Jeff Hoffman Q&A: Win A Gold Medal At One Thing

Foreign.

Fastlaners. Welcome to Freedom Fastlane. This is Ryan Daniel Moran and today you are in for a treat at freedom Fastlane Live 2015. Far and away, the most popular speaker was billionaire Jeff Hoffman. Jeff has a resume that is lengthy and really humbling and impressive, but the most notable among them is that he was one of the original co founders of priceline.com he exited that company and then has a whole bunch of other awards and accolades next to his name. I've had the privilege of getting to know Jeff over the last year and his talk was so popular and so well received that I wanted to share the Q and A with you here on the podcast. So this isn't his full talk, but his Q and A was immensely valuable. One of the really highlights of his talk at Freedom Fast Lane Live was when he said that you as an entrepreneur need to focus on winning a gold medal at one thing. He also talked about the importance of team and being the advocate for the dreams of your team members and your employees. That really struck a chord with the audience that was there in person at Freedom Fast Lane Live. Now, I wanted to unpack that a little bit further because we as entrepreneurs have a bunch of crazy ideas going on. I know I do. I want to start a new thing all the time. So to win a gold medal at one thing, does that mean I've got to limit my options or is there another way to do it? His answer really surprised me and it's one of my opening questions here in the Q and A with Jeff. We are going to be announcing our speaker lineup for Freedom Fastlane LIVE 2016 over on the blog very soon at freedomfastlane.com you are not going to want to miss this. Many people didn't think we could outdo what we did last year. I'd be willing to bet you on that one. If you missed freedom Fastlane Live 2015, you are not going to want to miss 2016. And if you were there, we'd like to have you back and you're going to want to come back. Until then, enjoy this Q and A session with Jeff Hoffman.

Sorry, that went long, my friend.

All right, so we are going to take some Q and A. So if you have a question, put your hand up and one of the mic runners will come and get all 50 of you. Okay, great. But before we do that, I want to ask you a couple questions. And the first one is, how in the world do you get everything done? I mean, you have. It's cool to come out and listen to this resume of changing airlines and airports. But you have this remarkable ability of identifying a problem, seeing the solution and fast forward a little bit and the problem's gone. So what's the actual process of how do you manage all these different things and how does it all get done?

Really good question. Because sometimes people say to me, you talk about focus, but you've done all these different things. Here's the important part. Not one of those things was done in parallel. Everything that I've ever done was one at a time. When we were launching that movie company, we did nothing but that movie. When we were doing those music tours, I was not launching an Internet company. When we were building Priceline, there was no music or sports. So part of it is prioritizing is when you pick something you want to do, you got. And it's a discipline. It's hard because you have all these other interests. But we would always focus on one thing at a time until we got it done. And then we would find the best people, which I just talked about, to do that one thing. So we would get, you know, I'd rather have A team of 6A players than 20 average people. So we would focus on all star teams in each domain, but we would only do one thing at a time. And you can never get your to do list done. You can never get all your things done. Which is why I said that's to sell more flowers. So every day I look at my list and I say, I got 12 things to do today, I can only do three. Which three will sell more flowers? I'll just do those three and not stress about the rest.

So I know it's going to change for every project. But on average, what is your attention span on a project before you either?

What were we talking about?

Put differently, how long are you usually investing in a project before you want to think about something else or before you're wanting to invest your interest in something else?

To be fair, we've been lucky because we've had this three to four year thing. They're always 10 and 20 year plans. But we work really hard up front. We focus on the sell more flowers, we prioritize. We don't do all these side things that aren't our gold medal talent. So we've been lucky that three to four years has been the run like that first company sold at three and a half years. The second company was about three and a half years old. Honestly, like I said, Priceline was one of only 12 companies in history that have ever gone from zero to a billion dollars in revenue in three years. We were just lucky that those first three years we put in so much focused effort with all the right people, that three to four years this tour I just took, took three and a half years. So that arbitrarily seems to be the cycle. But the part of that that's not arbitrary is that we're so focused on what's important to get done in those early years that we've created a big chunk of the value we're going to create early on. But we were committed every time. If it takes 10 years, this is something that's important to us and we'll finish it. We just kept getting lucky that people would come along, we'd either finish it or somebody would acquire it.

I want to talk about funding quickly because I think when you become unattached from the cash flows of it being my business, of it being my thing, of the money that's in the business account is my money, all of a sudden you can work on your business rather than working in your business. And I think that's an important transition for entrepreneurs when they start building teams is to disassociate from that connection. But it's hard because so many entrepreneurs who are at that million dollar point or so are still so attached to it. So building a world class team is difficult for them because they don't see the funding or the cash flows for it. How have you approached that? Have you generated the cash in the business? Have you always raised funds? What has been your process?

Excellent question. So when I ask business owners now, I say, what are the sources of funding for your business? They tell me bank debt, you know, and different kind of loans, convertible loans. They say private equity, they say venture capital. You know what not one business owner ever writes on the list? Customers. Why don't you sell something to fund your business? Because Silicon Valley, I'll blame them, has created this. You need to go get funding now. And the truth is you don't need to go get funding until you can. Here's a tip. Here's what I would always do. I would go and make a list on the wall of everything I can think of that I need to do between now and someday to make my company successful. List everything that has to happen between now and the day your company achieves your definition of success. Then I go back with a marker and I circle everyone on there that I think I could do without someone else's money, without money. And then I go do all those things. You should never seek funding but until you absolutely need it for something because it deters your focus. You said it earlier today, there's a lot of people that wouldn't know what to do with the funding. So one day I was showing a business. I said, customers are a source of funding. And they said, jeff, the product's not done. So the first thing is, can you sell something right? So I said, let me take a stab at this. So the product wasn't done. So I got in my own car and I drove around to customers. They were businesses for this product. And I said, look, the product's not for sale yet. And they said, then come back when it's ready. We're interested. And I said, well, about that. And I said, now, this is a little bravado, but I said, there'll probably be a huge waiting list for our product when it comes out. I have no basis for saying that. And I said, so you can take your chances and I'll go home, or you can write me a deposit check and I'll put you on the top of the list. I came back with a pile of money and funded my company from deposits for a product we hadn't even built yet because everybody wanted to get it when it was finished. So creative ways to finance your company through customers should be your first attempt. Borrowing money from somebody else should be after you've done everything you can think of. Not early on.

Yes. I mean, so many entrepreneurs get addicted to this idea of when they make more money. It's their money so they increase their lifestyle and they never really get free of their business, which, when we increase revenues and we recognize that it's the business's money, you can work on it and build something truly spectacular.

Absolutely. I always, literally would divide things into two piles. This chunk will be my money for the value that I created. But this is money that I'm reinvesting. So I don't watch those nickels every day. I kiss it all goodbye. On day one, I'm putting this money, it's now the company's money. It's gone. I've said goodbye. If it comes back, and, you know, in some cases, it comes back many times over, that's great. But you are right. If you continue to treat it every day as your money, what you should focus on was what normal controls and disciplines would you implement for anybody's money? You should focus on the controls in the business. And are you spending money on something that's actually selling more flowers? So I functioned on the process, making sure I had great process in place to protect the money, but not really the money itself. I mentally. Entrepreneurs. You know, there's that. I saw that poster one day that said being an entrepreneur is like jumping off a cliff and trying to build an airplane on the way down. Right? If you don't. If you don't have that DNA where you jump off cliffs all the time, you shouldn't be putting your money in it anyway.

So I want to ask you about failures. Has there ever been one and how did you handle it?

Yeah, we've had a couple. And by the way, that's one of the harder things with entrepreneurs is. And business owners is failing. And we all know why. It's pride and ego. So I actually called this the Thanksgiving test, and I'll tell you why. I was going to visit two people that I mentor, two business owners, entrepreneurs. And I went to the one guy and I said, hey, next week's Thanksgiving, are you excited about going home? And he said, I don't want to go home. And I said, just a guess. We haven't started talking about business, but you borrowed money from everybody, you know, and they're all going to be there at Thanksgiving, aren't they? And he said, how did you know that? And I said, just a guess. And the business is sucking, and you don't want to tell them. And he said, right. I met with the girl in the afternoon. I said, next week's Thanksgiving. And she said, oh, my God, I can't wait to get home. And I said, because you borrowed money from everybody in the businesses. She's like, how did you know that? I said, just a guess, right? The Thanksgiving test is pride and ego. He didn't want to tell people he was failing because he wanted to save face. There's something way worse than failing. It's deciding three years later that you should have quit at Thanksgiving. Okay, so entrepreneurs have the ego. So one of the things that we do, we definitely had failures. Here's what I. You asked, what did I do? I learned from it. And here's what I learned. What we do at the beginning of each venture and the beginning of each year is we make a list on a board of what success looks like at the end next Thanksgiving. If our company looks like this, we were successful. If it looks like this, we were a failure. Then we get all the stakeholders to sign it. Every aunt and uncle that gave you money, every employee, sometimes spouses want in. Everybody signs this thing and says, this is what we agree success is. This is what we agree failure is. My employee said, what are we doing? I said, you're pre firing yourself if we get to the end of the year. And this is true, I. I should not have to come down the hall. Everybody should be loading plants into their cars and driving away because we know we failed. The problem is people don't define success and failure. They get to the end of the year. I ask you and your investor, how was this year? You say, great. He says, horrible. I say, you guys did the same company. And you say, I can't believe how much we got done. And he says, I can't believe how much you didn't. It's defining it and signing it. Success and failure at the beginning. So when failure comes, what we've been always quick to do is let it go. When everything in the world pointed to fail, we finally said, guys, we don't need to spend three more years of failing. You can already see all the signs.

There's a beautiful chapter in one of my favorite books called Straight Line Leadership, which is in all of your VIP bags. There's a chapter called the difference between Expectations and Agreements. And they are very, very different things. When you just spell it out and you have that agreement, there's clarity for moving forward.

But do it for yourself. You don't want, you don't need to waste three years. Right? Somebody said, jeff, you've done a lot of stuff. That's because I never waste time when something's not working. I call it what it is. It looks like a duck, it walks like a duck, and it quacks like a duck. It's a duck. Let's move on.

Let's take some Q and A over here.

Hi, I'm Chris Rawlings from Jersey. My question.

Actually, first of all, Jeff, your speech was very inspiring to me.

Thank you.

And the part where you told about your employees mother's house in Florida made me tear up too. So that was super relevant to me because I'm hiring my first employee from the business I'm running now. So trying to be very careful about that and offer value to them as much as they're offering value to us.

My question is, you've had so many big dreams and taken so many of those post stickers off of your mirror. What's the next big awesome dream that you're gonna take off of your mirror for the next. You know.

You know, that's a fair question. And you know, along the way there were little ones too. Right? Because you can't have everything be a dream that takes forever. You guys were talking about that with Jesse, about that, some things, you said that actually about that some things, it's far away because it's a big vision. So you gotta have small dreams too little things along the way that you reward yourself with so that you can feel the progress. But it's a good question and I don't have an answer. My dream, my next one was this mentoring. To go on this mentoring worldwide mentoring trip and try to help other people achieve their dreams. So for the last three and a half years, my dream was that you would call me and say, I just bought the Cleveland Indians. My dream was being any tiny part of any one of you achieving some of your dreams. I've been doing that for the last three years. But I literally hit a moment in my life where I don't have anything on my own wall. I just finished this world tour and I'm going to sit quietly over the holidays and figure out what's next.

That's awesome. Well, you've provided so much value for the people in this room. I think you did a lot of that today.

Thank you.

Let's go over here.

Hi, Jeff. Tonya star from Lincoln, Nebraska. Burning question, did you buy the Ferrari?

I did close the loop. It doesn't look like that. It's all black on black leather with bright red trim. I could not drive the bright red car. I know yours is a bright color. I just couldn't do it. But I'm just going to tell you one thing about it. It's more like a circus ride, right? It's a racing Ferrari. The doors go up like that. It's totally useless. I'm totally impractical. But I needed to close the loop. But now what it is, it's a circus ride because everybody wants to ride in it. So one day I took somebody out there. It's a race car. It's literally air inducted like a jet. It spins up and down so it's really loud. And there was one moment that made the car worth having. I was giving a friend a ride, got in the car and he said, the car is so damn loud. Right. Even though you're in a glass cockpit. And what came out of my mouth I didn't even think about. What I said was it is it drowns out the sound of no. And I realized when I said that if I had listened to everybody in my life who told me I was not good enough and my dreams were too big, I would not be hearing the sound it makes when you turn the key right then. So there was a symbolism in closing the Loop. And just the fact that everybody will tell you what you can't do, very few people will push you towards what you can.

Amen to that.

Hi, Jeff.

Are you behind a pole?

No, I'm over here.

Jeff, didn't you point over there?

I did, and they pointed me over.

I'm one point behind.

Hi, I'm Lil Gentry from Austin, Texas, and you're my favorite entrepreneur. I've been following you and watching your videos, and I have two questions. One is in seeking talent. You know, I just like lots of people, and so it's easy for me to say, oh, well, you sound good. So how do you really scrutinize and find the best talent? And where did you go to look for that? And if you were launching a consumer products, good product today, how would you do it?

So a couple of pieces of that one, it's liking people. I love people, right? That what interests me. That's why I've been flying all over the world just to meet people. So it makes it very, very hard. And I want to say something about that because about managing your company around people versus objectives, right? So here's what happened. A company that I mentor, the guy said, jeff, can I call you back? He said, I gotta go find something for John to do again. And I said, wait, wait, wait. Time out. Every part of that sentence is wrong. Find something for John to do. And again, he said, jeff, I love this guy. He's like one of my closest friends, but we're gonna have to move him to a different job again. You cannot do that. You know what I said to him? I said, whoa, my bad. I didn't know you were running an adult daycare center. And he said, it's not adult daycare. I said, it sure is. People drop their adults off at your office and you find things for them to do. I said, if you are running a business, there's only one way to do it. So here's what I do. I write at the beginning of each year, I write the list of the strategies, the goals and objectives. What do we have to get done this year? Right? What are the strategies to get those things done? What are the tactics then? What are the tasks for each tactic? Then? What are the skills? And everybody in the company, we do this exercise. The first time I did it, I did it dramatically. I called everyone in the conference room and I said, bad news. And they said, what? And I said, every one of you is fired. There was this massive groan. This was in December, bad time to fire the whole company. I Said, oh, but there's good news. And they said, what? And I said, I'm starting another company right now and I need some people. What I did was I wrote all those tasks and objectives on the board and I said, I'm going to go down the line. You walk up there and you circle the things you can sign up to do. And this is going to be real simple. If you do those things, you keep working here. If you don't, you're gone. You have to take. So I have had many tears cried on my shoulder, and I've cried many times, too, because it was somebody that I loved. It's never personal. What I said was, none of those things that are circled on the board that this company needs are things you're delivering. So unfortunately, you have to go. You can't run it that way. The objectives go first, but the people that are achieving those things that are circled, we treat them like family. I do go pick up their dry cleaning. I will go watch their kid if the wife is sick or whatever it is. But swift and decisive is the answer to people management. When something's not working, when someone's bringing everybody down in your company, you can't wishy washy because you bring down everybody else. One sales guy I had to fire was my best sales guy. He said, you won't fire me. I said, turns out we don't keep assholes and you're one. And he said, but I'm also outselling everyone else here three to one. I said again, we don't really hire assholes and you're an asshole. And I said, I've told you time and again to stop behaving this way, the way you treat people. He said, you won't fire me because my productivity is up here. I said, the Delta and your positive productivity. If I go and look at the negative effect you have on everyone else, you're a net loss. I said, so pack up and go. And I did not want to do that. But the objectives, the values, integrity, the things you write on the board that make your company successful, those things have to win. It's hard. I've cried many a time, but I still walked the person to their car because I'm not running in a adult daycare center. I'm running a business.

Let's take one more and then we have to. We have to break back here.

Hi there.

My name is Johnny Vasquez. I'm from Long Beach, California. And I want to thank you so much for.

Sounds like a dating show. Johnny Vasquez from Long Beach, California.

It's what they tell us to say. Like you did.

That was right. Yeah. You might actually. You might get a date here.

As long as my wife's okay with it.

First.

Thank you for your presentation. I really didn't know what to expect, and, you know, I don't take a lot of notes at these things. And you had a lot of things to say that were light bulbs one after another, you know, thank you.

So.

No, thank you.

I am an information whore. And I was just wondering when you do.

Your wife knows that too.

She does, yeah.

When you're talking about idea sponging, is there any particular resources that you go to to find these kinds of articles that you're looking for? That was kind of the disconnect I was having.

Okay. You know, I go all over the place, right. If there's. Wherever I hear people. And I intentionally. So the answer is kind of no because by definition, you want to mix it up. Like if you always went to, you know, techcrunch every single day, you'll get their flavor on everything. If you always went to news for CNN or whatever, you'll get their flavor on everything. So I intentionally bounce around, but I just kind of watch in the conversation flow, something I hear, if you're talking about some new site that you just went to and I never heard of it, I'll be there tomorrow. And the next time I hear of something, so I think don't get locked in in any particular one, intentionally mix it up. Sometimes I go to sites that I. At the end, I say, I didn't actually really learn anything. I have no idea what I did that. But the point is, if I start filtering and editing them before I go to them, I'm already closing that funnel so it's wide open. One time I was in Africa, there was no WI fi. I was getting on a plane, and I can't do my info sponging. So I went in this little newsstand and I said, do you have any business magazines? There was one called African Business, and there was one called Africa Rising. In a million years, I never read those magazines. I saved four articles because I learned stuff I would have never thought of and applied those ideas when I got back. So I think the answer is mix it up. Try things that you never go out of your comfort zone and just let the world feed you ideas because you never know what's coming next. So mix it up. I think that's a good question for people to discuss throughout this weekend, too. What sources do you get good stuff from. And by the way, I won't be here the weekend, but Ryan asked me stay the rest of today and tonight. So I'll be with you guys all day and tonight as well.

Let's give it up one more time for Jeff Hoffman.

Thanks, Ryan.

I once heard someone say something from stage and it went something like this, stop building half built bridges. Instead, build one bridge to completion and then you will be able to see the other side and advise on how the other bridges can be built. I was reminded of that when hearing Jeff talk about focusing on one thing. Jeff won a gold medal in one thing and as a result was able to take that experience and that recognition and the respect that he garnered from accomplishing that and use that to build the other businesses. And as a result, over years of entrepreneurship, he has a host of accolades and awards, Grammys and all kinds of other cool things that he can add to his resume. And that really resonated with me, the idea of what's your one thing? That when you dial it in will make everything else easier and unnecessary. I was continuously reminded of that during my Q and A time with Jeff. I have since reconnected with Jeff since this Q and A. We had breakfast a couple of weeks ago and I am so encouraged by his willingness to give and to serve. And it is something that as you work your way up the channel chain of entrepreneurs, you realize more and more that the most successful people have an attitude of giving. They have an attitude of making things better, of improving the world, of solving problems. And it is our job as entrepreneurs, as people who desire something more out of life, to continue that and to spread that and to change this trend that is becoming so popular of demonizing success and discouraging success. It's our job to do something about that and to change that trend. Hey, one of the ways that you can help with that is by subscribing to us on itunes. It helps us spread our message of freedom and entrepreneurship. And if you liked this chat with Jeff Hoffman, you are going to want to be at Freedom fast lane live 2016. We will be announcing the speaker lineup soon, so stay tuned for updates here on the podcast and over at free freedomfastlane. Com. Until then, thank you for listening and I'll see you on the next show.