Start. Scale. Exit. Repeat. What Makes a Startup Successful with Colin Campbell

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. are brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like Sales Evangelist. Today, we'll be breaking down the start, scale, exit, and repeat method. What makes a startup successful? To drop these value bombs, I brought Colin Campbell into Eagle Fire Studios. Colin is a serial entrepreneur, number one bestselling author who started, scaled, and exited over a dozen companies worth almost a billion dollars. He also runs Startup Club with 1 million members.

0:36And today, Fire Nation will talk about what makes a startup successful. We'll talk about what makes an idea great, the four sticky note business plan, and so much more. And a big thank you for sponsoring today's episode goes to Colin and our sponsors. Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Marketing Made Simple brings you practical tips to make your marketing easy and more importantly, make it work. A recent episode on whether vulnerability is a superpower in business is a must listen.

1:10Listen to Marketing Made Simple wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training, where he teaches you how to land a TEDx talk and spread your message to millions. Colin, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. My kids tell me all the time that it was a lot easier for me to start a business in the 90s than it is today.

1:53And let me be pretty clear with you. In the 90s, it was a lot easier to start a business compared to the 1960s. And I'm going to make the case here, it's never been a better time to start a business today in the 2020s. It takes a lot fewer people to launch a successful company than it did in the 90s. I don't know if you know this, but we paid$100 ,000 for our first phone system for our office in the 90s. Now you can get that for$99 a month. Come on, Fire Nation. Oh, yeah. Come on. I mean, just think about this stuff. I mean, man, it is amazing what you have at your fingertips today. And it's only going to get better and easier to start, scale, exit, and repeat.

2:39And man, Fire Nation, there are a lot of you in the startup phase right now. So Colin, let's go to you, somebody who has been there and done that with over a dozen companies. What makes a startup successful? Oh my gosh, going back to 2012, I was asked to fly to MIT to speak on the topic of starting, scaling, exiting, repeating. And it was from a former mentor of mine and Vern Harnish who runs the Masters of Entrepreneurship program. Recently, before this, I recently just broke my leg skiing. So I literally walked into lecture hall on crutches, hobbled in there, and reflected back on what it was that I was doing over and over again.

3:28What were the patterns that I learned? And I learned that every startup needs to have a great story. It's got to have great people, enough money to succeed, and the right systems at the start phase. And by the way, that changes for scale phase and for exit and for even repeating. Now, give me a minute here. I'm going to take you back a little bit. I'm going to tell you about my past. Going right out of college, I worked on the family farm for four months. I earned a few thousand dollars, maxed out my credit cards and borrowed$12 ,800 from my mother to start my first business. We started a software rental business, which did OK, but had a short life because it got outlawed.

4:08software rental was outlawed January 1st, 1994. But during that time, we started something called a BBS, a bulletin board service. And although we loved that business, we saw the potential with this new thing called the internet. So we basically had to shut that business down in order to launch the internet. Well, we launched the fastest growing company in Canada at the time it went public. And we saw an opportunity to launch software downloads through a company called Two Cows. which today is quite a prominent company. And in 2000, we launched another company called Hostopia, which became the largest web hosting and email company, and then Geeks for Less shortly thereafter, which had 800 people in Ukraine.

4:54See, one of the things that I learned from all of these companies is that there were patterns. And it really broke down into three things. One, that each of these ideas we launched were highly scalable. Second, we learned pretty quick to build a moat around our businesses. Brand, focus, distribution, being the best product in that market, period. And number three was each of the companies we launched caught a wave, which occurred to me now is that probably the biggest wave in the 2020s is AI. That is truly going to mint more millionaires than any other technological shift in history. There's two other quick things.

5:35One, it takes a village to raise a startup and you're not alone. We're not going to go back to Steve Jobs and Wozniak in a garage. We can go to incubators. I teach at an incubator called the Allen Levan Center at NSU in South Florida, and they have a free incubator program with 10 sessions, including myself, who helps kick off with a four sticky note business plan. and we do that in 30 minutes. And then the sessions finish with a pitch to investors. I had the opportunity to interview Bridget Weston, who's the head of SCORE. They have 10 ,000 volunteers. She makes the claim, JLD, believe this, listen to this.

6:17She makes the claim that you can increase your chances of success by more than three times by having a mentor and it's free. Absolutely free. Fire Nation, I hope this is getting the hair on the back of your neck to stand up a little bit because it's right there. It's right in front of you. This is what works and it's free. Now, in today's world, Colin, we can't just be good. We must be great. So what makes an idea or a story great? Yeah, I think every great story needs a purpose or why. the reality is I love dogs which is why I love our company paw.com that's one of the companies that we run in the incubator here in Fort Lauderdale but let me give you another example we actually run a vacation rental company and our concept came out about based on the travels of my wife and I we would I look I traveled oh my gosh for 50 countries and I went to you know Every time I'm staying at a hotel rooms, I began to get depressed in hotel rooms.

7:26So we would choose vacation rentals as an alternative. But you know what we found? The mattresses were so cheap, the air conditioning wasn't working. There was one place we went into where they had a sign saying, please don't eat the meat in our freezer. I mean, it was just a mess. So we launched a concept called Escape Club, and we put in Weston heavenly mattresses, pottery, barn, furniture, and cookware. And of course, we have lots of games and entertainment for the guests. We tried to solve a problem, which was we want the quality of a hotel, but we also want the vacation rental experience.

8:07And I also want your listeners to think we don't always have to solve global warming. It could be something in our day-to-day life that we see that's out there. Fire Nation, I hope this is kind of stirring up some ideas, some thoughts. I mean, what in your life makes you depressed that you want to just mix up a little bit and make great? What's something that you find yourself complaining about time and time again that you know you can make better, that you have a passion to make better, that you can make great? Now, you have a four sticky note business plan, Colin. Let's talk about the first two now.

8:41I mentioned that earlier that we do a four sticky note business plan in about a half hour. It takes about 30 minutes to complete. So think about this. I'm asking you to just spend a little bit of time thinking about it. Now, why sticky notes? Well, one, because they're sticky. We can stick them up on the board. That keeps us focused. And two, they're small. Because we want this to be very, very simple. We don't want a complicated business plan. If we want that business plan for investors, we can take our fourth sticky note business plan, pop that into ChatGPT, and it'll pump out a really nice business plan for us.

9:16That's not what we're trying to achieve here. What we're trying to achieve is something that allows you to focus and be strategic with your startup. So on the first sticky note, we're going to want to title it story. What is my story? What is my purpose? We talked about that. what is the space that I want to own on the front page of Google? I usually say, what's the space I want to own? But I usually say, but also think about it in terms of somebody on the internet searching on Google to find a service or something like that, and you come up on the front page. Which means you might have to think a little differently.

9:55You might think about more geo. You might think a little bit more particular. You can't necessarily be the number one in the country, but you can be number one in a smaller geo. What is the space that I want to own? We also want to identify the customer persona. And then also, this one was a little bit controversial when we wrote the book. Do we put X Factor in there on the four sticky note business plan or do we save that for scale? Because it really is a tool that helps you scale. And we decided to put that in there. And what an X factor is, is something that you do that nobody else does in your industry.

10:33If you can crack that and you have it, nobody else has it, you can kill it. I would argue that Tesla's most powerful X factor isn't their technology or the fact that they're first doing electric cars, because there are other companies doing electric cars. I would argue that their X factor is their network of charging stations. It's so powerful that they recently announced that they would open it up to GM and Ford and to other companies as well. So first thing, first note, first sticky note, you get your purpose, the space you want to own, the customer personality, X factor. And lastly, the stage gates.

11:10What is the specific point in time that you will have achieved a smart goal? Specific, measurable, attainable, relevant, and time bound. So do you remember those car games where you're driving and you stick a quarter in? Oh, yeah. In the gate, right? You have to hit your gate or you don't have more time. You're out. Or else you got to put another quarter in. Well, I want you to think of your startup like that. Because if you can pick that point in time, whether it's 10 sales, whether it's an MVP, minimum viable product, whether it's 100 distributors, whatever that point in time is, if you can pick that point in time and say, If I hit it, great.

11:53We'll go to the next stage gate. If I don't, I'm either going to pivot or kill it. And then on the next three sticky notes, you're going to want to put people. How many people do I need to get to my first stage gate? How much money do I need to get to my first stage gate? On the third one and on the fourth one, all I'm asking for you to do is just come up with some basic KPIs. KPIs, key performance indicators. And if you can identify leading indicators, such as the number of phone calls I need to make per day to reach number of proposals, to get number of sales. You know, at paw.com, which is dog products company we have here as well, we actually track our ROAS, return on ad spent per day.

12:36And all of the executives look at that ROAS. Having a four sticky note business plan is all about drowning out the noise that comes along with the chaotic roller coaster of a startup face of your business. That's it. Fire Nation, I hope you're taking notes and I hope you stick around because we have some value bombs coming your way when we get back from thanking our sponsors. Are you ready to start your year off with increased revenue, faster growth, and record-breaking performance? Well, a powerful sales platform can make it all happen And for that, there's the all new sales hub from HubSpot.

13:11Sales hub is an all on one platform thoughtfully built with the tools and insights you need to communicate on a personal level with every lead, prospect and customer. If you're looking for a better way to acquire customers, make smart data driven decisions and increase visibility, productivity and predictability at a great value. Look no further than sales hub. Some of the other platforms out there take months and months to learn and integrate. but with Sales Hub, you can be up, running, and on your way to your best quarter yet in just minutes. I know what you're thinking. Sales Hub must cost a fortune.

13:42Nope, it's free to get started and will grow with your business as it scales. And with more than 1 ,300 integrations and a ton of valuable add-ons, you can customize it to your exact needs. With Sales Hub, closing deals is no big deal. Head to hubspot.com slash sales to try it for free. Do you have a message inside that you know is meant to be shared with the world? Giving a TEDx talk is one of the most powerful ways to share your message with the world, and Thought Leader can help you get there. Thought Leader is a speaker coaching company that has helped over 550 and counting coaches, speakers, entrepreneurs, authors, and experts land TEDx talks.

14:18Thought Leader is not affiliated with TED or TEDx, but they're able to get these results because their founder, Taylor Conroy, is a four-time TEDx speaker himself and past EO Fire guest. You might be thinking a TEDx talk sounds great, but where do you start? Taylor has put together a free training that's going to teach you how to land a TEDx talk in as little as 90 days. Join Taylor to learn exactly what TEDx organizers are looking for in their speakers, how to write a talk that goes viral once it goes online, and more. Visit thought-leader.com slash fire. Join Taylor for this free training and get your message out of your head, out of your heart, and out into the world where it belongs.

14:56That's thought-leader.com slash fire. If you've ever dealt with a lack of sleep, soreness after workouts, or stress due to the competing priorities in your life, then you've likely tried a lot of medications that claim they'll help. And chances are, your medicine cabinet is full of a lot of stuff that didn't work. I've been there too. Good news is CBD can help. If you're ready to clear your cabinet and reset your health like I did, then you should check out CB Distillery. What I love is that CB Distillery's targeted formulations are made from the highest quality, clean ingredients. No fluff, no fillers, just pure, effective CBD solutions designed to help support your health.

15:33In two non-clinical surveys, 81 % of customers experienced more calm. 80 % said CBD helped with pain after physical activity. And an impressive 90 % said they slept better with CBD. With over 2 million customers and a solid 100 % money-back guarantee, CBDistillery is the source to trust. And I have a 20 % discount to get you started. visit cbdistillery.com and use code FIRE for 20 % off. That's cbdistillery.com, code FIRE, cbdistillery.com. All right, Colin, we're back and I want to keep rocking with this Sticky Notes business plan. Let's wrap it up with a bow. Finish strong. What is the rest that we need to know about this?

16:18The sticky note business plan is all about identifying your strategy when it comes to your story, the people, the money, and the systems. And if you do that and you do it really well, your chances of succeeding will increase. See, a lot of entrepreneurs, including myself, I'm guilty of this. We launch a business, we launch a business, right? And you've probably done this before, you launch it, but you don't really plan it. It's sort of like you fire, aim, and then shoot, whatever. It's like backwards. We're doing it all backwards. We're using our instinct to get us there. And the fact of the matter is, if we take a little bit of time, I'm not asking for a lot of time here.

17:00I'm just suggesting 30 minutes to write down on these four sticky notes, the story, people, money, systems. If you do that, your chances of succeeding will increase dramatically. Fire Nation, I really hope you're listening because we need to do everything we can to increase our chances of success because there's enough obstacles out there in this world that we don't want to be hitting those when we have lessons that can be learned from people who have avoided them in the past. And you have a chapter in your book, Colin, that centers around why startups fail. Can you share some of these reasons?

17:36Yeah, and actually there's quite a few, but I'll share a few of them with you right now. So there's a US bank study that was done that 82 % of small business fail because of poor cash management. That's usually, that basically means they run out of money. So going back to that sticky note business plan, we said, here's our stage gate. This is the amount of money we need to raise. I can't tell you how many times I've seen businesses launch. They're great entrepreneurs, great concept. They even track their KPIs, but they just don't have enough money to get there. So that's probably the number one reason why.

18:11But I've also seen the opposite. We all have where a company gets too much money. I don't know if you know this, but 75 % of venture-backed companies fail. and recently there was a company called WeWork which you know about and I coined in the book I talk about them catching Silicon Valley disease which really is a condition where the founder of the company received too much money and they made a lot of bad choices a lot of bad leases lavish offices and parties and they did a lot of weird side ventures that were nothing to do with their core business. And ultimately, that company collapsed and failed.

18:53So you can see how not enough money can be a problem. Too much money can lead to Silicon Valley disease. But there are other things. And probably, you know, the one that really stands out for me is that bad things do happen. You know, in 2024, sorry, 2020, 2020, we saw the lockdowns, right? And in 2024, we saw, oh my gosh, 2021, we saw inflation, paw.com, which I mentioned is in our incubator. Let me tell you this, the container costs went from$2 ,000, and we do 100 containers a year, went from$2 ,000 to$24 ,000 a container. That's$2 million of losses that hit our books. and then we had the tech wreck in 2022, the crypto crash.

19:45I mean, bad things can happen, which by the way, is the thesis of this book. Start, scale, exit, take some money off the table, repeat. So I wanna talk about this start, scale, exit, repeat because the reality is a lot of people don't do that. They don't take money off the table. They don't understand that we live in a world of cycles and that this too shall pass, whether that be the lowest of the lows or the highest of the highs. Like you're going to be crushing it and then you're not. You're going to be an absolute disaster dumpster fire and then you're not. Like everything will pass. So talk to us about your main belief around scaling, around exiting, around repeating.

20:29I think that scaling is very different than starting. And you as an entrepreneur need to transform yourself as an individual. You know, the number one reason why companies fail to scale, in my opinion, by the way, the vast majority never do scale. It is because of the entrepreneur is in the way. The entrepreneur is their number one worst enemy. So we need to change our mindset when it comes to running a business. We need to hire leaders and delegate responsibilities, not tasks. See, when you're in the start phase, it's all about delegating tasks. You basically have everybody around you and you're moving in many, many different directions very quickly, quickly.

21:16You're handing out tasks to everyone. When you begin to get into the scale phase, it's time to delegate responsibilities, not tasks. I got that lesson back in 2006. We were running a publicly traded company. And the board was a board member came to me and suggested I was over my head and was talking about firing me. And I met I met a gentleman named Patrick Theon from Rhythm Systems. And, you know, at the beginning, I was like, just help me get the board off my back. And eventually he's like, no, I'm not going to do this without you unless you do it correctly. So we launched a lot of systems. We launched goal setting, annual quarterly goals.

21:57We had individual goals. We had weekly status checkups. We had daily sales huddles. We did two days of strategic planning, 88 days of execution. We developed core value statements. Now understand at the time we had 600 people in the company and we were flatlining. It was a difficult situation. Here were the results. We doubled in size in three years, sold the company for 17 times EBITDA to a Fortune 500 and company, and we were trading at$4.55 a share, and then$10.55 per share the next day. It was an incredible feeling. And JLD, when you finally exit, you finally do that as an entrepreneur, you can repeat the process all over again.

22:46And in the book, we talk about the best way to do that. Fire Nation, I hope you're getting excited. I hope you're taking notes. And Colin, let's end with a bang. What is the one thing you want to make sure Fire Nation gets from our conversation? And what call to action do you have for our listeners? Yeah, I think the number one thing for your listeners is that you're not alone. You have people who want to help you. And that there are systems that you can follow to start, scale, exit, repeat. I'm telling you, I learned the hard way, many, many lessons. And learning is the key. Entrepreneurship is a trade.

23:31And mastering that trade, you need to continue to develop and learn and hone those skills. I believe the book really does address that. We interviewed over 200 people for this book. It took 10 years to write that book from the day that I went into MIT. That was the very first day that we began writing this book. In the last two years, we had six full-time people working on it, and it's available everywhere. It was number one bestseller in eight categories on Amazon from starting a business to entrepreneurship management. And you can get it with the Audible on Amazon or a physical book. And by the way, this physical book is big.

24:14It is. I admit it. But it's full of illustrations, over 200 collards. We wrote this book for the ADHD entrepreneur. That's what we did. It's really meant to be simple and digestible. and a lot of stories that draw conclusions. Fire Nation, if you think you got value from this conversation, think about the value you'll get from this book. So take action. Colin has been a repeat guest on Entrepreneurs on Fire for good reason. And you're the average of the five people you spend the most time with. You've been hanging out with CC and JLD today. So let's keep up that heat, Fire Nation. And for links to everything we talked about, visit eofire.com.

24:54Type Colin in the search bar and the show notes page will pop right up. Colin, 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. I love Fire Nation. Hey, Fire Nation, a huge thank you to our sponsors and Colin for sponsoring today's episode. And Fire Nation's successful entrepreneurs accomplish big goals. That's why I created the Freedom Journal to guide you in accomplishing your number one goal in 100 days. and we're talking step by step, visit thefreedomjournal.com and I'll catch you there or on the flip side.

25:32Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Marketing Made Simple brings you practical tips to make your marketing easy and more importantly, make it work. A recent episode on whether vulnerability is a superpower and business is a must listen. Listen to Marketing Made Simple wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker, Taylor Conroy from Thought Leader can help you get there.

26:03Visit thought-leader.com slash fire to join Taylor's free training, where he teaches you how to land a TEDx talk and spread your message to millions.