Jeff Hoffman Q&A: Raising Funding, Scaling, and Selling Companies

You guys live in a time where entrepreneur is a real word. There are conferences like this, there's education, there's degrees in universities. Now it is a wonderful time. There's data, there's studies, there's incubators. There are many, many people trying to help you become successful entrepreneurs now. And I think that's an amazing time. I never really, at the beginning, none of this existed.

You're listening to Freedom Fast lane presented by capitalism.com this is the show about building businesses and invest the profits so that you can live life on your terms.

This week we're releasing Ryan's talk with serial entrepreneur Jeff Hoffman after his presentation at the Capitalism conference. Jeff was part of the early stages of priceline and and ubid.com Jeff has also advised multiple presidents and has spoken in 50 countries around the world on the topics of scale removing bottlenecks and managing multiple projects while maintaining life balance. In this Q and A, he talks about building world class teams, meeting Elton John and how the perception of entrepreneurship is changing for the better.

Give it up for Jeff Hoffman, everybody. This really is your sect. I love you.

Do you guys like that? Was that awesome or what? So Jeff, the first thing that I want to ask you is a lot of entrepreneurs get into this game and.

I know that Russell Brunson will be here tomorrow. One of the things that he talks about is us entrepreneurs who didn't cheat and raise capital and build teams is one of kind of his famous lines.

So a lot of people in this.

Room built this, bootstrapping it and the idea of going out and building the world class team or the world class network, they've been doing this feeling alone the entire time. And going out and building the New England Patriots feels like a long staircase. That is a long climb. How would you address that?

Or so let's separate those two. You don't have to raise capital to succeed. It's funny, when I ask entrepreneurs tell me all the sources of funding for your business, they will list debt and banks and VCs and private equity. Not one person ever lists, why don't you just sell something? Right? Revenue and customers should be your first source. I just want to tell you one of the times when people said, well, but we don't have a product yet. I said, watch this. These are those printers. I showed you the kiosks. I went out to all the customers, I said, hey, I'm building these kiosks. Do you want to buy one? And of course they said, no, come back when it's finished. And I said, I will said, but I'll tell you what, every airport in the world is going to want one. So by the time I come back, you're going to be way near the end of the line. And they said, well, we don't want our competitors to get it first. I said, you know what? Why don't you give me a 50% deposit up front and I'll put you at the front of the line. I came back with a pile of money this big and never had to raise funding. Figure out how to make money before you borrow money. But you asked about a separate part, which was the team building. I understand what you're saying about a lot of entrepreneurs building companies without building team, but I do not think the question is not can you run a successful company? The question is, can you scale? People ask me all the time. We built companies that scaled all over the world and scaled from nothing to billions of dollars. If that's what you want, you have to build a team. You cannot scale a company without team. You cannot scale a company when you're in the way. You have to build team around you to scale.

You've been in multiple different industries. It's. It's almost my perception of you is you kill it in one industry and go, that was fun. Let's go into music. That'll be fun. And then you kill it there. And then you try your hand at something else that interests you. So those are different networks every time, I assume.

Absolutely.

So when you are entering in a new industry, how are you breaking into that network so that you. And how do you even evaluate that team that you're attracting?

All right, I'm going to share. I'll try to make this quick. I'm going to share another technique that I just kind of created. So I have this problem with sarcasm. It turns out there's no medicine, no cure, no surgery. And I know that. But when I was a kid, my sister went to an Elton John concert, and her and her friends were all looking at pictures of the concert, and they were all excited. And I remember saying to them, when I was a kid, I said, what are you guys so excited about? And they said, we went to the Elton John concert. I said, it's not like you hung out with them. You're really excited. And she said, we were excited just to go. Because of my sarcasm, I said to my sister, I was a kid, I said, you know what? Someday when Elton and I are friends, I'll tell him you like his music. And everybody laughed at me. And I said, why is that funny? And my sister said, in a million alternate realities, you're never going to be friends with Elton John. So I started thinking, she's right. I'm a software engineer. I don't know anybody in music or anything about music. So here's how I built my network and here's how I do everything. When you are standing on the outside looking in, it looks impossible. You just said, building New England Patriots is a tall mountain to climb. If any of you have a big dream and you're standing and you're looking up, and for me, I'm going to create a music company, and one day I'm going to be on stage introducing Elton John. Really, I don't even know one person in music yet or anything about it. If you start from here and look up, it's a huge mountain to climb. And it's too high and it's too steep, and it's too hot, and you don't have the right shoes. So here's what I do. I plan all my goals backwards. I want you to project yourself at the end game. Project yourself on the top of mountain. So I said this. I said, okay, Elton John and I are friends. Let's just pretend. And here's what I did. I took out a pencil. Try this. And I wrote this down. What had to happen the day before that? He had to like me. What had to happen the day before that? He had to spend time with me. What had to happen the day before that? We had to meet each other. What had to happen the day before that? We had. I had to know somebody who introduced me. The day before that, I had to know someone in the music industry who knew someone who knew him. And the day before that, I had to have any reason that somebody in the music industry would take my call. And the day before that, I had to have something someone in the music industry wanted. And the day before that, I had to be able to solve some problem those people had. So what I started doing was the research. You can see what I did as you move backwards. All of a sudden there's a realistic path to you when you draw the map backwards. And when I did, I said, I know who I need to get to now, and I know what I need to do. I studied the industry. I made a list of problems that if I could solve these, somebody would take my call. Who would take my call? Are those people connected to the part of music industry that might know Elton John? So I wrote it backwards, reverse engineered it, started doing each of those steps and one day when I had that knowledge, solved that problem, did that research and made that call, somebody said, hey, I just was thinking about that problem. Can you come by my office? And the whole chain started forward again.

That's beautiful. You guys like that? Clap that up.

Hey guys, this is Ryan. Going to take a quick break and we'll return to the show in a second.

Hey, fastlaners. Ryan here. And I wanted to take a second and brag on one of our backroom members. Our backroom is our mastermind, really. We're focused on getting to $10 million in top line revenue. And I wanted to brag on athletic greens. They're in the back room and they have just absolutely killed it, not only with expanding their sales, but really by making incredible frickin products. So the products were made out of need by the founders and as a result they've been featured on Tim Ferriss, they were featured in the four Hour Body and you've probably seen them all over the web. The reason why I'm telling you about them today is because I want to support them by encouraging you to go over to athleticgreens.com.

Obviously you know that I am really big on maximizing your Amazon presence and I also just really believe in the product. So for example, I like to wake up in the morning, put my greens in a water bottle, add in some creatine. Sometimes I add in a fat burner. If I'm on a cut, shake it up. And that's sometimes my morning pick me up if you've ever heard me talk about my tribe. 5. I have five habits that I practice on a daily basis. My B point every day is getting to the gym and having my greens. And when I don't have time for a big salad or making a smoothie, I supplement with athletic greens. So I'd highly encourage you to support them. Head over to athleticgreens.com Amazon and give their 30 day packs a try. All right, let's head into the episode.

The day we met outside of Chicago, we were talking about scheduling it together and you said, well, I'm going to going on a trip with Obama next week. I was like, well, that's quite the name you just dropped there. And then last year you showed up here unannounced, which was cool because you were on your way to go see Trump. So you've advised multiple presidents. What the heck do you talk about?

I care about not politics because I do not know politics. It's like I said, quit trying to pretend to be something you're not. I care about one and only one thing. Entrepreneurship. My fundamental belief in life is that if you want to make the world a better place, you unleash an army of entrepreneurs.

Amen to that.

Entrepreneurs are problem solvers.

Yeah.

Entrepreneurs are innovative, efficient. You know, I remember when that book Lean Startup came out, I remember thinking when I was starting up, I couldn't even afford the book right. You got a book to tell me how not to spend money? I don't even have the money to buy the book at the time. We're lean because we're broke anyway. At the beginning, we're efficient because we don't eat until we create value. Entrepreneurs are literally the ones that will change the world. So with that as my fundamental belief, that is why I've been going country to country. I was recently in Thailand where we met with the prime Minister and the king. We just did that down in Paraguay to their president and their White House. Everywhere I go, my advice is this. Here are a list of things you can do to support entrepreneurs where you live. To give everyone in this room more chances to succeed. Because if you want to fix America, quit looking at Washington. We can do it right here in this room.

That's beautiful.

When you're starting a business, many entrepreneurs feel like they are running the whole thing, doing everything, which they are at the beginning. And what would you say is the real job of an entrepreneur? What. What is the highest thing that they can be focused on?

So I think it's two parts. The highest thing you can be focused on is generating that sell more flowers objective list. What is the list of things you have to get done to succeed? Remember your to do list. You'll never get it all done. So quit worrying about it. Every day I have 12 things on my list, but I know, and every day I look at it and I say, what are the two things on my list I could do today? That move the ball, that sell the most flowers, that move the ball farthest down the field. So prioritize. Develop a list of things that have to get done for you to succeed. Everything else is noise. And then go find the smartest people you can find that know how to do those exact things instead of trying to do it. If you, if you keep doing them and what, you know what kills you guys? Success. Because you say, jeff, I knew this by myself. Three person team. It's going pretty well. It is going well, but it's never going to scale. You're never going to hit the big time doing it yourself. You're Going to have to put it down, say this needs to get done and I need to go find that guy because he's really good at doing this.

There's a breakout happening later today with Jeff woods, who heard you say that and say two things. I can do that in half the steps. One thing, I really thought that was going to be funny and I was embarrassed.

I don't know how to pivot out of my badge. I'm a dad now. Thanks, Jeff.

Yeah, he gets credit for the socks too, so he doesn't need to worry about can they see the socks? Do we have a close up on.

The socks that'll get them?

I see the camera going, that. See, that makes up for it.

So, Jeff, you mentioned what kills you is success. When you have reached a certain pinnacle, like you've won, you've built the New England Patriots in multiple different industries, what keeps you hungry and driven to pursue something new?

So that's a very personal answer, but I'll answer that again. My friends still say to me, why don't you just golf, right? Why don't you just retire? Retire from what?

I'll tell you what it is. When I was standing, this has happened more than once in my life, but I'm going to call it this, a red carpet moment. When I was there at the Grammys as a software engineer and we found out we just won a Grammy, I stood there with my eyes closed, feeling this moment and thinking, no way in hell in any path through my life did I ever think I'd be standing on the Grammy red carpet and just won a Grammy. So I closed my eyes because I wanted to soak in the moment. Right, Whatever your list is. And I remember thinking something as I walked away. I went to New York from there, and I was walking through New York and almost got killed at every intersection because I was on such a high that I failed to hear the 14,000 cars coming at me in New York. I just tuned out. And. And I was thinking this. I was thinking, every human being deserves a red carpet moment. Right? Whatever yours is, this has nothing to do with music. Every human being deserves at least once in their life to feel the way I did that day. So the school that LeBron and I were working on, I went into the inner city in Cleveland where LeBron James is, and I asked some kids, some inner city kids that we were giving scholarships, sending them to school. I asked them, I said, what is your. What's yours? What's your red carpet moment? What's some feeling you need to have in your life again so you can look back and say, I found my resonant frequency. This little teenage girl who would not look anyone in the eyes from the inner city in Cleveland, she said this to me. She said, just once, before I die, I want my mother to say one nice thing to me. And that was it. And I had tears in my eyes and I looked down and I said, as long as there is one, just one person who still hasn't had their red carpet moment, why would I ever sleep in as long as I can do anything to try to help people? By the way, that's what entrepreneurship is, guys. It's a tool set. It's not a job, it's not an industry. It's not a goal. Entrepreneurship is the skill set of self determination. If you want a life you don't have, entrepreneurship is the skill set you need to learn. I literally wrote when I was doing this advising the State Department in Hillary's office. When I went back to Hillary's staff meeting, they said, what did you learn about entrepreneurship? And I'll tell you what I wrote on the board. It's written on my wall. I wrote, entrepreneurship is the shovel you use to dig a path to a brighter future. So when people ask me what I do for a living now and why, what gets me up every day, I'll tell you what it is. It's passing out shovels to as many people as I can before I die and teaching them how to use them.

It's beautiful.

Thank you.

For how many years have you been an entrepreneur?

Well, you're trying to figure out how old I am. That was clever. That was very clever. More than 20. Okay. My whole career.

So in those more than 20 years.

How would you evaluate the period that we're in right now in terms of the opportunities and the changes and the structures breaking down in entrepreneurship? And what do you see coming based on your more than 20 years of experience?

Okay, so the first part about how do I see it now? There could not ever be a better time. When I was an entrepreneur and people would say, what do you do? I never said entrepreneur. I used to tell people, I'm a problem solver. I fix stuff and then I fix something else, and it wasn't accepted. I'd say entrepreneur, and they'd say, oh, you're a hustler. And I'd say, well, I'm not a hustler. I hustle, but I'm not a hustler. That sounds bad. And I'd say, I'm an entrepreneur. And they'd say, oh, you got fired. I said, this is my job. People would say, you couldn't keep a job. I kept saying, I do this intentionally, voluntarily. Here's the difference. Recently, a school called me and asked me to speak at career day. And I was like, yeah, ma', am, you got the wrong number. I don't have your version of a career. I'm not a doctor, a lawyer, or a nurse. And she said, no, no, no. We finally decided that people that choose entrepreneurship do that on purpose. And I said, after all these years, you recognize that this is my job. When I was built my first startup, real quick, my stepfather said to me in the fall, what are you working on? And I told him, and then that was like October. Then in December, we sold the company. Then in February, just months later, he said, what are you working on? I showed him. He said, I just asked you months ago and you were working on something different. I said, yeah, I sold the company. He said, son, I said, what? He said, this is going to look really unstable on your resume.

He said, you're job hopping. I said, I keep building companies and people keep buying them. He said, yeah, that's just instability and unstable career. You guys live in a time where entrepreneur is a real word. There are conferences like this, there's education, there's degrees in universities. Now it is a wonderful time. There's data, there's studies, there's incubators. There are many, many people trying to help you become successful entrepreneurs now. And I think that's an amazing time. I never really, at the beginning, none of this existed.

Well, Jeff, thank you so much for being here. I love what you're doing on the world. Keep on changing the world. Give it up for Jeff Hoffman, everybody.