Steven Sashen, CEO of Xero Shoes, never had a traditional job and grew up too old for Ritalin. He argues that prior success often causes later failure, and that founders must watch for survivorship bias in business stories and stay alert to unexpected problems instead of relying on old answers.
Welcome to this edition of the million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell.
This afternoon we're going to have some fun with Stephen Sashin. Hey Stephen, how are you doing?
I'm doing really well. I could use a nap and a clone.
Well, we're going to have fun talking about winning. And Stephen has got the incredible background of having done all kind of things in business, starting with software, word processing for scriptware, which I don't even know what that is for film and TV writers, but you know, founded other companies and adventures and now he's involved in zero shoes, is that correct?
It's said zero spelled X E R O. And to say involved I think is an understatement since I'm a co founder and CEO and whatnot. So. And, but yes, that is exactly what I do.
And former stand up comedian.
Oh, yes, there's that. And then, yeah, basically my history is summed up with a really simple thing. I'm too old to have gotten Ritalin and I've never had a job.
Yeah. Well, let's talk about, you know, you and I started talking earlier. We had to cut ourselves off about this whole thing of looking at winning and learning how to, how this process works, you know, especially if you're on the way up or if you're, you know, if you're changing careers, it's like you're starting, you're starting over and you have to rework yourself or if you get to a big breakthrough and you all of a sudden now doing something on a whole nother level, your company and your business becomes totally new because of the level.
Well, let's not forget the people who, who started something, exited something and are starting something new. Right. And what they typically don't realize is, is the number one cause of entrepreneurial failure as a previous entrepreneurial success.
Yeah.
Okay, so we can, we can dive into that if you like too.
Okay, so talk about your, you know, we were talking about the idea of understanding how these things happen in the real world and what's your, how would you dive into your insights that you would want, you know, you would like clarity of thinking, especially when you're CEO.
Yeah, that's, that, that's a, that's a, that's a myth. So I'm gonna, I'm gonna sum it up or I'll do this one. When my wife and I co founded and Started zero shoes. And that's redundant. One day she said to me, I feel like I don't know what I'm doing. And I said, yeah, you're not supposed to. She's like, what? I said, no one knows what we're doing because no one's ever done what we're doing. And even if they had to, what we're doing, the, you know, you can't step in the same stream twice. So it's changed since then. Our job is not to know in advance. Our job is to figure out what. What fire started overnight despite the fact that nothing changed since yesterday, and figure out as quickly as possible what we need to learn to put it out. So this is not something you can know in advance. And the idea about confidence or having historical knowledge as being a causal factor is just highly, at best, overrated and usually complete nonsense.
And how did you come to these conclusions? And how did that dawn on you? Were you. Are you at this point understanding things and disabused of prior preconceptions about how things work?
Yeah, well, you know, look, it's easier than that. All you have to do is look at reality. I mean, here's a great example of how you get disabused. Disavowed. Disavowed. Stop thinking things like this. One of them is there was. If you look at books that talk about successful companies, especially where they have a list of successful companies, pick up that book 10 years later and see how many of those companies are still in existence.
There you go.
You'll find that most of them are not. Harvard Business Review, actually, someone did this where they had some book about, you know, the 10 most successful companies, and 10 years later, nine of them were out of business. Or my favorite one is when people use Apple as an example of how you should think about running a company or building or growing a company, and I love that one because one of my best friends from junior high on was John Scully's number two man. And that was in the 90s when everyone thought Apple was going to tank because it was tanking. And so they forget that, and they forget that now things are seemingly working well. Or, you know, there was a time where people thought Enron was an amazing company or when people talked about IBM as being a great company right before they laid off 40,000 people. So all you have to do is actually just look at history instead of the story someone's telling you. And that's based on hindsight bias or survivorship bias to justify the thing they're trying to sell you, whether it's a book or a course or consulting, it just doesn't take much. And, you know, in the footwear industry, there's some fun ones where there are people who have done really well. They've created a new product or a new category even, and then they try to come back with their second thing, and everyone's like, oh, my God, this thing's amazing because it's that same guy who did that first thing. And the second thing is a complete bust. And anyone who wasn't enamored with the personality of that person could have told them that from a mile away. P.S. i'm one of those guys. So I said, you know, hey, that new idea, it's really interesting. It's a complete bust. And they said, oh, no, it's, you know, so and so who's doing it? I went, yeah, yeah, it's a bad idea that people have tried 100 times before, and it won't work this time either. I don't care who's behind it. And I'm not trying to be cynical. It's just that it can come out sounding that way when you're just pointing out reality to people and they just, you know, you're just disabusing them in that case, definitely of their optimism.
Right. And there's no, you know, once you see something you can't unsee it is.
Right. Point. Yeah.
And you can't. There's no advent. You reach the point where you say, there's no, you know, I might. Might be his friend, but there's no advantage in me lying to him. And it's, you know, I could say he might hate me, but I've saved him 10 years and a fortune of wasted time and money, you know, and.
Eventually they may become your friend again. But here's another thing that knocked it out of my brain is when I met people who were, quote, unquote, successful, and I definitely put air quotes around that, I would ask them a question that was the opposite of the question that most people ask them. Most people ask, how'd you get to be successful? I asked, because almost every one of us who's been in an entrepreneurial journey has had things that have worked and things that haven't worked. So I would ask questions because I met people who had their. Their net worth be, you know, huge and then drop to nothing and then lather, rinse, and repeat. And I would ask them if you were teaching a course, like a college level course on how you went from making a couple hundred thousand dollars a day to making nothing every day. What would you teach in that course? How would you teach people about how to fail? Because that's all reproducible information. That's all something you can learn from. But the how to succeed part is so idiosyncratic and so a matter of time, of unusual times and luck that what are you going to learn from that? Somebody asked me recently, don't you want to go meet Ms. Richard Branson? I want. Why? They said, well, what could you learn from him? Well, pretty much nothing. And the evidence is there's only one Richard Branson. Right?
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