Thanks to Rob Dube for his Forbes interview. It’s been a dream of mine to be featured in one of my father’s favorite business magazines…
How to Build a Sovereign Business
Today, Bill owns four companies, SurveyGizmo, StickerGiant, SnapEngage and Avid4 Adventure. All are based in his longtime home of Boulder, Colorado—and he has no intention of ever selling.
But Bill wasn’t always bent on creating what he calls “Sovereign Businesses.” His earliest entrepreneurial forays were actually in flipping organizations. Now, business flipping is something he encourages owners not to do.
The Case for Sovereign Businesses
In the business world, most founders want rapid growth and a quick sale. After all, they’re striving to get the biggest bang for their investor’s buck.
“It’s all about extracting as much juice as possible from each business and flipping it as quickly as possible. And then the flipping cycles create a really horrible environment for employees,” says Bill. “I think long-term, the customers [also] get frustrated and get less as a result.“
After years in the business world, disenchantment with this toxic cycle kicked in. There had to be a better way to run a profitable, financially successful organization.
That’s when Bill remembered a famous deli located in his old college town of Ann Arbor, Michigan—Zingerman’s Deli. Co-owned by independent business icon Ari Weinzweig, Zingerman’s Deli launched in 1983 as a neighborhood market focused on incredible service and high-quality products.
The deli was an instant success. Ari and his leadership team could have expanded throughout Michigan and beyond. Instead, they chose to focus on creating a family of like-minded businesses within Ann Arbor. Today, the Zingerman’s Community of Businesses brings in about $65 million annually.
Why couldn’t Bill build his own business community in Boulder? He quickly realized making sandwiches wasn’t the right direction for him. However, Bill could create a similar network with the brands he was currently invested in.
“I realized I had these companies that I really believed in,” says Bill. “They were resonant with growing things organically…[and not having] institutional funding that would put us on a path to flipping the companies.”
Just look at the famously independent business behemoths like MailChimp, Apple and Patagonia. “All of these companies had plenty of buyout offers along the way,” says Bill, “and they said no to all of them.”
Imagine where these companies would be if they took the first lucrative buyout offer—or even the hundredth. They simply wouldn’t be the game changers they are today. In addition, the communities they still call home would miss out on the economic boost tied to these loyally local brands.
The bulb lighting Bill’s new path forward was finally lit. Bill asked his various company founders, partners and owners about pulling these individual companies under a cohesive umbrella. Together, they’d instill best practices, camaraderie and independent ideas.
Everyone said, “Yes.”
The Dirty Little Secrets of Independent Business
“In business, it’s very easy to confuse greatness with getting big very fast,” says Bo Burlingham, a speaker, business writer and author of several books including Finish Big: How Great Entrepreneurs Exit Their Companies on Top. He’s also one of Bill’s top business inspirations.
Bo’s an advocate for entrepreneurs who build companies prioritizing purpose and community over rapid growth. He also encourages leaders to be mindful about their eventual exit out of the company. Even if, like Bill, they don’t see that time coming for years—or even decades—strategetic transitioning is essential for any organization’s longevity.
Both Bo and Bill have seen countless founders flounder after leaving at the wrong time—or prosper personally and professionally by planning the right moves before they were forced into one.
That being said, if building a company with a positive culture, a strong community and a smart exit plan is so valuable, why don’t more founders do it? It’s a common question and the most prevalent answer is—it’s really hard!
First off, in the earliest stages of starting a business, founders need to consider more than ideals alone. They need capital. To get that capital, they often need investors. Most investors intend to cash out quickly with massive profits, and this requires selling the company.
It also takes strategy to properly build a sovereign business. No matter the passion behind a concept, not every idea is cut out for independent, long-term growth. Trendy or emerging technologies are particularly risky as it’s nearly impossible to predict the future.
Lastly, there’s an expectation that every founder’s dream is to build a company, cash out and either do it all again or retire in paradise. Of course, some entrepreneurs do build companies solely to reap the rewards and move on. However, Bill believes many founders sell because of pressure and expectations.
“I tend to have that conversation a lot with entrepreneurs who’ve created a successful [company],” says Bill “and I’m often surprised they’ve gone so long [only thinking], ‘I’d better sell it before all falls apart.’”
Instead, Bill boosts their confidence by showing a different option—that maybe life won’t be better after giving up their company. What if their real happiness was continuing to grow their beloved business alongside their team?
Thanks to these complex queries, Bill digs deep into each company’s history and trajectory before considering a partnership. Are they self-sufficient? Is the owner on board with independence? How does their cash flow structure work? Each of these questions—and countless more—must be carefully answered and analyzed.
So, what does Bill look for when choosing a new business? For one, his companies must employ a negative working capital. That means getting paid by the customer before paying for the product itself. “That’s my dirty little secret,” says Bill. “It keeps me from the trouble of having to finance things.”
He also ensures that his companies have long-term growth potential.
“I look for businesses built profitably from the get-go,” adds Bill, “and that have a lot of growth ahead of them. Growth also creates an opportunity for people within the company to grow and develop.”
After all, when you’re creating businesses made to last, few things are more important than taking care of the people that make it all happen.
Finding His Own Timeless Place
Bill has figured out his personal business passion. But until just a few years ago, he hadn’t quite figured out how to better control his mind. Like most leaders, Bill struggled with racing thoughts and sleepless nights—until he finally discovered transcendental meditation.
Many different meditation practices exist. Transcendental meditation is just one of them, and it’s the one Bill embraced as an integral part of his everyday life. He says transcendental meditation likely stuck with him because of its simplicity—it’s all about one word.
Transcendental meditation primarily differs from other methods because of the secret, one-word mantra given to new practitioners. No one else knows your personal mantra. Then while meditating, meditators let this word flow through their mind. “You’re not supposed to try to say the word,” says Bill. “You just let it flow and see where it goes.”
“I could immediately feel the difference,” Bill says “And at the same time, my wife and family also commented on how much more present I was…My mind wasn’t racing around thinking about other things rather than being present. It made a profound impact right out of the gate.”
It also improved his sleep habits. According to his sleep monitor, Bill was receiving less than 30% of quality slumber before starting a meditation practice. Within a couple of weeks of transcendental meditation, it was up to 80%.
Bill also notes how body aches, likely tied to his nightly restlessness, vanished. He realized that the benefit behind meditation was much more than mental—it was physical too. With regular restorative sleep, his body could truly go into repair mode.
Meditation improved his leadership abilities as well. It boosted his focus, performance and presence. No longer was his mind constantly bouncing among the endless thoughts of a business owner. Instead, he could concentrate on the current task at hand rather than what just happened or what’s coming next.
It’s all about the present.
Now, Bill dedicates twenty minutes every morning and evening to his meditation practice. If he ever does miss his daily practice, he says, “I don’t really feel a big difference in one day. But by missing a couple of days, I feel my mind start racing again.
Then I’m like, ‘Oh yeah. I got to get back to meditating.’”
Want to hear my entire conversation with Bill Flagg? You’ll learn more about his path to business success, his passion for transcendental meditation, how his three young daughters are already practicing mindfulness and so much more. Listen to the entire conversation on my donothing podcast.
