Leadership + People:
Episode 11 - John Dudash - Part 1 of 2
In this episode John Richards shares his story of entering the yellow pages industry as an innovator who adapted to the internet at the peak of the dotcom era and his experience starting an entrepreneurship boot camp, Start Up Ignition. He shares how to work with disruptions instead of fighting them and how a natural curiosity will assist in networking.
- How John Richards became an innovator in the Yellow Pages Industry [00:52]
- When the disruption to the industry arrived and the response. [05:04]
- The need to let go of the old and accept the new. [07:35]
- The way a natural curiosity will lead to more natural networking. [11:39]
- The value of Corporate Alliance and the relationships that can be formed in the C4. [15:10]
- Start Up Ignition’s role in entrepreneurial education. The increasing demand for bootcamps rather than four year degrees. [17:49]
This episode of Leadership and People
was originally released on:
November 07, 2017
Welcome to Leadership and People. This is a series that pulls back the curtain on leadership by interviewing CEOs, Senior Executives and Entrepreneurs who had large exits. We ask these experts about how they built trusted networks to rapidly grow their companies. And what advice they wish they knew if they could do it all again.
STARTUP IGNITION, CEO/FOUNDER, JOHN RICHARDS: “I was the first to do a lot of different things. I, even going back to when it used to be just black ink on yellow paper and then we started printing it on white paper with a yellow mask over it so that the ads could have white backgrounds, Those are called knockout ads. And then all of sudden we were saying well what if we could do 4 color printing. We could do 4 color ads with nice photos with 4 color art work and the ads brought innovation and different things like that.”
HOST – JESS LARSEN: Today on the show we have John Richards. John thanks for making time.
GUEST – JOHN RICHARDS: Pleasure to be here.
00:52 JL: So, you have had a couple of exits, you run a boot camp now. Can you give us a little bit of the John Richard story.
Innovation in the Yellow Pages Industry
JOHN RICHARDS: Well I was raised in Seattle Washington and went to college in Utah, so Provo Utah at Brigham Young University. And I was pre-med, but my senior year I rediscovered a love for business and decided not to go to medical school but to finish my degree in chemistry. And went back to Seattle and got into the Yellow Pages industry, because while I was in college from 80-85, in 1984 one of the biggest federal breakups of a company: American Telephone and Telegraph or AT&T, happened where it was broken up due to monopolization practices. And it was broken into 8 separate companies. And that really weakened the phone company and its different lines of businesses. So it was a real opportune time to compete against the phone company. And Yellow pages was one of the lines of business that went into that, to compete against it.
02:02 JL: Pretty successful opportunity it sounds like there.
JOHN RICHARDS: Yeah the print business in yellow pages for 100 years had been a very lucrative industry. Our percentage basis, the highest percentage profit for the phone company actually, even over the copper lines. So it was, and it was unregulated so it was easy to compete and offer better pricing and put out competitive yellow pages products. We were a really progressive publisher that did a lot of innovation with 4 color ads and just innovative products that stepped up the game in the entire yellow page industry. And then after about 10-12 years of doing that, more in the mid 90s, the internet hit. When I discovered the internet I realized the potential for the internet to eviscerate [laughs] so to speak the printed yellow pages. And so I launched one of the first ever online yellow pages. And partnered with people from microsoft to form a company ultimately that was know as Infospace that went public in 1998. And was one of the large success stories of the dotcom era. And that was up again in east of Seattle in a city called Bellevue, Washington and the Redmond, where Microsoft is located and so I did that and I retired in 2001. And BYU then offered me a teaching position to teach entrepreneurship. Which I took and moved my family to Utah from Seattle. I stayed 12 years at BYU as a professor of entrepreneurship and helping run the entrepreneurship center there. And then left there to go to Google when I helped Provo and the mayor of Provo, Mayor Curtis, sell the fiber network that Provo had built to Google. And then Google asked me to head that up for the first couple of years. Which I did. And It was a fun, interesting time to be with Google, but be able to stay in my hometown of Provo. So that was kind of a fun experience. And since then, after leaving Google after a couple years. I’ve run a bootcamp for entrepreneurs called Start Up Ignition. Which runs 13 week intensive boot camp experiences for those that want to learn how to start a company. Following good lean startup principles.
04: 26 JL: You know, and do I have the details right? When that went public back in ‘98 didn’t that go for like 38 billion or something when it listed, is that right?
JOHN RICHARDS: Yup yup. The market cap went very very high. Yup it was the dotcom era. Those were the days.
04:42 JL: That exciting. Well you definitely did better off the yellow pages industry than I did. I’m a little younger than you. And I got into the yellow pages as a newlywed. And was an inside sales guy at one of the last yellow page companies down at Orange County California. Calling people trying to get ads.
JOHN RICHARDS: Oh wow.
Disruption in the Industry
05:04 JL: And I had all these. Its funny talking to kids these days you know, like my kids who haven’t seen yellow pages right?
JOHN RICHARDS: Right
05:11 JL: But I remember my managers back there saying, you know, they were just trying to hold on to that print world tooth and nail. Saying things like you know “if your pipe breaks in the middle of the night you aren’t going to go google this. You’re going to go get the yellow pages. Just admit it.” You know “These are not going anywhere”. And I remember us like 20 year old kids [laughs] we’re biting our tongues, we’re like, you know I would go to google. [laughs].
JOHN RICHARDS: Yeah, The yellow pages didn’t go away as fast as people thought, but they also didn’t stay around as long as the old guard and the industry thought they would. so. Its interesting seeing such disruption in an industry. But it really was quite disruptive. I’m just glad I sold my print company and got a good multiple on it. Now if you have a print company you can’t even give it away.
05:57 JL: Yeah. What do you credit your forsite to. The ability to see where things were going and get ahead of the curve on that.
JOHN RICHARDS: I was always kind of innovative in the industry. I served on and I networked. I served on the three major yellow pages industry associations and their new technology committees. I was often the head of the new technology committees in the industry. so I was constantly watching and looking out for new technologies that would impact the industry, as a part of my participation in those associations. And so that gave me good insight. And in my own company I was the first to do a lot of different things. Even going back to when it used to be just black ink on yellow paper and then we started printing it on white paper with a yellow mask over it so that the ads could have white backgrounds. Those are called knockout ads. And then all of sudden we say well what if we could do 4 color printing. We could do 4 color ads with nice photos of 4 color art work and the ads brought innovation and different things like that. Ultimately to where the internet came around and of course the internet was a real game changer for, especially for a database product. Yellow pages is really just a data base and of course data bases thrive in an online environment where everybody can have access to the database in real time. So it doesn’t take a lot of vision to see what’s coming.
07:24 JL: Yea, but I guess my question is; you know, even our managers at Transwestern yellow pages
JOHN RICHARDS: That’s funny. I knew Transwestern really well.
07:35 JL: Oh really? So they were being bombarded with the information. I mean people were trying to shove that information down their throat. And they were actively ignoring it. You know. What do you credit, like, I mean obviously you weren’t the only one to pick up on that trend. Why do you think that you didn’t resist it? Why do you think that you were…..
Out with the Old. In with the New.
JOHN RICHARDS: Well because I have seen the cycles going through and it’s just part of understanding, you know. Just going back to The Innovator’s Dilemma, one of my favorite books written by Clayton Christensen, right. It’s just, you know, when a new disruption comes the old guard and old managers try to do the same thing they’ve been doing which brought them great success but now brings them their downfall. And so that’s exactly what you would’ve see at Transwestern. It’s not that the managers actually made mistakes. They were actually just doing what they had always done and what always worked for them. But when there is a disruption that comes that leads to the downfall. Which is of course the dilemma behind the title; innovator’s dilemma, What does an innovator do when a disrupter comes and disrupts them and how you react to that. And you can see that in so many different industries. And we see it all the time right before our eyes. And so what I did was, I think the right thing to do which is to completely throw away the old industry. Instead of riding the dinosaur, I moved to the new industry. So I sold my print company at the height of its value right before it was going to fall in value. And got started in a brand new industry. Which took a while to come up to speed. And that way I was able to extract high value out of the outgoing old industry, print yellow pages, and take advantage over the excitement over the new disruption of internet yellow pages. And that’s, I think, part of it is understanding the cycles that are really well explained in that book. And so I really credit a lot to understanding the cyclical nature of how things go. That happens. And It’s happening before us. You know It was interesting to watch it happen with Blockbuster and Netflix, right? I mean, Blockbuster had no idea how to respond to Netflix properly. And then they were too late when they finally did respond. Which was the wrong thing to do. It’s just a fascinating case study to see that one’s very similar.
09:57 JL: So much of the sunk cost bias. We look at all these assets we already have. We cannot abandon these, right?
JOHN RICHARDS: yea let’s look at the telephone companies copper wire investment. Would you want to be the owner of all that copper wire?
10:11 JL: Wow right. Being that the show is so much about how connections and relationships can accelerate you know, organizations and careers. You know, you mentioned there you were on all these different committees and boards in that industry. Can you talk a bit more about just the advantages you saw from that.
JOHN RICHARDS: Yes it varies from being insular company, just running your company being your own… you know, just dealing inside. But you lose a lot of insight you gain from being exposed to the greater industry. And so I really made a conscious effort to get involved in these national and international yellow pages associations, as an example. And you know there are some risks. I started taking my staff to them and there were a couple staff members that jumped ship and went to other companies because of what they got exposed to. But overall i got exposed to a lot of opportunity and a lot of knowledge and a lot of connection that really enhanced my ability to go to the next generation with internet yellow pages, and my contacts there. The overall net gain is tremendous to participate in networking organizations. Even though it takes time and there could be some risks to exposing your subordinate staff to it because of competitive offers they may get. But still the net net for me has always been tremendous because I learn so much from the peer to peer interaction.
11:39 JL: Yea. When you think about situations like that, what advice do you have for people when you know, relationships do take time. You know, the cheesy cliche of a guy shaking your hand with his business card ready to go, he hasn’t even heard your name yet. You know those are obviously something that most of us would like to avoid. What kind of advice to you have about the way to be a part of a group like that?
Networking with Natural Curiosity
JOHN RICHARDS: Well assuming it has something to do with business. So in saying that, I’m just naturally inquisitive. And I ask lots and lots of questions. Maybe to the point of annoyance but I’m really fascinated and simply love business. And so asking other people about their business, how it works, how they got started, what their secret to success are, and how… what operating tricks and tips they have. All that kind of thing. I love to just sit and ask questions and learn about that. And you know, more so than talking about me or myself and what I’m doing. Even though that does naturally happen ‘cause the other party starts asking the same type of questions back. But I think that’s being naturally curious and inquisitive about others and what their doing and what their about is one of the secrets to networking well. That’s my opinion.
13:01 JL: Yea. That’s great advice. Turning a little bit here more to the Utah focus. You and I are both members of Corporate Alliance, at that C4 level. You’ve had such a big exit you could be doing anything you want with your life. Why, why join corporate alliance?
JOHN RICHARDS: Well interesting, so… with the financial independence that came, my wife also wanted me to be engaged in something everyday. Just like a regular job. And she knows that about me. First so that my children at the time, because I was kind of young with smaller children, so that they would see me productively engaged in something. And she also knew that I personally am only happy if I am building and growing something. So that’s one reason to be actively engaged in building an enterprise and making a difference. And so, that…I’m helping lots of other entrepreneurs and companies through board positions and different things like that at any one time quite a number of them. And then with the current endeavor of entrepreneurship boot camp, it just makes sense to be in Corporate Alliance and C4 and participate at those levels and be around these folks. And it’s just natural extension of what I said earlier where if you’re naturally curious and inquisitive about business being in an organization like this where you can talk to significant and successful people and find out about their intricacies and find out what their doing Is just a net gain for whatever you’re working on. Plus you never know where opportunities will come up in the future. So I guess to boil it down is 1: it’s just good to be engaged in something really proactive that’s building and growing something. And number 2: if you are engaged in something like that being involved in corporate alliance enhances that experiences and gets you out there so you get exposure to peer to peer networking and the knowledge that’s happening out there in the world. Just sitting, sitting in your own office is not how you become successful. Getting out of the office is how you become successful.
15:10 JL: That’s like a great t shirt right there. And why Corporate alliance? I mean there’s lots of meetup groups out there. There’s other associations of CEOs and executives. What is it about this group that attracted you?
The Value of Corporate Alliance
JOHN RICHARDS: Well a few things. First off all Jeff Russ the founder is somebody I’ve known for a number of years and respect and like. And also a lot of the current membership are noted successful dignitary type people from the business community. So it’s, it’s a really good association to be around and people that you know is something that is a net positive and its its I guess, I guess what I’m saying is the quality of the founders, the people that work there and staff it and the other members is really high, all the way around.
16:05 JL: Yeah I completely agree with that. I was, the other day I was trying to talk to one of my CEO buddies into coming in, checking it out. He was kind of under the impression of like “isn’t it just a bunch of people in a room trying to sell each other something”. And I was like No No. This is not that kind of meeting. And I think I agree with you that that quality factor of knowing that people you are going on this trip with have, you know, at least this minimum of a background. And you don’t have to spend that first 80% of a conversation trying to figure out like is this person just a big talker or did they actually do something. For me it feels like an efficient way to connect with the kind of people I would want to learn from.
JOHN RICHARDS Right. And even if there is the another type that you alluded to. I still- I don’t know. This is just how I feel. I’m- I think I can learn from anybody. And that everybody has their own experiences. Even if there’s a big talker it will teach me something listening to them. And even if it was, you know a waste of time other people might think, I kind of chalk it up to saying hey, you know I learned something from that interaction with that person. And so I think that if you have that attitude then these things will be a lot more positive. Now I know people have limited time and can only, and need to be very careful with their time. So thats one reason you wouldn’t want to be into kind of a subpar type of group like this. But you know, like we said there’s a real… quality issue here…with Corporate Alliance that it’s high quality. So that’s not a problem there. But I can see how somebody might find an inferior organization and say maybe that’s not worth the time. But I don’t think that’s any kind of an issue for Corporate Alliance.
17:49 JL: Yea. Well thinking about this Start Up Ignition, the entrepreneur boot camp. I was interested in, you know before we started the show here, you were telling me sometimes other entrepreneurs who have had a big exit they’ll be getting pitched, you know, some entrepreneur looking for cash. And they will recognize- hey this person, you know, probably needs to grow some skill sets. and they’ll end up sending them over to you. Can you talk a bit more about what Start Up Ignition does and why it’s grown so much?
Start Up Ignition: The Increasing Need for Bootcamps
JOHN RICHARDS: Yea so, Start Up Ignition is an entrepreneur bootcamp that, I started basically my son is the cofounder of DevMountain, a coding bootcamp. The vertical area of software engineering and software coding was really the first vertical industry to have the modern day bootcamp over the last five years imerge to where short term intensive bootcamp that last around 12-16 weeks was out performing 4 year degrees. So literally if you went to one of these intensive bootcamps career wise, you had more results than a computer science degree. And that’s been really interesting to see and of course that industry is now much more mature. And Devmountain has been wildly successful. Well I brought my son in to talk about his success with Devmountain into a class one time and this was in his early years with that. And some of the student afterwards came to me and said why don’t you do entrepreneur bootcamps so that I don’t have to matriculate to a university.
19:27 JL: [laughs]
JOHN RICHARDS: ….If I’d have to matriculate to a university, take a bunch of ge courses and take a bunch of prerequisite courses just to get into your 400 level college class, which changed my life. What if you did that outside so anybody can take it. And I said ah that’s an interesting idea. And I started looking into it. Found out there was a market for it and we launched and in 2 days we filled up the first class and it’s been going for two years now. And it just really helps entrepreneurs, you know, avoid 90% of of the problems. They’re not going to avoid all of the errors but they are going avoid a lot of them. And then to do… And so it’s learning to do the right things and to avoid the wrong things. And it really seems to have gone well so far. But a byproduct of it is interesting. All of my wealthier exited entrepreneur friends who may or may not be angel investor types, they’ve come to me and said “John this is amazing. Now I have a place to send all the people who come to me wanting me to invest in them. 99 out of 100 times I can tell they are not prepared and ready to take my money. And they need to really work on a lot of things. And now I can give a value add by just saying ‘You know, I’m not going to make an investment decision right now. I need you to go talk to John Richards and Start Up Ignition and get indoctrinated in good start up practices and then let’s talk after that”’. And that’s really helped a lot of people to handle all the incoming inquiries for capital that they get. That’s what I meant by that story I was telling you.
20:57 JL: Yea. No that’s great. Because, you know, it’s funny I think for entrepreneurs who have made a lot of money, is like, you want to encourage people for having the guts to try. And at the same time there’s all those – oooo you’re about to make a whole bunch of mistakes I’ve made [laughs]….
JOHN RICHARDS: Yea.
21:15 JL: And you know it feels like you get to straddle both those worlds.
JOHN RICHARDS: Yea I kind of view it see… I’m known for kind of being blunt, and I hope I do it in very kind way. But I just can’t sit back. If I have an entrepreneur come to me, it’s not uncommon for me to say “that is a terrible idea and that’s a terrible business and you really shouldn’t do it”. And I don’t stop there. I say “and here’s the five reasons why”. And I tell them what the problems are. And a lot of people don’t do that because they don’t want to discourage them as entrepreneurs or something. But I go the other direction and say well do we want to encourage them to waste their time and capital. And more than capital it’s time. I mean, you know you waste a year of two on a startup that never should have been started and you’ve really really hurt yourself. Now a lot of people come back and say “Well that is cheap tuition, two years I ran at it and I failed but I learned a lot”. Well that’s not a good outcome. You can learn just as much by failing a lot faster and succeeding. [laughs] You don’t need to spend two years on a failure. And so anyway, Thats kind of how I look at it.
22:19 JL: Yea. Hopefully in part 2 of the episode here we can talk more about that and it sounds like you guys are implementing elements of the lean start up and some of the things that could really help people there.
JOHN RICHARDS: Yes.
22:39 JL: Well listen I think this is where we should stop for part one of the episode. Everybody please make sure to listen to part 2 where we will be continuing the conversation with John. And John thanks for making time.
JOHN RICHARDS: Thank you