When people hear the word exit in the business sense, they sometimes think of retirement, but that’s not necessarily true. For every organization you get into, it’s always important to plan for the best exit strategy for your career. Jeff Hoffman, the Global Chairman of Dream Tank, joins Michelle Seiler Tucker this episode to tell the story of how he began as an entrepreneur while emphasizing the importance of knowing your options throughout your career. Listen in and learn how the meaning of success can greatly differ depending on your personal goals and beliefs. Having started and exited multiple companies, he gives advice on how to position yourself or your company in the best way possible. In addition to this, Jeff also touches on why you need to invest in creating the proper team suited for your goals so as to not waste the idea that could potentially lead to achieving your goal.
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Learn How Successful Entrepreneurs Don’t Walk Away From The Problem, They Find A Solution And Make Millions/Billions
I’m very excited to have the one and only, the famous Jeff Hoffman. Jeff Hoffman is an award-winning global entrepreneur, proven CEO, worldwide motivational speaker, bestselling author, Hollywood film producer, a producer of a Grammy winning jazz album and executive producer of an Emmy award-winning television show. He has been the founder of multiple startups. He has been the CEO of both public and private companies, including Priceline.com, Booking.com, uBid.com and many more. Jeff serves on the boards of companies in US, Europe, the Middle East, South America, Africa, and Asia. He supports entrepreneurs and small businesses on a worldwide basis. He is the Chairman of the Global Entrepreneurship Network, which works with entrepreneurs in 180 countries.
Jeff supports the White House, the State Department, United Nations, and similar organizations internationally on economic growth initiatives and entrepreneurship programs. Jeff is a frequent keynote speaker, having been invited to speak in over 60 countries. He is the author of the book Scale. Jeff is featured as a business expert as seen on Fox News, Fox Business, CNN, CNN International, Bloomberg News, CNBC, ABC, and also publications, including Forbes and Inc. Jeff has produced TV shows, movies in Hollywood, musical events, including concert tours and charity events where such artists as Elton John, Britney Spears, and Boyz II Men. Welcome to the show, Jeff.
Thank you so much for having me.
It’s a pleasure to have you. You and I met speaking on stage a few years ago. Thank you so much for giving us a testimonial on Exit Rich. Jeff, what have you not done? Is there anything you haven’t done?
The one that’s on my list I haven’t checked off yet is getting some sleep.
It’s like we say, “You can sleep when you’re dead.”
I kept on saying I’ll sleep when I get older. I kept getting older and I never got around to sleeping, but there’s always something cool to do, that’s why.
How did the entrepreneurial Jeff meet the entertainment Jeff? How did those two roles collide for you?
A little bit was an experiment and a learning process and a passion. Let me explain that. Music, film, media and entertainment has always been a passion of mine. I love music and movies, etc. I always thought that was a passion on the side. Two things happened. One, I noticed that Hollywood was the ultimate marketing machine. I would see the things that they would do. There was a specific example where I was all excited in a movie that they were promoting. By the way, it was the sequel to The Silence of the Lambs called Hannibal. I was excited that I went on opening night, Friday, waited in a long line, went early, spent all that money, got in the seats and ten minutes into the movie, I thought this movie is an absolute piece of crap. How did they get me here? How did Hollywood get so good at marketing? I went early on the opening night and stood in the long line to go to a movie that was horrible. I started thinking they’re the ultimate marketing machine.
One interest I had in entertainment was to learn how the best marketing people in the world of Hollywood do that. The third piece is then I had a theory which was that the core skillset of good entrepreneurship applies to any industry, which by the way, is not what everyone told me. What everybody said was, “Jeff, you’re a tech guy.” I’m a software engineer by trade. “You’re a software engineer.” They kept on telling me, “You can’t do music.” By the way, it was a perfect example, especially in film, people would say these two things, “You’re not a filmmaker, you’re a businessman, so you shouldn’t be in our industry.” Other people told me that 97% of all independent films will lose all their money. They’ll never get them sold. They’ll go broke. I was like, “What if those two statistics are related?”
What if the reason all of you are “starving artists” that’s where the term came from, is because none of you have the business skills? My theory was, what if I took the core skills that you use to build any company and said, “A song is a product.” It has domain experts. They happened to be singers and musicians instead of programmers and graphic designers. You have talent in the middle that creates a product. You figure out a market for a product, you finance the creation of the product. You find sales and distribution channels. How is that different just because it’s a song? That was my premise, Michelle. When we launched the companies, I was testing if you apply these same core principles to music or film, you should be able to create a successful startup.
Business is business no matter what the product is. No matter if it’s a movie, a song, or if it’s a Broadway play, business is business. You have the fundamentals. You have marketing. You have the core business competencies that needs to go with that to make it successful and make sure it’s profitable.
That’s the part that people forget. In so many industries, people say to me, “I’m in the blank.” Fill in the blank. “I’m in the music industry. It’s different here.” “I’m in the movie industry. It’s different here,” whatever industry you’re in. That’s not true. The fundamentals of good business, the things like how to build a team, how to attract talent, motivate and retain your talent. How to pitch for financing and how to gain investment, internal, how to structure operations for efficiency. How to identify your customer and your sweet spot and your target market, all the same, no matter what business you’re in. If people would realize that, they have more success outside the lanes that they stick to.
That’s what I call the 6 Ps in Exit Rich, whereas people, no matter what business you’re in, you have to have the right people. You have to have the right product. The product needs to be thriving, not dying. If that process is not in place, everything will fall apart. You have to have something proprietary and you have to have patrons, which has diversified client-based marketing, and then you have to have profit. It is the same. It doesn’t matter what the industry is. I love how you looked at the entertainment industry, though, to see how they were marketing. They are marketing experts, marketing genius to get us to the box office to watch a lousy movie.
We learned a lot. I did the music company first before we did film or television. Back then when we started the music company, we were doing concerts, tours and charity events. We were doing music production, but it was the pop era. I was working with NSYNC at the time, Britney Spears, Elton John, Backstreet Boys and Boyz II Men, all these pop groups. In that space, we experimented with and learned a lot about marketing and those lessons. I learned lessons in marketing pop music that we took forward later. Later I did uBid but did another internet company. When I was back in the non-entertainment business and the tech business, I took the lessons I learned from the marketing experts and the things that worked for us in entertainment and music and brought them back to tech.
What were those top 2 or 3 lessons that you learned that you incorporated into tech?
One of them was about reference customers, which I talk about a lot. The reference customer, it’s one thing when you and I are selling our product. It’s the greatest product in the world. When you’re the one trying to sell it to me, I know you’re going to say that. What’s a much more powerful sell is another customer. It’s not me. When another customer said, “You’ve got to get Jeff’s product. I bought it and I am so thrilled.” That’s way more powerful than you selling your product. Reference customer is somebody that has credibility with your desired customer and is willing to be a reference. They are willing to say on their own, “I’ve got this product and I loved it.” That was a prime example because I’m going to go all the way back to the early NSYNC days.
The audience was mostly young girls. The early adopters, young girls didn’t come and listen to NSYNC because your record industry executives told them to. They did it because other screaming, teenage girls came home in tears, screaming and said, “You have to go and see this.” It made me think that I’ve got to focus on delivering 1,000% customer satisfaction to my first set of customers. I’ll make sure that I’m marketing to people that are probably going to love this product and then help them go out and tell everybody about the product. I didn’t know that as clearly before then. That’s probably one of the single most important learnings. You find those people that are going to be crazy about you and you focus entirely on them. You stop trying to convince people that aren’t sure whether they want your product. Find those early adopters and take good care of them. By the way, help them and nudge them towards telling their friends, whether it’s B2B or B2C, you need that reference customer to tell other people they should buy your product.
My partners have done a good job with that at our Onsitedecals, which is a graphics company that specializes in graphics for police cars, ambulances, fire trucks. The police love us. They go bragging about us on social media, do videos and everything else. This is a huge community. That’s where most of our business comes from.
That’s the lowest cost of customer acquisition is the customer you didn’t acquire that one of your other customers brought us. That’s a great example of that. That’s the efficient way to grow a business, but you have to be intentional about making that happen. What I mean by that is you’ve got to make sure that your early customers, you go above and beyond to make them happy. When people say, “What’d you think of that product,” the first people to use it absolutely love it. It’s hard to recover from the opposite of that.
I call it creating a wow experience. Have you ever met Dr. Nido Qubein, the President of High Point University? He has a director of Wow. His only job is to go around and make sure the students have wow experiences. If there’s a problem, they find out early on what’s your favorite candy bar? What’s your favorite soft drink? What do you like? If there’s a problem, then they deliver a basket with all your favorite stuff. They have a director of Wow and Un-wow. Are you still doing anything in music and movies?
I’m doing a little bit in music. We’re doing some production stuff coming up that I’m doing with my friend and business partner, which is Pitbull. Pitbull is very focused on entrepreneurship. He’s the ultimate entrepreneur himself. This is the son of Cuban immigrants that grew up in the streets of Miami that became obviously a worldwide music star. We’re doing some things in music, but the area we’re focusing on most is some television production. It’s all relevant to the topics that you and I care about. One show that we’re producing is about success in your city. We’re asking the question, “What is the 2020 definition of success?”
“The fundamentals of good business are all the same, no matter what business you’re in.”
This next generation’s version of success is not the same as what I was raised with. They don’t define success as the length of their title and their salary alone like my parents grew up with. Their definition is different. We’ve been exploring the definition of success in 2020 and beyond. That’s the show. We’ve produced a number of episodes right before COVID, but that’s the show we won an Emmy for, this show about redefining what success means in this day and age.
Is that interviewing Millennials? Who is that interviewing?
It’s a mix. Yes and no. I will give you an example. One of our episodes is definitely a Millennial. I’ll tell you the story because this is the episode that when we won an Emmy for. This young man, Shea Hillenbrand was every boy’s dream. He became a big college baseball star, became a professional baseball player, got a contract, played third base for the Boston Red Sox. How could it be better than that? He led the American League in home runs one year. They went to the World Series. Boston Red Sox won the World Series and he hit two home runs in a game to win it. Now he’s the star of the World Series-winning Boston Red Sox.
He’s the third baseman. He makes the all-star team. He gets a new $25 million contract. This is success, money and fame. Everybody’s out there trying to get rich and famous. That’s success, except the next day he quits. He’s a youth minister now. He talks about the fact, the way that the money and the fame ruined his life and made him a person he hated. He walked away from professional sports because that wasn’t his definition of success. It was everybody else’s. Everybody else wanted him to be the big star, but he was miserable. Now he’s an extremely happy and fulfilled guy as a youth minister that runs a youth ranch. That’s an example of the content that we’re creating. There’s no right or wrong here. This isn’t a guy that’s saying that he didn’t like making the money. He said that the holistic definition of success is not simply being famous or being rich.
I have a client who was selling his business. I don’t want to like want to say what type of business it is because there are not very many competitors, but it’s a multimillion-dollar company and he’s like, “Michelle, I don’t want to do it anymore. I want to be a preacher. I want to go and have a youth ministry. I want to teach the youth.”
That’s everybody finding their version. There’s no right or wrong. It’s a DNA thing. Our message is don’t let everybody else tell you what your success is. There are people that feel bad because they haven’t made money. There are people that feel bad because they have, and neither of those people should feel bad. You should adapt your definition of success. If making money makes people in some way feel bad, then find something to do with it to help others. I was talking to a multibillionaire, a personal guy who told me that his goal is to make sure that at least 90% of his money is given away before he dies instead of dying with those billions of dollars. That’s a pretty cool personal goal to have. He said, “I want to make sure I’m giving it all away to help other people.” He’s never been negative or in any way bad about the fact that he was smart enough and successful enough in business to make billions of dollars. He said, “What will make me happy is to be able to use that money to help so many people,” throughout the course of the rest of his life. I think that’s cool. There’s no right or wrong. Do what works for you.
Don’t listen to other people. A lot of times parents tell children how they should feel and what they should do and what success means to them and children have to figure it out for themselves. Where is the show aired at?
We’ll see. It’s on Amazon Prime now. We were getting to that point and then COVID hit and all the production, everybody’s shut down everywhere. Success in Your City is on Amazon Prime, but whether or not it winds up getting a network release, we’ll see when everything restarts again.
What about movies? Are you producing any more movies?
Not at the moment. We’d like to do that again, but we’d like to focus on uplifting stories. We were talking about that before COVID. What’s even more prevalent in a post-COVID world is telling stories of hope and of action and stories that let people realize that the whole world is in fact not bad news. There are a lot of amazing people doing unbelievable things out there and they don’t get the spotlight on them because it’s the bad news that sells in media. It would be cool to have movies based on real stories, but that are telling uplifting stories that when you’re done, you say, “I feel like I can go do something now too.” I see how it’s possible. We’ll get back to that, but not yet.
It’s like Frank Shankwitz’s movie from Make-A-Wish Foundation.
Frank’s life story more is a wonderful example of how to leave a lasting legacy.
How to turn out of turn a terrible job around and pay it forward, give it back. He was helped as well. What movies have you produced?
The last one we produced was a scary movie. We don’t want to talk about that here. It’s a bloody scary movie for twenty-year-olds. It’s called Cabin Fever. I saw Hulu where somebody put out ten movies you should watch during the pandemic because they are movies about viruses. That’s what our movie is about. People are camping in the woods. The cabin fever is a virus that’s going around. All of a sudden, the movie is getting a lot of clicks again because people are watching movies about viruses. It’s a scary movie about a scary virus.
Let’s go backwards a little bit because I remember when I spoke with you when we spoke on the same stage. I remember you telling us about your background, how you were an engineer, how you would go into the airport and you’re standing in the line for a ticket. This is how you founded the kiosk machines. Can you tell us the story?
It goes back a little before that though because to what you and I were talking about was very relevant. When I was growing up, the parent’s message that everybody got and most kids still do was go get an education in something that you could get a good job in. All the focus is on a job. Get a good job at a good company so you can get a good salary. I got a software engineering degree because I was told by society and my parents too, “Get a degree where you can get a good job at a good company and a good salary.” I did. I got an Engineering degree in computer science software. I got a job at a big engineering company. I had a good job at a good company and I had a good salary, which would be a great story, except that I didn’t have a good life. I hated my job. I couldn’t stand the management of the company that I worked at.
I got to tell you a story from my experience only. Remember, we’re not talking about right or wrong. Everybody should follow their own path. It’s a DNA thing. Here was what happened. I’m in this big engineering company. One day, the boss comes in. The big boss, like the boss’s boss. We never seen this guy. He comes in and everyone’s whispering, “What?” They’re like, “The big guy’s in the building.” We’re in our sea of cubicles, all these engineers. He comes walking in. He’s walking over by the window and he yells out, “Hoffman,” and everyone was like, “He wants to talk to you.” I can’t believe he knows my name.
I go over there and he tells me the story. He said, “There’s a management position available at this company.” I said, “Everybody knows that.” He’s like, “Would you love that promotion? I have to promote somebody.” I said, “Everybody in the building is hoping for that promotion.” He said, “Do you know what I’m going to do? I’m going to tell you how I pick the person that’s going to get this promotion.” He said to me, “I come every day at the end of the day and I look out the window in the building. What do you see out there?” It’s giant parking lots because it’s a huge engineering company. All that’s out there is cars. I was like, “The cars are out there.” He said, “That’s right.” I’m completely confused. I don’t understand what he’s talking about.
He said, “The way I decide who’s going to get this promotion is at the end of every day, I look out there to see whose car is here last. That is the person that’s most dedicated to this company, the last car in the lot. That’s who I’m going to promote.” I said, “That’s Mark. He’s a complete moron and he can’t do his job. He’s always here when we leave because he doesn’t know what he’s doing.” I was like mortified. That’s not the criteria. The boss doesn’t say a word. I was like, “I go home on time because I know how to do my job. I’m good at it. Why am I being penalized for that?” He didn’t say a word. He said to me, “Did you learn your lesson here today?” I said, “Yes, sir.” He said, “What did you learn?” I said, “I’m going to buy a second car and leave it here permanently.” He didn’t think that was funny.
When you said I probably wasn’t a very good employee, that was the end of my job there. The boss did not think that was funny and I didn’t want to work there anymore. He said, “Do you think that’s funny?” I said, “Honestly, sir, that was funny.” He stormed away. I couldn’t help it. I was like, “That was funny.” I quit. Now I’m an unemployed twenty-something-years old and broke. My mom’s yelling at me, “Why would you quit? You had a good job.” It’s because I hated it every day and she didn’t get that. She’s like, “Now you have no food and you’re broke.” That’s when I bought an airline ticket to see a guy that I was hoping could mentor me a little.
I had an idea, but I went to the airport on a busy Friday and the lines were miles long. That was back when you had to wait in line to check-in at the ticket counter to get your boarding pass. The line was one hour long and I missed the flight. When I was talking to the lady, I was a little irritated and I was like, “We’re standing in an hour-long line watching you use the printer.” A boarding pass is a printout. It’s a piece of paper, your boarding card. She’s like, “Next.” I’m like, “This is ridiculous that we’re all standing here in line and you’re printing pieces of paper,” and she’s like, “Next.” That’s when I got the idea. It made me nuts and I was like, “I’m never going to do this again.”
Granted, one of my issues in life is impatience. I know I have that problem, but it’s also served me well in moments like this. I went back home and took out a sheet of paper and said, “There has to be a better way to check into a flight than standing in a line and watching someone print your boarding pass.” For your readers that have checked in at a kiosk in an airport most anywhere in the world, that was my first invention. I was able to do my first startup. I had no clue what I’m doing, no money, no nothing. I was just a broke unemployed engineer and started designing the kiosk in trial by fire, figured it all out along the way. Fortunately, we were successful that airports all over the world wanted to buy those kiosks. The company worked.
Millions and millions of people all around the world have missed a flight, have had the same problem that you have, but did nothing about it. What makes you so different than them?
“The holistic definition of success is not simply being famous for being rich. “
I didn’t know any of this then when the story occurred, but now I’ve noticed the behavior, a couple of things that entrepreneurs do that other people don’t. It will tell you if you have the entrepreneur DNA. Every day, you encounter problems in the world. There are problems everywhere. What most people do is they come home you have an hour to run an errand at lunch and it takes 2.5 hours. When you come back, you’re mad. “Those idiots. They’re incompetent. It shouldn’t take 2.5 hours to sit in that stupid line.” What you do is complain and go back to what you were doing. That’s what everybody else does.
Entrepreneurs do this different thing. They stop and they say, “Is this a problem that bothers a lot of people? Is this a big problem?” If the answer to that is yes, then they do a second thing. They do some research and say, “Is there a better way to do this?” If there is, then they do the third thing that no one else does. They own it. Entrepreneurs stop and they say this, “I’m not leaving until this is fixed.” What I want your readers to think is next time you hear yourself complaining about something, stop complaining and say, “Is this a big problem? Can I fix it?” If so, that’s your entrepreneurial journey. Many entrepreneurs and business owners are sitting in their conference room with a white board or a piece of paper and coming up with ideas for products.
They push them out in the world and they hope someone will buy it. Sometimes people show me stuff. They say, “This is cool. I invented this.” I was like, “Who’s going to buy it?” They’re like, “Hopefully, somebody. I’m going to start selling it soon.” That’s backwards. The best and most successful people don’t design their company from their boardroom, their conference room out. They design it from a problem from the real world in. Another example, a friend of mine, Lars, who’s Danish got sick of getting lost all the time. He couldn’t read paper maps. He couldn’t fold them. He couldn’t follow them back then. He was sitting in his car one day, upset that he was always lost and talking to some friends on his phone. “I’m lost again. I don’t know where I am. I don’t know how to tell you where I am.”
How many other people are asking people? Everybody was sick of getting lost. He said, “This is a big problem.” Sitting in his car, he’s like, “I bet there’s a better way to solve this.” He’s looking up at the sky in exasperation. It occurs to him that there are satellites up there. The satellite can see me. It knows where I am. If I tell it where I’m going, can it tell me how to get there? Lars created the technology that’s Google Maps, not Google. They bought the company from this guy for over $1 billion. It’s because he solved the problem that he was sitting in. That’s the difference between successful entrepreneurs and everybody else. They don’t walk away from the problem that everybody else is complaining about. They say, “I got this one.”
That was the best invention ever. I remember traveling around Dallas going from one client to the next trying to read a map and then getting outside using a payphone in the rain to ask the client for a specific direction.
I don’t know how I ever got anywhere in hindsight. I have no sense of direction.
A lot of entrepreneurs have no sense of direction, which is quite funny. Those are two great stories. Tell us about Priceline. How did you find the Priceline?
Priceline was founded by a guy named Jay Walker. Jay is an intellectual property guy that studies business models. He had a company then called Walker Digital. He was looking for ways to improve businesses. Jay had this idea of the reverse auction, which is the name your own price. That was an idea that he had. Instead of you having a business where you say, “A hotel room is $200,” then what if you had a business where you said, “Tell me how much money you have and I’ll see if I have some empty rooms.” That was the idea he had. Jay called a small group of people, including me. He rounded up a group of people and said, “Let’s take ideas and build companies out of them.” That’s where it started. We got a group together and that’s a big piece of what you’ve heard me talk about before, how important the team is.
Somebody with a brilliant idea without the team to execute it, it still doesn’t get done. If you have a bunch of engineers on your team and no one knows marketing, it still doesn’t get done. You’ve got engineering and marketing, but no one knows anything about finance, it still isn’t going to get done. What made it work at the time was that we assembled a cool group of people from all the disciplines that we needed to be able to launch and scale a company. I will always say that the reason Priceline and now it’s Booking.com, it’s the same company, was able to scale is because we had a great group of people covering every position. We designed the company for scale from the very beginning. That was always a discussion. If this thing takes off, are we building an infrastructure that will enable us to grow a company quickly?
Did you end up selling that company?
No, there was never any need to, but you have to keep in mind, this was at a crazy moment in time. It won’t happen again, the internet bubble. At the time, Priceline was only eleven months old when it did an IPO and that won’t happen again. It’s still a public company. It was never sold, just IPO. At the time, the IPO was the third-largest IPO in market history because internet stocks were crazy. The IPO was able to raise enough money for the company to run so that the public market did its job and the company was never acquired. The other reason why is not only the investment, the stock continued to gain value, Priceline was the first S&P stock ever to hit $1,000 a share, not Google and not Apple. Now it’s called Booking, but it’s probably at $1,800 a share. Because the company performed for its investors, there would be no reason to sell it. It’s also a very profitable company quarter after quarter.
Why did they change names?
The company is now in about 190 countries and Booking is the bigger name in more countries than Priceline overall. The holding company is no longer called Priceline Holdings. It’s called Booking Holdings and the stock symbol is now Booking and not Priceline. Booking is more recognizable and certainly easier to remember in all the other countries.
What about the airport kiosk? Did you exit that? Did you sell that?
Yes. I was able to sell that company as well to a major corporation, a Fortune 500 company. For me, that was my first time going through the acquisition process in which I learned a lot of things such as the immense difficulty of valuations. Valuing a company is a game that I was totally unprepared for. I watched both sides, even though I hired people who knew how to do valuation because I didn’t, the process was eye-opening for me. The other part of the process that I think was eye-opening was selling a small company to a big company and watching how it’s absorbed. That was a learning process as well. We’ve been through IPOs and acquisitions.
If you hired me, you probably would’ve gotten more.
I wish I had known that at the time. If I had known you at the time, I could have used the help because I didn’t know what I was doing. I wasn’t ready. Now with people like you that do what you do out there, people can come to you to prep their company and prep them for the exit, but that was less prevalent that many years ago for my first company. There weren’t people like you. Also, I wasn’t ready to exit. They came along. I wasn’t saying, “Let’s try to sell this. Let’s get ready.” People started calling and saying, “We love your company and your core technology. We’d like to buy the company.” I was like, “I don’t know how to sell my company. I’ve never done this before.” The world’s a much better place now with having resources like yours to go to because I was over my head in the process back then.
It’s a very complicated process. No matter how intelligent a business entrepreneur is, there are so many caveats to it and so many different things to learn. You’ve got to make sure somebody gets your business ready for sell and preps you the right way because otherwise the buyer side can take advantage of you.
That probably would have happened. I would have been much more taken advantage of, except I had one random thing that worked for me, which is I didn’t want to sell it. When they came in realizing I didn’t know what I was doing. Where they started the offer was, they were saying, “This guy doesn’t know.” I’m going to be honest with you. Remember, I’m a software engineer. I’m still in my twenties. Somebody comes in these suits. These guys are wearing these suits, these M&A guys, that costs more than like all the clothes I own in one suit. I was like, “Can I help you guys?” I don’t know these well-dressed people. That was a team of men and women.
I was like, “Can I help you guys?” They said, “We’re from M&A.” I said, “I know that university.” They said, “Not A&M, you idiot. M&A.” I said, “I don’t know what school that is.” They said, “It’s not a school.” It stands for mergers and acquisitions. I did not know the term M&A. All I’d ever done was technical stuff and travel stuff. It didn’t ring a bell. I misunderstood and they laughed at me. I guarantee you, they went back and said, “We can get a good deal because this moron is clueless.” The only thing that saved me this time was that I didn’t want to sell it because I loved my job every day. I hadn’t thought it through or anything.
When I said, “No, thanks,” they kept coming back with a better offer. I was like, “I don’t want to sell now,” and they were doing the wink. “We get it. He’s a tough negotiator. We’ll tell the boss you don’t want to sell.” I was like, “No, I don’t want to sell.” They never believed me. They thought that was a negotiating tactic. They kept coming back until it was an offer that I felt like saying, “You guys are idiots to pay that for this company, but I’ll take the deal.” It’s not the right way to do it.
You got your price?
Yes, but the hard way.
“Successful entrepreneurs don’t walk away from the problem that everybody else is complaining about.”
It’s surprising how many business owners, not just you, who have never heard the term M&A before, a business broker before, who have no idea what we do and who we are. I’ll hire real estate agents to sell their business. Even though it’s prevalent, there are so many people that are not educated on the process.
More people need to learn that and a lot of that is awareness. I told you, in my case, I wasn’t aware that there were people that could help me.
Which is why I’m coming out with a book, Exit Rich with Sharon Lechter, who you also know, so I can raise awareness. One of the other things I want to talk about is everything that you do overseas in other countries, the boards that you serve on, the think tanks that you have for young entrepreneurs having them come up with ideas to solve real-world problems. I know that’s a mouthful, but I know you’ve served in 185 different countries and you have what’s called Dream Tank.
We do that in a couple of organizations. The main one for me is the Global Entrepreneurship Network or GEN. GEN is in about 180 countries with a simple mission. We have people on the ground in all those countries. Our mission is to help anybody anywhere that wants to launch a business. We want to help enable them to do it. That’s the Global Entrepreneurship Network. We are the sponsors of Global Entrepreneurship Week every November that’s celebrated around the world and other global entrepreneurship days. I’m the chairman of that. Dream Tank is a new youth movement we’re launching to get more and more young people to start entrepreneuring when they’re kids and not waiting until much later in their life. Dream Tank is a new launch. I’m also the Global Chairman of Dream Tank. We’re gathering youth around the world to teach them how to solve real problems as entrepreneurs.
The third one that I’m the founding board member of is called The Unreasonable Group named after the George Bernard Shaw quote, “Reasonable people adapt to the world around them. Unreasonable people expect the world to adapt to them, so therefore all progress in the world is dependent upon unreasonable people.” The difference is unreasonable is entirely social entrepreneurship. We are assisting the entrepreneurs and the startups around the world who are solving the world’s biggest problems, i.e., the United Nation’s seventeen goals for a better world. Clean drinking water and food for everybody and education and wiping out illiteracy. All the sustainable development goals, that’s what we do at Unreasonable. Those three organizations are the ones that occupy my time now.
You’ve had some stars too evolve from some of these organizations. I know one girl that you mentioned in one of your speeches that evolved as a star who was a breakout success. Do you know who I’m talking about?
I don’t because we’ve had a bunch. They’re all over the world so I’m not sure which one you’re thinking.
She’s quite impressive. She got an award too.
You’re probably talking about the girl from Peru. That might’ve been one of them. It’s an amazing story, to give you an example of the power of entrepreneurship. In South America, there are these countries where 5% of the people own all the wealth and 95% are poor. It’s ridiculous numbers like that. She lives in this part of Peru where the poor people live on these hillsides and houses made out of trash they collect. When the monsoons come, the shelter around them slides down the muddy mountain and they are homeless again. That’s a horrible life in lots of parts of South America. If you have a young man, a boy, a son, you send them away to school in the city, but they don’t send the young girls away. You don’t send them to school frequently.
It’s just the young boys. Mariana was one of these girls that said, “This is not okay. I’m not going to accept this as my future with no chance to grow or learn or go to school or get a job or anything.” She started a rogue coding school in an empty building with borrowed computers, teaching South American teenage girls how to write code. They would walk 2.5 hours a day each way. It’s a five-hour round trip walking into town. She would interview these smart girls in the slums and take the smart ones down and teach them to write code. Since then, starting with this rogue coding school, she’s now opened real coding schools.
She’s taught thousands of South American teenage girls how to write code and they get amazing jobs writing code online and they can feed their whole families. I think what you were talking about was that before Obama left office, he had a summit on global entrepreneurship and he was picking some people to honor. He picked Mariana from Peru as an example of how entrepreneurship can be used to completely change the world. There are stories of people like her around the world that are incredible. That’s the stuff we want to make film and television about going forward.
I hate watching movies unless it’s based upon a true story because I think it’s a total waste of my time. I want to learn something and I want to be inspired. I don’t want to go to another Rocky movie or a Terminator movie. That’s why I love Frank Shankwitz’s movie so much. That’s amazing. I know you also take people with you on some of these excursions to help change the world.
Let me tell you about a trip we did. Part of the reason why is for a lot of people, if you’ve never seen anything else in your life, but what you grew up with, you don’t know there are options. I’m going to give you an example. You know that right now at this moment in time, the violence in Chicago is at an insane high. They had nineteen people shot.
Is that why you’re in Florida now?
It’s safer than the inner city of Chicago these days. Chicago is dangerous. Inner-city children, if all they see is drugs and gangs and violence, what choice are they likely to make? They don’t know there’s another choice because that’s all they see all day. The reason we like to take people someplace different is to show them that the whole world is not like what’s in front of them and it’s not their only choice. We did a cool trip where we took all these inner-city kids from the worst parts of Chicago, a whole group of them. We flew them up to Silicon Valley first and they got to visit Facebook, Apple, and Google and see what the tech world and learned about what education they need to get jobs there. We also did a fun thing. We went down to Hollywood and we took like the Warner Brothers studio tour so they could see what jobs were available in the creative industries as well. It was amazing because when they went back, they had bright lights in their head. They’re like, “If I go to school and toed the line and don’t make bad decisions, I can get out of the situation I’m in and go have an amazing life.” They didn’t even know that was possible. That’s why I like to take people on trips to places they’ve never been to open their minds to other possibilities.
What was the outcome of that?
It’s been fantastic. A lot of them are focused on their education. These were young kids, so they’re not in college yet, but some are in high school now. They’re coming up with career goals. They saw opportunities of types of jobs they could have instead of gangs and drugs and that’s what they want now.
All you know is all you know unless somebody shows you something differently. You should do a documentary on that from the start to the finish.
We’re discussing doing that story to inspire other young people of what’s possible.
Don’t you also have a cruise ship that goes in the middle? There’s a submarine that goes in the middle of the ocean with a bunch of young Millennials on board that solve the world’s problems.
We haven’t done that again in a while. That’s Unreasonable, the group I told you. It’s called The Unreasonable Group. That’s UnreasonableGroup.com. GEN that I told you about, global entrepreneurship is GENGlobal.org in case the readers want to look at these. Dream Tank is DreamTank.co. That’s the organizations that I chair. We did something we called Unreasonable at Sea where we took entrepreneurs on a ship sailing around the world to do what I was talking about in the airport to see real problems while you’re standing in them, see if you can come up with solutions for them. It was one of the coolest things I’ve ever done in my entire life, sailing around the world with a ship full of entrepreneurs looking at ways we could make the world better.
You are a true visionary. What were you like as a little boy?
I’m always curious. I grew up with a single mom with four kids. She worked multiple jobs, so we never had anything, but we weren’t raised to care. We didn’t focus on that at all. I wasn’t raised in any materialistic way or anything like that. I would say the number one factor, and I’ve learned this later, was curiosity. I did make a U-turn even when my friends walked on ahead of me to see what that shiny object was. No matter how hard I tried, I could not walk over there to pick up the shiny object, which 99% of the time was a piece of trash. My friends mocked me, but I still couldn’t stop myself. I would say for me, probably two things were definitive for me as a child.
“Reasonable people adapt to the world around them; unreasonable people expect the world to adapt to them. “
One was curiosity, but the other was resourcefulness. Whether it was mowing lawns, cleaning pools, delivering newspapers, I had always found some way to make money so I could independent and not have to ask my mom who was already busting her butt working multiple jobs. I don’t want to ask her for money when I needed it. If I need to choose, I’d rather be able to buy them. I was very resourceful and always finding a way to do some work for somebody that I could get paid for so I could take care of myself.
I’ve always said that money is all around us. If you want to make money, you can make money. What is the number one tip that you would have for people suffering? Business people, entrepreneurs, people have lost their jobs suffering right now because of COVID, what’s the number one piece of advice you would have for them?
There is a whole new set of business opportunities that have arisen because of this. You need to be exploring them. You need to take out a blank sheet of paper and write down what you think the new normal means and what are the new requirements of the world. Look to see if there’s something you could be doing in this new space where people need you. There are some prime examples. Work from home is a prime one. All of us are working from home now. Every single day, I get business owners that tell me, “There are not enough tools. I don’t know how to stay connected with my team and collaborate virtually. We need more help.” You could be training workers. You could be developing collaborative products. You could be holding online workshops for them. Helping companies work remotely is a huge new market.
Similarly, so is school. Schools everywhere sent their kids home and teachers are struggling. Millions of teachers were not prepared. There’s no training for them. You could be developing training to help teachers be comfortable online, or you could be developing products for them or for schools. You could be developing parent products to help parents work with their students. Parents are saying, “I don’t know what I’m supposed to do in online school. Am I involved or not involved?” That’s a big one. Healthcare is another one. When we had a pandemic world and everybody was locked down, the question of how to deliver healthcare to people like telemedicine was a huge new thing that people didn’t know what to do.
We have a medical clinic so we had to learn very quickly.
Those are some examples of new business opportunities that people have to pivot to.
That’s my seventh P, Pivot, because you have to pivot or you’ll be out of business for sure. What’s the number one tip that you have for business owners that are looking to exit? You’ve been through a few exits.
To be strategic about looking for two things, about looking for that likely acquirer, if you’re talking about an acquisition, and then take steps. I’m going to give you an example that we can end with. Take steps to position yourself that way. Here’s what I mean. We also have a confidentiality agreement so I can’t say, but I’m selling a software company of mine to a Fortune 500 company. First, I started looking around and asking myself who’s the likely acquirer. In this space, I started reading the perspectives, business plans, websites and press releases of all these companies in the industry that I thought might want to acquire me. I narrowed it down to a small handful that the way their business plan read I would be right in their line of sight.
Find somebody that’s likely either because of one or two reasons. You can get them there faster or because you’re in the way. You’re either an accelerator or you’re a decelerator, but you have to be one of those two things. Otherwise, you’re irrelevant. I found one that I could be both an accelerator or a roadblock for them after doing all this research and looking at where they were planning to go in the next couple of years. That was the first part of strategically search. The second part though is more focused on position yourself. What I started doing, and I’m going to be honest with you, there was a market I wasn’t planning to get into, but they were. I made an announcement that we were preparing an entrance to that market, which in fact we weren’t, but I knew what happened.
I found out later back at their shop, they immediately called a meeting and said, “We can’t let this company beat us. We’ve been working on that for a long time. They’re small and agile. They’ll probably get there quicker because our product’s not ready.” They went into a panic. They told me this later post-acquisition. I strategically got in their way. That’s my other piece of advice for an exit. Put yourself somewhere where somebody needs to remove you either because you’re a great asset that will accelerate their path or you are an obstacle and they need to remove you one way or the other. If you’re not relevant to them, your exit is going to take a lot longer. That’s what we did each time we were trying to exit through a private market through an acquisition. The public market IPO is a whole different story.
Align yourself with a great, experienced mergers and acquisitions advisor.
We would have hired you if we had that opportunity back then to get help because it’s a complicated landscape that is not intuitive. You need experts.
Just remember me for the future.
I will. Everybody should.
I would love to have you on and talk about the first P, which is people, employees. Without a team, there is no company. I remember hearing you speak on stage about how you interview people. How do you find out what their hot buttons are? What’s important to them, what they’re emotional about, what they’re trying to accomplish and how you help them obtain their goals? Not so much about the company attaining their goals, but helping employees obtain their goals together as a club or to effort.
I’d love to have that talk with you sometime. That’s a whole topic in itself. Human capital is so important, but it is one of my favorite topics.
I’d definitely love to have you back on when we talk about people. Jeff, you should run for president.
I don’t know why anybody would want to be in politics, but not me.
You’re such a visionary and such a problem solver. How would you solve the world’s problems?
We don’t have that time for sure.
Any last-minute thoughts or tips for our readers?
I want to say in the COVID time, it’s not all bad news. There’s plenty of good news. There’s good news for innovators to solve new problems that didn’t exist before COVID. By the way, there are exits happening now because there are people that are realizing strategically there are investors that want to want to be positioned for the new normal. They’re buying companies and buying assets that they think are innovating to be ready to serve whatever the new normal is going to be. Whether it’s in healthcare, work, or education, whatever field it is. This is as exciting a time as it is a bad time.
“If you’ve never seen anything else in your life but what you grew up with, you won’t know there are options. “
Some of those industries that are doing things like manufacturing and distribution and construction, etc., they’re now thriving and having the best year they’ve ever had. As long as their EBITDA is over $1 million, we can bring on hundreds upon hundreds of buyers. It’s not all gloom and doom. There were more millionaires created out of the Great Depression than ever before. We believe there will be more millionaires and billionaires created out of this pandemic.
Thank you for having me.
Thank you for being here. Jeff, how can our readers find you?
Thank you again, Jeff. You dropped so many golden nuggets. I can’t wait to have you back on and talk about people and human capital. Thanks to all of our readers for joining us on another episode at Find Your Exit.
- Jeff Hoffman
- Global Entrepreneurship Network
- Exit Rich
- Dr. Nido Qubein
- Shea Hillenbrand
- Dream Tank
- The Unreasonable Group
- Unreasonable at Sea
- LinkedIn – Jeff Hoffman
- @SpeakerJeff – Twitter
About Jeff Hoffman
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