WIN 47 - The Entrepreneur Equation & Future File with Carol Roth, WGN Radio's The Noon Show

Welcome to win, the Women Investing Network, the podcast where you can learn from successful entrepreneurs, business leaders and real estate investors who are winning in business and life. Learning from others is the fastest way to grow your skills, gain knowledge and avoid pitfalls so you can win. Join our hosts, Elizabeth Embry and Jason Hartman. Elizabeth is a seasoned real estate investor, experience, experienced corporate executive and skilled mentor. Jason is a self made multimillionaire investor, entrepreneur and highly acclaimed thought leader. Together with their successful guests, you'll get the tools you'll need to win.

It's my pleasure to welcome Carol Roth. She is the creator of the futurephile Legacy Planning system and author of the New York Times best selling book the Entrepreneur Evaluating the realities, risks and rewards of having your own business. She calls it kind of the anti entrepreneur book. So we'll dive into that one. She's also a TV and radio personality. Carol, welcome. How are you, Jason?

I'm doing fantastic. How are you?

Good. It's good to have you on the show. And I should mention to our listeners that you keep your shoes, most of your shoes and your one husband in Chicago, Illinois, right?

That is correct. And as I've mentioned to you, no other husbands that I'm aware of, but shoes in other locations throughout the U.S.

That'S a great answer. Good stuff. Talk to us about let's start with Future File Legacy Planning system because that's your most current work. And then I want to take a deep dive into the entrepreneur equation.

Perfect. So futurephile is as many entrepreneurial endeavors are, something that came out of a lot of personal experience. I've had a lot of loss in my life. My mother passed away the day after her 51st birthday. My stepmother died of lung cancer at age 55. I lost a boyfriend when I was a senior in college in a car accident. He was 21. So I've seen a lot of life stuff happen. And after my mom and my stepmom passed, my father wanted to make sure my sister and I were prepared. So he gathered all of his wishes and information on everything that he possibly had, did a lot of financial planning and kept giving us paper and said, put this in the file, put this in the file and if anything happens to me, you're going to have this file. And even though we'd been through it before, we just kind of expected we'd never have to use it. But we rolled our eyes and obliged and said, okay dad, whatever. And five years ago, my father was in a freak accident and my sister said, you're not going to believe this but go grab this file. And we grabbed the file and we went to the hospital. We had to find his wishes, we had to find our power of attorney, we had to get a key to move his car and get into his house. And we did all these things and he didn't make it. And so then we had to lay the body to rest and we had to wrap up his personal affairs. And through his pre planning and putting this information and wishes roadmap together for us, he saved us first a lifetime of burden from did we make the right decision? It's not something we have to carry around every day and which is priceless from a tangible cost perspective. He saved us more than $10,000. End of life costs are in the five figures right now. So he pre planned and said, I don't need the Cadillac of caskets and I don't need two services, just graveside and all of these things. And then he put life insurance in place to take care of those end of life costs. And then he saved us hundreds of hours in trying to track down all of his accounts and, and policies and making sure we had found everything. So when we told people about this, they kept saying, you know, I've got aging parents, I need them to do that. Or I have a spouse who doesn't know what's going on financially in the household. I really need to do that for my spouse or I have kids and I want to make sure they're prepared. And so we decided to create a product called futurephile that created that roadmap. So whether it's an aging issue, a passing, or even if your house is burning down, you have one location that you can grab that has literally everything you need and a full roadmap to take care of that family crisis.

Wow, that is something. First of all, I'm so sorry for all of those losses, but something good did come out of it. It sounds like with this system. What is the system? Is it a physical product? Is it a virtual thing? A SaaS website? How much does it cost?

Yeah, so we did a ton of beta testing. We were actually in beta for three years on the product. And the first product we brought to market, which is available@Futurephile.com for one time fee of $99.99 is actually a hard copy product. You get two workbooks that we call sort of our kindergarten workbooks. One that is the instructions one where you fill out information and then you get a filing folder and, and as you go through the instructions that you also put things in the filing Folder stuff that you couldn't put on a website, such as a key to a safety deposit box or a key to your house or things that you don't want to digitize. So it actually, you put the place where you fill out the information back in the folder and you have literally a grabbable folder. So that is our most popular product for just a number of reasons. And I can tell you, when I was at the hospital with my dad with the physical product, trying to find on my phone, access to powers of attorney and wishes and all that kind of stuff would have been nearly impossible. So we came to Mark with that first. And then we do have a desktop based software version, if you prefer to type it, that's coming out in about a month. It's going through final QA right now. People have really liked the grab ability of the hard copy. And also just from a filling it out perspective, if you have a family that's trying to go through things together and sit around a table, it's much more difficult to do that on the computer than it is if you've got some booklets in a kit that you can work through.

Yeah, there's a lot to be said for good old paper. Yes.

And also we have a place that you can put your cryptocurrency keys so you don't lose your Bitcoin and people keep losing those keys. So there's something about having that offline.

Too that might be very valuable when you're alive. So that's for sure, because you know where you can get it. Well, good stuff. So that is the way a lot of entrepreneurial ventures start. They come out of a need that we have. Certainly my most successful company, my real estate investment company, came out of my personal need. You know, I. I wanted to be a nationwide investor. I couldn't find anyone to help me do it. And I basically created my company and became my own first customer. And that's the way a lot of ventures evolve. So that's, that's great to hear stories like that. And you know, they always help a lot of other people. And capitalism is such a wonderful system. It just allocates resources so well and sparks innovation so well. You know, it does.

And I would say, you know, with future fil. Well, it's the first time it's really been a mission based business. Our father did something that was really a gift to us and we wanted to be able to protect other families. And that's why we didn't try and make it a subscription model. And we didn't price it at a higher level because we wanted to make it accessible and really be on this mission to help as many families.

Sure. Good stuff, good stuff. So speaking of entrepreneurship and capitalism and how ideas start and so forth, your book is a real and realistic view of entrepreneurship. You know, most, most of the content out there is sort of rah, rah, just go and do it. Just go for it. You know, quit your job, start your business.

Seven steps to success.

Well, not, not only seven steps to success, but seven steps to success in 24 hours. Right, right. You'll be an overnight hit. It's not really this way, is it? Huh? No.

You know, those overnight successes usually take about 10 or 20 years in the making. And, you know, that was the impetus for writing my book. Before I became an entrepreneur myself, I was an investment banker. I call myself a recovering investment banker because it's kind of like a 12 step program and you're permanently stuck on step 11. And as an investment banker, as I was servicing middle market companies and Fortune 500 companies, I would get small businesses and entrepreneurs who would call me and they would be asking and begging for help. And I just realized how much bad advice the entrepreneurs and small business owners of this country were getting. And so most of the people who were going in weren't making any money. People were spending their life savings to invest in something that they really hadn't thought through and they really weren't prepared. So I wanted to write that, like you said, keeping it real, keeping it 100 kind of book about here's what you're really in for. Because I felt like there was too much of, of this rah, rah, you can do it kind of rallying cry, which is great, but you have to have the flip side. You have to be grounded in reality and you have to be the right person pursuing the right opportunity at the right time and then have some luck on top of it in order for your business to work out. And there really was nothing like that in the marketplace. And funny enough, I had actually a really hard time getting it published because everyone said, well, this is too in your face. It isn't, you know, happy enough. You know, you really, this is just a, you know, kind of a bucket of cold water. And then of course, after it was a giant success and a New York Times bestseller, they all came back to me and said, you know, what we really loved about your book is it was really different and it was a bucket of cold water. So everything they hated about it before was successful is what they loved about it afterwards.

So talk to us about some of the specifics in the book about what are some of these buckets of cold water that maybe entrepreneurs should, if not throw over their head, splash on their face. Right? And I mean, are there some real wake up calls? Is everybody meant to go out and start that? You know, virtually everybody's had the idea of, hey, I'm going to start my own thing, you know, and not have a boss anymore. Is everybody really cut out for it? Or are some people just not meant to be entrepreneurs?

No. You've hit so many of the issues that I talk about. The fact that ideas are inherently worthless in today's market. You know, basically every idea has been thought of some combination or another and that it's truly the execution that matters. And even if you were to have a new idea, typically the first person with the idea isn't the one that's successful. It's the one who learns from the mistakes and watches somebody else pay money to educate the market. And then they swoop and do it better. So if you think about Google, Google was not the first search engine. Facebook was not the first search engine, social media platform. They let somebody else go die on a hill and then they came in and did it better. So it's selling.

Do you know how you always can identify who the pioneers are?

Because they're in the graveyard?

No, no, not exactly, but close. They're the ones with the arrows in their back.

Exactly, exactly. Okay, so that's. Yes, perfect. Perfect. Yeah. So I mean, you get it, you've been there before, you understand it. But so many people who get entranced with their idea and believe that. You also mentioned the whole idea of being your own boss. We dispel the notion that you actually are your own boss because your customers are the people that you need to basically live and die for. And if they're not buying from you and you're not making them happy, you have no business. And so the customers end up at sort of the thick end of the pyramid. And then you have to take care of your employees, if you have any. And then you have to, you know, pay your vendors and your landlords and sort of, you're the last person who gets taken care of. So being your own boss really is answering to all of these people instead of answering to just one person. So you've kind of taken the number of people that you answered to and increased that exponentially. And then I think the other thing is that a lot of people create a hobby that makes money Or a job that they have to pay to have the pleasure of having, that if they were to be hit by a bus, the business would have no value, instead of a business that has value, that stands on its own, that could be sold. And so a lot of people put out a lot of time, risk their own personal capital, a lot of effort and a lot of stress, and they really aren't ever better off than if they had just worked for someone else. So, you know, I lay all of this out, I give you exercises to do. I have you really think through the model and making sure that you're pursuing the right type of business. And at the end of the day, it all comes out to the rewards greatly outweighing the risks. And that's the math or the equation that so many entrepreneurs don't do.

Okay, good. What else should people know in terms of these myths and realities?

I think that the biggest reality that people should know is that there's so few businesses that truly end up being successful. We hear about these unicorns and billion dollar success stories, but the reason we hear about them is because they're newsworthy. And they're newsworthy because they are unusual. The average small business does not make six figures over its entire lifetime. You know, isn't a success, doesn't make a profit. You create a lot of financial stress and you know there's an opportunity. If you still have great ideas and you want to be entrepreneurial, you can be entrepreneurial without being an entrepreneur. You, you can go into another business, start at square two, use somebody else's resources and, and still make a difference and make things happen and execute ideas. It doesn't always require you putting up your own capital to do so. So I think that's truly huge. And the other thing too is go get some experience. You know, if you've eaten in a restaurant, it doesn't make you qualified to run a restaurant. A lot of people think that it does. So if you haven't gone in and worked in the kitchen and worked as a busboy or a bus girl, worked at the front of the house and done all these things to really see how it operates first, then don't go invest six figures in something. I've sent so many people who've had these wonderful ideas to do just that, and you two weeks later they're like, oh my God, I had no idea that that's what was entailed.

And they have a whole new respect for it. I always say that every business looks really simple from the outside, but there are so many things that go into it. You know, I have a friend who's always talking about, oh, I'm going to do this business, that business. And here I thought I had entrepreneurial add. It gets much worse than me. I tell them, I'm like, look, you know, this requires a whole specific set of knowledge, a whole specific set of contacts and network, a certain reputation among those contacts and network. And it's just not like you're going to open the door and just do this. It's crazy. And I feel like I'm being the pessimist and the, you know, the doomsayer, but it's just. It's just true. I mean, I've started so many businesses, and it's complicated. There's a lot to this stuff that just is just not appreciated.

It's hard. So let's just say it's hard. You and I have both been successful entrepreneurs. I'm somebody who's, you know, on television multiple times a week, has a huge network, has a huge following. And even for me, it's still hard. And I don't think enough people are willing to say that to people. This is not something for the faint of heart. You have to pursue something with that vigor to get it done immediately and have infinite patience when it takes years and years to materialize.

It really does. It really does. So talk about how people are, you know, mostly just buying themselves a job rather than an actual business and how they get out of that trap. Of course, a business. As Michael Gerber, you know, he's been on the show, he famously kind of said is, you know, you work on the business, not in the business type of concept. What are some of your thoughts around that concept of not buying yourself a job, but, you know, actually creating a business that lives beyond your own efforts?

Yeah. So I will say that Michael E. Gerber's book the EMEP Revisited is one of the best books for entrepreneurs. I actually wrote my book To Be Somewhat of a Pro prequel to that book. So be so if you're going to move forward, you should read that book and you should get into the systems. But I think about people who are, for example, service providers. So let's say you're a massage therapist and you go out and you get a clientele and then you do the massages. And, you know, if something were to happen to you, you go on vacation, you're not making any money. If you get hit by a bus, nobody's buying the business. There's nothing there other than maybe the.

Table that you you're really just an independent.

You are, but you think you have a business. And so if you want to be an entrepreneur, it's not necessarily about performing the thing that you think that you like to do. It's about running a business and it's finding other people to come into that business and other services and other products that you can sell that are separate and apart from you so that you create something with that tangible value that's not 100% related to you doing the work. And that's a very difficult thing because most entrepreneurs are really bad at delegation. They think that they're the best at doing everything and they like to done a certain way. And it's a hard thing to transition from being the one man band into creating those systems that other people can follow. But that is where the value is. And that's what makes it worth investing your own capital to create something that does have value that you can ultimately sell one day or pass along to somebody else that has value apart from you. That's what it truly means to have that bonafide business.

Carol, do you teach any kind of math? Is there an equation for entrepreneurship?

It's more of a, how shall I say, non numerical equation. But it's basically being the right person pursuing the right opportunity at the right time and then weighing that against a reward that highly outweighs the risks. And then if you have all of that aligned, then that's when you have the green light to go ahead and pursue. And it doesn't mean that you'll be successful. It just means that at least you have that open path. That if you put in the time and the effort and you work smart and do all those things that you mentioned about having the network, at least you have a shot. Whereas if you don't have those things aligned, it becomes almost impossible.

Okay, so that's good. I like those three items you mentioned and having them aligned. Can you give us an example? I mean, maybe any of your followers share one of their examples or something?

Sure. I mean, I think that if you think about, let's say something like Webvan.

Versus what a joke. I knew that was a stupid idea the day it opened because why did they need to be buy all that infrastructure? That was just silly that that's what happens when too much venture capital is thrown at you. You know, you be. You just. Money makes people stupid. It's better to be a little bit scrappy and not worry about raising a ton of money or raising any money. Maybe because you're, you just Be better at your business when you don't raise.

So how do you feel about this, Jason? I'm not really sure.

I'm not getting a good rate about it.

How you feel about it.

I'm not much of a money raising guy and I know I could do a lot of more with money, but I've never really tried to raise money and I just think it blows my mind the waste in these businesses and that. Just the massive amount of waste and multi layered bureaucracy and just silly. You know, everybody wants to do something in some big corporate program. No, just make some calls and make some stuff happen and put a few pieces of software together and.

I mean that's how most things really work in Life.

Yeah, you're 100% right. And if you look at the sort of right time, right person, right opportunity, the one that sticks out for me on something like that is that it wasn't the right time. There wasn't the infrastructure in terms of, you know, people having a desire for things on demand. There wasn't the same web infrastructure. People didn't have smartphones. So that was a concept that was ahead of its time. That was compounded by the fact that there was too much capital versus today where you have delivery models that are doing much better because of the infrastructure. So that's an example on timing front where was a great idea. It was just way too early vis a vis the context of the infrastructure.

Right. But I would even go more. The problem with webvan is that they didn't overlay on existing infrastructure hardly at all. Like they wanted to do their own square one. I mean that's just silly. There's all these grocery stores out there. Why not just make a deal with them to go pick up stuff and deliver it to people? You know, that's the way you do that. You don't.

That's called low hanging fruit path of least resistance. And also some people, most minimum viable product. And all of those things are things like you said that you do early on to test out the model and then if that works, then you think about investing in the infrastructure instead of trying to do that from square.

Yeah, they went all the way through the supply chain almost. I mean they didn't manufacture stuff, but they went way too far up and down the supply chain when they should have just used existing stuff out there. Had they read the Lean Startup by Eric Ries, they would have done that differently. But I don't know if that book existed back then.

And that's the thing. And also an example that I use of a company that one day was worth a billion dollars and, you know, a couple months later it's worth zero. And it just goes to show that the idea itself has no value.

Which example is that? Yeah. Which was that? Webvan.

Webvan.

Their market cap was that. Oh, my God. I thought you were going to talk about the sock puppet or something like that.

Yeah. A billion dollars.

Crazy.

Yeah.

That's insanity. Unbelievable. Well, good stuff, Carol. Wrap it all up for us and give out your website.

Absolutely. Well, it's a pleasure to connect with me. Check me out on Twitter caroljsroth. And to learn about Futurephile or about me, go to futurefile.com and Jason, thanks so much for having me.

All right, Carol, thanks for joining us.

Thank you so much for listening to the Women Investing Network. Be sure to subscribe, rate and review the show on itunes or the platform of your choice. You can find the show notes and resources for today's episode@womeninvestingnetwork.com remember that guest opinions are their own and information is of general nature, so be sure to consult appropriate tax, legal or other professionals for specific advice.