Christopher V. Flett

I have assigned a class that I’m teaching (CampusCEO) at UBC to watch Dragon’s Den (CBC) and Shark Tank (ABC) and report back on what they are seeing business owners do during funding pitches. These shows should be mandatory for ALL business professionals. There are some good lessons to be found in these programs.  Here is my commentary from this week’s Shark Tank.

Lipstick Woman: Awesome idea. Barbara got girly and started to pout when two of the sharks tried to muscle her out. Her good sense let her bypass the emotion and wiggle in on the deal. She had to have the infomercial shark in on this deal and if I were her, I would have given up 90% of the company, just to have 10% of a product that is selling on QVC. Remember that she had sales only of $6,000.00 and was doing valuation strictly on potential.

Captain Ice Cream was a captain twat. He makes not money, but wants to franchise. Goes to show that you don’t focus on the money, you’ll get ripped apart. The Sharks hated this guy and I did too.Plus, there’s something creepy about a middle aged man selling ice cream to kids.

Cafinator: I loved this guy, but he took a stupid deal. Dumb, dumb, dumb. He allowed them an option (that they didn’t pay for) on his idea. IF the company can sell, the dragon (Kevin) can buy into the company. It’s like letting someone drive your car without making payments, paying for gas, or insurance. This guy was a great presenter and I like the idea of playing the different sugar suppliers off each other. Good idea, but his novice experience showed through by allowing someone to have control of his company WITHOUT any money.

Coffee Lawyer: Obvious brain injury or something on the part of the husband. He’s giving legal advice but can’t remember what the hell he does or his presentation and needs her to prompt him. Wife is a bit off as well. They don’t know what the hell they are doing. This sucks.  Wife gets pissy because she feels like she is being criticized. The husband and wife are talking over each other. They keep on eroding their presentation. The sharks are ripping them apart. This is a car accident. The sharks have no intention of funding them.  They are just playing with them. For a franchise to work, it has to have the support system in place.

The only good deal was the first deal. A woman who has worked it, shows a gap she fills in the market, and is committed to making it happen. Worth the one hour.

Business owners, as a whole, give too much away.  There are occasions when doing something cheap (or free) has a strategic value to your business (aligning with the right companies, an endorsement, someone impressive on the client list), but getting nickel and dimed is tough. Here is a great video to illustrate the point for ‘challenging’ clients. Regardless of what you charge, some people are going to think you are a deal and others too expensive. Focus on the clients that ‘get’ the value you bring, and punt the rest.

I’m sitting at Starbucks in Kerrisdale looking at my business models. We are about to close the first month of the year and when I was looking at the numbers and status of everything, a thought pops into my mind. HOLY SHIT! This is all working! I set a pretty aggressive plan for this year. Quadrupling revenues while decreasing costs. I’m on pace right now from a revenue stand point and I’ve decreased expenses (compared to last year), by a whopping 87%. Yes…87% reduction in overhead. That all goes into my pocket. Campus CEO is rolling with an amazing group of ladies, the bookkeeping/babysitting models are rolling with new opportunities coming in daily, and I’m sitting here with a shit eating grin on my face because what I envisioned is now happening. The coaches are all in play (but some are working much too hard which we need to tweak.) New clients are coming in through champions, a handful of prospective coaches have some interesting potential we are exploring, and the US market is waking up again. Did I mention I’m heading to the Caribbean for 4-5 weeks?

It all starts with a plan. It starts with you (or me) sitting down and putting to paper the revenue projections and then placing strategies that will support those projections. Is it magic? No. Does it take focus and commitment? Yes. I’ve found myself the last two weeks having a hard time sleeping (and fighting off a lingering cold). It dawned on me today. I don’t have insomnia. I have excitement. Last year, all the cannon fodder got out of the various models and champions are running the race together. Partners, clients, coaches all running in cadence towards big things and it’s fun. In any given day I’m chatting strategy with a client in Miami, chatting with a prospective coach in Vancouver, and having frank conversations with 30+ entrepreneurs that are still in university. This doesn’t suck.

What are you doing to make this your year? Are you getting rid of your dead weight? Are you focusing on what is working and buring off what doesn’t? It only gets easier if you make it easier. I’m seriously thinking about ramping up my own private practice to 100 clients by the end of summer. I mentioned this in passing to three champions, and I already have some really interesting people waiting for sits when they open up. Tell me this isn’t living!

Get out there and clean house people. If you want to fly with eagles, don’t run with turkeys.

I’ve been meeting a lot of recent graduates the last few months. Those coming out of the University of Washington, Seattle University, UBC, Langara, BCIT and SFU. These young adults have at most, limited business experience, but they can’t wait to tell me how much value they bring to the table. If I were to hire/partner/endorse them, I would ’see’ their value. Give them a chance and they “will prove it”. Okay folks. Reality check. If you want to talk the talk. walk the walk. Don’t come into meetings acting as if you are equal because…you aren’t. Could you be? Yes. Are you right now? No. At 25 I thought I knew a lot of shit; at 35 I realize how much shit I don’t know. Confidence comes from being clear on what you can and can’t do. Insecurity comes out when you pretend you can get it done (even though you have never gotten it done before.)

One student told me how much money she would make me if I hired her. Yet, she doesn’t make any money for herself nor has any proof that he has done this anywhere else. Does anyone see the gap in logic here? What if instead she said, “I’m eager to learn what you have to teach me. I’ll do what you ask of me. I’m prepared to work hard to show you that you are making the right decision with me.”

With prospective business partners, it is more of the same. I have some budding entrepreneurs showcasing how we can make money together (which I like) only to then put demands in place on how I will work with them. What I learned (after getting punted out a lot of deals) is that my good ideas were shit if I couldn’t deploy them. I could take my ball and go home, but I ended up having a house full of balls with no value. Everything I have today was because of the sacrafices I made to learn the ‘craft’ of building business. I got my ass handed to me 5 or 6 times before it finally got into my young, thick head, that I might have a good idea, but without the right direction and leverage, my idea was just that…an idea. I guess that’s why I love Dragon’s Den and Shark Tank. Entrepreneurs come in telling the investors how much their company is worth. Many are valuing at $1,000,000 but have fuck all for sales. “Yes, but I know this is going to be really good. You can count on me!” Sorry Muppet, you can’t pay the bills with ‘hopes and dreams’. When you stop ‘buying your own PR’ and realize that you don’t have any credibility nor experience in the market, you’ll be ready to learn. If you think you know everything already, you’ll never be able to receive new instruction.

For me, ideas I was hot for a week ago, are now starting to feel a bit weird for me. Am I prepared to teach? Yes. Am I prepared to argue/debate a point with someone who doesn’t know how to build a business model…no. I think what is best when you find yourself in this situation is to let the other side who ‘knows’ what they are doing, space to do it. The best test of talent is to put it into the market and see how the market responds.  I’ve been known to miss opportunities by letting things go. I’ve also saved myself a lot of frustration and disappointment by betting on ‘dogs that can’t hunt’. Let your intuition guide you. Better safe than frustrated. If someone has all the answers, don’t offer your support. They don’t need it. The market can be a cruel bitch. She sorts things out for people who ‘know everything’.

What’s the value of a recent grad? The value is in direct relation to their willingness to learn practical application after four years of theory. Just because you watched Rocky 100 times doesn’t mean you know how to box when life smacks you upside the head. For grads, heres a simple equation for you to figure out and justify what you bring to the table:

(# of valuable business contacts /not friends from school)

x

(years developing business)

x

(# of successful business start ups )

x

(your ability to ask good questions and take direction)

x

(your specialized skill set that no one else has)

x

(reputation in the market you want to enter)

=

professional value.

What’s yours?

C/

“Killing the baby” means removing the personal attachment you have to your business. Entrepreneurs (especially first-timers), have a personal attachment to their business. They grow it and nurture it and feel connected with it. Not unlike a new parent, business owners personalize everything in their business. The upside is they put a lot of detail into what they do; downside is the company will never have value unless they can let it go.

When you are building a company, consider yourself a foster parent. You are there to give it love, care for it, feed it, wash it, and sing it lullabies. But you are just ‘taking care of it’ until the new parents come to take the baby home. You can’t get too attached. As long as you and it are attached, no one will ever want to buy it. If the baby can make money on it’s own without mamma (or papa), then that baby will work with any parents. But….if you are the only one that can care for it, you haven’t built a business. You’ve bought a job. And that is something to cry about.