In one of my blog posts last month, I wrote a little bit about a garden we were planting in our back yard. A month later, this garden has already started producing fruit…or vegetables, as the case might be. It’s a great feeling to grow many of the vegetables that we eat on a daily basis, right in our own back yard.
“Ideas are welcomed, but execution is worshipped.”
My girlfriend and I attended Freedom Fast Lane Live in Austin, Texas in 2015 (I wrote about this experience here) and we were fortunate to hear Jeff Hoffman speak. We learned that Mr. Hoffman went to Yale University and graduated with a degree in Computer Science. He almost got kicked out of school on his first day because he could not pay his tuition bill. To pay his tuition, he started a software company in his dorm to help pay his way through college.
He learned early on that entrepreneurship is a tool that could allow him to solve problems in not only his own life, but the lives of others as well.
“Entrepreneurship is the shovel you use to dig a path to a brighter future.”
Mr. Hoffman dreamed of doing bigger things. It did not take him long to start launching his own companies. As a result of his entrepreneurship, he became a multi-millionaire in his early twenties. At the time we heard Mr. Hoffman speak in Austin, he had taken two companies public, two companies he had started had failed, and two companies were still going strong. Perhaps the one company he started that he is most well known for is priceline.com.
“The whole point of being a business owner is to design the life you always dreamed you were going to have.”
Here is some great advice I’ve noted from some of his talks:
Solve Real Problems: Entrepreneurship is about solving real problems. Mr. Hoffman created software that allowed people to book travel online as opposed to over the phone with a travel agent (this later became Expedia). He was once annoyed that only one person who worked for the airlines could print boarding passes. He created and patented kiosk technology that allowed anyone to print their own boarding passes.
FOCUS: Follow One Course Until Success. Win a Gold Medal at ONE thing. Then move on to your next best idea or thing. And winning a Gold Medal is *REALLY* hard.
Harness The Power of Wonder/Curiosity: Stay curious about things around you. Never stop asking ‘why?’. Answers to your curiosities can lead to innovations, newer and better ideas, and solutions to problems. Never be satisfied with the status quo.
Info-Sponging: Spend time each day reading about things and look for things that interest you outside of your industry. Write these things down. Try to connect the dots between interests over time.
Filter Data Through the Eyes of Your Customers: If your executive team is not a representative cross-section of your customers, take their data analysis and decision making with a grain of salt. Get real feedback from real customers. Sam Walton used to put on a John Deer hat and go to a diner to buy Apple Pie for people who were representative Walmart customers, so he could learn more about their buying patterns.
Dream Big and Make it Happen: Hone in on your dream. Print out a picture of it. Make it the reason behind the things you do.
“Dream Big, Work Hard, Create Value.”
I could not find an estimate for Mr. Hoffman’s net worth online. My assumption, however, is that much of Mr. Hoffman’s billionaire status is tied to an equity stake in priceline.com, which currently has a market cap around $88.5 Billion.
I told my youngest daughter this morning that I am trying to write a quick article about a different Billionaire each week. This week I was planning to write about either Warren Buffet or Sarah Blakely. I asked my daughter to choose between these two for me, and since she is familiar with the ‘Spanx’ brand, she chose Sarah Blakely.
My daughter is 14 and she is familiar with the Spanx brand. I have not really heard of Spanx before this year, or if I have, never thought much of it. That is until one evening when my girlfriend and I were pondering applying for a patent on a goofy sock idea we had (that’s another story). While searching for information about patents I stumbled upon the story of the creation of Spanx and it’s founder, Sarah Blakely.
Here are some things that strike me about the meteoric rise of Ms. Blakely and the Spanx brand:
- Ms. Blakely scored low on the LSAT. Boy can I relate!
- She went to work for Danka selling fax machines door-to-door. This sounds like a brutal job to me, but I’m sure this experience provided the spark and sales skills she needed to start her own successful enterprise.
- To build a prototype of her idea, she went to hosiery manufacturers in North Carolina. She promptly discovered that the female undergarments industry was dominated by men who never actually tried the garments out they were making (at least none that would admit to doing so). She stumbled upon a complete lack of female influence in the production of undergarments for women!
- Her Dad taught her it was OK to fail, and apparently even encouraged it. Robert Kiyosaki (‘Rich Dad, Poor Dad’ author) is constantly harping on the Public Education System for not allowing kids to feel comfortable with failure. Many people who are afraid of failure may never try to do something hard or new, and thus may never realize big success.
- Ms. Blakely worked full-time at Danka while she was working on Spanx business and only quit in 2000 when Opra featured her product on the Opra Show.
- In the ideation of the ‘Spanx’ Brand name, she wanted to create a name that had a hard K sound in it, like successful brand names Coca-Cola and Kodak.
- Spanx first year revenue was $4 million. Second year revenue was $10 million. Then she signed a contract with QVC and sold 8,000 units in the first six minutes of operation!
Forbes estimates Ms. Blakely’s net worth at $1.08 Billion today.
“All you’ve got to do in life is find something you love and are good at.”
John Schnatter is the founder of Papa John’s Pizza. I was skimming my latest edition of Bloomberg Businessweek (edition June 11, 2017), and started reading my favorite section in the magazine: ‘How Did I Get Here?’ I was immediately interested to learn that Schnatter grew up in Jeffersonville, a small town in southern Indiana. My family, on my Dad’s side, is from New Albany, IN, which is right next door to Jeffersonville (or ‘Jeff’ as my Grandmother used to call it) – both towns are immediately across the the Ohio River from Louisville, KY.
According to Forbes, Schnatter is the grandson of German immigrants who came to the U.S. in 1867. His grandfather and father were entrepreneurs. His grandfather owned three successful businesses, while his father started 20 business that all faltered. Schnatter started working to earn money by cutting grass at 8 years old, and started painting gutters at 12 (starting to work for an income early is generally a sign of financial success later in life).
Jeffersonville, IN is a pretty small town. Not much appears to be happening there, at least the last time I was there, 5-6 years ago. In fact, one of Schnatter’s Life Lessons is: “If your business can be successful in Columbus, Louisville, or Evansville, you’ve probably got something you can franchise.” Presumably, he chooses these cities because of their relative size and the amount of business taking place in, and around, them.
So, Schnatter graduated from Ball State University in 1983 or 1984 with a degree in Business. Nothing remarkable there. But before he graduated from college, he may have discovered a secret to his future successes. While working as a dishwasher and pizza cook at Rocky’s Sub Pub from 1977-78, he discovered that he hated washing dishes! He also discovered that if he made the pizzas right, the plates would come back empty, but if he didn’t, they’d come back half-eaten. The lesson being, make really good pizza and you have to do less work!
After graduating from college, Schnatter helped out at his Dad’s bar, called ‘Mick’s Lounge II’, in Jeffersonville. His Dad’s bar had accumulated about $64k in debt so Schnatter sold his Camaro to cover the near-terms costs of the bar. According to Forbes, he settled the Bar’s debts in about 4 months.
He started making pizzas out of a broom closet in the bar and immediately went from making $300 a week, to $1500, then $3000 and then on to grossing over $100,000 a year in 14 months! The first Papa John’s was built next to his Dad’s Bar.
With the help of Schnatter’s brother, Chuck, a lawyer, they were able to sell 100 franchised restaurants between 1986 and 1991. Schnatter says he put his brother, Chuck, through college and law school, and in return he received free legal services. This ultimately resulted in Papa John’s having their franchise agreements created by the top law firm in Kentucky. This was probably another key ingredient in the franchise success of Papa John’s, I would guess.
“In 1991 I didn’t have $2,000 to go on vacation. In 1994 the company was worth $200 million.”
Papa John’s filed for IPO and went public in 1993 with 232 franchised stores. The company is listed on the NASDAQ as ‘PZZA’. In 2016, they did $1.7 billion in sales worldwide. So, roughly 10 years after graduating from Ball State with a degree in Business Administration, Schnatter finds himself at the helm of a publicly traded pizza company that would soon be doing almost $2 billion in top-line business each year!
“What gets measured gets done, and what gets rewarded gets repeated.”
According to a January 26, 2017 video posted on Business Insider:
- Peyton Manning owns 30 Papa John’s franchises in Denver, CO.
- Jerry Jones own 89 Papa John’s franchises in Dallas, Ft. Worth, Waco and Austin.
- Jerome Bettis owns 4 Papa John’s franchises in the Pittsburgh area.
- Jamal Mashburn owns 57 Papa John’s franchises across the U.S.
Forbes reports that Papa John’s currently has a market cap of $3.2 Billion, yet it has only captured about 1/10th of the Pizza Market currently dominated by Pizza Hut and Dominoes.
John Schnatter’s net worth is currently reported to be around $1 Billion.