Entrepreneurship Podcast post

Building a Team with Steve Hoffman

George Grombacher May 20, 2022

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Building a Team with Steve Hoffman

LifeBlood: We talked about building a team, the challenges of startups, why you shouldn’t be married to your ideas, how to find the right people for your team, and how to develop your message, with Steve “Captain Hoff” Hoffman, Chairman and CEO of Founders Space.  

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You can learn more about Steve at FoundersSpace.com, Twitter and LinkedIn.

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Our Guests

George Grombacher

Steve Hoffman

Episode Transcript

Unknown Speaker 0:00
Come on

george grombacher 0:11
Herbalife well this is George Jean the time is right to welcome today’s guest is drawing a powerful Steve Hoffman. Steve, are you ready to do this? George? I am ready. Alright, let’s go. Steve is known as Captain Hoff. He is chairman and CEO of founder space. They are a global innovation hub for entrepreneurs, corporations and investors. He is also a venture investor and an award winning author. Captain Huff, tell us a little bit about your personal life’s more about your work and why you do what you do. So I’ve been doing this my whole life, I founded three venture funded startups in Silicon Valley. And to bootstrap startups. I’ve done both. I went on to launch founder space, which is a global startup incubator and accelerator, we have partners all over the world. And then I work with hundreds of entrepreneurs, entrepreneurs of all types, you know, small businesses, fast growth businesses, high tech businesses, I love it. And I put a lot of that knowledge and learning into my books, like my most recent one, surviving a startup is basically everything entrepreneurs need to know, just to survive.

Unknown Speaker 1:23
Nice. So walk me through, you’ve started venture based companies, venture backed companies, bootstrap companies, you’ve seen and lived through the success and the grinding and The Good, the Bad and the Ugly. Why? Why founder space? So I started founder space to really reach out to entrepreneurs. I mean, first of all, it wasn’t a plan. I didn’t, I was finishing my first my third venture funded startup and all my friends started to come to me. And when I was taking a break, they’re like, Steve, can you help me? Can you help me with my idea, my startup, how do I get funding? How do I go to market? How do we put together an investor deck all the different things entrepreneurs want to know? So I just started helping out friends and it grew from there, we started to open up chapters all around the world. And we started our own incubator and accelerator and and it just blossomed. Nice.

Unknown Speaker 2:20
incubators and accelerators.

Unknown Speaker 2:23
How long have those been a thing? They’ve been a thing since Idealab. So way, way back in the early, remember, the.com days, you know, when dot coms were new.

Steve Hoffman 2:37
That’s when incubators and accelerators first took off, but they didn’t really get going until kind of the second wave of startups. And that’s when you know, Y Combinator came 500, startups founder space all around the same time, we started bringing in entrepreneurs, and helping them.

Unknown Speaker 2:54
And the whole thing is, we’ve been successful. Now it’s time to give back and give a hand up. It’s it’s an opportunity to, to cultivate and create potential investment opportunities, it’s all these things, it is all these things and more, you know, a lot of what I do is entrepreneurs come in, and they’re stuck. They have a problem like, and it’s really tough for entrepreneurs, I’ll tell you one of the biggest problems I see on early stage companies, they come in, and they are fixated on their idea, their initial idea, which was, you know, in their heads is supposed to be the big thing that changes, you know, everything changes their life changes business. However, what entrepreneurs don’t realize is that often the idea you start with is wrong. And actually, more often than not, and I will tell you, the number one reason entrepreneurs fail is because they stick with the same idea that isn’t working too long. And they just run off a cliff. Like they run out of money, they run out of energy, and they’re gone. do really, really smart entrepreneurs do one thing at the beginning. They don’t care about the idea. And this sounds counterintuitive, like you would think, Oh, I’m an entrepreneur, the I can’t even start a company till I have an idea. I tell entrepreneurs, don’t start with an idea. Start with 20 ideas, like have a lot of idea don’t get fixed on one because all these ideas are new, you don’t know if somebody else is already doing it, or it just won’t work because there’s really no demand out there or it’s not meeting a strong need. So what you need to do is start pick a direction or direction you want to go, like let’s say it’s the restaurant industry. You say I want to transform the restaurant industry with new technology. I’m going to do this I’m going to figure it out, or the fishing industry or the you know, the farming business familyfarms It doesn’t matter what it is you just pick an area. And then before you do anything, before you even think of ideas, go out and find a team that is passionate about this

Unknown Speaker 5:00
Doing the same thing. So if your whole team, like they really want to make fishing more sustainable and transform the fish and bring the fishing industry in the, in the 21st century, how do you do it? Well, first of all you need people are capable of executing, because you could stumble across the best idea in the world, I’ve seen it happen over and over again. And you just fall flat on your face, because you don’t have the team to back it up. So spend 80% of your time getting the team. And then once you get your team, take not just your 20 ideas, but the 20 ideas of all your different co founders, all your brains put together and start go into that industry. Because you’ll find like, if you go into the fishing industry, they probably don’t care about most of your ideas, you might think it’s great to be more sustainable, but they have other priorities they want, they want to make more money, they want to cut costs, they want to, you know, do trade, you know, they don’t want to change how they’re doing stuff. Unless you can figure out an intersection between what value you can offer and what value they perceive, you will go nowhere.

Unknown Speaker 6:03
Yeah, this is a this is something that I’ve I knew in my past, and then I was just reminded of it by my five year old because I had a great idea. And I said let’s do that. And he thought my ideas sucked.

Unknown Speaker 6:16
He was he was right, that his less than perfect idea was the way to go. So I appreciate that. So and I appreciate everything, you just said that 80% of my time should be spent developing a team finding like minded people who are rowing in a similar direction versus just me following my idea, because that that that that more than often leads to ruin and and lack of success.

Unknown Speaker 6:47
Is that possible for people? Who are who are in this full time? Or is it a part time thing? How, how if, if I’m working currently, how do I bridge the gap? Well, a lot of people start off working, and they do the startup on the side, it’s tougher to get going that way, because you’re not fully committed, you don’t have the time and resources to really go at it. However, it is, especially in the very early stages where you’re getting the team together, where you’re figuring out where the market need is, you can do that while having a job. And but when you start to build a product, a lot of times, you just got to jump ship. But by that time, you should know almost for certain that there that people out there really need this product, like don’t quit your job until you have that team. And you know that there’s a huge demand, like, I have entrepreneurs out there. And I will tell you, a lot of them, they go round, I think go talk to 100 potential customers and figure out if they want your product, they’ll go out to 100 customers, and you know what, they’ll get the customer saying, Oh, wow, that’s interesting, you know, come back later after you build it, and we’ll try it out.

Unknown Speaker 8:02
And if I if if an entrepreneur comes to me and say, you know, all 100 customers told me, that’s interesting, they want me to go build it, and they’ll try it when I build it. I tell that entrepreneur, you will absolutely fail. Like there’s no doubt in my mind that you will fail. And there’s a lot of times shocked. They’re like, What do you mean, people said they’re interested, I go, everybody’s interested. It doesn’t mean they’re going to buy your product. Like, that’s their way of just saying, Okay, go away, and you know, do whatever you’re gonna do. And maybe I’ll talk to you later, what you need to hear. If you’re starting a business, like you have a full time job, you’re going out, you’re talking to customers, this is what you need to hear from them. You need to hear not I’m interested come back when you build it, you need to hear, Oh, my God, I need that now. Can I have that? Now? How do I get that now? Could I pay you? Can I be a beta tester? What can I do to get that product? If you hear that from enough customers, and there’s a big market behind it, you have a business like, you know, you will make money and that’s the point where it’s worth quitting your job, the and you need. You also need partners, people that you bring on early in your startup that are equally committed as you are because what you don’t want is find these people who will not quit their job, like you’ll quit, but they won’t do it. And that’s not good enough. So I tell people, you don’t need a lot of money. You You know you’re never gonna match Google or Facebook or all these companies in terms of salary, but you can beat them in terms of passion. People don’t make these decisions just based on money. They make it because they want to do something they want to change the world. They want to change their life. They want to do something meaningful. Those are the people you need to find.

Unknown Speaker 9:47
I like it. Yeah, I’m interested. Come Come circle back as soon as it’s made. That is a recipe that is a death knell. That’s a death now I I made that mistake. Like when people told me that

Unknown Speaker 10:00
I’m one of my early startup, I believe them. Great. And and I learned the hard way. Yeah, I appreciate that. All right. So there aren’t co founders just sitting around waiting for me to call them. How do I how do I find this team? Yeah, it takes a lot of work. Because you’re not, you don’t need to just find people who are really competent. That’s an absolute must. You don’t want your cousin Joey just because Joey’s available, or your old roommate or your drinking buddy, you don’t want them you want like the best people. Now you’re gonna have to have, you’re gonna have to this why said 80% of your time upfront goes into finding the people. So you pick an area you’re passionate on. And then you find people who share that passion, again, you’re not going to be able to pay them, like all you can promise them is some equity, which is currently worth nothing in an idea which you don’t really have, because it hasn’t been proved. Right. So you’re offering them nothing. But you can offer them something more valuable than that. You can offer them a dream, you can offer them the chance, if they really care about this, you can offer them the chance to step out of their boring routine job, change their life, and hopefully transform an industry change the world. That is what you the thing is the reason it also helps not to have your own idea is because literally, if they start investing their ideas and their time alongside you, they own the business with you, they don’t own it just in shares, that doesn’t mean anything, those shares aren’t worth anything, they own it in terms of their heart, you know, their heart is in it. And that’s what you need to get like a great person to quit Oracle or quit, you know, IBM or some big company and join your little no name startup and help make it a success. Yeah.

Unknown Speaker 11:50
That makes sense.

Unknown Speaker 11:52
And is that in there? Do you work with these folks? And or, or do your books help and say, Okay, that sounds good. Now, how do I? How do I articulate that in a way that’s going to convince somebody to step away from a fortune? 100? Opportunity? Yes, I coach entrepreneurs on this, and my book goes into detail, you know, on every aspect of running a startup and how to make it actually work. Number one, is you not you has it the qualities that the CEO needs more than any more than anything else, is leadership. Leadership means you can take a vision, point A direction and get people motivated, self motivated, not by external forces, like money and other things, but by their internal forces to actually go and follow and do that. Now, how do you do that? So number one, you have to believe in it, like if you don’t believe in it very hard to convince other people to believe in it. Number two, you have to really have a purpose, a purpose, that is more than we’re just gonna get rich quick, like, because you’re probably not, it’s gonna be a lot of work. By the time you’re rich. You know, if you ever make it there, most startups fail. But you have to believe that you are really doing something valuable, you have to be able to articulate that you have to be able to show them the path to that. You have to tell them why is this necessary in the world? What difference are we making? Where are we going together, and you need to find people whose backgrounds and belief systems really align with that. If you don’t, you know, if you’re trying to fit a, you know, a square peg in a round hole, it just never works, you just move on. And you know, the same skills you use to convince your team are literally a training ground for how you’re going to convince customers to come on board that you’re going to give you giving customers essentially the same pitch, you’re going to be giving investors essentially the same pitch, the core elements are going to be the same. So it’s good that you get it down. Like if you can’t like as an investor in Silicon Valley, I look at stars if they can’t get an A list team. If they’re getting B C’s and D’s on their team as their partners, then I think that they’re not they’re not going anywhere. They’re not going to get customers, they’re not going to get you know, raise money. Why should I be investing in them? The first criteria? Is the team look at them. Are they amazing? Why did they join? are they passionate about this? If that person and you know, if you want to find programmers or you know, engineers, or you want to find marketing people don’t go to the same old meetups and different groups that you in circles you already know. You need to go to where they hang out. Where do engineers hang out? What forums online? Do they hang out? Where do they gather and exchange information? What meetup groups can you go to in person like no JS and MongoDB and whatever other technologies are out there, where you can be might be the only person in the room who isn’t a coder? Well, that’s beautiful, because at the normal events, you go to networking events, they’re all business people. So you’re not going to meet. If you meet a coder. They’re starting their own business. But if you go to an engineering event in each

Unknown Speaker 15:00
Even if you don’t understand a word that people are saying, you are suddenly surrounded by potential partners that you can bring on who do have the skillsets and the passion of what they’re doing to be at this meeting. And you can engage them on an idea level, not on a technical level, but on, like, how they want to change the world, what they want to do what you’re working on. And if you connect with somebody there, you can see those sparks fly. That’s the beginning. That’s how you find great people love it. Why do bank robbers rob banks? Right? That’s where the money is go to where the people are that you need. Yeah. And when when you hear that, when when I hear that, it sounds so obvious, but for some reason, it’s somewhat counterintuitive, we naturally are drawn to the places that you were just talking about, that we should avoid, because it’s like, Okay, I’ll go to a meetup with other people that want to become founders. Well, that’s not what I want. I want the people who are probably really successful doing what they’re doing now. And I need to, you know, I’m not necessarily looking for somebody who’s looking for a job, right? In the people who are really successful and doing you know, it’s scary to go to a, an engineering meeting where you don’t know coding, right? Yeah, that’s why people don’t do it. That’s why if you do it, you can actually find great engineers, or a marketing meeting where people are like, marketing Meetup group, where they’re exploring the latest marketing platforms and all this stuff. That’s where the people you want are, because they’re what you want for a startup are people who are passionate self learners, right? They’re out there exploring, they’re on the the message boards, they’re downloading the latest SDK, they’re doing, you know, if they’re a marketing person, they’re experimenting with every new platform and social network that comes out there. You want those people.

Unknown Speaker 16:43
I love it. Passionate self learners, I couldn’t agree more. Leadership is essential, I think it’s, I think it’s inspiring to hear that the way that you’re going to articulate your idea, your vision, your passion, is this is the same thing, it’s going to attract co workers, same thing, it’s going to attract customers, and it’s the same thing, it’s going to attract potential investors. So being able to really successfully articulate that will serve you forever.

Unknown Speaker 17:14
Exactly. And there’s one other thing I want to say, when you do a startup, you can do a small idea, that becomes a small business. And but honestly, that’s almost as much work as doing a huge idea. Like, in any business you want, it’s going to be a huge amount of work and a huge risk. Like when you go into kind of a normal business, usually, there’s lots of competition, you know, because everybody’s doing the same thing. And it’s really hard to grow that business, because competitors are already out there doing it. But if you do something new, something innovate in a way, and people haven’t tried this new area, it seems riskier, but it actually isn’t any harder. And I will tell you the key things to look for when you’re launching a new business. Number one, make sure you get what we call recurring revenue. That means when you grab a customer, they don’t just pay you once and walk away and you never see them again, if you do that, it’s incredibly hard to grow your business. Because every time you’re gonna have to spend money and time to go out and get more customers. And just really, really hard to do when you get a customer you want to hold on to them for life quick, and you want to you need to think of your business is how do I keep giving that customer value over a long period of time, creating value for the customer and in return, they are paying me they are paying me with their attention, their engagement, their money, and and that relationship, the companies that figure that out, explode, especially if there’s a big market. The second thing you need to do is lock in that customer. Why? What do you offer that that customer can’t get elsewhere? What is there a way that the more time a customer spends with your product or service, the harder it is for them to leave? And number three, is there a way that you can get customers to actually invest not just in your product, but in your entire ecosystem to make it richer for all you the other participants, like the more different people you bring in, and the more value they start to add to each other in this ecosystem, the harder you are to replace because they you control that ecosystem. And I tell companies think of ecosystems, not products or services like I want to bring customers in. And I want to make it so that the more they use my product or service, the more information we can share with all the other partners and the more value they can bring to all the other partners. This has a compounding effect and creates incredibly valuable businesses for everybody involved. Love it. Current revenue locked

Unknown Speaker 20:00
Customer in what can you offer they can’t get anywhere else and then figure out a way to create an ecosystem that

Unknown Speaker 20:08
that everybody who’s involved contributes value and strengthens it. I love it.

Unknown Speaker 20:14
Sounds easy to us hard, though. It’s hard, it’s hard to think of those you won’t see, doing a startup isn’t like a lightbulb moment. It’s an it’s a journey. So you’re going to figure these out step by step, the first thing like an entrepreneur needs to do is get the team, then second thing they need to do is go demand hunting, like I, you know, as an entrepreneur, I don’t care about what I did is, I want to find these pockets of pent up demand, like huge demand. And if you if you identify those that isn’t being met by the current market, tap into it, boom, you have the demand. The third thing, then is building the business model, and the ecosystem, it all goes in order. You don’t have to know it all. You don’t have to have it all mapped out in advance of it.

Unknown Speaker 21:01
Okay, after half the people are ready for your difference making tip even though you’ve already given us a lot, what do you have for them, I’ve given you a lot of tips. So the big, the biggest difference making tip that can really, ultimately change your life is when you go into the world. I want you to not talk not try to sell your idea, not try to just convince people, I want you to focus on absorbing information. Information is the key. That is what makes it successful. And you get more information. By listening carefully listening and carefully asking questions of everyone you meet, have the people want to join your team of your customers of potential investors like you should be spending more time listening to them than you are talking at them. And if you do that one thing, you I guarantee you will get smarter and smarter and smarter because you’re getting all these different data inputs, all these different ideas bouncing off each other. And you’re not trying to force your ideas onto them, you know what you think. But these will evolve your thinking at a faster pace than you can do any other way. Well, I think that is great stuff that definitely gets come down and off. Thank you so much for coming on. Where can people learn more about you? How can they engage with you and founder space? Where can they get a copy of surviving a startup? Yeah, if you want to get a copy of surviving a startup, just go to surviving a startup calm, it’s published by HarperCollins. It’s an all in all the bookstores. If you want to reach me, and I have lots of videos and other materials, just go to founders space.com founder space, you can contact me and access our startup kit and everything else we have there. And lastly, on on most of the social networks, LinkedIn is a great place to find me Captain Hoff Steve Hoffman, I’m there. Love it. If you enjoyed as much as I did, show Captain half your appreciation and share today’s show with a friend who also appreciates good ideas. Go to surviving a startup comm pick up a copy of the book, go to founders space.com And check out other great resources that Kevin has been talking about and then find him all over social media particularly linked in under Steve Hoffman. Thanks again Captain off. Thanks, George. And until next time, but in a good fight. We’re all in this together.

Transcribed by https://otter.ai

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