Game. Set. Match. Business Lessons from the Court to the Company

Host: I appreciate everyone being here for the first speaker series of the semester, with many more to come. Appreciate you being here today. He’s come a few times, and we’re very excited to have him. Without further ado. David: Thank you. Yeah, I graduated here in ’09, so dating myself, but I actually played tennis here, not on the D1 team but on the club team. So, any tennis players here? No? Okay. Well, we got one. You dabble? How many people have actually played tennis once in their life? Okay. And how about pickleball? Ooh. Padel? Okay. All right, cool. So a lot of this will resonate with a lot of you, and a lot of it will also resonate with any sport that you play, whether or not it’s a racket sport. So to start off, I always like to ask this question. Every time I’m about to start a point in

any competitive tennis match, I always ask myself: are you going to serve, or are you going to serve and volley? And the reason I ask this is because I’m always trying to strategize before every single point and visualize myself winning that point. For those that play tennis, you know: okay, I’m going to serve to your forehand, then I’m going to hit it to your backhand, and then I’m going to drop-shot it and win the point. So I’m strategizing before every single point, and it’s very similar in business, where you’re strategizing before every sales call, every call with a customer, every email campaign you do. Everything you do is all about strategy and visualizing your success. So that’s a little bit about what we’re going to talk about here. A lot of the slides are blank, so don’t worry. For those that play sports, you know that it’s not just a matter of being good or having skill or practicing a lot. It’s also a lot about your mental game. In tennis especially, they say your biggest opponent is yourself. You’re always fighting against yourself and playing

against yourself. So when the going gets tough and you’re losing, you get in your head and you start playing worse. The mental game is as important as the physical game, and in business we like to call that EQ. How many people have ever heard of EQ here? Okay. Everyone’s heard of IQ, obviously, but that’s just intelligence in general. EQ is emotional intelligence. Now, with IQ, it’s generally said you can’t improve it. You’re born with your IQ, and they test you at a young age. EQ you can definitely improve, and that’s the good part about it, because you get better at controlling your emotions. Like in tennis and in any sport, you get better at controlling your emotions, and because it’s a mental game, you eventually get better and better at that and start winning more matches. In business, it’s all about controlling your emotions. Before you get into a sales call, maybe a customer will insult you on the call, maybe a competitor will speak badly about you, maybe an employee will do something

horrible to throw you off and upset you. But when you have strong emotional intelligence, it’s almost like you can see the world through the Matrix. You can see the big picture, you calm yourself down, you think logically, and then you start finding answers to every single problem. The best way I can explain it when you get to that level of EQ: how many people have seen the movie Limitless with Bradley Cooper? Okay, a few hands. For those that haven’t seen it, Bradley Cooper is a nobody in the beginning of the movie, and then he finds this pill called, I think, NZT. He takes this pill and it opens his eyes. He’s awake, he’s alive, he can think for the first time, and he can see the big picture. He has problems, he’s getting mugged, but he has 10 solutions. So no matter what situation he’s put in, he can see all the creative solutions. It’s the same exact thing in business. There are going to be so many challenges when you’re starting your own business, so many fires you’re going to be putting out, roller coaster rides, ups and downs. But when you have a strong

EQ, you are able to take a deep breath and think about all the different solutions to the problem that you’re having. So we’ll get more into that a little bit. Now, there is a very funny story in tennis about Boris Becker versus Andre Agassi. Anyone know Andre Agassi? A few hands. Okay. He was number one in the world maybe 20 years ago, and he would always beat one of his biggest opponents, Boris Becker. Now, Boris hired a new coach, who was Andre Agassi’s previous coach, and he said, “I’ve lost the last eight matches in a row against Andre Agassi. How do I beat him?” He put his coach in a really hard position, because his coach said, “Look, he was my previous student. You can’t beat him based on skill, but you can beat him in the mental game. If you break Andre mentally, he will fall apart and you will win the match.” So how do you break Andre mentally? At the time, he was dating Brooke Shields, a supermodel, and the coach said, “She’s going to be in the stands, in his box. If you’re losing the match, I

want you to look at her and start flirting with her during the match: blowing kisses to her, winking at her, waving at her.” So that’s exactly what he did. He was actually down, I think, a set or two. He started doing that, Andre lost his mind, it broke him mentally, the whole game turned around, and Becker ended up winning. So in that situation, Boris found his opponent’s weakness and he exploited it. It’s very similar in business, where you are going to find your competitors’ weaknesses and you’re going to exploit them. Now, when I say exploit, I don’t want you to think of that in the bad sense of the word. When you’re talking to a potential customer or lead and they’re comparing you to your competitors, you could say, “Oh, the competitor’s horrible. They’re slow, their software crashes, they have a lot of bugs,” or whatever the problem is. You could talk badly about your competitors, but you don’t want to do that. You want to always take the high road. The way to exploit it, though, is to realize: what are they not good at,

and how do I turn that into my winning advantage? So in our example, a lot of our competitors are slow, they’re hard to use, they’re outdated, they don’t have good customer support, it takes four hours to speak to someone on the phone. We know all these things, and we said, okay, we’re going to take those weaknesses and make them into our advantage. So what do we say? We don’t say our competitors suck. We say, “We have instant live chat support. Within five minutes, you can get a demo, same day. We’re fast, we’re easy to use.” So when we’re talking to customers and they bring up competitors, we say, “I’m so happy you brought them up. In fact, I want you to please go and sign up for our competitors. Please get a trial and a demo of them,” because we know that they’re not going to be as easy as us. “And I want you to tell us which one’s easier to use, has better support and answers the phone faster.” We’re so confident that they say, “Okay, okay, we trust you. We’re going to go with you.” So that’s how you exploit your competitor’s weakness. I’m

stuck here. And by the way, if you have any questions throughout, just stop me and I’ll take them. There was an agency called TalentSmart that did a big study of the most successful people in thousands of companies, and what they found was that EQ was a higher predictor of success than IQ. In fact, they said that 90% of their top performers had a high EQ, and they earned an average of $29,000 more than someone with an average EQ. So you’re saying, “That’s great, but how do I get better EQ? How do I get better at it?” There are books, obviously. You can go online and research and learn more about it. But it’s really just learning on the job and in life. When these stressful situations happen, think to yourself: How do you react? How could you have reacted better? And what do you do? Eventually, you’ll get to a point where you go into problem-solving mode instead of freaking-

out mode, or fight-or-flight, where you’re amygdala-hijacked and you’re just going crazy. You need to calm yourself down, take deep breaths and figure out what to do. Yeah, question? Audience: How is EQ measured? David: I have no idea, and I don’t know if anyone knows, honestly. How do they measure it? I’m not sure. Maybe they put people in stressful situations and see how they react, or maybe they ask their managers, “Hey, who’s the person that keeps their cool during times of crisis?” But you do get better at it the more you practice and, unfortunately, the more stressful situations you have in life. Great question. Now, the next really big, important thing when you’re playing sports. A lot of you that play sports probably have the competitive drive, right? You’re competitive, you want to win, you go to tournaments and you always strive to win. What was interesting to me was that when we were selling our last company, the VCs had a sort of scorecard, and they shared it with us. They said, “This is what we look for in founders, and this is also what we look

for when we hire our own internal employees in our company. We look to see if they’re athletes.” I said, “That’s weird. Why?” They said, “Because athletes are competitive. Athletes have a willingness to win. If they want to win so badly in sports, that usually translates over into the business world, with them winning in business also.” Now, in tennis and any sport, every single point is a battle, every match is a battle, and in business, every day is a battle. I am battling my competitors every single day, and it really is a battle to see who will win and get the ultimate prize, which is being number one in the world in whatever you do. Okay. The second thing the VCs said was, “We especially like team captains,” and almost everyone on their team was a team captain of some sport. Why? Because captains are leaders. Captains know how to lead their team, motivate their team, strive for success, reach new goals and hit their goals. So it’s the same thing in business as it is in

sports. There are a lot of correlations. Now, as a captain, when you’re playing a team sport and your team is down, you have to rally the troops. It’s the same exact thing in business. When you’re having a weak sales quarter or a weak sales month, you have to rally the troops. You have to find a way as a leader to really motivate your whole company, set the vision, set the strategy, and then show everyone that you can lead and that we’re going to hit it. That’s what makes a really good leader, from what I’ve seen. And speaking about strategy, for those that play tennis, you know that every time you switch sets, let’s say you have to win two sets or three sets, and you lose the first set, what do you do? You take a break. You have to sit down for about 90 seconds, a minute and a half, to chill, drink water, have a snack. And in those 90 seconds, what are you doing? You are strategizing. You are thinking: what can I do to win the next set? What can I do to win the match? And it’s the

same thing in business. Every day you’re trying to find new strategies, execute your strategies, change and pivot your strategies to succeed. The one thing I see a lot of people make mistakes on when starting their business: number one, they make a business plan, which is great, and I’m sure a lot of you have done that before. Always make a business plan before you start your business. But then they start working on that business plan, and they’re so focused on it that they’re just heads down, and they forget to look up and see the big picture again and change their plan. Because things change. The environment is changing, AI is changing every day, the economy, everything’s changing. So you have to continually change your strategy and your business plan as the world evolves, as your business changes and as your competitors change. You’re always changing. So don’t forget to always look at the big picture and change your strategy. Now, we had to do this in our last company, and it’s called a pivot. You can have a small pivot

or a big pivot. Jeff Bezos from Amazon talks about this. He says there are two types of decisions you make in your business every day: a Type A decision and a Type B decision. Type A is easy and reversible; you can change course. But the most important part is that you need to be making decisions every day. You never want to get stuck in what’s called analysis paralysis, where you have a big problem to solve and you just think about it forever but you never actually take action. The most important part as a founder and CEO is to take action and make decisions. Now, Type A decisions are ones you can make fast. You can change them, you can reverse course. It’s okay if we mess up, as long as we’re making decisions and moving forward. Type B, however, are big decisions that are much harder to reverse. Maybe you’re going to change the whole pricing model or the whole website, or you’re going to go into a new market. It’s going to take three months, and if you mess up and it was the wrong decision, it might kill you. It might be the end of your company, right? So

you want to recognize what’s a Type A and what’s a Type B decision, and obviously act and plan accordingly. Now, I’m actually going to give you two recommendations for two books that I highly recommend on working as a team. This is the first one. Has anyone ever read this book? It’s a funny title. Great book, and I have some copies here. It teaches you how to work better with people in your company: partners, co-founders, employees, customers. One of my favorite books. And there’s another one that talks about the six types of working genius, and it pretty much categorizes everyone into six different types: people that are thinkers, people that are doers, et cetera. The other book categorizes people into four colors. So I’m a yellow and a blue, as an example, but if you read it, you’ll understand. Who knows where this quote is from? Yep. Insanity. Good. All right, first tennis ball. I hope I don’t hit anyone. I’m

gonna... should I throw it or bounce it? Okay, I’ll throw it. Oh, good catch. So if you get a ball, you come up and grab a book or something at the end. So insanity is doing the same thing over and over again and expecting different results. The reason I put this up here is because I see young new entrepreneurs making the same mistakes over and over and over again, and I’m here to warn you about the top three or five mistakes that I see everyone always making. Number one: they start their business and they get all excited. They have no clients, they’re not making any money. “David, okay, I’m going to patent my business. I’m going to trademark it. I’m going to get shirts, I’m going to get hats, I’m going to get notepads and pens. I’m going to spend $5,000 on attorneys,” and I’m like, why? Who’s suing you? No one even knows you exist yet. Why are you doing all this? The number one thing you need to focus on in the very beginning is just getting your first client. That’s it. Nothing else really matters. Just get your first

client. That’s what I tell everyone. Number two: they think that in order to launch their business, they have to build and build for three years, be in stealth mode, do all this work and then have a big grand launch. They do all that, and then nothing happens the next day. And I say, “Yeah, because no one knows about your company. No one.” So what I tell everyone is: whatever business idea you have in your head right now, think of the MVP version of that, which means the minimum viable product version, that you could release tomorrow. Tomorrow. Let me see if I can give you an example. In the last UStart, someone wanted to start a travel concierge business: you tell us where you want to go in the world, and we will plan your itinerary for you. “And we need to raise $2 million and build this app and do this thing.” And I was like, “How do you know people even want this, or that they need it, or that they’re going to pay you for it? Why don’t you just put a Google form up

tomorrow, find a few people that need your service, have them fill out your Google form, and then just manually deliver the service? See if it works, beta test it, improve it and see if people are willing to pay you for it.” Almost every business idea could be started with a Google form. Almost. I’m convinced. So before you do anything and go crazy and spend a lot of money, a lot of time, a lot of years and effort, see: is there a way that you could launch your business in 24 hours? Most of the time there is. You just want to test the concept and see if people are actually excited or interested and will pay you for it, even though it’s not flashy or fancy yet. And this is probably my favorite book of all time from when I started my company. It’s called The Lean Startup, by Eric Ries, which teaches you all these things. Just launch. It’s not going to be pretty. Just get out there, get beta customers and start testing it. Now, in my last company, we originally followed this book to the tee. We launched, and we were doing

horribly. We didn’t have a niche market for the product, and people weren’t signing up. So we ended up having to make a huge decision and pivot. We switched our whole software to be for lawyers, and right away it clicked. We just got lucky, but it was a big decision we had to make, and it took six months to make that decision. So pivots are very important, and you’re going to be doing them over and over again. The next thing I want to show you is probably the number one thing I learned in my last company. In the last company, I was the founder and CEO, but I also had a partner. And it makes you feel good, especially your ego, that you’re the most important person in the company. You’re the CEO, the big shot. Everyone has to come to you for everything. Nothing can get by you, everything has to be signed by you, you hold all the power. And I had a consultant shadow me for the day, and I was like, “Wow, you see? Look how much I’m doing. Look how much I’m in charge.” And he was laughing at me. He said, “You idiot, you’re doing everything wrong.” I’m like, “What do you mean?” He’s like, “You’re holding all the keys. You’re holding all the power. You’re trying to make every decision here. You can’t do that. You’re trying to be

the most important person in this company. You need to be the least important person in this company.” I was like, “What do you mean? Why?” He’s like, “How could you ever grow this company if you’re in charge of everything? You’re not delegating to anyone. No one’s ever learning. You’re holding all the power. What happens if you want to take a vacation for a month?” I said, “I can’t.” He’s like, “Exactly. What happens if you want to sell your company? You can’t, because you are the company. The VCs will never let you leave. They’re going to hold you hostage for three years.” So that was a big slap in the face and a big learning moment, and he was absolutely right. What I decided to do after that moment was be the least important person in my own company. And how did I do that? By delegating as much as I could to people and outsourcing as much as I could. Now, the thing about delegating as a founder is you always think you can do everything best. No one’s going to do a better job than me. And it is true in many senses. However, there are times when you will find those few employees that are so good they do a better job than you. And those are the people

you need to keep by you and delegate everything to. Now, what I ended up doing was building processes and procedures for every single thing we did in our company, because, God forbid, if something happened to me, someone would know what I’m doing and be able to take over. So the two lessons I can teach you are: number one, build processes so anyone can do what you do. And number two, and this is a big one: when you hire your first employee, you’re going to be excited and you’re going to want to train them on everything. I’m telling you not to train them. What I’m telling you to do instead is to make videos. Loom videos, any video. Make a training manual of how they should learn whatever they’re supposed to do. Why? You’re going to train them, then you’re going to hire a second employee and have to train them again, and then again and again, over and over, and it’s very time-consuming. And what happens when that employee leaves? You just spent four months training them, and now you have to do it all over again, and it’s going to kill you. So don’t make the mistakes that I did. Now, any time a new

employee comes into our company, they have a whole Notion board or a Trello checklist: here you go, here are all the videos, documentation, processes. We still do some manual, hands-on, one-on-one training, for sure, but 80% of it is fully automated video recordings, for the whole company. So that’s probably the biggest thing that I did. Now, motivation. As a leader, you’re constantly trying, especially in doubles. Doubles means it’s you and another person on your team against two other people. And as everyone who plays a team sport knows, if you have a partner on your team and they are not motivated to win, or they’re putting themselves down, you need to pick them up, and vice versa. If you’re getting down on yourself, they need to pick you up. Same exact thing at work. There are always people going through ups and downs in life, and you always have to pick them up and motivate your team, especially when things aren’t good: they didn’t close a deal, they lost a customer. It’s all about motivation

and leading your team. We’re going to get into this soon, but I’ll tell you the story now. Recognition. There are different types of motivation. There’s extrinsic and there’s intrinsic. Anyone know the difference? Yeah? Audience: Intrinsic is when you think things happen because of you, and extrinsic is outside of your control. So if you do badly on a test, intrinsically it’s like, “I didn’t study,” and extrinsically it’s like, “The teacher just made a hard test.” David: Yep, good. I’ll give you a ball for that. Bounce it. And how about when it applies to motivation? Anyone else? Yeah? Audience: [Partly inaudible] When you’re motivated by the things around you, because you need something

from someone else, versus working because you believe in the company. David: Yep, awesome. Get a ball too. Be careful. All right, thank you. So yes: with extrinsic, you’re motivated because you’re driven by external factors, and I’ll show you a few examples. With intrinsic, you’re driven by internal factors. Some examples of extrinsic: praise and recognition. Now, the next one, obviously, is money, and we’ll talk about that in a second. But not everyone is motivated by money. Some people want to be in a job they’re happy with, they love, where they feel valued, which is super important, and where they get praise and recognition. I’ll give you an example. Just today, we did a webinar for the first time, a brand-new

webinar, with someone that had never done a webinar before in our company, and he blew it out of the park. He impressed me so much. I was so shocked, and after, I was like, “Oh my gosh, you’re amazing. I can’t believe how well you did. How are you such a natural? You did this, you did that. You did everything right. You looked at the camera, you talked to the audience. You’re amazing.” And he was so happy. Not only that, I went a step further. We have Slack, and I messaged his managers and him together, and I said, “Guys, you’re not going to believe what this guy did. He killed it. He’s amazing. He needs to do all our webinars going forward. He did such a good job.” And by the way, all this is genuine. I’m not just doing this to inflate his ego. I really meant it. He really did a good job, but I went out of my way to give him some praise and recognition because he deserved it. How do you think that made him feel? He’s going to go home tonight and talk to maybe his girlfriend or his family or his sister, whoever, and say, “Wow, work is going great. I did this new webinar tonight, and my boss gave me a lot of praise. Everything’s amazing. I’m on cloud nine.” Praise and recognition, for a lot of people, is a big

extrinsic motivation. Money, obviously. Oh, it hasn’t come up on the screen yet. Why not? What’s going on here? Money. Yes, money. My clicker is not working. So obviously people are motivated by money. Any time I ask founders why they’re starting their company, why are you doing it, to change the world or for this, a lot of them, sometimes embarrassingly, say money. I say that’s not embarrassing. Everyone’s motivated by money. There’s no wrong reason to start your company. You can start your company because you want to make a lot of money. That’s perfectly fine, and that works very well. But when you’re starting your company and you don’t have a lot of money to pay employees, you can’t keep motivating them with more money, because you don’t have more money to pay them. So you have to use other motivating factors besides money to keep encouraging and motivating them. And vice versa: there are some people where companies are just throwing money at them, “Just stay with us, please,” and no matter how much money they

throw at them, they still want to leave, because they’re not happy. They don’t have everything else filled out. My wife is an example. She got a killer job as an attorney, and she made a lot of money, more than she ever made in her career. A week later, she quit. I said, “What are you doing?” “I’m not happy. I don’t like the company. I don’t care how much money they’re paying me. I’m not happy.” So it’s not only about money. Number three, you also have promotions. People always want to move up in life, like you said. Now, we made a big mistake early on in our last company. Because you’re so new, you hire the first employee, second employee, third employee, and because there are so few people, everyone is a chief: chief technology officer, chief product officer, chief marketing officer, CMO, COO. Everyone’s a chief, and everyone else is a director or a manager, even though they have zero experience and they’re straight out of school, whatever. And the problem happens when the company starts growing and you actually need to hire C-level executives. You’re stuck, because you

already have all these C-level titles, and all of a sudden you need to demote someone so you can bring someone else in. And that demotivates someone. Now, the second mistake: giving people crazy titles in the beginning makes them feel good. “I’m the CMO, chief marketing officer.” But then they’ll come to you in a few months and say, “David, you’re paying me 60 grand a year, but CMOs in Miami make 300 grand a year,” because that’s their title. But those are CMOs with 15 years of experience, not six months of experience. So be careful with that also. And the next thing I want to tell you about promotions is that it’s always good to start employees off at lower titles, because they can move up. So now, when we hire someone to do blog posts for us, they are a junior content marketer, and after six

months or a year, a senior content marketer, and then eventually director of content marketing, then director of marketing, then VP of marketing, and then CMO one day. They have a growth trajectory, and you keep giving them promotions along the way. But if you start them off as CMO, they can’t grow anywhere unless they become CEO, which won’t happen. And then you have intrinsic: internal factors. Learning: they want to learn and grow with the company. That’s very important. Exploring, meeting new people, networking, learning more about the business and the industry, and mastering a skill. So completely different from extrinsic. This was actually something that kept me around at my first job, and I’m happy it did. My dad always told me, “Okay, they’re not willing to pay you more money. They can’t afford more money, and that’s okay. Are you learning? That’s all that matters.” In most cases, in the beginning, especially for your first one or two jobs: learn, grow, build your experience

and portfolio and resume. I learned more in four years working as an employee at my first startup than in any education I ever got in my life. In just four months, I learned more than in any school, ever, because you’re learning on the job. You’re in the right place at the right time at the right company, and you learn everything. So learning is super important to me, more important than money in the beginning. Learning and growing. Now, we spoke about motivation, but I want to flip it. What happens when your partner, your co-founder or your employee makes a huge mistake? You’re playing doubles, and your partner’s playing horribly, and he curses at the umpire, and you lose a game, and he breaks his racket. What do you do? I’ll tell you a story. In my last company, we were at a trade show, the biggest trade show of the year: the Legal Tech show in Chicago. We

plan for months for this show. We’d been going four years in a row. We spent $10,000 on a brand-new booth. We spent probably $25,000-plus on the show in general, flying 12 people out, hotels, everything. The show starts on a Tuesday. We arrive Monday at 3:00 p.m. to start setting up our booth. And there’s a girl who’s new, she’d been with us for a few months, and she was in charge of the show. She shipped everything to the show. So we’re sitting there and we say, “Okay, go get the equipment.” You ship everything to a shipping holding center, then you go pick it up and set up your booth. Thirty minutes go by, she’s not coming back. An hour goes by. She finally comes back, and she’s pale as a ghost, white. I was like, “Oh my gosh, what happened? Is everything okay?” It looked like someone died. And she said, “The booth’s not here.” I said, “What do you mean the booth’s not here? It’s the biggest trade show of the year. What do you mean?” “It never arrived. They never got it.” I said, “Well, did you call to confirm they received it?” “No, I assumed they got it.” “Did you check the tracking number?” “Nope, I

assumed it was delivered.” Okay. Can you imagine? The show is starting in something like 14 hours, with no trade show booth, and we have a huge 20-by-10 booth we paid a lot of money for. What do you do? In that situation, you have to figure out two things: what are you going to do to make this show a success, and what do you do with this employee? So, anyone want to throw out some ideas? What do you do? Audience: [Partly inaudible] David: 100%. Yep. Audience: Don’t fire her. David: Funny you said that. Why did you say that? Audience: Because she made what, a $10,000 mistake? So that’s $10,000 you [inaudible]. David: 1,000%. Huge answer. Huge. That’s actually my next slide. There you go. That was great. Anyone else? Someone had a hand up.

Okay, exactly. We did everything all of you said. At that moment, of course, I wanted to freak out and scream, but everyone’s looking at me, right? I had five employees around me like, “Holy... David’s going to kill someone.” And of course, in that moment, I wanted to kill someone. I wanted to go crazy and let it all out. But you have to keep your cool. You’re a leader. Don’t forget you’re a leader. You’ve got to motivate the team. You have a show in 14 hours. And plus, I needed her. I needed her help, so I couldn’t yell at her, scream at her or fire her right then and there. But the first thing you said was 100% correct. I took responsibility, because I should have followed up. I should have checked in on the booth. I should have checked the tracking number. She didn’t know how to do any of these things. I’ve been to shows many times. It was my fault, ultimately. The buck stops with you. So because of the lessons and the EQ that I’ve learned over the years, you go into problem-solving mode. You go to IKEA, start buying furniture. You go over here, rent furniture. Then we called the employees that were flying in the next morning: bring everything, all the old trade show booths, bring it all. So we

managed to have a decent booth at the end of the day. It still wasn’t the best, but we actually managed to do it. So what you said was spot-on. I did not fire her, and I also did not yell at her, because there’s no need to yell at someone like that. They know they messed up. She will never forget that day for the rest of her life, I can guarantee it, and she will never make that mistake ever again in her life. But if I fired her and hired someone else, they wouldn’t have learned from the mistake, and they probably would have made it again. And then, solving for the future: now, before every trade show, there’s a whole checklist and process, tracking numbers, blah, blah, blah. And then, to make matters worse, to top it off: we finish the show, we get back home, and I say, “Okay, what happened happened. Let’s move forward. At least let’s claim insurance with UPS, and we’ll get $10,000 and buy a new booth, a better booth.” And she goes, “I didn’t get insurance.” I said, “Great.” So this is a daily thing in business, though,

right? These things are going to happen over and over again. You just have to learn how to handle it. So I have a picture here of what our booth should have looked like, what it looks like every year, and the year after. And instead of this, we were that. It still hurts me to see this picture. But we went to IKEA, bought some stuff and made the best of it. People came to us, “What happened?” We told them the story and made a joke out of it, and fine, we survived. But you learn from your mistakes. Now, obviously, if you have a partner, co-founder or employee making mistakes all the time, it’s the wrong person for the role. Find someone else, obviously. So we are going to do a little workshop quickly, for two minutes, similar to that scenario. You’re going to partner up in pairs of two, all the way around. Here’s the scenario: an employee of yours emailed your entire customer base a 50% off coupon by accident. Customers are calling: “Wow, thank you, amazing, I could use the

money. How do I claim it?” And you’re freaking out, because on one hand, if you honor this coupon, maybe you’ll go out of business. You just lost half your revenue. On the other hand, if you don’t honor it, you’ll have some upset customers, and maybe you’ll have some cancellations. So what I want you to do is, by yourself, for two minutes, before talking to your partner, on your phone or whatever, write down what you would tell this employee who messed up so badly, and also how you would handle the situation as a company. After two minutes, I’ll tell you to stop, and then each one of you will talk to your partner: this is what I would tell you. Pretend they’re the employee, and then you’ll switch roles. All right, go ahead, two minutes. So pairs of two all the way around, and then you two over there, and then the next two, and the next two.

Okay, another minute. One more minute.

Everyone ready? All right. So now, one person, go to your partner and pretend they’re the employee. How would you talk to them? What would you say? And then, what would you do as a company? You can join their group right here.

Twenty seconds left. Wrap it up. All right, very good. Who wants to give an example of what they would do in their response? Yeah, go ahead. Audience: I said I would tell the employee who sent that email to immediately reply to it and say it only applies to the first 50 or 100 customers. So if they come back saying, “Oh, I have the coupon,” we’ll just forward them the new email that we sent out, which said, “Hurry up, it only applies to the first 100

people.” David: Okay, good. That’s definitely one solution. What would you do with the employee? Audience: I would keep them. [Partly inaudible] David: No way they’d send out another 50% off coupon. Yep, go ahead. Audience: I would put an expiration on it for those customers, instead of having it put the company in debt. I guess it depends, too, on whether it’s software or inventory or whatever. But I would ask the employee where they came up with that 50% number. What made you think 50%? David: Good. So, questions: what happened, why did you do it? Exactly. Yeah, go ahead. Audience: Same, depending obviously on what you’re selling. But maybe you could make it apply to the purchase of a membership or something, and make it expire, where you still get to retain some of that revenue and also try to engage customers in a new way. David: Awesome. And then the employee obviously wouldn’t make that mistake again. Exactly. Okay, so also, great: add an

approval process. Add more steps afterwards. Yes. No email will ever get sent out in the future until you approve it. 100%. Go ahead. Audience: We talked about the employee, but from the perspective of a consumer, if a company were to send out 50% off everything, that huge customer base would probably go shop at that specific place. [Partly inaudible] David: And by the way, some companies do this as a strategy, like,

“Oops, we gave you too big a discount, but we’re going to honor it,” but they do it on purpose. So that’s also interesting. And what amazes me is that so many people never check their work. They’ll publish something on a new website, a new page, a new email, and they never actually preview it or run it by anyone to find the mistake. So always double-check your work. It’s a simple thing. Someone had a hand up here? Yeah. Audience: What I would do is, depending on the size of the loss, [partly inaudible]. David: Yep, yep, yep. So everyone has a lot of ideas here, which is great. And what I encourage you to do in your own businesses one day is brainstorm. It’s not just you in the business. There are other people in the company, other partners, managers and employees that have really good ideas. Use them. And I think the most surprising thing to me in business is that sometimes an employee will

just get into a role by accident, they’ll get promoted or whatever, and all of a sudden they’re amazing overnight. You’re like, “Where were you the last three years?” “You never asked me for my opinion. You never valued me. You never took me seriously.” You have talented people in these organizations. Just ask them for their opinion. You, up here? Yeah. Audience: I’d say, “Okay, this is what happened. We’re going to be honest. Thank you for understanding. Here’s maybe 10% off,” depending on the margin. David: Very nice. Good. Yeah? Audience: I would turn it into something fun. The hot topic now is building in public, so I’d put him on the spot. You email and say, “Hey, this guy screwed up, but he’s working hard to find a solution.” David: I love it. I love it. There’s no right or wrong thing to do, and that’s the sort of thing you’re going to have to come up with on the fly, though. People are emailing you, their phones are ringing. It’s

fight or flight, and you just have to get into your zone. Solutions. Everyone come together, emergency meeting, figure it out. There have been so many times when we had these emergencies at midnight. One time at our current company, when we were brand new, a month old, we started charging people extra rent, and it was insane. I had to wake up the main founder and CEO of the company, and his phone was off, on Do Not Disturb. I sent an Uber to his house to ring his doorbell to wake him up. That didn’t work. I called the Alexa devices he had in his home, and that finally woke him up. You’re just trying to get so creative to solve problems in emergencies. There are so many fires you’re always putting out. Anyone else? Anyone else want to share? Okay, that was good. Awesome, that was great. So I’ll skip around. This is actually cool. I don’t know if I can show you this, if it will pop up here, but we’re getting towards the end here.

Visualization and goal setting. Like I said at the beginning of the class, before every point I’m visualizing my shot. I know exactly where I’m going to go, I know how I’m going to win the point, and I’m visualizing myself winning the match and winning the tournament. Tony Robbins, everyone know Tony Robbins? Business guru, coach. He always says that every morning you need to visualize your dream state. You have a vision board: What is your dream house? What is your dream health? What is your dream money in your bank account? What is your dream job? Everything you want, visualize it. Print it out or make a vision board, and look at it. You’ve got to look at it and visualize it so you manifest it every single day. Now, one of the most famous actors in the world, Jim Carrey, visualized. I don’t know if anyone knows the story. Before he was a big actor, he was broke, totally broke, and he visualized his success. I want to show you this clip, and I’m not sure if it’ll work, but let’s see. What screen is it on? Let’s see. I don’t know if you’re going to hear it,

so I’ll try to make it loud on my laptop. Jim Carrey (clip): I’m a huge visualizer and a manifester. I literally spent every night of my life for about four years on Mulholland Drive, after I did the comedy clubs, manifesting my life. I made a check to myself for $10 million for acting services rendered, paid to the order of Jim Carrey, postdated Thanksgiving 1995, and stuck it in my wallet. And six months before that due date came due, I was making $10 million for a movie. I gave my dad that check. David: That movie was Dumb and Dumber, by the way. So he wrote himself a check, postdated it and said, “By this date, I’m going to make $10 million,” and he did. I’m going to show you this in a second here. I got this idea from someone, and I started doing it many, many years ago. I saw someone who had this exact same thing: a Post-it note on their mirror that said

$10,000. I said, “What is that?” He said, “That’s how much money I want to have in my bank account.” I said, “Wow.” He said, “Yeah, I look at it every single day.” So I copied it. I put 10,000 on my computer monitor, 10,000 above my bed, where I’d see it when I woke up and went to sleep, 10,000 on the mirror where I brushed my teeth. I was seeing this number everywhere, and every single decision I made with money was all about how much I could save to get to this amount. Every day I ate lunch: dollar pizza. I made my own food. My friends went out clubbing and partying; I drank before, I didn’t drink out. When I went out, I didn’t pay a cover. I didn’t want to do anything. I think I even had a little pocket flask, just to save money and not pay for anything. And eventually I hit the goal, and when you hit the goal, you up the goal. Now you put $20,000 on a Post-it, then $50,000. So whatever your goal is, you want to have it written somewhere, and also with a deadline date. I want to make $10,000 by this date. I want to get my first customer by the end of this month. So a goal and an

actual deadline date. Those are probably the two most important things you can do. And I’m going to keep repeating this: when you start your company, the only goal you should have is getting your first customer. Nothing else really matters, and figuring out how you’re going to get that customer. All right, so this is something that I did in my 20s, and I’m really happy I did. I killed myself in my 20s. I worked a lot, nonstop, seven days a week, multiple businesses. I always told myself, “I’m going to work my ass off in my 20s so I won’t have to in my 30s, and I won’t have to when I get married, I won’t have to when I have kids. I’m going to do it now.” And I don’t regret ever doing that. There’s probably one thing I would change, which is work-life balance, a little bit. It’s okay to work until midnight every night because you love it, you’re passionate, it’s amazing, that’s your life. That’s okay. You don’t have to have such a balance. You’re all in on your business, and that’s okay. But what I did wrong was I let my health slip. I started eating bad food and not being healthy, not

playing tennis anymore. As soon as I graduated college, no tennis for 10 years. Horrible. I lost everything. When you’re working out and you’re athletic and you’re playing sports, your mind is working better. You’re getting more ideas, you’re thinking more clearly. So that’s probably the one mistake I made. But this quote really carried me throughout my 20s. In sports, you have to show up 110% every single day. You need to put in the work to succeed. It’s the same exact thing in business: get to the office first, leave the latest, work long hours. It’s the exact same thing. Now, there’s another quote that I love, and I’ll let you read it on the screen first. Go ahead. Okay, so this is so true. So many people want the end result but aren’t willing to put in the work. They want to be successful, they want to be a millionaire, they want to be financially independent, but they’re not willing to put in the work. If you want to be number one in the

world in any sport, or number one on your team, you need to put in the work. You need to show up early, leave late, sweat, do the work. Same thing in business. No one is an overnight success. That doesn’t exist. Twitter, Uber, WeWork, Airbnb: they all started off, and it took them years to get big, and all of a sudden, “Wow, they’re an overnight success.” No, they’ve been doing it for seven years, and only now did they hit their tipping point and blow up. It’s just years and years and years of working. Now, the hardest thing is that in the beginning of your career, not every business is a hit. My first two businesses were total failures. Lost money, didn’t make anything. Then the third business was a decent success, the fourth was amazing, life-changing, and now I’m at the fifth, and it’s like, oh my gosh, I never thought I’d be here. But you keep learning and growing with every business, and you’re going to have failures, but every failure is a learning opportunity. That’s entrepreneurship to me. You are willing to sacrifice your 20s and kill yourself, so when you do have a family one day, if that’s what you want, or

you’re in your 30s and 40s, you can actually enjoy life. And there’s a funny thing: people save for retirement until they’re 65, with an IRA and a 401(k), and they hit 65, but they can’t enjoy their retirement. They have money and they have time, but they don’t have their health. In your 20s, you have some time and you have health, but you don’t have money. There’s always this dilemma. So hopefully you get to a point in your 30s, 40s or 50s where you have time, you have money and you have your health. That’s the ultimate goal you can strive for, and then you can travel and do whatever you want. Okay, we spoke about this, so I’ll skip forward a little bit. Okay, I can talk about this for a second. A/B testing. Who knows what A/B testing is? Yeah, go ahead.

Here you go. All right, so A/B testing: you are going to be testing different strategies in sports and in business. This is an example of a very simple test that you could do: just changing the color of the button on the website. Something so simple. We tried different colors, and we tried different text at the top. This is just A/B testing on the website, but you could also A/B test strategies in your company. You could A/B test anything. So which one do you think won? Pink? Green? There’s no right or wrong answer. You just have to test, and that’s the important part. Because imagine you two are partners: “Oh, pink is going to win.” “No, green is better.” You’re going to have so many arguments like this with your co-founders, if you have co-founders. It’s very difficult to agree on everything. But who wins? The data. You test everything. If you can, you test it. It’s not about who shouts the loudest or who has the biggest title. Put all that ego aside. Everyone wants what’s best for the business, and what’s best for the

business is to test everything and make data-driven decisions. So which one won? Green ended up winning, and it had a 51.6% improvement. Just a color. 51.6% more clicks, more leads. Crazy. I’ve run tests that had a 300% improvement. Yep? Audience: [Partly inaudible] Is it how many clicks there are? David: Yes. So 1,000 people see version A, 1,000 people see version B. A hundred clicked version A, 50 clicked version B. That’s it. Just the color. Then I changed “Property management software made easy” to say “the highest rated.” The highest rated, maybe that will work. It did. It got 17% more. Every single thing. And if you’re talking about 10%, that’s 10% more revenue, 10% more company value, 10% more everything. It’s crazy, just from A/B testing. So this is website A/B

testing, which I recommend everyone do, and usually no one does it. It’s so simple to make more money: just A/B test simple things on your website, but also strategies in your company. Now, this is a huge dump of a million marketing strategies and ideas that you could use, and I put it up here to show you that you need to test everything and try everything. Just throw darts at the board and see what sticks. For us, just as a fake example, you need to figure out in your business how much you are willing to pay to get one new customer. Let’s say the average customer pays you $1,000 a year. I always love breaking even after one year, assuming it’s recurring revenue, like software, as an example. But let’s say you’re selling a product for $100 and you want to make $50 profit, so you have $50 to play with. So try everything and see: are you willing to spend $1,000, or $50, to get one customer?

Figure out how much you’re willing to spend, and just test it all. Now, I was on the UStart judge panel recently, with a bunch of business plans and presentations that were great, and I was laughing, because on every single person’s marketing slide, they all had the same one thing. What was it? Influencer marketing. Exactly. That could work. That’s great. It’s obviously the new thing everyone’s doing: influencer marketing, social media marketing. And sure, it does work sometimes, but I don’t want you to think, “Oh, that’s the only thing I can do.” I put it up here at the very bottom. It’s not the only option. It’s one of many options. Test everything. But a big mistake I see people make early on is they only do social media marketing. That’s it. Why? “I know it, it’s easy, it’s free, it doesn’t cost me anything, just a little of my time.” I have so many conversations with friends, and I say, “Oh, how are you getting new customers?” “Oh, I’m doing social

media. I have 800 followers.” “Wow, great job. How many customers did you get?” “None.” I was like, “So why are you doing it?” “To build my brand.” I’m like, who cares about your brand? You need customers. You don’t need a brand right now. You need customers. That’s all that matters. So if you’re going to do social media, or anything, make sure you can track it. It’s measurable, there’s ROI, you know how many customers you’re generating. Otherwise, don’t waste your time. Someone was talking earlier about the 80/20 rule. Who was it? The 80/20 rule, the Pareto principle. It can be applied to everything in life. After selling my last company, I started this new one, and I said, “Okay, what am I going to do to grow this business?” I tried everything in the last company, and only two things were responsible for 80% of our revenue: Google Ads and SEO. Look at the top two: Google Ads, and SEO and blog posts. So when I first started this one, we had no social media, no webinars, no podcasts. We

didn’t do any trade shows. We still don’t even do trade shows. In the beginning, just Google Ads and SEO. So 80% of the results came from 20% of the things I was doing. I said, “I’m just going to do those two things. That’s it.” And we built a multimillion-dollar company just off Google Ads, and that’s it. Eventually, after we maxed those out, we started doing everything else and trying everything else. Now, what’s funny to me is when I talk to a lot of entrepreneurs, I say, “Did you get your first client?” “Yeah, I got my first client.” “Awesome.” “Actually, I got two clients.” “From where?” “All from this networking group.” I say, “Great. Now what?” “Oh, now I’m trying emails, and I’m trying this, I’m trying that.” I said, “Why don’t you do more of the networking group?” “Well, I’m doing that already.” “Why don’t you join more networking groups? You could join five networking groups.” So the mistake I see people make is one of these ideas and channels works, but then they get so caught up and excited about the next fancy thing that they start trying to do something else. When something works, you

double down on it. You pour gas on the fire. You go all in. Google Ads worked for us. We started off with $500 a month, testing it out. We made $500 back. Okay, let’s do $1,000 next month. We made $1,000. Wow, we’re breaking even in month one. That’s amazing. Last month, we spent over $1 million on Google Ads in a month, because it works. We keep increasing the budget until we get diminishing returns, and then, okay, we maxed out Google, let’s try Meta next. Let’s just go down the list. That’s what we’ve been doing: try everything, and whatever works, double down on it like crazy. Any questions on that? Cool. All right, I’m going to fly through a few things here. We already spoke about a lot of this. Okay, last two slides. Funny: I’m giving a TEDx talk in April, and it’s about this exact topic. I always thought I’d be more successful the more I worked. If I had more time in the day, the more hours I could work, the more

successful I’d be, the more I could get done. And the opposite was true. Funny enough, the less I work now, the more I get done, because it forces me to delegate and outsource. I can’t do everything myself, so I get more done in a day because I’m delegating more. But thinking: not enough people think today, because we’re just so hyper-focused on what we’re doing. We’re connected more than ever. I used to be the most connected person, running my last business. I woke up in the morning with my Apple Watch on and my phone on me, and as soon as I got out of bed I plugged in my AirPods and started making calls, right until I came home. I was in bed still listening to videos, and then I went to sleep, and sometimes I fell asleep with my AirPods in. I actually had to replace my AirPods with wired headphones because they would die all the time. That’s how much I was on the phone. I was so connected. And I ended up burning out. It was bad. I was 29 years old, five years of just killing myself, and I burned out because I didn’t work out and I wasn’t eating healthy. And I only realized it when I started

taking naps in the office, which was crazy. An employee came to me and said, “David, are you okay? I’m noticing you don’t seem so good anymore.” And I said, holy cow, if this guy realized it, and I thought I was hiding it pretty well, I need to make a drastic change. So I tried everything, but there was one thing that stuck. I’m not recommending it, but it was the one thing that stuck, and as a side effect I figured out this new superpower. I ended up observing the Jewish Sabbath, which means every Friday to Saturday I disconnect. No electronics, no phone, no TV, nothing. All I do is talk to my wife and read a book, and that’s it. It was amazing for my mental health. But I thought, oh my gosh, how could I take Saturday off? A full day, 10 hours of not working on a Saturday, the best, most productive day, with no distractions. I’m going to make so much less money. But I made so much more money. Why? Because for the

first time all week, I was alone. I was thinking, I was reading, I was brainstorming, I was resetting, and all the ideas started coming. You ever have those moments where you’re just doing nothing, letting your mind wander, and all of a sudden your subconscious is working on a problem and you’re getting the solution, you’re getting the answers? That’s what happens when you let your mind wander, when you just do nothing. But it’s hard for us today to do nothing, because we’re so connected. So I ended up making it a life mission to do nothing and wander as much as I can, every moment I can. I want to think. So I give you some examples here of letting your mind wander. Number one is when you’re driving in the car. Most of the time you’re driving, you’re on the phone calling people, listening to music or a podcast. No. Next time you drive: nothing, no music. Just disconnect. Put your phone on airplane mode if you want, silence, Do Not Disturb, and just let your mind wander. You will be amazed at the ideas and thoughts that come to you.

Number two: when you exercise, especially going for a run. A lot of people go for a run and they love it, but no music. Just let your mind wander, and you’ll be shocked at the ideas that come. Showering: this is a funny one for me. I don’t know why, but in the shower I get a lot of ideas. So I actually brought it here: the number one thing that helps you get the most ideas. A lot of the time, ideas come up in the shower, and it’s a great place because there are no distractions. There’s no phone. You can’t be connected. So in the shower I started getting ideas, but I didn’t know where to write them down, and I would get out of the shower and forget them. They actually sell, of course, on Amazon, a waterproof shower notepad. And I brought three today, so if you got a ball, you can grab one. It’s just crazy. There are so many different ways and places where you can think and get life-changing ideas. Reading will give you a lot of ideas. And then when you go to sleep, instead of getting in your bed and watching something as you fall asleep: no phone, and you’ll be surprised. It just flows. Now, the cool part

is that the more you do this, your brain is a muscle, and just like any other muscle in your body, the more you train it, the better it gets. Earlier I asked, “Does anyone have ideas for a solution?” and a few hands immediately went up, because maybe they’re training their brain over and over and over. Think, think, think. So eventually you just become a problem solver, a solution powerhouse. You go into thinking mode, and the more you use it, all of a sudden you can solve any problem and you have the best ideas. And it’s funny if you think about it: why are some people huge CEOs of companies? What’s so special about them? Why are they any different? They are thinkers, and they are problem solvers. They have an amazing ability to disconnect, brainstorm, think and solve all the biggest problems for these Fortune 500 companies. That’s really it. They’re just good thinkers. So my advice: stop doing and start thinking. So, to summarize the takeaways: be a leader and motivate your team.

Always A/B test new strategies and ideas. Be the least important person in your company: make training videos and processes, delegate, outsource. Visualize your success and set goals. Have that notepad, write it down, put a due date on it. Exploit your competitor’s weakness and turn it into your winning advantage, your unique selling proposition. Remove all distractions and let your mind wander; that’s probably my number one up here. Be a good sport: sportsmanship, do business honestly. We skipped over that. And work hard now so you won’t have to later. So the question I will leave you all with is: are you going to serve, or are you going to serve and volley? Thank you. I put a link up here if you want to download the slides, so go ahead and download them, and I’m going to put my contact information up on the

screen in a second. And for those of you that got the tennis balls, come up and we’ll give you some stuff. Any questions? Yeah? Audience: In the early days, how did you exploit your competitors? Customers were probably using AppFolio, Buildium and others. What was the main selling proposition? David: So first, we got demos of all the competitors. We tried becoming customers. We tried signing up for their software, and the first thing we saw was: wait, we filled out a form on their website and they haven’t contacted us in six days. That’s crazy. Wait, I want to sign up today and I can’t? I need to wait five days for a demo? And then we got on the demo, and then I had to do a second demo. Like, what? I want to sign up right now. So we said, okay, let’s just offer same-day sign-up, same-day demos. Okay, that’s easy. And then we got into their platform and said, “This is ugly. This is outdated.” Okay, let’s make ours really easy, like everyone does anyway. So you want to learn about your competitors. One

crazy thing that we did, that no one else really does: sign up and become a customer of your competitors. Pay them and see what they do. How do they onboard? How do they train? How do they do customer service? It’s amazing. You’re going to learn a lot. They’ve done this for 10 or 20 years, they’re so far ahead of you. Just learn what they’ve done and make it better. Always improve. Great question. Yeah? Audience: How did you decide, in the first few iterations, that the product was ready? David: It is never finished. It is never ready to go. We’re constantly updating. But in the beginning, how do you figure out when to launch? You’re never going to want to launch, because you’re always going to be a perfectionist and want it to be great. The Lean Startup teaches you that your first version should be so bad that you’re embarrassed about it. You just need to get the ugly duckling out there. Just launch, in beta, and everyone that you’re

signing up knows you’re in beta. There are bugs, there are glitches, we’re not perfect, but we’re looking for those early adopters and innovators that are willing to take a chance on us and help us grow. “And by the way, we’re going to give it to you for free for the first six months. Come help us make it better, and you can custom-build your own software with us.” Oh my gosh, it’s amazing. Everyone loves that. So that was our strategy for the last two companies: give it away to everyone for free for six months, just to get people on the software, and they tell us what they want. Because we always think we know what they want, and then you build all these things, and then you launch and they don’t actually care about it or need it. But when you have these beta customers, they’re telling you every day what they want. Just do what they want. Listen to your customers. It’s so simple. Just listen to your customers and you’ll be fine. Yep? Audience: What would you say is the best quality of an effective leader? David: The best quality of an effective leader? There are so many.

Put yourself in the shoes of your employees. Because too often we act like big shots: “I’m the boss, you do what I tell you.” You forget how it was when you were the employee. So the best managers are the ones that were employees and then all of a sudden became managers, and they have to manage the people that they were sitting next to two seconds ago. Because they know what it feels like to be an employee. “I was an employee yesterday.” So they know, if someone messes up, how would I want to be talked to? How would I want to be treated? But as you become a founder and you haven’t been an employee for many years, you start losing sight of that. So it’s really important to stay grounded, stay humble and put yourself in their shoes. There’s the famous saying: do unto others as you would have them do unto you. Same with your customers, same with everyone. Yeah? Audience: You’re a judge for UStart. What do you wish you saw more of from the medical device teams? David: What do I wish I saw more of as a judge at UStart? A lot of them did a really good job, I’ll be honest. Some of them did a great job.

I think a lot of them sold themselves short on their financial projections. They weren’t thinking big enough: “Oh, we’re going to make $50,000 this year.” There was one company I spoke to afterwards, and I said, “You guys could be a billion-dollar company. This is a billion-dollar idea. Show me projections that get me to a billion dollars as an investor. This is a huge company.” One of the things we did at this company, and I think it helped us so much: the CEO, and I’m the CMO now, recruited five co-founders. I was one of the co-founders. And he said, “This is going to be a $100 million company,” before we even built anything. “We are not selling until we hit $100 million.” Wow. Okay, crazy. Oh my gosh. But because he said that, he set that North Star so high that everything we did was: would a $100 million company do a webinar with an iPhone? No, they’d have a professional camera. Would a $100 million company send a plain-text email? No, they’d send

a nicely designed email. So everything we did was: how would a $100 million company act and behave? We had that five-year goal, that in five years we were going to hit it, and we hit it in less than five years. Crazy. And then we had another five-year goal, and we hit that. When you set crazy, audacious goals, you hit them sometimes. It’s a lot of luck, though. Right time, right place, everything. Yeah? Yep? Audience: How do you know whether to devote your time to different avenues of marketing? Right now a blog post is taking me something like six to eight hours, and in my head I’m thinking maybe I should focus more time on learning about Google Ads rather than spending so much time on this. David: Yep. So let’s say you want to try blog posts first, and then you think, okay, after that I’ll do this, I’ll do that. In the beginning you’re throwing darts. You’ll invest 50 hours in blog posts, you’ll do, let’s say, 10 or 20, and you’ll put them out there. And I mean,

blog posts are tough, because it takes time to see results. So you do some work, and then you probably just have to wait and see if it’s working. That’s what we did. I didn’t generate 1,000 blog posts overnight. I did probably 20, and after four months, oh my gosh, it’s working. So after the first 20 or 50 hours of work, I said, “Okay, I’m not going to invest more time in this, because it’s not bringing immediate results and I haven’t seen any results yet.” So I’ll just let that cook, and then I’ll focus on something else. Now, you have to have money to run paid ads, but the cool thing with paid ads, like Google Ads, is you can see a return immediately, day one. You put in $100, you’ll get 10 clicks, maybe you’ll get one customer in a day, or in an hour. It’s crazy how fast it works. You get the return, so you know instantly whether it’s working. Yeah? Yep? Audience: Some of the advice people are giving in UStart is that if you have people who might be your customers, you go to them first, before

anyone else. Would you recommend that, going after the people in your network first? David: I didn’t hear the beginning of your question. Would I recommend going after your network first? Audience: Yeah. For you guys, for example, if you have property owners, going to them before you start with new leads. David: Great question. For sure. It’s free, it’s organic marketing. You have people in your network, you have friends and family, they could use it. 100%. That’s always the number one thing we do in the beginning. But there were some people in the network where we don’t want to burn the bridge yet. We’re not ready for them yet. They’re really big companies, and if we come to them now, we’re a joke. They’re going to laugh at us, and they’re never going to give us a second chance. So for those, we’ll hold off a year or two. We’re five years in and we’re still not ready for some of those people yet. We still haven’t used those connections. But yeah. Yeah, go ahead. Audience: I’m on the software engineering side, and there’s so much FOMO now about people dropping out to build things. Last semester I was

trying to balance school and building whatever I wanted to build, and I found that both of them suffered. So I have two routes: one, I let school suffer, or two, I use school as a boot camp, let’s say, for learning how to work harder and getting that work ethic. What would you recommend? David: I gave another class last year, and my single biggest mistake as an undergrad was not using my courses for my own business. You’re going to be taking marketing courses, finance courses, entrepreneurship courses, business tech, business law. You’re going to be building business plans and doing SWOT analyses. Do it for your own company. That’s the one thing I regret: not having my own business in college, where I could apply everything I was learning and use my own company for my class projects. So for sure, use your class projects for your own business. But also, it’s okay if you’re splitting your time 50/50 or whatever it is,

because school is your main priority. Just like when you graduate, you’ll maybe have a full-time job, and that’s your main priority, but then you have your side hustle that you’re building on nights and weekends. That’s how I got started. I had a full-time job, and I was learning what they were doing. I was taking notes: oh, they did blog posts, I’ll try that for my website. I was building on the side, and it took me about two and a half years to build up my side business to where it was making the same amount of money as my full-time job. And then I was like, all right, now I’m ready to quit, because I couldn’t just quit. I needed the salary. So I quit, I had my other business still making the same amount of money, and then the business exploded, because now I was full-time on it. That’s always my advice: learn from other companies first, because you don’t know what you don’t know yet, and then apply what they’re doing to your own business. Eventually, when you’re doing well enough, you can quit your day job. Like Mark Zuckerberg: Facebook blew up while he was still in college. He didn’t just quit, drop out and then say,

“Let’s try this thing.” It blew up. He’s like, “Oh my God, 12 million daily active users, I’m getting investors. Okay, I’m going to drop out.” Very different for him. Oh wait, sorry, you had a question first. Audience: When you were raising your first rounds, how did you decide which investors to take money from, when there are probably a lot of them? David: Yeah, especially in the early stages. Big, big question. So how did we figure out which VC or private equity firm we were going to raise money from? It was different for us, but in most cases you’re just begging people to take your call. You’re reaching out to 100 VCs: “Please, angel investors, give me money, I need money.” It’s hard. Beggars can’t be choosers. You just take what you can get at that point. For us, it was different, because we had already sold two companies. We were seasoned entrepreneurs. We’d already done it, we’d already invested our own money. So they’re like, okay,

they come to you now. So for us it was a totally different experience, and we got to handpick the ones that we wanted, with the best valuation and the best terms, who were easy to work with, because they’re partners. We looked more at what they could bring to the table besides just money. What could they do for us? How could they grow the company? What connections do they have? But also, during the negotiation and diligence, you’re going to learn a lot about them. Are they hardcore? Are they going to beat you into the ground for every penny? Because they’re going to be working with you for the rest of your life. So you want to make sure this is a good life partner, like when you get married. You can have arguments, but you can come out of them stronger. So that’s what we looked at more than anything. Yeah? Audience: Do you use ads to market your blog posts? David: Yeah, yeah, we do. We used to, we stopped, and now we’re doing it again, because it’s a lot cheaper to target those. And if the blog post converts into free trials or paid customers, for sure, drive traffic to it. A lot of people do it. Yeah. Question here? Audience: So, in

terms of motivation, you said positivity is overall the best tool. I think positivity is infectious: once you start being positive, everyone is, and everyone’s happy. But I coach, and positivity doesn’t always work infinitely. So should you ever be negative? When and how should you use tough love? David: Let me give you some examples. The problem I see a lot today in our culture, especially American culture, is that a lot of Americans, myself included, avoid confrontation. Someone messes up, and you’re passive-aggressive, you don’t say hi in the hallway. We’re afraid to confront people. Now, half our company is in Israel, so we work with a lot of Israelis, and they’re the polar opposite. They just confront you: “You messed up. What are you doing, you idiot?” Totally different. I think there’s a good balance. It’s a hard question, because you’re going to have to figure out what works

for you. But what I do is I’ll sit with someone and say, “Hey, this obviously was a mistake. We didn’t mean to do this. I know you didn’t mean to do this. But in the future, what could we do better? What do you think we could have done better? How do you think you messed up?” It’s a lot of open-ended questions. You want them to realize what they did and how they can improve. You want to put it on them. And if you’re in a tough position, throw it back at them: “If you were me, what would you do in this situation? I’m just like you. I’m just trying to do my best too. I don’t know what I’m doing either. I’m figuring it out on the go, just like you are. We’re all figuring it out together.” So there are definitely moments for tough love. You can’t always be happy, like, “Oh, you messed up, it’s okay.” You can’t always do that, obviously. But they know they messed up, and you can have a one-on-one, direct conversation with them. You also have performance reviews, where you can tell them what they did wrong. But what a lot of people do is wait for the end-of-year review to tell someone what they did wrong. Don’t wait 12 months. Tell them now. Confront them earlier on. People, employees, want to grow. They want to learn. They want to know how they can do better. So every month or so, talk to

them: “Hey, there are a few things I think you could do to improve. Are you open? Do you want the feedback? Do you want to learn? Are you coachable? Okay. I think if you did these two or three things, you’d be a rock star.” But script it first. Frame it. Practice it. Because words are everything. It’s all in how you deliver it. It’s very important. You don’t want to offend or upset anyone. And you have their best interest at heart. You want them to succeed, because if they succeed, you succeed. So explain that it’s a win-win. If you do better, we all do better. And likewise, tell them, “If I can do anything better, please let me know.” A lot of times they won’t, because you’re the boss: “I’m not going to tell you.” So you do anonymous surveys, every month or every quarter. People will destroy you in the anonymous surveys. They will tell you exactly what you need to hear. But then you take action on it. Yeah? Audience: I was just wondering, what would you say to the employee who sent out the discount? David: Same thing that he mentioned earlier. Why were we

sending this email? Oh, it was to that audience. Well, did you test it before? Did you have someone review it? What do you think you could have done better? What do you think we should do going forward so it doesn’t happen again? What process should we put in place so it doesn’t happen again? Why did this happen? And then you learn. With every mistake that happens, you just add more process, and more process. Hopefully you don’t add so much that it bloats your company, but it’s all about oversight, reviewing your work and getting approvals. At the end of the day, it’s also your fault. You didn’t put these processes in place. You gave them free rein to do whatever they wanted. So you’re going to learn that you need to be, not micromanaging, but to have your finger on the pulse. Don’t just give everyone free rein: “Do whatever you want, go.” No. You need to be a little bit involved too, and have a review process. Yep? Audience: You showed a couple of quotes already. Do you have any other favorite quotes, or anything like that? David: Oh my gosh. “If at first you don’t succeed, try again.” I don’t know. Gosh, there are so many out there.

Nothing that comes to the top of my head. Yeah. All right, cool. Yeah? Sorry, no, go ahead, go ahead. By the way, everyone has my email, so I always tell everyone this: please email me. I’m more than happy to help you out. Every time I say this, no one does. Hunter did, and he’s gotten some good feedback, hopefully. So feel free to email me anytime. Yeah? Audience: After your first two failures, how did you start again? What drove you? Passion? Because it’s a word that’s loosely thrown around. David: My first company was started because I was very good at fixing computers. I was fixing things for friends and family: my printer, my Wi-Fi, my parents are calling me, whatever. And then one day my parents, or someone, said, “Hey, my neighbor’s printer broke. Can you fix it? I guess he’s willing to pay you.” “Really?” “Yeah.” Okay, I fixed it. “Oh, here’s 50 bucks.” I was like, 50 bucks, wow, that’s pretty good. Okay. And then someone

else, 100 bucks. Like, oh my gosh. Wait, I could charge $75 an hour to do easy work that I love doing? Oh my gosh. A business was born. I started a website, and all of a sudden I had a PC repair business. And then, in that company: “Oh, do you build websites?” “Sure.” And now I’m building websites. You just say yes to everything, and that’s how it grows. And then the next company was entertainment. I loved DJing in college. People were paying me 100 bucks an hour, as a 19-year-old, to DJ. I was like, this is crazy. A DJ company was born, and then I started doing weddings and corporate events. “You’re going to pay me $1,000 to play music at a wedding? What? Hell yeah.” Businesses are born that way. So for me, it was always a passion, a passion, a passion. And then the last one was just luck. My old boss came to me and said, “I want to start a company with you.” I was like, “Oh my gosh, yes.” Right place, right time. I said yes. “But you have to sell or quit all the other companies you started.” Like, oh no, no more DJing, no more fixing computers. Tough. I

was like, all right. So I think you said it: you have this path in life, this path in the road, a fork. Which direction do you take? There were probably five of those moments in my life where I was like, “Do I do this? Do I do that?” Luckily, I had good advice. My father helped me. You want to brainstorm with people that care about you, and they always pointed me in the right direction. I made the right decisions, and I just got lucky. Cool. I’ll be hanging around for a few minutes, so if you want, come and chat with me. And if you got tennis balls, come and grab something. You two, come grab a ball. You asked a lot of good questions.