Episode 135: Navigating Business Beyond Your Comfort Zone

Hi, everybody. This is Peter Diamandis. Welcome to our next episode of Exponential Wisdom. I'm here with my dear friend and coach, Dan Sullivan. I received a call from a friend I know I won't mention his name. He runs one of the largest Silicon Valley companies, very successful, 100 million customers, billions in annual sales, and they're in the software business. I'll leave it at that. He said, listen, I would like to brainstorm with you what business we should go into next. He said, I'm looking for a business unconstrained by our past. He's like, I'm not looking for direct adjacencies. I'm open to anything that's in line with our mission of our company. And the mission is very similar to creating global abundance and such. But I found it fascinating. And he brought on a number of his team members, and he and I went into a dialogue, and his team members asked him questions, took notes. But I think this is a really valuable practice. A company that's gotten successful and has gotten to whatever point you're in, making 10 million a year, $100 million a year, you may have clear, unfettered future for yourself, or maybe you've tapped out what you're doing and now you need to go into an adjacency. And what I found fascinating is he's not asking his internal team. He's going out to people completely outside his industry to get really novel ideas. And I just think this is something that entrepreneurs should be thinking about, that we don't know how to think other than the way we know how to think. And if you're tapping only inside your organization, your organization has a group think element, too. You really need fresh cognitive content to unleash disruptive thinking. What do you think about this?

I just want to tell you this is a personal story along these lines. I went to school in a very small town in northern Ohio, and it was 1 to 12. We didn't have kindergarten, and I spent 12 years with more or less the same 50 people, same building. First grade was September of 1950. So that's a long time ago. 70 years ago.

Yeah.

Anyway, so we get a speech invitation from St. Paul's High School in Norwalk, Ohio. Will Dan Sullivan please come and talk to our entrepreneur class? We're creating a new class for entrepreneurs. And with Dan Sullivan, will he be available? And I said, well, as long as it's zoom, I have no problem with it. There's an old biblical thing that says, that prophet is never honored in his own land. And I said until 70 years have passed, you know, so I'm going to do it. But it's a very fascinating topic for me because what do I say to 17 and 18 year olds about entrepreneurship? Obviously? And they said that, you know, it's been very popular, you know, people signed up for it and everything. So the spirit is there, you know, and the Lord knows they have enough cultural role models these days with entrepreneurs. But it's fascinating because it's every entrepreneur's, you know, to a certain extent, their personal challenge is to find a business that really is going to grow in the future. And it's really going to, you know, it's really going to expand.

I think about how, you know the successful entrepreneur ceolader who's looking for growth. So when I was talking to this particular CEO, I was like, okay, well we need to find a business that's at least the size of the industry you're in right now, otherwise you're stepping down. What have you seen, Dan, as growth instigators, you know, directional indicators. Where do you advise entrepreneurs who are members of Coach to go and look for 10x growth opportunities?

Well, the first one I tell them is as much as possible, don't be in a regulated industry.

Interesting, right?

You know, stay free of as much as you can. Of any rate. I mean the computer industry has really, I mean all things computer microchip and everything. If you think about it, it's been a fairly unregulated 50 years and the reason is because it was brand new, they won't even know how to think about regulating a lot of what's happening right now. It's not a question of regulating. They don't even know how to do.

And they can't move fast enough. I mean, the intern. If people knew back in the early 90s what they know today, you know, the entire entertainment and communications industry would have been writing the laws and regulations for the Internet back in the early days. And thank God things moved so agilely so quickly that it was unconstrained.

I think the other thing I would look at is that probably look under 35 years old for all your workers and for your customers and what are under 35 year old people already great at that. There wouldn't even be any training for it because they already have the training and this is the kind of stuff that they buy.

So, you know, I respect very much the process this guy is going through and he asked me for to recommend three or four thinkers outside of his field to give him advice and I've done that. Another approach I've used for disrupting companies and thinking about where I should go is using what I call a black ops team, where you imagine you have a company and you invite in a half dozen MBA or entrepreneurial 20 something year olds and you say, okay, you have unfettered access to speak to anybody in the company. Here, here's the businesses we're in, here's where we make our money and so forth. I want you to spend a month, get to know us and then I want you to come back a month after that and tell us if you were going to disrupt our business, how would you do it and what are the biggest opportunities that you see that we don't see. And again, it's the notion that we don't know how to think other than the way we know how to think. So sometimes really getting orthogonal, you know, and we've talked about this thinking about your thinking.

Yeah, I was always been fascinated in the Skunk Works model that basically they have a business that you can put within really tight timeframes where 80% of what you're going to need already exists and just brain. I mean your black ops group is very, very good because I think it was the F117, the stealth fighter that they built with the original Skunk Works. And they couldn't do it inside of Lockheed because the internal politics and bureaucracy would just prevent the talent from getting what they wanted. So you basically have to create the company outside of any existing company.

Yeah. To avoid the immune reaction that any new idea. I mean, back as early as Steve Jobs creating the Macintosh, Steve cherry picked his team, moved them into a separate building, put a pirate flag over it and said, stay away.

Yeah. IPhone, he did the same thing with the iPhone.

Yeah. And IBM with the IBM PC down in Boca, Florida. So we don't realize that we have a culture which kills disruptive innovation in any size company.

Yeah, Steve Jobs bragged about this. You know, Henry Ford had a great line. He said, you know, if I'd given customers what they wanted, it would have been a, a faster horse, 10 foot high horse that cleaned up after itself and fed itself and you know, had more horsepower. You know, he said, I gave him something else. But I think Steve Jobs, it's the Wayne Gretzky from hockey, you know, greatest hockey player ever played, hands down. They said, well, what is it that you do that nobody else does? He says, well, everybody goes where the puck is, I go where the puck's going to be.

Yeah, I love that.

And My sense is that to a certain extent, you have to go where the market doesn't exist yet, but the market will exist five years from now, you know, and my sense is that his approach that he's taking right now is a very right approach in the sense talk to everybody. Because my feeling is the ideas won't necessarily come from technology. You know, they might come from anthropology. They might come, you know, I mean, just go out and find. There's just a phenomenal anthropologist that I've been raiding. His name is Joe Henrick, who's a master at. Humans are cultural learners. The one thing that we're different from every other species is that it's not about our individual brains. It's about our individual brains using other people's individual brains. So my sense is that almost any discipline or any business field that's really growing, that's making use of virtual technology, it's making use of the Internet in any way. There's hundreds of people out that are thinking through this model. It's kind of like the beginning of computers after the Second World War because of the Bletchley park and Enigma and Alan Turing. And you had Clyde Shannon, who, you know, was a great thinker, but they didn't even know what they were thinking about. They were just thinking about something brand new. And then 30 years later, Silicon Valley just starts to explode.

Yeah, agreed. There's something I want to bounce off you. So I just did a session with my A360 members on moonshots. One of the things I talked about was how to create a moonshot organization. And defining a moonshot again is going 10 times bigger when the rest of the world is going 10%. So it's 1000% versus 10% a hundred times more. And I said, listen, when you're creating a moonshot organization, you need to identify the right group inside your company that has a moonshot mindset that can deal with moonshots. Because moonshots are about trying crazy ideas and failing and failing and failing on these crazy ideas and eventually coming up with something. And a lot of people don't want to fail. And so there's not everybody in your group should be a moonshot go. And in fact, once you identify them, and I say it's maybe it's 2% to 10% of your company, depending on how big your company is, you need to move them physically away from the main company, right? This is the Mac team, this is the Skunk Works and so forth, into a separate place. Someone said to me, well, how do I identify those people on my team who are great moonshot thinkers who should be inside my moonshot organization.

Right.

The main organization, 95%. You say to them, I don't want you taking moonshots. I want you delivering consistently on what you do Right now. You deliver 10% profits, and it fuels us in the moonshot group. You want to say to them, listen, I don't want anything incremental. If I see you doing incremental, you're fired. I want you focusing on crazy ideas.

The greatest intelligence on the planet is the pricing mechanism of the marketplace.

Yeah.

Okay. People say, what would you pay for this? The way it looks right now, this is how much I paid for it. If you paid double, how would it have to be? Oh, I'd have to do this and this and this. There's no judge like a check writer. I mean, check writers are.

I agree.

So I would build in check writers as part of. These are venturesome consumers.

Yep. You know, I love the Colby score that you introduced to me, and I use it on hiring and on understanding interactions. And there are a few other diagnostics or these assessments. Right. I'm thinking about creating a assessment for whether someone is in the 95%, 10% growth group or the 5% moonshot group.

Right.

What's the right mindset so that you can evaluate who to put in your moonshot team? How would you go about doing that? Any thoughts?

Well, I have some rules that when I'm creating new stuff in the Colby, I don't have fact finders or follow throughs in the innovation, just quick starts. First of all, quick starts can talk about anything without being committed to it.

Yeah, yeah, I resemble that remark.

Yes, let's do this, let's do this, let's do this, and let's try it out. And they'll try anything out because they have a totally different attitude towards failure. Failure is just a way of researching when it comes to the point where you actually want to move something forward. Then you bring in selected fact finders and follow throughs.

So you would build your moonshot organization with quick starts, principally.

Oh, yeah. Well, there's different parts of it because there's actual work to be done and there's deadlines to meet. In fact finders and follow throughs. The person who is my number one partner in creating the free zone, she's a six fact finder, a seven follow through, and a too quick start.

Yeah.

And she just gets things done. She doesn't question the ideas. She doesn't argue with the ideas. She said, anything you want done, I'll get it done for you. I'll coordinate anything. And she has no judgment about the ideas or anything. She says, that's your job.

That's great. I love that.

One of my best partners is Kathy Davis. You know Kathy, inside the company, we communicate by impact filters. And I do an impact filter on a project and I simply say what the idea is and what it looks like when it's finished. I don't tell her how to do it and then she sends me back an impact filter and how she's going to do what I did. But I give her two days after I've sent my impact filter because she frowns for two days. And I can't stand frowning. I can't be in. I can't be in the presence. Well, ask yourself, Peter, do you like being in the presence of frowning when you've got brand new ideas?

No, I want.

No, you take it personally. It's an attack on your creative manhood, you know. So I said, you do your frowning on your own, but you don't do it when I'm around. And I think the same thing is that you want, just go ahead. But the big thing, you know, when I was watching Astro Teller on stage in that, I didn't see any inclusion of check writers.

Yep. That is a stage where you launch the business and find out whether anybody really wants it. But the sooner you can put check writers into the picture, the better. You know, there's the old adage of the company that builds a product, spends a decade getting it right and then launches it and it's a total flop. Yeah, yeah, yeah.

I mean, you see how I do it? I do it right in the workshop. I say, hey, I got this idea. What do you think about it? Let's think it through here. And I'm just watching. And some of the concepts last today and some concepts last 25 years and it's all regarding whether there's buy in from the check writers.

Yeah. Well, I think I'm going to create an assessment for evaluating a person, as in your Moonshot team. And part of it is quick start, but part of it is your ability to fail and pick up and start again, you know, serially. Because you're going to have lots and lots of failures. And the quicker that you actually fail a project, that you shut it down voluntarily, the quicker that the resources and people and money can be applied to another idea.

Yeah, it's really a big difference. I've just celebrated 50 years in Toronto. It's just a livable city. I like the city and everything else, but 85% of my money always comes from the United States. You know, first of all, it's been worth 26 cents on every dollar for 32 years. That's the differential between the currencies. So we bring US Dollars back and spend them in Canada. But I'll tell you something about, you know, you've often heard, well, this is the next Silicon Valley. You know, there's some place always talking about the next Silicon Valley. And I said, I want to tell you something. There's only one Silicon Valley, and there will never be a second Silicon Valley. And it has to do with failure, what the attitude is toward failure. I said, in Canada, I went bankrupt twice here, and I got my credit card back six years later. Okay? I said, in the United States, if you lose your credit card on Monday, you get a new one on Friday.

You get three new ones on Friday.

And the reason is they've already run the numbers. They know what the risk is of giving you, and they don't want you out of the game. So we have an area called Kitchener Waterloo, and all the big companies are there. Google is there, Apple is there. Everybody's there. And they're picking off Canadians and taking them, but they're not hiring them in Canada. And I said, you know, here's the difference. In Canada, if you have a technology startup and you go bankrupt, you're a permanent failure. You're a permanent failure in Silicon Valley. If you had a tech startup and it failed and you're back for a second time, it's better than a doctor's degree.

Yes. You've actually learned something. Yeah.

Yeah. Well, you won't make those mistakes again. And you're tough enough to do it again. So we know two things about you.

Yep. No, it's an extraordinary, extraordinary world. So where do we go from here, Dan? We started with the conversation of, if you've got a successful business, what are your adjacencies? Where do you go next? And one of the questions is that you shared with me is really driven by your passion.

Right. That's how we created a 360, remember, conversation? And he said, what topics? I said, what are you excited about? Just tell everybody you're excited about.

Yeah, I know it's true. Anytime I've ever tried to start a business just to make money, it's failed.

Or you're using rational analysis that this is going to be big.

Yeah.

There's no gas in the tank for that kind of Idea.

Yeah. But whenever I've done anything based on my authentic passion, it's been extraordinary. And that passion has fueled it over the decade it takes to get to success. You know, most people don't realize that when you see amazing success stories out there, they've been going on for a decade. A lot of times it's not like, you know, day one, you go from an idea to a billion dollar company. It happens, but it's rare.

Yeah. You know Jeff Madoff. Have you ever met Jeff?

I have, yeah. Through Joe. Yeah.

But Babs and I are invested. Different industry, but it has a lot of the same things that you're talking about. So we're invested in a Broadway musical.

Oh, yes. I remember this. This is great.

Yeah. It's Lloyd Price, who was the crossover artist who started rock and roll in 1951. 52. But what's really interesting, we've got a podcast series which is called Anything and Everything, because I didn't really want to be constrained. So we just talk. And we're both born in Ohio, we're both in our 70s. Politically, we're about 180 degrees far from each other. You know, he's Upper west side Manhattan, and I'm, you know, we vote the way we vote anyway. But we were talking about magic, and here's something, we've never talked about this. I think people who create great things have a really healthy belief in luck and magic.

Interesting.

And what I mean by that is that you behave in such a way that good luck can happen to you. You put people together in such a way that magic can happen.

Yeah. No, I mean, it's interesting. Magic and luck is the prepared mind coming across enough opportunities and being able to recognize it.

Yeah. And not taking it personally. The big things don't take it personally. You know, that's. You're just a player in a big game. You know, know how to land on your feet, know how to get back up, you know, know how to attract good talent. What would you say from your past where you've had good luck and what were the skills that probably set you up for that, that you can remember?

So it's interesting, right? I mean, if you think about it, if you're in love with something that you want to do and you are willing to speak about it openly, all of a sudden you'll run into somebody who will connect you with just the right person and you say, wow, what a coincidence that you introduced me that person. Well, it's not a coincidence.

It's.

You've Been on broadcast, broadcasting what you want and what you love. And every single person who heard that is a repeater, you know, connecting you to their ecosystem. So it's being clear about your massively transformative purpose, about what your moonshots are, being willing to speak about it openly and invite people to bring you luck in your future.

Here's a who that you have to have. It's a who who finds who's.

Yes. Yeah.

And you just had an experience of that.

Yeah.

And how do I know you? Joe Polish? Yeah, I said, I've got a one man Rolodex. Anybody I need to know, I call Joe. And Joe said, let me think about that. Yep, I got somebody for you and everything like that. And there's people whose joy in life is just connecting people. I mean, there's a lot of ingredients in what this man is seeking. Your friend. One of the problems I think of being really good at something for a long time is that you haven't been really alert or curious about a lot of things that weren't your growth track.

Yeah, it's turning your organization into a really precise, highly optimized mechanism for doing this. And that level of success, people forget that true success comes from eliminating options from really hyper specialization. But in doing so, you've cut away all of the adjacent growth areas. I mean, the group that does this the best is Amazon. Right. Going from books to movies to healthcare to food, if you think about what their core business attributes are, what their core capability is. And I would write Jeff Bezos business plan as three lines. Number one, bring us more variety, cheaper, faster, and that's it.

Yep, I developed a technique and this was just a hobby, but I've gotten three of my clients selected to political office just following one method. But here's what you do in the area that counts. You know, what's your geographic area that really counts? I want you to identify 25 kinds of people on one side and 25 kinds of people on the other side. And these are influencers that you can spot. And 25 of them are Republicans and 25 of them are Democrats. And you go out, you don't bring up any political issue at all. You just ask them a question, tell them the truth, Tell them you're running for political office and tell them your affiliation. I said, now ask them this question. If we were having this discussion and it was four years from now and you were looking back over the four years, what has to happen in this state for you to feel happy with the progress of the state? Okay, so really straightforward question. The guy is knowledgeable, he's connected, he's got an influencer, or she does. And say specifically, what kind of dangers do we have that have to be eliminated? What kind of opportunities do we have to capture and what kind of strengths do we have to maximize? Okay, and you talk about an hour and you take notes, and then when you go back, you send them a really nice letter recounting the discussion. Then you get together after you've talked to 50 people. Remember, it's both sides. You take the three biggest dangers, three biggest opportunities, and three biggest strengths. And that's your campaign. Regardless of what your political party thinks or anything, there's your campaign. And the one that's running for Senate, he ran first time in 2016, and against 16 opponents. He beat 16 opponents. And all 16 opponents had political experience, and he beat him handily. And the reason is you neutralize the other side. You neutralize the other side. You know, and he's a Republican, but the word went around. He says, you know, for Democrats, you know, Republicans are as dumb as fence posts. You know, he said they're just the dumbest people. But this is a smart one. This one's a really smart one. He really, really. He really knows a lot. He really asks really good questions. So you neutralize that side, and you're a star in the other side. So go out and ask people, you know, the dos question, you know, what are the biggest danger we're facing? Because any breakthrough is eliminating dangers, capturing opportunities, and reinforcing strengths. So that's how I would approach it.

You know, Interesting, for sure. All right, buddy. Well, another fun, wide ranging conversation today, and look forward to seeing you on our next episode.

Thank you.

Take care, pal.