Shark Tank Jump Start Your Business: How to Launch and Grow a Business from Concept to Cash (20 page)
Authors: Michael Parrish DuDell
BIG IDEA: A simple solution for losing track of eyewear that keeps glasses within hands reach, safely and securely
INVESTOR: Lori Greiner
There are some people who are born to be entrepreneurs—people who, from their very first memories, have been hungrily searching for solutions to problems big and small. Rick Hopper is one of those people.
“I had vision as a little kid,” says Rick. “As soon as I learned mathematics, I understood the power of information, and since then I’ve always wanted more.”
Rick was the middle child in the family, so on outings he always found himself squished between his two brothers in the backseat of his parents’ 1973 Ford Pinto.
“If you’ve ever sat in the back of a 1973 Ford Pinto station wagon, you know there’s a really uncomfortable bump right in the middle,” Rick recounts. “That was my seat!”
As a result, Rick would spend most of the car rides perched forward, staring at the gauges on the dashboard.
“My eyes would dart between the speedometer, odometer,
and clock,” says Rick. “I was constantly trying to figure out exactly how long it would take to get to a destination. I always had numbers running in my head.”
Although Rick wouldn’t start his first company until much later, he never wasted an opportunity to exercise his entrepreneurial muscle. No matter his salary or position, he was always searching for ways to improve systems, solve problems, and create a stronger business. “Looking back,” recalls Rick, “I think I probably drove my bosses crazy.”
Eventually Rick opened his first business and ran it successfully for ten years before deciding to sell the company. Not long after, Rick’s doctor broke the news that he would need to start wearing glasses. Rick didn’t know it yet, but the seed for his next business had just been planted.
Very quickly, Rick discovered that wearing glasses was a pain. When he took them off, he never had a good place to put them. And if he tucked them into his shirt, they always wound up falling on the floor and getting scratched.
After a long conversation about this problem with his best friend, Rick decided it was up to him to create a solution: a magnetized system that allowed a person to hang a pair of glasses safely and conveniently on any shirt. His goal wasn’t to create a business; he was simply trying to solve his own problem. But very soon it became clear that the problem was bigger than just him.
“Every single day I got stopped on the street by people who wanted to know how my glasses were staying on my shirt,” says Rick. “It was very clear that the demand was there.”
After many of his customers suggested he go on
Shark Tank
, Rick finally decided to take the plunge, and eventually he secured a deal with Lori Greiner. The rest, as they say, is history.
“Thank God I had some experience with a rapidly growing company, or I never would have been able to handle what happened after
Shark Tank
,” says Rick. “It was like being on a helicopter and getting dropped into a monster wave. You either sink or swim.”
Rick chose to swim, and has loved every minute of it.
“I have a theory that if you’re lucky enough to get more in life, you always get more of the same. If you’re miserable, all that extra responsibility, opportunity, and chaos will lead to more misery. If you’re happy, you’ll find even more happiness. I’ve always been a really happy guy—right down to my core. And
Shark Tank
has given me more of the same. I couldn’t imagine anything better.”
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REAL-WORLD WISDOM: “No matter how excited you are about an idea, you’ve got to do the math and count the costs. There are so many little things that need to happen to get a product to market, and those little things can add up. You owe it to yourself to count the costs before starting a business.”
I’m great at failing—there’s no doubt about it. It’s my sweet spot. In fact, my best ideas usually come from some type of failure. And I think that’s true of every entrepreneur—at least it’s true of the ones I’ve invested in on
Shark Tank
who have done well. And it’s lacking in every entrepreneur I’ve invested in that isn’t succeeding. That’s the dividing line.
We all fail, but the people who ultimately succeed are the ones who take no time to feel sorry for themselves. The truth is that when most people take a major hit, they quietly go out of business. They may look like they’re still in business—they’re at their desk every day—but mentally they’re out of business, because they’re spending all their time licking their wounds. You can’t lick your wounds if you want to be an entrepreneur. You have to be able to continuously jump back up and say, “Hit me again! Hit me again!”
Everyone talks about tenacity and perseverance, and those are important, but I think the element that’s really critical is having the
inability
to feel sorry for yourself. Because so many people do.
When an entrepreneur walks into the tank, it’s not the
company I’m looking at; it’s the person. That’s it. I’ll even take a bad idea intentionally and turn it around because I know I have the right entrepreneur. I’ll take the bad idea with the right entrepreneur any day of the week. And, of course, to be a good entrepreneur you need the talent, enthusiasm, and energy, but you also must have the ability to deal with failure.
YOU CAN’T DO IT ALONE: BUILDING THE RIGHT TEAM
While many business owners are mavericks at heart, most reach a point where they need to start thinking about building a team. Whether you have a retail operation or a small tech startup, hiring employees comes with both benefits and challenges. Adding the right employees at the right time can take an organization to the next level, but doing the opposite—bringing on the wrong ones at the wrong time—can have a disastrous impact on the business and the entrepreneur. To make the right choice for your company, you should understand both the opportunities and the limitations that come with assembling a team.
Before you can begin building your team, you must ask yourself those five famous “W” questions: Who, What, Where, When, and Why. Let’s take each question one by one.
exactly
are you looking to hire?
This may sound like a basic question, but many entrepreneurs forget to give it thorough consideration. What kind of
person would be ideal for the role? What experience does he have, and what skills must she possess to excel in the position? What are you willing to compromise on, and what are your deal breakers? Whether you’re searching for an assistant, associate, or executive-level employee, it’s important to fine-tune your expectations before the search begins.
If the goal is to hire a team that rounds out your skill set, you may find it helpful to revisit Chapter Two—where you were asked to identify your strengths and weaknesses. Or perhaps you’re looking to bring on people who can directly affect the bottom line. When Barbara Corcoran was first building the Corcoran Group, she put every extra penny toward hiring sales associates. She knew that the only way to grow the company was to build the sales force, so she focused all her efforts on that.
Write out a short (one page) document describing the kind of person you’re looking to hire, and be sure to get as specific as possible. Whatever you do, try to avoid the dreaded “I’ll know it when I see it” approach. If you don’t know it, you’re pretty much guaranteed to never see it.
From administrative duties to high-level tasks, small business owners are used to wearing many hats. They often look for someone who can do a little bit of everything. From the entrepreneur’s perspective it just makes sense: “My role is vast and never-ending, why shouldn’t my employees have the same experience?” Well, because it’s not
their
company.
From your very first hire, you should set clear objectives for every role. If you bring on an accountant, for instance, you can’t expect that person to also be responsible for building the
brand, generating leads, and sweeping the floor. It’s possible that you may be able to find someone who will do all that, but he’s likely to be less proficient at his accounting duties.
While most people who choose to work for a startup anticipate a less-structured environment, it’s your job to help your employees succeed. And the only way to do that is to provide a framework for success.
Once you have a good idea of the kind of person you’re looking to attract and the role you’d like to build, next you’ll need to actually go about finding the right candidate. While there are plenty of services to help with the job search, most often your best tool is your network.
Whether you know it or not, it’s likely you’re a mere one or two degrees away from your dream hire. Before you begin posting ads online or using a recruiter, do a little investigation into people you might already have in your network. LinkedIn can be a great resource for this type of discovery, but you shouldn’t feel limited to just one social network. Create a special page on your website that details the opportunity and post it on Facebook, Twitter, or Google Plus. You never know which friend of a friend might stumble across the opportunity and decide to apply.
You may want an employee this month, but that doesn’t mean it’s necessarily the best time to hire. When you begin building a team, you take on many new responsibilities, both financially and operationally. Depending on how you choose to structure the role, you may need to pay additional taxes, buy
insurance, or make other financial adjustments. In fact, it’s usually best to consult your accountant or lawyer before beginning the process, as laws differ from state to state.
You must also consider that when you bring on an employee you’re now more than just an entrepreneur; you’re a manager as well. Outside of just basic training, it’ll be up to you to manage your employees, which of course creates additional work. Therefore, it’s best to approach hiring, especially at the beginning, from a strategic perspective—instead of just based on your immediate needs. Knowing when to bring on an employee is sometimes just as important as the employee herself.
Identifying the “why” behind a decision is often the most challenging part of any process. But it’s also usually the most revealing and rewarding. Why exactly are you looking to begin building your team now? Have you experienced rapid growth? Are you feeling overwhelmed and eager to offload some extra responsibilities? Are you trying to legitimize a struggling business? While some of these reasons are obviously better than others, it’s crucial that you explore yours. This reflection will ensure that you’re making the right decision to bring on a team.
| “When you hire an employee you have to realize he is not your friend; he is there to execute the business plan at that particular time. And as the business changes, so too will the specific skill sets you require. I expect a lot of turnover in businesses that are successful.” |
Only once you’re able to answer the five “W” questions, will the “how” slowly begin to reveal itself. And, of course, once it does you’ll be faced with a whole new set of challenges to tackle and decisions to make.
For most businesses, the hiring process looks very different than it did even ten years ago. Today it’s possible to run an entire company remotely—with employees based in different states, or sometimes even different countries. In short, the days of having one team under one roof are quickly fading and making room for new ways of doing business.
As the professional landscape shifts and grows, so too do the roles of the employee and the entrepreneur. No longer interested in
only
hiring full-time employees, it’s common for companies to bring on independent contractors (or freelancers) to fill critical roles.
An independent contractor is defined as “a person who contracts to do work for another person according to his or her own processes and methods
.” Writers, accountants, and lawyers are all good examples of traditional independent contractor roles, but the job category is quickly expanding.
From design to support services, more than 17 million Americans work as independent contractors each year—a number that’s expected to hit 23 million by 2017.
And while this blossoming role has its own set of obstacles for business owners to consider, it often provides a great alternative for entrepreneurs looking to save money and decrease liabilities.
When you hire a contractor, as opposed to a full-time employee, you are not required to withhold income taxes or pay
Social Security, Medicare, or unemployment tax. You are also void of certain types of liabilities and not required to pay benefits of any sort. But before you decide to rethink your hiring strategy and work only with contractors, keep in mind that this role has its limitations.
| “When it comes to hiring, the most important thing is that you just go out and do it—even if you think you’re only 50 percent ready—because it forces you to grow your business. Immediately you have a problem, you have a deadline, you have to grow it. And there’s nothing better than a deadline. It always works.” |
A freelancer has the right to accept or deny any project he chooses. In other words, the independent contractor always retains complete control of her work life. So even though working with independent contractors may bring down your hiring costs significantly, it may also create challenges you’re unwilling to deal with. Most likely, it will be a good solution for some roles and less ideal for others.
The individuals you choose to hire are the lifeblood of your organization. Not only are they the people you’ll be spending the majority of your time with, they are also the face of your company—an extension of your brand. Whether you’re looking to bring on a full-time employee or simply work with an independent contractor, you’ll want to attract the highest-caliber
candidate possible. Therefore, you will first need to make some key decisions about what type of compensation package you can offer and how you’ll position the opportunity.
Outbidding the competition isn’t the only way to secure great employees. Believe it or not, just the fact that you’re a startup can be a great competitive advantage, as many people are drawn to the energy and opportunity a new venture offers. In fact, being able to provide a unique and purposeful work experience can often be your greatest selling point. Below are a few additional strategies you can utilize to attract great people.
Get creative with the job title:
What’s in a name, you ask? Both everything and nothing at all. One of the benefits of building a company from the ground up is that there isn’t a lot of pesky infrastructure or obnoxious red tape to get in the way. While this can occasionally create an overall lack of structure, it also leaves room for tremendous freedom.
Although you most likely won’t be able to match the compensation package of a larger, more established company, what you lack in funds you can certainly make up for in creativity, especially when it comes to job titles. If you’re hiring a sales associate, for instance, and you can only afford to pay 70 percent of what other companies are offering, you may wish to sweeten the deal by repositioning the role as “senior sales director.” What do you care? An upgraded title doesn’t mean much to you at all. But it can make the employee feel more valued and help him secure a better job in the future.
Don’t let titles get in your way. Use them as bargaining chips to secre higher-caliber employees.
Load up on the perks:
During the startup phase, it’s common to work long hours for little pay. One of the best ways to
offset this pain is to offer your employees valuable perks. From free daily lunch and laundry drop-off service to regular outings and complimentary gym memberships, many startups have found great success by offering employees small, but thoughtful extras.
But won’t people just do the math and realize that a free gym membership isn’t worth $10,000 less in annual salary? Maybe, but that’s not necessarily the point. Plenty of studies suggest that money isn’t always the determining factor when people seek a new position, especially for the younger generations. Offering small perks can be a good way to stand out and show that you appreciate your employees. Even if you own a very small company, there are many ways of getting group rates for local services. You may find it advantageous to partner with other local business owners to secure better deals. The more people you have on your side, the better poised you’ll be to negotiate.
Provide professional development opportunities:
Today’s workers are not looking for a static opportunity; they want a position that has the potential to grow and evolve with them. Likewise, they want to feel challenged and inspired by their work. An easy and relatively low-cost way to empower your employees to excel is to provide complimentary professional development opportunities. Whether that’s by offering scholarships to local education programs, hosting your own unique learning event, or bringing in an expert to work one-on-one, showing that you’re invested in the overall professional development of your team is a great way to let employees know you value their dedication and service.
