Leadership + People:
Episode 12 - John Dudash - Part 2 of 2
In this episode, John Richards explains Startup Ignition and how a bootcamp can streamline the learning process while helping entrepreneurs gain skills and a network. He shares book recommendations and names of those who have influenced him and his career. Look for his important life tip at the end of the episode where he explains why he ended up not going into medicine.
- The goal is to fail faster, not necessarily less. [01:51]
- Eat 3 of the 5 business day lunches out with someone you can learn from. You probably cannot afford their fees, but you can afford to take them to lunch. [05:00]
- Startup Ignition helps spare entrepreneurs of wasted time and capital for the fraction of the cost of a four year degree. [07:00]
- The many relationships, formal and personal, formed as a member of the C4. [12:32]
- Better to find an A Team with a B idea rather than an A idea with a B team. [16:17]
- Book recommendations on building business traction, people management and general entrepreneurship. [18:20]
- How shadowing doctors lead John into a career in business and not medicine and his advice that could save you a lot of disappointed, time and money in selecting a career path. [21:39]
This episode of Leadership and People
was originally released on:
November 15, 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 “So that’s you know one of the most important decisions assessing whether you think it’s a winning team or not. All things being equal, the team is what makes the difference. I mean. It’s, you know, said- it’s kind of trite saying but it’s really true, that it’s better to invest in a B idea with an A team rather than an A idea with a B team.”
HOST – JESS LARSEN: Today on the show we’ve got part 2 with John Richards. John’s a very successful angel investor. He runs an entrepreneur bootcamp. He had a very large exit back in the dotcom days. If you didn’t catch 1, really would recommend, go back and see what he did to innovate in the yellow pages industry and team up with some folks from Microsoft. Take a big company public. John when we were finishing off we were talking about Start Up Ignition and this entrepreneur bootcamp you have in Provo. It’s in Provo correct? Is that where the location is.
GUEST – JOHN RICHARDS: Yes. mmmhm at the start up building in Provo.
01:17 JL: Oh great. That’s a fun building uh?
JOHN RICHARDS: Mmhmm
01:20 JL: So I was really interested as you were talking about how, you know there’s… in an effort to be understanding of failure or something, we’ve really got this attitude that there’s a lot of folks at least in the startup community it feels like, where as you were saying they say “oh you know.. Yeah that start up didn’t work but it only cost me two years and thats cheap tuition”. And you made the point well yeah but what if we could have had you learn stuff for two years on something that was successful… [chuckles]
JOHN RICHARDS: Mmhmm
01:51 JL: Can you talk about how that type of mentality and principles from the Lean Start up and things like this are used in your boot camp?
Fail Faster Not Necessarily Less
JOHN RICHARDS: Sure we’ll Lean Startup is, you know a revelatory not just a revolution but a revelation to entrepreneurship… and it’s now about ten years old, its coming up on ten years old. And it’s based on a lot of research and scientific work to find out what makes entrepreneurial ventures succeed. And what makes them fail. And you know part of the core principles behind Lean Startup are that you are… that ideas to fail faster and get to success faster. So in other words Lean Startup doesn’t change the failure rate of human ideas and business. They’re still going to fail at the same rate. But what it is is how we go about implementing those ideas. We are going to do rapid experimentation and really find out what business models will work with…before we build a product and start scaling before we even know what our business model is. And so the idea is to fail 30 times really fast in the first few months. And arrive at the winning business model that you can then scale because you know it will work. As opposed to starting a company with an idea and pretending to be a company by doing all the things like hiring people, renting a big office. And going out and doing all sorts of scaling activity when you don’t even know what your business model is. And we call that premature scaling. Lean Startup, what it is trying to do is help you fail faster and avoid premature scaling. And that’s really the core of lean startup and it’s the core of what we do at start up ignition. Helping entrepreneurs to really find a business model in a rapid way with little money and time spent so that they can spend the time, money on an already known business model that will work. And it’s really an exciting process. When I was introduced to this it changed my entrepreneurial and angel investing life because I was now able to know why things would or would not succeed or why they would fail and to have some predictability to it which is really, like I said, revelatory experience in entrepreneurship.
04:08 JL: You know I too am a big fan. Our consulting firm Milan advisors. That’s also a member of Corporate Alliance in the C4 club with you. We are affiliated with the Shingo Institute. So we teach lean, maybe more in like healthcare and manufacturing energy spaces. But you know that book and the way that it gets to those root causes analysis and like its just like confronting the brutal facts early. It’s…What an advantage over pretending, right?
JOHN RICHARDS: Yep exactly.. And you know it’s fascinating. When I got introduced to it, I back tested my entire career and it explained why I was successful or why I failed. And now since I was exposed to it, It’s been a really reliably framework from which to operation so… it’s been good.
05:00 JL: And so you know here with a theme about leadership and people. What kind of advice do you have for these individuals in your boot camp about how they should be networking and you know getting out of the office.
The Value of Startup Ignition
JOHN RICHARDS: First of all Startup Ignition is all about networking with mentors and also with the peers. So an average cohort is about 20 people. We now have over 150 alumni. And there’s a really strong alumni group and some really strong peer to peer to networking. And that goes on. And that’s proven valuable. They’ll form ad hoc lunch groups that go out to lunch once a week and report on their progress as an entrepreneur. I encourage them to go out to lunch at least 3 of the 5 business days a week because everybody has to eat and some of the people they really want to get to and reach, they could never afford to pay for their time but they can all buy them lunch for $10. And you know just all sorts of encouragement to have that kind of attitude. Again it’s back to the principal that you don’t, you know figure out a business model by sitting at a cubicle or at an office looking at your computer screen.
06:14 JL: Yeah. Well thinking about Corporate Alliance specifically. When you, when you come and talk about this this startup incubator is the primary benefit for you or for Startup Ignition that you’re getting referrals of students or what do you feel like are some of the primary benefits.
JOHN RICHARDS: Well I just want to clarify that it’s not an incubator. It’s a boot camp.
06:43 JL: Oh I’m sorry. It’s a boot camp
JOHN RICHARDS: Yeah incubator is kind of a name for more of an accelerator. I was a cofounder of Boom Startup the accelerator in the State of Utah that’s the leading accelerator. I sold out to my partner a few years ago. But I just want to clarify that.
07:00 JL: Oh sorry. No good good point.
Focus on Less Wasted Time and Capital
JOHN RICHARDS: Yes. So Startup Ignition is a bootcamp. What it gets out is just exposure. There’s so many people that are interested, are thinking about starting a company and are wanting to do it. The mission I have is to really help people not waste time and capital. You know spending 30 thousand of your life savings and a year and half of your life on a venture that never should have been started or that should be pivoted and changed really early on is just not a good experience for anyone. And so there’s people that are active in corporate alliance that know probably on average 10 people starting a company or doing something entrepreneurial in the early stages and… a lot of them, they’re watching them like a train wreck. They’re saying “This one’s going to end badly but I don’t know what to say or do”. Well one of the things they can say or do is recommend Startup Ignition to them. That’s kind of one of the things that you can get out of Corporate Alliance. Because successful people tend to attract those who want to be like them. And so they come to them for help and guidance when they are starting companies. But most people haven’t spent the time and studied it and been trained to teach people how to start companies like I have. So they can easily farm that off to me. And that’s why it’s a good situation for me to be in Corporate Alliance.
08:39 JL: You know It is interesting how efficient bootcamps can be. Right? Like I interviewed Cult, I think one of your sons cofounders from Devmountain, after their exit and you know, we I interviewed a guy named Adam Bran who started Pencils of Promise that’s doing one out in New York and he has you know Spotify and all these big brands who are saying… like “will you just let us know who’s graduating and have them talk straight to us”. When you think about the cost, how much is StartUp Ignition?
JOHN RICHARDS: Yes. Well we have two curriculum. Our first curriculum, the one that is really what people think about when they think of StartUp Ignition, we call our nail course which is about nailing your business model. So it’s from start to nailing a business model And that is $2500 dollars tuition for a 13 week program. And includes, you know alumni status and ongoing mentoring after the graduation date so it’s a really good value. And we have a lot of vendors and service providers that provide free or very low cost services to our participants and alumni which greatly makes up for any tuition paid anyway. So it’s really it’s a net gain for the people that participate because they can get so much good help. Any way I have vetted out a lot of good service providers that will really give affordable help to these companies in the early stages so. Thats…. Go ahead.
09:55 JL: Well I was going to say, not that it’s an apples to apples comparison but what is a four year degree costing?
Downside to Traditional Degrees
JOHN RICHARDS: Yeah, I know. I, its… I’m very concerned that higher education its very poor at teaching skills and
I just went to lunch literally with two BYU graduates who told me their degree did nothing for them and they can’t land a job. And they are really talented individuals but everybody…you know, there are so many. They said that one job they went for and the first day the employer got 130 resumes and there’s just such a glut of college graduates that don’t have any skills. And What these companies are looking for is not degrees. They are looking for what you have done or what can you do. But if you are college graduate and got a four year degree and have no skills training, you can’t do anything. And that’s a problem. And I’m hearing this more and more. I….Something’s got to change. You know but we are talking about a 10 year system. We are talking about really high salaries for professors. We are talking about a lot of high tuition that has gone up straight for 25 years. There’s a lot of money and politics involved. But you are right. That the bootcamps, I think, if we are going to say how do we educate and prepare for the workforce and keep America skilled and competitive. I don’t know if there is anything more efficient then this bootcamp which is basically skilled knowledgeable people that are bringing that knowledge and skill to the trainee or the student without all of the massive middle man expenses taking all of those tuition dollars in between. And its super efficient. It really is.
11:53 JL: Well you know I was telling you before we started I think you know, you could probably easily classify like 10 of my 12 businesses as total failures. And I think would I have had to wander around in the woods so much if I have been able to taken something like this 15 years ago. You know.
JOHN RICHARDS: I felt the same way There is so much help available to entrepreneur these days, no entrepreneurs needs to go alone. They should seek out mentors and they should seek out help because there is a lot of help available. We live in a very pro-entrepreneurial time right now. So anyone starting a business should seek out help, because doing it on your own is a very expensive endeavor.
Friends from the C4
12:32 JL: Yea. Well shifting gears a little bit, thinking about some of our you know fellow members in C4, you know the show we are talking about people and leadership.Who are some of the friends you have made in C4 or people that you feel like are leaders worth learning from.
JOHN RICHARDS: Well now you are going to put me on the spot and see how well I remember names and all that. But you know Brad Caldwell of Security Metrics. I went on a golfing trip and was in his foursome and that was a really good connection and introduction. And he is a stellar person and I really enjoyed getting to know him. The Woodbury family, which you know the owner of University Mall and the Woodbury Corporation. And that was fun getting to know them. The CEO, and I’m having a hard time remembering his name. so now this is going to go out public, but I got to know the CEO of Costa Vida and he and I just had a real affinity for one another ‘cause of similar ages and things like that in life. And it goes beyond business and learning from each other about our families and where we are at in life and things like that. There’s just been a whole slew of things like that. There’s actually some people that I mentored when they were students and they are now in there. So that is kind of fun. Its…..
13:50 JL: That’s got to be fun.
JOHN RICHARDS: Yea.
13:42 JL: I know you have brought up Jeff Rust before. To me he is a guy that really leads with that service leadership type of “what can I do for you” type of way about him.
JOHN RICHARDS: Yup I know Jeff and his wife and we’ve traveled as a part of the BYU Entrepreneurial Center groups and different things like that. And he is a great guy.
14:04 JL: What about outside of C4. who is someone is has had a real positive impact early in your life or early in your career.
John’s Role Model and Mentor
JOHN RICHARDS: Well there’s been a number. Early in my career some folks that I worked with and an older gentleman. He is now deceased. But he taught me a lot about life and about business. He taught me how to fire people properly ‘cause that’s one of the tasks when you become a business owner and entrepreneur. How do you terminate someone properly and all those kind of little tips and tricks. One mentor that’s here in Utah has been affiliated with BYU Center for Entrepreneurship that … I just really look up to him is a fellow named Steve Gibson. Who was- helped in the 90s really build the Center for Entrepreneurship at BYU up. And he was one of the first investors in One-a-Day Contacts and Ancestory and in Omniture and all those types of businesses around Utah. And he… I met him. I wanted to be like him when I grew up like him, kind of thing. And then I did kind of follow in his footsteps at BYU doing that. He’s, he’s been a good person. And he has quotes like “Work a few years like nobody else will. Live the rest of your life like nobody else can”. Meaning you know that entrepreneurship is not about workaholic that dies an early grave because they work too hard.… it’s about someone who is willing to temporarily sacrifice and give it all in order to have freedom you know perpetually afterwards which is just an interesting concept and way of looking at it so. And anyway and things like that.
15:47 JL: Yea for sure. Well I’m interested as you have done angel investing and things like this. you know there is such an opportunity I think for people to get excited about something that sounds flashy or sounds cool and really it is just a hyper speculative investment. How do you make decisions yourself? What are some of your standards as you’ve made decisions about what you’re going to back when it comes to what is in your circle of competence and how do you get comfortable with certain amounts of risk and what not?
JOHN RICHARDS: Yeah you are talking specifically as an angel investor?
16:17 JL: Sure
Look for a Winning Team Behind the Idea
JOHN RICHARDS: Well obviously the entrepreneur or the team is very vital. So that’s, you know one of the most important decisions, assessing whether you think it’s a winning team or not. All things being equal, the team is what makes the difference. I mean. It’s, you know, said- it’s kind of trite saying but it’s really true, that it’s better to invest in a B idea with an A team rather than an A idea with a B team. And so that’s really critical. But also I have my favorite types of business. Like, there’s… when we talk about types of ventures there are archetypes like one actor models, multi actor models, marketplaces. And what these mean are like you know simple businesses with one actor means you know you are selling to one customer and you don’t have to worry about any other users or customers. It’s really easy. So for instance, business to business as we call b2b saas, software as a service company so b2b saas is one of my favorite places to invest because they tend to be one actor. Business models that are simple but the market gives them very high multiples on exits so you can spend the same time and energy working on a business that has low exit multiples or the same time and energy working on a business with a high exit multiple. So b2b saas just happens to be a business that gets high multiples. Omniture for example, which I was an early investor in was a classic b2b saas business and great business with great multiples.
17:55 JL: Was that exit number public when Adobe bought them?
JOHN RICHARDS: Yea.
18:00 JL: What did Omniture go for?
JOHN RICHARDS: Yea 1.8 billion.
18:04 JL: That’s incredible.
JOHN RICHARDS: Very very good.. Yep met Josh and John when I flew down from Seattle and went to a second story office. Kind of a dingy little place on Center Street in Provo and wrote them a check and that ended up doing well. So..
18:20 JL: [laughs] That’s exciting. But there again it is interesting like how people and skills and leadership how often, like, that human connection, if you can’t get that right, you know you can get a lot of things right but if you miss the human element how things just don’t work.
Learn Management Skills: Book Recommendations
JOHN RICHARDS: Yea. And one of the big stumbling blocks in entrepreneurship too is a lot of the young entrepreneurs who are talented in so many ways are actually very poor people managers because they have never done it. And they don’t know how to do it. So one of the things that I tell them is go get the book, the new one, the new One Minute Manager. It’s just really, you know, The One Minute Manager was a book I read years ago and now there’s a new version updated. But it just if you don’t know anything about people management you’ve got to quickly find a way that you can in an efficient and quick way can become at least a decent manager of people because if you can’t manage people you are going to ultimately fail.
19:20 JL: Any other top book recommendations that were helpful to you?
JOHN RICHARDS: Well In Lean Startup the absolute bible is a book, not actually the Lean Startup by Eric Reese, but it’s the Startup Owner’s Manual by Steve Blank, That is the masterpiece in the industry. And I already mentioned the the innovator’s Dilemma and that series of books by Clayton Christensen which is really good and excellent. And If you want a more recent book. One of the more recent books that I recommend to people and people seem to love is call Traction. And so that’s really been a popular- so understanding what real traction in a business is and it’s really been popular….
20:00 JL: That’s the “Duck Duck Go” guys right?
JOHN RICHARDS: Yeah well there’s two different traction books. I want to make sure it’s the right one.
20:10 JL: The one where it’s giving you like hey heres like 16 different options? You know, here’s the different ideas of getting that initial traction.
JOHN RICHARDS: Yea. It’s probably best for me to just to say who the author is instead.
20:25 JL: Yea yea.
JOHN RICHARDS: This is the one by Gabriel Weinberg. And so and he also has co-author Justin Mares.
20:39 JL: It’s so practical right?
JOHN RICHARDS: Yea. And it’s just about explosive customer growth and traction. And it really lends itself well to software based companies in today’s world. And it just, I don’t know. For instance like, people all the time say “how do I know if my business is getting traction?” or “what do I need to do to get traction.” And really this book really is thorough in answering this question so… You’re right it is the Duck Duck Go folks of course. And all that. And it’s their experience and what they have written in. It just… I guess it’s kind of like if you were to talk to any of our great leaders in Utah like Josh James at DOMO formerly Omniture and ask them what’s the most important thing, they are going to say revenue revenue traction traction traction. And this is a book about that topic and what it really means. And It’s really good.
21:39 JL: That’s great. Well we appreciate how much time you have spent with us. What’s a question that we didn’t ask that I should’ve asked. Or what’s something, what’s a good piece of advice going out there to close with?
Shadow Others Before Making Selecting Career
JOHN RICHARDS: Well let’s see. I think for those that are thinking about following their career path or doing something new or doing something they need to go out and find somebody who is already doing it and shadow them and find out what their lives really like .. What I find a lot of disheartening experiences for especially for young people that figuring out their way in life is they think they want to do this or be that but then they get there and it’s not the life they expected. So for instance for myself I was.. I had the fortune to shadow a couple doctors when I thought I wanted to be a doctor and I did that. And I didn’t like their lifestyle. I didn’t like what they did during the day. I didn’t like some of the things they had to deal with. And I found out it wasn’t for me by shadowing them actually. But the entire time before, I had this great vision of “ohh kind of a rainbow dream” of what it would be like to be a doctor and so, especially a surgeon. And so and for me it just wasn’t for me. And it’s just kind of interesting. And I think that’s just one fo the tips in life. When you’re trying to figure out your way to go find other people who are actually doing it and see if you truly like the life they have. Because sometimes it’s very surprising it’s not for you but you only discover that after investing in a four year degree or 2 years of you know borrowing money for some special education program. Just make sure you want to do that.
23:15 JL: That’s great advice. Well again appreciate you making time for the show and all you shared with us.
JOHN RICHARDS: Alright well thank you very much. It was an honor.