TSP013 | Jay Samit – Transcription

TSP014 | Nellie Akalp –Transcription
TSP012 | Brian Smith – Transcription

John Livesay:
Today’s guest on The Successful Pitch is the author of Disrupt You, Jay Samit. Jay has raised over $800 million dollars in startups over the decades and the foreword to his book was written by the founder of LinkedIn, so you can imagine how many people he knows and how many connections and insights he has on how to find an idea that disrupts things and solved a problem much like Uber did.

Jay says that businesses don’t sell products, they sell solutions and that all disruptions starts with introspection. He really has three elements to his book. Master your personal transformation, seize opportunity and how to thrive in an era of innovation. Jay’s big takeaway is have an idea that is like a zombie. It’s so great it can’t be killed and be sure to listen to the very end where he tells about a secret contest where you could literally win a day with Jay where he’ll help you with your pitch and valuable information. Enjoy the podcast.

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! And 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, so we are obviously extremely thrilled and honored to have him on the show today. Jay, welcome to the show.

Jay Samit:
Thanks for having me.

John:
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 multiple-screen TV services and teaching 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 sort of do this in your book 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?

Jay:
So, 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 know, you did what you were told. You got good grades in high school, got into good college, you got good grades in college and then bam, there’s no jobs. So, 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, and so I could morph and figure out what we did later and so my first company was called Jasmine Productions.

Jasmine, Jay Alan Samit and it was mine and from that humble beginning I happened to look at where were new industries happening, where could growth take place and probably the easiest message is when we look out today, all the changes in our world, I call this the era of endless innovation, there’s constant disruption. Well, disruption is either an obstacle or an opportunity, the choice is yours.

John:
I love that. Your book says, you know, you have to do three things, master personal transform, seize opportunity and thrive in this era of, as you said, endless innovation. I want to start with this whole concept 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, and 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?

Jay:
Sure, so, 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 believed this, when in fact you can actually do whatever you want and I’m always envious of those people that believe in reincarnation, I don’t know, so I figure I have one shot to get it right and I want to do as much as I can. So, 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.

John:
Correct, you also talk about in Disrupt You! The important of just taking five minutes and visualizing your success and how important a positive attitude is to being successful.

Jay:
Have you ever met or gotten a great idea from a negative person?

John:
Never.

Jay:
Never. So, if you can just start your day out of what’s great, okay, you woke up, you were 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. So, your life is just like any other journey. You have to put out a map, what I call, a disruptors map to really plan out. You don’t have to know all the steps. That’s where some people get lost in the process like, I really know that I want to direct Hollywood movies, you know, but I don’t know what to do. Well, most likely, staying in Indiana is not the place to start. So, get yourself there.

John:
I love how you say all disruption starts with introspection and that’s such a key connecting element to your book 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 from your book is, “Business don’t sell products, they sell solutions.” And 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 and so, 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?

Jay:
So, I’ve taken stakes in over 80 startups in my career and investors have made money almost all of those times.

John:
Wow.

Jay:
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, okay, just solve a problem and so what is unique and where you can succeed is you were the only person seeing the world from your point of view. You are experiencing every single day problems and arrogation. Every one of those is an opportunity, because if it’s bothering you, it’s obviously bothering others, and the bigger the opportunity, the – you’re one click away from billions of people now a days. So, becoming a global brand and solving a global problem is as easy as first identifying it.

So, just write them down. Write down three problems you have every day that you see in the world, okay. 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.

John:
That’s such valuable takeaway for our audience, Jay. Thank you. One of the quotes you have in the book is, “Problems are just businesses waiting for the right entrepreneur to unlock the value.” And 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 is with this concept you’ve come up with called the zombie idea. Can you tell us what you mean by that?

Jay:
Sure, everybody else tells you to nurture your idea, to grow your idea, to love your idea, and they’re wrong. The best thing you can do with your big idea is kill it! Okay, 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 and when you find that idea that can’t be killed, that’s a zombie idea. That’s the one you start spending money on.

John:
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 that 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.

So, we’ve talked about mastering your personal transformation. The second part of your book is all about seizing opportunities and you have one of the best stories I’ve ever heard of seizing an opportunity, which is happened, I’m sure, anybody who has been in the business world and made appointments to pitch people, which is oh, I’m sorry, there’s been a last minute cancellation, this person is no longer able to see you right now and in your story, the person was catching a limo on the way to LAX. Can you tell the listeners how you seized that opportunity?

Jay:
Sure. So, taking everybody back about 15 years ago when the music industry was being disrupted. Suddenly Napster comes out, everybody stealing music, the industry goes from a $40 billion industry to $20 billion dollar industry. Every group – record companies, losing their money, no body knows what the future is and 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 stand allow music company. This is the home of Frank Sinatra and The Beatles and Pink Floyd and etc, etc, and Ken Berry, who was early in his career, Richard Branson’s original partner and founding (#10:10?).

So, I have this meeting, I show up at Capital Records, go up to the top, the E floor of the Capital Records building and 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. So, I realize it’s LA, to get to the airport is 45 minutes with traffic. I said, “How about I just ride with you in the limo to the airport?” So, 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, and 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, and got hired right then, the second he landed.

John:
Had you not seized that opportunity and been bold enough and creative enough to say, hey, why don’t I read 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 is this amazing opportunity that came to you, which tells people when you have an idea that really is so great that people find you, which is you gotta call to come meet with President Clinton at the White House. Can you tell us about that opportunity?

Jay:
Yes, so, I was very successful in the early days of launching what became the PC and the internet and the way we see the world and one of the ways I wanted to get back is I had this vision we need to get computers into the schools. We need to get a computer to 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 it would appear in magazine and speak at conferences and one day I’m sitting in my little software company, you know, there was 20 of us, nobody knows who we are and I get a call from the President of the United States and 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 say how do we make this happen and you get all inspired. I mean, you’re sitting in the White House, you’re sitting with the President, Vice President, all these really important people and then they give you a 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 and the people that came out of this – one story, I don’t know if it’s in the book, but the fun out of this is we ended up wiring a Nations school one day, a school in California for the press, you know, so photo opt – back then before wifi, you literally had to wire so the President is wearing a hard hat and the Vice President and at the end of it, there’s photo opts with the White House photography and a month goes by and I get this beautiful signed photo to me that’s going to be framed to my wall forever, but 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, you know, it’s the kind of picture you want to show your mom. About ten years go back and people go, oh, you’re friends with Eric Schmidt. So, there was somebody else that volunteered who went on later to become the founding Chairman of Google.

John:
Yeah, that’s quite a very high group of people that you’re working with. So, that whole concept of figuring out away 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.

Jay:
Yeah, but the takeaway of the story is Eric Schmidt was a guy who just left Nobel. 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 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 crass, this isn’t about race, and when I look at, you know, 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.

John:
One of the things you talk about, you have a whole chapter devoted about capital, is a lot of entrepreneurs say, you know, I just need funding and then I’ll be successful and 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 and 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 brain storm something that allowed Sony music to piggy back on their money. Can you explain that whole strategy to our listeners or being creative like that?

Jay:
Sure. So, 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 or maybe young people, maybe women, whatever it is. There are some other brand out there that also wants to sell, 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.

So, in the case of Sony, we were launching a competitor to iTunes and that is a big task to do and I was trying to figure out who else had problems. It doesn’t matter what their problems were, but who else were in the headlines and the two, one of 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, you know, nearly dying by eating McDonald’s three times a day for 30 days.

So, make a long story short. I went to each of them and United 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. So, now you have McDonald’s spending millions of dollars to a great TV commercials, putting signs in every store, bags, and all that, and then United we did a concert t in the sky with Sheryl Crow, 30,000 people, filled the plane with press from Chicago to LA and got lead story on all the network news, all the news papers, everybody covered it, and you now have millions of customers coming to your store, opening week, and it didn’t cost you one little cent.

John:
And you were competing against Apple’s huge budget, so 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.

Jay:
And if I could just build on that. When you pitch, if I could give one piece of advice for your listeners to takeaway day. When you pitch it’s the same concept. When I was in my 20s and pitching big companies, I would go in and say, oh, 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.

John:
It’s really having a 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?

Jay:
Yeah, so, 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, who else is selling ketchup or Kodak versus Fuji kept on looking who sol how much film and who sells film at this new land and should we pay to sell our film there and da-da, ad not paying attention, oh, people aren’t using film any more, those are digital cameras.

So, 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, and so 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 and you’ll see this time and time again.

So, many of the millionaires, most of the millionaires that you think of that came out of these Silicon Valley area did so on businesses that were not profitable.

John:
Just to expand on that concept of coming up with something that necessarily isn’t hugely profitable out of the gate but still has extreme values for someone to want to buy, you also talk about, you know, there are times where you do want to get investors to give you money for a percentage of your company and 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 and, 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 and 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, so, I’d love to have your insights on that.

Jay:
So, the insights 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, right? You’re not going to do it alone, so 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 and in the beginning, your employees are going to have to come on that leap of faith in what’s going to give them that leap is that there 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, you know, the vast majority of startups won’t make it, so they’re taking a huge risk and so 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, but in the basic premise, you want as strong as a team as you can and one of the things that sometimes people forget, 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, and that’s an easy way and many of these people want to give back and just want to feel validated that they’re experience and expertise made a difference.

John:
When you talk about getting the right team and , you know, 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 your 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?”

Jay:
Yeah, so I don’t feel like I work. I mean, I put in more hours on a seven days a week. I don’t golf, I don’t sit around. I’m on a mission and when you feel like you’re on a mission, there’s nothing that’s going to stop you. There’s nothing more energizing and you sleep because our human carcass forces you 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.

John:
So, if you had to say what’s your mission was in a nutshell. I mean, you sort of gave us a little bit of it, it’s making a difference, encouraging other people to make a difference, right? Is that what gets you going?

Jay:
So, I truly believe the only thing that solves world problems are entrepreneurs and we’ve got a lot of problems and yet we don’t teach people how to be great entrepreneurs. So, I’m on the wrong side of 50 and I grew up with I Love Lucy, so Lucy would have a get rich quick scheme, it would fall apart, and then Ricky would forgive her and like 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 anything else and every great entrepreneur, Bill Gates and Paul Allen first company wasn’t Microsoft. The first company went out of business. Did they get shunned? No. The next business was Microsoft. So, you know, many people, Henry Ford had gone broke, Walt Disney. I mean, you have to understand that failure is part of the process and not stop, you know, you don’t want to just give up.

John:
Right. Well, that brings up the whole concept of pivoting that you talk about in your book. You say, you know, when you talked earlier today about ask your customers if they think it’s a good idea and why not, I mean, to get that data, you have this great tweet, “Data has no ego and makes an excellent co-pilot.” So, 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 and you tell this amazing story of what YouTube originally had as an idea and I don’t know that many people know that. Would you tell us that story?

Jay:
Sure, so 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 and that could be 20 years and 20 pounds ago. I mean, you don’t know what that person is really like. We’re going to make a dating site that has videos on it. So, they put up Tune In Hook Up as a video dating site and 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.

So, they got rid of the dating part, put up more videos, and within a year changed the name to YouTube and became billionaires. So, 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. So, 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 not only your competitors have, because they haven’t gone through that experience.

John:
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 and sometimes that means the only way that 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 on 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?

Jay:
So, I haven’t seen one as far on how to raise money. There’s books on pitching, Pitch Anything. There’s books on how to make a lean startup, tech startup, you know, The Lean Startup has done very well, but what really drove me to write this Disrupt You! Was the fact that I saw a lot of books written by journalists about what they think it should be and then I saw a lot of books about, like 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 hundreds of examples, silly putty to odor eaters and I really wanted people to see not only how easy it is, but disruptions are not just about releasing value, but focusing where to capture that value.

Shawn Fanning did a great job with Napster of disrupting the music industry, but Napster never captured any value that it unleashed. So, what’s the point? So, it’s really important to understand the complete value chain of a business and where those things go, so 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 and, if I can be so bold, have those people reach out to me with their success stories, because I really, nothing fires me more than getting to hear from them so they can go tohttp://jaysamit.com/ or follow me at @JaySamit on Twitter.

John:
Oh 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, so you just gave us that. Twitter and obviously you’re on LinkedIn and you have a website that has all kinds of things and obviously you are also an incredible speaker and you talk about that in your book about – that’s a big way to increase your own brand and you 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 that you’re going to have a year’s worth of knowledge in one read. I highly recommend it.

Jay:
And John, if I could just give one last thing to your listeners. You did such a great job and I’m so flattered you read the book and 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 and here’s what I’m giving your listeners that haven’t told anybody. There is secret buried in that video trailer that is a contest and 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, so if you’re clever, you’ll figure it out, and it’s just search for my name and Disrupt You! On YouTube and you’ll see the video trailer and I haven’t tipped anybody else off that it’s in there, so you guys have a head start.

John:
Wow! A day with Jay! What a great prize. That is – I can’t even put a dollar on that it’s so huge. Thank you so much, that’s amazing. Everybody, well, I’m sure everybody is going to YouTube right away and try to enter that contest.

Jay:
Yeah, I’m sure you’ll put a link on your podcast.

John:
Yes, we will definitely put that in transcription and also the links and all that stuff. So, thank you for that.

TSP014 | Nellie Akalp –Transcription
TSP012 | Brian Smith – Transcription
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