Forbes Article: How to Build a Sovereign Business

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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

Making Tough Decisions

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Over the years, I’ve made and have helped many others make important decisions… decisions like who do I marry, where do I live, do I start a company, do I take funding, do I buy or invest in a company, and do I sell my company. What I’ve found is that our natural instinct around making important decisions is mostly flawed and if left to our own instincts, can have major negative impacts on our lives.

I got lucky early on when a mentor taught me the best decision making tool of my life. I was just two years out of college, working for Harris Bank in Chicago, when I was having lunch with a banker/mentor named Cedric Thurman. We were discussing Benjamin Franklin (one of my heroes) and his approach to decision making. Cedric pointed out that Ben was WRONG. Decisions should not be determined simply by the pros and cons, but rather by the single thing that is most important to us (and our happiness).

As Cedric & I continued devouring the most incredible cajun food in Chicago at Heaven on Seven, I played through Cedric’s theory on an important decision regarding whether I should stay in Chicago or go try living somewhere else. On my Ben Franklin list was:

Pros: great city, great food, lots of young singles, lots of friends, close to family in Michigan, great career path at Harris Bank,

Cons: Didn’t like midwest weather, insufficiently entrepreneurial (big business bureaucracy dominated jobs and conversation), uninspiring natural environment

As we compared these lists, Cedric agreed my decision appeared to be a tough one. He then asked me, “What single item on the list trumps EVERYTHING else? What can you NOT live without? What’s the ONE thing you pick first as if you got first pick of players for a dodgeball team?

I  just blurted out, “Living in a place that INSPIRES me!”  Cedric laughed and said, “Ok then, are you sure that comes first over everything else?” As I ran down my list, I realized I WAS willing to risk everything else in order to surround myself with an inspiring environment. But ultimately it was and still is (after 22 years) Boulder, Colorado – close to the mountains, lots of outdoor activities, entrepreneurial, small enough to run into people I know everyday, large enough to have endless cool things going on, and within an hour of a major airport.  Eventually, everything else on my Ben Franklin pros list materialized as well. Even being close to family, as they come to visit often!

I have applied Cedric’s decision making tool to getting married, raising money for businesses, and selling companies in which I held an ownership position. And I have made plenty of mistakes along the way by forgetting to apply this tool.

What breaks my heart is seeing family, friends, and associates make decisions that check the boxes, but don’t ultimately serve or fulfill them.

A common decision that people ask me about is whether to sell their company – probably because they know I’ll be the lone dissenter. Their Ben Franklin list usually looks something like this:

Pros: Will provide liquidity/diversification to themselves and others, reduce risk of failure, give more growth opportunities to themselves and their team (to be a part of a larger platform), make the company more competitive, take weight off their shoulders/remove stress, enable them to pursue other hobbies/businesses, and learn how to invest

Cons: Could hurt the company culture, may not be as good for customers, won’t be in charge anymore, may not stay involved longer term, may need to figure out what’s next, need to figure out how to reinvest cash from sale.

What they usually haven’t considered/thought through is what dominates everything on this list. The most common, retrospective trump-card item (that doesn’t usually even make the list) is having a CREATIVE PLATFORM with which to create increasingly more value in the world. A creative platform to continue developing a great culture and a great place to work. A creative platform on which to have a voice and impact in the community. And economically speaking, a creative platform to maximize long-term wealth (as Warren Buffet and Albert Einstein have described as the greatest force in the universe – compounded growth!).  A creative platform to continue to enjoying what they’ve nurtured and cultivated over the years.

Humans are awful at prioritizing. This inherently makes us really bad at making tough/critical decisions because we DON’T have the natural instinct to prioritize the ONE factor that stands above the rest of the pros and cons. Instead, we weigh all the pros against all the cons, and decide, and then wonder why it seemed right on paper, but didn’t feel right in our guts – and in our lives in the aftermath.

So, fight the urge to use a Ben Franklin pros-cons list. Determine your #1 priority and then take massive action in that direction. Subjugate everything else.

Real Leaders Podcast

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Recently, I had the pleasure of talking with Sue Heilbronner on her podcast, Real Leaders. Sue asked some really great questions that got to the meat of what I’ve done and am doing.

I shared what Sovereignty means to me and discussed the role that the sale of our business, RegOnline, has played in my life.

Sue and I discussed my path to partnering with founding entrepreneurs, as a co-owner of SurveyGizmo, SnapEngage, StickerGiant, Avid4Adventure, and PosterBrain to help drive growth and business architecture.

And, I also dig into the economic, societal, and logistical considerations that I wish we had asked ourselves before we sold our business.

If you like Sue’s interview style, subscribe to her podcast and put in a good review for her. She deserves it.


Built to Last and Last

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Inc photoI feel incredibly fortunate to be a part of an Inc. Magazine article by the great Bo Burlingham about  How to Build a Company That Will Be Around in 2115 .* It’s great to see this topic get press so more entrepreneurs can feel supported in building for the long term.

To add to what I said in the article, here’s my formula for building a company that will be around one hundred years from now (in this order):
1. Start with a product or service that LOTS of customers want/need to buy repeatedly. Repeat Customers + Big Enough Industry = Continued Growth
2. Be profitable. Grow the business in a way that expenses are always a good margin below costs. This profit margin enables us to self-fund our own growth without outside investors or debt. This requires a sharp eye towards which positions/people in an organization produce real value.
3. Build a great organization that people can thrive in. Happier coworkers means happier customers and less turnover of both.
4. Resist the urge to sell when feeling burnt out, incapable, or bored. These feelings will most likely pass.

5. Create a culture of innovation that keeps the product/service relevant and exciting for a growing number of customers.
6. Create leadership succession by promoting/cultivating/mentoring from within.
7. Create an ownership succession plan to preserve the company for many generations to come.
*As a side note:
Just out of college, Inc. Magazine was my favorite publication. Read it cover to cover the day it arrived. I loved the stories about entrepreneurs growing their businesses. I remember dreaming  about the possibility of being one of those profiled in Inc. one day. Would I build a company(s) worthy of being in the magazine or would I be sleeping on my sister’s couch?

Fast forward twenty-some years and I’m waiting for my beautiful wife in a hair salon before heading to dinner, when I see Inc Magazine on the lobby table and open it up to see my ugly mug bigger than life! It was fun, funny, and a bit of I’m-not-worthy all at once. And to make it even sweeter, the article was written by the former Inc Editor in Chief of twenty years ago that I loved, Bo Burlingham. I would have never predicted that I’d have something to say about building great companies for life. I was just a scrappy kid trying to make an independent living. Half scared, half crazy, with a whole lot persistence to make up for both.



Avid4 Adventure

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In the spirit of Summer, I am excited to announce that I bought a significant minority stake in Boulder-based Avid4 Adventure camps. Last summer, Quincy, my 4.5 year old daughter tried a handful of week-long camps in Boulder. There was only one that blew her and us away… Avid. So much so that she spent this past year periodically asking “When do I get to go back to Avid?”  She loved learning how to rock climb, kayak, and explore nature. We loved how everything about the camp lit up Quincy and how well organized and engaging the staff were.

They perfected every little detail about our experience… from calling the week before to welcome us and see if there was anything we’d like them to focus on with Quincy, to creating fun ice-breaking activities for the her to make new friends, to teaching her something new about nature or safety with each activity, to  how good they were at building confidence in trying new things, to making everything fun for her, to writing a hand-written heart-felt thank you note to Quincy afterwards.

I bumped into Avid’s founder, Dave Secunda, last Summer and told him how impressed we were with his  camp. He shared some of his growth and financial numbers which impressed me even further to say if he ever wanted to talk about selling part or all of the Avid to let me know. Over the course of the year, one conversation led to another and we decided that to make an offer to his original seed investors from 10+ years ago, giving them a long-awaited exit.

Dave was excited to create a cash-out “win” for his original passive investors while at the same time bringing on an actively-involved built-for-life focused owner like me. As he so eloquently shared in an email with his leadership team:

“Earlier this year, Bill approached me to learn more about Avid… His passion for working with companies of our size was clear, and his interest was very different from every other investor that I had met. Most investors are looking for “the big win”. They look for rapid growth, unaccompanied by solid business metrics that would indicate long-term sustainability, followed by an “exit” or sale of the company to make their money back at a multiple. Bill, on the other hand, looks for businesses to get involved with that have solid fundamentals, clear vision and a compelling value proposition, in order to see sustainable growth and returns over time. “

I like the way Dave phrased this because he alludes to a distinction, in my mind, between being an investor and being an owner. I’ve come to realize that I love being an “owner” of businesses a whole lot more than being an “investor” in businesses. I’d like to write more about this difference later.

I’m excited to work with and learn from Dave and his fabulous team, share some of my company-building experiences with them, and more importantly, be a part of growing Avid to inspire a whole lot more kids about their connection with the outdoors. Thank you Dave for giving me the opportunity to be a part of what you’ve created and are building with Avid!

To Take Investment or Not?

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show me ROII’ve been asked a handful of times in the past couple weeks about whether to take on investment. I think it’s a little funny that folks ask me this knowing that I believe in customer-funded businesses instead of raising money. I suppose they are really asking to hear the argument for not taking on investment. None the less, my answer has been:

The real question is do you have a clear way to return that investment?

Meaning for every dollar you spend on hiring a new person, advertising, product development, etc… do you KNOW you can return $2 back through more revenue?

Or are you just throwing things at the wall to see what sticks?

If you KNOW you have a clear ROI for investing/re-investing any capital, then do it! That’s how people get rich.

If you don’t know, then put a 10% probability* of the investment sticking/producing a return on the investment dollars and ask yourself if the extra debt or less equity is really worth it? *10% is the approximate percent of time that new ideas produce a return for me. Which is why I try to minimize spend while testing new ideas.

I’ve seen too many people throw away too much equity and other people’s money by not first vetting the potential ROI of what that money is being used for first.

Nail it, THEN scale it with capital.

Creating a Customer-Funded Business

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TALKI get asked all the time by startup entrepreneurs how to create a customer-funded business. The dirty little secret is that I haven’t actually STARTED a business on my own since college.  I’ve watched and helped many others do it. And more specifically, my expertise is helping companies grow organically from early 7-figures into GREAT 8-figure companies. But I still get asked a lot, and I still can’t resist answering and sharing the startup stories of my partners/founders.

Here’s an hour audio interview that Michael Williams, a super-cool fellow Boulderite entrepreneur, did with me on Creating a Customer-Funded Business .  If you want to skip the small talk, and spare yourself from my singing, fast forward to about 5 minutes in.

Click to hear the interview

Thank you Michael for the fun interview and creating a great resource to help entrepreneurs (!


Business Architects

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proud_business_architectI’ve had several conversations in the past couple weeks with entrepreneurs of established and growing companies about their role as a business architect. It went something like this:

Entrepreneur: “I’m frustrated that I’m the one who always needs to solve the bigger challenges or come up with the ideas for innovating for the customer. Why can’t my employees step up?”

Me: “Isn’t that YOUR job? Aren’t YOU the architect of your business?

Entrepreneur: “I guess so, but why do I feel so stressed at times?”

Me: “Because your business needs more architecting. And rather than embracing that challenge everyday, you’re hoping your employees will do it for you.”

Most entrepreneurs are first and foremost business architects, but they don’t know it or fully embrace it. At their best, they architect systems that make their products, services, pricing, and cultures better and better. I believe the role gets confused a lot of times with leading people. And there may be a sense of not being a good leader without  giving themselves enough credit for being an architect.

I chuckle when I hear people criticize successful entrepreneurs for not being good leaders. I’ve gotten that criticism too… and felt bad about it. Until I realized that I like, and am good at, being a business architect…  the kind that creates structures that enhance peoples lives so that I can be the introverted un-leader that I am, and read quietly in a corner by myself.

So my advice to entrepreneurs is to OWN it. Be the architect for your business. Be proud of it. Embrace it everyday. And love your employees for empowering you to do it. And nurture business architect thinking for others in your organization by trying open book management.

Unconventional Freedom

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Freedom-SkydiveIf I had to pick two of my favorite words they’d be Unconventional & Freedom. I’ve been told my whole life that I see things differently than what’s conventionally done. At times it’s gotten me into trouble because I tend to question everything. But, overall I’m really happy with the results. I feel like I’ve been able to live a life I dreamed. A life with great freedom.

The key for me is that it has nothing to do with what others around me have dreamed. I’m not happy because I have money, live in a cool place or because I own fancy things. I’m happy because I’ve gotten to live my life on MY own unique terms. I became an entrepreneur not to get rich but to feel the freedom of creating things that could be of real value to my customers. To feel the freedom of creating an organization in my own unique way. To have the flexibility to vacation when I wanted (or not in the early days).

Growing up, the conventional wisdom was to follow the rules in school, go to a good college, and get a job/profession that could pay the most. Then it was get married, buy a house, start a family, and work to retire one day. It all seemed rather boring and pressure filled with expectations that didn’t seem to inspire me. Each time I tried to follow the conventional path, I lost energy and felt more lost than before. On the flip side, each time I did what felt uniquely right for me, I gained energy and felt inspired. I call that unconventional freedom.

I also found that in business when I did the things no one else was doing, I had more success (and it was a lot more fun for me). And when I did things because I thought I should, they didn’t turn out as well.

An example of this was when we were deciding on what to do for holiday cards for our clients. In the past we sent out thousands of relatively generic “Happy Holidays” cards “from all of us to you.” When my marketing manager, Cindy, came to talk details about that season’s cards, I said “I want to puke, these cards are so predictable and boring. What can we do different?” She came back with an amazing idea to do a company cookbook, with each co-worker who wanted to could cook their favorite dish that we’d photograph at a potluck lunch and then share those pictures and the recipes in a pamphlet-like holiday cookbook. We said, why not, wouldn’t cost us that much more, and we’ll have fun with it. Well, it was a BIG hit with our customers AND we all had a lot of fun doing it. I’m still reminded of it as a half a dozen or more companies I know are doing their own unique versions of company cookbook holiday cards!

cookbook cover Click to see 2006 RegOnline Cookbook PDF

Visions that Work

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chickensoupI recently saw Jack Canfield (co-author of Chicken Soup for the Soul) speak at a conference here in Boulder. People have bought half a BILLION of his books around the world over the past 20 years.  This is a book that got rejected by 180 publishers while Jack and his co-author almost went broke.  He hit on a nerve that people went nuts over.

At this conference Jack did a demonstration that I’ll never forget. He asked someone from the audience to come on stage. A woman volunteered. He asked her to hold out her arm and push as hard she could against the force of his hand pushing down. Which she did with some great strength.

He then asked her to think of a goal she had, and how SHE would benefit from that goal being achieved. He pushed down on her arm again and it got weaker.

He then asked her to think about her goal in terms of how it would benefit OTHERS in the World. He pushed down and her arm got significantly stronger.

It’s called muscle testing, where your body derives strength or weakness when focusing on certain ideas (or foods).

Whether you believe in muscle testing doesn’t really matter, the point of the exercise was to show how our goals or visions can be or feel stronger when viewed from a standpoint of benefiting others.

I was reminded of the power of this in my own life today when I was talking with one of my former co-workers from RegOnline (now at SurveyGizmo). I was replaying how our vision at RegOnline was simply to make people’s lives easier. Not only easier for customers to manage their events with our software. But also easier for them to find us, try us, start using us, and do business with us. We also looked internally and kept asking what would make it easier for people to work there. The vision was absolutely focused first on what we could do to help others by making it easier for them. We had forecasts of what we thought would happen with our revenues and profits, but they weren’t the top priority. And interestingly enough we usually ended up exceeding them anyway mainly through consistently figuring out how to better serve our prospects, customers, and co-workers.

I’ve also noticed that some of the best and most successful entrepreneurs are constantly talking about how to better serve others. Richard Branson, Steve Jobs, Tony Hsieh, etc.

Back to Jack.  After his talk, I thought to myself,  what an interesting demonstration for a guy who is known for feel-good story books. Then it hit me, maybe that’s EXACTLY why his books were so unbelievably successful. All the stories were about people HELPING/SERVING other people. AND he had written the books not because he thought he’d get rich on them, but because he truly thought it would inspire OTHER people.

Now I’ve had many goals/visions in my life. Most were pretty self-serving. But when I look back at the ones that weren’t, I have to say they felt a lot better AND succeeded more often. I’m personally starting to look at all my visions and decisions through a new lens of “how can this serve others?” Give it a try with your goals/visions and see how it feels.

I sincerely hope this post helps to create a positive impact for you in some way.