory to their nature. You have to find the right people up front. That's why in a startup, you have a clean slate. I found something really interesting is that people that have typically gone to really good schools and done really well grade-wise, they're used to getting A's on everything, have a much harder time taking risk because they look at something that has a low probability of success and say, "Why would I do that? I'm used to getting A's and that's 95%, so why would I do something that has 20%?" Because the outcome is 200X or 500X. That's why you do it. A lot of people just can't get comfortable with that. I think that's different between an entrepreneur or not. Somebody who's comfortable with a low probability of success with a huge outcome and then you go after it and you're okay failing. I failed so many times as a kid, whether it be academically or otherwise, that I was so comfortable with failing that it was not even a constant ... That combined with just being chill generally about things not working out, the combination of that allowed me to freely just take risk without any regard for maybe failing. Tom Bilyeu: I love the story that you have about applying to college and the non-zero probability. I thought that was really, really a powerful story.


The Rejection That Changed My Life (16:03)

Walk us through that. Jay Samit: Okay. I didn't have good grades in high school. This is funny. I tell people this and nobody believes this story, but it was sophomore year in high school. I remember walking down the corridor and somebody's like, "Hey, where are you going to go to college or what are you thinking about?" I said, "Oh, I'm probably just going to go to Harvard." They said, "Harvard? You can't ... You're not going to get in Harvard." I was like, "What do you mean? Don't you just send your thing in and pay and go?" No, you have to actually apply and they have to accept you. That was sophomore year in high school is when I learned that, which is crazy these days because I've been talking to my daughters since they were like this Yay Bay about college. I didn't really know. I wasn't applying myself in school, didn't have good grades. My dad had asked me ... I did all the applying myself, went to the colleges myself. Parents didn't know what was going on. Then after the deadline, this is like in January, February, the deadline was like November, December of applying to college. My dad said, "Hey, how's it going? How's the college stuff coming? Where are you going to apply?" I said, "Oh, I already did. I applied. I'm done." He's like, "Oh, you applied already? Did you apply to Wharton?" because he knew that I knew that that was ... I talked about that business school and I wanted to do business and stuff. I'm like, "Oh, no, I didn't apply to Wharton. There's no way I could have gotten in." He said, "Oh, really? There's no way you could have gotten in?" "Zero, zero." I said, "Well, I don't know if it's zero. It's pretty close to zero though." I said, "There's a lot of essays and all this stuff." He's like, "Oh, so it's work. You didn't want to do the work." I said, "No, I'm fine to do the work. It's just basically my guidance counselor told me I can't get in. Objectively, I don't think I can get in, so I didn't apply." He's like, "All right." He was looking at me and I'm like, "All right. You're right, Dad. I'm going to apply." This was after the deadline. This is two months later. I went, did all the essays, did the whole application, did everything, sent it in. I'll never forget. It was May when you got the letter. It went out to the mailbox. I saw it. It said, "Wharton School." I ran in. I opened it up. I got rejected. It really taught me a great lesson because when I was opening that envelope, it really felt non-zero to me. Even though I had no chance of getting in, it was after the fact. It probably was as close to zero as anything could possibly get, but I just felt happy that I went through the process. Nothing had changed. It was still the same probability, but I was really happy. I went through the process and took a shot, and I was actually, I had an at-bat. That letter, that chance, there's a possibility it could have said accepted, although it's as close as you are. I've just taken that in life in general. It's like, I'm not going to accept that it can't be done unless somebody proves it's a zero probability. Often the case, you can't prove it's zero. There's always some non-zero probability. It's typically the stuff that's really close to non-zero, nobody else is touching. That's where the big opportunities are. Tom Bilyeu: When I heard that story, man, I was really blown away. Now, of course, I know the punchline of your life is that it all works out okay. Hearing that story after seeing what you go on to do with your life and really thinking, "Wow, the vast majority of humanity, dude, when they get that letter and they're rejected, they're like, 'See, Dad, I told you. I never should have wasted my time.'" The fact that you take that lesson to be, "In that moment, I held the envelope. It went from when I didn't even apply, I knew guaranteed I wasn't getting in to now there's actually a shot. I'm going to pursue that in the future that I'm actually going to try things." I think that's really powerful.


How Adaptable Are We? (19:50)

I want to tie this back to something you said earlier. Part of what you look for for people is adaptability. You also talked about some people have a personality this way, some are that way, and don't put people against their nature. How much of that ... I want to believe, literally my life is predicated on the belief that someone watching this right now, hearing you tell that story, they will now forever think the way that you think about non-zero probabilities and they will go on to do something that other people wouldn't do. They weren't born that way. They encountered that information and they chose to adopt it. How adaptable do you think we are? Can you teach that to somebody? Could you teach that to your children or is that you don't have it or you don't? Jay: Yeah, I think it's a little bit of both. I think you can definitely be better at it, but I do think there's something that you're not necessarily born with, but that you're raised with. After 18 years basically, at home with parents and the friends that you surround yourself with, you're definitely molded in a certain way. I think it's tough to change it dramatically after that. You can certainly push it one way or the other, but my starting point was way out there, just given the way I was raised, which was pretty hands off. Tom Bilyeu: What did your parents teach you?


What Did Your Parents Teach You? (21:13)

Was it just the freedom to learn on your own that was powerful or did they give you certain things that have really carried through? Jay; I think different things from different parents. I think my dad was pretty non-present and to get his attention, which was not that frequent, you'd have to do something pretty spectacular, which is probably one of the driving forces to this mentality. You need to go and do big things to be loved basically in the world. That's been an internal drive and motivator that I didn't really know and appreciate until just recently, you start to think through stuff in your life and why am I this way? Why does this make me happy? Why am I driven to do this? Then you always, if you think about it long enough, you tie it back to something in childhood that's the catalyst. I don't know what it would have been like without that. I coupled that and I could have gone the other way, I guess, and just been a bum and just forget it. I went this other way. I think on my mom's side, I think there was such incredible empathy and caring and kindness on this side and that the coupling allowed me to achieve what I had set out to do. Jay; I think the key thing that I really always try to instill is the sense of caring, kindness and empathy.


The Key To Giving Advice (22:35)

You can't pick too many things as you know. Kids are not going to react but if there's one thing and you want to keep hammering it, there's a good chance that could sink in. I think that's how we approached it. Let's go with the core, be good to people, treat people as you want to be treated, be empathetic, be kind and just drill that into them. Not only drill it into them but by example as well and see that. I think they have turned out to be very kind, empathetic. That at the core, I feel good. There's other things that you'd say as a parent, "Oh, well I wish there would be more like this and more like that." At the end of the day, if you've got the nucleus of being kind and good, then everything else is okay. I would just say you have to pick something.


Self-Discovery (23:34)

Tom Bilyeu When you're in banking, you're following a relatively typical path for somebody who's ultra ambitious. I won't say it's just a typical path but for somebody who's really got some drive and ambition, I get why you went into that. What was the epiphany that made you decide that that wasn't for you? When did you know that leaving was the right thing and how do you structure your life now to make sure you never go back to the way that you felt when you were banking? Jay Samit: Sure. Well, I mean just starting out. In grammar school, high school, I started every business that a kid could start. I was doing paper, car waxing, lawn mowing, baseball cards, recycling, lemonade stands, anything and so I was quite entrepreneurial as a kid but there wasn't really any thought to go to work for a startup. That really wasn't the case. I graduated high school in '89 and in college in '93. That wasn't really a thing until the late '90s really. I for some reason got interested in stocks in like 10 years old and then started reading books on derivatives and stock options when I was like in seventh grade, eighth grade and I was really into it and went to Bucknell, studied finance, knew I wanted to work with stocks, went to work in banking and seven years into it, I had gone pretty far pretty fast because I was willing to work as hard as it took to kind of move up. I was executive vice president, chief risk officer, the youngest in the bank's history kind of thing. Things were going really well but I wasn't happy and it really was interesting. I'm like, "Wow, this is as good as I possibly could have imagined doing six, seven years out of college." I was making a ton of money. I was doing really well but I wasn't fulfilled. I wasn't happy and when I was really thinking about it, I realized that what I really missed was that sort of entrepreneurial kind of feeling that I had as a kid, building something from nothing. Yeah, I had this incredible pull that just toward entrepreneurship and startup that got to the point where I just walked in to my boss's office and said, "I'm going to quit and become an entrepreneur." He's like, "That's really funny." I'm like, "No." He's like, "Oh, well, what's your idea?" I said, "Well, I don't have an idea yet but you're going to quit this job making this amount of money. Didn't you just have a kid?" "Yeah." "That's crazy." I said, "Yeah, well, I'm going to do it." He said, "Well, you're serious." He said, "Well, if you're that serious, can I be your first investor? Can I put 50?" I think it was 50 grand he said. I didn't know anybody with money and so that was the seed. He introduced me to two people. I met with those two people. They introduced me to a couple of people and I wound up, I met with like 200 angel people and got 60 investors. Tom Bilyeu: I have to stop you there because people at home, if they're not having a seizure right now and desperate for me to ask the question that I'm about to ask and they're not paying attention. All right, you're an insanely hard worker. I'll give you that but for a guy sight unseen to say you're quitting, you have a kid, that's crazy. That's so risky. He's a banker so he's not exactly captain risk and for him to go, "I want ... " Without knowing what you're going to do, "I want to invest $50,000 in you," which was I'm assuming a very smart bet on his part. So what is it? I think everybody has something that they get early wins in. I'll say for me it was verbal ability. Now I've put an inordinate amount, decades of practice into making it useful but I definitely got disproportionate results out of every amount of energy that I put in. Is there something that he saw in you like, "Yo, this guy is so good at finance. I know he'll never fuck up a business on that side," or was it something else? He knew you were a natural born leader. What was it that he was banking on at that point? I don't know exactly but I would think he probably saw a little bit of what I talked about before which is I won't let it fail. I'll do whatever it takes. Billions of body bags. Billions of body bags.


Cultivating Innovation (27:39)

I'll do whatever it takes. Work as hard as necessary to make it work. I think also I was just naturally really good at math which was something that I was known for which translates into finance, which translates into other stuff. Can we go into the billions of body bags thing for a second? First of all, I'm not a fan of burn the ships at the shore but the do or die mentality to me is so intoxicating. I have it very much so. It's exactly the thing that I will say is because I don't think I'm particularly bright. I don't have any entrepreneurial skills whatsoever when I started. Didn't have a lemonade stand but dude, when I fucking set my mind to something, that is it and literally I'm going to see it through no matter what. All the success in the world, I've only sped up in terms of my drive, my ambition, the speed at which with I move. I am so desperate to be able to package that up to say magic fucking words to somebody to give them that, the power of desire so that they'll want things the way that I want things because it's not in a destructive way. I'm not destroyed by it. You could take the wealth away. It wouldn't matter. That wouldn't phase me. It's that sense of like dude, we have so little time here, so much ability, potential that we can transform into real skills. How do you infect people with that? That is one of the things. I always tell people if I could give somebody a gift, it would be the gift to have that desire the way that I have the desire. - I agree. That is everything. - How do you build it? - How do you build it and give it to someone basically? - I want to believe it can be built because I know it can't just be given. I want to believe that there's a process. I think there is, but I'm always super curious. - The only thing, the thing I've seen is first of all, people need to feel an intense sense of ownership of their idea. Making sure that when somebody has an idea, you can help them mold it, but it's their idea and they have to feel like they're accountable to the idea. Then pushing them to go out there and tell the world, friends, family, everyone about their idea and what their vision is and what they hope to achieve. It's amazing how infectious that can be. When somebody gets out there and they start telling people, "Wow, that's a really good idea," or "Oh, can you do that?" Or, "I don't think you can do that." Whether somebody says, "You can't do it," or they say, "Well, that sounds like an amazing idea," in either case, it's pretty motivating. I find the people that are scared to tell people about it because they feel some sense of like, "Now I'm kind of committed," or "I've told all my friends about this big idea I'm going to go do." Just getting somebody to go out there, it's kind of like if you want to work out, they say, "Put your shorts, your T-shirt, your shoes right next to the bed. Get out of bed and put them on. Then once you get them on, it's easy to go." It's a similar kind of thing. It's like once you have your idea, start telling everybody you know about this idea and how you're going to do it. Usually that starts to snowball and then people feel a sense of accountability to it.


Overcoming Challenges And Leadership

Juggling doubt and deals (30:40)

Then take friends and family money. Some people say, "You know I don't want to take friends and family money." It's like, "Why?" Well, yeah, because it's kind of scary, right? That's always been a motivating factor, just knowing you've got ... It's not only the money, but it's also hold you accountable. This is like everybody you know will know that this thing failed and there'll be a monetary proof that it didn't work. Tom Bilyeu: You said that you're equally motivated by people telling you that it will work or that it won't work. Literally, when I look, every idea you've had has seemed like a terrible idea. Yet you've turned it into these juggernauts. One, how do you look at that and go, "No, no, no. I see a path there." Then two, when people start telling you, especially in the early days when you did not have the track record to back it up, how did you deal with doubt? Other people like putting doubt on you. Jay Samit: Yeah. Well, I mean, diapers.com is a great example because it was sort of I said, "My idea is pretty simple. We're going to sell diapers on the internet and deliver them to people's homes so they could have convenient access to something that's a pain in the butt." Then I talked to people in the industry and they'd say, "Well, let me tell you why it hasn't been done." It hasn't been done because diapers are loss leaders for places like Walmart and Target and Big Box. They don't make any money on it anyway. Then now, you want to pay for shipping and you want to pay for film it and they're heavy. By the way, wipes, that's basically shipping water. There's no way to make money. Every time somebody says something can't be done, there's also a part of me that gets a little bit excited because I'm like, "Okay. Well, then nobody else is going to do it. The big companies aren't going to do it." Then you kind of put that juxtapose that against really big market opportunity because the follow-up question I would always ask was, "Okay. Fine. You're not going to make money, but will there be customer demand?" People want diapers delivered to their door overnight at amazing prices. Everyone said, "Oh, yeah. There's no arguing with that. People will love that." I'm like, "Okay. The demand is there. The really big market can't make money." Then thinking about how to solve that, well, what if the diapers, the fulfillment, the shipping, all that was a loss leader online to basically sell that long tail with unlimited shelf space? Similar to brick and mortars, they use it as loss leader. You could afford to lose more money on diapers if you've got million SKUs to sell them with limited shelf space that you make money on. Once I got convicted on that, that that made sense and that penciled out, nothing was stopping me at that point. I didn't care what anyone said. The more people said it couldn't be done, the more fired up it got me.


The biggest step you can take today (33:37)

Tom Bilyeu: What do you think stops would be entrepreneurs? I'll say for me it's boredom. Boredom kills more entrepreneurs than anything. They don't understand what's coming for them. In your story, I hear something else. I wonder if there's something that you've seen. David I've never been done before which usually result in nice little businesses. I challenge people all the time to say it's not about the idea It's about the execution find and pick any industry out there. There's a way to disrupt it there's already a big market if you just figure out a way to do it a little bit better and execute well You could make a nice return on on Capital you could take anything take, you know, pizza delivery or something and just say great We know people order pizza. They get it delivered. It's great. What's wrong with it? Oh, it comes it's not hot the quality snarky, you know, what are the things? Okay, I'm gonna create this It's gonna be better quality faster. What whatever it is. Yeah, if you if you go and raise capital and execute You'll make that work doesn't doesn't have to be Anything super innovative. So I think that's what holds people back. I think once people get going I think they spend too much time Thinking about all the things that could go wrong and they get overwhelmed then it literally just paralyzes them I'd always say like forget about all that stuff Today's today. What's the biggest step you can take today toward your vision? Well, how could you make the most progress against the vision today? So I always push people to be really clear about the vision and then and then they take that step and then it's the next day And they say well, what no no don't focus on that. What's the biggest step you and as you start lining up? Five six seven eight weeks months in a row. You're like, wow look back It's some serious progress and focus on like how far you've come and and keep the vision in mind But don't get caught up between today and the vision because you'll just you'll spin out of control. I see that all the time How do you deal with failure?


How do you deal with failure (35:50)

Like surely none of your plans are like we're doing this. Oh, no, you just always know I've so many like Ted before in my life so many failure You know growing up and things and the way deal with it is not to dwell on it at all Just you just have to basically Soon as you recognize first of all being objective about progress So constantly reevaluating all the new information so you could basically say, you know here's the vision and you start marching and Information is coming at you every day Competition things the market the world whatever you need to to take in that information and then kind of reassess Constantly so you could be objective about making decisions and if you get to a point where you realize what you thought was true A year ago or two years ago is not true anymore Given all this information now where where do you need to be and as soon as you recognize that? Being able to tell people I was wrong forget that I know I said that that was when the information was this new information new We're gonna pivot and then get everybody aligned around it But willing to take that risk of looking stupid and and basically just changing your mind and sometimes that happens over a year or two years Sometimes it could be months. You could be months and say you know what wrong Objectively, we've got some new information. Let's go in this direction. So I think you can't dwell. You just have to reassess and And go if you're thinking about the failure or feel bad even for a minute That's just a minute of lost time going forward if someone wants to be a great leader What do you think are the key traits that they should be developing? It's funny I I get asked this question a lot and I thought about it a lot If I had to pick one and this usually surprises people I had to pick one trait of a leader It would be empathy for any business to be successful Most people would agree you need to have great people working in the business You need those people to basically give the everything that the best they've got You need to retain those people they need to be happy like if you really want to create a big sustainable business And then it comes back to well What does it take for the ability to sort of recruit great people and then keep great people and keep them motivated?


What does it take to be a great leader (37:27)

It's like well, they want to be happy. They want to feel a part of something Okay like what drives someone's happiness at the end of the day when you kind of When you really get into it, it's people want to be understood. They want to be heard They want to feel like that. There's something bigger than just dollars and cents in business and I think being empathetic is putting yourself in somebody's situation and being able to Relate to how they feel about business situation things outside of business personal stuff and I think that builds a lot of trust and respect and People willing to to be more loyal and committed and willing to give The best that they've got when they feel it's also a feeling of safety, too I think when when when people feel listen to heard and understood they feel safer and A lot of times people don't give their best or do their best because they feel unsafe which brings the total another topic around you know just creating a Inclusive work environment which I think is super important and the empathy plays a big part of that So going beyond empathy because I know some seriously empathetic people who are not good leaders So I'll say that is necessary but not sufficient. That's true What else are things that people should be working on if they want to lead I think entrepreneurs Should be thinking about what I call VCP vision capital people At least 80% of the time and I really focus probably even more than that percentage on those three things it's constantly, you know thinking shaping molding the vision and Articulating it over and over and over so that everybody's crystal clear on where we're going. What's the North Star? You know making sure that you Set your org structures under the people bucket set your org structure in such a way that you can put people In spots where they've got end-to-end ownership I don't like creating organizational structures where you know, you don't really know who's responsible for what so thinking about the org structure Getting that nailed bringing in the very best people in each area Is the sort of pea part and then and then making sure that you're able to go out and raise the capital which involves Selling your vision a lot of entrepreneurs about selling selling the vision to investors selling the vision to employees And then packaging it all up and and I think a good leaders are able to do VCP really well on the people part of it the single most important thing The outside of empathy I would say is is about Empowerment I would say especially in a startup where you're hiring fast moving fast You have to be able to empower people which means set the vision Let them know, you know What part of the org they're going to represent and what they're responsible for and then just let them run let them create Not get in their way not micromanage, you know I think if you really want to get the best out of people especially people that are self-motivated It's it's let them let them do their thing and Give them a chance to show what they what they can do. You've talked about the power of culture and core values Yeah, when you started jet.com, what were the core values core values would let you guys?


What were the core values at Jet.com (41:27)

Yeah was trust transparency and fairness Interesting and the reason why I picked those three and one another thing that I would say about core values to anyone that's thinking about Core values is and I've learned this lesson is you can't start with a list of ten If you get like a bunch of people in your management team together and you start doing a list They all sort of converge to a similar list of ten things, you know, you know and integrity and and Excellence and all this all this stuff. I think For the core values to really be core It has to be three or less and you have to be prepared to live those values as a company In a way that no other company in the world does And it's not just values like don't confuse them with traits. You're looking for like the spot a don't don't confuse it with that These are values that the company things that company can do to create a culture And so when we pick trust transparency and fairness reason why we picked those three is because we felt those were the three most important values To lead to empowerment. So if you want to somebody who feel empowered You got to be transparent as a company meaning be willing to share information share financials She has sensitive information be really open and know that there's a risk that that it could get out and they but that's you know But be transparent trust people so you trust them obviously with the information But also to do their job not to get in their way we didn't have a non-solicit agreement not compete agreement be trusted people and it was more of a Handshake come work here and we're gonna give you information that you won't get at other companies We'll trust you in a way that you've never been trusted before and we're gonna create a fair safe work environment When you were starting out, what was the secret to raising capital? I get now you have a track record There's gonna be a lot of people that would bet on you side on the scene at this point But what was the key in the beginning?


Convincing Investors to Give You Money (43:19)

How'd you convince people to give you money? Okay, so the first was the pit that I really raised money for which is an online sports stock market That's where I raised I did 200 investor pitches. So first thing I'd say is Prepared to do a lot of pitches people when they tell me like like I'm having trouble raising money I'm like, oh tell me how many people have you talked to I? Sat with probably like five or six people and it wasn't really a lot of interest like five or six That's about five hundred. You know, it's like so the first Company, I met with 200 people 60 of them made an investment which is a pretty good hit rate, you know almost one in three I still about still tell people that's 140 people that I gave the full pitch to that said no I don't want to invest so even though it's a great hit rate Still way more people gonna say no But the thing that put a lot of those 60 people over Was the fact that they saw the passion that I had for the idea and the commitment I was making not only for quitting my Job, but I invested three hundred and ninety thousand dollars into the business and they looked at the sheet I remember this one investor very specifically Garnett He looked at the sheet and he goes I see here you invested three hundred ninety thousand. Can I just ask? Well, I never seen that before. Why didn't you round to four hundred? I said well, I only have three hundred ninety thousand And he's like, all right, I'm in put me in it was like immediate, you know And and that sort of triggered for me. I didn't realize at the time that that was actually, you know Gonna be gonna be as valuable as it was but I started to use that with investors after I'd say, you know I I've invested, you know my entire life savings in this business. That's how much I believe in it No, and they're like are you committed? Are you really gonna like? Yeah, my entire life savings is in it I have I was making this salary. I'm making zero salary now. Yes, I'm committed. That's what got a lot of people over the hump So I would say if you're raising money from angel investors, it doesn't need you Don't need to have a network because I knew nobody it was just my boss and he introduced me to two people It's fine one person asking that introduced for a couple people and then each person you pitch Asked to introduce you a couple people and you just and so the network just grows and that's the way I did it It was no connections. A lot of people think you need connections. You need to know people you need there's no venture capital There's no institutional investor the first time it was five million bucks of just you know 80,000 a pop on average basically and look 60 people. That's how I started. It's crazy man. Yeah, dude Look your your string of success is so gnarly Congratulations, how can people stay in touch with you?


Maintaining Connections

Staying in Touch with Reid (45:58)

How can they learn more? I've been the last year. I've been sort of active on LinkedIn I don't really have time for other social media stuff But LinkedIn I try and you know once a week put a post I get an idea about something I could be think could be Helpful to folks and I'll sort of post it on there. So that would be the best way I guess perfect Yeah, all right last question.


Global Impact

Impact on the World (46:22)

What what is the impact that you want to have on the world? What is the impact? That's a big question. I just I mean the way I live my life every day is I try and Do what I was telling you I do with my kids and just trying to be empathetic and and give back and You know, you know give more than I take and I think that's kind of the impact I want to make give as much as I possibly can Without asking or taking much back in return Amazing. Yeah Well guys he is starting to put out a little bit more content I would say drink it all in what he has done is beyond extraordinary to be that all in in your life to gamble on yourself to learn from your mistakes to grow and just continue to execute at A higher on a higher level and that may be the most important thing that he said Execution is far more important than the idea So speaking of executing if you haven't already be sure to subscribe and until next time my friends be legendary. Take care While he was here on this planet In his human form he did something to make the planet better off because he was here He paid really good rent and was happy because of it You You


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