Minnesota attorney Aaron Hall speaks with Dr. Jeffery Stamp, inventor of the “Baked! Lays Potato Crisp” and founder of Bold Thinking Institute, about some of the problems new businesses face and how to solve them.
Aaron: I’m Aaron Hall, an attorney in Minneapolis. I am talking with Jeffrey Stamp, Dr. Jeffrey Stamp. The inventor of the baked
Jeffrey: Baked Lays Potato Chips
Aaron: And you have a very interesting background since that time. You have gone from an inventor to a business person and now you’re an educator at a number of universities and it sounds like you do quite a lot of speaking. Could you give us a little more information about your background?
Jeffery: Well certainly. I came into entrepreneurship in sort of an interesting way. A lot of inventors have ideas for new products and services and then wonder, how do they get to the market place? Well, fortunately I was a corporate entrepreneur. My job was to create new business. I worked in the Pepsi Co. organization for Frito Lay and my job was to come up with new products. What is interesting is Frito Lay makes a bunch of fried things and we came up with the baked idea. To which they said, we don’t need this, right? So we had to learn to be entrepreneurial to add that to a business. So in many walks of our business careers, we get asked to bring out new things and so after I left the corporate world I have started 9 companies and through that process I do a lot of public speaking and I teach at universities about how do you take great ideas and not just have an idea, but how do you then create an opportunity for a business to emerge from that idea because you have to have business.
Aaron: What are the concepts that you’re excited about right now that would be relevant to entrepreneurs?
Jeffrey: I think the biggest thing that entrepreneurs have to be aware of today is that the world obviously is changing very fast. Now that’s a cliche but what does that mean? That means you have to stay about 15 minutes ahead of the behavior of your customers. To me, the biggest thing, I don’t care what area of business or segment, but learn the consumer behavior. If you’ve invented an idea for a product or a service or even a social networking area, go to the customer that you’re target is and understand their behavior of what they’re spending their money on today and then what you want them to trade that expenditure on later. Because I always say the job of an entrepreneur isn’t to start a business, it’s to learn to turn transactions. So think about a transaction with that targeted customer. Think about who they are and how they behave. Don’t just worry about your tech. Because no one really, at the end of the day, no one cares about the intel inside, they just want to have the intel inside.
Aaron: When you go speak with entrepreneurs, what are the common challenges that you see them facing?
Jeffrey: Two. This is a very dangerous and fun question. The first is what I call reality drift. Entrepreneurs in their own way, bless their heart, we all get this, we invent something and we can see that perfect world scenario will it will work. And we get that fixed in our mind and we can’t shake it because that’s what we desire. So unfortunately we have a reality drift between what is possible and what is real. So we need good advisors to kind of straighten this out. I always tell every entrepreneur, get an advisory board. Before you get a board of directors, just get an advisory board, people who are relevantly aware of your market and your customers. The second is, it’s probably not a polite word, but entrepreneur arrogance. Do you ever meet an entrepreneur who won’t change their point of view? Entrepreneurs have to be coachable, they have to recognize that your great idea cannot make a business all on its own. Ideas can only change current conversations, they can’t help you make better decisions, you have to learn how to make business decisions.
Aaron: This idea of an advisory board, building on an advisory board, that seems foreign to some entrepreneurs, others might wonder how do I get that started? What advice do you have for business owners who want to build an advisory board? You mentioned two criteria. The advisory board members understand the market and
Jeffrey: And the potential customers. So for example, one of the, even though I created products in the snack food area, one of my other companies is an insurance company. I really don’t know a whole lot about the insurance business. I had a sense, being a business owner, of what kinds of insurance opportunities were out there. So we started this secondary employee benefits insurance company. I had to find people who understand the insurance business, the regulatory component, the legal part, how do you sell into companies. I knew that our idea was relevant, but I didn’t know how to make it transactionable. Again, we have ideas for how to fill a need, entrepreneurs often see a problem and a solution. That’s not a transaction, that’s a problem and a solution. So get advisors who can help you get some clarity on what it is that you need to face because, again, you don’t want to run into those walls on your own, take some friends with you.
Aaron: So going back to what you had mentioned about bringing together an advisory board when you’re hoping to launch a new venture, what is the process for doing that, how should you go about bringing together those kinds of people. Are you going to pay them? Are you looking for friends and family to advise you? What would you recommend to me as a young entrepreneur?
Jeffrey: It’s interesting. I think I have to answer this question with one piece of step-back. That is why do people do what they do? So you get an idea, and you’re intention to act has two mental switches, right? The first is do you perceive to be personally desirable? So there’s a personal side. Do you think it’s desirable? The second is, is it feasible? So you have those two switches. Do I want to do it and do I have the resources to do it? So you’re advisory board should be people who sit on both sides of that determinant for you. People who are your personal friends. You see the reason I like an advisory board is that they’re not a corporate board. As you know, a corporate board has fiduciary responsibilities. You don’t bring Uncle Bob into a corporate board because he doesn’t understand fiduciary responsibility, that’s why boards get into trouble. And especially for young entrepreneurial companies, they’re filled with a lot of bad, the wrong people they’re not necessarily bad. The wrong people can’t help you make better decisions. They put those people on an advisory board. If you have a person who is sort of like your coach and person who helps you understand your own personal beliefs as an entrepreneur, that’s relevant. I tend to think of it as sort of like your mastermind, your brainstorming group. Those people that you can simply say, let’s get together on a weekly basis, I want to tell you where I’m at, give me your honesty back. I found that I’ve never had to pay an advisory board because I’ve gotten them involved in the challenge. Now there are way to compensate, there called options, but that’s a whole other conversation.
Aaron: Interesting. So what are you speaking about as you go around the country right now? What are the big concepts and topics?
Jeffrey: I think the biggest challenge that we have today is that people perceive that in a bad economic climate you get two kinds of people right? You get those that go, it’s a terrible economic climate, I’m going to throw away my job and I’m going to go be my own boss. Well , A. you’re never your own boss because you just transplant one set of bosses for another. And whether you’re trying to do just income replacement with your own small business or you’re trying to grow an entrepreneurial business that can grow, you have to recognize that a down economy does present a lot of opportunities. But then you get people that say, well the down economy there is no opportunities because no one is buying. Well that by definition is an opportunity because if no one is buying what they’re currently buying, they do have a desire to buy something else. That’s why there are so many areas of the marketplace that are enduring across down economic times. So I always say to myself, do you have something that you can feel you can contribute to what consumers problems are? If you can see an answer to some problem, whether it’s a, you know a soup kitchen for homeless people to I have the greatest new computer gadget ever, whether it’s social or economic, there is a place for you if in fact you put it together correctly.
Aaron: What is it you like about entrepreneurship? What attracts you? What drives you?
Jeffrey: I like the problem solving nature of making good decisions. I guess for me I’ve always been a big person who likes complex problems where people say it’s impossible. What I love to hear someone go, I got this idea that tells me I’m crazy, am I or not? Now sometimes you are and sometimes you’re not. It’s a fine line. But I love to find the puzzle of a good idea needs more than just the idea. It needs the resources. It needs to be able to have the ability to find a marketplace, get into the marketplace, complete in the marketplace. It’s a multi-faceted problem. So I guess I was that kid in school who always liked the long story problems and the answer was always C. So I guess you just go with that.
Aaron: Your website mentions left-brain, right-brain. Can you talk a little about that concept?
Jeffrey: You know at Bold Thinking our philosophy is that we don’t want to make a particular kind of entrepreneur. There is not a cookie cutter. You’ve heard that story that entrepreneurs are either made or born that way. No, actually entrepreneurs are actually assembled. You ahve to assemble the pieces around you and if you’re a left brain person, if you’re that person that is very analytical and likes things the bottom line, then you need to surround yourself with people who are divergent thinkers, if you’re a convergent thinker. If you’re a divergent thinker, Michael you’re a divergent thinker you like new ideas, then you need to make sure that you get another person around you that can help you bring them in. My goal is to get people to realize that they need to build a team that is a whole brain. You need to get at least one, but you have to bring pieces of everybody’s thinking. I’ve always said in my companies that if I have ten people around my board table, and I ask a question and everybody agrees with me, I tell them to look, nine of you are now cost-savings opportunities because I don’t need people who think exactly like me, I need people who can bring in different points of views. So, don’t be afraid to interject those people who you think are very negative or very positive, they’re all valuable to you.
UNKNOWN: For those individuals who maybe are in a place in their career where they wish they could embark on their own but perhaps they’re in an existing company and you can sympathize and empathize with that coming from Pepsi Co. and Frito Lay, and embarking on your own. What advice would you give them for taking the first step and whether they should take that first step.
Jeffrey: Michael that’s a great question, I get this all of the time. When is the time to jump? Now one of the competitions that I help to guide is the state of North Dakota has a new business venture competition which we call Innovate North Dakota. And every year we get people from the state that are already working a job and they want to say, when do I leave? So the big thing is you have to plan. Every great decision set has to have an endpoint. You have to say, by this day I’m goign to make that decision. But I look at every job as sort of like a degree. If you are working for someone and you feel like you’re still learning at that job, then stay at that job. But if you’re not learning, then you start to think about something else that you’re going to do, figure out all of the resources that you’re going to need and know that when you jump, you need to have about six months of free cash in your pocket to cover your base expenses. Too many entrepreneurs believe that they just need one or two. Well it always takes twice as long as you expect and twice as much money as you plan. So have about six months worth of cash, but also say to yourself, I’m going to keep developing this business on my own, in my spare time, and until you start selling this to one or two people, if you never sold your idea to somebody, don’t leave your job. It’s just too much of a distance.
Aaron: So you wait until it’s proven to make that choice?
Jeffrey: Ya, and that’s part of that whole process of where you get to raise money for your business. People don’t want to fund your hobby, people don’t want to fund your mental problems or your mental challenges with being teased by some technology idea. Prove that the concept works, not only technically but prove that a customer actually wants it. Sell one, and people will talk to you.
Aaron: You read a lot of business books that are popular in the market, maybe some that are not so popular. I’m curious about what your favorite ones are right now, and why do you like those?
Jeffrey: I’ll tell you and there are a lot of great books so we could talk about that infinitem, but one of the gentleman that I had a chance to speak with recently on a platform was Steven Covey, Jr., not Steven Covey, Sr. but Steven Covey, Jr., who is the son of the guy who wrote the Seven Habits of Effective People. Well Steven Covey, Jr. wrote a great book, it’s called The Speed of Trust. And the whole book is really about the value of what trust is in an organization and I have to tell you that it changed my perspective because I’ve always told my students never trust anybody in business for understanding their personal motivations. What Steven does is he takes that normal entrepreneurial fear of can I trust anybody, and says what are the five dimensions of how you build trust. Because you’ve seen this all of the time, I’d love to show you my idea but you have to sign a nondisclosure agreement. Well are they enforceable, but B what is trust in todays world? So to me, those kinds of elements are so important today it’s a great book, Speed of Trust.
Aaron: Any other books come to mind that you recommend?
Jeffrey: Well I always love Seth Golden, I think he’s a great guy because he puts out provocative questions. Now Seth and I have always had a lot of fun debating whether or not the questions he poses are true or not, and his answer is, does it matter? At least we’re talking about them. So I love any authory, Harvin McCaye in another great guy, a Minneapolis guy, who likes to pose great questions and whether we solve them or not, I don’t think is important. But if we’re talking about them then we get a better perspective. I think that at the end of the day entrepreneurs want more choices, not more corners. So lets give each other more choices.
Aaron: People who are watching right now and saying, this guy really resonates with me. I’d like to pick up more of this, I’d like to learn more of this. I’m curious about what they can find out on your website or how they should get involved, what resources are available.
Jeffrey: It’s really simple you go on our website which is BoldThinking.com. I think it’s kind of humorous people ask me is that Old Thinking? And I say listen for a second. Do you want old thinking or not? So it’s Bold, B-O-L-D, Thinking.com. And we have a series of entrepreneurial lessons. We have a lot of content on there, a lot of my lectures, and we have directed courses. What I always say is, I don’t teach people how to write a business plan, that’s your task. What I teach people is to make better entrepreneurial decisions. I think what unites all of us in business, no matter what business you’re in, is the ability to make better value focused decisions, and that’s what I focus on.
Aaron: Very briefly, what are some nuggets of tips or ideas or concepts that you would pass along to small business owners that could get them thinking and help them improve their business?
Jeffrey: I love this question because you can go on any website on Google and what are tips for entrepreneurs and there’s all of these common things. I’m going to give you three that I think you won’t find anywhere else. First of all, recognize that your job as an entrepreneur like I said before, is not simply to write a business plan and walk around at networking events and shake hands. Your job is to figure out how to turn a transaction. So think about your business in a transactionable sense. Every time you go out in the public, think about how you’re buying. Think about good customer experiences, bad customer experiences, how you transact with other people, and then bring those things back to your business. Second of all, so many entrepreneurs always talk about, we’ve created something where there’s no competition. Get over it. You have competition. The biggest inertia that any customer has is the inertia of doing nothing. The easiest thing for any customer to say is no thank you. So figure out why they’re saying no thank you, but then also think about if you don’t have direct competitors, what are they spending their money on. Because you’re going to ask them to put that aside, something that they already like, and by your thing. So look at competition from a different way. I always say that if you can’t change something, just change the way you look at it. And the third one always is, check your own sense of reality at the door. Be open to be amazed by how simply something gets done. Don’t try to build a massive complex organization. Focus, focus, focus. You don’t need forty two good ideas, you need one. The hardest thing for any great entrepreneur is to realize, I have more ideas. Get one, really work hard with the customers, turn some transactions, figure out how you’ll run in the market. Good stuff.