Magic Johnson – WINNING on the Court and in the Boardroom

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Seeing Magic Johnson speak was one of the highlights of my week in Nashville at the SiriusDecisions 2015 Summit a few weeks ago.

He was funny, engaging, and inspiring, and also had some sound business wisdom for the crowd of 3000 or so sales and marketing executives in attendance. Everyone knows Magic Johnson as one of the all-time NBA greats, but his business resume would seem to qualify him also as one of America’s top entrepreneurs.

He’s a true Unicorn, a rare individual who has reached the pinnacle in sport as well as in business. He spoke about how he made the transition, and how he started winning in business.

CAREER HIGHLIGHTS

CEO of Magic Johnson Enterprises, which reportedly has a net worth of $700 million

Part owner of the LA Dodgers, Major League Baseball team

Former minority owner of the LA Lakers, National Basketball Association team

Owner of Magic Theaters

Partner in the $500 million Yucaipa/Magic private equity fund

First franchisee of Starbucks ever, built a chain of 125 stores in urban locations, sold the chain back to Starbucks corporate

Co-owner of the Dayton Dragons (minor league baseball) and the LA Sparks (WNBA)

Founder, Magic Johnson Foundation

MAGIC’S KEYS TO WINNING

  1. Play to win, and work with Winners
  1. Know your customer – an example he cited was his knowledge of the “Urban customer”, and how he replacing scones w sweet potato pie at Starbucks, and adding more flavored drinks to the menu in order to cater to his customers
  1. Over-deliver – “the key to business success and the key to retention”
  1. Work with great partners
  1. Sell at the right time – Johnson sold his stake in Starbucks and the L.A. Lakers NBA team as valuations started to rise.

OTHER INTERESTING FACTS AND THOUGHTS

He does an annual SWOT (strengths, weaknesses, opportunities, and threats) analysis of all of his companies AND himself.

Magic’s All Time starting 5 lineup – Kareem Abdul-Jabbar, Larry Bird, Tim Duncan, Michael Jordan and himself.

His number one, top rival on the court: Larry Bird

Mentors – Magic has a network of 20+ CEOs who mentor him. He built this network after retirement from basketball by obtaining a list of the Lakers’ VIP season ticket holders and cold calling them one by one.

His biggest failure – Magic 32 sporting goods stores, which failed after only one year.

Magic, on the handful of traits which makes him a success in business (he said he brought these skills he learned as an athlete to his business ventures) – desire to WIN, perfectionism, preparation, focus, discipline, professionalism, and his ability to motivate his team and those around him to reach their full potential.

I’ve never met Magic Johnson, nor have I seen him speak at this length, but here are my main impressions of him, garnered from his 50 minute talk:

Burning desire to WIN. He hates to lose – “underperforming is not winning the Championship

Supremely confident – he KNOWS he’s going to win

His “game plan” is simple. He sticks to the basics (customer focus, over-delivering, good teams, good partners, etc.)

Coachable (he spoke extensively about soliciting and absorbing good advice from his network of 20 CEO “coaches”)

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It was quite inspiring and refreshing to hear from an entertaining, motivational speaker who backs up his thoughts with relevant stories and sound business advice. Always a fan of him as a basketball player, I am now a fan of Magic Johnson as an entrepreneur.

Yanik Silver’s 34 WINNING Rules for Maverick Entrepreneurs

My friend Yanik Silver is a successful, young, internet marketing expert.  A self-made millionaire by the age of 30, Yanik exudes creativity, energy, and passion.  He’s a veritable idea factory, and I am impressed by his knowledge and wisdom at such a relatively young age.  His Twitter handle is @yaniksilver and his main Blog site is InternetLifestyle.com.

Yanik has, through reflection and analysis of his business experience and interactions with dozens of the world’s top entrepreneurs and business leaders, developed what he calls his “34 Rules “  They can also be found on one of his Blogs:  maverickbusinessinsider.com.

So here are YANIK SILVER’S 34 RULES FOR MAVERICK ENTREPRENEURS  (I added some commentary of my own in BOLD text below.)

  1. It’s got to be a BIG idea that you, your team and your customers can “get” in seconds.  Agree 100% that THINKING BIG is one of the most important things you can do in business.  See my Blog Post on “5 KEY LEARNINGS.”
  2. Strive to create 10x — 100x in value for any price you charge. Your rewards are always proportionate to the value you provide.
  3. You must charge a premium price so you have a large margin to provide an extraordinary value & experience.  This is right out of the Steve Jobs Playbook!
  4. Provide a ‘Reason Why’ customers should do business with you and pay you a premium.
  5. Get paid before you deliver your product or service. And when possible figure out how to create recurring revenue from transactions.  Collecting cash early allows you to finance your business, and ecurring revenue creates maximum shareholder value.
  6. You get to make the rules for your business. Don’t let industry norms dictate how you’ll work or who you’ll work with.  Another Steve Jobsism.
  7. Create your business around your life instead of settling for your life around your business.
  8. Consistently and constantly force yourself to focus on the ‘critically few’ proactive activities that produce exponential results. Don’t get caught up in minutia & bullshit.  Focus!
  9. Seek to minimize start-up risk but have maximum upside potential.
  10. Get your idea out there as fast as possible even if it’s not quite ready by setting must-hit deadlines. Let the market tell you if you have a winner or not. If not — move on and fail forward fast! If it’s got potential — then you can make it better.  The one great characteristic of internet-based businesses is that the feedback loop is shortened and rapid iteration can be done to perfect the model.
  11. Find partners and team members who are strong where you are weak and appreciate being paid on results.
  12. Your reputation always counts. Honor your obligations and agreements.  There’s nothing more important than INTEGRITY.
  13. Never, ever get paid based on hours worked.
  14. Leverage your marketing activities exponentially by using direct response methods and testing.
  15. Measure and track your marketing so you know what’s working and what’s not.
  16. Bootstrap. Having too much capital leads to incredible waste and doing things using conventional means.  I love this concept.  Bootstrapping builds a culture of resourceful and a “lean and mean” operating philosophy.
  17. Your partners and employees actions are their true core — not what they tell you.
  18. Keep asking the right questions to come up with innovative solutions. “How?”, “What?”, “Where?”, “Who Else?” & “Why?” open up possibilities.
  19. You’ll never have a perfect business and you’ll never be totally “done”. Deal with it.  Warren Buffett has said that it’s not necessary to do extraordinary things to get extraordinary results.  See my related Blog Post on Buffett.
  20. Focus most of your time on your core strengths and less time working in areas you suck at.
  21. Make it easier for customers to buy by taking away the risk of the transaction by guaranteeing what you do in a meaningful way.  If you are supremely confident in your product or service, you should have no problem guaranteeing it, and every customer loves a guarantee.
  22. Always have something else to sell (via upsell, cross-sell, follow-up offer, etc) whenever a transaction takes place. The hottest buyer in the world is one who just gave you money.
  23. Always go back to your existing customers with exceptional offers and reasons they should give you more money. It’s 5x less expensive to sell to happy customers than go find new ones.
  24. However the flip side is – fire your most annoying customers. They’ll be replaced with the right ones.  I have done this and it has worked miracles in getting my Team focused on the higher-value customers.  Figure out how to “score” or rank your customers and rationalize the lowest value ones.  You can then apply the scoring system to new business opportunities you evaluate, so that you accept the customers you want.
  25. The marketplace and competitors are always trying to beat you down to a commodity. Don’t let that happen.  I agree that getting into a commodity position is a losing proposition because someone will ALWAYS be lower in price.
  26. Develop and build your business’s personality that stands out. People want to buy from people.
  27. Create your own category so you can be first in the consumer’s mind.
  28. Go the opposite direction competitors are headed — you’ll stand out.  It’s amazing how so many of successful business leaders and investors are CONTRAIAN in their thinking.
  29. Mastermind and collaborate with other smart entrepreneurs if they have futures that are even bigger than their present.  You can’t win by yourself.  You need peers, advisors, mentors, and others who can help you.  Create a group, join a YPO or EO Forum, or a Vistage Group.  I am in a YPO Forum and the learnings and experience have been priceless.
  30. Celebrate your victories. It’s too easy to simply move on to your next goal without acknowledging and appreciating the ‘win’.  This is a good one.  Oftentimes, you see Founders relentlessly clamoring for “more, more, more!” without stopping to celebrate success.  This is super important for morale.
  31. Make your business AND doing business with you FUN!
  32. Do the unexpected before and after anything goes wrong so customers are compelled to ‘share your story’.
  33. Get a life! Business and making money are important but your life is the sum total of your experiences. Go out and create experiences & adventures so you can come back renewed and inspired for your next big thing.  Life is very short, so enjoy your moments at every opportunity.
  34. Give back! Commit to taking a % of your company’s sales and make a difference. If this becomes a habit like brushing your teeth pretty soon the big checks with lots of zeros won’t be scary to write. If you think you can’t donate a percentage of your sales simply raise your price.  The more you give, the more things come back to you. Giving is great for the community, for your company, and your teammates.  
This is a big list and, for me, I like #1, #6, and #8.  I believe in “Thinking Big.”  You’re going to be thinking anyway, so why not Think Big?  As for #6,  your business will definitely differentiate better if you follow your voice and make your own rules, as opposed to following someone else.  The great companies create their own products and solutions.  They set the trends.  Finally, I can’t say enough about FOCUS (#8), because that’s one of the TOP 5 necessities for success.  I blogged about this in my very first Blog Post, SUCCESS FORMULA.
Which one of these 34 RULES do you like best or find most relevant to your business?  
Please Comment below and Subscribe to my Blog.  Thanks!       
Featured image courtesy of Ralph Zuranski, licensed via creative commons.

5 KEY LEARNINGS – National Capital Region Entrepreneur’s Club

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Recently, I had the honor of speaking at the September, 2011 luncheon of the National Capital Region Entrepreneur’s Club.  It’s a group of terrific business leaders from the DMV region.

Our host, Ingar Grev, asked me to tell my story, talk about some successes, some failures, and key learnings.  Ingar is a US Naval Academy grad with MS and MBA degrees from Maryland.  As fit today as he was 25 years ago when he was a star D-lineman for NAVY, Ingar is an entrepreneur, technology expert, connector, and CEO/executive coach known as The Growth Coach.

He was also nice enough to write about my presentation in his Washington Business Journal blog post.  At the conclusion of my remarks, I listed 5 things I had learned in my experience as an entrepreneur, CEO and investor.  Here are the 5 Key Learnings I shared with the group:

1.  Do the right thing always.  It can be expensive to take the high road, and it takes courage, but at the end of the day, your reputation is all you really have.  High integrity is impossible to fake, and integrity is a real magnet for other Winners and for success in general.

2.  Build relationships.  You can’t win without great partners, clients, and teammates. Success is all about creating, building, and nurturing relationships.  I am not talking about quantity, but rather QUALITY of relationships.  People want to do business with people they know, like, and trust.  The old adage about “It’s not what you know, it’s WHO you know” is true.

3.  Never, ever, ever, ever, ever give up. The great football coach Vince Lombardi once said, “The Green Bay Packers never lost a football game.  They just ran out of time.” Luckily in business, there is no time clock!  Winning in business is about having staying power (capital, stamina, confidence, persistence)   In my case, my company CyberRep lost our largest client twice and faced extreme business challenges both times.   If we didn’t have confidence and persistence, we would have never replaced the lost business and grown our company.  We never gave up, and would up with a great outcome.

4. Think BIG.  Over the years, we set grand plans for ourselves and somehow managed to hit quite a few of them.  My philosophy is that if you’re going to think, you may as well think big.  Set your goals realistically but high.  Stretch yourself.  I know many people, including my partners and me, who have surprised themselves with what they were able to accomplish.  Your organizations will rally around and get excited by big plans and big goals, so go ahead and shoot for the moon.  If you fall short, you still will have made good progress.

5.  Greatness is defined by Consistency.  Great performers are able to produce day in and day out on a consistent basis.  Great companies deliver for their clients and customers consistently.  The challenge is figuring out how to get your organizations to do fantastic work over and over again.  If you can do it, then congratulations, your company is on its way to being “great.”

I hope you enjoyed this Post.  Thanks for reading, and please sign up for my Blog!

Featured image courtesy of woodleywonderworks licensed via creative commons.

3 Types of Startup Founders – a Cooking Metaphor

What do chefs and entrepreneurs have in common?  Both try to use great ingredients, and apply their energy and experience to create masterpieces.

I love to cook, and I love to watch cooking shows.  Maybe it’s because I worked in my Dad’s restaurants as a young kid.  Anyway, I have found that there are 3 basic types of chefs:  1.  Scientist, 2. Magician, and 3. Artist.

To make a meal, the Scientist is the left-brained chef who meticulously measures and weighs ingredients, and follows religiously a 50-step recipe.  The Magician has no recipe and, in fact, has no preconceived idea what kind of meal she’s going to cook. Instead, she goes to the market and sees what’s fresh and in season, then she goes back into the kitchen and conjures up a creation on the spot.  The Artist is a combination of the first two. He has a general sense of what he wants to make, and how he wants to make it, and works within these guidelines to create his meal.  He dosen’t work off an exact recipe, but instead relies on instinct and creativity to work within his themes.

Having observed, invested in, and worked with dozens of startups over the years, I theorize that Startup Founders also fall into 3 categories, each one similar to those in the cooking metaphor above.

For example, the Startup Scientist may have a super detailed business plan and 30 pages of financial projections including a dozen pages of assumptions (ok maybe I’m exaggerating, but you get the drift).  Some years back, a good friend of mine sold his company for a tidy sum and used the 12 month noncompete period to develop a detailed business plan for a consumer-oriented startup.  He raised $10 million in venture capital. His business plan was amazing, and every possible contingency and possibility was covered, this even before his company earned Dollar One.  What happened?  Within 2 years, he burned through all of his cash and folded the venture.  Why?  I think the Scientist and his team were enamored by his plan, they hired too many executives too soon, and failed to be flexible and responsive to clients needs.  I really think his “awesome” business plan worked against him, and he stuck with it even though he should have pivoted and iterated. The bottom line is that startups are not a “science,” and this approach works better for large companies than startups.

The Startup Magician has NO PLAN.  He has a business idea, and gets to work, whether it’s developing a killer app, or acquiring customers and adopters.  He is open to change and creativity, and pivots and pivots until he finds something that works.  This kind of startup has no real business model per se.  Can this kind of company succeed? Remember Google? They had no business model until a year or so before they went public.  What was Facebook’s business model 2 years ago?  Does Twitter have a business model today?  Most would say it is undefined, but it has to be considered a very successful startup.  These are exceptions.  My personal feeling is that it’s very difficult to build a hypergrowth enterprise in this manner.  Some Startup Magicians create successful businesses, some create nice lifestyle businesses, but most either stagnate, or fail, usually because of a lack of direction.

What about the Startup Artist?  This entrepreneur has rough guidelines for what she wants to achieve in her business.  She knows her product or service, her company culture, the kinds of people she wants to hire, and the markets in which she will compete.  She has a general mission and vision for the startup, and a set of core values which serve as guiding principles.  Maybe she doesn’t have an awesome business plan, or a 10-scenario DCF analysis, but those things are not only NOT NEEDED in a startup, they will in fact inhibit growth and innovation. Ideally, she and her team work off a one-page plan with a couple of key areas of focus, and then they concentrate on EXECUTION.  I believe this type of startup has the best chance of winning because it allows for flexibility and adaptation to changing market and business conditions.  The company also has a general sense of its direction, culture, and style, which will keep it from meandering aimlessly.

The lesson here, I think, is that it’s best for a startup NOT to be to be too exact, nor too free form.  Planning is great, but the plan itself should not be Gospel. The benefit of preparing a business plan is in the planning process itself, where you and your team think carefully about your capabilities and differentiators, your customers, your competitors, financial assumptions, and markets.  But, it’s imperative to keep in mind that the one true thing about any startup’s business plan is that things will NEVER turn out as planned.

To build a hypergrowth company, you must be ready to pivot, to develop new solutions, to move into markets you didn’t originally foresee, and to take on other opportunities without being beholden to some preset plan which was made in theory to begin with.

Thanks for reading, and please leave a Comment below.  What style of Startup Founder do you think has the best chance of succeeding?  Am I being too critical of the Scientist?

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Note:  This Post is dedicated to my good friend Derek Coburn (@cadredc), Founder of CADRE, the UN-networking organization of remarkable advocates.  Thanks D, for suggesting I write a Post about this topic!