Five Stories To Inspire Entrepreneurs

1. Kevin Rose and Digg.com2. Aron Thornton and Subway3. Peter Patafie and Patafies Inc.4. Craig Schoen and Kijiji-Feed.com5. Bruce Firestone and the Ottawa Senators

Appendix: Ten Things that Startups Forget to Do

Five Stories to Inspire Entrepreneurs Kevin Rose, Founder, Digg.com Kevin Rose made $60 million in 18 months How did he do that? a) JOB? b) Entrepreneurship?

Five Stories to Inspire Entrepreneurs “If you spend our last $10,000 on launching

this site instead of a deposit on a home for us, I’m going to leave,” Kevin’s ex-girlfriend

Kevin and his partner populated their site by CALLING 3,000 of their friends

They didn’t push on a string– an email campaign might have gotten them 15 users

I wonder how she feels now?

Five Stories to Inspire Entrepreneurs DIGG.COM’S DIFFERENTIATED VALUE? It is a new model for a newspaper uniquely adapted to the

Internet It is not simply the online version of the New York Times or

some classified advertising page transferred to the Internet It is a digital community made up of a fairly homogenous

demographic—80% are male, mainly young techie readers Readers are also contributors Readers dig up interesting stories from all over the web and

post brief synopses to the site and links to them whereupon other readers vote on them—the most popular ascend the page

Five Stories to Inspire Entrepreneurs The site harnesses the competitive instincts of the

readers/contributors to compete to see whose story will lead The site works because of its homogeneous demographic—

contributors only post stories that will be of interest to the group The site is dynamic—leading stories change by the minute or

hour Digg.com’s cost for headline writers = ZERO Digg.com’s cost for journalists = ZERO Digg.com’s cost for editors = ZERO Digg.com’s cost for distribution = ZERO (at least, the marginal

cost is practically zero)

Five Stories to Inspire Entrepreneurs Digg’s sustainable competitive advantage is

its business model and its readership You might be able to knock off its business

model but it is extremely difficult to knock off its millions of dedicated readers which form a community

The key is that the readership and community are relatively homogeneous and have similar interests

Five Stories to Inspire EntrepreneursKeys to success:a. Sound biz model;b. Guts;c. Marketing that works;d. Community makes Digg.com tough to knock

offe. Beaucoup de differentiated valuef. Scalableg. Human curate the news

Five Stories to Inspire Entrepreneurs Where does true job security come from? Having a job with the GOC? 25 years with the GOC doing post project

reviews Aron Thornton (not his real name) laid off in

the recession of the 1990s What to do next? Send out 500 CVs

Five Stories to Inspire Entrepreneurs ZERO interviews What kind of JOBS are available for a guy with a

PhD in Anthropology who has done nothing but GOC work for 25 years?

ZILCH What to do next? Scared to become an entrepreneur Not the kind of person to start his own business Needed some structure– Ah Ha! Buy a franchise What franchise?

Five Stories to Inspire Entrepreneurs Bought a Subway franchise and a couple of

years later bought another Took over a loser of a location but only paid

$35,000 Turned it around in less than 18 months using

smart (guerrilla) marketing Every day at 10:30 am go to mega mall parking

lot across the street* and put $1 off sub coupons under the windshield of 500 cars

Run back to his shop and wait for the traffic to come in the door

(* With permission of franchise owner + promise to clean up lot every evening)

Five Stories to Inspire Entrepreneurs Also visited every local (tech) office within three

kilometres between 11:00 am and noon weekdays over the next 18 months

Would bring in huge platters of finely cut subs and a bunch of $1 off coupons

Talked his way past receptionist and security to hand out free food and coupons by the bucket load

Although he only made $30k in his first year, he made over 100 grand for himself and his family in year two

Five Stories to Inspire Entrepreneurs Bought a second location and now takes home over

$140,000 every year Making more than he ever did at the GOC and loves

what he does Does his own hiring, firing, banking, accounting and

marketing—outlet for creativity As long as he keeps a good relationship with the

Master Franchiser, no one is ever going to downsize him again

True job security comes from what you have between your ears: what you learn over a lifetime + your ability to put it into practice

Five Stories to Inspire Entrepreneurs Peter Patafie: up by the

bootstraps kind of guy Hired on to sell moving and

packing supplies– 100% contingent (all commission)

Peter had confidence in himself

At age 45, suddenly laid off Why? Because he was making too

much money (more than the President)

He had a wife and three kids to support and only had High School

What to do?

Five Stories to Inspire Entrepreneurs Started his own business selling moving and

packing supplies Started with less than $5,000 But he had a great reputation, knew how to

sell and he could get product on credit from suppliers

Also brought some creativity to the new biz

Five Stories to Inspire Entrepreneurs First great insight: realized that his clients’

salespeople spent a lot of their time redelivering packing and moving supplies to their clients

That is, he worried about his clients’ clients What if instead of delivering moving boxes to client

warehouse and then having their salespeople redeliver them to people who are moving, deliver boxes and moving supplies directly to them

Client salespeople can then spend more time selling (moves) and less time delivering boxes

Five Stories to Inspire Entrepreneurs Peter ended up with a 97% market share

(better even than Microsoft’s OS) Within six years, business that did $13 million

per annum with 30% margins Never expected to make that kind of money

and every year gets together with his employees and shares cash with them!

Five Stories to Inspire Entrepreneurs Peter has three priorities:

Priority # 1: TAKE CARE OF THE BUSINESSPriority # 2: TAKE CARE OF MY FAMILYPriority # 3: TAKE CARE OF YOURSELF

“Surely, you mean TAKE CARE OF THE FAMILY is your number one priority?”

No! What is the number one cause of divorce: a) Alienation of Affection,

b) Financial Difficulties? Answer is b) So take care of your business so it can take care of your family and

you

Five Stories to Inspire Entrepreneurs Craig Schoen, former

student Winner of Wes Nicol

Business Plan Competition Serial entrepreneur Hi ECQ Test Score: http://

www.dramatispersonae.org/ECQTest/ECQ(ns)TestAuto.htm

Sold (Cutco) knives door-to-door!

Five Stories to Inspire Entrepreneurs Problem: car dealers and REALTORS taking

forever to upload their info to Kijiji.com Answer: www.Kijiji-Feed.com Irresistible value proposition Servers do the work! From his apartment!

Five Stories to Inspire Entrepreneurs Bring Back the

Senators Campaign: 1987 to 1990

“What does Toronto have that Ottawa doesn’t?” Bruce Firestone to himself, 1987

A zoo, a theme park, a NHL Team!

Five Stories to Inspire EntrepreneursOut execute the competition:

Purchase 600 acres for Palladium (now SBP) Pre-sell 15,000 PRNs for season tickets (at $25

each) Sign up 500 corporate sponsors (at $500 each) and

32 original corporate sponsors (at $15,000 each) Lobby the 21 members of the NHL’s BOG and its

President

Five Stories to Inspire Entrepreneurs Don’t take ‘No’ for an answer, late Professor

of Economics O. J. Firestone, U Ottawa to his son Sept.1990

“You will never, ever get a NHL Team in Ottawa,” anon. BOG member the night before the NHL awards the Senators to Ottawa, Dec. 6, 1990

Five Stories to Inspire Entrepreneurs “Make sure that the last face the BOG sees

before they make their decision is yours,” Norm Seagram, former member of TOOC to Bruce Firestone

Last two faces the BOG see: Phil Esposito (Tampa) and Bruce Firestone

“The NHL is pleased and proud to announce… franchises have been awarded to Tampa and Ottawa,” five hours later

Five Stories to Inspire Entrepreneurs After winning the franchise, you:

a) Party all night?

b) Do a few media interviews, leave for Miami, fly to Montreal, drive to Ottawa, prepare to sell $22 million in cash worth of season tickets in ten days in late December 1990 for a team that won’t play (and win) its first game until October 8, 1992?

Five Stories to Inspire Entrepreneurs “John, what was the vote?” “It was unanimous.” Surprise phone call three weeks later

Five Stories to Inspire Entrepreneurs People like to buy from people they like and

trust Suppliers trust you to pay them/you trust

them to deliver on time Clients trust you to deliver and you trust

them to pay you Sold the NHL on Ottawa and … on BMF

Five Stories to Inspire Entrepreneurs Trust is the foundation of a successful career Once you establish trust, you become part of a (business)

ecosystem that will sustain you, your business and your family for a long time

Every business is an experiment… until proven otherwise Good decisions come when all three are in agreement:

YOUR GUT / YOUR HEART / YOUR HEAD A mentor can help give you confidence but at the end of the day,

every enterprise is an act of faith GO FOR IT!

THANK YOU,Dr. Bruce M. FirestoneB. Eng. (Civil), M. Eng.-Sci., PhD. Twitter: http://twitter.com/ProfBruce

Five Stories to Inspire EntrepreneursAppendix: Ten Things that Startups Forget to Do

1. Select the right idea—if their idea is a bad one to begin with, they are going to waste precious years of their lives for nothing. A knowledgeable mentor can really help here

2. Create a business model for the 21st Century that produces great results so that the harder they work, the more money they make—if their business model is bad, they won’t be able to compete effectively with hard charging entrepreneurs from China, India and other Tigers. Maybe their business model can be easily duplicated or dislodged and doesn’t give them a lasting, sustainable competitive advantage and concession or franchise

3. Add differentiated value, innovation and ‘pixie dust’ to their business models

Five Stories to Inspire Entrepreneurs4. Create a compelling value proposition and learn

how to clearly demonstrate it to customers and clients

5. Self-capitalize (bootstrap) the new enterprise so that a VC firm or other investors, partners or creditors won’t end up owing it instead of them

6. Use smart marketing (guerrilla marketing and social marketing) so they can acquire customers and clients cost effectively—if you have to run Super Bowl ads to get your fist clients, you’re probably dead anyway

Five Stories to Inspire Entrepreneurs7. Mass customize products and services using the

Internet so that, for the first time in history, they can get custom outputs from standard inputs as well as reverse out some of the work to their clients, customers and suppliers using the Internet so that they create a scalable enterprise that can produce more value than if they simply had a JOB

8. Find pre-launch and launch customers and sell, sell, sell (or as Ben Affleck said in the film Boiler Room: “ABC”—always be closing). If they have cashflow, they will probably survive. Ever hear of a company with fast rising revenues folding?

Five Stories to Inspire Entrepreneurs9. Execute expertly, show leadership and become a

trusted member of their community and business ecology—if they can’t execute and they don’t become a part of their community, it won’t matter how good the idea and business model were, they’re sunk.

10. Make your own rules and set and achieve their goals—people are excellent at achieving their goals if they remember to set some!

Prof Bruce