Episode 270: The Start — Everyone Tells You How Stupid Your Idea Is with Business Leader Marc Lic...

Welcome to this episode of the Million Dollar Mastermind. I'm Larry Weddell. And before we get started, if you want to know exactly how to win again and again, go to Wydell on winning.com webinar now to watch something I've put together for you. Now let's get going into this episode of Million Dollar Mastermind. This is a chance I've got to talk with Mark Lickfed. And Mark is from Europe, all over Europe, and now living out in that hellhole of Malibu, California, overlooking that ghetto of the Pacific Ocean and just got a terrible life. My sympathies to you, Mark.

Thanks, Larry.

Yes, and he's the founder of Knife Aid and he founded that company in 2019 after many other adventures in business and got on Shark Tank early on first year. And now that company is, you know, he got a great deal and the company is blowing and going. And so Mark, tell us how you've got the idea of Knife Aid and what, you know, what, what is it? What's unique about the knife?

Yes, a good question, Harry, because it's, it's a random idea. And I think you've said that before as well, that a lot of times when you start out, everybody tells you what a stupid idea it is. And I think that definitely qualified knife, it was very much the same. People are really puzzled. What's it, what is it about? So the idea is really that knife sharpening, that whole. It was probably one of the oldest crafts that they are, obviously because knives were the first tool. So knife sharpening has been around literally forever. But it's something that an industry that's been dying and that's collapsed because the sort of the butcher shop around the corner that used to sharpen knife, maybe the guy that cycled around the neighborhood or had a van and drove around the neighborhood sharpening knives, all those kind of, that sort of supply has disappeared. So people still use knives, people still have knives. Knives still need sharpening because there's really no technology that makes them sharp forevermore. So that need is still there. But there was no, there's no supply of that service any longer. And that's why we created an online service where we can get you order on the website. People stuff their knives in the envelope that we send them, send them to us, we sharpen them and send them back out. So we can handle it anywhere in the US and we'll do New York, but also kind of people in very rural areas just because the supply isn't there. And the idea really came about because I mean, I've done online businesses since the 90s, and the niches that are unexplored online are getting smaller and smaller. Obviously in the 90s, you could start anything and nothing was digital. Now the niches are getting smaller and smaller. So I was really looking for a niche that's still unexploited. And I loved the idea of it actually being a niche like knife sharpening, where it. It helps people recycle their existing knives. So rather than people taking the knives and throwing them in landfill and disappearing, we can actually help them reuse their knives. And knives should last you 20, 30 years, but for that to be the case, they need to be sharpened. So it was that combination of an old craft. It helps the environment. Plus it's a niche that's not digital yet and therefore kind of ripe for digital disruption.

And, you know, what about knives? I must have. I am just stupidly fascinated in my life about knives. You know, we've done hunting, we've done, you know, all kinds of things. And I don't know what it is, but I just love that I'll never use all these things. Every size, you know, the kind with the sheaths and the big, fancy leather sheaths and, you know, at least we do use some of them when we go hunting. But I even have one as a money clip with a knife to carry my money around. My son got that for me.

I don't even have that. You're a fan.

What is the fascination we have with knives?

I think to me, it's that sort of primal. The primal aspect that it probably really. And much like you say knives and hunting, I think it's this sort of thing cutting stuff up. If you do DIY projects, carving things, preparing food, it's sort of. I think it just ties into. Just because I don't know what many ever tens of million years ago. It's when the first knives were invented and kind of when they used stone to cut things. I think it just somehow in our. I don't know what DNA, we remember that. That's sort of one of the most basic tools and it's independent of WI fi of everything else. It's so useful. And then a lot of nice knives, a couple of the ones I love, you can really see how they've been kind of made as well. So it ties us back to all that sort of somebody standing there pounding glowing steel. I think it must be that sort of romance and old connection that we have to knives, because I think. I think they're ridiculously. Fun as well. It's so great. And I end up carrying a knife without ever using it. But it just feels good to have it just in case.

Well, in every car, you know, you gotta have them. And it's the first thing that people, if they go on these wilderness or survival things, they can only take a few things, they're going to have a knife with them. And you know, knives are great metaphors for people in the sense that if they're not sharp, they're useless.

I'll tell that to my staff. That's a good one. To make sure everybody's sharp.

Yeah, people, what kind of things come in the most? I mean, because I've got knife sharpeners all over the place here, but they're just for like straight edge pocket knives or kitchen knives and things like that. What kind of things come in the most? How did you get convinced? What kind of research did you do? And how do you go about finding these niches that are unexplored and unexploited?

Yeah, I mean the interesting thing with knife sharpening is basically that there is no information on it whatsoever. So I. Back when we did this research in 2018, there was one study that said there were 1,300 knife sharpeners in all of the US which is obviously totally nonsense. Couldn't possibly be true if you think of the population and with 120 million households and many more knives, because every household obviously has multiple knives. So just looking at doing a bit of research, it's clear no one watches that space, no one looks at it, it's just completely forgotten. And then I started looking at sort of suppliers of machinery for knife sharpening. And the majority of those suppliers, they either do two million dollar machines that a manufacturer will buy when they make knives or they will sell you as kind of a standalone unit that people will have in their shed somewhere or somewhere in the garage to sharpen their own knives. And it was very clear that there was zero information, there was not a service like ours and zero information on that whole market that it had just been basically forgotten. It was sort of a supply side collapse of that market. So it was really through that finding out about it and then it's. I think it's slightly, it's almost, I don't know, it's almost like a bad habit of mine is that I just love this disruptive sort of products and most of the businesses I've done are disruptive and in a way I should have have learned better than to do that now because it's in a way a really difficult business to get off the ground. Because rather than selling into an existing demand and people looking for your product, I tend to find stuff that people need but don't know they're looking for, which makes it sort of a longer journey to actually get them to understand the product exists, why they should have it and then get them to start buying. So I love it, it really triggers my brain and I love that sort of challenge. But it makes for a lot of times makes for slowly growing businesses just because you have so much work to do, picking the customer up where they are today and then getting them to buy from you.

Well, this was hardly a slow growing business with you.

But if you think, I mean the market potential is so absolutely massive. So it's.

How do you figure the market potential for knives?

So it's interesting. I mean if you just think, if you think there's 120 million households knives, everybody has at least our smallest package is for knives. Every household. If you throw in a pocket knife or we do scissors as well, if you throw in scissors, every household will have four, at least four knives or scissors. And then they really need, even if you don't use them a lot, you should sharpen them once a year. So in theory we have all of those households are our customers and they all need our service once a year. And the people that cook a bit more and like, like they're cooking more, the normal knife block will have 12 pieces in it, 10, 12, 14 pieces in it. And they probably sharpen every half year. So the basis there is absolutely massive. It's just a question of getting all those people. And it's funny because you said you have knife sharpened equipment at home. You wouldn't believe the amount of knives we get in that people and mainly guys I think completely messed up at home because it is, it's a craft. And there are very few machines that will actually do a good job. And much like you said, they'll do a good job on certain knife types only. So we get so many knives that look like a banana and that are completely scratched and broken off because people told their wife, no, honey, I can do this, I can do this myself. And then after a while the wife loses, the patient says no, send them to someone who knows what they're doing. So even the kind of competing substitute products, there aren't really that many. So that's why the knife, the market size is massive.

Hey, listen, there's a lot of information online, but there aren't a lot of people who have actually done something. In my case, I've actually built a successful business, has accrued over $5 billion in assets under management, and has done well even during trying times. Now, if you want to know exactly how I've done this, go to Whiteellawinning.com webinar Now, I've compressed a decade of learning into five short weeks. Just for those of you who want to give yourself an incredible advantage and are tired of waiting and watching others move up. Yeah. And what came first? Did you stumble into this idea or were you out looking for a product? And if so, like, how many did you sort through and how long did that take to find? You know, I've got to find something I can do.

It was more this process of looking for a product and it was really, it was sort of half time, probably a two year journey. Half time. I did. And I know you've made fun of coaches before in one of your episodes, but I actually took a coaching degree, sort of a business coaching degree, life coaching degree in parallel, and had clients coaching clients because I've always loved this sort of coaching leadership style. So I've done that in parallel with looking for business ideas. And I really had three other ideas I took far where there was a full business plan, a full model, budget model and investor conversations before disregarding them and then jumping onto this one.

And what were they?

There was one. One is it was a twist on kind of basically the magazine, the whole magazine market and guys magazines, the kind of equivalent of a GQ and the likes, those sort of magazines that they all have gone out of print. And I think what has replaced the traditional print magazine isn't at all as satisfying as the old magazines were. So the business model is unclear. There's really no one who has powerful platform community around those sort of topics online. And it was an attempt to bring both physical publication back and create a website to go with it. So that was one of them. The other one was actually taking the concept of micro loans that work so successful in the third world. So this idea of giving really tiny loans to entrepreneurs in. Yeah. In less developed countries, taking that concept into Sweden and into Europe. Because we've had that massive wave of immigration in Europe the last sort of three, four, five years ago. We had that massive wave of migration to Europe. And a lot of the people coming to Europe then are highly educated, but none of their education is really being acknowledged. They have issues with language. And it was the idea to say, really those people that have made it to Europe in A way that's the hardest, most gruesome assessment center ever. A lot of those people are obviously very, very focused, determined and willing to push through barriers to have made it at all. And giving those people micro loans in Europe to get them off their feet and start the bar, start a sewing business, start manufacturing business, what have you.

And those seem to be a lot more complicated than what you found wound up doing.

That's true. I love the idea, this microloan idea, bringing that into Europe, I love, because it's just I care for entrepreneurship so deeply. And that obviously would have been a really powerful enabler. It was very hard to find a good way of making money with that model. It was almost more. The more we looked at it, the more it went into the direction of sort of a charity and definitely more.

That's true. Yeah. There's just not enough, enough ways to.

Slice up the pie and all the red tape with. Obviously if you give out loans and so forth, it's more complicated. So you're perfectly right. I think they were both more difficult. But then at the same time, I mean, you wouldn't believe how challenging it is to do what we're doing. Because in the beginning, the post office wouldn't transport our knives. Facebook says you're trying to sell weapons. You can't advertise. Google wouldn't let us advertise the post office. We had the very first sort of our beta envelopes when we sent them out and they came back here to California in the middle of the summer in the heat, the glue dissolved and the envelopes opened up, the knife fell, knives fell out of envelopes. And so it's like always. There's a lot of trial and error and the devil is in the details. So it wasn't. It's not as simple as it sounds, maybe.

How many people do you have that are. I mean, whoever's doing this sharpening has got, like you say, it's a craft, it's a skill. It's not something you hire a minimum wage person out of high school and in an afternoon it seems like, seems like, you know that your people are very important to you that are doing the service.

That's very true. And we basically created an apprentice program like in the olden days. So people start out doing parts of the process only and only on certain knife types. Obviously in the very beginning, the first three months, they never even touch a customer's knife at all. But that we have training knives. And so there's a whole process of. Yeah, an apprenticeship process. Of learning to become that sort of craftsman. And it's really important to retain them. Obviously the good thing is right now we don't have any competitors that anyone could go to, but they could obviously set up their own shop. So it's about keeping them, keeping them motivated and keeping them loyal to us. And then it is, I mean it's tough work because it's kind of physical work. It's obviously, yeah, it's dirty, it's messy, it's noisy. So yeah, that definitely, it's a really important part of what we do is keeping them educated and upskilling them and keeping them happy.

Well, the thing is that your apprenticeship program is exactly parallel. For the best way you train anybody in anything that involves skill or performance is to get them in and let them kind of ride with you and observe. And then step by step, start to do one piece, then two pieces, then three pieces of the step and the important you. And then always under the watchful eye of the training manager. You know, it's almost like how we did trained people in financial services. They came in, they would come in, get certified, get licensed and learn things. But then they would observe the pros in action in front of live fire, more or less like it was a war or something. But they can't handle the guns yet and they can't handle the presentations. But eventually they move over to where they're doing the presentations. But at least pieces of it step by step is really the best way to train anybody in anything. But before that happens, you've got to know how to do it at the highest level yourself. So how did you get that knowledgeable about that business?

We have one of the founders, Magnus, he's a guy and it's very funny because he's an engineer by trade and for the longest time he worked with sort of encryption software and really just a brainiac smart guy. And he about 30 years ago started to do knife sharpening. So he was in LA doing knife sharpening for sort of high end chefs for, for the sort of most knowledgeable people, knife people in L. A. He was doing work and he'd actually, for many knives he would charge 100 or $150 to sharpen one of their knives. So it was him we reached out to and he joined us in setting up the business and really brings the knife knowledge to the table.

Well, that's shows the value of partnering up with people that the expertise you need, you know, you can move ahead light years, collapse decades of development time by doing things like that. And I think you had me with the name Magnus. As soon as you said Magnus, I kind of figured where we were going with that.

He's larger than life. But. And I really like your point because it's so easy to think knife sharpening, you need an apprentice program, but you don't need an apprenticeship program for business. But I think much like you said, things like presentations and so much in business is so much more craft and art really, than it is science. So this sort of approach of, yeah, I'll just hit a book and afterwards I can do it. It definitely doesn't work in knife sharpening, but it doesn't work in business either. It's really about, yeah, watching good people, learning from good people and doing it rather than just studying endlessly.

Yeah. That's why people, you know, you have the big corporations and they matured out to where they're being run by ex accountant or attorney who has no idea about the art of sales. And sales is what drives every company. Sales and marketing got to sell the stuff and they have no idea the trauma, the things that the marketing people, the salespeople go through. And so they don't put a big premium on it, you know, but if it's, if it's not, if you can't do it in a factory, you know, if you can't teach a robot to do it, then it's going to be an art because you got to think on your feet and you got to have instincts and you got to play your instincts and be able to keep on going when it doesn't work out. But then learn something from that situation so you're better the next time. It's gonna be a long way before we can get the robots to do that. They said they're working on it, but.

I think to your list of marketing and sales, I would even add culture, because I do think it's so, I mean, more and more so that people's motivation, the company culture, the corporation, is just so totally key. And obviously that robots will never learn. And an accountant, they can do surveys and then look at the numbers and say the surveys are trending up and down, but that's not a way of creating culture. So I think that piece as well, it's just something you need to learn from other entrepreneurs, from other organizations, those soft facts.

To wrap up this segment, would you speak to the issue of those who are listening? They're saying, you know, Ted Comet, I wish I knew a Magnus. You know, I wish I could come up with an idea like this. I'm just, you know, I'm just not a great idea person. But if I had that idea, you know, I could really do something. But they don't understand that. It's a process of sorting through things and just taking the time to go through the numbers and evaluate. Because, folks, if we look out, you know, I'm just talking to all of y' all now. If we went, like, five years in the future, there'd be like 100,000 new inventions in every area of life that none of us had ever, you know, could imagine today. And, like, and then the things that are already here are going to be reinvented and improved up to another level. You know, they're not going to run out of people to be contestants on Shark Tank. They're not going to run out of people to be, you know, they're not closing the Patent Office, you know, they were. There was a bill in Congress to shut down the Patent office in, like, 1920 because they said, you know, all the inventions are made, you know, you know, what else could there be? But so, you know, there's going to be new stuff out there, but you got to get. You can't let yourself say. You can't rule yourself out of the game now because you haven't thought of something yet. You're one idea away from transforming your life. And so you got to be on the attack, looking just like. You've got to be on the attack once you get the idea to make it happen. And so I wanted you to talk about that.

And I saw. I think that's why I love your stuff and the things you say. Because for me, it's this. It's almost. It's really this we talked about earlier, not hesitating. So I think it's also, it's. It almost doesn't matter what idea you start with. I think this. I really believe in this. Creative ideas are nothing. Execution is everything. So the idea to just don't hesitate, decide, just do anything, as long as you're then able to keep adjusting while you do it, then you're going to be fine. You tweak and you turn it, it's going to turn out. And I have one example of a business I started where really, in hindsight, it was probably the most stupid business idea ever. But we raised money on that idea, had the money, and then understood, luckily, and we adjusted, understood it was a stupid idea, it's never going to fly. And then we changed the business around and ended up doing something drastically different. But none of the shareholders and investors cared and we sold it really successfully and it's a market leader in Sweden. So I've really been there. And this is idea just to show how stupid it was, is this was in 2005 where we wanted to build something on the web protocol back then, the mobile website protocol, which is obviously long dead, and the iPhone killed it dead. But it was never really a good platform to begin with. And then we wanted to do a price comparison of books and DVDs and basically books are dead and DVDs are bad dead, dead. So the idea was really to compare something no one cares about any longer on a platform that doesn't even exist any longer. But we started with it, people loved it, we raised the money and then we pivoted and we ended up doing a price comparison of insurance products and financial products, which are much better still around have much better margin and it was a much more successful business. But had we sat there and just deliberated forevermore about starting and not starting, nothing would have happened.

Very, very well said. Thanks so much. If you enjoyed what you've heard and are dead serious about finding out for yourself exactly how this works in the real world, I've taken the most valuable business lessons I've learned over 40 years and put them into something for you to watch. Go to whiteellawinning.com webinar now in order to move up as fast as possible. I'm Larry Wydell and I run the Million Dollar Mastermind. Go, go, go.