[Allie & You] Increasing Creativity to Design Your Next Big Product

Welcome to Ali and you'd the business success and lifestyle show. My name is Ali and I work with business owners just like you to grow your business. Now today you are in for a treat because we have a true serial entrepreneur that has built hundred million dollar company, 200 million dollar company, and done it really quickly. And why is this great? It's because it's an inspiration for you to see that you can do this too, too. So don't go away. Right here on Ally and you'd. Well, hi everybody. And you know what I find so fun about being an entrepreneur is that we have a lot of things in common. I know when I get into these deep conversations with entrepreneurs, like we get each other, it's almost like this secret language. So I've been chatting with our guest today, Stuart Newman, who is a true serial entrepreneur and he has an amazing story. He's had several businesses, built them up, you know, over $100 million, sold them and all of that good stuff. And so there are so many things that you're going to learn. So stay with us. And Stuart, I'm so excited to have you here.

Pleasure to be here, Alison. It's wonderful to see this going on right in my own hometown.

I know, right here in beautiful Cardiff. Right. Cardiff by the sea, we call it. So. And you know, I feel, as I was saying, that entrepreneurs have a lot of things in common. Like, you know, we're not good at people telling us what to do. We have a little ADD sometimes we can be all over the place. And you've had quite a varied past. I mean, you've had many businesses, you've retired a couple of times.

True.

And so we're going to go into all of that. But how did you get started? I mean, how did you decide, oh, I want to be a business owner? How did that all come about?

Well, probably the, the first thing that occurred to me very quickly is that I wasn't very good at working for other folks. So I decided to create my own businesses. The first one was a construction business where I could go out and buy homes and fix them up. And that was my early start in business.

How did you get into that? I mean, how did you get the idea of, okay, I'm going to buy a home and then I'm going to flip it.

I saw what was going on in the Southern California marketplace at the time. In the 80s, there was a huge growth spurt and people and houses were much more easy to acquire. At that time. You weren't looking at a 200 or $300,000 down payment. That's how much the homes cost.

Right.

So I.

Little different time.

Very, very different time. It's just scale, though. Today there's bigger packages, bigger paychecks. You can still do it, folks. Yes, but. So I saw a need and I would buy the older homes and fix them up, put a deck and a palm tree there and paint it and make 50 grand. It was great.

Yeah, well, that was very smart. So you had that, that idea of where you buy something and then you fix it up and sell it for more, which really is what business is.

All about, basically making a profit. I like profit.

That's kind of important.

And then if I continue on. So I just took that and then I started doing two and three homes per year, and then I started to have a crew, and then I became a general contractor and then a developer where I was buying the land and building the homes.

Wow. So. And what were some of the lessons that you learned? Just, I mean, that early, being a business owner, what are some of the things you learned?

I think we talked about this a little earlier. The main thing for business is to stay with it, be persistent, believe in yourself. And I know it sounds cliche, but the persistence thing is very big. You have to continue on even when it looks very difficult.

And so are there some times that you remember in those early years and we'll get into some of the amazing things you did after. Yeah, well, it is quite amazing. You know, sometimes when people have acquired great success, you know, it's not like you're sitting there thinking, going, oh, I am successful. You're just into what you're doing. You have, You've achieved a lot.

Well, thank you.

And there are people watching this and, and they want to learn, you know, and so they learn through others experiences. And I know that I have.

Okay.

And so.

As have I.

Yes. And so what? Like, you know, in the beginning, even when you started building that company, you had to. You had employees.

Right.

You had to be able to delegate and all of that. So do you remember some of those early experiences and lessons?

Oh, absolutely. You know, there was many times you couldn't get materials at the right time. You couldn't. Projects were held up. There was environmental impact reports that would set you back. Struggles, constant, you know, always struggles. I worked very much with a lot of the Hispanic people and neighborhoods, and so a lot of the Mexican guys were my foremen. And, you know, we had a little language stuff sometimes, but it was all part of the, the process. It became Very organic. But you have, again, as I said earlier, you just got to keep going through it.

Right.

But, I mean, it doesn't just happen.

It doesn't just happen. And I think the difference, though, because, you know, the statistics show that there's a very high chance that you could fail in business.

Absolutely.

But what I really think is that it's not so much failure, it's that people quit.

Right, right. It's amazing how good your luck gets when you work hard, you know, very, very old axiom.

And so you. Let's say you came up with, you know, you came to a roadblock.

Right.

Which sounds like there were many.

Oh, yes. Tremendous roadblocks.

And so oftentimes we get overwhelmed by it. We're like, I can't handle this. I'm done.

Right.

And so it sounds like you're wired very differently to find a solution.

Well, you know, not every time is it perfect, but definitely, you gotta see it through. You gotta see the bigger pict. You got to see the other side. So if you keep going, generally you will, I believe, you succeed. It's just not giving up. And we go back to the persistence thing. I think that's the key to most business success.

Yes. Yeah. You know, when I started my advertising agency that I had actually here in San Diego, one of the clients that I was trying to get was Charlotte Russe, and they used to be based here in San Diego. They've sold since. But I called the owner so many times, Larry Lawrence, that he called me back and he goes, I'm just calling you so you'll stop calling me.

Exactly.

And they became my biggest client.

Well, congratulations. And there's your persistent nature and your entrepreneurial spirit coming through.

Yeah. So I do think that's a common theme that does run through. So let's go beyond that because you've created some amazing things.

Yeah, a couple things.

So tell the story about the phone card and how all that came about.

Absolutely. Well, I was. After selling the construction and development company, I moved over to Hawaii for some time and had some kids, and then it was time to move back around 94 or so. And while I was over in Hawaii, I had some Japanese friends who were in the telecom phone card business, and they were really showing me that this is something that would be great for the U.S. now, at that time, phone cards were only used with chips that you put in phones, and travelers to Europe were used to them and Australia or what have you. But the United States pay phones only took coins. So I had the idea of why don't we try to have. I had a little software background. So a stored database with the memory of the financial value. So in other words, you could get a PIN number that access the stored database. And when you dial the 800 number and put in the pin, it said you have $10 make a call.

So it would track how much you were spending based on that PIN code. And what year was this?

This would have been right around 94, 94, 95. I partnered with AT&T and WinStar in Dallas and did that development. And then there was a company called MCI at the time.

I remember that was one of my first accounts.

So there you go.

But you were doing phone cards for them. I was doing greeting thank you cards for them.

Beautiful. Yeah, that was a great company. Till it wasn't. But yeah, so I created that and then no one ever heard of like a phone card or how to use it.

I remember those. Do you all remember the phone cards with the PIN code and everything? That just made it so easy. And also know when if you had kids and so forth and you didn't want to send them money, you could send them the phone cards.

Well, there was that. Plus it made it affordable. It's like on a $10 card you could get a hundred minutes to Mexico. If you put the quarters in the payphone, you'd get 10.

Right.

It was a.

And then you had to keep sitting there and like you're trying to grab chain.

Yes, very much so. So it was a very unique proposition and it was especially useful for people in foreign countries or visitors to the US or people living here that wanted to call relatives overseas.

Right.

So they were our biggest customers.

So you tapped into a need.

Exactly right.

And it was also something that was very simple.

Well, yeah, now it is. Well, it's a simple need to fill. It was difficult.

Well, it was simple for the customer.

Oh, for the customer was great.

It might not be. There was back end complication, but for the customer it was simple, very easy.

To understand, very easily adaptable, adoptable. It got picked up like kind of wildfire. But then again, when you're getting 100 minutes instead of 10 minutes to call your family, you find it. And word of mouth was great. And of course this was before social media and cell phones and all of those things.

Right. So you actually had to really sell, sell, sell.

Yeah, and yeah. And have a decent product and have it service. See, in the beginning too, with the phone cards, our switches weren't big enough to handle the traffic. So I'd have Nortel build me some very special giant switches to handle that.

So. Well, that's interesting. And I'm just, I'm kind of thinking through in my mind. So all of a sudden you hit a wall because you realize, wow, we don't have the capacity.

Right.

So instead of going this isn't going to work. And oh my gosh, it's like, okay, how do we build the capacity?

Right? And Nortel helped me with that. And this is interesting too because it just shows the times have changed and what have you. But I had three Nortel switches that would probably need three of these buildings to fit in. You know, giant air conditioned, huge stacks and all of that telecom power could probably fit on this desk today. A little box from Cisco.

Yeah, it's incredible. I know it's, I mean, how tiny. And it just, you know, that just keeps multiplying. I know with my dad had a chain of women's clothing stores and he had one whole room in his warehouse that was one computer, like massive. And I think the only thing it did was like spit out tickets.

Yes, it's incredible. One of my favorite stories about that is when we put a man on the moon in like the 60s, I guess they had the four story building in Houston at NASA that was all computers to put them on the moon. And apparently from what I've heard, that computing power is now in your iPhone.

Yeah, that's incredible. I mean we carry so much power. I think people take it for granted.

I think. Oh absolutely. Well, people are used to it, we're used to it.

So we don't think that it's.

You're born with an iPhone in your hand. That's just the way it is.

Yeah. And the access to information, which is, is why I think that there has been an explosion of entrepreneurs and people wanting to have business. I think it's so great. And so when you were thinking. Because I'm just trying to break this apart a little bit. So when you have this card, this idea, you want to get it out to as many people as you can.

Absolutely.

So you all that are watching this, you have a product and you're wanting to get it out to as many people as possible. And one of the ways you do it, of course, is social media. But you, we talked about earlier that you said, well, who are the people that are already talking to the people that we need to reach? So it's kind of shifting your mind to think is how, what's the fastest way to get this into the hands of customers? So you're for those phone cards you were wanting to sell it to like the convenience stores and things like that, right?

Very much so. I studied distribution in the U.S. i needed to access the convenience stores and the little markets called bodegas in the heavily ethnic neighborhoods. And I said, who's bringing what to these stores? So naturally there used to be lots of newspapers, magazines, tobacco. And so I got in touch with ARA Services, who was the biggest distribution company in the US and wound up going to their convention and convincing them to carry the cards. And then there's other big distribution houses like McLean Distributing. And so that's how we got it in. And then once we got it in, it was so popular that I hired independent distribution. We had independent people in each major city with their own trucks. We no longer needed them.

Okay, so that's some interesting things. So I'm going to kind of back up a little bit because if you all are thinking of finding a distributor, you want to find people that already have a relationship, so that helps you break in. Right. But some of the challenges I know with that is a distributor might have many products.

Oh, absolutely.

So you're kind of competing against, you know, if they're going to go in and sell something, you know, what are they going to be promoting first?

There's lots of problems with distribution.

Yeah. What some of the biggest challenges you have.

Oh, well, you know, you're sending them to the distributor in Florida and he's shipping them to New York for less money than the guy in New York is selling them for and steals his market. There's that kind of a problem. The other problem with distribution can be you have to price. Right. Because if I'm selling you a phone card for $10, you give me $10. If I give it to distributor, he has to get it for five and then he has to give it to the store for 750. Everybody has to make money. Right.

Then they have to double that.

Right. So when you keystone it along the way. So you have to be very conscious of your pricing if you're using a third party distribution.

So then you shifted from distribution to having your own reps, which a lot of people do, they start with distributors and then bring it in house.

Absolutely. You just cut out that level of.

Profit loss and you're probably more connected to these people.

Oh yeah. More secure, Better for better or worse, right?

Yeah. Well, there's definitely some pros and cons, but you have more control over 100%. The customer service, the delivery, all of those things.

Yes, absolutely. And it also created a family. Really. I mean, and we talked a little bit about motivating teams and having people. If you treat, if you have everybody kind of in house as much as you can, and treat everybody very respectfully, and no matter who they are in the organization, they get the same amount of respect, you go a long way.

It does go a long way. I know. Sometimes we feel like it has to be really complicated with our teams and you have to kind of do all these special things and really it's just. Be nice. Yeah, like, be nice. I mean, of course you have to be clear on what it is you want. And I think sometimes there's communication breakdowns. As you know, everybody that works for you, they have different personalities. People process information differently.

Absolutely.

Different paces, misinterpretations of things.

100%.

That's definitely happened to me. And so learning how to communicate what you really want to see happen or, you know, your ideas around things. And I mean, that's in any relationship though, right?

Well, I guess so. Sure, sure. Communication is key to all of it and understanding and, you know, being truthful and honest about it. It's like if the job isn't performed correctly, it's like, okay, this didn't go well, but why don't we try it again or try it this way? You know, and then there's just so many times you can do that, obviously, but by being open and honest, that's how you get results.

Right, right, right. Instead of flipping out.

Well, there's that. And then a lot of. I do have a lot of friends that are CEOs and C level people that, you know, they tend to take themselves very seriously and they're unapproachable and they dictate a lot and they are very successful. I just don't. Didn't run my businesses that way.

Right, right. Well, it sounds like you have. I mean, we haven't known each other for very long.

Right.

But it sounds like you have a pretty mellow, kind of relaxed ideas about things. And it also sounds like you were doing it and having fun with it.

Oh, absolutely. We had a great time. Yeah. My second company, the Tele Fiesta company, I brought my brother on board and we shared a lot of, lot of good times. We were based in Houston, Texas, and this was in the 90s and every month.

Right.

And then if I'm at Best Buy, I say, well, it's this on Amazon. They're like, okay, you know, but that's how it is.

Well, I think that you Know, necessity is the mother of invention, right? You know that. And so you found a need with these phone cards and that it was definitely, you know, people there trying to put their coins into the phone.

And.

And I think that obviously some of the best inventions, like, here's one. Remember when we used to carry our suitcases around and they didn't have wheels, right? And you think, wow, like, the simplest idea. I saw a brainstorm.

I saw the simplest idea. This guy's making so much money. I'm so proud of him. I saw it at the gas station down the street the other day. Somebody took all the emojis from iPhone and made little stuffed animals out of them. They're not patented, they're not trademarked. The guy just. I don't know where he had them manufactured, but they've sold out of them three times already at the market. So this guy, it's like, I'll make emoji dolls. I love this guy.

Yeah, I know. I think as entrepreneurs, you definitely, when you see people doing that, you're like, yeah. I was like, you know what we do? This is funny because my husband and I. My husband has a business, too. He's in the furniture. Office furniture business he's been in for 30 years.

Oh, wow.

So we'll. We'll walk by, like, we'll be strolling down the hall.

It is difficult for entrepreneurs today because as soon as you get an idea, there might be five other people, but they might be in other parts of the country. However, because of social media and digital, it's. It can be out there very quickly, right? You can take a product and retailers, you know, you. You know, the first thing I always do if I'm going to buy something, I go to Amazon, right? And then if I'm at Best Buy, I say, well, it's this on Amazon. They're like, okay, you know, but that's how it is.

Well, I think that, you know, necessity is the mother of invention, right? You know that. And so you found a need with these phone cards and that. It was definitely, you know, people there trying to put their coins into the phone. And I think that obviously some of the best inventions, like here's one. Remember when we used to carry our suitcases around and they didn't have wheels, right? And you think, wow, like the simplest idea, like a brainstorm.

I saw the simplest idea. This guy's making so much money. I'm so proud of him. I saw it at the gas station down the street the other day. Somebody took all the emojis from iPhone and made little stuffed animals out of them. They're not patented, they're not trademarked. The guy just. I don't know where he had a manufactured, but they've sold out of them three times already at the market. So this guy, it's like, I'll make emoji dolls. I love this guy.

Yeah, I know. I think as entrepreneurs, you definitely, when you see people doing that, you're like, yeah. I was like, you know what we do? This is funny because my husband and I. My husband has a business too. He's in the furniture, office furniture business he's been in for 30 years.

Oh, wow.

So we'll. We'll walk by, like, we'll be strolling down La Jolla and we'll look into the windows and we'll like, you know, if I own this, if we own the store, this is how we'd merchandise it, right? We'd move this over here and, you know, or. Or we'll be at a big show and we'll think, okay, there's this many people in the audience and the tickets are this much. Do you ever do that?

Every day.

I think it's just how entrepreneurs think that. Now, one of the things that I want to touch on because I think it's really important, and one of the biggest roadblocks, I think, for business owners or the mistakes they make is not being revenue focused sales.

Yes, we talked about that.

And so I think it's just like, oh, I have to get an investor. I have to get an investor. And I think if you start your business from the beginning going, how can I sell this? How can I get it out there and work on that every day? That's what keeps the cash flow coming in. So tell me your thoughts about that.

Well, we talked about that a bit earlier. And again, you asked me the question, why do businesses fail or what do you see? My number one answer is cash flow. It's being prepared for what you need and doing your best to get there. Not to get your product all the way to here and then run out of cash. Cash. I've seen a lot of people run out of money when they needed it. And so you try to your best of your ability when you're doing your roadmap or your business plan or you're starting your company. Absolutely. Capitalize, capitalize, capitalize. Just be prepared for the downtimes. You will get through it, but you have to be prepared. It's an emotional time for people. And that's what's.

Again, I'M sure that probably you've been there many times. It's like, payroll is due, and it's like, okay, who can I call?

Everybody. Cash your checks next week.

What can we sell today? What painting can we sell? But also just that mindset of how can we get customers? Because I think people are always looking at, you know, what loan can I get? And yes, you always want to get those things and have cash at your, you know, get credit lines, whatever you can do.

Right.

But also, it's like, you know, for you, let's make sales.

Sales is the key because that's what brings in the money in the door. So again, you'll get the sales. If you have a product that's got. It's priced correctly, is available to the consumer, the consumer is actually aware of it. I mean, there's lots of little places here along the line to be successful. It's not just you're successful because you invented this. I know so many people, and I'm sure you do, too. Ideas are everywhere, all kinds of ideas. But I mean, how many people have looked at emojis every day and never made an emoji doll?

Yeah.

I mean, what's it cost to make it? I don't. Not much. Right.

Yeah. Yeah. So, yeah, that is a great idea.

And it's not just about that idea. I was going to say. You were saying something earlier about. I'm sorry. Okay.

That's okay. It will come back to you.

I have.

Stuff goes out of my mind all the time, so. So sales is one. And the other thing is just the fear. How do you, you know, because you. You have the attitude, you're persistent, you go for it, you fight it through. But there's other people that are like, you know, that haven't had this experience.

Right.

It feels like overwhelming to. To take those big leaps. They have family and all that stuff. What are some things you've done to break through the fear?

That's a very good point. I think personality has so much to do with that. As we discussed, I've been involved in the surfing world, and if you want to ride the big waves, there's some fear element, but you get a bigger reward. And for entrepreneurs, it's almost like, you know, taking it to the limit. You've got to be kind of fearless out there. You have to go forward, and it is scary. It's very easy to go get a job at Qualcomm and be an engineer and drive down to Sorrento Valley every day. I mean, it's a Great lifestyle. There's nothing wrong with that and it's very secure. But for some folks, they just can't do that. And when they have an idea, my suggestion to them is they can make it work. Just get on it.

Right. And hire a business coach.

Absolutely.

Yeah. So to have that direction and let.

Me just a little accolade for you. What you do is amazing. And the whole field of coaching and mentoring and helping folks along this path is really great. None of that was ever available. And to see you doing this is wonderful for folks. Yeah.

Well, it's just that if you. If someone has already done it, they can shortcut all of that for you and help cut out some of those.

That's true.

You know, that you've gone through. So it's very rewarding work that we do. But I like something that you said, because if you're going. If you're on a wave where you, I mean, you have to, like, go for it. You can't, like, go, wait a minute. The wave is gonna come.

The recriminations don't come into effect. If you're going down the face of a.

Or skiing, you have to go either way, anything right into it. You gotta go straight down the mountain.

Right.

And then you see that you get to the other side.

Hesitation can be a big problem. So when you're going for it, keep going, Keep going.

So let me ask you this, because I think this is a good. I'm having so much fun. I love this. This is so cool. Decision making. Yes, I would say, is it in the top three of skills for business owners?

100%.

Because if you, like for you, you would have to go, yeah, I'm gonna do this, or, okay, let's go for it. Even if it was spending a decent amount of money on certain things or you would miss opportunities.

100%.

Right. And so it's trusting that gut because a lot of people. Well, let me think about it for a while then. Most times, don't ever take action.

Right. And along with that, let me say this. It's being decisive. But also one of the most powerful words in business is no. Someone makes you an offer to clear out your inventory, but I only give you 50 cents on the dollar. And you could use that money. But sometimes no is a very powerful word to use in business. It can save you.

Well, because if you're going to take it at, you know, pennies on the dollar, then you're doing it sometimes out of fear.

Yes, right, exactly.

So when you make a decision out of fear, Right. It usually bites you in the butt later.

I would agree with that sentiment.

Yeah. So, well, this has just been awesome and I appreciate you coming on. And I have to say this was kind of last minute because some had an emergency with our guests that we were having and Stuart said, hey, yeah, I'll do it. And so it just. This is how the universe works. But I really enjoyed it. So thank you for sharing all of your genius with everybody.

Well, you're more than welcome. I don't know if I'd go that far, but it's been a pleasure being here and chatting.

Yeah, he's humble, but he's pretty brilliant. So anyway, thank you for being with us today. And listen, you don't want to miss out. Where all of the fun is happening is the CEO Success Network Online Community where you're going to get online connection. You're going to get all kinds of business wisdom and you're going to get some of the inside scoop that the general public is not seeing on how to build a successful business. So check it out. The CEO Success Network Online Community. And until next time, get out there, elevate yourself because you're absolutely worth it. Bye everybody. Join Alison Maslin, CEO Success Network Online Community the CEO Success Network for connection, focus, motivation and solutions to your biggest business challenges. Get strategies, tools and inspiration to drive your business forward. Get access to insider interviews with business world influencers only for community members. Get the latest tips and strategies on revenue streams, marketing, sales, team building, time management systems and more. Enjoy monthly group hot seat calls with Alison, private weekly video success tips from top business leaders to members only. Access the CEO Success Network Facebook Group where people are connecting and sharing and supporting one another's growth. Share resources, tips, strategies, networking with other businesses owners. Allison is phenomenal. She's just a fearless leader who continuously gives us everything we ask for. We've gone from $2,000 months to $130,000 months. I've learned so much through the past three years working with Alison and I just can't see myself like stopping. I think everybody needs to continue to have a mentor and to work side by side or constantly be accountable to somebody and take direction from somebody and I don't see it ending.

People always talk about they want to be part of seven figure companies. I'm now part of seven, eight and nine figure companies. I've been introduced to some of the largest corporations, Fortune 500 companies and it's with Allison's hand help. She's kind of expanded my horizons and my capabilities and I think that's the most important thing. Where she expands, she makes you know what you can do and be successful then.