So what makes all the difference?

Francis Galton, who authored the book Hereditary Genius in 1869 coined the term “nature versus nurture”. Galton argued that people had innate limits in what they could achieve in life, and regardless of the work they put in, they would never break past these predetermined boundaries. At which time, it’s best if they just accept it, stay within their boundaries and “find true moral repose in an honest conviction that he is engaged in as much good work as his nature rendered him capable of performing.” In other words, give up and be content.

This explains a lot of the thought patterns in our culture that surround great performers and the notion that they operate at an unattainable standard. You either have it or you don’t.

Over a hundred years has passed and the research continued. Hundreds of studies have been done on the subject; the employees who’s performance had plateaued for years, seemingly hitting their “rigidly determinate natural limits”, only to a see a consistent improvement in performance after new incentives were offered.

In his now famous paper, “The Role of Deliberate Practice in the Acquisition of Expert Performance”, Anders Ericsson concludes that “the search for stable heritable characteristics that could predict or at least account for superior performance…has been surprisingly unsuccessful.” Meaning after countless case studies, researchers found no relationship between natural talent and great performance.

However at the time of this paper, “natural talent” was still the favoured theory when it came to high achievers. To this the authors indicate, “the conviction in the importance of talent appears to be based on the insuffiency of alternative hypothesis.” Meaning people believe in ‘talent’ because they don’t have an alternative.

Until now.

The book had been released two days earlier on 14th December, 2010 and had been enjoying incredible sales.

I went into Dymocks and asked if they had the book. The man behind the counter, hadn’t heard of the book so punched it into his computer.

“That book comes out January 1st and will be here on January 28th, 2011″. What he was saying was that Dymocks, one of the biggest book chains in Australia, who sell nothing but books, wouldn’t have this new release until 6 weeks after it came out online.

I felt like asking him whether he had walked his dinosaur recently. Instead I turned around, walked out and went back to my laptop.

In examining the greats, the book highlights that very few of them were born with any real degree of talent.

Mozart was born to a father who was a professional music composer and an expert in teaching music, particularly to young men.

Tiger Woods was born to a professional golfer who also studied the most effective strategies for training young men. Before Tiger could walk, his father would take him to the garage, sit him in his high chair and start to hit golf balls in to a net in the garage. “It was as if he was watching a movie” Tiger’s father said.

The premise of the book is that talent, a natural aptitude in a specific field, does exist yet when it comes to being great in a particular field, it is irrelevant.

One of Tiger’s childhood coaches said that Tiger was like Mozart, according to these accounts, indeed he was.

Facebook are changing the world again.

By now you’ve probably heard of Facebook Places, the application that allows you to “Check In” to places you’re visiting, alerting all of your Friends where you are.

Starting now, businesses can offer customers special deals when they “Check In” to their place on Facebook.

Check it out:

You’re in the area and looking through “Places” to see where to go. You can tell which Places have special deals because there is a Yellow Icon next to their name…

Sharp’s Coffee have a “50% off coffee” deal for anyone who Check’s In. Why? Because they want you to tell your Friends your there.

Simply Check In and show your phone screen to the person behind the counter…

…and just like that, you’ve got 50% off your coffee.

All of your Friends now know you’re at Sharps. Next time they’re in the area and looking for coffee, where are they going to go?

This application will change the way businesses, particularly offline businesses, reach new customers.

Right now Facebook Deals is available in the US and will be available in Australia in the coming months, giving us time to track the success of campaigns before deciding which ones are best to adopt.

Some of the deals already being done in the US:

American Eagle Outfitters: Offering 20 percent off.

Chipotle: Giving its Facebook guests two entrees for the price of one.

Gap: Giving blue jeans to the first 10,000 customers to claim their deal.

Cinema: Hosting a free screening for whichever of their movie theaters gets the most check-ins, as well as giving free souvenir Facebook Places pint glasses just for showing that you’ve claimed the deal.

So what’s going to determine whether customers come to you?

It might be as simple as…Deal or no deal.

A remarkable demonstration of the power of the social media has just been released – “What the F*ck is Social Media Now?”

The power of social media now means that any idea, campaign or business can go viral very quickly. The question is, are you fully utilising social media?

If Social Media is so f*cking huge, what are some simple ways we can utilise it to grow our business?

The Facebook Like Button

The Twitter Share Button

Learning From the Young Rich – Part 2

Every year BRW magazine publish “The Young Rich List”. The list includes the 100 wealthiest people in Australia under 40 and is read religiously by most people who are looking to create wealth.

D.  Back yourself. While Gerry Harvey, founder of Harvey Norman, was closing down stores throughout the year to cut costs, Nigel and Tania Austin, co-founders of Cotton On, were opening three new stores a week over the 08/09 financial year. This aggressive approach to capturing market share has paid dividends for Cotton On.

This is not to say that had Gerry Harvey opened up more stores rather than shutting them down, then his wealth would not have dropped by $400 million in 12 months. But it is to say that there is always more than one approach and being greedy when others are fearful, can pay dividends in the long run.

Nigel and Tania Austin have seen their wealth jump from $125 million to $156 million, doing just that.

E.  Focus on the people. Cotton On’s growth is highly aggressive, to the point where it has even drawn criticism recently by commentators who say that the growth is not sustainable. However Nigel Austin says that it’s the people in the business that have been able to ensure they have met their aggressive growth targets. “We spent a lot of money on management training to make sure our people have the right skills to drive growth.”

He attributes the success of Cotton On to, the “excellent managers right across Cotton On who are real leaders and business builders.”

F.  Have clear targets. Given what the economy has done over the last 18 months, most entrepreneurs have not hit their financial targets. However in business as in life, it’s the goals we choose to set for ourselves and live by, that will influence our direction more than any external factor. It has been said that what lies in front of us, and behind us, is far less important than what lies within us.

As Shaun Bonett, number 5 on the list says, “I’ve found it makes me focus on managing for the longer term. It also helps to make all the challenges you are going through at a time like this feel like a worthwhile learning experience.”

Overall the Young Rich held up very well over the last 12 months. The Rich List, which includes the richest 200 people in Australia (mainly over 40 years of age), saw their wealth drop by 18 per cent this year. Whereas the wealth on the Young Rich List, only dropped by 4.5 per cent – a great achievement considering we have just experienced the worst financial crisis since the 1930’s.

Of all the people on the Young Rich List, none ended up there by accident.

Learning From the Young Rich – Part 1
Every year BRW magazine publish “The Young Rich List”. The list includes the 100 wealthiest people in Australia under 40 and is read religiously by most people who are looking to create wealth.

The more I have seen in business, the more I have learnt the importance of learning from people who have the results you are looking for. These days many people are willing to give advice, the question is what advice do you take on?

Given that the average wealth of the people listed in the Young Rich List is $65.5 million, I think we can trust that these people, at least for the most part, know how to make money. Everyone in the list is self-made and has therefore not inherited any of their wealth. James Packer has never been featured in the Young Rich List.

Lessons:

1. Think big, start small. “Before you achieve that first $1 million, you have to get your first dollar.” Phillip Di Bella started a coffee business in 2002, selling coffee to cafes. He would roast his own coffee in a machine that he rented and would then pack it and deliver it himself, doing the books for the business on his girlfriends computer.

   Sometimes people can have a romantic idea of what it is to be an entrepreneur, usually these ideals are shattered rather quickly when they realise that it’s not all glamour in the beginning.

   Having said that, it can pay off. Phillip Di Bella is now worth $47 million and is still dedicated to delivering a quality product to his loyal customers. “My promise to them, and it’s a very simple principle I’ve kept, is that I’ll do for my customers what others are not prepared to.”

2. Never too young. Trent Davis started his company NetBox when he was 22. This was his third business, after his first two businesses had failed. Learning from the first two businesses, Davis went into NetBox with what he calls a “one foot on the brake approach.”

   Now 32, David has built NetBox into a formidable company with annual sales of $30 million and 20 staff. Having started the business at 22, he remembers the sacrifices he had to make in order to get started early. “It was two-and-a-half years before I was taking home a proper wage, which is quite a long time to be living like a university student when you’re not at university anymore.”

3. Fake it until you make it. An important skill of any start-up or small business is to be able to look bigger than you are. Entrepreneurs are masters at giving the impression they are a large organisation, when in fact they live in a studio apartment and had to catch the tram just to meet with you.

   Stuart and Nicole Patterson started a building repair business when they were 24 and 23 respectively. Because they were dealing with large clients, they understood the importance of looking the part. They started the business in their rented two bedroom apartment – this was their office. Nicole would answer the phone as “the receptionist” and would direct the different calls to different people (different people being Stuart) in a number of different “departments”.

   Business is about delivery and it’s also about show-business. Thanks to such a convincing performance, Stuart and Nicole have grown Pattersons Building Group into a company with revenues of $42 million per year and 70 staff.

   Although the performance was a convincing one, they always understood the importance of delivery. “We delivered. We never failed a client. We had built a reliable network behind the scenes.”

   Go to Part 2 of Learning From the Young Rich

]]> http://www.the-entourage.com.au/blog/businessstrategies/learning-from-the-young-rich/feed/ 0 http://www.the-entourage.com.au/blog/interviews/creel-price-%e2%80%93-109-million-reasons-to-exit/ http://www.the-entourage.com.au/blog/interviews/creel-price-%e2%80%93-109-million-reasons-to-exit/#comments Fri, 06 Aug 2010 09:45:26 +0000 tech06 http://dev.the-entourage.com.au.dev.itontap.com/blog/?p=116 Jack Delosa speaks with Creel Price about how he built and sold a business for $109m.

From scaling some of the highest mountains in the world, to meetings with Richard Branson, exiting his business for over $100m to more recently captaining Australia in the World Elephant Polo Championships, he is the high octane adventurer at the forefront of what he now calls the “entreprenaissance”.

Starting his business at the age of 25 with $5,000, Creel built Blueprint Management Group to 1000 staff and within a decade sold the business for over $100 million. However Creel’s business advice remains profoundly simple.

“Business has become too complex.” Creel explains. “But it doesn’t have to be. There are so many components that can overwhelm entrepreneurs. They’ve got to do the finance, HR, marketing, sales…there’s just so many things that can overwhelm you but the role of an entrepreneur can be a lot simpler than that.”

Creel sees the role of the entrepreneur as being the ability to find and engage good people. “If you can actually get your people to have confidence in what their role is, they can really become successful…rather than you the entrepreneur needing to know everything.”
He simplifies the different management styles required for each phase by breaking the business life cycle into three stages.

1. The Income Stage. How do I generate enough income to pay the bills, and eventually pay myself my market salary?
2. The Profit Stage.  How do we build a model that is scalable, allowing us to drive revenue and profits?
3. The Value Stage. How do we create a solid business that is ready for sale? In the value stage it stops being about expansion so much and starts being about de-risking the business.

Creel encourages entrepreneurs to start with the end in mind, he draws on lessons learnt from when he climbed Mount Kilimanjaro. “The goal in mountain climbing is not to get to the top of the mountain, it’s actually to get to the top and back down safely and that’s where it parallels business.” He argues it’s not enough for entrepreneurs to know to how to build a big business, it’s also about succession and exiting that business, something the vast majority of entrepreneurs neglect to fully understand.

“One of two things is going to happen, either you’re going to outgrow your business or your business is going to outgrow you.” Creel calls this “the entrepreneurs curse” and explains “entrepreneurs can get so excited about an opportunity, but then they fall out of love with it, and so they move on to the next opportunity. Unless the entrepreneurs builds the business to a point where they can sell it, they can get stuck.”

Alternatively, the organisation will grow to a point where the entrepreneur is no longer the best person to be sitting in the chair. “Entrepreneurs are great at coming with an idea, innovating and building it to a certain stage, but then sometimes they have to realise that the business has moved beyond their skill-set.” At this point he advises the entrepreneur step aside from the role of CEO and become a non-executive director, putting someone with greater management experience at the helm.

Aside from the personality traits of an entrepreneur, Creel explains that it is also financially beneficial to eventually sell the business. “You can earn an income working for someone else and you can earn an income working in a business, but it’s sort of capped. Whereas when you build up equity value within a business, you can make a substantial return because someone’s willing to pay a multiple of your income, so you can bring some of those future earnings forward.”

An example of this may be a business that is doing $2m profit, and is valued at a multiple of 5 times its profit, achieving a sale price of $10m.

Creel emphasizes that in order to achieve the highest possible price in the sale of a business, it is important that the entrepreneur is no longer there. “Succession plan. The business is worth a huge amount more if the entrepreneur isn’t in the business.” This is about systemising the business to a point where it is scalable, and eventually putting in place a board of management to manage the business.

Today Creel has several ventures that are about encouraging this movement. He educates entrepreneurs of all ages starting at the age of 10 with his Kidpreneur Programs, right up to high-profiled entrepreneurs with his “Add a Zero Program”. To be involved in the movement visit www.creelprice.com .

The media has recently slammed Generation Y for their lack of work ethic. To find out what business leaders think, Jack Delosa catches up with Janine Allis, founder of Boost Juice, to find out how she turned this generation into her greatest asset and what Gen Ys can do to get ahead.

THE ISSUE

A study from SmartCompany, Roy Morgan Research and Dun and Bradstreet indicates that 70% of employers are dissatisfied with the performance of their Gen Y employees. 48 per cent of Small to Medium Enterprises (SME’s) also expressed disappointment with the communication skills of their younger employees. To make matters worse, 90 per cent said that Gen Ys are more demanding than our counterparts and that we’re 79 per cent more likely to ask for a pay rise.

Janine Allis is one person who has managed to turn the troublesome Gen Y into a strong commercial asset. Founder of Boost Juice and the winner of several awards including Telstra Business Woman of the Year (2004) and BRW Fastest Growing Franchise, Allis has been listed several times in the BRW Young Rich List as a result of her entrepreneurial aptitude.

THE PROBLEM

“They’re coming in too entitled,” Allis explains to me of Gen Ys. “If I was a young marketer and I wanted to get involved with a brand like Boost, I would come into the Marketing Director and say, ‘I’m in, whatever it takes, I’m in. I’ll work for one month for nothing and prove to you that you can’t let me go.’

Some of her highest performing employees came in this way, starting at the store level and working their way up, gaining a practical education of how the business works.

With Boost Juice, Allis has managed to create a youthful brand that not only attracts Gen Ys as customers, but employs them as the bulk of their workforce. Allis explains that although there may be a higher portion of Gen Ys that come into the workplace feeling “entitled”, it’s about recruiting the right people that are suited to the culture of your business. “We’ve got the right Gen Ys in the business. By getting the right Gen Ys and giving them a direction and a goal, that’s the answer.”

THE MYTH

With such a high emphasis being placed on tertiary education and good grades, SME’s and corporations can fall into the trap of placing too much importance on the grades of a student rather than the character of the person. “I wouldn’t not hire you because you don’t have a degree. If you had an MBA, great that’s nice, but I wouldn’t hire you because of it. I go by the attitude, the drive, the passion, the ability to succeed. That doesn’t come with a degree, that’s inbuilt.” Allis explains.

When asked if the fact she left school at 16 years of age has ever put her at a disadvantage, she replies, “Never. Never once.”

THE EDUCATION

Gen Y has drawn criticism due to our lack of practical experience in the real world. This is a position which is consistent with the majority of business owners I have come across. It is a downside which the most ambitious of the Gen Ys are overcoming through self-learning.

Education can no longer be viewed as something that happens within the four walls of a high school or university. University is fantastic, sometimes even necessary if you’re looking to become an accountant or a lawyer. However, this can’t be where the education stops. The Gen Ys who realise that the majority of their education needs to happen outside of those four walls, will ultimately break-free of the pack.  Education in the real-world comes from making mistakes and gaining experience.

Having left school at 16, the vast majority of Allis’ education took place outside the classroom. “Talking about university courses, I see lessons in mistakes. I did a $300,000 course in site selection. I did a $800,000 course in getting the right person to do brand. I’ve done a lot of courses to get to where we are today.”

“Every generation needs
a new revolution.”
– Thomas Jefferson

THE OPPORTUNITY

According to Allis, recent media attention puts ambitious Gen Ys at an advantage.

“There are some amazing Gen Ys that are passionate and driven. They’ll make a lot of money and be highly successful because there’s less competition.”

The biggest challenge for companies is to find good people that will genuinely help them drive the bottom-line of their business. “The greatest challenge for the milk bar down the road is the same greatest challenge they have at BHP, and that is people.”

The revolution will come when a select few Gen Ys put their hands up as the achievers of the bunch. Because of the negative media attention around the younger generation, the ones that do stand up as leaders in their field will be very visible. “For those great people who are willing to do anything to succeed, you will be able to write your own ticket.”

He is one of the country’s most respected marketing experts and has taken home almost every advertising award in the world for his creativity. Siimon Reynolds built The Photon Group from nothing, to 50 companies with 6,000 staff and a value of $500m on the ASX, making it the 15th largest marketing group in the world.

He speaks with Jack Delosa about marketing, money and why people fail.

“What are the reasons people fail?” I ask Siimon as he sits across from me in a black Mercedez.

“Well there’s a stack of them…” He says laughingly, “and I’ve experienced most of them.”

Although he’s built one of the largest and most successful marketing groups to come out of Australia, Siimon remains intimately connected with what entrepreneurs in the start-up phase must do to stay ahead.

His overall message is clear, “Pick one thing and become the greatest in the world at it.” Siimon illustrates the importance, particularly in the early stages of business, of knowing your core business activity and sticking to it. “There’s so much competition, unless you specialise and unless you focus, why should anyone go to you?”

Although SME’s and corporations can diversify into other markets, Siimon argues that that’s not how they got there. “What happens is that we see successful companies and see that they do many things, but what we sometimes don’t realise is, how they became successful is they owned one niche and they became an expert at it.”

While building The Photon Group, Siimon went from a two-man band, to owning over 50 companies, most of which were still in the growth phase of their business.

He talks about the importance of business owners not only focusing on one thing, but being efficient in the way they develop their model. “We get stuck having meetings, talking to staff and doing emails, all this peripheral stuff that is not actually generating new income.”

“70% of your time within the first year of a new business should be spent on sales and marketing. And that’s not the case, the research shows that 11% of a business owners time is spent on sales and marketing. But that’s the stuff that keeps you alive.”

Siimon indicates the keys to marketing are what he refers to as “recency and frequency” and that by systemising, and wherever possible automating the way you market to prospective clients you will create a cash-generating machine. All it takes is focus and discipline. “Often it’s the recency and frequency with which you have contacted a client that gets you that client. It gets you on the short list and gets you top of mind and this makes them want to ring you or go and buy your product and service.”

By automating this frequent contact with your target market, Siimon explains that you will remain top of mind for the client.

While in advertising, Siimons’ companies would contact prospective clients 16 times a year. Most of these contact points were automated, and some were managed by a person who had it diarised to contact prospects each and every week.

“We moved from people hearing from us once a year, to people hearing from us 16 times a year. And that’s everything from articles that were useful, phone calls, presentations or inviting them lunch or sending them gifts or sending them books or giving them a birthday card.” A move which obviously paid dividends, “What happened was that numerous times we’d be put on short lists for big accounts, simply because we had recently contacted them when they wanted to look for a new ad agency.”

For small business owners Siimon explains the importance of applying this strategy. “Have a calendar of contact points, so that you know that over the course of 12 months you’re going to be hitting your target market, this many times and in this many ways. And diarise it.”

You can follow Siimon at www.thefortuneinstitute.com.