051: How to increase the value of your business by up to 71% using the 8 drivers of company value with John Warrillow, Value Builder System Founder

Most entrepreneurs tend to be naturally good at coming up with the ideas, they can think about the ideas but we’d have too many ideas, and so we need to hire or put systems in place, to make sure the ideas go from sort of our head, or on a whiteboard to actually get implemented. And that’s where often times its important to hire people who are really long or strong and follow through, so they are there picking up the ideas and actually implementing them.

#00:01:07-4# Neil : Hello, its Neil here, thank you so much for joining me today on the entrepreneur way. The entrepreneur way is about the entrepreneur’s journey, the vision, the mind-set, the commitment, the sacrifice, failures, and successes. I am so excited to bring you our special guest today, John Warrillow. But before I introduce you to him, I have a little bit of trivia for you. Ludwig Wittgenstein said ‘it is one of the chief skills of the philosopher not to occupy himself with questions, which do not concern him. The entrepreneur way asks the questions, so we all get the insight, inspiration and ideas to apply in our businesses. John, welcome to the show, are you ready to share your version of the entrepreneur way with us?

#00:02:00-1# John Warrillow, Value Builder System Founder & Owner : I am Neil, thanks for having me.

#00:02:02-0# Neil : Thanks for coming on the show John. John Warrillow is the founder of the value builder system and the author of the best-selling book, ‘built-to-sell’ creating a business that can thrive without you. Which was recognised by both Fortune and Ink Magazines as one of the best business books of 2011. Built-to-sell has been translated into four languages, John’s new book, the automatic customer, creating a subscription business in any industry, was released by Random House in February 2015. Prior to starting the value builder system, John started and exited four companies including a quantitative market research business that was acquired by the corporate executive board in 2008. John has been recognised by B2B marketing as one of the top ten business to business marketers in the United States. John, can you provide us with some more insight into your business and personal life, to allow us to get to know more about what you do, and who you are?

#00:03:11-5# John Warrillow, Value Builder System Founder & Owner : Oh man I have been studying entrepreneurs, I have had four businesses of my own where there is a common theme which is about entrepreneurship and in particular helping others both understand and become entrepreneurs. The current business I run is called the value builder system where we work with entrepreneurs to help them improve the value of their business. We have had about 20,000 businesses now use the value builder system and over that time, we have discovered that there is a process by which we can help them improve their value by up to 71% so that is what we do. We work with entrepreneurs to improve their value, and yeh I am a proud father of a couple of very active boys who are involved in every possible sport imaginable and married and live in Toronto Canada.

#00:03:56-0# Neil : Okay thanks for that, and when you talk about increasing value by 71% what types of things do you do to do that?

#00:04:05-6# John Warrillow, Value Builder System Founder & Owner : Well we discovered there were these 8 drivers of company value. Some of them are obvious, things like financial performance, growth potential of your business. Others are a little bit more nuanced, a little more subtle. So for example, the proportion of your company’s revenue that is recurring has a profound impact on the value of your company, because people want to know, once you head off to the golf course or the beach, or wherever you are going to go in retirement, how is this business going to continue without you and so there are again, there are 8 factors and when we have business owners start with us, the first thing we have them do is complete a questionnaire, and it pops out a response or a score on that questionnaire out of 100 and the average business scores around 59. And we know if they are able to get their score up to 80, those businesses go on to get an offer for their business on average which is 71% higher than when they started the programme.

#00:04:59-7# Neil : And what do you enjoy most about what you do?

#00:05:07-3# John Warrillow, Value Builder System Founder & Owner : You know, I mean, I love hearing the success stories, I had an email about five minutes before our conversation from a lawyer. Now a lawyer is a business that is very very difficult to scale, its legal services you know they everybody thinks of law as being something you build by the hour, if you pay your solicitor, you are probably paying them hourly. And its a very un-scalable business, very people-dependent business, its a very difficult business frankly to build any value or sell, which is why law firms are typically just a collection of partners who pass equity down from one partner to the next, when partner A is ready to retire, they bring up the new recruits and make them partners, but they are never really creating value per se beyond just passing along their business to one another. And this lawyer emailed me saying ‘loved your books, and I put them all to practice and he has built this company called ‘trade mark factory’ and as you can imagine, the company name suggests, all they do is trade mark companies. And its an example of productising a service, which is one of the big things that we talk about in built-to-sell is the importance of if you have got a service, don’t hang yourself out there as being a generic provider of a service, a generic graphic designer, a generic lawyer, a generic architect. But instead, brand your service as a product, because that gives you ownership of it, allows you to control the pricing of it, and other things, so to answer your question in a very long-winded way, it really is that feedback that we get from business owners who have put our thoughts to our systems in place and seen some great results.

#00:06:47-9# Neil : What a fantastic answer. What is it that drives you?

#00:06:57-0# John Warrillow, Value Builder System Founder & Owner : Well I guess we have this goal to try to create a million saleable companies, by the year 2050. And so that’s our big hairy audacious goal to use a Jim Collin’s expression, and I guess it comes from a very personal place where I used to run a company that was a guaranteed market research business, and I think like a lot of entrepreneurs, my assumption was that that business would trade at a similar multiple to other public trader research companies that were on the market place, so I was able to look up in the FTSE 100 with the stock market indexes and see what companies are worth, and I would say ‘ok well big publicly traded research company was trading at 12 x that’s therefore my company was worth 12 x that’s.’ And what I was rudely wakened to the fact of was that has really no relation to what your company is worth, the stock market is virtually no relation to what a small business is worth. In part, because small businesses are really taken advantage of quite frankly, by big companies, who prey on their naivety, they prey on the fact that entrepreneurs do not understand what the process of selling your business is, they pray on the fact that they are naive to the drivers of company. And they basically take businesses from the hands of entrepreneurs for a fraction of what they would be worth, if the entrepreneurs were informed, and so what motivates me is really helping to level the playing field for entrepreneurs and taking the power out of the hands of these large corporate buyers, these large private equity companies. Who are again, in my view, somewhat mercenary in their approach to buying companies, and I think the world would be a much better place if entrepreneurs could fight back and had the schools, the education, the tools that they need to frankly get a fair price for their business.

#00:09:01-7# Neil : That would be a great thing that so, that’s what you do effectively is that? Is that what you are doing in your business then you are actually helping to drive that?

#00:09:06-2# John Warrillow, Value Builder System Founder & Owner : Yeh that’s right, that’s what we do in our company and it is something that perhaps in previous companies my motivations were maybe somewhat more materialistic, more objective, you know hitting a certain amount of revenue or hitting a certain amount of profit or value, or selling at a certain price that all those things in the past were important. I think with this business, you know while we have metrics that track our progress, it is a much more mission based business where I am trying to achieve a certain vision that we have as opposed to, I don’t want to understate the importance of having metrics. We have metrics in our business, I am looking at my whiteboard in front of my office right now, and we have three core metrics that we are tracking right now, so we are a very metrics organisation. But why I get out of bed in the morning is a little bit deeper.

#00:10:12-1# Neil : And when you get out of bed in the morning, and you are not working, how do you relax?

#00:10:16-1# John Warrillow, Value Builder System Founder & Owner : Well when I am not working, its anything other than business, so I am a big sports kind of fantastic so I like snowboarding, I like skiing, we have a place a couple of hours North of where we live, where our kids are in ski racing and so I ski race with them, and I am a cyclist, a mountain biker, a .. rider, so anything kind of sports and outdoors is sort of how I kind of wind down.

#00:10:48-4# Neil : And do you have any kind of entrepreneurial role models John?

#00:10:51-7# John Warrillow, Value Builder System Founder & Owner : Oh for sure, yeh. Yeh no for sure, I have a number and I have come to know them in sort of disparate sort of ways, one was a member of an EO form that I was involved in, entrepreneurs organisation of a peer group of advisors. And he is a dear friend now and I think of him as a mentor, I have a friend out in Seattle, who is a very successful entrepreneur who again I think of as someone as a mentor and role model. Another individual in Toronto and what I find is that those individuals have a few things in common, number one they are entrepreneurs. I am a big believer that you pay for professional advice, but turning to your professional advisors, for all of the kind of emotional reasons, some of the deeper emotional reasons that you would have challenges in running a company. I mean the people who are going to relate to those issues the best are other entrepreneurs, they are not your lawyer or your accountant.

#00:12:06-6# John Warrillow, Value Builder System Founder & Owner : Those people should be paid for their time because they have professional service that they are rendering, but I am a believer that if you are an entrepreneur, you should have a group of other entrepreneurs that you turn to, whether formally through a peer to peer group or in my case, a bit more informally frankly. And like anything, I think if you are looking for a mentor, its about finding someone who has done something that you have not achieved right? So if you want to run a marathon sub three hours then by all means, go and find a coach who has done it. Do not read a bunch of magazines or listen to a bunch of theory about how to run a three-hour marathon. You know, get mentored by someone who has actually done it.

#00:12:49-6# Neil : John, can we talk about the time before you were an entrepreneur? What difficulties did you have to overcome when you started your business?

#00:13:02-4# John Warrillow, Value Builder System Founder & Owner : Oh you know, I mean all the classic ones, so I was 22, had no money so borrowed some money from my folks, so I had the deep need to pay that back, because I did not want to be a lousy son, so I had that bogey over my head to try to pay that back which I did. Challenges were, I mean everything, the funniest part I remember, I did not have enough money for office space, so I was in the basement of my parents’ house at the time, and I can remember that they did not really have a basement, it was somewhere between a crawl space which is something you have in North America, I am not sure they have them in the UK but like a crawl space and a full basement, so it was about five feet high, so whenever I got up from my desk, I would slam my head across the top of the ceiling in this space, so that was a very physical barrier. But I can remember getting up every morning at 5 am, and not having the results that I wanted, meaning not growing the business as quickly as I wanted, so I figured I had to start working getting up earlier, like 4.30, if I was not able to achieve the results at 5 then I would need to wake up at 4.30 in the morning and you get the results and so, very determined as a young person but at the same time horribly ill-informed about what it requires to run a business but I thought, I just need to put more hours into it, and it would work, that was my headspace at the time.

#00:14:43-8# Neil : And did you have any doubts that delayed you starting your business?

#00:14:54-1# John Warrillow, Value Builder System Founder & Owner : No, I was all full of piss and vinegar in the beginning, its very easy to sit on the side-lines, I think and you chastise others, criticise others for the way they run their business, say how easy it would be. I can remember, I used to work in radio, my first job at .. I can remember having, having lunch and having a good laugh with a couple of guys that were also in, working for the company that I worked for and saying how easy it would be to run some of the companies that we had as advertisers at the radio station. And it was easy because we were looking at it from the point of view of distance, we were not running the company, we did not know what it was like to have to be the guy who clears the snow away from the driveway at 6 in the morning so customers could be there, and the guy that when the internet goes down that you are the person that has to call the internet service. Right and when a credit card does not process properly, you are the one that has to get on the phone with the merchant process to figure out why the guy’s credit card, all the muck that goes involved in running a company is sort of disguised from the outside and so at the time I thought this looks easy, little did I know how challenging it can be.

#00:16:17-9# John Warrillow, Value Builder System Founder & Owner : But it was easy for me to criticise and sort of look at it from 30,000 feet and say ‘I’ll be hugely successful with this.’ Again, the reality was much different.

#00:16:27-4# Neil : I think that’s quite a common thing in business isn’t it where people who are not actually running the business, often think that they could do it better themselves if only they had that business or that opportunity in some way or other.

#00:16:39-1# John Warrillow, Value Builder System Founder & Owner : Yeh I mean they sit around the pub and talk about how easy it would be or how lucky the entrepreneur was, they happen to discover this amazing you know frankly I think that’s BS I think luck has very little to do with successful entrepreneurship. I think if somebody said Mark Zuckerberg was lucky because he thought of the idea of Facebook, they have no clue what’s involved in running a company. Luck has very little to do with actually building a successful business.

#00:17:12-9# Neil : What mistakes did you make that slowed your journey?

#00:17:16-2# John Warrillow, Value Builder System Founder & Owner : Oh my gosh. You would need like a three year lecture like broadcast to cover them, I mean so many. The, one of the big ones that I can recall is not investing enough in, in not really thinking through the cost of acquiring a customer. So when I was running my business plan, for my first company, which if you can imagine, now this is going to date me Neil, but my first product was an audio cassette magazine about entrepreneurship. Where I would interview a different entrepreneur, and hear their stories on an audio cassette, so an audio cassette for those younger listeners was a way that you communicated or the way you stored audio, and played in your car. Just to go back about 25 years, so that was my original idea for a business and in many ways it is being done today in podcasting. Right? but in a much more efficient manner. At the time, I spent all my time costing out the business on what it would cost to produce each episode, so how much I would at the time we had to get studio space, so how much studio space would rent for, how much it would cost me to hire professional voice talent and so forth. But I did not spend anywhere near the amount of time on what it would cost to acquire a new customer. And that’s really I think where so much work needs to be done. Especially if you are a start-up entrepreneur, you know if you spend too much time on the business plan and too much time thinking about the cost of the business without thinking about ‘ok what’s it going to take me to win a customer? how much am I going to have to spend in marketing or sales or advertising?’ because once you can figure that out, you can back into how much you need to price your product for.

#00:19:14-8# John Warrillow, Value Builder System Founder & Owner : But if you don’t have any real data on what its going to cost you to get a customer, its very difficult to write any sort of business plan, so my big advice on that piece, especially for a start-up entrepreneur is an Eric Reese of lean start-up talks about you know, I think he calls it ‘simplest viable product’ or some variation of that, but the idea, creating a very, very basic form of what you want to do, for as little money as you possibly can. And then instead of spending hours and days on the business plan, actually just try to go out and sell it and see what it takes to sell it, I mean Matt Meaker is a guy who built a company called ‘Bark Box’ which is a subscription based company I wrote about in the automatic customer, where they will send once a month a box of dog treats to your home. And you might say, ‘well why on earth would that business exist?’ well it turns out there are two types of dog owners in the world, there are dog owners who own their dog and there are dog parents. Dog parents are smaller but as you can imagine, very passionate group of people who own dogs, who treat them as children, who get them raw food because its better than the pre-packed stuff, who buy them toys at Christmas and so forth. These dog parents are the people Matt Meaker was targeting with this subscription because he argued that if we send them a fancy box of treats once a month, they would pay for it, sure enough they did. The way that he discovered that they would, is instead of writing some long business plan, he went to a park, I think it was just outside of, I think it was in Central Park, New York, he’s based in Manhattan, I think it was actually in Central Park. He went to a dog park, he went and brought a little adaptor for his iPhone, that allowed him to basically charge a credit card. He just asked customers at the dog park, ‘hey is this something you would be interested in, if so can I get your credit card number and I will sign you up right now?’

#00:21:12-3# John Warrillow, Value Builder System Founder & Owner : And by doing that he could tell people from everybody who says, ‘I think your idea’s great.’ If you ever go to anywhere, cocktail party, a pub and say ‘hey I have got this idea for a business, I am going to do x, y and z’ everybody’s stock responses would be like ‘that sound great, go for it.’ Very few people will say, ‘that’s a stupid idea.’ The better thing to do is say, ‘here’s my idea and would you sign up and give me your credit card now for x y or z?’ That’s when you know you have actually got a product if people are actually willing to pay you, with either a description of the product or a very simple version of the product, that’s when you can start really predicting or projecting out what the viability of your product is.

#00:22:00-8# Neil : What are some of the things that you did before you started your business? that would be helpful tips to some of the listeners who have not yet taken the first step of the entrepreneur way?

#00:22:12-9# John Warrillow, Value Builder System Founder & Owner : You know I think obviously you want to do some research about what it is you want to do. But I would not write a business plan, and I think you know, when a bank asks you for a business plan it is the biggest joke on the planet, it is the biggest ridiculous excuse for an exercise I have ever seen. Every bank in the country and I would argue that Canada is no different than the UK on this front, will say ‘great young start-up entrepreneur, why don’t you write a business plan?’ and no one will look at your business plan, the banker will ignore it completely because they have no way to interpret the business plan, that they don’t have the expertise, the front line people at a bank have no clue what it takes to run a business. And that is a complete waste of your time. What I would do, if I were to start a business, is as I said earlier, figure out the cheapest most simplest way I can create a viable facsimile for my products. So either that is a description of the product, or a very what in North America we call a straw man, but a very simple version of the product and go to the market place, and ask them ‘would you buy this?’ in fact, not only would you buy it? will you buy it? And give them some value proposition for being among the earliest customers right?

#00:23:39-4# John Warrillow, Value Builder System Founder & Owner : So hey my normal price is going to be $500 dollars, but if you sign up, you know, give me a $100 dollar deposit right now, your final price will be a third of that. Or for my first 100 customers, I am going to do this extra special thing over here that nobody else is going to get. Or as a charter subscriber to this thing, we are going to give you a, so give them a benefit for taking the leap. But actually go sell what it is you want to sell, and then you will start to get some real time data on your product. First of all, your product will change dramatically, as you get feedback from customers, like ‘no I would never buy that but if you changed it in these six ways, I would.’ You are going to start to get real time feedback, you are going to build up some cash to actually go to market, and then you can start putting pen to paper on the business plan, not for a bank’s sake, because they still won’t look at it, but for your own sake, that you can really start to plan your business in the growth bit, but for god sake don’t spend days and weeks toiling over excel spreadsheets, trying to kind of build the business model. Because they are all not worth the paper they are printed on, so to speak.

#00:24:51-8# Neil : Thank you for that. John, can we just talk about the entrepreneurial journey a little bit now? and can you tell us, do you think whether culture is important from the beginning in a business?

#00:25:06-9# John Warrillow, Value Builder System Founder & Owner : You know I do but I do not think its something you can force. You know I think culture is something like the culture of a country, the culture of a sports team. Its something that evolves over time. And in the early days, it is the personality of the owner, which is basically grafted onto the company, and that’s very normal, in fact in some companies, that same personality becomes structurally part of the culture even though the company has 1,000’s of employees, arguably Starbucks is culturally part of Howard Schultz, the owner and CEO and primary shoulder of Starbucks is still, his personality is still infused into the company culture but in the early days, I don’t think you can force it, I do not think you should go away and have some retreat with your two employees, and talk about company culture, I think its something that in the beginning, it really is you as the entrepreneur, your personality, what you bring to the table, what makes you mad, what makes you excited and happy and enthusiastic, will all be part of the culture. And then I think the entrepreneur’s job over time is to start to document that, and let the true culture of the company start to separate itself from the entrepreneur, as you bring on more senior employees, employees who have their own heroic moments in your company that define who you are as a business. Those will start to shape your culture beyond just your own personality, but in the early days, I would not think a lot about it, I think essentially if you understand who you as a person, and you can articulate two or three things that you stand for as a person, those will by default be your company culture.

#00:26:57-4# Neil : Knowing what you know now, is there anything that if you had known it when you started out, would have helped you to shortcut the learning curve?

#00:27:10-7# John Warrillow, Value Builder System Founder & Owner : Great question, I think I would go back to the importance of recurring revenue as a key fundamental to business success. The idea that you do not have to recreate your business every month because you have got some recurring revenue, and I think I knew it intellectually, but I don’t know that I was willing to be completely all in. What I mean by that is in my research company for example, fourth business I started and exited in my early iteration of a recurring revenue or subscription model, we were sort of half pregnant, on one hand we continued to run, a custom consulting project based research company and in parallel we tried to create a subscription business. And what I discovered is that if you give customers both an option to have a completely custom designed bespoke solution for them versus signing up for a standardised or syndicated subscription. Virtually everyone is going to opt for the bespoke option, and so I think in order to really get a subscription model, recurring revenue model out of the gate, and really get it off the ground, you kind of need to go all in, meaning you need to commit and say, that whether you offer dog-walking service, math tutoring business, whether you have got a landscaping company or a swimming pool installation business, you have got to say, ‘we run our business, using a subscription business model’ and so the way that looks instead of charging by the hour, say ‘we do dog-walking and we charge £8 a walk, for example in central London.’ Instead of doing that, you say, ‘yeh look, we offer a dog walking service, we are incredibly busy but so if you want part of our solution, if you want to use us as a dog walking company, you have got to sign up for a six month agreement, we are going to walk your dog every day, Monday through Friday at this time and we are going to basically send you an invoice once a week at the beginning of the week for that week and you can opt out after the six month term.’

#00:29:32-9# John Warrillow, Value Builder System Founder & Owner : You then as an entrepreneur know that you have got a customer for the next six months, so you can start planning your business, hiring subordinate dog walkers for example, and they do know that they do not have to call you every day, to remind you to go pick up their dog, and so its a pritpro quote, theres a commitment on both sides, and it makes your business so much more a. valuable, but in the early days you are not really focused on value as much as you are focused on getting your business off the ground. And it becomes so much more predictable, there is a company based in New York City called H.Bloom and what they have decided to do is re-create and again, I wrote about these guys in the first chapter of the book, the business of selling flowers. And what they have done is, they have said ‘ok, most people buy flowers at valentine’s day or mother’s day, and then they kind of rarely maybe wedding anniversary, but they rarely buy them on them, they went in and said, ‘who buys flowers regularly?’ and its this very small but lucrative co-hoard of people who buy flowers regularly. They are, hotels, spas and restaurants, why do they do that? well they want the flowers on the reception table to provide sort of a boutique image.

#00:30:46-7# John Warrillow, Value Builder System Founder & Owner : And so what H. Bloom did, they went to these spas and restaurants and hotels and said, ‘look we’ll come every two weeks we’ll replace your old flowers, we will put new flowers on your reception table. We will send you a business grade invoice at the end of every month and you can get back to the business of selling hotel rooms and spas.’ And so they took a business, the business of pedalling flowers which is horribly seasonal first of all, very unpredictable, typical flower store, will throw out, all garbage, this is a high street flower store, will throw out 60% of its inventory every month, because it rots in the fridge. At H. Bloom their spoilage rate is 2% a month. Why? because they know how many flowers they need to order because they know how many subscribers they have. So it just makes your business so much easier more predictable to run.

#00:31:34-5# Neil : It makes total sense. How much does gut feeling influence your decisions in your business?

#00:31:48-1# John Warrillow, Value Builder System Founder & Owner : You know I think they influence it a lot, I am a big subscriber of fuzzy math and what I mean by fuzzy math is I was never very good at math you know sums in school and being really good at sophisticated math, but I was always pretty good at fuzzy math which means you take a 100,000 and you say ‘ok I want my business to generate a $100,000 dollars this month as an example, just put that there’ So what do I need, I need roughly four customers to generate $25k or I need a $1,000 dollars from a 100 customers. And so I could roughly breakdown fuzzy math to kind of get to rough broad strokes numbers, and so I think that, I can’t even remember the answer to the question that you asked Neil. But that was my answer and I can’t remember why.

#00:32:41-5# Neil : I was asking ‘how much does gut feeling influence your decisions in your business?’

#00:32:44-0# John Warrillow, Value Builder System Founder & Owner : Yeh thank you, so I am a gut feel kind of person at that fuzzy math level, I need to know whether my goal is to find a 100 customers to spend a $1000 dollars a month. Or whether I need four customers to spend $25,000. So that’s the kind of gut feel, Am I looking for a couple of big customers or a bunch of medium sized customers? that’s the sort of gut feel, I don’t pour over spreadsheets making those kinds of decisions. Right and saying ‘well if it was a 106 and we lost three and instead of 10,000 we got, I don’t mess around with spreadsheets, I am thinking very intuitively or gut feel, at broadstrokes numbers. So yeh to that extent I do use gut or intuition a lot, when making decisions and do not rely heavily on deep analysis before making decisions. When I say deep analysis, I mean closed door, spreadsheet kind of work, I don’t do a lot of that.

#00:33:49-2# Neil : Have you always been like that?

#00:33:53-2# John Warrillow, Value Builder System Founder & Owner : Yeh I think so, and I do not think I am alone, I am part of an organisation or I was, part of an organisation called the strategic coach where it brings together entrepreneurs, who meet once a quarter and work on each other’s businesses together. And there were about 60 entrepreneurs in my last group, and I remember at one point we did a personality test called the Kolbe, Kolbe test. And it analysed all of us on entrepreneurs on four dimensions. And the argument that Kolbe .. Kolbe makes is that all of us have a little bit of every personality type in us but we have sort of dominant strains. Right and so the four types of personalities are fact finder, follow through, quick start and implementer, fact finder are people that make a lot of data before making decisions. Follow through are people who are good at following are process that’s been created and also initiating make processes on their own, or processes if you happen to be in the UK. Quickstart are people who start lots of things but are not great at finishing them. And follow implement are people that are good with their hands, often times working in a setting where they can actually physically work on something with their hands. Well when the facilitator has all raised our hands, and said who has a dominant theme, meaning more than 7 out of 10 on fact finder. Only a few hands went in the air.

#00:35:23-4# John Warrillow, Value Builder System Founder & Owner : Likewise when we said, ‘who has a dominant theme in follow through?’ only a few hands in the air. Not surprisingly when the facilitator asked ‘how many have a dominant theme in quick start?’ Virtually every hand went in the air. So I think most entrepreneurs tend to be naturally good at coming up with the ideas. They can think about the ideas but we have too many ideas. And so we need to hire or put systems in place to make sure the ideas go from sort of our head or on a whiteboard to actually get implemented. And that’s where often times its important to hire people who are really long or strong and follow through, so that they are there picking up the ideas and actually implementing them. It makes entrepreneurs by the way, very difficult to work for, because what you will hear and my staff I am sure feel the same way, is ‘god I love it when he is not around because I do not have to deal with the 60 million new ideas, every day like I can take the ones we have already got and actually get something done on the one we have already got, so very common theme, so to answer your earlier question about working on gut feel, you know there are only that group of about 16 entrepreneurs, very few of us, were fact finders meaning spending lots of time making a decision you know, consuming lots of information.

#00:36:50-5# John Warrillow, Value Builder System Founder & Owner : Looking at it from 50 million different angles. Very few people are like that, very few true entrepreneurs are like that. Many more are kind of ready fire aim, as it were.

#00:37:06-9# Neil : Life is made of constant change whether we like it or not, and some would say the only constant in life is change. John how do you try to keep up with change?

#00:37:22-8# John Warrillow, Value Builder System Founder & Owner : I’m actually, I struggle a little bit with change to be honest with you Neil, I think, I tend not to be an early adopter, and that sometimes bites me in the ass, for example you know I am not a big Facebook user. You know obviously I am aware of Facebook, my wife is a power Facebook user, uses it every day. I have only really started to adopt it, and that was part because I was not really sure who was going to up, I was not really sure if it was necessary in a business context. I was not really sure that I wanted to kind of reveal a little more about my personal secrets etc. I was a little concerned about privacy, and so I missed the boat a little bit, on Facebook, like all my, most of my friends now have had deep networks built on Facebook and that’s how they keep in touch with each other as they moved around, travelled, changed jobs, changed companies, done sabbaticals and so forth and I kind of don’t have many friends on Facebook. Just because I have not really made an investment. So I am not a great one to ask, about keeping in touch with current trends. I tend to be you know to use a Clayton Christianson term, sort of a ‘late majority guy.’ Once the platform seems to be the agreed to platform, then I will kind of jump on. I started a podcast about three or four months ago, and that podcast was two or three years late relative to most people who had podcasts. So again, I am not a great one to ask on staying ahead of trends, because I frankly, I don’t stay ahead of trends, I am kind of behind the ball a little bit on trends.

#00:39:18-7# Neil : Yeh I do not think there is a right or wrong answer to it, there is just interesting to see how different people answer the question, so

#00:39:25-8# John Warrillow, Value Builder System Founder & Owner : Mmmm yeh yeh.

#00:39:27-5# Neil : So that’s good. What is your favourite book on entrepreneurialism, business, personal development, leadership or motivation? and can you tell us why you have chosen it?

#00:39:37-6# John Warrillow, Value Builder System Founder & Owner : Mmm well I am a big fan of a book called ‘small giants’ by Bo Burlingham. First of all Bo’s a great friend, wrote the forward for ‘Built to sell’ but I love his book and do you know what Neil? have you taken a look at Small Giants before?

#00:39:51-1# Neil : I have not heard of that actually, no I will do though.

#00:39:54-1# John Warrillow, Value Builder System Founder & Owner : Its a brilliant book. It talks about, it falls around about ten different businesses, who have made the decision to be great instead of big. And it starts off with the kind of idea or the hypotheses that in order for a business to be great, we have been sucked into this idea that it must be big. So the only great or worthwhile businesses are the biggest businesses on the planet, and Bo’s argument is ‘hang on a minute, there’s another way to think about entrepreneurship, and that is to strive to be truly a great business, not necessarily a huge business’ and so he points to examples like Patagonia which is one of the larger companies in his co hoard that have sort of issued or avoided going public and making a huge business, for focusing in on the initial kind of vision and goals of the entrepreneur. He talks about Anchor Steam Brewery again, a business that has had many, many options or offers to go much bigger than they are. But instead have chosen to remain independent and relatively small. And so I am a huge believer in that and that may sound somewhat strange coming from a guy who spends his life talking about how to improve the lives or how to improve the value of a company.

#00:41:43-5# John Warrillow, Value Builder System Founder & Owner : But I think there is something tremendous to be said for owning a 100% of a relatively small business, when compared to owning a very small slice of a much larger business. I think being the captain of a small ship, as opposed to the third of first maid on a bigger boat, has tremendous benefits. Economic benefits, freedom, flexibility etc., so I think if you are turning over a million pounds in revenue and you are putting £300,000 of profit into your pocket every year, compared with a guy who runs who is the CEO of a 20 million pound business but does not own any of it and is a hired gun. I would make the case that the guy running the million pound business has a lot better lifestyle.

#00:42:13-9# Neil : Mmm hmm

#00:42:13-9# John Warrillow, Value Builder System Founder & Owner : And maybe creates more wealth depending on when and how he chooses to exit that business, so Small Giants is a great book and worth picking up it just gets you away from that idea that bigger is always better, it can I think cloud some decision making at times.

#00:42:32-4# Neil : I think its very easy in business to look at big businesses and think, ‘that’s the way you have to do it.’ isn’t it? When sometimes it isn’t. In fact sometimes when you look at marketing and things, they are not always that great at marketing that in a way that is useful for small businesses, because they do not focus on things like the cost of acquiring customers and things or capturing customer’s details and things like marketing like you would in a smaller business, so some good advice there.

#00:42:59-5# John Warrillow, Value Builder System Founder & Owner : Yeh its funny, I’ll just interject Neil, I will just tell you briefly, to kind of pick up on your point. The one thing I do every morning is kind of a daily habit is what I call my gratitude diary, and basically I take five minutes before I open my web browser before I open my email and I just take five minutes to say what I am most grateful for. Right then and there, it just helps centre me and kind of gets me focused on the rest of my day, and if I look down at my diary over the last month, it includes a lot of entries about flexibility, so I am grateful for the opportunity to pick up my son and take him to tennis at 3pm in the afternoon, and not have a boss tell me where are you going. I am grateful for the fact that on Fridays we basically spend our weekends skiing because my kids are involved in the ski racing programme that starts on Fridays. I am grateful that I can leave come and go from my company at any time, when the kids are sick, I can leave the office and go get them, without having to answer to someone, there’s nothing very few entries in my gratitude, diary about money or the amount of money or material purchases about a car that I drive or a house that I live in, none of those in fact. Its all about the flexibility to determine how I spend my time, and so I think that’s a tremendous benefit of entrepreneurship that as entrepreneurs we should never underestimate that the freedom of time and how would you spend our lives and the payoff of that. The return on that is massive.

#00:44:42-0# Neil : Absolutely, everyone when you have a busy life, listening to audio books is a great way to expand your knowledge in the time when you may be doing other things, such as driving or when you are at the gym. We have a special offer for you of a free audio book of your choosing, to choose your free audio book, go to www.freeaudiobookoffer.com. As long as you have not already signed up then you will qualify. John, can we just speculate about a few things about the future, what one thing would you do with your business if you knew that you could not fail?

#00:45:20-8# John Warrillow, Value Builder System Founder & Owner : You know I would probably take a lot of the content that we have created and hire a very expensive sort of video production company, and productise some of our IP. When I say very expensive, we do cheap and cheerful, IP right now, so intellectual property. So we will create videos, we will put a smart looking banner, we will do a screen flow but its a basic sort of way to productise our intellectual property but if I knew that it would be successful, without any shadow of a doubt, we would hire a production company and spend five or ten million dollars creating the most incredible video series, and that is just not a bet I am willing to make at this point, I am not sure that it would necessarily pay off.

#00:46:22-1# Neil : What skill if you were excellent at it would help you the most to double your business?

#00:46:31-0# John Warrillow, Value Builder System Founder & Owner : Probably managing employees. I am an average or below average manager of employees, and that holds me back at times. I think if I were better, manager, I think I am a decent leader of a company but I think there is a different between leading and managing a company. A leader says, ‘here is where we are going, here is what your values are, here is this course we are charting.’ The manager says, ‘ok Neil, you said you are going to sell three widgets last week, and it looks like you only sold two. Why didn’t you meet your goal? What are you going to do this week to insure that you do meet your goal?’ Its day-to-day management of the business and I am again below average at that, I forget what their goals are, I forget what my employee said last week, I have trouble keeping everything in one place. I am just sort of crappy, I am not organised enough to be a good manager, basic day-to-day management. I think if I was better, that would excel with the pace of our business growth for sure.

#00:47:33-0# Neil : In five years from now, if a well-known business publication was publishing an article on your business, after talking to your customers and suppliers, what would you like it to say?

#00:47:41-5# John Warrillow, Value Builder System Founder & Owner : The value of their system helped us improve the value of your company, we exited our business, for a multiple that was a huge premium over industry averages. The value of their system is the standard way that companies go through the exit process, those would be some of the things that we would love people to say.

#00:48:09-4# Neil : We are now at the part of the show where you share three golden nuggets with us, so the first one John is what is your favourite quote, and how have you applied it?

#00:48:20-4# John Warrillow, Value Builder System Founder & Owner : You know I cannot remember the president, I think it was Roosevelt, the United States President, who talks about being in the arena. And I won’t give you the whole quote because you can google it later but or maybe put it in the show notes. But it basically talks about the kudos or the credit goes to the person who is in the arena. I think who’s brow is covered in sweat and blood and tears and so forth, but at least they are doing it. As opposed to the person who looks on from the sideline and criticises. Its called ‘in the arena’ and its a great quote and it really talks about and encapsulates that idea, of you know its easy to criticise and I was one from people on the side-line, but until you are doing it, and for the folks that are doing it, those are the ones we should be celebrating.

#00:49:10-5# Neil : Yeh I agree with that. Do you have any favourite online resources that you can share with us?

#00:49:21-4# John Warrillow, Value Builder System Founder & Owner : Oh all the normal, I am a big Evernote user if you have not used Evernote that is brilliant. I am a pretty big user of Nest, which is a way to manage your home. If you have a vacation, you can set your temperature on your house to go off when you are not there. I am just looking at my phone, I am a big user of Trippit, online resource to manage your schedule if you happen to travel a lot for business, that is handy. Uber, I could not live without Uber, like I do not know the last time I actually flagged a taxi must have been years ago. I am a huge power user of Uber, so there’s a few.

#00:49:53-9# Neil : And what is your best advice to other entrepreneurs?

#00:49:57-4# John Warrillow, Value Builder System Founder & Owner : Just do it. As I have said throughout this conversation, I think there is a huge premium that is available for people who act. And there is frankly a significant discount for people who spend time naval gazing and thinking and analysing and talking. The true test of any idea, is going to be taking it to market in its basic form and asking people ‘will you buy?’ and only then will you know if you have got a business.

#00:50:33-3# Neil : Everyone if you did not manage to get a note of John’s favourite resource, or his favourite book, then you can find the links on John’s show notes page, just go to theentrepreneurway.com and search for John or John Warrilow, in the search box. John, is there anything else that you would like to add about your business?

#00:50:51-0# John Warrillow, Value Builder System Founder & Owner : No I mean if people are interested in getting their value builder score, which again is the first thing that all of our entrepreneurs do when they complete the questionnaire that is available in UK pounds. They can go on to value build a score, valuebuildasystem.com or just simply valuebuilder.com will get you there as well, and you can complete the optin box there, and we will get you instructions for getting your score.

#00:51:14-7# Neil : Thank you John, John you have been absolutely awesome, thank you so much for coming on the show, you have given us some fantastic advice. So thank you very much.

#00:51:24-9# John Warrillow, Value Builder System Founder & Owner : Thank you very much Neil.

#00:51:24-9# Neil : You are welcome, thank you.