Customer is Key | Doug Mellinger

So how many of you would say that the answer, that the one thing you absolutely must have is money? How about time? How about that idea? And what about customers? So the answer is customers. Why? The reason is because— and I used to sit on the Patent Office board, and so I saw literally millions of ideas that people came up with. And the amount of money people spend on those ideas is pretty intense. People raise money, they have the time they put in, but unless there's somebody out there who's willing to actually pay you ultimately for what you're building as a business, you just don't have a business. People talk about, we're going to do all these websites and we're going to figure out how to monetize it at some point. Well, at some point you still have to monetize it. If you can't ever figure out people that are going to actually give you money in whatever currency for that business idea, you just don't have one. I find a lot of people spend so much time working on the idea or just spending money, literally. Sometimes, there's a company I just recently was talking to somebody about, a competitive business that just went through $180 million. worth of venture capital, and they just shut down a couple of weeks ago. And they never had a business model, ever. But they always felt that they could figure it out. But I think if people spent more time thinking through who's going to pay you money and why, I think you'll be much better served in that. Some people say find a need and fill it, and you'll hear how I've started many of the companies I've started came very specifically from finding that need. So the second question I have for you is, how would you guys define an entrepreneur? You know, what would you say an entrepreneur is? Crazy. I agree with that one. What else? Perseverance. Perseverance. An entrepreneur is someone who falls down a cliff and builds a plane on the way down. I like that one. Problem solver. Yep. What do you— So let me just give you— I think these are some great ones. My definition of an entrepreneur is somebody who will do anything they have to to keep from getting a job. So for a long time, that's what I did. I started my first company when I was 13, And it was, you know, like a lot of people, I hired a bunch of kids around the neighborhood and did everything from painting to tarring driveways to mowing lawns to getting rid of snow removal to whatever it was that I could find. And then when I got into high school, I bought a soda machine and, you know, got into the concession business. And then I got to Syracuse University, and one of the things that happened when I got to Syracuse was that I found this word, and the word was entrepreneur. And this is going back to the early 1980s, 1982, and I was a computer science major, and I was walking through the business school, and I saw a poster with the word entrepreneur on it, and I was just absolutely fascinated because I never could remember seeing that word before. And it's unimaginable for most of you probably today that when I went to school, in 1982, there was no entrepreneurship major. And when they would talk about us as young entrepreneurs, every time that that was written, if you go back to the old articles, it would say whiz kid as a young entrepreneur. There was no credibility for being an entrepreneur. We were like these one-eyed monsters. And so, you know, back then I found this word, I became completely obsessed with the word, and I started trying to figure out what was an entrepreneur, what was the topic of entrepreneurship, because I realized that that's what I had been doing since I was 13. I walked into the business school, I made an appointment with the dean of the business school at Syracuse University, and I said, I wanna be an entrepreneur major. And he literally laughed at me. He said, that's no such thing. It's not a discipline. Basically, he said, go back to the computer science school, And leave me alone. So I didn't leave him alone. I drove him crazy. And I drove everybody else at the university crazy until the point where the dean of the student affairs left a message in my dorm and said he wanted to see me. So I went to see him. And he said, I need to stop driving everyone nuts. There is no major. Leave it be. And I started arguing with him. And he said, OK, fine, fine, fine. I wanted to see if you were serious about this. there is a way to create a major, but you're going to have to jump through all these hoops. And so I did that, and over a period of 9 months, I created the first major in entrepreneurship. And it was not easy. But what that led to was, with some other students, we created an organization called ACE, which stood for the Association of Collegiate Entrepreneurs, back in 1983. During my college life and for 2 and a half years after college, I basically traveled around first the United States and then around the world to try to convince universities and governments to create programs to foster and support youth entrepreneurship. It was just an absolutely magical experience that was like getting multiple PhDs. Out of that organization, we created something called YEO, the Young Entrepreneurs Organization, that today is called EO. Entrepreneurs Organization. And that today is 12,000 entrepreneurs all over the world that came out of this movement. And the first members of this program, we created something called the ACE 100. It was Steve Jobs and Bill Gates and Mitch Kapor from Lotus and Michael Dell before it was even called Dell. It was PCs Unlimited. And we had people like Mark Cuban who you see now. It was well before broadcast. He had other companies. The guy who created California Closets and the woman who created I Can't Believe It's Yogurt. We just had this incredible array of young entrepreneurs who created all these amazing businesses that we were putting out there to try to convince the world that we were entrepreneurs. We weren't young entrepreneurs and we certainly weren't whiz kids. That movement is what really launched By the end of the 1980s, we went from about 5 schools that had a class in entrepreneurship to over 600 by the end of the 1980s. And by the end of the 1980s, I had traveled to 29 countries, to China. I went to China back in 1986, Russia in 1986, a time when they were just trying to understand what did that word even mean. And it was just an amazing experience to go through. So that's where I started my career, and then during college I built some companies like a summer storage business and a fraternity sorority supply company and an ad agency that published a coupon book, and I grew those to over 20 college campuses across the country while I was helping to build this organization. Then I left and did it full-time, and then I came back to basically practice what I was preaching. The company that I started initially was a company called PRT. What I did was I wanted to be back in the technology business where I had grown up. I wanted to find a need and fill it. I was trying to decide, was I going to go down and do something in the emerging PC arena, or was I going to do something for large corporations? Was I going to do a package, or What was I gonna do? So I went out and I interviewed 35 chief information officers and CEOs of Fortune 500 companies. How many of you have ever seen the movie Wall Street? You guys seen, you know that movie where he's calling over and over and over again to get those appointments? Yeah. That was basically me. I was a very annoying person because I'd call at 7:30 in the morning and I'd call at 7 o'clock at night when the assistants had gone home. And I just would get these appointments. And when I sat down with these people, I said, tell me what I need to know. What is wrong that you're trying to solve, and where do you see the future going? And after meeting with a number of people, I started to form a pattern that at that time, many companies were trying to get off the mainframe and were trying to get to either client-server or mid-range computing. And they're also trying to lower their costs of the old software that they were trying to maintain. So I created a company called PRT that really stood for Platform Reengineering Technologies. Later on, we used to call it Pretty Ridiculous Technologies. But that company, I started it with $12,000 and went out to the guys that had told me what the problem was, and I said, I figured out how to solve exactly what you told me was the issue. Now give me a contract. And lo and behold, I got my first 2 contracts, one from an organization called TIAA-CREF and the other one from Merrill Lynch. And—