24 Jun Disrupt You – Interview with Jay Samit
Listen To The Podcast Here
Jay Samit is widely recognized as one of the world’s leading experts in innovation and disruption. You can pre-order his newest book, which is out July 7th, entitled Disrupt You!: Master Personal Transformation, Seize Opportunity, and Thrive in the Era of Endless Innovation on Amazon. Jay sits down with John Livesay to talk on some of the life lesson’s he’s learned over the years. In the episode, Jay talks about Disrupt You! and shares examples of successful people failing, people pivoting their business, and much more.
Disrupt You – Interview with Jay Samit
Hi and welcome back to The Successful Pitch. Today’s guest is Jay Samit, the author of a new book coming out July 7th, Disrupt You! Boy, does that book have great information for startups today. Jay has raised over $800 million dollars over the decades for startups, so clearly he’s an expert. His book, Disrupt You!, has a foreword written by the founder of LinkedIn, if you could imagine having those kinds of connections. We are obviously extremely thrilled and honored to have him on the show today. Jay, welcome to the show.
Thanks for having me.
Jay, I just gave a little tip of the ice berg of your background, everything from being at Sony and Universal to now you’re the CEO of C-Change, doing multi screen TV services and teaching at USC on how to build a high-tech startup. You have such an incredible background and your book is full of information. I’m honored to have had a chance to read an advanced copy of it.
Can you take us back, I know you do this in your book [Disrupt You!], about how you first came up with the idea of getting into startups in the first place and what made you realize you really have a passion for that?
I’d like to say it was a plan, but I graduated as many Millennials did, although this was many years ago, at a time of a great recession. You did what you were told. You got good grades in high school, got into a good college, you got good grades in college and then bam, there’s no jobs. Back then, it wasn’t so easy to raise money. But I figured out if I would just go out and print a business card and suddenly claim to be a business, nobody would ever come and visit the business. I could morph and figure out what we did later.
My first company was called Jasmine Productions. Jasmine, Jay Alan Samit, and it was mine. From that humble beginning, I happened to look at where were new industries happening, where could growth take place. Probably the easiest message is, when we look out today at all the changes in our world, I call this the era of endless innovation, there’s constant disruption. Disruption is either an obstacle or an opportunity, the choice is yours.
I love that. Your book [Disrupt You!] says you have to do three things: master personal transform, seize opportunity, and then thrive in this era of, as you said, endless innovation. I want to start with this whole concept of mastering personal innovation. You talk a lot about that in your book about how important it is to think of yourself as a brand, first of all. You have this great quote about people are so interested in changing the world, but no one thinks of changing themselves. Can you speak to that?
Sure. Most of us, by the time we get to be adults, are carrying all this baggage of being told what we can’t do. You weren’t good at math, you can’t read a map, you can’t do this, you can’t do that. For most people, they actually believe this, when in fact you can actually do whatever you want. I’m always envious of those people that believe in reincarnation. I don’t, so I figure I have one shot to get it right and I want to do as much as I can.
If you really look at it that way and you stop saying what you can’t and start focusing what you can do, almost anything becomes possible. The most successful people in the world have the same 24 hours a day that you do.
You also talk about it in Disrupt You!, the important of just taking five minutes and visualizing your success and how important a positive attitude is to being successful.
Have you ever met or gotten a great idea from a negative person?
Never. If you can just start your day out of what’s great, you woke up ahead of everybody else and just start visualizing what you want to get out of the day, what you want to get out of life, what your goals are. If you don’t know where you want to be in five years, you’re not going to get there.
Your life is just like any other journey. You have to put out a map, what I call a disruptor’s map, to really plan out. You don’t have to know all the steps. That’s where some people get lost in the process. “I really know that I want to direct Hollywood movies, but I don’t know what to do.” Most likely, staying in Indiana is not the place to start. Get yourself there.
I love how you say, “All disruption starts with introspection.” That’s such a key connecting element to your book [Disrupt You!], about take a look at who you are, what your strength are, and what problem you can solve in the world. The real Tweetable quote that I love from your book is, “Businesses don’t sell products. They sell solutions.”
So many startups that I work with get so in love with their idea, but can’t verbalize to investors what solution it’s fixing for people. You have done that time and time again, both for big companies like Sony and Universal, as well as startups. Can you tell us about the importance of, and when you teach your students to look for things that are disruptive and how that solves problems?
I’ve taken stakes in over 80 startups in my career, and investors have made money almost all of those times.
What attracts me and what you need to do, the classic elevator pitch. What’s that one sentence that explains what your business does? Tons of people want to come to San Francisco for Mac World, but can’t afford hotel rooms. AirBnB. Just solve a problem.
What is unique and where you can succeed is you are the only person seeing the world from your point of view. You are experiencing every single day, problems and aggravation. Every one of those is an opportunity, because if it’s bothering you, it’s obviously bothering others. The bigger the opportunity. You’re one click away from billions of people nowadays. Becoming a global brand and solving a global problem is as easy as first identifying it.
Just write them down. If you write down three problems you have every day that you see in the world, the beginning of the month it’s pretty easy. By the end of the month, it gets tougher. But you have 90 ideas and then you can work down that list and see which ones scale the most, which one can capture the value that you create. It’s that easy.
That’s such valuable takeaway for our audience, Jay. Thank you. One of the quotes that you have in the book is, “Problems are just businesses waiting for the right entrepreneur to unlock the value.” You certainty gave us an example of that with the AirBnB example.
When you talk about the multitude of ideas that you get if you write down three a day, at the end of the month obviously and at the end of a quarter, you have a lot. One of my favorite takeaways in your book [Disrupt You!] is with this concept you’ve come up with called the zombie idea. Can you tell us what you mean by that?
Everybody else tells you to nurture your idea, to grow your idea, to love your idea. They’re wrong. The best thing you can do with your big idea is kill it. Before you start hiring people, spending money, whatever, go to people in the field and find out, not relatives and friends that want to help you, go to actual customers and have them tell you why your idea sucks, why it’ll fail, what’s wrong with it.
Because if you can start plugging those holes, “Wow, you’re right, that’s not a good idea. Oh, yeah, what if I do this?” Then you’ll go down a path. When you find that idea that can’t be killed, that’s a zombie idea. That’s the one that you start spending money on.
I love it. That’s going to be the big Tweetable moment for sure, because the zombie idea, the Walking Dead, everybody loves that concept. The idea is so great, the problem that it solves is so needed that it can’t be killed. It’s really a wonderful, wonderful, clever, clever way to get people to think about their ideas.
We’ve talked about mastering your personal transformation. The second part of your book is all about seizing opportunities. You have one of the best stories I’ve ever heard of seizing an opportunity, which has happened, I’m sure, to anybody who has been in the business world and made appointments to pitch people. Which is, “I’m sorry, there’s been a last minute cancellation. This person is no longer able to see you right now.” In your story, the person was catching a limo on the way to LAX. Can you tell the listeners how you seized that opportunity?
Sure. Taking everybody back about 15 years ago when the music industry was being disrupted. Suddenly Napster comes out, everybody’s stealing music. The industry goes from a $40 billion industry to a $20 billion dollar industry. Every record company is losing their money, nobody knows what the future is.
I, as a serial disruptor, want to change that industry and jump in with tons of ideas. I finally get a meeting with the CEO of EMI, the world’s largest standalone music company. This is the home of Frank Sinatra and The Beatles and Pink Floyd and etc. Ken Berry, who was, earlier in his career, Richard Branson’s original partner in founding Virgin.
I have this meeting, I show up at Capital Records, go up to the top, the E floor of the Capital Records building. He’s gracious enough to come out of his office and say something has changed, he can’t do our meeting and he has to leave right now for the airport.
I realized it’s LA. To get to the airport, it’s 45 minutes with traffic. I said, “How about I just ride with you in the limo to the airport?” Now, instead of getting a 15 minute meeting. I get a 45 minute meeting. During that time, I explained my visions and thoughts. I hear what his needs are. While he’s in the air, I now know for the next 12 hours, nobody can reach him. I spend those 12 hours like a mad man and write an entire business plan for what I believe the next five years of the music industry will look like. That’s in his inbox when he lands. Got hired right then, the second he landed.
Had you not seized that opportunity and been bold enough and creative enough to say, “Hey, why don’t I ride in the limo,” and figure out your own way home from the airport, that would have never have happened. What a great example of seizing an opportunity.
The other one that you have in your book [Disrupt You!] is this amazing opportunity that came to you, which tells people that when you have an idea that really is so great, that people find you. Which is you got a call to come meet with President Clinton at the White House. Can you tell us about that opportunity?
I was very successful in the early days of launching what became the PC and the internet and the way we see the world. One of the ways I wanted to give back is I had this vision of we need to get computers into the schools. We need to get a computer into every class room. It’s a very simple, big idea.
Had no idea how to make that happen, but I would write about it and would appear in magazines and speak at conferences. One day, I’m sitting in my little software company. There was 20 of us. Nobody knows who we are. I get a call from the President of the United States. I literally thought it was somebody doing an Arkansas accent pretending to be, “This is the President.”
To make a long story short, the White House believed in the idea and they invited a whole bunch of forward thinking people together and saying, “How do we make this happen?” You get all inspired. You’re sitting in the White House, you’re sitting with the President, the Vice President, all these really important people. Then they give you the little thing, “Oh, by the way, there’s no federal dollars to help you. We’re there for moral support,” but that’s all it took.
It just took people believing and you got enough great minds together. One of the stories that, I don’t know if it’s in the book, that spun out of this is we ended up wiring a Nations school one day, a school in California, for the press. Photo op. Back then, before Wi-Fi, you literally had to wire CAT5 wires. The President is wearing a hard hat and the Vice President.
At the end of it, there’s photo ops with the White House photographer. A month goes by and I get this beautiful signed photo to me, that’s going to be framed to my wall forever. It was a three shot. It was me, the President, and this other guy. I’m like, I really wish it was just the two of us. He’s one of the guys in the committee that participated. It’s the kind of picture you want to show your mom. About ten years go by and people go, “Oh, you’re friends with Eric Schmidt?” There was somebody else that volunteered who went on later to become the founding Chairman of Google.
That’s quite a very high group of people that you’re working with. That whole concept of figuring out a way to solve a problem without a lot of money and everybody pooling their resources together, you never know who you’re going to interact with. That’s such an inspiring story.
The takeaway of the story is Eric Schmidt was a guy who had just left Novell . He was looking for something new and meaningful to do. These people that become the legends of entrepreneurship, the disruptors that change our world, it didn’t happen to them. It wasn’t like, “Oh, I was walking down the street and I just won a lottery ticket.” They made it happen. They went out of their way.
The majority of the world’s billionaires are self-made. That is not something that existed in the past. This isn’t about class, this isn’t about race. When I look at the big problems of the world, whether you go with climate change or water shortage or anything, the only people that are going to stop these problems are entrepreneurs.
One of the things you talk about, you have a whole chapter devoted about capital, is a lot of entrepreneurs say, “I just need funding and then I’ll be successful.” You have a whole creative strategy that you’ve used throughout your whole career called Other People’s Money, OPM, without having to necessarily get an investor. One of the stories you talk about is how you got Sony music, McDonald’s and United Airlines, which seem like completely separate industries, to somehow work together and brainstorm something that allowed Sony music to piggy back on their money. Can you explain that whole strategy to our listeners on being creative like that?
Sure. You’re starting a new business and it’s aimed at solving a problem for some segment of the audience, whatever that may be. It may be elder care, it maybe young people, it maybe women, whatever it is. There are some other brand out there that also wants to sell to, reach, and work with that same target audience, and they have a non-competitive product.
If you can figure out how to use their marketing dollars, their reach, their sales channel to promote what you do, then you’re basically spending off-balance sheet financing. They’re paying for you to become successful.
In the case of Sony, we were launching a competitor to iTunes and that is a big task to do. I was trying to figure out who else had problems. It doesn’t matter what their problems were, but who else was in the headlines. The two on the headlines at the same time was United was coming out of bankruptcy and wanted to tell the world, “Come fly with United,” and McDonald’s had suffered through a movie called Super Size Me, which shows Spurlock nearly dying by eating McDonald’s three times a day for 30 days.
To make a long story short, I went to each of them. In United I said, “Wow. United, you have all these people with frequent flyer miles that they’re not using. What if we make it a currency that you can buy digital downloads with it?” and, “McDonald’s, what if we make you hip and cool by every time you buy a Big Mac, there’s a free code on the box. It’s called the Big Mac value track, and you got a song.”
Now you have McDonald’s spending millions of dollars for great TV commercials, putting signs in every store, bags, and all that. United, we did a concert in the sky with Sheryl Crow, 30,000 feet, filled the plane with press from Chicago to LA, and got lead story on all the network news, all the newspapers, everybody covered it. You now have millions of customers coming to your store, opening week, and it didn’t cost you one little cent.
And you were competing against Apple’s huge budget. That is an amazing story about being creative and using other people’s money, but people are willing to spend their money because you’re solving their problem in addition to having your own problem solved. I think that’s the real genius behind what you did there.
If I could just build on that. When you pitch, if I could give one piece of advice for your listeners to takeaway today. When you pitch, it’s the same concept. When I was in my 20s and pitching big companies, I would go in and say, “Intel, this will solve this for Intel, this will solve that for Intel.” I thought it all out, everything. You know what? That’s not what a pitch is.
Pitches solve the problem for the human being across the desk. What motivates them? Are they trying to get a bonus? Are they trying to get a promotion? Are they trying to beat a certain competitor? Get in their mindset, because all you have to do is solve for the individual that you’re pitching and all the rest will work itself out.
It’s really having huge empathy skills, it sounds like, of what you’re saying there. What is their hot button? Is it they need a promotion, they need to hit a certain number? You also talk about in Disrupt You!, the concept of CEOs are happy to buy your startup company if it’s going to make them look good or help them solve a problem, right?
Yeah. Large corporations are not setup to innovate. They’re not setup to, what’s our new thing to do? What they’re busy doing is, “We’ve got this percentage share of the ketchup market,” and they look at their competitor or who else is selling ketchup. Or Kodak versus Fuji kept on looking, who sold how much film and who sells film at this Disneyland and should we pay to sell our film there. Not paying attention that people aren’t using film any more, those are digital cameras.
When that moment happens that you take those risks and you have that money losing business for two, three years to prove your new concept, then it’s at a point where they’re willing to say, “Wow, we need to get in there. We don’t mind overpaying. We don’t mind buying Oculus Rift for billions of dollars though it doesn’t have a penny in revenue,” an extreme example.
Even the innovator type companies like Google, about as innovative as you can get, they were late to mobile. They bought Android. They didn’t sit and create that on their own. You’ll see this time and time again. Many of the millionaires if not most of the millionaires that you think of that came out of the Silicon Valley area did so on businesses that were not profitable.
Just to expand on that concept of coming up with something that necessarily isn’t hugely profitable out of the gate but still has an extreme value for someone to want to buy, you also talk about there are times where you do want to get investors to give you money for a percentage of your company. You have this great tweet in there about, “100% of nothing is nothing, whereas 50% of something can be worth millions,” and that you’d rather half the Pacific Ocean than all of Lake Erie. What a great visual that is.
So many of our startups talk about valuation. “I don’t want to give away too much of my company for this kind of investment.” But like you said, 100% of nothing is nothing. If you need the money in order to make your company grow and scale and prove that it’s viable, then 50% of something can be worth billions. I’d love to have your insights on that.
The answer I usually give to people that are afraid to give away something or whatever is, “Tell me a billion dollar company that has no employees and no investors.” You’re not going to do it alone. You better start figuring out that it is going to take a whole team of people and you’re going to be the Pied Piper leading them.
In the beginning, your employees are going to have to come on that leap of faith. What’s going to give them a leap is that they’re are going to get some of that upside, because they’re going to be working for free or less than they could get at a job somewhere else. Your investors know, that the vast majority of startups won’t make it, so they’re taking a huge risk and. That’s how it starts getting divided up. There’s no other way.
Now, there’s cleaver ways to structure things and various ways to get into detail, too much to get into here, but I try to cover them in the book [Disrupt You!]. In the basic premise, you want as strong as a team as you can.
One of the things that sometimes people forget is that LinkedIn is a great tool for solving this issue. There are esteemed people in your field, in your industry, that you can just reach out to on LinkedIn, send them a note, and ask them for advice, and put up a group of advisers around your concept that will make you seem more connected, know the industry better, grow faster. That’s an easy way. Many of these people want to give back and just want to feel validated that their experience and expertise made a difference.
When you talk about getting the right team and people need to feel like they have a huge upside to leave their, especially if you’re recruiting somebody from a really big company that has great skills and is in big demand, one of the other tweets in the book that was so empowering I thought, and really made me stop was, “Would you rather work 40 hours at a job you hate or 80 hours at work you love?”
I don’t feel like I work. I put in a ton of hours, seven days a week. I don’t golf, I don’t sit around. I’m on a mission. When you feel like you’re on a mission, there’s nothing that’s going to stop you. There’s nothing that’s more energizing. You sleep because our human carcass forces us to. I’ve been in, I don’t know, 20 cities in the past month. I fly around like crazy because the opportunity to help one more person, to change one person’s life, to inspire one more person, it’s selfish. It makes our world better.
If you had to say what’s your mission was in a nutshell? You gave us a little bit of it. It’s making a difference and encouraging other people to make a difference, right? Is that what gets you going?
I truly believe the only people that solves world problems are entrepreneurs. We’ve got a lot of problems. Yet, we don’t teach people how to be great entrepreneurs. I’m on the wrong side of 50. I grew up with I Love Lucy. Lucy would have a get rich quick scheme, it would fall apart, and then Ricky would forgive her and life would go on.
To today’s generation, they grew up with Homer Simpson has a crazy idea, it falls apart and life goes on. That is the ethos that is very specific to the American dream. The American dream isn’t that anyone can get rich. The American dream is really anyone can try. There is no fear in failure. Failure means that you tried. You learn more from failure than you do from anything else.
Bill Gates and Paul Allen’s first company wasn’t Microsoft. The first company went out of business. Did they get shunned? No. Their next business was Microsoft. Henry Ford had gone broke. Walt Disney. You have to understand that failure is part of the process and not stop. You don’t want to just give up.
That brings up the whole concept of pivoting that you talk about in your book. You talked earlier today about, ask your customers if they think that’s a good idea and why not. You have this great tweet, “Data has no ego and makes an excellent co-pilot.” That ability to say, “This is what I think. I’m not afraid of failing. I’m going to get some feedback. I’m going to get some data. If that doesn’t work, I’m going to pivot.”
You tell this amazing story of what YouTube originally had as an idea. I don’t know that many people know that. Would you tell us that story?
Sure. In the early days of internet dating, a couple of guys sat down and said, “You know what? Internet dating just shows a still picture. That could be 20 years and 20 pounds ago. You don’t know what that person is really like. We’re going to make a dating site that has videos on it.”
They put up Tune In Hook Up as a video dating site. They learned two things from the data. Nobody was really excited about dating any of these people, but tons of people liked watching the videos. They got rid of the dating part, put up more videos, and within a year changed the name to YouTube and became billionaires.
Had they not looked at the data, had they believed that their idea was so good and flawless and we-know-everything, they would have just gone their merry way out of business and never pivoted.
Pivoting is a very hard to thing to do. You have to admit that you were wrong. But the good news is, you wouldn’t haven’t gotten to that point to get that data and see that insight had you not gone down that wrong path. Going deep into the woods with your eyes closed, you’re going to hit a tree and die. The whole point is to look at all this rich data that we get nowadays and see that insight that none of your competitors have, because they haven’t gone through that experience.
I love that. That really is the third element of your book, which is thrive in this era of endless innovation by seeing the insights that no one else has seen. Sometimes that means the only way you can see is by trying something that doesn’t work. What a great, great book.
Jay, in addition to your book, which obviously everybody is going to want to pre-order on Amazon and any other way you can get it, are there any other books you have your students read or anything that would suggest for startups that are looking for either great ideas on pitching, getting investors to pick them, since it’s such a percent that get invested?
I haven’t seen one as far on how to raise money. There’s books on pitching, like Pitch Anything. There’s books on how to make a lean startup or a tech startup. The Lean Startup has done very well. What really drove me to write Disrupt You! was the fact that I saw a lot of books written by journalists about what they think it should be. Then I saw a lot of books like the famous one by Jack Welch, one career, one moment in time, look how smart I am.
But I really didn’t see anybody that took the point of view of, let’s do a cross section of every industry and show how we all follow the same process, whether you’re Richard Branson, whether you’re starting LinkedIn, whether you’re starting YouTube, any of these business or restaurants or the many of the hundreds of examples, Silly Putty to Odor Eaters. I really wanted people to see not only how easy it is. Disruptions are not just about releasing value, but focusing on where to capture that value.
Shawn Fanning did a great job with Napster of disrupting the music industry, but Napster never captured any of the value that it unleashed. So, what’s the point? It’s really important to understand the complete value chain of a business and where those things go. I tried to bring this in the most accessible manner. If a moron, like me, can be successful over and over again, anybody can.
I hope this inspires the next generation. If I could be so bold, have those people reach out to me with their success stories. Because really, nothing fires me more than getting to hear from them. They can go to JaySamit.com or follow me at @JaySamit on Twitter.
Great, that was going to be my last question, is how can readers follow you and keep up with you or reach out to you. You just gave us that. Twitter and obviously you’re on LinkedIn and you have a website that has all kinds of things. Obviously, you are also an incredible speaker. You talk about that in your book, about that’s a big way to increase your own brand. You’ve spoken literally around the world. I love that story you have in your book about speaking in Mumbai and how that totally changes your world and your perspective on everything.
Jay, this has been so great. We really appreciate you sharing your wisdom, your insights. Disrupt You!, everybody, comes out July 7th. You’re going to want to pre-order it and you’re going to have so many valuable tweets in that book. You’re going to have a year’s worth of knowledge in one read. I highly recommend it.
John, if I could just give one last thing to your listeners. You did such a great job and I’m so flattered that you read the book and that you liked and you really did your homework, unlike most journalists who just phone it in. I have a trailer out on YouTube for the book. Here’s what I’m giving your listeners that haven’t told anybody. There is a secret buried in that video trailer that is a contest. The prize is a day with Jay. I will work and help you with your pitch, your deck, get your whole business up to going.
If you’re clever, you’ll figure it out. Just search for my name and Disrupt You! on YouTube and you’ll see the video trailer. I haven’t tipped anybody else off that it’s in there, so you guys have a head start.
Wow, a day with Jay. What a great prize. I can’t even put a dollar amount on that, it’s so huge. Thank you so much, that’s amazing. I’m sure everybody is going to YouTube right away and try to enter that contest.
Yeah, I’m sure you’ll put a link on your podcast.
Yes, we will definitely put that in transcription and also in the links and all that stuff. Thank you for that.
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