You are listening to Impact Theory. Impact Theory. Impact Theory. Impact Theory.
Hey everybody. Welcome to Impact Theory. Today's guest is a profoundly successful serial entrepreneur who has gone head to head with some of the largest companies on the planet and one. Fortune Magazine named him one of the smartest people in technology and given his unprecedented string of successes, it is not hard to understand why.
He's founded and sold for massively disruptive companies including The Pit, which challenged online giant eBay and had a successful exit just two years after beginning. He also co-founded diapers.com destroying the myth that people would never buy diapers online and establishing it as such a powerful player in the industry that it was acquired by Amazon for a staggering $550 million. And most recently he founded Jet.com which proved that it is possible to compete directly with the juggernaut Amazon and build an enormous business in the process. Under his leadership, Jet.com raced at breakneck speed to $1 billion in sales and subsequently sold to Walmart for a dizzying $3.3 billion.
Again, after just two years in business. Now the CEO of Walmart Ecommerce, this Wharton Business School grad is once again demonstrating that the right idea executed well can thrive against any competitor. So please help me in welcoming the man Ernst & Young named regional entrepreneur of the year, the former Wannabe farmer, and now storied entrepreneur, Mark Lorie. Welcome, man.
Great to be here. And dude, the fact that you did it once already amazing to do it two, three, four times, it's pretty crazy. What is it that you understand that makes you so successful that you think other people are missing? I don't know.
It's not necessarily other people are missing. I'm willing to do whatever it takes, like create a situation where it feels like life or death. Billions or body bags? Billions or body bags.
No, but in all seriousness, that I think is distinguishing characteristic because all for the businesses, they will all turn out to be successes. But if I didn't put it into that extra gear, I think none of them would have made it. I really think that you have to be willing to go all the way. How do you pull that off though?
Like the first time I get it because it really is, I know you left a banking, you didn't exactly have a safety net. And so the first one really is sort of billions of body bags. But after that, I mean, you've had some huge wins. How do you recapture that?
I always figured a way to put myself in a position where it can't not work. And so the first one, it was not only quitting, but I also put every dollar in my bank account into that first company. Did you have kids at that point? Yeah.
So what do you tell people? Just had a kid. Like the number of people that want to be entrepreneurs that come up to me and they say, look, I've got this litany of things. You know, I married now, I have kids, I can't really do this.
How did you position yourself financially and emotionally to pull that one off? I just convinced myself that I would do this for a year or two, give it a real go. Because you had that much saved up or? So the idea was to take everything I saved, invest it in the company, take a salary, and then, but I still needed to raise capital to kind of continue on.
And so I hope that I'd be able to do that. And if I was able to, then I'd be able to sustain. Worst case wasn't able to raise money, had no more money in savings, and had to go back into the workforce. Did I think that I can get back in?
Like was I, you know, past the point where I've no return? And I thought, no, you know, I'm seven years into my career, worst case, I can go back and get a, you know, normal job again. But it was, that was too much of a safety net. And you could always go back.
And then you could invest in every penny of savings into the business that was the real catalyst for making sure that it worked. And then in the subsequent business, it was less about the money that was at risk and more friends and family money. So every relative, every friend, everybody I knew pretty much had a stake in the startup. And I just didn't want to disappoint all the people that I love and care about.
So that drove me more than anything. In that moment, so I find that pressure like that can be powerful for people or can be really destructive. Do you think about framing it in a certain way that makes it powerful for you? Like are you sitting there putting actual words behind the idea or is it just this overwhelming sense of like, yo, I can't fuck this up?
Yeah, it's just, it just brings out abilities you didn't know you had, basically. I mean, just knowing that you need to like go all in here and do everything you possibly can and work as hard as possible to make it happen. It wasn't an anxiety like, oh, I can't fail. I can't fail.
It wasn't like that. It was more just, it's like you don't really think about it. You just go. It's sort of, you know, if something would have happened in the moment, you know, that was life threatening, you'd react in a certain way that you needed to react without having to think about it.
That's sort of the way it is. Do you consider yourself an aggressive person? No. It's interesting.
I'm not aggressive either. It is like, so when I think about that story of you really backing yourself against the wall or having your friends and families money and business, you know, like I really don't want to mess this up, for me to tap into the aggression, which is something that's what I had to learn. So for me to go from an employee to an entrepreneur, it was a game of learning to be aggressive. It was being bold, striking, even if I was the youngest person or the least educated that I had to be able to step up to the plate to learn, to try something to be willing to fail all that.
So for me, I really had to cultivate an aggressiveness about myself to be able to do that. So taking things like family money or whatever, which is not my story, but things like that and saying, right, look, like actually talking to myself, look, man, I'm not going to fuck this up. I'm not going to let these people down. You're going to do it, but it's not going to weaken you.
Like this is going to make you stronger. You got this. They focused. Do you have an internal dialogue like that or do you have a different approach to it?
I didn't really think about it day to day. It was more just, you know, I can imagine if it was the equivalent, you know, the analogy of like being in some sort of bike race or marathon or something and you basically just bike as hard and as fast as you can for as long as your body will allow you to do it. It's like, just push yourself. So when you get across the finish line, you're like, I just couldn't have gone any faster on this day, right?
Just everything I had went into it. And so once you put yourself kind of into that gear, you're in that gear you're not really thinking about it. You're just running as hard as I possibly can to leave nothing on the table, you know. How do you even sell that in your teams or do you?
I look to hire people that are self-motivated who are more missionary than mercenaries. It's not about, you mean by that? I mean, the primary motivation is not money. The primary motivation is to make an impact on the world and the company has a mission.
It's got a vision. It's typically bold. You want to find people that really believe in it and want to make a contribution to be a part of something bigger than themselves and they're willing to work hard at it. And yes, money will come and they want money, but it's like secondary.
Some people, you know, like I've been working banking for seven years, it's very different. It's other than everyone just paying. And so find people that are really self-motivated, get them in the right position and then empower them, give them all the information, be transparent, trust them and then just empower them to run and not micromanage or get in their way. And I find you having credible leverage when you have great people and you kind of let them do their thing.
If you had to give a few key characteristics to what makes somebody great, so one thing I'll say is very difficult is hiring, especially in a hyper growth company, you're having to hire so fast. What are some key elements that you look for? Is it like personality traits? You look for different personality traits for different jobs?
Like how do you know that? I've learned so many lessons along the way and where I come out is, and I see this happen a lot of startups, you'll be looking for like a certain position like I need a supply chain person to do X and the initial start from this place of trying to find someone that's done that before. The chances of find somebody that's actually done it before, that's in the top sort of 10% for that job and get that person to quit their job and come work and take their risk of start up. I found that that's too hard, too much of a unicorn, certainly if you're hiring lots of people, you're not going to get lots of people like that.
So then does that mean you just go after mediocre people? How do you solve the problem? What I've done is I find the smartest person I can that exhibits the traits that I look to hire for. And the traits would be I use the SPOTTEC, which is a smart, passionate, optimistic, tenacious, adaptable kind and empathetic.
Those are sort of the traits that I look for. And the entire interview process is trying to make sure that people align to those traits because I find that those people are more missionary, they are more self-motivated, they want to be empowered, they want to do big things. And if you find great people like that after six months or 12 months or 24 months, they want to be coming to some of the top people in their field because they learn it and they got all these other traits there. So that's what I found.
I am desperate to know what your interview process looks like. How the hell in an interview do you figure out SPOTTEC? Yeah. So how do you how do you start out?
What are some key questions? Do you have them walk in and it's amazing? How do you figure out a secret interview? Here's the secret interview for me at least is never to ask a question that somebody could have already prepared in advance.
So it's kind of levels of playing field. So nothing like which is strength, what you can tell me about some great thing you've done. A lot of that is just people that prepare and they have good answers and some people have mentors or other people that have been through it and say, hey, listen, let's prepare. Let's go through it.
I do it in my daughter, my daughter, I interview. I'm like, okay, I'm going to prepare for this. There you go. Give me a strength.
Give me a strength. Give me a strength. You know, I went through the whole thing. She nailed it.
It was like the same questions. I kind of don't like that. I don't think you could in an hour, which is typical length of an interview, sucks out whether somebody has these traits. If you're just asking, the other thing that happens too, I find is that there's also an unconscious bias toward people that do have more connections, do have parents that have kind of been there and done that before.
I was the first person in my family to go to college, very different than my daughters now. So to avoid their unconscious bias and also to make sure that you take level playing field, I ask questions that basically you couldn't prepare for and really trying to open people up to see who they are. Yeah, I'll give you a great example. So one that I ask is, how much is the minimum amount of money that you would take to walk backwards everywhere you go for a week?
Can't tell anybody why you're doing it. If they ask you to say, I can't tell you, you have to go to work, you have to go out on the weekend. It has to be a normal week. Backwards everywhere, the only thing I'll do is I guarantee you safety and it's after text dollars.
What's the minimum amount of money that you would actually take? Like if I wrote your check right now, you would go and do it. But the minimum, people will come up with numbers and I'll just press them. I'll say, somebody says, you know, I would do it for five grand.
I'm like, I don't believe you do for five grand. No, this has to be actually, you know, I would. And then I go and leave the room and come back with a check. I'm like, whoa, whoa, whoa, whoa, whoa, I didn't know you would actually, I said, I gave you, I told you, I told you, you know, so basically just having the discussion like this is good.
I asked people questions like, if you could only be one of the two, what would you be? You'd be known to be very nice, but not very smart, but very smart and not very nice. You can only pick one. And I find it's kind of interesting.
Some people are like, oh, of course, you know, I can never not be nice to people. So even though I don't want to be smart, I'll pick very nice and not that smart. And other people are like, there's no way I'm going to be that smart. So, and it's kind of interesting.
Probably like, I'd say probably 60, 40 asking that question. Which is a 60. 60 is nice. And I don't know how many people align or just think that's what I want to hear, but probably 60 will say the nice.
And that's one of the things I'm looking for. I definitely want people, given the choice to prioritize being nice over being smart, it's more just get people open it up, get them talking about real things and seeing how their problems solve highly approach situations. How do you deal with employees that have like a real different tolerance for risk when you're asking them to take a big swing or to take a chance with you on a new business? I think it's really tough to ask people that are already in the organization that haven't been vetted through a process of, you know, are you comfortable taking risk and ask them to take risk?
No, it doesn't work. You don't want somebody to do something that's contradictory to their nature. You have to find the right people at front. That's why to start up.
You have a clean slate. I found it's something really interesting is that people that have typically gone to really good schools and done really well grade wise, they're used to getting As on everything, have a much harder time taking risk because they just, they look at something that has a low probability of success and say, well, why would I do that? I'm used to getting As and that's 95%. So why would I do something that has 20%?
Well, because the outcome is 200x or 500x. That's why you do it. A lot of people just can't get comfortable with that. I think that's between an entrepreneur or not.
Somebody who's comfortable with a low probability success with a huge outcome and then you'd go after it and you're okay feeling. I've failed so many times with the kid, whether it be academically or otherwise, that I was so comfortable with failing that it was not even just, you know, just that combined with just being chill generally about things not working out, the combination of that allowed me to like freely just take risk without any regard for like maybe failing. Let's talk about the most powerful force in wealth building compounding. There's a reason that people have talked about this forever.
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HSA FSA tax savings vary. I love the story that you have about applying to college and the nonzero probability. I thought that was really really a powerful story. Walk us through that.
Okay. Yeah. So, you know, I didn't have good grades in high school. I really didn't.
It was this is funny. I tell people this nobody believes the story, but it was sophomore year in high school. I remember walking down sort of the corridor and somebody's like, Hey, where you're going to go to college or what are you thinking about? I said, Oh, I'm probably just going to go to Harvard.
And they said Harvard, like you can't you're not going to get in Harvard. And I was like, what do you mean? Don't you just like kind of send your thing in and pay and go? Like no, you have to actually apply and they have to accept you.
That was sophomore year in high school when I learned that, which is crazy these days because I've been talking to my daughter since they were like, you know, the big about college. So, but yeah, so I didn't really know. So I wasn't applying myself in school. Didn't have the grades.
And my dad had asked me this is I did all the applying myself once the college is myself. Parents didn't know what was going on. And then after the deadline, this is like in January, February, the deadline was like, you know, November, December, the point of college. My dad said, Hey, how's it going?
How's the college stuff coming? Where are you going to apply? I said, Oh, I already did. I applied and I'm done.
He's like, Oh, you applied already? Did you apply to Wharton? Because he knew that I knew that I talked about that business school and I wanted to do business and stuff. Like, I know I didn't apply to Wharton.
There's no way I could have gotten in. And he said, Oh, really? There's no way you could have gotten in zero. It's zero.
And I said, Well, I don't know if it's zero. It's pretty close to zero. And I said, there's a lot of essays and all this stuff. And I said, Oh, so it's so it's so it's work.
You didn't want to do the work. It's no, I'm fine to do the work. It's just basically my guidance concept told me I can't get in. Objectively, I don't think I can get in.
So, you know, I didn't apply. He's like, All right, he was looking at me. I'm like, All right, you're right, Dad. I'm going to apply, you know, and this was after the deadline.
So this is like two months later. I went and did all the essays, did the whole application, did everything, sent it in. I don't forget. It was like May when you sort of got the letter when after the mailbox I thought it said, you know, Wharton school, I ran in, I opened it up.
Yeah, I got rejected. But it really taught me a great lesson because when I was opening that envelope, it really felt nonzero to me. Even though it was like, I had no chance of getting in. It was after the fact, you know, and it probably was as close to zero as anything could possibly get.
But I just felt like happy that I went through the process. Nothing had changed. It was still the same probability. But I was really happy I went through the process and took a shot and I was actually, I had in it bad.
That letter, that chance that it could, there's a possibility it could have, it could have said accepted. Although it's as close as you want. So I've just taken that in life in general. It's like, I'm not going to accept that it can't be done unless somebody proves it's a zero probability.
In the case, you can't prove it's zero. There's always some nonzero probability. And it's typically the stuff that has, that's really close to nonzero, nobody else is touching. That's where the big opportunities are.
When I heard that story, man, I was really blown away. Now, of course, I know the punch line of your life is that it all works out. Okay. So hearing that story after seeing what you go on to do with your life and really thinking, wow, the vast majority of humanity, dude, when they get that letter and they're rejected, they're like, see that?
I told you, I never should have wasted my time. And the fact that you take that lesson to be in that moment, I held the envelope, it went from when I didn't even apply, I knew guaranteed I wasn't getting into now. Like, there's actually a shot. I'm going to pursue that in the future that I'm actually going to try things.
I think that's really powerful. And I want to tie this back to something you said earlier. So part of what you look for for people is adaptability. You also talked about, like, you're sort of some people have a personality this way, some are that way and don't put people against their nature.
So how much of that, like, I want to believe, literally my life is predicated on the belief that someone watching this right now, hearing you tell that story, they will now forever think the way that you think about nonzero probabilities and they were going to do something that other people wouldn't do. They weren't born that way. They encountered that information and they chose to adopt it. How adaptable do you think we are?
Can you teach that to somebody? Could you teach that to your children or is that like you got to have it or you don't? Yeah, I think it's a little bit of both. I think you can definitely be better at it, but I do think there's something that you're not necessarily born with, but that you're raised with.
So after, what's it, 18 years, basically, you know, at home with parents and the friends that you surround yourself with, you're definitely molded in a certain way. And I think it's tough to change it dramatically after that. You can certainly push it one way or the other. But my starting point was way out there.
You know, just given the way I was raised, you know, which was pretty hands off. You know, what did your parents teach? Was it just the freedom to learn on your own that was powerful or did they give you certain things that have really carried through? I think different things from different parents.
I think my dad was pretty sort of non-present and to get his attention, which was not that frequent, you'd have to do something pretty spectacular, which is probably one of the driving forces to this mentality. Like, you know, you need to go and do big things to be loved, basically, you know, like in the world. And so that's sort of been an internal driving motivator that I didn't really know and appreciate until, you know, just recently you start to think through stuff and you're like, why am I this way? Why does this make me happy?
And then you can always, if you think about it, I'm going to have to tie back to something in childhood that's sort of the catalyst. And so I don't know what it would have been like without that, you know, and I coupled that and I could have gone the other way, I guess, and just been like, you know, a bum and just forget it, you know, like, and I went this other way. And I think on my mom's side, I think there was such incredible empathy and caring and kindness on this side and that the coupling, you know, allowed me to achieve what I had set out to do. How do you think of that with raising your own kids?
I think the key thing that I really always tried to instill is the sense of caring, kindness, empathy, and you can't picture many things. As you know, like it's just kids are not going to react, but if there's one thing and you want to keep hammering it, there's a good chance that that could sink in. And I think that's kind of how we approached it. It's sort of like, let's go with the core, you know, be good to people, achieve people as you want to be treated, be empathetic, be kind, and just drill that into them.
And not only drill it into them, but by example as well and see that. And I think they have turned out to be very kind, empathetic and that at the core, I feel good. There's other things that you'd say as a parent, oh, well, I wish it would be a little more like that. But at the end of the day, if you've got the nucleus of being kind and good, everything else is okay.
And so I would just say you have to pick something. When you're in banking, so you're following a relatively typical path for somebody who's ultra ambitious, I won't say just a typical path, but for somebody who's really got some driving ambition, I get why you went into that. What was the epiphany that made you decide that that wasn't for you? When did you know that leaving was the right thing and how do you structure your life now to make sure you never go back to the way that you felt when you're banking?
Okay, sure. Well, I mean, just starting out. So in grammar school, high school, I started every business that a kid could start, you know, papers, car waxing, lawn mowing, baseball cards, recycling, lemonade stands, like anything. And so I was quite entrepreneurial as a kid, but there wasn't really any thought to like build a work for startup.
That really wasn't the case I graduated from high school in 89 in college in 93. It just wasn't really a thing until the late 90s really. And so I, for some reason, got interested in stocks in like 10 years old and then started reading books on derivatives and stock options when I was like in seventh grade, eighth grade. And I was really into it and went to Bucknell, studied finance, knew I wanted to work with stocks, went to work in banking and seven years into it, I had gone pretty far, pretty fast because I was willing to work as hard as it took to kind of move up.
I was executive vice president, chief risk officer, the youngest in the bank's history, kind of thing. You know, I was like, things were going really well, but I wasn't happy. And it really was interesting. I'm like, wow, this is as good as I possibly could have imagined doing, you know, six, seven years out of college.
So making a ton of money is doing really well, but I wasn't fulfilled. I wasn't happy. And when I was really thinking about it, I realized that what I really missed was that sort of entrepreneurial kind of feeling that I had as a kid, you know, building something from nothing. And so yeah, I had this incredible pull that just toured entrepreneurship and startup that got to the point where I just walked into my boss's office and said, I'm going to quit becoming entrepreneur.
And he's like, that's really funny. And I'm like, no, he's like, oh, what's your idea? I said, well, I don't have an idea yet. But so you're going to quit this job making this amount of money.
Did you just have a kid? Yeah, that's crazy. I said, yeah, well, I'm going to do it. And he said, well, you're serious.
He said, well, if you're serious, can I be your first investor? And I put 50, I think it was 50 grand, he said. And I didn't know anybody with money. And so that was the seed.
He introduced me to two people. I met with those two people. They introduced me to a couple of people. They showed me, and I wound up, I met with like 200 angel people, you know, and got 60 investors.
I have to stop there because people at home, if they're not having a seizure right now and desperate for me to ask the question I'm about to ask them and not paying attention. So you're an insanely hard worker. I'll give you that. But they're for a guy sight unseen to say, you're quitting.
You have a kid that's crazy. That that's so risky. He's a banker. So he's not exactly captain risk.
And for him to go, I want without knowing what you're going to do, I want to invest $50,000 in you, which was I'm assuming a very smart bet on his part. So what is it? So I think everybody has something that they get early wins. So I'll say for me, it was verbal ability.
Now I've put an inordinate amount, decades of practice into making it useful. But I definitely got disproportionate results out of every amount of energy that I put in. Is there something that he saw in you like, yo, this guy is so good at finance, I know he'll never fuck up a business on that side. Or was it something else?
He knew you were a natural born leader. Like what was it that he was banking on at that point? I don't know exactly. But I would think it's he probably saw a little bit of what I talked about before, which is I won't let it fail.
Like I'll do whatever it takes. I'll do whatever it takes. I'll do whatever it takes. You know, work as hard as necessary to make it work.
And I think also I was just naturally really good at math, which was something that I was going to know for, which translates into finance and translates into other stuff. So can we go into the Billions of Body Bags thing for a second? First of all, I'm not a fan of Burn the Ships of the Shore, but the do or die mentality to me is so intoxicating. I have it very much so.
It's exactly the thing that I will say is because I don't think I'm particularly bright. I don't have any entrepreneurial skills whatsoever when I started. It didn't have a lemonade stand. But dude, when I fucking set my mind to something, that is it.
And literally I'm going to see it through. No matter what, all the success in the world, I've only sped up in terms of my drive, my ambition, the speed of which I move. And I am so desperate to be able to package that up to say magic fucking words to somebody to give them that, the power of desire so that they'll want things the way that I want things. Because it's not in a destructive way.
Like I'm not destroyed by it. You can take the wealth away. It wouldn't matter. That wouldn't phase me.
It's that sense of like, dude, we have so little time here, so much ability, like potentially we can transform into real skills. Like how do you infect people with that? That is one of the things like I always tell people if I could give somebody a gift, it would be a gift to have that desire away. I agree.
That is everything. How do you build it and give it to someone basically? Yeah, I want to believe it can be built, right? Because I know it can't just be given.
So I want to believe that there's a process. I think there is, but I'm always surprised. Yeah, I mean, the only thing that I've seen is, first of all, people need to feel an intense sense of ownership of their idea. So making sure that somebody has an idea, you can help them mold it, but it's their idea.
And they have to feel like they're accountable to it, to the idea. And then pushing them to go out there and tell the world, friends, family, everyone about their idea and what their vision is and what they hope to achieve. It's amazing how infectious that can be. When somebody gets out there and they start telling people like, wow, that's a really good idea.
Or can you do that? Or I don't think you can do that. Whether someone says you can't do it, or they say, well, it's not an amazing idea. In either case, it's pretty motivating.
I find the people that are scared to tell people about it because they feel like some sense of like, now I'm kind of committed or I told them my friends about this big idea, I'm going to go do. So just getting somebody to go out there, it's kind of like, if you want to work out, they say, put your shorts, your t-shirt, your shoes right next to the bed, get out of bed and put them on. And then once you get them on, it's easy to go. It's a similar kind of thing.
It's like, once you have your idea, start telling everybody you know about this idea and how you're going to do it. And usually that kind of starts to snowball and then people feel a sense of accountability to it. And then take friends and family money. Some people say, no, I don't want to take friends and family money.
It's like, why? Because it's kind of scary, right? That's always been a motivating factor, just knowing like you've got. Suddenly the money, let's also hold you accountable.
This is like everybody you know will know that this thing failed. And there'll be a monetary proof that it didn't work. You said that you're equally motivated by people telling you that it will work or that it won't work. Literally, when I look, every idea you've had has a terrible idea.
And yet you've turned it into these juggernuts. So one, how do you look at that and go, no, no, I see a path there. And then two, when people start telling you, especially in the early days when you did not have the track record to back it up, how did you deal with other people putting doubt on you? Yeah.
Well, I mean, diapers are common is a great example because it was sort of, I said, you know, my idea is pretty simple. We're going to sell diapers on the internet and deliver them to people's homes so they could have convenient access to something that's in the butt. And then I talked to people in the industry and they'd say, well, let me tell you why it hasn't been done. It hasn't been done because diapers are lost leaders for places like Walmart and Target and Big Box.
So they don't make any money on it anyway. And then now you want to pay for shipping and you want to pay for film it and they're heavy and by the way wipes, that's basically shipping water. So there's no way to make money. And so every time somebody says something can't be done, there's also a part of me that gets a little bit excited because I'm like, okay, well, then nobody else is going to do it.
The big companies aren't going to do it. And then you kind of put that juxtapose that against really big market opportunity because the follow question I would always ask was, okay, fine, you're not going to make money, but will there be customer demand? Will people want diapers delivered to their door overnight at amazing prices? And they went, oh, yeah, no, there's no arguing with that.
People will love that. So the demand is there, a really big market. You can't make money. So then thinking about how to sell that, well, what if the diapers, the fulfillment, the shipping, all that was a loss leader online to basically sell that long tail with unlimited shelf space.
So similar to brick and mortars, the user is a loss leader. You could afford to lose more money on diapers if you've got millions to sell them. And then you make money on. And once I got convicted on that, that made sense and that penciled out, nothing would stop and make that point.
I didn't care what anyone said. And the more people said it couldn't be done, the more fine up it got me. So what do you think stops would be entrepreneurs? What's the idea?
So I'll say for me, boredom, boredom kills more entrepreneurs than anything. They don't understand what's coming from them. But in your story, I hear something else and I wonder if there's something that you... What stops them after they've already started or from starting?
From starting or once they get going? Yeah. I think from starting, and I know a lot of people that have ideas. First thing is people think the idea is not good enough and they think the idea is way more important than it really is.
And people try and find ideas that have never been done before, which usually result in niche little businesses. I challenge people all the time to say it's not about the idea, it's about the execution. Find and pick any initiative out there. There's a way to disrupt it.
There's already a big market. If you could just figure out a way to do it a little bit better and execute well, you could make a nice return on capital. You could take anything, you know, pizza delivery or something and just say, great. We know people order pizza, they get it delivered, it's great.
What's wrong with it? Oh, it comes, it's not hot. The poly is not great. Oh, one of the things, okay, I'm going to create this.
Whatever it is, yeah, if you go and raise capital and execute, it doesn't have to be anything super innovative. So I think that's what holds people back. I think once people get going, I think they spend too much time thinking about all the things that could go wrong and they get overwhelmed and it literally just paralyzes them. I always say, forget about all that stuff.
Today's today, what's the biggest step you can take toward your vision? Well, how do you make the most progress against the vision today? So I always push people to be really clear about the vision and then they take that step and then it's the next day. And they say, oh, no, no, don't focus on that.
What's the biggest step? And as you start lining up five, six, seven, eight weeks, months in a row, you're like, wow, look back, we've got some serious progress and focus on how far you've come and keep the vision in mind. But don't get caught up between today and the vision because you'll just spin out of control. I see that all the time.
How do you deal with failure? Like surely none of your plans are like, we're doing this and you just think it's doing it. No, I've so many like times before in my life, so many failures growing up and things. And the way you deal with it is not to dwell on it at all.
You just have to basically, as soon as you recognize it, first of all, being objective about progress. You're constantly reevaluating all the new information. So you could basically say, here's the vision and you start marching and information's coming out every day. Competition, things, the market, the world, whatever.
You need to take in the information and then kind of reassess constantly. So you could be objective about making decisions. And if you get to a point where you realize what you thought was true a year ago or two years ago is not true anymore, given all this information, now where you need to be. And as soon as you recognize that, you know what, I tell people, I was wrong.
Forget that. I know I said that that was when the information was this, new information, new, we're going to live it and then get everybody aligned around it. But willing to take that risk of looking stupid and basically just changing your mind. And sometimes that happens over a year or two years.
Sometimes it could be months. You could be months and say, you know what, wrong. Objectively, we've got some new information. Let's go in this direction.
So I think you can't dwell. You just have to reassess and go. If you're thinking about the failure or feel bad even for a minute, that's just a minute of lost time going forward. If someone wants to be a great leader, what do you think are the key traits that they should be developing?
That's funny. I get asked this question a lot and I thought about it a lot. If I had to pick one, and this usually surprised me, but I had to pick one trait, I believe that I would be a leader, it would be empathy. For any business to be successful, most people would agree you need to have great people working in the business.
You need those people to basically give everything the best they've got. You need to retain those people. They need to be happy. If you really want to create a big sustainable business.
And then it comes back to what does it take for the ability to recruit great people and keep great people and keep them motivated. It's like, well, they want to be happy. They want to feel a part of something. Okay.
Like what drives someone's happiness? At the end of the day, when you really get into it, people want to be understood. They want to be heard. They want to feel like there's something bigger than just dollars and cents in business.
And I think being empathetic is putting yourself in somebody's situation and being able to relate to how they feel about business situation, things outside of business, personal stuff. I think that builds a lot of trust and respect and people willing to be more loyal and committed and willing to give the best that they've got when they feel. It's also a feeling of safety too. I think when people feel listened to, heard and understood, they feel safer.
A lot of times people don't give their best or do their best because they feel unsafe, which brings the total of the topic around, just creating an inclusive work environment, which I think is super important. The empathy plays a big part of that. So going beyond empathy, because I know some seriously empathetic people who are not good leaders. So I'll say that is necessary but not sufficient.
That's true. What else are things that people should be working on if they want to lead? I think entrepreneurs should be thinking about what I call VCP, vision capital people, at least 80% of the time. And I really focus probably more than that percentage on those three things.
It's constantly thinking, shaping, molding the vision and articulating it over and over and over so that everybody's crystal clear on where we're going. What's the north store? Making sure that you set your org structures under the people bucket, set your org structure in such a way that you can put people in spots where they've got into ownership. I don't like creating organizational structures where you don't really know who's responsible for what.
So thinking about the org structure, getting that nailed, bringing in the very best people in each area is the sort of the peapart and then making sure that you're able to go out and raise the capital, which involves selling your vision. A lot of entrepreneurs are about selling, selling the vision to investors, selling the vision to employees and then packaging it all up. And I think the leaders are able to do VCP really well. On the people part of it, the single most important thing outside of empathy, I would say is about empowerment.
I would say, especially in a startup where you're hiring fast and moving fast, you have to be able to empower people, which means set the vision, let them know what part of the org they're going to represent and what they're responsible for and then just let them run, let them create, not get in their way, not micromanage. I think if you really want to get the best out of people, especially people that are self-motivated, let them do their thing and give them a chance to show what they can do. You've talked about the power of culture and core values. When you started Jet.com, what were the core values that you guys were looking at?
Yeah, trust, transparency and fairness. And the reason why I picked those three, and another thing that I would say about core values is that anyone that's thinking about core values is, and I've learned this lesson is you can't start with a list of 10. If you get a bunch of people and you're managing two together and you start doing a list, they also have converged to a similar list of 10 things, integrity and excellence and all this stuff. I think for core values to really be core, it has to be three or less.
And you have to be prepared to live those values as a company in a way that no other company in the world does. And it's not just values like, don't confuse them with traits you're looking for like the spotte, don't confuse with that. These are values that the company can do to create a culture. And so when we pick trust, transparency and fairness, the reason why we pick those three is because we felt those were the three most important values to lead to empowerment.
So if you want to feel empowered, you got to be transparent as a company, meaning be willing to share information, share financials, share sensitive information, be really open and know that there's a risk that it could get out and that that's be transparent. Trust people. So you trust them obviously with the information, but also to do their job, not to get in their way. We didn't have a non-solicited agreement, non-compete agreement, we trusted people.
And it was more of a handshake come, work here and we're going to give you information that you won't get another company, we'll trust you in a way that you've never entrusted before. And we're going to create a fair, safe work environment. When you were starting out, what was the secret to raising capital? I get, now you have a track record, there's going to be a lot of people that would be ahead of you, side and side at this point.
But what was the key in the beginning? How do you convince people to give you money? Okay, so the first was the pit that I really raised money for, which is an online sports stock market. That's where I raised 200 investor pitches.
So first thing I'd say is, prepared to do a lot of pitches. People when they tell me, like, oh, I'm having trouble raising money, I'm like, oh, tell me, how many people have you talked to? I sat with probably like five or six people and it wasn't really a lot of interest. Like five or six.
That's about five hundred. So the first company I met with 200 people, 60 of them made an investment, which is a pretty good hit rate, almost one in three. I still tell people that's 140 people that I gave the full pitch to that said, no, I don't want to invest. So even though it's a great hit rate, still way more people are going to say no.
But the thing that put a lot of those 60 people over was the fact that they saw the passion that I had for the idea and the commitment I was making, not only for quitting my job, but I invested $390,000 into the business and they looked at the sheet, I remember this one investor very specifically, Garnet, he looked at the sheet and he goes, I see here, you invested $390, can I just ask, why do we see that people? Why didn't you round to 400? I said, why only have $390,000? And he's like, all right, I'm in.
It was like immediate, you know? And that sort of triggered for me. I didn't realize at the time that that was actually going to be as valuable as it was, but I started to use that with investors after. I'd say, you know, I've invested my entire life savings in this business.
That's how much I believe in it. And they're like, are you committed? Are you really going to? Yeah, my entire life savings is in it.
I was making this salary, I'm making zero salary now, yes, I'm committed. That's what got a lot of people over the home. So I would say if you're raising money from angel investors, it doesn't need, you don't need to have a network because I knew nobody. It was just my boss and he introduced me to two people.
It's fine, one person asked me to introduce to a couple people and then each person you pitch asked to introduce to a couple people and he just, and so the network just grows. And that's the way I did it. It was no connections. A lot of people think you need connections and you need to know people.
There was no venture capital. There was no institutional investor the first time. It was five million bucks of just, you know, 80,000 a pop on average, basically. And like 60 people.
That's how I started. That's crazy, man. Dude, look, your string of success is so gnarly. Congratulations.
How can people stay in touch with you? How can they learn more? I've been, last year, I've been sort of active on LinkedIn. I don't really have time for other social media stuff, but LinkedIn, I try and, you know, once we put a post, I get an idea about something I could think could be helpful to folks and also post it on there.
So that would be the best way, I guess. Perfect. All right. Last question.
What is the impact that you want to have in the world? What is the impact? That's a big question. I just, I mean, the way I live my life every day is I try and do what I was telling you.
I do with my kids and just trying to be empathetic and give back and, you know, give more than I take. And I think that's kind of the impact I want to make, give as much as I possibly can without asking or taking much back in return. Amazing. Yeah.
Well, guys, he is starting to put out a little bit more content. I would say drink it all in. What he has done is beyond extraordinary to be that all in in your life, to gamble on yourself, to learn from your mistakes, to grow and just continue to execute at a higher on a higher level. And that may be the most important thing that he said, execution is far more important than the idea.
So speaking of executing, if you haven't already, be sure to subscribe and until next time my friends, be legendary. Take care. All right. Thank you, man.
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And you guys rating and reviewing really helps with that. All right, guys, thank you again so much. And until next time, my friends, be legendary. Let's talk about a pattern that is guaranteed to be killing your progress.
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