Danny Warshay: See, Solve, Scale

Hello and welcome back to Franklin Covey's twice-weekly podcast, On Leadership with Scott Miller. That's me. I'm your host each Tuesday and Friday, 6 years, almost 400 episodes taped and 350+ aired, where twice-weekly We release episodes where we feature entrepreneurs, business titans, bestselling authors, academics, professors, world record holders, celebrities, songwriters, creators of every form and fashion. We often interview people that have expertise on very particular areas, all designed to make you a better leader. Of course, this podcast comes on the heels of the legacy of FranklinCovey, the world's most trusted leadership firm, co-founded at least by one of our heroes, Dr. Stephen Covey, who wrote the book The 7 Habits of Highly Effective People. This book has sold 50 million copies and gone on to transform literally hundreds of millions of lives through those who are investing in and applying the principles taught by Franklin Covey's 50-plus different leadership solutions. Today our guest is Danny Warshay. He is a professor of entrepreneurship at Brown. He is the author of this book, See, Solve, Scale, which is a must-read for anyone who's at any journey in their entrepreneurship journey. The tagline is how anyone can turn an unsolved problem into a breakthrough success. Danny, welcome to On Leadership.

Thank you so much, Scott. A real pleasure to be here today.

Great to have you here. For those people who may not recognize the, the role that Brown plays in leadership development and entrepreneurship. Talk a little bit about the institution known as Brown in Providence. I think most people may know that it's part of that group of esteemed colleges. Talk a little bit about Brown and your role there.

Sure. Well, I know Brown from all different angles. I originally knew it from a student angle. I went to Brown in the early '80s. I fell in love with the environment there. It trusts its students. Students to figure out their educational pathway and to create their own educational focus. I was a history concentrator, had a very wonderful liberal arts experience. I'm a big proponent of liberal arts for just about anything, and especially entrepreneurship. And I fell into the opportunity to help start, be part of the leadership team of a software company. We built that company up. and we sold it to Apple. I'm not sure I knew the word entrepreneurship, but I realized that's what I really loved. And so I thank Brown for getting me on that track. And then all these years later, I'm a professor at Brown. I teach entrepreneurship, and I'm the executive director of Brown's Nelson Center for Entrepreneurship.

In fact, along the way, you came across a few of my friends and colleagues because you earned your MBA at Harvard and were in class with a couple of Dr. Covey's sons, both of which I've either worked for or worked with, and delighted to have you on this podcast today. Dr. Covey would be delighted 10 years after his passing to think that this podcast is still robust and featuring people like yourself. I want to start first with kind of level setting an irritation of yours, which is this thought of entrepreneurial spirit, because in fact you say entrepreneurialism is more of a process than it is a spirit. Talk about that, and what are the maybe nuanced or significant differences between the entrepreneurial spirit and entrepreneurism as a process?

Sure, and it relates to your first question about why at Brown. You're right, I went to Harvard Business School and had a whole bunch of startup experiences after that first one. And I was somewhat surprised to be invited back to teach at Brown. About 18 years ago. And when I was, I had to think about what does it mean to teach entrepreneurship in dominantly a liberal arts context? Because Brown, you may know, doesn't have a business school. And so I had to think about what would entrepreneurship mean there? And a lot of people kept saying to me, you know what, you should just teach people how to adopt, how to embrace the entrepreneurial spirit. And I had to scratch my head and realize I have no idea what that means. And I certainly wouldn't know how to teach a spirit. And then I realized, you know, at Brown, my faculty position, I'm a professor technically in engineering. And imagine in engineering if we were to teach somebody how to build a bridge and all we did was to say to them, you know what, just go out there and have the bridge-building spirit. And if the bridge collapses and the cars and trucks fall down to earth, then just be persistent and have more spirit. And of course, that would be ridiculous. That wouldn't be the way to teach somebody anything. Brown would lose its accreditation. And so I thought in bridge building, you could distill some fundamental principles that all bridges have in common, a beginning, a middle, and an end with lots of room for variation, aesthetic, operational, functional. And I thought surely I could do the same thing for an entrepreneurial process. I could distill some fundamental principles that all venture building has in common, leaving lots of room for variation depending on where you were building that venture. And that's what I did. And that's the basis of the process I created then, this 3-step process: see, solve, scale. Figure out what the process, what the process should focus on, what problem it should solve. solve it on a small scale with very few resources, and then figure out how to have a big long-term impact at scale. And so that's what I devised about 18 years ago when I was first asked to teach. And that's now what I teach at Brown and then all over the world in different contexts. I know a lot of your viewers and listeners are people who work in big organizations, big companies, And I do a lot of training and workshop facilitation in some of those contexts too, way beyond an academic environment.

Danny, before we jump into your book, let's talk about this concept that I find interesting. You call it the benefits of scarce resources versus the burden of abundant resources for entrepreneurs. Talk about that concept and how might that change some people's go-to-market strategies, early days of startups, how they maybe even embrace some of the frustrations of early-day entrepreneurship?

Sure. This is one of these polar opposite concepts that often I find surprises people when I'm in especially big environments where they think that their dominant resources could be a benefit or really useful, something to lean on. And in fact, it's the opposite, that small enterprises with very few resources— and I know this from now having over 3,000 students at Brown and elsewhere around the world who sometimes think they're at a disadvantage because they don't have a lot of money, they don't have a lot of training, they don't have a lot of network or pedigree. And in fact, what I find is they're better off. They don't have a choice. They have to embrace other people's resources, people, money, experience, and they can iterate. They have to iterate. They have to fail fast, fail cheap in order to figure out at that second stage, the solve stage, what really is worthy of embracing as a potential solution to a problem. And when I'm working in big companies, or for example, I did 4 workshops for the US Army and 2 for the Air Force this past summer. I have to help them understand that all the resources they have, again, their normal way of doing things, their lots of people, their traditions, the money they have, those can work against them because they get them entrenched in a certain way of doing things that is very difficult to change. They can't figure out ways to fail fast or fail cheap because they're making really big bets. And so this is one of these counterintuitive principles that I've discovered along the way through my own entrepreneurship, through my research, through my teaching, that is sometimes difficult for people to understand. And so that's why there's a whole section in the book and a big part of my teaching to help people realize that, yes, there's a benefit to having scarce resources, at least early in the process, and there's a burden to having too many resources.

Confession, as an author myself and a podcast host, I'm a little fatigued by academics that write books on entrepreneurship and leadership that have never hired or fired anyone in their life and don't know how to meet a payroll or fund that week's insurance plan for their employees. You, however, are both an academic expert on it and you are a practitioner, which is why we chose to highlight you today, 'cause you have that sweet spot I'm constantly looking for on this podcast. You chose to write a book about see, solve, and scale. See an unmet need, solve through a unique value proposition, and scale through a sustainability model. Will you take a few minutes and walk us through those 3 concepts? Why did you choose to write a book on that? Why do you think that's valuable for entrepreneurs to become deeply immersed in those 3 tranches, if you will?

Sure. Well, first of all, thank you for acknowledging that I have both practitioner experience and academic experience. The truth is, I feel like my practitioner experience has been much more dominant in my life. And I know now I have the title professor, but maybe sometimes I feel like a fake academic. I think my experience has been much more relevant than, you know, any research I've done or Uh, my teaching, I think, has been, um, something that I could add value to. Uh, the, the truth also behind why I wrote this book is that it wasn't even my idea. I mentioned I've had over 3,000 students around the world and dominantly at Brown and elsewhere in workshops. It was their idea. They came to me in pretty big and increasing numbers and said, Professor Warshay, or Danny, you're teaching your workshop It has had life-changing impact on me. And boy, that is such a wonderful thing to hear as a teacher. And they said, though, you are not doing the 3rd step of the process that you teach us. You're not scaling. And I said, oh, how interesting when the students can become the teacher. That's true. What do you think I should do about it? And they said, well, you should write a book. And so that's where the idea came from, and it wouldn't have happened if not for the impetus of encouragement of so many students who were pleased with what I had taught them but acknowledged that I hadn't really developed a model for scaling. And that's what the book does. That's what a lot of the workshops I do now, even in bigger numbers around the world. And even that's why I'm so honored and pleased to be with you here today, Scott, because this is also part of the Scalability of my teaching.

So Danny, take a few minutes and walk us through these 3 concepts: see, solve, and scale.

Sure. You know, when I was asked to figure out how to teach at Brown and I realized it's a problem-solving mechanism, I actually borrowed a little bit of my training from the one corporate experience I've had. After business school, I worked at Procter& Gamble in brand management. And P&G, as it turns out, is really good at some of these key principles. I adapted them to more of the appropriate entrepreneurship focus. And if entrepreneurship is a structured process for solving problems, which is how I define it, the first step better be figure out what problem to solve. And you would think that might be kind of trivial, like that seems obvious, and yet it's not at all. I mentioned I'm in the engineering school. That's where my professorship is. And especially when I work with tech people, although not only, I find them falling into the trap of being what I call a solution in search of a problem. And that's really dangerous. In fact, when I'm asked what's the biggest mistake that entrepreneurs or aspiring entrepreneurs make, that's it. They fall in love with something they think is something everybody needs, And then they go try to push it on a market that may or may not exist. So, the C stage is figure out what problem to solve in the first place. And I guide you in the book and in my teaching and workshops. It's the most popular workshop I facilitate on how to do what I call bottom-up research. How do you be anthropological and empathetic, immerse yourself in the environment where your prospective consumers might be behaving and living and learn what is a problem for them. And it's not as simple as simply asking them. Often they don't themselves know what problem to solve. Once you've done that, I guide you through all sorts of creative and innovation techniques, some that have mysterious names like systematic inventive thinking or nominal group technique, but I demystify those. And I make them accessible so that in a group, because entrepreneurship is better performed as a team, it's a team sport, not only a participation sport for me as a practitioner, but as a team sport. I guide you through a number of structured approaches to solving the problem iteratively, meaning you're not going to nail the solution immediately. You have to have some tolerance for failure. And then the third step is I don't even consider small business or a small venture entrepreneurship. In order to qualify for entrepreneurship, it has to have the potential of scale, of having really big substantial impact over the long term so that you can address a very consequential problem and maybe have life or world-changing impact. And so those are the 3 steps. See, figure out what problem to solve. Solve, which is iteratively on a small scale with virtually no resources, how to solve that, and I teach you how to do it. And then scale is a method and methods for having big and long-term impact.

Danny, the book is rife with fantastic stories, one in particular about Chinese Milk Way. I'd love for you to— not Milky Way, Chinese Milk Way. Would you take a few minutes and tell that story And maybe tease out some learnings from it.

Sure. I went to China shortly after I had started teaching at Brown. I guess my teaching got some renown, and a group in China asked me to go there. I'd never been, and I had a wonderful time teaching in a city called Zhengzhou. And as part of my visit, they acknowledged that I ought to go to Beijing because I had never been, and they My guide showed me around. I saw the Forbidden City. I saw the Great Wall. I saw the National Museum. And then toward the end of my stay, they said, tomorrow's a really important day. You're going to experience something that we call Chinese Milky Way. And I asked for an explanation, and it sounded suspiciously like plain yogurt. And I didn't quite understand why there was so much drama about it, but they said, it's really important that we get you up early. We pick you up in a taxi, we make our way across Beijing to the oldest section of the city, and there's one place we have to go to that's very famous for producing Chinese Milky Way. They only produce a certain amount every week, and if we don't get there early enough, we'll miss it. And again, I thought, what's the big deal? Sounds like plain yogurt. But something weird happened throughout the day. I started getting a little anxious. I thought, what if I don't wake up in time? What if our cab gets stuck in traffic? What if we get there and there's no more of this famous Chinese milkway? But we got there, and I my heart kind of sank. I saw this huge line, and I thought, "Ah, I came all this way, and now I'm not going to get to sample this famous Chinese milkway." But we actually got to the front of the line, and I saw this container. It had a cute little cow on it. It said, "When you cheese." I didn't know Mandarin, but I was told that that means that's this very famous kind of Chinese milkway. Very excited to. Dip my spoon in it. And it tasted honestly like plain yogurt. But somehow I felt very accomplished. I'd come all this way and I had indeed tried this very famous kind of Chinese Milky Way. And I'm cleaning up and we're getting ready to move on. And I look next door, I see a sign in Mandarin. I asked, oh, what, what is this place? Because it looks like no one's been here in ages. And the guide looked and said, oh, they sell Chinese Milky Way here. And I said, whoa, hold on. Why did I have to get up early and fight the traffic and wait in a long line to get this Chinese Milky Way? It looks like we could have just come here anytime and gotten this Chinese Milky Way. And the guide scratched her head and she said, you know, I don't know how you describe this phenomenon, but no one wants that Chinese Milky Way. The only one they want is this one with the long line. And I laughed because I had worked, as I mentioned, at Procter& Gamble in the food sector even, and I learned all about the importance of brands. And that's a big part of what I talk about in the scaling section of the book, which is brands reduce searching costs. And it did for me and for everybody else in Beijing who would only go to this particular Chinese milkway purveyor and not to the other. And so that's an example of one of the models that I share. And I share throughout the book lots, as you've read, lots of— I don't want to call them case studies. That sounds a little bit too strict, but little stories, vignettes that when I've been interacting with readers, there's a whole LinkedIn group of readers now, the Seesaw Scale group. They comment that the things they remember most are these kinds of little stories about the principles, and then they apply the principles to their own ventures.

It was intriguing. I was reading your book a week and a half ago. I was in Florida for 9 days, and I was at a mall. And it was just so fascinating to see the different restaurants. Some of them were bustling. packed, and the one next door had 8 people. And the one upstairs was packed, and the one next door had 15 people. And I was trying to kind of discern, was it the brand? Was it the colors? Was it the umbrellas? Was it the food? And it was just so interesting. These restaurants that were serving similar cuisine next door to each other had just dramatically different customer bases. Some of them were making a couple hundred thousand dollars a night. And some of them were making a couple of thousand dollars a night, meaning they won't be here in a couple of nights. And it's all about customer experience. I'm guessing the wontons at this restaurant were the same as the wontons at that restaurant.

Well, my suspicion— I wasn't at that mall with you. But my suspicion is the ones that were doing even better had figured out fundamentally what the problem was to solve. And the others may not have. And that problem may or may not have anything to do with the actual quality of food.

Yeah.

It could have had something to do with service or delivery or packaging. And so what I— why I always start with the C stage is that usually what it reveals is surprising. And I know you mentioned again that there's a lot of people listening, watching from established organizations. And for them especially, this again is burden of abundant resources. What they have gotten used to as a method for service or product delivery may actually not be the best method. And the way to figure out how to improve is by starting at the see stage. And again, I, I offer lots of training in the book, as you've seen, for what that looks like, for how you need to do it, for how you can be anthropological, keeping your eyes and your ears open, I share a couple of examples from P&G, from the Tide brand, from the Dawn dishwashing brand, of brands that have been around a long time and used some of these methods to figure out some insights about problems their consumers were facing that they didn't even know, even though they're experts as much as anybody in not only their brand, but in the whole category of laundry and dishwashing. And so again, to me, that's one of the most rewarding parts of this whole enterprise. And the whole process is that it applies to lots and lots of different kinds of organizations. I mentioned military. I do work with the arts, with healthcare, financial services, all different kinds of industries who can apply this same entrepreneurial process even if they're not starting a pure startup.

Danny, as you survey the landscape of thousands of entrepreneurs, you've taught, you've coached, you've counseled, you've facilitated. What are some of the common practical traits that the most successful, air quotes, entrepreneurs have in common? Success as measured either by mission fulfilled, company exited, IPO'd, product well received, put success aside, what are the 3 or 4 common traits that successful entrepreneurs have So that people that are listening that have an entrepreneurial or intrapreneurial spirit can say, okay, I've got to work on that, I've got to refine that, search for that.

You know, I really appreciate the question. I hope it doesn't sound inappropriate to say, but I'm tempted to say there are none. And here's why I would say that, because I think the bias a lot of people have toward entrepreneurship is that you have to be born with certain kinds of personality traits, or you have to be from a certain part of the world or country, you have to look a certain way. And unfortunately, that's driven a lot of bias in the entrepreneurial environment where it has caused lots and lots and lots of people who may not adhere to those stereotypes to be neglected, ignored, let's face it, discriminated against. The numbers are terrible in terms of welcoming people of color, welcoming women to be entrepreneurs, welcoming certain personality types. A big part of the book, in one whole section of the book, is to debunk lots of those myths and to guide you to figure out the best way to form an entrepreneurship team. And it's also a reminder of why the subtitle of the book is how anyone can turn an unsolved problem into a breakthrough success. And I talk in great detail. I cite lots of the research. I have so many footnotes in here that the— a couple of the publishers in other countries who've now published the book asked me whether we could reduce the number. And I said, no, this is all scientifically and academically based. And so I share lots of the guidance for how to create the most successful startup teams. And the 2 words which I hope people are happy to hear are diversity and inclusion. The most diverse teams tend to do the best, but only diverse if they are in an environment that's inclusive. that encourages them all to bring their true and full selves to the table, all they have to offer in terms of their skill sets, their backgrounds, their training, gender, race, personalities, introverts and extroverts. I share a whole bunch of data about how introverts, contrary to popular opinion, can add disproportionate kind of value to startup teams. And so I hope I'm not being disingenuous or I'm, I'm not being inappropriate by setting your question aside because I don't want to reinforce the sense that you have to operate in a certain way or have a certain personality type or have certain training. That's why this is a process and not a spirit. You don't have to be kissed by the spirit of Steve Jobs to be a successful entrepreneur. You just have to be able to Learn and master and apply this particular See, Solve, Scale process.

Okay, so I appreciate your response. I'm going to push on you. There have to be some common traits regardless of gender, age, race, background, education that you've come across. Perhaps it's an indefatigable work ethic, a growth mindset, emotional agility, humility, an insatiable curiosity, being a magnet of talent to you, independent of the legitimacy of what you just said, right? It's process versus spirit. Are there any behaviors or traits or mindsets that you would say successful entrepreneurs, you kinda need to have these to complement see, solve, scale, I'm guessing there's something there that you've seen that run common.

Yeah, and I don't wanna dodge the question 'cause I think it's a fair question. I just wanna make sure we're level set about trying not to reinforce the myths that I think are so prevalent and that have led us to segment people who can be entrepreneurs from those who can't. So virtually everything you said, I would endorse. But the few that I think I have seen the most are one, as you say, big curiosity, which leads you to begin with to be curious about what problem needs to be solved. I'll give you an example. The Casper Mattress founders, as you read in the book, were 2 of my students, Luke Sherwin and Neil Parikh. They had a lot of curiosity about, you've got to be kidding me, this is the way you have to buy a mattress? They knew nothing about mattresses except that you sleep on them. And they were completely baffled about how idiotic the standard way of buying a mattress worked. And so they were very curious about that. The second thing they had was some tenaciousness to overcome the initial challenges they had in figuring out a solution. They didn't get it perfect and right the very first time. I mentioned that word earlier, iterative. And so I think people need to be tolerant of failure. Successful entrepreneurs know that they're likely not going to get to a perfect solution the very first time. That would be just pure luck. And so instead, they had to figure out how to overcome their initial failures and push through to the point where they figured out a solution or a series of solutions that were worthy of scaling. And then the third step, and all these map to see, solve, scale, of course. The third trait that I think is really important is an ability to see beyond the near term to envision a solution that could have monumental impact. You know, Imperfect Foods from Ben Chesler, another former student of mine who wrote the section in the book about it because he could do that far better than I could. He was able to figure out a problem that 40% of all produce is thrown away at the farm. He figured out iteratively a solution. And at the time of the publishing of the book, the, the company founded was saving hundreds of millions of pounds of food. It had 1,500 employees in 43 states. It had raised hundreds of millions of dollars in venture capital. And so I'd say those 3 kinds of traits map to CSolve's scale.

Danny, last question. My wife and I are the parents of 3 young boys, 9, 12, and 13, quickly moving into 13 and 14. Would you prognosticate a little bit out 8, 10 years in what's going to be an unrecognizable market landscape, the global economy, cyber warfare, Immigration, competition, AI, you name it. It's gonna look like nothing we know, but given that, are there some skills that my 3 sons you think need to nurture or master in order to be competitive as entrepreneurs if in fact they choose that track?

Well, whether they master, I hope this doesn't sound too self-serving, but again, this is why my students told me to write the book. They said this is a process of entrepreneurship that is learnable. You can master it, and then you can apply it to any kind of problem you're looking to solve. And that's why of the over 3,000 students of mine, many of whom are featured in the book and in my training, they are in every walk of life you can think of. We can't predict what walk of life your children are going to be in in a bunch of years, or my children. But this is why I consider teaching CSOLV scale not only appropriate for a liberal arts environment, but I consider it a liberal art. These are skills that no matter what changes, no matter what happens, and a lot is going to change and happen over the course of their lifetimes. These are skills that are universal and that can help them no matter what problem they're facing. The way I think about it is if you come to Brown or any university, you're going to learn the scientific method. It doesn't mean that you're going to necessarily be a scientist, but there will be times in your life and in your profession when you can leverage that approach to seeing the world differently. Same with learning how to write and communicate. You're likely not going to be a professional writer, but it's important to learn how to do that. I consider teaching entrepreneurship similarly a liberal art. And so whether you use all the things in this book or you just learn how to identify the problem, I think these are all universal kinds of skills that I see among all the over 3,000 students I've had using in public health, in the military, in the arts, on Wall Street, in the law, almost anything they're doing. They come back to me and say, Professor Warshay, I wasn't sure how the See, Solve, Scale entrepreneurial method was going to benefit me, but I use it all the time. And so even what you're asking in particular, in the scale stage, I share a method of seeing the future 25, 50 years from now. It's called the landscape metaphor exercise that a very close friend shared with me, Bob Johnston, a collaborator and expert in innovation. And working backwards through time to figure out what a big-scale solution could look like. So I hope that is the mission of the book and of my teaching, because I know we have a lot of problems in this world. It's what I start the book out about, and we need a lot of problem solvers just like your children and my children and my students to make the world a better place.

Danny Warshay, you are the Professor of Entrepreneurship at Brown University. The book, as we have said several times, is See, Solve, Scale: How Anyone Can Turn an Unsolved Problem into a Breakthrough Success. Appreciate your time today joining us on our podcast.

Thank you so much, Scott. It's been a pleasure to be with you.

And we'll see you back next week for a new conversation on leadership.