0 (3s):
Shake the room Fire Nation. JLD here and welcome to Entrepreneurs On Fire brought to you by the HubSpot Podcast Network with great shows like business infrastructure. Today, we'll be focusing on how business schools set founders up for failure to drop these value bombs. I have brought to Robin Copernicus into to EOFire studios. Robin is an author startup mentor and startup community influencer. He is the founder of a Vertical Liftoff (VLO): the first startup accelerator that helps founders skip investor funding. And today Fire Nation, we'll talk about how business schools used to be relevant, but not so much anymore.

0 (43s):
We'll talk about equity and how you can keep yours, how to deal with copycats. The number one reason startup founders fail and the 6% entrepreneurs stick around for that one. And so much more. When we get back from thanking our sponsors, Fire Nation is time to stop trading time for money and start reaching more clients and making a bigger impact. And you can do just that with online courses, try Thinkific for free today at Thinkific.com/EOF. That's Thinkific.com/EOF. Interested in BDB sales strategies. The salesman podcast is the world's most downloaded B2B sales podcast. Host Will Barron helps sales professionals learn how to find buyers and win business in a moderate effective and ethical way.

0 (1m 24s):
I recently tuned into Will's episode on digital body language, how to have better zoom sales meetings. And I love how he provides relatable examples. So the strategies are easy to understand, listen to the salesman podcast, wherever you get your podcasts. Robin say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1 (1m 47s):
What's up Fire Nation, Robin Copernicus in the house. And in terms of what is successful, it really depends on what you define as success. So for me, success means doing what you want whenever you want to do it. And that means not playing the game, not playing the games of other people, not conforming to others. This is living a life of no limitations, no consequences. And what this means is if you want to date that person go date that person, if you want that job, or if you don't want that job, go ahead and make that decision. If you want to go get face tattoos, John, and you know, you still keep all your friends, you still keep all your business. Then this is a true freedom that most people can't enjoy.

1 (2m 31s):
And this to me is, is really what success is. One of the first things that we do with VLO founders is when they first come into the startup program, the way we build businesses is instead of us conforming to the universe, we build businesses that makes the universe conformed to us, the founders. So it's really about putting the founder first and making sure that they're able to build a company that's sustainable for them, that they won't get bored of. And that, you know, adds that definition of success, where you can truly just be yourself and be comfortable with who you are.

0 (3m 5s):
I love this message and Fire Nation hope you really understanding the game aspect of it and play your own game. Live your own life. I mean, I can remember I had this moment of clarity. It was honestly about like, oh, not 20, but 15 years ago. Now I was honored elliptical machine. I don't know why that was part of it, but I was working out and it just suddenly clicked for me that life is a game and it can be a game that we can either choose to play and have fun or game that we just toil away at and help build other people's dreams. And I will be honest. I haven't been able to keep that unbelievable clarity I had in that moment with me at all times, it's slipped away at some points and I'll be like, man, like I want to just recapture that feeling and habit forever.

0 (3m 54s):
Cause it was such like this weird moment of clarity, but just because I did have a once I'm able to go back to her multiple times and be like, John, like stop stressing out so much about X or Y or Z, or stop trying to do this or that, that isn't lighting you up. Like this is your game. You weren't control. Let's play it. Let's have fun. So that when we're, you know, in the last few days of our life, we look back and we say, I played my own game and that's an amazing message. Now we're going to talk about how business schools actually set founders up for failure. And we have to be honest, we have to give credit where credit is due business schools used to be relevant. They used to be a place where you met other founders and you learn the fundamentals of business, but we're talking about the past there.

0 (4m 42s):
We're not talking about the present and the future. So how Robin has a startup world,

1 (4m 48s):
The startup game is very different. So back in the day, if you wanted to launch a startup, the way that you would have to do it is you would have to go after this huge market size. Because the idea behind going after a huge market sizes, if you can capture a small sliver of this huge market size, and this is what they teach you in business schools and traditional accelerator programs like Y Combinator and Techstars is if you can capture this small sliver of this huge market size will then an investor can come behind you with his or her capital and help you scale. So this made sense back in the day, but the thing is, if you ever take an entrepreneurship class, one of the first things that a business school professor will tell you is that 96% of your companies will fail.

1 (5m 28s):
And the reason that 96% fail is because they're having you go after this huge market size, which really just sets the founder up for failure. This makes the investors happy because the investors, what they're doing is they're not the ones failing, right? They are, they're not only investing in you as the founder, but they're investing in similar founders, just like you with similar companies. And they put all these companies into a portfolio, knowing that 96% will fail, but hoping that 4% will be able to cover for the losses. So the way the startup game is changing, the way venture building is fundamentally changing is what happened for the music industry is what's happening for the venture building industry right now.

1 (6m 9s):
So if you think about in terms of the music industry before the iPhone came out, well, if you were a musician and you want it to go nationwide with your, your record album, what you would have to have these million dollar budgets. So you would have to get a million dollar record deal because you need to be able to afford the million dollar record studios, the manufacturing capacity for your CDs, because that's tapes, you would need the huge marketing budgets you need for a street team in every major city to make sure that this is a good campaign, right? But now we don't need to do all that anymore because we have technologies that let us get us that bring us in front of our customer and on a very cheap budget, right? So technology such as Facebook ads, Google ads, Twitter ads, YouTube ads, the game has entirely changed where now we can focus on this very small niche.

1 (6m 57s):
We can dominate that niche. And then as we dominate this niche, then we can start slowly expanding out to other verticals. So what happened for the music industry is now happening for the venture building industry, where really the power is in the founder's hands. We don't have to go to these investors anymore. For these huge budgets. We can actually start a very scalable business by doing it very slowly, by focusing on the audience. First,

0 (7m 22s):
I love this and foundation. I really hope you are understanding that it is so true with this venture capital game and this angel investing game like these people are just spreading out a ton of bats, hoping that just 4% go to the moon or a 4% crush it and knowing the other 96% aren't. And so they're just not going to care at the level that you need people to care about your business in order for you as an individual, as a company to win. So let's really get specific Robyn about equity, because a lot of startups give away so much of their equity before they even start. I mean, you see some of these deals on shark tank, you're like should almost be criminal.

0 (8m 2s):
Why is it important for founders to keep a hundred percent equity?

1 (8m 7s):
John, whenever founders approached me for the vertical liftoff accelerator program, one of the key questions that I get is do you take equity? And the thing is I do not take any equity because that goes against my entire philosophy, because I really do believe that you are not a boss, unless you have 100% of your equity, because what happens is as soon as you start diluting your equity, you start diluting your vision. There's going to be other players that are in your business, and they're going to give you advice that benefits them. And a lot of times for investors, they're more thinking in terms of short-term where the founder is thinking of a larger vision, where they're trying to expand this huge vision and they're more about impact.

1 (8m 48s):
But once you start giving out this equity that takes away from this vision, and this is usually where a lot of founders fail because they will start giving out equity. And what they'll learn is, especially for visionaries, especially for the natural born hustlers that have so much drive, they will find themselves frustrated because they're doing a lot of the work. And what they'll find is their co-founders stop putting in their, in their work and they just become dead weight. So they become this dead equity weight where this visionary no longer wants to perform in the company because they're doing more, most of the work for only a small piece of the pie. So we are totally against taking equity. We are also against giving up equity. There are ways to motivate co-founders or people that are on your team in ways that simulate equity, for example, Phantom equity, but just giving away real equity, dilutes your vision.

1 (9m 37s):
And this is one of the quickest way to kill your business.

0 (9m 40s):
What would be an example of Phantom equity? Like what does that look like?

1 (9m 43s):
Yes. For Phantom equity, the way this works is instead of giving someone equity right from the jump. So, you know, they have this equity and you might have a vesting schedule, et cetera, but you're giving up control. So in terms of keeping control, if you give out this Phantom equity, what Phantom equity is is this. If you're giving out equity to a co-founder, for example, and you want to give out 5% Phantom equity, well, they don't get to exercise on this option until there's an exit event. So this equity option is tied to some type of exit event. So it could be maybe your first time you get revenue or maybe your first valuation. And then as it's tied to this exit event, this is when this person can, can exercise on his equity option.

1 (10m 26s):
But you are still able to keep 100% of your vision and control because they have no say they have no equity until this exit event happens.

0 (10m 36s):
It was a startup founder. You can do everything, right? And then you have some success. And then what happens? People love to sniff out other successes and then copy them and copy cats are everywhere. So how can we protect our startups from these copycats?

1 (10m 53s):
John, this is such a great question. So a lot of founders will think that patents, NDAs and trademarks will protect them, but that's not true because you need to have a bank account that stack behind you to be able to defend those assets. So in terms of copycats, I mean, if you have a physical product, for example, and you start putting that onto the market will no, NBA's going to stop a copycat from launching 10 versions of your product and co on Alibaba, the very next day, you're going to see copycats, right? So the only way in the future where we can start building businesses that are immune to copy cats is there's really two points of differentiation.

1 (11m 33s):
So the first point of differentiation is on price, right? And as we all know, that's probably not a game you want to play because it's a race to the bottom. But the second point of differentiation is something that your competitors cannot take from you. And what this is, is it's your brand story. And that connection with its users. Once you build up this story and this connection with its users, for example, John, you have this great connection with the Fire Nation. And if you were to release any kind of products, and even if there were similar products out on the market, will Fire Nation is going to come and buy from you because they trust you and they are involved with your story. So just because you have this audience, this actually sets up a moat for your business, where even if your product fails, even if your product is being copied, you will still survive because you have this connection with your audience and this brand story that cannot be taken from you.

0 (12m 24s):
I love that. And Fire Nation. I really hope that you're keeping this in mind when you're building your brands. When you're building your company, when you're serving your audience. Now Fire Nation, we have some awesome bio bombs coming up. The most advanced startup strategy that Robin can share. The number one reason why entrepreneurs fail and then the 6% entrepreneur and so much more. When we get back from thinking our sponsors, how have we been able to continue to create scalable systems and stay in touch with our customers, regardless of whether we're in the office or on a plane with the help of our CRM, if you're ready to grow bigger, faster, and stronger as a business and as a team, then the flexible and customizable HubSpot CRM platform is for you.

0 (13m 7s):
The HubSpot CRM platform gives you the opportunity to have a purpose built solution tailored to your business and team, whether your company is big or small has dozens of systems in place or zero HubSpot is here to scale and grow with you, your team and your business. I've come to realize this. After several years of scaling and growing entrepreneurs on fire, our CRM is no longer just a sales tool. It's the heart of our business. It's time to ditch the over-engineered clunky and unreliable platforms that are costing you more time and money than they're worth and check out the HubSpot CRM platform today. Learn more about how you can customize your CRM platform with Hubspot at hubspot.com. The pandemic has changed how we do business and how we make money.

0 (13m 47s):
And over the past year, we've seen a lot of entrepreneurs turning to online courses to help hit their bottom line goals. But we've known just how impactful online courses are. For years. We've been using Thinkific the best platform to create market and sell it online course since 2017. But don't just take it from me. Meet Kate Klassen co-founder of Coastal Drone Company. She's been using Thinkific to train thousands of students to become certified drone pilots before creating online courses. Kate spent a lot of time coaching students in person, constantly traveling around cities, but by teaching online with Thinkific, Kate has been able to reach more students, earn more income and achieve more location in time. Freedom. Now Kate easily creates an as new videos and lessons each week with Thinkific updating courses and lessons while on the go and our students love the simple user-friendly way thing.

0 (14m 30s):
Kevin allows them to learn and take action fast. So if you're ready to create an online course as a lasting way to reach a wider audience, build revenue and make an impact, then Thinkific is the perfect partner to have by your side. Get started at Thinkific.com/EOF. That's Thinkific.com/EOF. Robin we're back. And as I kind of teased before the break, we like advanced stuff here at entrepreneurs on fire. So what is your number one most advanced startup strategy.

1 (15m 3s):
John, I am so excited to share this strategy. So here's how founders are building startups. Now they will focus on the product first. And what ends up happening is when they focus on the product for is they'll usually end up running out of money before they can start marketing it, or they will have built something that people don't even want to buy. I can tell you that the average startup founder, before they come into the vertical liftoff program, they will have spent around $100,000 working on their product. And once they come into the program, what they learn is they start getting traction in their very first week. And what they could have done is they could have saved all that money from developing the product, built the traction first, and then went to go developing the product. So my startup strategy, this advanced startup strategy, I, I have a community of early stage startup founders.

1 (15m 50s):
And when these founders come into my community, will I help them with different products and services that help them on their journey? So one of these journeys for example, is to be able to help them. Pre-sell their idea. So in terms of pre-selling, I am working on a SAS tool it's called pre seller, and it's a pre-sell social proof widget. Well, when I started developing the SAS to at least developing the idea, one of the first things that I did is I did an overview of the competitors that are out in this space. And what I found is I found 40 other companies that are doing the exact same idea, but with these companies, they've already built out the product. And if you actually go look at their websites, they're dusty, they don't have any customers. They don't have any traction.

1 (16m 30s):
And a founder like me that has an audience of early stage startup founders. What I can do is I can easily go to any of these founders that are probably in debt, probably, you know, going bankrupt and I can buy their companies on pennies of the dollar, add my audience to this SAS tool for instant MRR. And basically you can just keep doing this over and over where you're buying companies, you're getting cashflow, you can flip these companies or you can be, keep them for yourself and just, and just, yeah, enjoy that cash flow coming in. So instead of focusing on the product where this is like a fast lane towards failure, what we're doing instead is we focus on the audience, building this customer list.

1 (17m 11s):
So we can have a moat around our business and we can approach other business and products and services like where we don't even have a product. We can go buy up other businesses and just put our audience on it for instant MRR.

0 (17m 23s):
And I love Fire Nation. This idea of the moat, you have to be thinking moat, what is my moat? Remember this phrase that I love, the higher, the barrier, the lower the competition. How can you apply that mentality, that moat type mentality to your business? How did I do with entrepreneurs on fire? Well, my barrier was so high, a daily podcast interviewing an entrepreneur seven days a week that people knew it was a great idea. People saw the success I was having. They were seeing my income reports, but it was just too much work. It was too hard to be replicated easily. If the barrier was low, there was a once a month podcast interviewing an entrepreneur.

0 (18m 4s):
Then a zillion people would have jumped in and it would have been saturated and everybody would have lost. We're seeing that a lot right now in the NFT world where everybody's just copying each other on these NFTs. And there is going to be a reckoning where the blue chips will probably keep crushing it to some level, but there's going to be a lot of a loser. So what is your barrier? How can you make it higher? How can you build a moat around your business? All this being said, and we mentioned this earlier, Robin 96% of startups will fail at some level. So what's the number. One reason that

1 (18m 41s):
The number one reason that startups fail is when founders tell you that they're failing or that they have failed, they will give you all these different types of excuses. They will tell you that their co-founder left them. They will tell you that the investment that was supposed to came in that was supposed to come in the investors now ghosted them, or they couldn't get any investment funding. Or AWS is, you know, charged three or four times their server costs and it completely wiped away their runway. And now this startup is frozen or Google ads shut their ad account down or regulations change. There's all these different types of excuses that our founder will give you. But the real reason that the founder is not telling you the real reason that founders fail is not because of any of these reasons is because founders just give up.

1 (19m 25s):
They lose motivation. The way a founder thinks is as an entrepreneur, we see commercial opportunities everywhere, right? We see million dollar ideas here, a million dollar ideas there. And we just jump on an idea, thinking it'll give us freedom. But what we end up learning is it's really difficult to see 10 years out. And once we start putting ourselves into the startup, we're actually just trapping ourselves into a job. And the first obstacle that comes up, if a founder will use that excuse, because really they just want to give up the lost motivation. They'll use that obstacle as an excuse on why they failed. They will tell you all these different things. But the real reason, because I truly believe that if the founder was motivated, they would've figured it out.

1 (20m 6s):
They would've, they would've went around those situations and they would've made it happen. But because they gave up, they realized that it's not something they want to do anymore. They just quit. And this is how the vertical lift our program is so different is instead of focusing on what makes investors happy? What makes shareholders happy? Well, we're, we're all about 100% equity, right? So that's the shareholder of one. We're all about establishing founder market fit. First, once you establish founder market fit, what this does is this gives you a thousand year view into your business. So, you know, you're getting yourself into something that's not going to fail. This is kind of like having Eagle vision. So an Eagle, if an Eagle is on the 10th floor of a building, well, this Eagle is able to see in ant crawl on the floor.

1 (20m 49s):
This level of resolution is what you get. Once you're able to establish founder market fit, and you're putting yourself into a business where, you know, you'll succeed because you love your customers. The customers love you. And it doesn't feel like work. It just feels like fun.

0 (21m 3s):
Fire Nation. What are you doing? If you're not going after fun? What are you doing? If you're not going after every single potentiality that's going to lead to your success to you, building that moat to you, having that barrier, being high to you, avoiding that final finality of failure. And Robin, you have a phrase, the 6% entrepreneur, what the heck is a 6% entrepreneur

1 (21m 29s):
Fire Nation. The 6% entrepreneur is a very special type of entrepreneur. So the age old question are entrepreneurs made or are they born? Well, the thing is, there are some entrepreneurs that are made. There are some entrepreneurs that are born this concept of the 6% entrepreneur. This was actually from a clubhouse room with David Rose. So David Rose, he's a prolific angel investor. He has, he teaches other angel investors, how to angel invest. But what David Rose says is there's three different types of entrepreneurs. The first type of entrepreneur are consequential entrepreneurs. These are your entrepreneurs who are in some type of really bad situation. They're probably living in poverty. There's no jobs around them. And to get out of whatever situation they're in, they have to turn towards entrepreneurship.

1 (22m 11s):
This is the only way out. So this is your type one consequential entrepreneurs. Then your type two entrepreneurs, these are your natural born entrepreneurs. And there's something very special about these natural warrant entrepreneurs. And these are your 6% are entrepreneurs. And I'll cover exactly what that is. The type three entrepreneurs. Well, these are your entrepreneurs that have kind of done all the right things. They, they, you know, went to the schools, they got the jobs. And somewhere in this career where they're specializing, they found some kind of commercial opportunity and they want to capitalize off this opportunity. So they're teaching themselves how to become an entrepreneur, but they're not your natural borns. They're not just like self-driven from day one, will these natural born entrepreneurs, they are very different.

1 (22m 53s):
They see the world very differently. They evaluate risk very differently. There's a lot of pros and cons to these natural born entrepreneurs. So they succeed spectacularly. They equally fail spectacularly. They don't need very much sleep. They're hypersexual. They there's a lot of things that they do very different that where these entrepreneurs actually start failing, the 6% entrepreneurs is when they start taking conventional advice. So what I call quote, unquote, normy advice. This might work for other people, but the 6% entrepreneurs, these are your natural borns. They think very differently in, in terms of this thinking, David Rose. He mentioned this book by John Gardner, who is a psychologist at Johns Hopkins university, my Alma mater.

1 (23m 39s):
And in this book, it is a history lesson of hypomanic entrepreneurs. So what hypomania is hypo manic entrepreneurs are people who actually suffer from type two bipolar disorder. And this sounds like a scary thing, but it's actually not that bad. But what this means is for bipolar people, you alternate between mania and depression. Well, each of these levels, mania and depression, this is debilitating for hypomanic entrepreneurs. However, it's a sub level of mania. So this actually gives the hypomanic entrepreneurs super powers. And this is your 6% entrepreneur in terms of how I came up with that number 6%. This was the only statistic that I was able to find.

1 (24m 20s):
They did a survey on how many people in a us call setting has this trait. The number was 6%. So this is what, this is the number that I went with. But obviously I think that number is much smaller. There's probably less than 1% of these natural born entrepreneurs. And for this non-conventional advice, I actually have a podcast it's called the 6% entrepreneur. And this is all advice for these natural born visionaries, these hustlers that don't do things the conventional way. And that conventional advice just does not work for them.

0 (24m 52s):
You don't listen to entrepreneurs on fire for normie advice. We don't talk about normy advice here because you can go get that at any boring place where all the sheeps go, and then you can start buying all the way to a normie lifestyle. And if you want that go good. I mean, that is not a bad thing for some people. In fact, there's a lot of happy people that wants that normy life, but that's not you obviously, you're not listening to a podcast focusing on entrepreneurship. If you want the normy advice real quick, Robin, do we get that?

1 (25m 28s):
The name of that book is called the hypomanic edge. And here's a little hint about the hypomanic edge. If you're interested more about learning about these types of entrepreneurs, that first chapter is golden. So if you want a little tease, you can easily go to Amazon and just download that first free sample chapter. And it's going to fundamentally shift on how you actually see yourself as a hustler, as a natural born entrepreneur, as a visionary.

0 (25m 54s):
And I want to end with a bang because you have a book of your own. You have some other things going on. So let Fire Nation know the one thing you really want to make sure we get from our entire conversation here today. Share with us your book, your brands, any call to action you have for our listeners. And then we'll say goodbye.

1 (26m 12s):
Yes, this was such a fun episode. So in terms of something, I do have a very special gift for your audience. If you go to Robin dot w S forward slash fire, then it will take you to the 65 minute audio course on how to skip investor funding by going vertical. So you can keep all your equity. So you don't have to go towards all these other avenues where they're just setting up obstacles and they're setting you up for failure. You can actually empower yourself, build a vertical startup that puts all the in the founder's hands. And it's all about not only making profit, but also profit and happiness. If you go to robin.ws forest fire, it will take you to that audio course.

1 (26m 55s):
And I think this is a game-changing audio course. This, this actual audio course is based off of a clubhouse room that I do that attracts four dot 400 to 500 people each session. And it's just like an amazing course that I just want to give out to your listeners.

0 (27m 9s):
That is fantastic because Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with RC and JLD today. So please keep up that heat head over to EOFire.com. If you type a Robin, R O B I N in the search bar, the show notes page will pop up with everything that we've talked about here today. One more time, Robin, give us that call to action and where you want Fire Nation to go.

1 (27m 31s):
Yes. So robin.ws Ws stands for website robin.ws/ robin.

0 (27m 38s):
Thank you for sharing your truth, your knowledge, your value with Fire Nation today, for that we salute you and we'll catch you on the flip side. Thank you so much. JLD Fire Nation. Hey, Fire Nation today's value bomb content was brought to you by our Robin and Fire Nation. The ideato store contests by.store domains is live. You have the chance to win cash prizes up to $30,000 for sharing your online store ideas. Learn more at www.ideato.store.

0 (28m 19s):
That's www.ideato.store. And I'll catch you there, or I'll catch you on the flip side. Fire Nation is time to stop trading time for money and start reaching more clients and making a bigger impact. And you can do just that with online courses, try Thinkific for free today at Thinkific.com/EOF. That'sThinkific.com/EOF interested in B2B sales strategies. The salesman podcast is the world's most downloaded B2B sales podcast, hosts, wheelbarrow, and helps sales professionals learn how to find buyers and win business in a modern, effective, and ethical way. I recently tuned into Will's episode on digital body language, how to have better zoom sales meetings. And I love how he provides a relatable example.

0 (28m 59s):
So the strategies are easy to understand, listen to the salesman podcast, wherever you get your podcasts.