He grew then tanked a multiple 6 figure business before graduating NYU, ignored his parents’ advice and now…| Scott Gerber
Scott Gerber - tweet @scottgerber
He grew then tanked a multiple 6 figure business before graduating NYU, ignored his parents’ advice and now helps reduce youth unemployment via entrepreneurship
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Big Startup Mistake
"The big mistake we made is thinking too much about scale from day 1. Instead think about time invested to impact ratio."
Consequences of NOT Owning Your Failures
"When you say you're pivoting instead of your idea failed, that is when you don't own it. When you don't own who you are and the failures you have you are actually failing your self more than the failure itself."
Myth that Kills Entrepreneur’s Dreams
"If there's one big message that's not emphasized its the myth that entrepreneurship is this lifelong quest to learn. It's the lifelong quest to learn AND grow. If you don't do the first part then the second part is meaningless."
"I'm learning everyday. I'm grateful to have failed so spectacularly in my early 20s when I didn't have a wife, house, and kids. A big failure now would be much different. Now there will be many hopefully smaller failures that I can come back from faster. There are no more all in moments. That's what I learned. It's nuts to go 'all in all the time'."
"I've built a real business in a time where there is this notion that aqua hires, exits, raising money for the goal of selling and ‘It's not about making money it's about building traction' run rampant. I've never been a big proponent of raising money just to raise money or to try to substantiate some BS valuation that makes no sense. Raise money based on a core of this historical data means you'll get this ROI."
#1 path to profits
"I don't think if I had sold harder, partnered earlier, or not spent foolishly that any one of those particular things would have skyrocketed my career earlier. I am the product of hard knocks. That's something I'm proud of."
Why Listen to Scott:
- big startup mistake and the ratio that matters instead
- the consequences of not owning your failures… Failing yourself
- the big myth that kills entrepreneur’s dreams
- what to do instead of going ‘all in all the time’
- contrarian wisdom that built his business in this muddled world
Scott Gerber is the founder of the Young Entrepreneur Council, an invite-only organization comprised of the world’s most successful young entrepreneurs.
He practices what he preaches because he’s a serial entrepreneur, internationally syndicated columnist, and the host of Founders Forum on Inc.com.
He authored the book Never Get a “Real” Job.
Scott’s been featured in the New York Times, Wall Street Journal, Washington Post, Bloomberg, Fortune, TIME, CNN, MSNBC, CNBC, Reuters, BBC, NPR, Forbes, Entrepreneur, The Daily Beast, CBS News, US News & World Report, Fox News, Inc. and has been honored by NASDAQ and the White House.
He was mentoring people in Egypt as one of the first US delegates right after the Arab summer and Egyptian revolution. He was sent there to teach entrepreneurship on behalf of Hillary Clinton.
Scott was joined by multiple members of the Young Entrepreneurs Council as part of the delegation. They were there to teach some of the highest caliber young people in Egypt the ins and outs of entrepreneurship and provide mentorship as those Egyptian youths started out. He was featured on the cover of the New York Times when this happened in 2012.
He and Alexis O. Haney, founder of Reddit, were standing in Tucker Square just days after the millions of people have protested and requested a change in the Egyptian government.
He was at New York University but realized classes were’nt for him because he wanted to be an entrepreneur. He was a hustler. At around 20 years old, he started presenting himself to record companies and entertainment companies. They assumed he was as a near 30 year old who could produce as a freelancer. He did music videos, commercials and other media types.
People assumed he was much older than he was so he got to work on wide reaching projects with massive budgets.
He embodied the philosophy “Fake it till you make it".
Then greed set in.
He made a strategic move to bring the music in-house but that was not his company’s specialty. He turned a business that was producing hundreds of thousands of dollars per year in revenue into near bankruptcy the next year. This was about three weeks before his graduation from NYU.
His well-meaning mom had worked for the New York City school system teaching special ed students. She told him, “We've just spent $250,000 educating you. Now it's time to get a real job."
Scott didn't even know how to respond to that.
Instead, he took the last $700 to his name, leveled out his business, realized his mistakes and the grand fashion he made them in, turned his focus back to his core competencies, honed in on where he was wasting money, then soared from there.
At his low point, he decided if he ever made it back to huge levels of financial success, he didn't want young people to be where he was without any mentors. He wanted to give back. He started speaking at colleges and universities around the US, mostly on his own dime.
Many other young entrepreneurs heard what he was doing and started joining him on panels.
His 'ah ha' moment came when he got a phone call from the senior editor of the New York Times Sunday business section. The senior editor said, “We hear you're leading a movement to solve youth unemployment in America through entrepreneurship."
2009 and 2010 were terrible economic times with unemployment and underemployment running rampant especially among recent college graduates.
Scott answered “YES" right there even though he had no formal structure set up. They asked him what the name of it was and Scott told them it was Young Entrepreneurs Council.
It started out as a loosely connected group of entrepreneurs who believed in two basic things. One is do well. Two is do good. It's evolved into a much more highly organized group where members have access to high-level concierge and editorial services as well as mentoring, funding and much more.
They've got a little over 1,300 members out of 15,000 who applied. Current members vote and then vet potential new members. The democratic nature keeps the group strong. This maintains the credibility and authenticity of the community.
Members are doing billions of dollars in sales every year, with billions of dollars of funding behind them, and have hired tens of thousands of people contributing to the economy.
Some Shareables from Scott Gerber in this episode…
"Today with YEC we consider everything through the lens of the layered effect. How do we build something fantastic, spectacular and members love it? Then how do we slowly layer on the level of something cooler and then another layer. It's trying to never hurt the core business, credibility or core interaction with our members because we realize that's the key to what we've built at YEC."
Helping Type A Personalities
"I thought I had the world by the balls in my early 20s. I'm glad I was such a prick back then because I realize how schmuckish I was. Now thankfully, I've changed those ways. I'm able to help other Type A personalities change for the better because of this. They can avoid all the craziness swirling around my early business career."
#1 path to profits
"It sounds like a stupid cop out answer but I would have forced myself to fail again faster. I don't think anybody can say, 'I have all this knowledge now let me do it'. If I give advice to you it might be wholly accurate or a complete disaster because of your experience and where you're at in your life. The reason I am where I am today is because of the mistakes and successes that led to my core."
"If anything I'd have tried to fail faster. There were too many times when I held on for dear life thinking, ‘Oh we are just gonna weather this'. I kept throwing good money after bad money. Cut bait and run. Don't have pride and ego make decisions for you. Those are key things I would change. It's not a decision between fail or not. I think if there is no such thing as failure, there's no such thing as success.
True Entrepreneur's Mettle
"I don't think you can call yourself an entrepreneur if you think it's all rosy glasses and smooth sailing because you haven't been tested. You've been tested when American Express calls you and says, ‘Hey, you owe us this huge amount of money for this time period and we’re going to shut down your credit. By the way if we do that you're pretty much screwed for the next decade.' That is when you know you've been tested. It's not when you say, 'Oh I can just make this little adjustment and pivot’.”
"I don't know if it was a mistake more than the wrong action to take at the time. There are times when it's the right decision because your heart’s in the right place but not for business reasons. Anybody just looking out for the bottom line would say that's crazy and why are you doing that? You have to juggle that."
"There have been times where I've wanted to do a whole lot more for entrepreneurs outside our YEC members. We're thankfully now getting smarter about how to do that at the level of scale we are at. In the beginning we'd spend hours and hours of time on a single event where there might be 30 people and only two of our members would participate. It just wasn't scalable. We'd shift so much focus to this event that other things would fall by the wayside. It didn't have the impact to deserve the time investment."
"We've learned from our early attempts to give back to young entrepreneurs through mentorship. We now partner with the biggest players in the field. We act almost as the top agency because they've accumulated the quorum. Junior achievement is our latest partner and our members now go into classrooms all across the US."
"The big mistake we made is thinking too much about scale from day one. Instead think about time invested to impact ratio. It's not that we don't want to give back. It's that what we are doing is not good enough for the investment of time, energy and money. We should have learned that earlier in our career. It was the right intention. We've gone on to give back but at a scale that is much more compelling and provides much more value."
Trash the word 'pivot'
"What's the word I would love to burn forever? It's 'pivot'. Why can't we just say, ‘We messed up. It didn't work.' If you were a photo sharing app and now you're a crowd funding site you didn't pivot. Your first idea sucked, it failed, it didn't gain traction and now you're trying something else."
Big message not talked about enough
"If there's one big message that's not emphasized its the myth that entrepreneurship is this lifelong quest to learn. It's the lifelong quest to learn AND grow. If you don't do the first part then the second part is meaningless. Because if you're not consistently getting smarter and better, then you're not failing the right way. You are maybe failing hard and fast but you're not failing smart. A lot of this comes down to the semantics of owning the failure. Don't sugarcoat it. We did learn this new market was interesting for a specific reason. The original idea sucked. We feel this market is hot and this new idea can work."
Favorite part of the entrepreneur's journey
"It's a blessing every day what I do. When I look at friends and family, who are successful in their own way, I just don't think I could do it. I'd be unemployable. On the first day, I'd tell my boss he was wrong about something and get fired. The best part has been to spend time with my family...to be a father that's here. For example, last night I came home early from work because I wanted to take my daughter to her first book fair. You can live a complete life because there is no separation of work and life."
"You've probably heard this crazy talk around what Kim Kardashian did for paper magazine. I find the culture of finding other people important or special very weird. The first day I bought my house in Jersey, I went to the local pizzeria. This kid standing next to me asks, ‘Excuse me are you Scott Gerber'? I'm thinking maybe I know his brother but he knows me because of what I do for a living. I felt touched that I'm making an impact and YEC has motivated him to do something while still in high school. It was a very surreal experience to have this pseudo D-level fame moment. That happens more and more lately and it's still strange to me. I'm just like you not like some of my members who are multibillionaires. I am an entrepreneur in the trenches every day."
My celebrity book moment
"We were trying to find ways to make a splash with my book launch. Thankfully there was a lot of notoriety around the topic of youth unemployment at the time. People were looking for anything they could do. One of my business partners called to say he can get me on the red carpet of this event that night. It ends up being Snooki's 21st birthday party. She goes, ‘Oh that's a cool book' and holds it up in front of this banner where lots of pictures are taken. Snooki holding a book 'Never Get a Real Job' is funny in and of itself."
"I've built a real business in a time where there is this notion that aqua hires, exits, raising money for the goal of selling and ‘It's not about making money it's about building traction' run rampant. Building a real business is a counterintuitive thing for a millennial today. That kills me. Many of the companies featured on Tech crunch aren't thinking about making $1 million, they're thinking about raising $1 million. I've never been a big proponent of raising money just to raise money or to try to substantiate some BS valuation that makes no sense. Raise money based on a core of this historical data means you'll get this ROI."
"Where I'm at in the ecosystem right now, if you buy into this hype and nonsense I would have lots of optionality. I could go into a tech startup as the CEO. I could use my credibility and social capital to build a startup that just raised money. I'd rather know that every day I'm building another dollar into the bank account that's going to make the company stronger, be able to hire more people, be able to take care of more families, and know there is very little chance of a one swoop issue coming in from nowhere and taking us out."
"I've seen far too many startups with very smart people who build and build and build and then all of a sudden have to meet their valuation which they don't because it was already crazy. Or they're building, building and building and realize, ‘Oh crap. We need eight months to raise another round and we have only four months of runway left'. Now what?"
Conventional wisdom that hurts
"You have to write a business plan. Business plans are for companies that have traction. They're not for starting. The idea of ‘this document must be perfect before I can execute on this business’ is just nonsense to me. Most businesses can start with next to no dollars today. You're not going to get money or loans anyway."
"The idea that you need to be complex with bells and whistles and keep up with the Joneses is not my perspective. Young entrepreneurs make presentations to me all the time where they don't show me the one main way they can make money but 20 ways they might make money. Ask a cash flow entrepreneur, you've got to have one main way to make money."
Why we're not asking Jeeves
"If Google told the world it was going to do mapping, mobile apps and all these things we might be asking Jeeves many more questions. Google started because they had a core focus of making the world of search better. Then we are going to monetize that search in this way. Everything else is gravy or a copy and paste of the model."
Learn more about Scott:
If you want great mentorship and real insights from some of the smartest entrepreneurs in the world then Scott recommends you subscribe to the YEC blog at:
News Media Scott Gerber has been featured in:
- Inc. Magazine
- The Next Web
- Time Magazine
- Huffington Post
- Serious Startups
- Business Insider
- Search Engine Journal
- Fast Company
- Next Shark
- Bloomberg Businessweek
- Small Business Advocate
- Gabelli Connect
- Harvard Business Review
- Biz Journals
- Business News Daily
- The Atlantic
- Yahoo Small Business
- American Express Open Forum
- CBS News
- Venture Beat
- Fortune Magazine
- Success Magazine