Lessons - The One Thing That Kills Every Startup | Captain Hoff - Advised 1000+ Companies

In this lessons episode, explore why work remains essential even when survival no longer depends on it. Discover how purpose and community drive people to seek meaning beyond financial need, understand why true fulfillment comes from creation and contribution rather than wealth, and uncover strategies for turning bold ideas into innovations that thrive in a competitive market. If you didn't want to work in theory, there's so many in most in most Western countries, there's so many social welfare programs that you could sit on your coach all day and not work and still find a way to get money from somewhere to be quite honest and some people do that. But I think the vast majority of people would much maybe it's because society imposes, you know, like these ideas of what you should do and you know, you mentioned like you have to provide and whatnot, but like for most people you're not going to be rich, but you don't have to work to live day to day. But people do choose to work. They do it because what we value more than the job is we value people are social animals. Like if you think about human beings, you know, in the hunter gatherer for, you know, tens of thousands of years, they just hunted when they needed food or gathered stuff when they needed food, but most of the time their value wasn't on, their value was on how they relate and what they give to their community. And fundamentally, we all live in this community, this social structure, and that social structure is informing us how to feel about ourselves, and that social structure will change with time. And it will free people up to do things with their time. Like right now you're saying, some, most of the hardest people I know, the work the hardest are like super rich, but like they, they could stop working tomorrow, right? Yeah. It's like they aren't working for more money. They don't need more money. Like you look at any of these rich people, they work like Elon Musk. Does he need more money? No, he has no need for more money. Bill, you know, Bill Gates is working like crazy, but now he's working on his philanthropy like crazy. But he says he puts in the hours. He's putting in hours. These people work. We don't work. We work because what are we going to do, right? Work creates meaning in our life. That's why we don't work for the money. So the people who think that the welfare is going to make people lazy. I just don't believe it's true. I mean, if people are going to be lazy, they'll be lazy, right? They'll be lazy on the job or off the job. If they're the type who doesn't want to do anything, then that's how they're programmed. You're not going to change them. And if they're the type who are going to, if they're the type like us who just love doing stuff, love creating stuff, love, you know, it doesn't matter. We're going to we're going to figure out something to do with our time. Yeah. And we're going to do it. Yeah, I think my, I think my, my issue is I always try and figure out. I always try and take on too many things as, as hobbies. And I have to remember that sometimes they're obvious. You had no day job. You would, I guarantee you, you would be busier than ever. Because you'd be like, I want to do that. I want to do this. And I think most people who want to be busy will be busy. And those who just want to sit around and, you know, play games or watch television, they could do that, right? Yeah. They'll do that now. Every chance they get, they'll still be the same thing. People do what they do. Yeah. I want to ask a question. Just the first book that you wrote, Make Elephants Fly. What is that? What is the book about? And this is not a plug. I didn't plan this at all. It was curious about the title. Why you chose that title. The elephant, well, I like fun titles. So the elephant, it's called Make Elephants Fly. The sub-title is what it's about. It's called the process of radical innovation. And radical innovation is an innovation, not incremental, like not a little innovation, but a huge leap forward. So how do you get there? So the elephant for entrepreneurs, it's your big idea. It's your dream. It's like what you want to do, but it's an elephant. How elephants don't fly? How can you get this huge idea off the ground? So the book tells you how to come from an idea all the way to execution. How to take that idea and make it fly. So let's speak about that. Let's speak with that. Because let's speak about it in the context of I have a hobby. I'm working, you know, I'm working full-time and I'm using myself as an example, but a lot of people have these side hustles right now. Yeah, even, especially even more if you have more free time because you're stuck at home and you don't have anywhere else to go. So people are starting. I've never seen so many live Instagram sessions, live Facebook sessions before in my life. I feel like everybody's just starting something new now. So it's good. But okay, so you have an idea of a side hustle. How do you take that and you turn it into a flying elephant? So this is all about the process of innovating, right? Figuring out where your idea meets reality. So it's in a way a process starting with the idea. There's a lot in there about ideation and how to create ideas. But once you have these ideas, how do you know which are the really good ones? Because if you're anything like me, I have a million ideas, right? A million ideas. And I think they're all great. When I first think of them, I just get excited. I'm like, oh my god, that's the best idea in the world. But you know what? Like 99% they have a flaw. 99% are actually ideas that will not work. And most of them, maybe not 99%, but most of them are actually terrible. So they're not great ideas. It's just in my head. So how do you go into what is a process through which you go into the real world? You test out an idea. And also I go through this thing called the innovation loop where you go through a process of discovery with each new idea. So I liken being an entrepreneur to being an explorer. Now an explorer, your job is to find something really valuable, but it's very dangerous. You're going to go into uncharted territory like the explorers that came to the Americas. You're going to meet hostile forces, whether it be nature, that's going to kill you, natural things, whether it's going to be other companies or tribes that are going to come after you. But what you have to do is a figure, you don't know what's there. So when you first go there, it's all this black wilderness. And your job is to figure out your way through that wilderness as quickly as possible without getting killed. So getting through that wilderness without getting killed is not an easy thing. Most startups die over 95% from idea, from conception, all the way to being profitable or selling your company is 95% do not make that. So what are the, it goes into detail on like the pitfalls along the way where startups go wrong. What type of what is wrong thinking? It goes into the fundamentals of business model. Like there's certain business models that are really lucrative that like make a lot of money and there are others that are doomed to failure. But on the surface, you might not even recognize which is which. I can give you an example. So there are a lot of people out there who will put up these Kickstarter projects. And the Kickstarter projects are pretty cool. Like they are like a super cool gadget that, but what they don't realize is that that that gadget that they're putting out there on Kickstarter is there's some problems with it. Number one, maybe the market is too niche, right? There's just not enough people out there who would buy it or that people think it's a nice to have. It's something they would like to have, but they don't really need. And even if they get enough people to like give them their initial Kickstarter target, doesn't mean it's going to be a successful product. Because the most successful products out there are products not that you sell once to a person. Because as a small company, when you sell to get a new customer, let's say you make a gadget, the profit margin isn't that high. And you start off maybe with if it's really novel, you start up with a reasonable profit margin, but as soon as people in China and other countries start copying you, that margin starts to shrink, right? It goes really, really low because they didn't, they'll just sell it for whatever they can get away with selling it for. That's low as possible. And if you have to acquire new customers, which is the biggest job for any entrepreneur, like you acquire new viewers for your show or whatever it is, acquiring new customers is expensive. And if you don't have a big profit margin, you can't afford to advertise. You definitely can't afford to call them up and do direct sales, right? Like person to person and you can't afford even to market on Google if the profit margin shrinks, so that will just kill your business ultimately. So you have to recognize that. Now the companies that really succeed well, like Microsoft, Google, Salesforce, Apple, whatever they are, they don't sell a product once. Once you buy into them, you are continually giving them money. So whether it's on your iPhone, whether you're giving the money through the App Store over and over and over, you're locked into their ecosystem, you're buying their upgraded phones over and over and over, whether it's Amazon, which they may take a commission off every sale, whether they sell it or whether their partner sells it, they're giving them money every time you go back to Amazon, whether it's Uber. The reason it got the big valuation was because once you have that Uber app, you keep using it over and over and over. So the recurring revenue, when you can get recurring revenue, that is the type of business model that really scales. Facebook has the same thing. You're going on to Facebook over and over, every time they're getting a few pennies from you, you know, you view an ad, but you're going over and over and over and over. So the thing is, you know, I go into detail on the book like how you can get a customer and never let that customer go, never let that customer go. And then how can you make that customer as valuable to you as possible over their lifetime? I love it. That's very smart. It's a very good takeaway. And I think that, you know, it's funny. I've always worked in organizations that focus on recurring revenue. My background was in Telecom and now so obviously they're very profitable. And also now I'm in SaaS or software, right? So it's always about recurring revenue. But I think that a lot of industries haven't haven't woken up to that fact and now they're getting hit hard, especially when if they're selling physical products or they have physical storefronts or brick and mortar. And like that's this killing them. If they haven't expanded and they haven't taken their their store online or expanded their products into the recurring revenue products, you know, like that's why people are really hurting now. But that's what I think is going to fuel. I just tweeted this yesterday. I think this will be a benchmark in the fourth industrial revolution and it will push people to look at digital in a new way. And not just as that's my opinion at least. I don't I don't know if it's going to change everyone's behavior. But I already know it's changing some people because you know, now it's like all the people that were told, oh, you can't work from home. Well, now they're all working from home. And they're probably working harder because they don't know when to shut off. And you know, so like now all the people that had all these work life balance issues didn't want to commute an hour and a half. Now they're all working from home. So now what does that do to the to to, you know, all these cultures, these office cultures globally that didn't want it before. Like there's so many changes that are going to happen because of this. But also just tech and you know, modernization in general. But it's very interesting. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.