Last summer with LaunchBox Digital, Ted Leonsis (see bio) spoke about what he thought were key ingredients to start up success gleaned from when he was a Georgetown student who started a snow cone company (aptly named SnoCoLoco), to his own TV guide business that grew to $75M, all the way to AOL and RedGate Communications. He now owns hockey teams, sports arenas, and is invested in over 15 different companies, including Clearspring, Zipcar,SnagFilms, Revolution Health, and Revolution Money. The presentation above is from another talk, but it covers some of the same things…
Here were his observations of successful entrepreneurs:
- Be competitive, willing to take risk, and don’t get tied down- There is a reason why many successful entrepreneurs were young and really hungry, they are able to take risk more and are not tied down. For him, he never grew up with much and was always willing to do the unconventional because he had nothing to lose.
- Better to win than to be right- you don’t have to be overly charismatic, have gone to Harvard Business School, or always have the right answers. To succeed, you have to be willing to take criticism and use that to win.
- Be obsessed about product- Companies he saw succeed took feedback very seriously and would always listen to even Ted’s advice- even for the simplest things like changing a button colour.
- Build teams and partners with intense reflection on strengths and weaknesses- From his personal experience, Ted is good at seeing something interesting, raising money, getting the team together, obsessing about the product, but he needs a strong CFO who obsesses about the nuts and bolts. On a scale of 1 to 10, you need to be surrounded by top quality people (9s and 10s) that fill your weaknesses especially when the going gets tough. Ted’s bet was that “few of you will make it” (not personal); many will later craft together something that is very meaningful though.
- Sniff out your business model to end up with a money store- Ted was part of the first round of Google’s investors, and noticed how Larry and Sergey bought a company that turned into AdSense. Those guys understood the ecosystem and saw the mashups and value chains that would allow them to change the industry.
Many wonder whether Google is an ad company (with more revenue than ABC and CBS combined) search company, or platform cloud computing company. Really, Google won because they were willing to innovate and combine disparate elements to create its Money Store. The bionic arm (ISP) was the undoing of AOL and to this day no one has figured out how to monetize chat (e.g. at ICQ, they used to say “revenue is distracting”).
Two examples of companies (Ted’s investments) who have figured it out:
- Clearspring- Taking from the Google playbook, one of Ted’s investments- Clearspring is focused on the lesson of building a “data warehouse with powerful algorithms.” So far, they have been rocking with 130M unique, 12B views/quarter, and fast becoming the Google of distributed social applications.
- Revolution Money- PayPal meets master card without the high fees. - Going after a $60B market, with five huge competitors in the financial credit industry. Revolution Money’s key insight was to show a path to breakeven, showing that they could be successful with 2.5M accounts instead of PayPal ‘s 164M online accounts.
AT THIS POINT, TED STARTS TALKING ABOUT HAPPINESS. He specifically talks about his plane crash and how it made him think of the 101 things he wanted to do before he died.
Ted surveyed 50K people about happiness and found the following factors to highly correlate to happiness that everyone (especially entrepreneurs).
- Be an active participant in multiple communities of interest.
- Personally express yourself- Write a blog (there are over 77M out there), engineers should learn how to dance, do something for the balance, and companies that can help individuals personally express themselves generally win.
- Empathy and gratitude- shorthand- golden rule,
- Volunteerism- globalgiving.org and Network for Good make you feel good by doing well.
- Pursue a higher calling- Whether it’s levelling the playing field, or empowering democracy, you need to have a higher calling.
No matter what you do, you need to have a cause along with making money. Clearspring is about sharing, Revolution Money is about taking money out of the hands of monopolists and giving back to merchants, and SnagFilms is giving filmmakers a place to easily express themselves, without the huge cost. Pursuing that higher calling will give meaning to your life.
NOTE: Launchbox Digital also wrote about Ted Leonsis at the same event in June 2008.