Transcript of Interview with Ryan Blair
Dan: Welcome to another episode of shoulders of Titans, this is Don Lok and today I am so excited I have the privilege of bringing you another business titan, a self-made multi-millionaire, serial entrepreneur, someone who started his first company when he was just 21 years old. Just think about it, someone that has created and sold companies for hundreds of millions of dollars over the course of his career, and most importantly someone who has overcome enormous challenges and adversity to get to where he is today and I have a lot of respect for that. Ryan welcome to the show.
Ryan: Thank you very much for having me on Dan, and I really appreciate you and your listeners for hearing my story and hopefully contributing to creating some great entrepreneurs out there.
Dan: Ryan you have an amazing story, so tell us a little bit about your background and your childhood and how you got into business in the first place.
Ryan: A lot of people that have read my book know the story of how I went from the mindset of having nothing to lose to everything to gain. It was a result of losing my family was I was 13 years old. My father got addicted to drugs as a result of that my family structure disintegrated, my mother ended up getting addicted to alcohol herself and as a result my brother went to prison, my other brother went to prison, my sister went to prison, one of my sisters fled the house and next thing you know I am on the streets living in poverty, in and out of juvenile hall just constantly in trouble with no hope and so forth.
At 17 years old my mother started dating a man who was a real estate entrepreneur and he started teaching me the subject of entrepreneurship and started mentoring me and giving me sound wisdom and advice about the subject of entrepreneurship and also just about being a good man and changing my life. I took his lead and next thing you know I started my own business when I was 20 years old it was called 24/7 Tech. From there I started a company called Sky Pipe Line which became the nation’s largest wireless broadband communication provider.
I sold that when I was 24, for 25 million bucks which was a fair amount of money to me at the time although my capitalist made most of it. From there I started ViSalus, I sold that in 2008 and through a beautifully written earn out structure and by the time, 2012 when the earn out was over they were worth 792.4 million. And so I have been on both sides of the transaction I have seen the middle class, I have seen poverty and I have seen the wealthy class and I have been heavily involved in a lot of different types of deals, and so I am happy to share with you and your listeners anything about the subject and nothing is off limits.
WHAT DOES IT TAKE TO START A BUSINESS
Dan: Awesome, take us back-sometimes we here entrepreneur say I don’t have money, I can’t get started or I don’t know anybody. What’s your take on that?
Ryan: One of the bully system my stepfather help me change my mind was the believe that it takes money to make money. And every time he heard those words come out of my mouth he would stop me in my tracks and correct me. He would say, it takes brains to make money, it takes creativity to make money, it takes anything but money to make money. And so I have had bad believe systems and a lot of times we all have that because we have been programed by parents that weren’t entrepreneurs and the environment that we live in surrounded – we are basically apart of entrepreneurship in everything we do all day long and yet we are not taught about it in school.
Unless you have a family that comes from an entrepreneurial background you’re not gonna find yourself learning it, so a lot of times what I tell people that ask that very question, how you get started when you might not have money, or might not have the right mindset; you got start, you got to just start today, you got to start anywhere possible and you got start been a lifelong student and listening to podcast just like this.
Dan: Over the years, how do you get so smart, you read books, attend workshops?
Ryan: I self-educate. I dropped out of high school my freshman year , I didn’t even have the competency to pass a math or a English exam up until after I had gone back to got my GED, after I was 18 years old. I dropped out of high school which talk about starting on the wrong path, it is often said if you don’t have a high school diploma you don’t have a chance. Well I didn’t have an high school diploma and I didn’t think I had a chance at getting that, I ended up going to a community college, I got my GED and then went on to a 4 year university because I discovered I had an aptitude in the computer sciences, specifically in software that was a gift.
And so I have just been pursuing learning and understanding, and it’s an indefinite pursuit so been a lifelong self-educated individual and to make sure that you are constantly educating yourself whether it be podcast like this seminars which I attend often or books that I write , books that I read , research that I do . I read cover to cover the New York Times every day, cover to cover the Wall street journal every day and I am constantly seeking information to better understand perhaps the economic environment or things that could impact my business on global bases like currency fluctuations, I have to learn constantly because the world is changing constantly.
Dan: Ryan when you started your second and third company did you ever think that you would be that big and that you would have a successful exit like that, was that part of the plan or that just kind a happened?
Ryan: I have some good friends that have made way more money than me and have done far better and we all have this common agreement that luck is a multiplier. Now some people say they don’t believe in luck well if you work your butt of, and you focus, and you were relentless and you never gave up, you will be successful in America that’s just it. You will be successful in almost any society that embraces capitalism as a form of structure.
So some of us get lucky and we put in the hard work and the harder you work the luckier you get, and then you get a multiplier and ViSalus was a multiplier, that I never dreamed possible. I have goals to take it even further and do even more, it’s just because luck is my multiplier and I continue to work just as hard today if not harder than I did in the creation of any of the companies I bought and sold.
Dan: Through that experience – sometimes we have listeners from 27 countries , some of them they just start up, some of them maybe running a business, some of them running hundred million dollar companies but like I notice entrepreneur get stuck maybe below a million dollars – how did you break through that?
Ryan: How do you break through a million dollars? I did a simple peace of math when I was 20 years old I made something like a $150, 000 trading in the stock market. At the time I thought I was a genius but in 1996 through 2000 time frame, you could make money by placing bets in the market day and day out and it was hard to lose. So I had made a lot of money, I had a career that I was making about a hundred thousand a year at the time and I was 20 years old, and I decide that if I can do that at 20 with no high school diploma, with no real background, imagine what I could do by 21, 22, 23 by 30, by 40, by 50 and I just started multiplying.
Now I haven’t hit the absolute trajectory that I multiplied out at that time because in one hour at that time I would make a hundred grand on occasion, and I thought if I could make a hundred every hour- but I can tell you that I have had hours that I have made a lot of money and I have had some where I lost a lot and at the end of the day it’s just simple continuing to try to get better and better every single day and not stopping and not having a number to stop at. So I don’t have a number, I am not doing this with an end in mind, I am doing this for the rest of my life and the amount of money I accumulate is all to be given away any ways and my believe system, my purpose is to do this not just for me, but for all the people that I will be able to help along the way.
SKILL SET REQUIRED IN ENTREPRENEURSHIP
Dan: I think that is a very powerful believes you have to say, if I can do this, imagine what I can do 10 years from now, 5 years from now, what if I try a little bit harder, what if I get a little bit smarter. Ryan do you notice when you are running your first business or second business which is big and your third business which is much , much bigger , what are the skill sets that are required and what have changed, so what are the skills you think you need to have to kind a master .
Ryan: Well I talk a lot about this in my next book “Rock Bottom to Rock Star”. We went through some very difficult times having a massive rise of success, we were the fastest growing company on the planet for a period of time we went from 9 million to 36 million to 231 million, to 624 million, and a hundred million in profit and 120 million in cashflow. And we were bought out by a public traded company so the next thing you know I am officer of a publicly traded company, I am buying selling I am involved in use capital allocations, massive budgeting, hiring and firing I guess the number one thing that I would tell you that I learned along the way, is the importance of culture and I know a lot of people, I am a friends with Tony Shea, Dan Gilbert, two very culturally lead entrepreneurs, their organization are all about culture.
I can tell you I didn’t understand culture, and I didn’t focus on it enough, and as I moved too fast we hired way too much people, we hired the wrong people, we made a lot of mistakes that I won’t make again. I guess the skill sets that you have to learn in order to really scale, like generally, people oriented, hiring, firing, leading, developing, working with on a joint venture bases, know who your partnering with, and also who you are competing with and you have to really have to a good understanding of the people involved in your environment in order for you to maximize your success and certainly not make the same mistakes that I did because we had a lot of people problems.
BEING A SERIAL ENTREPRENEUR
Dan: Ryan, like how many deals are you involved with right now?
Ryan: How many deals? You know not as many as Donald Trump.
Dan: He has one big deal going on.
Ryan: He does, doesn’t he? I probably would say, my venture fund which is a private fund myself and my co-founders started , we have about 10 active investments there , plus I have a number of pieces of real-estate that are diversification strategy, plus I have got people trading my money in the stock market and that type of stuff. So I am involved in a number of different transactions at all given times, but I would say probably 15 data points in my life —that I constantly have to circle around, one of which is this book for example.
Dan: Yes, because what I notice is that like our friends who are serial entrepreneurs and then you have friends who are just entrepreneur like [inaudible] they are a very big company they don’t do anything but managing that one company. I notice serial entrepreneur it’s a different type of animal, we are just a little bit different than the rest.
Ryan: Yeah, you know it’s funny you say that because focus is an important thing and it’s tough when you’re a serial entrepreneur to maintain your focus, because you want to do everything and many a time you do way too much. I had a great conversation with my friends who just sold his company , not too long ago for a great deal ,a significant amount of money and he asked that very question, he is like why don’t you just focus on one thing.
I really see myself as an investor and entrepreneur and so for me all of my businesses are just simple developing entrepreneurs to be better entrepreneurs, and so to me it’s all one and the same but I do have to apply my focus individually and specifically to certain opportunities or certain risk differently according to when they come up and it’s always a balancing act.
Dan: and with the let’s say the 10 company you invest in are you an active investor, do you get involved, and kind a teach them the operators or leaders or you just hands off and say here is the money do your best with it.
Ryan: I try to be active; I also try to look for other very smart people on their board of directors or investing in them. If I can find very smart people involved then- cause I can’t be there a 100% of the time. Steve Jobs use to talk about his best board member was Larry Harrison; Larry never showed up to a single board meeting they had the meeting before the meeting. They always had the meetings necessary for Steve to extract the wisdom from Larry and the perspective of Larry but you know they didn’t have to have too formal of a structure.
So I look for entrepreneurial opportunities where I can lean in when necessary provide some value and then go back to everything else that I have to do. I don’t like to passively invest unless I am doing so because I am a rock star entrepreneur and I just know that this person is going to win and I’d be happy to write a check kind a thing- but it is rare, generally speaking entrepreneurs reach out to me and want to come to my fund they are working for more from me than just money.
Dan: And are those companies all in similar industries or are they mostly related to direct selling or all kinds of industries?
Ryan: all kind of industries but primarily technology focused, when I look for a creative portfolio investment. So for example ViSalus is in direct selling in the health life style space if I can see a technology that would support ViSalus be more efficient, I might invest in that, so like for example we have spun out a couple companies out of ViSalus that turned into very successful technology companies, one of which we called Solution X which became one which powered the direct selling industry in terms of software.
There is another company we called Frag mob, it’s now the mobile leader in the direct selling technology space and its diversifying into other non-direct selling industries, we have invested in daily for example which was a concept when we wanted to learn about content so we invest with a purpose and we try to connect the dots of these many different investments in order to maximize or inefficiencies and our yield and in some case where ViSalus can become its first customer or one of the other portfolio companies it’s just always a great situation when you can create immediate value through your investments.
Dan: Then you can pretty much have immediate revenue.
Ryan: Yeah, in some cases were it’s a brand you start up that’s the easiest way to get off the ground is to incubate it with in a bigger company with the intention of spinning it off.
Dan: What if someone said Ryan I read your book, I am so inspired, and I am looking into different industries and there are so many different vehicles that I could pick, what should I do first, like what you recommend, should I do direct selling, what should I do?
Ryan: Depend on your skills set and your passion. If you find something that you do well would be number one, and you might have to experiment and privet till you find that one thing, so I can tell you that , like for example the Solution X spin out-we sold a company called Path Connect to a company called Solution X. Path Connect wasn’t really working in terms of its original business model, we didn’t develop a product for our own company using the code we had written in Path Connect to then create a product that ViSalus started using that product is still doing pretty well.
We then sold the code and the underlining base of that product to solution X, so that result turn out fantastic we made a lot of money, ViSalus has generated may be you know 70 -80 million off that very code that we wrote or entire industry has generated hundreds of millions of dollars as a result of that code that we wrote, but it did happen with a strict plan or intention, it happened because we just going to work on this until we earn one way or the other.
So you just got to get started today regardless of whatever that is and know that you’re gonna continue making game time adjustments until you finally get to a place where you love what you do and I can tell you now , what I do for a living it’s the finest time of my life, I never done anything so fun as inspire entrepreneurs , write books , invest in companies, operate companies, I mean it’s just the time of my life and that’s only as a result of me starting early taking action daily and never giving up when obstacles came my way.
Dan: What’s your like daily routine like, how do you leverage and maximize maybe your activity?
Ryan: I am not the most disciplined individual in the world and I have to admit that. I did this thing called strengths finder, which is an awesome test I love it and it explains to you your strengths 1 through 36. Now that I understand my weaknesses or my lesser strengths I just put myself in my strength zone every day and I try to hire people that do just that. So I have got this great team that optimizes me that make sure that I am prep for an appointment and then I ready to go when I need to be ready to go and also they know me better than myself sometimes, so in essence surround yourself with great people try to really self-actualize and self-understand and understand your strengths and understand you know the basements of those strengths meaning where those strengths could be a double hedged sword and understand the balcony of them where those strengths make you magical so to speak and that’s really myself optimization process.
Now on a real tactical bases I do my best to meditate, I do my best to heal the damage that I do to my body as a result of the lifestyle that I life and the work environment that I am in and the travelling across the world and speaking in front of thousands of people and turn around and get on a plane and come right back home to be with my son. That’s takes a lot out of you and I do my best to replenish that life force through nutrition protocols and through the process of meditation and exercise and wellness and that type of stuff.
Dan: Would you consider yourself a spiritual guy?
Ryan: Yes I am very spiritual , when I say very spiritual I mean this is the core of my success and my essence is spiritual deal that I made when I was just meeting my step father for the first time he wasn’t my stepfather yet but when I met him I realize well I have an opportunity of a life time here this man is going to teach me , he is gonna get my mother a Cinderella story and I made a commitment right there and then to God, and I said that if this is my way out of poverty I would forever be grateful for this, and I would forever give back, and I will forever do my best to try to honor this opportunity that I received and that deal that I made that many years ago has continue to pay off today so yes I am very spiritual.
Dan: And being that, that is your first mentor in business over the years you have had other mentors?
Ryan: Yeah, I have had the privilege to be mentored by a lot of people, John Maxwell for example is a personal mentor of mine, John Wooden the world famous legendary UCLA coach, and I had the privilege of spending some great time with him prior to his passing. Coach Dale Brown, the UCLA hall of fame coach is another one of my great mentors, Dan Gilbert the owner of Quick and Loans is a person that I know on a first name bases and get to spend time with he has mentored me.
Tony Shea for example all of these people are all my mentors and I hope that in some cases I would have given them some advice here or there. So I am always seeking out mentors I see it as a very fluid thing and its reciprocal. So it’s not just that I have 20 people telling me what to do and how to do it, I got 20 people that will listen to what I think and I get to listen to what they think and a lot of those people have achieved what I only can think about achieving and I hope to achieve.
Dan: And for someone listening where can they find the first mentor and how should they approach that mentor?
Ryan: But then you and I are mentors to a lot of people this podcast is a mentor. Today you can get a mentor easier than ever. You can target them online, you can listen to them , you can read their books , you could attend their seminars, you can watch their you tube videos, you could do all the home work that you need to have a mentor that you may not even have a relationship with.
With that said I highly recommend that people find a way to mentor that they can have a relationship with, their target mentor meaning the mentor that either has the experience, skill or chemistry that you are looking for in life. I seek these people out day and day out it’s gotten easier now that I have some credentials and some value to exchange, but for those people who don’t yet have that value to exchange my recommendation is to find a way to do them a favor, give them, help their charity , send them an article, send them a book that you love , give them away to get on their radar in a way that they agree to take your conversation and if you could add some sort of reciprocal to it give that mentor an offer of value then it’s likely that you are gonna get a mentor. So people just have to take action and do it, and it’s not that hard but you got to work hard at it.
Dan: I agree and sometimes it’s a numbers game, sometimes you talk to one and maybe that mentor wants to help you but he is not available, don’t stop there just keep searching.
Ryan: Yeah, and don’t get mad at the potential mentor for not been able to respond. I have had people emailing me I didn’t have a chance to answer. I get a thousand email a day my book “Nothing to Lose” has done well all over Asia and Europe, I mean it’s just- so I get thousands of email every day I don’t have time to filter through all of them, I do try to scan them and I have a staff that looks through them but I have had people that immediately get mad that I didn’t respond immediately to their email and I don’t even know this person. So people just need to understand that, you have to understand the communication rules of the person that you are trying to connect with and you have to try to adapt to their rules don’t try to make them adapt to yours otherwise they will quickly quit responding.
Dan: Exactly, sometimes when I do speaking I tell them it’s – sometimes when you finish speaking they come to you and they share their story with you and they get your business card but I always tell them don’t give me your business card. It’s not my job to follow you it’s your job to follow up with me.
Ryan: Yeah, a 100% right. I love when people give me business cards and I just say take down this email address cause there is no way this card is getting into a data base period and I don’t carry business cards any more I just simply exchange contact information.
Dan: Ryan one of the things I respect of you from your first slogan, and that’s how I got to know you, “I have nothing to lose”, you don’t just share your success you share a kind a lot of your personal failures and mistakes that you have made. Could you share with us a couple of big mistakes or failures and what have you learned from them?
Ryan: In “Nothing to lose” I have a chapter called million dollar mistakes, in “Rock bottom to Rock Star” I probably have some hundred million dollar mistakes if not bigger. I made a ton of mistakes. One of my top strength is competition, but it can also be your weakness or maybe I am competing with the wrong people, I am allowing that competitive drive to engage in a law suit for example that I should not have cared about or shouldn’t have gotten myself into or whatever the case is. So I have learned and I share with my readers, and the reason why I write these books is because I wanna learn from other people’s mistakes. I think a business book environment right now is a bit, you know, everybody just talks about all the great things that they have done it’s a bit of a fairy tale situation that doesn’t teach you.
You teach from hardship, you teach from the pain that you had and the mistakes that you have. I was at West Point the other day on behalf of a leadership retreat with a great author named Don Yeager and I got to meet with the head of West Point the military academy leadership program, Cornel Bernard Banks and he gave me a great analogy. He said his job is to create failure among his cadets because failure is like muscle when you tear down the muscle, you can build it back up correctly and as a result becomes stronger.
And so I have made a lot of mistakes, I share those mistakes, so that people don’t have to make the same ones. In my book I talk about a 100 of them. I cancel an IPO, we were said to go public on NYIC and I cancelled on the day of the road show, I talk a lot about the pros and cons of that decision, I look on how I sold my company by ViSalus just to buy it back, I talked about the pros and cons of that decision and some things I am up to the vote is still out on. We will still be talking a year from now as to whether that was a mistake or not.
Dan: And I will always say every great business always starts out as an idea, right?
Ryan: Yeah, Yeah, 100%.
SHOULD I MAKE MY BUSINESS PUBLIC?
Dan: It is exactly like that, so what about entrepreneur who said they have been running the company for a while they have been growing quite steadily, when is a good time to go public or is that always the best option.
Ryan: going public is –to each their own. I wanted to go public because I wanted to ring the bell, I wanted that experience, I want to cement myself as an entrepreneur. Probably having had such a rough upbringing and having openly shared my tough pass, to me it was an important thing for me to do to demonstrate what I was capable of. I ended up canceling my IPO but as a result of the guaranteed purchase I had, I had a very large shareholder and cooperate officer of the public company that acquired me. It wasn’t the same as having my own pubic company, so I hadn’t quite check that box yet.
My advice to any entrepreneur out there from what I learned, I had a guaranteed sale of my company times , when I sold in 2012 it was 97 million, so I had a 792 .4 million dollar acquisition and when you add that all up as oppose to a public offering that started out with its original valuation of 1.5 billion and then ended its valuation at somewhere around 500 million as a result of the [inaudible] scandal that went on and so I like to not take my company public , now I tell you focus on the multiplies you’re gonna get and if you’re gonna get a great multiply by been a public company meaning above and beyond your life span on this planet then take it or maybe a multiply that is above and beyond your desire to work in this particular industry or this space.
Going public is the worst environment for an entrepreneur to operate in, you have to deal with security challenges, you have to deal with Private I’s investigating your relationships day in and day out, you have to deal with all kinds of things that are just absolutely counterproductive to entrepreneurship and its bit of an unfair situation that we life in right now and the short sellers that operate , you know these massive funds on wall street they are more interested to tear you apart than they do to build you up because it is easier to tear down a house than to build one up.
Dan: That makes a lot of sense, and for someone to that is an entrepreneur they are running the company how could they prepare maybe not to go public they just a successful exit, how could they prepare themselves for that?
Ryan: Yeah you always should prepare as though you’re gonna go public, that was one of the things my early mentor Fred Warren told me. In terms of my quality of my financial house keeping for example, the quality of my process, you always build a company to go public because when you wanna finally sell your company or go public you need all that stuff built, all that infrastructure to be in place in order for you to have a clear strategy for all these different elements that play into either a successful acquisition, a successful fund raising campaign, a successful public offering or so forth.
Dan: So I guess it’s not a good idea to [inaudible] the book keeping right?
Ryan: Yeah, I have a couple companies that I made a mistake and invest in and they just did not run a clean operation. They are sloppy and so the investors lost confidence and their company failed. It’s like to me I tell this over and over again, do the fundamentals professionally because a guy like me shows up looks at your company if I can’t find the fundamentals of your finances , your strategy and so forth then you know either I can invest and I do and it turns out to be bad and that will damage your reputation, so you wanna try to preserve that reputation because it’s all you got and I see a lot of entrepreneurs they make mistake after mistake in the fundamentals because they are so focused on perhaps the bigger vision they don’t get focused on the most important parts of it which are the fundamental finance, the fundamental strategy , the fundamental IT system and operations , all that good stuff.
Dan: For a company when is good time to consider or bring on the outside investor?
Ryan: To me I like to do it early and I like to do it often. Even though now I can still finance most of my endeavors I like to bring on outside capital in because I get unique perspective. There is a value add to their money just beyond their money that I am gonna learn from them, perhaps their reputation has some value to my customer base, to my perspective banking relationships that can give you introductions , so I prefer to do it early and often as soon as I possibly can. You never know as an entrepreneur capital is the most important aspect of your job is to make sure you have enough money in the bank to sustain your operations and to grow your operations and to see your vision to reality and so my believe system on fund raising and investing in companies is do it as soon as you possibly can.
Dan: Maybe even in the beginning you can use other people’s money, why not?
Ryan: Yeah use other people’s money hold you to a higher level of accountability. When I use other people’s money I actually work harder and I do anything to get them a return, when I use my money on occasion I am not as emotionally attached to it as I am to make sure I get an investor their returns. My perspective is, yes, use other people’s money because there are things that, that’s does and certainly if you help them get a return then you have an investor for life so that’s how I manage my investor relationships and so forth.
Dan: They may continue to fund your existing venture or even in the future they may finance that as well.
Ryan: Yeah I have a number of repeated investors and I certainly have some very good friends that I can call upon for any reason because of the returns I have got them. One friend invested a 100 grand in one of my companies and I paid him back 3.7 million in cash and he didn’t even have a contract. He loan me a 100 grand to start the company and I gave him back 3.7 million in cash, so he is a friend for life.
Dan: I notice people get warm and Fuzzy when people make them a lot of money
Ryan: Yeah, it makes sense.
Dan: Ryan I also want to know when you are managing your company what’s your management style like, are you like a manage by consent kind a guy or your more like I have my vision I know exactly what I want , what your leadership style?
Ryan: Well I could tell you I am learning to be a leader every day so I don’t have this perfectly figured out by any means. My style is to hire the very best self-supervised people I can, I put them in their strengths zones they put me in mine and I defer to them as a subject matter expert in their field and they defer to me where my strengths are. My style is very specific to the individual that I am leading and working with, for example my CIO, is one of the best CIO on the planet was one of the heads in Disney Enovation group went on to be the CIO of Herbalife, he and I we get together we will have some scotch and we will talk for hours and we will get ideas on the table and we will build our relationship and so forth.
Another one of my partners he would prefer a sit down meeting, where we sit down he will go over an agenda which he writes and it’s very much on time, on target and so forth and I basically accommodate that individual’s communication needs and leadership needs of me. So I don’t have one specific style, I try to tailor it to the individual I am trying to lead, but those individuals that I am tailoring to are really great human beings.
Dan: Make sense. At this stage how many employees would you say are under your leadership right now?
Ryan: There is over a thousand when you combine our full time sales force which we call promoters at ViSalus, my portfolio companies of which I am on the board of; we are over a 1000 people.
Dan: And out of the 1000 persons do you have a core team that you communicate with, 7, 10, 20 people and they kind of manage everything else.
Ryan: Yeah, I kind a follow Malcolm Gladwell’s book “Tipping point” where 12 people are the most you can manage at one time in terms of direct reports. I have found that the more direct report you have the busier you are and if you are wicked smart and have wicked smart people around you , you want to have a lot of direct reports so that way you are constantly busy. And obviously you are not going to see 12 direct reports in a single day but you should see all your direct report pretty much every week in some form or another, whether it be one on one chat, conference call or so forth.
So I try to keep my number under 12 people that I am constantly engaging and if I find myself missing appointments and not able to add value or not able to really focus on what their needs are then I will try to find one of my other team members to engage with them so that way I can maintain the relationship and the investment that I might have to pull back from the frequency of my communication directly with them because other priorities emerged or other values and proposition emerged for that entrepreneur that they need to take advantage of.
KEY BUSINESS MATRIX
Dan: Awesome, and what are some of the key matrix that you kind a keep an eye on?
Ryan: Key matrix I keep an eye on , obviously top line revenues is an important thing as an entrepreneur drive it in and the more of that you do the more you can do other things. A lot of times entrepreneur is focused on every other matrix than the revenue line, I focus on the revenue line. Each business has specific matrix connected to revenue and the driver of revenue whether that be your customer acquisition cost, whether that be your marketing awareness cost or advertising cost or so forth, so each business has different matrix as it relates- I try to find one or two drivers of revenue that really matters and then just put all my energy in them and then I try to find the other drivers of profitability and just dissect your business model as many times over as you possibly can.
Every six months I do a full review of every expense within my business, I mean last time I did this review I got into people’s company paid cell phone accounts and started a asking why they were charging me for applications or what not, company productive right, you have got to get into the details and into the weaves in order for you to really optimize the business.
Dan: Yes like they say, Why is Pokemon Go on the statement.
Ryan: we had like 6 Spotify accounts being paid for by yours truly and I was like can we just have one in the office , do we need to have 6 different Spotify accounts that I pay for.
Dan: We are taking about been cheeky we just talking about where there is waste.
Ryan: Waste is all around you everywhere in a company and if and we are supposed to preserve as much of this money as possible in order to invest in our growth and if we invest in our growth correctly as a company all of our careers grow and get better we make money, our lives are better, we have more security and long term futures and so forth so wasting money to purchase all. And so it’s not been cheap it’s me saying this is hurting us, and frankly when you asked if I run a democracy or if I run a dictatorship when I come on to things like wasting money I run a dictatorship not a democracy. They are wasting my money and that is coming out of my sons life savings and my family’s philanthropy , and that’s impacting me and my future and so if they are not going to be conscious of that then you know they either learn to either be conscious of that or leave.
Dan: That makes sense, what is your take on the amount of cash reserves should have in the company?
Ryan: You would always want to have 6 months to life on, if it’s not a profitable entity, if not more but try to have 6 months of cash in the bank if you can get out to a year get out to a year. Cash management is an important thing, if you have great fund raising skills then you might be more comfortable with high risk environment where maybe you have 2 or 3 months, but if you don’t have great fund raising skills make sure you got plenty of cash in the bank starting with the minimum of 6 months.
Dan: Okay and then when it comes to fundraising skills any particular resources you will recommend?
Ryan: I would read everything and anything I can, I would start looking heavily into crowd funding, based on the jobs act which I file to go IPL under the 2002 jobs act you know its allowed for crowd funding there is a lot of new capital formations that would start to occur as a result of that. So for those people who don’t have [inaudible] buddies, high network friends and family, I would be heavily investigating and experimenting with crowd funding.
Dan: And just like you said, it doesn’t take money to make money it takes guts, its takes energy and it takes creativity.
Ryan: Everybody to understand one thing capital is no longer going to be an issue it won’t , capital is going to be solved and talented people are not going to have to leave Detroit for example and move themselves to Silicone Valley just to get funds , they are going to raise as much money as they need to solve whatever problem they are solving right there in their own backyards which I think is going to distribute to capital formation situation we have in the United States right now where you know in essence you have only a few spots where you can actually raise BC, the Bay area of San Francisco or California I should say been number 1, number 2 would be maybe Los Angeles where Silicon beach as they call it , number 3 New York, number 4 Boston and I can’t find a number 5.
Eventually I see that capital formation dissipating into the places where the problem or been solve locally by their own entrepreneur. I can’t imagine how , Guber came up with the idea to solve the black car problem out of San Francisco when it should have been solve say in a city like New York where there is more black cars than and more cabs than anybody but they had to go to San Francisco to do it cause that’s where the IT account was, that’s where the capital formed. And now look at all the companies they have disrupted around the world like they are from San Francisco. So it will be interesting to see how crowd funding changes the way communities and Towns and all those other stuff are built and I can’t wait to see that in the next 20 or 30 years. You now capital formation changes and how entrepreneurs are with great ideas get funding no matter what.
Dan: Let me say in crowd funding you can have your customers funding the venture your idea and that is actually good?
Ryan: ViSalus is basically a crowd funding company, we crowd funded our business we sold first, we got people involved in business, we created value, got result and then since we had 3 million people signed up through VisSlus and that number continues to grow. So every single day I add more people to ViSalus using the same technique so I have always used that approach which is sell first and then build second. I hate it when I hear entrepreneur say build it and they will come like I asked because I came into telecom days when you saw people spend billions of dollars on telecommunication infrastructure and they never got the customers, we got to get the customers.
Dan: What inspired you to right your second book: “Rock Bottom to Rock Star?”
Ryan: So I, had so much experience after writing nothing to lose, both in terms of nothing to Lose took off to being number 1 best seller, it had such a phenomenal debut and then followed on number one in paper back and around the world it still sells to this day and I realize like there is some much more to give. Then I also realize that writing is my art form, its also I kind of therapy, It is something that I need to do and I had stopped doing it I put my pen down after I wrote “Nothing to Lose” I didn’t realize how important it was for me to seek clarity and for me to write things out and to communicate via that for and I picked up the pen again for Rock Bottom to Rock Star. It has just been so much fun and I get to write and tell stories you know that no one knew existed. You know I had some distance from them and so I was able to give some perspective on perhaps some mistake I make or an experience that I had or a Rock Start moment that I had , did I probably was a little bit excessive with or something of that nature.
Dan: I am curious with your journey as well , when I first – I know money- mommy and dad got divorced when I was 6 years old , with the only child my family wanted to take care of my mom, got into business. When I first made the money I would just blow it, get a new car. I just wonder what money mean to you knows.
Ryan: Money is a way of keeping scores, when I talk about selling my company for 792 million or whatever the case think of me as just a basketball player, who had the highest score of the game he had or at times people just take money too personally, I mean it’s not yours, its energy, it has no value other than the value you apply to it. Money is not my real motivation; I try to find other things that motivate me Dan Gilbert gave me an expression about money he said money follows it doesn’t lead and Dan owns the [inaudible] and Quicken Loans, 2 billion dollars plus worth of real estate, he is a self-made type individual. Focus on other things than money and you will get the money.
Dan: Yeah that’s a perfect, perfect analogy, as I always say chase needs don’t chase money. Sometimes you see in the direct selling industry that people just chase the money other than how can I get the product out there, how can my product help people, no there are I wanna just recruit people and that doesn’t last.
Ryan: Yeah I have seen a lot of challenges on that system and believe me I have lived them and my value system is one where I really don’t care about money and so we try to structure ViSalus as best as we can to not make money focus culture because the vast majority people don’t join direct selling companies, they don’t make money because they don’t learn the skills necessary to make money and so when a company leads with money as the core marketing program, I have a big issue with that. Most of the individuals that are involved in this industry ViSalus included they are not going to make a tonne a money because they are not going to do the work they are not going have the skills, they are not going to have the passion or the network or whatever the case is or because they are just joining because they want to connect with a community or they want the product or the discount. So a lot of people join for other reasons than money, so if you focus on money you are only speaking to say 1 % of your audience if you’re marketing and focusing on money and if you look what happened to Herbalife just recently, they got sanctioned as a result of their money focused culture.
Dan: Yes that’s very true and sometimes these leaders when they go to another company I will make more the Com Plan is better with that company and they take the whole down line with them.
Ryan: Oh yeah I have seen it, believe me I have seen it, I fought my appearance war into this industry and I fight them all different now than I use to but, our way to build our company to 9 million in sales to 624 million in sales we had a lot of competitive battles this time around I am just going to smile and let my competition say whatever they want and just build within my internal team and develop my own internal entrepreneurs and not necessarily seek to recruit those from outside the industry.
Dan: And I am also curious how do you define success say 10 years ago and how do you define success today?
Ryan: You know John Wooden gave me a quote about success formula I should say and I can’t read it to you verbatim because I don’t have it in front of me but it is something that says the degree of success is the peace of mind in knowing you’ve done your best. So to me success is the peace of mind of knowing I have done my best, I did my best and when you have that fulfillment its success. So for example we are on a call right now I have enough money to live for the rest of my life without even have to do anything.
I just bought 40 acres of land at North Arizona, I have very low needs, I don’t need to have all the joys that I have, and so for me to fulfill my conscience it’s to know I have done my very best and when it comes to things like this book for example “Rock Bottom to Rock Star” I am working on it harder than I ever have and the reason is when that book publish and comes out it will either be a success or a failure but I will know I have done my very best to make it a success.
Dan: You could have just easily say you know what it is a new book; you are going out there your pushing the book your promoting the book, .that’s what a performance person does.
Ryan: Yeah it’s not fun man and I got to tell you I am sure my son is at my house right now imagine this listeners I am looking out at the ocean on one view I have a beautiful house which is panoramic 180 degree view of mountains and my son is playing in the pool and I can look down at him , I love nothing more than just to dive in that pool with him but I think my son needs to see what it takes to build this environment that he is living in and I think I need to be an example of entrepreneurial work ethic to him and so that’s why I am not in that pool and I am on the phone with you here.
Dan: And we appreciate you being here with us
Ryan: It is absolutely my pleasure I am not complaining I am just trying to give –a lot of people have entrepreneurship with an end in mind I do not I do entrepreneurship wanting to create a culture of entrepreneurship within the places I participate right now my company ViSalus is in 15 countries, my book is in something like 14 and I am growing and so I am simple seeking to help inspire generation of entrepreneur like any other.
Dan: That’s awesome, that’s awesome, one last question before I let you go, and it’s a deep question. Let’s imagine you’re on a dessert Island and your dying and there was a young person there with you , someone who you really care deeply about and you can only give that young person one piece of advice before you go about life and how to life it what would that piece of advice be?
Ryan: If I was on a dessert island with a young person and I can give him one piece of advice and I care deeply about them. Well that would be my son and I would just tell him the one simple thing that my mother told me and she kept it in my brain day in and day out, she said you can do anything that you put your mind to and I would simply reiterate that believe and I would help that person understand that believe and help him understand the sky is the limit and I try to do that with my son every day that I am with him and if we are trapped on an island I would be saying the same exact words cause I would need him to help me get out
Dan: That’s awesome, that’s awesome. Ryan how can our listeners find out more about your book or if they want to buy you new book
Ryan: Yeah so nothing to lose is sold everywhere, I appreciate anyone who picks it up, all the proceeds go to charity and it will give you a good foundation of what’s to come. Rock bottom to Rock Star comes out October the 4th, I would appreciate it if you go to my website and sign up to my email list so you could hear about what we are going to do. Right now I am going to launch Rock Bottom to Rock Star with a cause attached to it. We are going to literally get out there and help people having rock bottom moments in their lives and help them understand the rock star that they can be and we are going to acknowledge a lot of people that have actually done that gone from rock bottom to rock star , so I would love for people who are listening right now either on this call or on this podcast to make sure they participate and support this cause I think we are going to do a lot of good you can go to ryanblair.com to get that and all my social media and links are out there if people want to connect directly with me.
Dan: Ryan thanks you so much for inspiring us and informing us and empowering us today. This is an amazing story and ideas, you are a true Titan and you are an inspiration to me personally
Ryan: Thank you Dan and Dan it’s a pleasure and I got to tell you, you are an inspiration to me to my friend so I appreciate having the time with you on this podcast with you
Dan: Awesome, thank you so much
Ryan: Okay thank you Dan