The G.E.M. Series EP21: When Purpose Meets Demand With Steve Hoffman
[00:00:00] Blake: Welcome to the G.E.M series powered by rocket level. On this podcast, we empower entrepreneurs to succeed by setting big goals, executing like a pro, and having a fearless mindset. The G.E.M series is all about investing in yourself. We're here to share the path to getting what you want out of life. By sharing the stories of entrepreneurs who have.
[00:00:21] Themselves providing thorough research from our team on what careers and habits are yielding the best results and discussing the mindset it takes to overcome the obstacles that all future entrepreneurs will face investing in yourself, starts with putting in the work every single day. And this podcast is here to help you do exactly that. 
[00:00:39] My name is Blake Chapman. I'm the vice president of the ambassador program here at the rocket level. And I am thrilled to be your host for the G.E.M.
[00:00:49] Hello and welcome to today's gem series. I am personally overjoyed to welcome our guests. Steve Hoffman is also known as captain Hoff. Just to give a little bit of background. Steve is the chairman and CEO of founder space, a global innovation hub for entrepreneurs, corporations, and investors with over 50 partners in 22 C.
[00:01:10] Steve is also a venture investor, and founder of three venture-backed and two bootstrap startups. And he is an author of several award-winning books, including make elephants fly, surviving a startup, and the five forces. And in addition to all of this, he's also worked as a TV development executive and founded several startups in the area of games and entertainment.
[00:01:33] Steve has done so much and done all of it well. So excited to have you on. Captain Hoff. Welcome 
[00:01:40] Steve: to the show. How are you doing today, Blake? It's fantastic to be here. I'm super excited to be on the show and to talk to you and today's great. I'm doing great. Wonderful, 
[00:01:50] Blake: wonderful. I, I, I always like to, I always like to make sure so Steve, you know, you've, you've covered so much ground in your career and for those that don't know, you could you just share a little bit about yourself with our audience?
[00:02:02] Steve: Sure. My main role is working with entrepreneurs. I do that globally. So I work all over the world with entrepreneurs, helping them launch their companies. I bring a lot of startups from overseas into the United States. I also take startups in the United States and launch them here and then bring them overseas.
[00:02:20] So I'm traveling like 70% of the time. I was just in Europe for a month and I looked at a hundred startups, so a hundred startups, and out of those hundred. I found one that I thought was gonna break through. So this is usually the odds out there. It's like, it's like one out of a hundred. You find them and they're a gem.
[00:02:41] And then, I'm now helping them enter our market. And I'm going back to Europe in a month. So I'll be back there in a month. 
[00:02:49] Blake: Oh my goodness. You know, I, I talk to, I get to talk to a lot of entrepreneurs and something that I always see is a kind of a common thread. I think most people would listen to your schedule and say, how do you find time to, sleep, Steve?
[00:03:01] You know, you're, well, I 
[00:03:03] Steve: time to sleep. I make time to sleep, but I do want, I, I do love traveling. I love meeting entrepreneurs. Amazing. I, you know, there are a lot of entrepreneurs in Silicon valley who I meet here. But it's great to give people who don't have direct access because there are a lot of amazing startups out there.
[00:03:20] that isn't in Silicon valley. So often they're overlooked. and giving them a chance to have the same opportunities is kind of that's what founders face. And that's 
[00:03:30] Blake: been your mission for yes. The last several years. Wonderful. And let's bring it back a little bit further. I'd love to know you know, where did all of this begin for you?
[00:03:40] You know, what was, what was growing up like have you always had an entrepreneurial mindset or a creative mindset? Well, 
[00:03:46] Steve: I've always had a creative mindset. So when I was young, I was completely into two. Number one, I was into games. So like a lot of guys, I was into games, but I was into all types of games, role-playing games, board games, computer games, video games, you name it.
[00:04:03] If it was a game, I was in it. I created over a hundred board games. When I was a kid, I was just massively like always developing them and testing them out on my friends. And later in my life, I became a game designer than a game producer and I have about 50 different game titles out there. Right. That I've produced or designed.
[00:04:23] So games have always been a big part of my life. The other part was filmed. So I had my little movie studio. I made movies constantly from the time I was in grade school through high school. So I have a huge number of movies, animations, live-action, everything. And I sort of combining my talent.
[00:04:43] So like I have, an engineering mind which comes from mine. He was an engineer. He's a rocket scientist and from my mom. Wow. Yeah, he was an MIT-trained rocket scientist. He trained some of the early astronauts. They were his students and, and my mom, my mom is an artist, so freewheeling free-thinking artist.
[00:05:05] And so I have both those DNA. And then in my career, I've straddled entertainment and technology. So I've done a. In both areas. Now I'm an investor across all technology segments, but then, all the startups I launched were entertainment, and technology, startups. 
[00:05:23] Blake: That's incredible. And oh my gosh.
[00:05:25] I feel like if somebody would go to a place where they could just create a baby and they said, Hey, These are the ideal genes I'm looking for. That's what I would choose is something along the lines of MIT, rocket, scientist, and extreme artists. That's pretty incredible. 
[00:05:40] Steve: well, you don't know what other genes I got.
[00:05:42] Those aren't as perfect. it's put this way. It sounds good on paper. Wait till you meet me. 
[00:05:49] Blake: Hey, I, you seem, you seem great so far. I've, I'm already enjoying your charisma and attitude in this. It's great to meet somebody smiling and, and enjoying life. something that I you know, when I was looking about up a bit more about you, something that I found that I, I love.
[00:06:07] Gazillionaire. So you have a gazillionaire fan over here. Oh, thank you. You played it. You got into it. Yeah. I, well, I, I watched through the demos, and I, I started figuring out how to play it. Because I was, I watched through all the YouTube tutorials and things like that. And I was like, oh my gosh, this is incredible.
[00:06:23] People find super trade with aliens and 
[00:06:27] Steve: people find it super addictive. So it's. Yes, it's actually, gazillionaire was my first. So the first time I launched a company, I, you know, went to undergrad in electrical computer engineering because a father was like, sun computers are gonna change the world.
[00:06:44] So I, I yeah said, oh, I have to study computers. I, then went back to film. I went to graduate school in film and television at USC, graduated USC, and worked in the film industry for a. Kind of worked my way up to TV development exec. Then I got an opportunity to go to Japan and head up projects game projects for them.
[00:07:04] I, one of them was with Michael Jackson, an amazing project with, yeah, it was back in the old days. Michael Jackson, what was that? What was that? That's so, so cool. It was called the ass one. It was a simulation ride. Out of Sega of Japan for Las Vegas and Michael Jackson was a star. He was your, you know, he was a good guy.
[00:07:22] Most people don't even know that exists, but we did it. It was big back then. And then I came back to my home territory, Silicon Valley, San Francisco bay area, and I wanted to start my own game company. Didn't wanna work for another game company. So I launched a company called lava mind. And I wanted to do games that my real mission was to do games that were good for society.
[00:07:47] So I wanted to do games that not only were complete because I'm a gamer were completely addictive and you want, you know, you just had to play more, but also, but also games that taught people. So. But you didn't realize you were learning something. So my first endeavor, the first game I ever made was called gazillionaire.
[00:08:07] And of course the goal was to be a gazillionaire, which is ironic because I didn't know that today I would be, you know, my main job is teaching entrepreneurs and hopefully turning them into gazillionaires. So I'm still doing the same thing. I started out doing, trying to make gazillionaires, but gazillionaires became popular.
[00:08:24] It got picked up by the largest game publisher in the world. At the time, the PC game publisher, which was spectrum hall by micro pros, did civilization and Star Trek and all. Those early games when were first launched and they put it out there worldwide and it was just a game. It wasn't for education.
[00:08:41] So it was just, people played it for fun. It was really popular. Yeah. And then schools started to pick it up universities. And they started to put it in. Oh gosh. And you know, hundreds of schools and universities still use the game today, even though it's old wow. And it's, and then we, I kept the rights to the game.
[00:08:59] So we put it up on steam. So now it's available for everybody. And that was my first entrepreneurship. It was a real risk like we had to, you know, I just sunk my life savings into that game all my time. I was betting on it and fortunately, it paid. 
[00:09:16] Blake: Take me to that mindset because that's a pretty big decision, right?
[00:09:19] You know, going from typically working for other people, what, I guess, what pushed you over the edge to where you're like, you know what I have to see out my vision and, and execute and, and make something. 
[00:09:31] Steve: It was pretty simple. Maybe you see this through. Yeah. You know, I was in a big Japanese company working in Tokyo.
[00:09:37] It was great, but I had the itch. Like I saw I could do this myself. There's no reason I have to sit here working for this big corporation. So I decided, but I can't do it in Japan. I'm not Japanese. You know, my Japanese language abilities were rudimentary. I could get by, but you know, it's another thing running a business in Japan with all the bureaucracy.
[00:09:59] I said, where should I? I should just go back to San Francisco. Something's happening. It was kind of the time things were happening. So I, I went there and I literally, because I could code just started coding it. So I started coding the whole game myself. I also did. A lot of the artwork, not all the artwork, but, I drew and did the artwork because my mom was an artist.
[00:10:21] So I, I had enough skills and you'll see like the artwork is kind of crazy and Zaney. I love the characters yeah. People, people do. So that was the thing I was then, you know, in the old days, literally you couldn't put a game on the, in that very. because there were no real web browsers. They had mosaic, but it was crude.
[00:10:43] it was only used by kind of research scientists at the time, but there was a thing called bulletin boards where all the geeks hung out. So I took the game and uploaded, a limited version to the bulletin boards where the gamer geeks hung out. They started downloading it. And literally, my first sale came from none other than Lord deck.
[00:11:07] Lord deck. You don't know him, but I actually, he was in the bay area. So I invited him to my house for dinner because he sent me a check in the mail and I sent him and I said, oh, come to my house. And I'll give you a stack of floppy discs. And so he came there, we had dinner, I handed him the floppy discs and Lord deck.
[00:11:23] This gamer geek went home with the first copy of gazillionaire. But you know, after that, after that That the largest PC game publisher, their QA department, their testers there's quality assurance who test the games. They got a whole, they downloaded the game and they got hooked and that's what gave me the entree to publish it.
[00:11:42] Wow. 
[00:11:43] Blake: That's, that's pretty amazing. And it's gotta feel just like so rewarding that first time you meet cuz. You remember Lord get to this day, right? That first person that you know, went, came over, and bought the game. And I no, I just, I love that story so 
[00:11:57] Steve: much. And he looks exactly like you would imagine a Lord get to look.
[00:12:01] So he's a chubby guy, like a gamer guy with a GOE, you know, the whole, the whole works. 
[00:12:07] Blake: That's honestly, that's perfect though. That's exactly who you want, you know, kickstart in this thing, and yes. And 
[00:12:13] Steve: that's when, you know, you have a business when you just put it up there. So now I work with entrepreneurs and they're like, you know, what would you do?
[00:12:20] To start a company today, like, because I work with a lot of companies, many of them that go public or become big and get acquired. Sure. Yeah. And if, and if you have that dream, what would you do? Well, the first thing is don't do games. It's a tough business. Like when I entered games, there weren't a lot of indie developers.
[00:12:36] it was much smaller, so it was easier for me to break in today. Like anybody can upload a game. I mean, if you're passionate about games, Like, if you believe you can make the best game in the world, do it. But if you're just doing it to be an entrepreneur, there are, there are a lot of other opportunities out there that are less crowded where you can make a much bigger impact.
[00:12:55] So this is what I tell entrepreneurs. Don't build your product. Don't do anything like the first thing you need to do is pick an area you're passionate about whatever that is. Like, if it's sustainability, you wanna make fishing more sustainable, like, so they don't have all this SPCA and, you know sure.
[00:13:13] Yeah. Solve the problems of fishing or you want to change the restaurant business. Maybe you grew up in the restaurant business and you see an opportunity to transform it with technology. If you, what the first thing you do is don't just think of some idea that you think is good. And then. Start building it because that almost always fails.
[00:13:31] The first thing you should do, if you're really smart is don't build anything, go out there and hunt for demand. Demand it's because what I've learned through my own companies and working with all these entrepreneurs around the world is you can never create demand. And what do I mean by this? People have this mythology, like Steve jobs, they think, oh, Steve jobs envisioned the future.
[00:13:55] He created it. The market was, you know, and then he created all the demand for the iPhone or the, and, and before the iPod, honestly, He didn't create the demand. Even the Mac, didn't create the demand. The demand was already there because if you looked at the time, Steve Jobs was really smart. Like before he made apple, you know, before apple launch, people were already buying these home PC kits Commodore and all these other, it was a growing market.
[00:14:20] It was a market that was growing like crazy. He just hopped on that market and made the next iteration of a much better product. Same with the iPod. There were all these MP3 players already on the market. They were all out there. He just saw that demand got on board, made. You can, no matter how brilliant you are, you cannot make somebody buy something that they don't think they need 
[00:14:40] Blake: or want.
[00:14:41] Yeah, that's exactly right. 
[00:14:43] Steve: You know, I have entrepreneurs, and I did this myself in one of my startups. So I, I, I know what it's like, who spend a year making an incredible product, like incredible it's a bug, beautiful UI, you know sure. Integration with everything else and people look at it and go, oh, that's nice.
[00:15:02] You know when you hear that's nice. That's not good. It's the kiss of death. Like nobody goes after nice products, you know, you download apps on your phone all the time. Sure. And you go, oh, that's nice. A week later, delete mm-hmm, which I exactly, you know, I'm not, or, or it gets lost on your phone and you never look at it again.
[00:15:21] Those nice it's only the apps that you're like, oh my God, like, I, I need this. I need, or I, this is amazing. Like I have to use this. Those are the apps that resonate. So I tell people, you know, the real job of an entrepreneur is not to think of a brilliant idea, the real job. Of smart entrepreneurs is to go into the world like an oil, wildcatter and start sinking Wells.
[00:15:46] Like you don't know where the demand is, but if you hit the demand, you'll know it because it's a gusher, like, you know, absolutely when there's pent-up demand that isn't being met by the marketplace like people aren't being made and you, you are the one who. Boom. Like a lot of entrepreneurs ask me, like, is my, you know, what do you think of my business?
[00:16:04] Is it doing well? And I'm like, the demand will tell you, like, like if the, if you're going out there and talk, yes. Talking to a hundred potential customers and they are clamoring for your product, you know, they will do anything to get it. You've hit a gusher. If they are telling you that's nice. Well, 
[00:16:21] Blake: game over.
[00:16:22] Forget then. Yeah. You're gonna have to try something else. And that is yeah. Such incredible advice. You know, it reminded me of a story. That I read recently that it's a McDonald's marketing study or something of that effect. And they said that they noticed a few years back that all of a sudden their milkshake sales went down significantly.
[00:16:43] And they're like, what on earth is going on? And they had changed a couple of things like the machine I think changed. I think they might have changed, the recipe slightly. But they kept going and going and going. And there, some people were hired to stand right by McDonald's in the drive-through.
[00:16:58] And if somebody ordered a milkshake, they'd ask them, what do you get out of this milkshake? And the thing that they found was that the reason there was a demand and that it had dropped is not because they're just suddenly fewer people that wanted milkshakes it's because the peak hours were from.
[00:17:15] Roughly 4:00 AM to eight in the morning. And what people wanted was the milkshake wasn't as viscous because most of the people getting them were on a long commute to go to work. And they said a banana doesn't do it for me. I eat that too fast. A bagel is kind of tricky, but a thick McDonald's milkshake was what I needed.
[00:17:34] So they adjusted it and they made sure that everything was available at those hours. And then all of a sudden. Booming selling milkshakes again. And 
[00:17:41] oh, 
[00:17:41] Steve: see, when is even timing makes a difference, even it 
[00:17:45] Blake: was timing too, you know? And yes. When you tell me that I. I, I just think it's just so essential to realize that, you know if the demands you 
[00:17:52] Steve: have to know about the market, you have to go deep into the market.
[00:17:55] And too many entrepreneurs think a big idea, the light bulb moment, that's it. That light bulb moment is only in your head. What you need to find out is what's in the real world, like great entrepreneurs, the greatest entrepreneurs out there usually didn't even invent the products they become famous for.
[00:18:13] Elon Musk, like he didn't start Tesla. He wasn't the founder of Tesla. No, most people don't know this, but it's two other guys and they're kind of pissed off that he took all the credit, you know, took over the company and took the credit, you know, Kalanick who found, who supposedly founded Uber. Wasn't the founder of Uber.
[00:18:31] There was another guy who was who's working on it long before he brought Kalanick in Kalanick was an angel investor. And then. Became the face of Uber until he screwed up. But you know, you look over and over and over again, the really smart entrepreneurs don't feel like they have to come up with the idea and they don't even feel like they have to build the idea.
[00:18:50] They just have to identify them, this is what they do. They identify the demand. And at the same time, they're looking for demand. They are assembling an amazing. To execute it, to figure it out. That amazing team is because you can find, you can have the best idea in the world. You can identify, you know, a gusher of demand, but if you don't have a team to execute on it again, you'll drop the ball and somebody else will run with it because there's plenty of competition out there.
[00:19:19] There are plenty of people looking at the market at the same time. You are, somebody's gonna figure it out or they're gonna see what you're doing and they'll just pass you up. So getting that, you know, I usually. When you start a company spends 80% of your time upfront and 80% looking for the right team members.
[00:19:38] Because if you get on the right team members, magic happens like literally magic hap it's you, you nobody's good at everything. Like we're you, you, and even if you were brilliant, You're a polymath. You could do that. AbsolutFor every job in the company, you don't have time. Like you just don't have time. Yeah. It won't happen.
[00:19:56] So getting those early people on right now is the most important thing you can do. And also then you can go on a journey together and search for the demand. So I tell people, don't start companies wait for an idea to start a company. It's better. Your chance is higher. If you don't have any. Or if you have 20 ideas, because then you're not we to some idea that may not work so many people.
[00:20:19] The biggest reason I say entrepreneurs fail is they stick with the same idea for too long. Not because they're not entrepreneurs, it's not that they lack stamina or fortitude, or grit. Mm-hmm, that's not why they fail because just by being an entrepreneur, usually, you have those things like you're gonna do this.
[00:20:35] But the mistake you make is that you have so much grit that you think I'm gonna make this idea work. When in the real world, there's some disconnection to the real world that you don't see, and this idea will not work. And look, if you're traveling in the wrong direction, it doesn't matter how fast you run, how hard you try, you're going in the wrong direction.
[00:20:56] Finding the team in the direction are the things that make smart entrepreneurs successful. 
[00:21:02] Blake: Absolutely. I think operating from a place of an abundance mindset and realizing. If you have an idea, now you're gonna have an idea. You might have hundreds of ideas a day and, and you know, not, 
[00:21:13] Steve: not holding onto exactly.
[00:21:14] You don't have any. And if you don't have any ideas go into the world. Yeah. The ideas are sitting there waiting for somebody to execute on. People will tell you what they'll show you. Like you've. You go into the, if you're in the restaurant business, find out, go embed your you and your team, your great team, embed yourself in restaurants, fly on the wall, watch people, ask them questions.
[00:21:35] Where's the chef having trouble? Where's the owner having trouble? What headaches are they causing? What things do the customers want that they aren't getting? All of those are potential opportu. All of those are the type of ideas that can, can birth, you know, many new businesses. And the beautiful thing about the world today is that technology is evolving.
[00:21:54] That means there every time we have an advance in technology, which we have one every day now because we have billions of people on the internet innovating, creating stuff, you know, putting stuff out there. Every day, there's a new opportunity for some entrepreneurs. Some are small, some are enormous, like bigger than, you know, maybe Google you, we don't know right there.
[00:22:14] Huge. But it's up to you to go out and start figuring out where those are. 
[00:22:18] Blake: So was this a mindset that you adopted, when you first went out on your own into the gazillionaire? I think that's lava mind, right? That era? Yes. And or did you have to discover that 
[00:22:28] Steve: along the way? When I went to gazillionaire, I did it.
[00:22:31] The other, I did the way I told you not to. I had my brilliant idea. And I went out there and put all my bets on that one horse. And I hope it crossed the finish line. Well, luckily it did, you know but. I'm telling you that's a long-shot bet as opposed to a better way of doing it. And this is what I learned working with, you know, doing, I did three venture-funded startups and two bootstrap startups in my past.
[00:22:55] So I've done a share of my own companies. And then I also learn every single time I work with a really smart entrepreneur and watch what they're doing and see, oh yeah, these are the patterns that work, you know, and I put all these in my book, surviving startup because I want to help startup founders.
[00:23:13] I mean, how you start is so important because most, you know, the majority of startups fail, it's just the fact like, yeah, the odds are against you. You're, you know, you're probably gonna fail. So what can you do? What smart decisions can you make every step along the way that will give you maximize your chance?
[00:23:31] Now there's still a chance in there. You can't take it. You can't take chance out of the equation. 
[00:23:35] Blake: Sure, sure. And you know, something that I think about too, and has stood out to me. I've done. Gosh, I think about 19 of these interviews with all kinds of different people. And it seems like curiosity is a lot of times what fuels being able to get to the next stage.
[00:23:53] And curiosity means genuinely wanting to know somebody else's perspective or maybe an answer to a problem or anything 
[00:23:59] Steve: like that. You're right. Our curiosity is. Curious, people ask a lot of questions, and curious people go to places where other people don't, how do you find these great ideas like that are sitting out there waiting to be executed?
[00:24:14] You don't find it by just sitting in front of your computer, trying to dream up something. Yeah. You find it, by going out into the world and engaging people. The questions you ask are more the problem with most entrepreneurs, they get the light bulb goes off, and they think their idea's brilliant. And then they go into sales mode.
[00:24:31] They they're gone. They evangelize, and they want to convince people that their ideas. Great. That's not your job as an entrepreneur, your job isn't if it's great, you'll know it because they'll be banging down your door to get it. Your job is to go into the world and figure out where. What they are thinking what's in their head, and what are the stumbling blocks in their life?
[00:24:50] How can you change those things? Because when you change things that impact people, you make a big impact. Now 
[00:24:58] Blake: that's such, such great advice. What are some of the, do you have any kind of abstract examples of ways that you've gone out and sourced information in the past or any tips that might be useful for people that are 
[00:25:11] Steve: doing that?
[00:25:12] So I have a lot of tips. So when you think of a business don't just think so a lot of people think they'll have a great idea and they'll put it up there on Kickstarter in the Gogo. Yeah. So it might be a new gadget or whatever it is that you know, a new invention. Those again. Indiegogo is a great way for one, and Kickstarter for one reason you can do it without creating the product.
[00:25:35] You can create just a video that was the brilliance of those platforms, right? They're saying absolutely. You just create a video and you can get people to pre-order and we can fund this. Well, a lot of those products should do quite well. You can see they raised millions. Mm-hmm, but a lot of those same products that raise millions of dollars to shoot up like in sales, and then a year later, they shoot back down.
[00:25:56] Why? Well, because some per, you know, 20 people in sheen, China saw that on Kickstarter and copied it and put it out there for low and at that a low price. And at that point, you're just competing on margin and you're competing on their home. Because they run the factories, they have all the relationships they can always underproduce you in price.
[00:26:17] So you have to think beyond just demand like this is, this is where it gets tricky for entrepreneurs. It's not enough to just have a great idea. It's not enough to just prove that people will buy my product, but what are the businesses that become big? Because there are a lot of businesses out there where you can make some good.
[00:26:37] Yeah, but they're not going to become the next Google, Facebook, Twitter, or Microsoft. Sure. They're just never gonna become that. What is the distinguishing factor? This is what I tell entrepreneurs. We need to go deep into the business model. So first of all, if somebody buys your product just once and then disappears goes off into the ether and you don't have any more relationship with them.
[00:27:03] That is a tough model because your biggest expense in running a company, your biggest number one expense number one is usually the people. Number two is customer acquisition. So let's say you make this great gadget. You have all these sales on. On Kickstarter, Indiegogo, like you make a couple of million bucks, and then, and then people stop coming, like to buy your product.
[00:27:28] You know you need to advertise well, every time you need to advertise, it costs a lot of money to acquire, to acquire a new customer. You know, most clickthroughs don't even convert to buying. And the few that do absolutely. So the customer acquisition costs are high. And then the customer goes. And you have to go out and buy another and another that erodes your profit margins.
[00:27:48] Add on top of this competition and you get killed. You get into a business that's a really low margin, a high customer acquisition. Very, very tough to grow. Like you just don't have the capital to grow. Sure. So, yeah. So I tell entrepreneurs what you need to do. First of all, whenever you get a customer, never let that customer.
[00:28:07] Never let that customer go. If you can't keep that customer for a long period, it's gonna be tough to grow your business. Number two, true. When you have that customer, when you have that customer continually provide that customer with value, the more value you give that customer over their lifetime with you, the more they will stick with you.
[00:28:32] And the more. The revenue you can earn. So it's an ongoing recurring revenue by constantly focusing on increasing the value of the engagement with the cust of, between your product or service and that customer. These are the businesses that go and you can look across every major business out there in almost all of them, especially in the technology space, work this way, Google, Microsoft, Facebook, and Twitter.
[00:28:56] It doesn't matter what they are. The customer's engaging. And every time the customer engages that company is extracting a little bit of money from them. Whether it's ad revenue from Facebook or others, or whether it's transaction revenue from Amazon, all of these, whether it's B2B or salesforce.com, all do this.
[00:29:15] Then the next thing they do. Is, you don't want other people poaching your customers. You don't want them to say, Hey, come over to our service. And we'll, we'll do it at half the price because we can because they don't care if they cut your margins, they just want to gain market share, but you want to lock them in.
[00:29:32] You want to keep your margins. How do you do that? Well, one of the keys and it's the most important key is that you need to think not of selling a product or. That's not enough in today's world. You need to create an ecosystem, an ecosystem where the more the customer engages with you, the more value they receive in return.
[00:29:57] And, at the same time, the more value they give to the ecosystem. So, let me give a super simple example that everybody will understand. So we all know Salesforce, you know, that CRM for big businesses. So when a customer, Salesforce is no longer the cheapest platform out there, they, you know, they were the first, but they're not the cheapest.
[00:30:19] They are not the most user-friendly. They are clunky. They're old, they're dated. They are not the most flexible or versatile. They don't have a monopoly on all the features. So why do people stick with Salesforce and why do people go to Salesforce? Well, there's a reason Salesforce, isn't just Salesforce.
[00:30:36] They open Salesforce up to all these third-party developers who create all these modules for Salesforce, some of which are incredible. Unique and valuable. And because they were first, they're leveraging their first mover advantage in creating a marketplace. So they were the first ones to get developers on their platform for a CRM.
[00:30:57] And then these developers in turn got access to their customers. The developers added value to the customers. Of course, the custom more customers that they attract, the more developers join their platform, and the more developers that join their platform, the more customers they can attract and the more customers they can retain, because of all these other platforms, the developers don't wanna develop for some new platform.
[00:31:19] Sure. And they, you know, be cheaper, have a better UI. Other things that to its advantage, but there are no customers there it's brand new. Yeah. They're in they're gonna invest their time, they're gonna go where all the customers are. The ecosystem is what makes Salesforce, Salesforce. Like, that's why they're this huge multi-billion dollar company, Amazon, same ecosystem buyers and sellers, you know, and they're all contributing.
[00:31:43] You know, the buyers are competing on price and product quality and all these different things. And the, and the, no, the sellers are competing on price. Product quality and all those things. And the buyers are going into the system, reviewing the products, reviewing the sellers, creating a more valuable system for even more buyers.
[00:31:59] So that's why we use Amazon. And then Amazon, Jeff Bezos, super smart guy. Constantly increasing value to the customers. He never stops. Right? How can I cut this? Are the shipping times down? Yes. You know, he was the first one to offer free shipping. He was, you know, a pioneer in making returns as simple as possible, even though it cost him money.
[00:32:19] All these things were very forward-thinking because they were building the ecosystem and locking customers into the platform. Like we can leave, we can shop anywhere we want. Why do we do it? Exactly for the reasons I just laid out. It was about the ecosystem. You look at Facebook, you look at Microsoft, you look at apple, you look at any, any of the players out there that are dominant, they do these things.
[00:32:41] And this is what I want entrepreneurs to understand, you know, the steps to building a great business, you know, how do you build like. You know, how do you start? How do you build a great small to medium-sized business? And then if you want to take it and build a huge business, what do you need to?
[00:32:56] Blake: And are these, some of the things that are focused on in surviving a startup? 
[00:33:00] Steve: Absolutely. I go through them all because I learned them, some of them the easy way, some of them the hard way, but I learn these over time and I feel they're critical for entrepreneurs to know. I also go into things like, how do you fundraise?
[00:33:13] Like what, what is the psychology of investors? You know, what, what do they, what makes an investor say yes, and what, what you need to show them and how should you speak to them? All really important things when you're an. 
[00:33:24] Blake: Absolutely. And who is surviving a startup for in general? Cuz I know there are entrepreneurs.
[00:33:31] Yeah. Who, who, who do you think it, could 
[00:33:33] Steve: Did anybody read it and get something? So it could be for any, any type of entrepreneur, you could be running a small business, a big business, a tech business, you know, the rules, a lot of the rules are the same. So the rules around how you engage with customers, how you, how you.
[00:33:47] In, you know, develop products, how you innovate on your business. I don't care if you are a solo entrepreneur yes. Out there, you know, selling something on the web or you run a family store, you know, in your local downtown, or you're the next big Silicon valley. You wanna be the next big Silicon valley Titan.
[00:34:06] The basic business rules are the. and you, even if you're a small business, can increase your revenue dramatically by innovating, by thinking about your business differently than your competitors. By looking at the people around you, by engaging with your customers, you know, you can run a stationary store and create the coolest most, you know, most innovative stationaries in the world and, you know, double, triple your revenue by taking fundamental principles and putting them into action instead of just, oh, I'm gonna run a store like every.
[00:34:39] Blake: You know, a lot of our audiences, people that are either actively pursuing entrepreneurship or they've had a dream of, of going after their passion for a long time. And I just think it'd be so essential for them to read through even just these short snippets that you've given. I'm like everybody should be taking notes right now.
[00:34:58] What motivated you to want to even? Write this book. I mean, writing a book is a feat in itself, you know? It, 
[00:35:04] Steve: yeah, it's a lot of work. So it took a lot of work to write. It took a lot of work to find a publisher, you know, Harper Collins as a publisher. It's just a long process. Sure. To go through writing a book.
[00:35:14] But I had accumulated all this knowledge over the years and I was teaching entrepreneurs. I'm teaching them through videos. I'm teaching. In-person, but I thought I could reach a lot more people through a book and it also gave me a chance to go deep on these ideas, articulate them, and put them down in a very structured way.
[00:35:32] So for, I felt it was, it was, it was some, it was time. I did this. That's why I wrote the book and, you know, I've written a couple of other books. I wrote make elephants fly, which is all about the process of innovation. You know, how do you come up with that big idea? How do you go through that process? And then the five forces, which is for me a personal passion, it's all about how technology's gonna change our future.
[00:35:56] Like, what are the latest technologies in development in labs around the world and how, you know, brain, computer interfaces, gene editing technologies, technologies that we're using to get to Mars and the moon, how are these technologies going to impact our lives and change the business landscape?
[00:36:13] Blake: Incredible. Steve, I just wanna a kind of comment. I mean, you just radiate positivity and I I, I enjoy Getting to getting to chat with people that, that can able to do that. And, have the kind of charisma that you have. Where does this, yeah. Where does this mindset, have you ever been in a position where you've ever like, wanted to give up on something that you're doing and how do you listen to your intuition about it?
[00:36:36] What you're working on right now, when things get tough, I'm 
[00:36:39] Steve: human. So like all humans, I have my down moments and especially when I was doing early startups and I didn't know as much as I know now when I was making mistakes there. A moment in every startup that I've ever had, where I was flat on the floor and I felt like I couldn't get up.
[00:36:56] I felt like I couldn't get up. I was too exhausted. It was like, yeah, I can't go through it again. I remember one time when I was fundraising for VCs, I spent a month and a half. Engaging with a venture firm going through all the steps and all the hurdles they put me through, you know, they wanted me to meet with this partner.
[00:37:16] They wanted me to meet with that partner. They wanted due diligence. They wanted to come in and do endless requests. I finally got a chance to pitch to the entire partnership, the whole partnership. And I pitched and they said, They said no brutal. I was just like, 
[00:37:34] Blake: yeah, look 
[00:37:35] Steve: I another I, how many times can I do this?
[00:37:38] Like, I spent so much time and energy on that. And you know, you invest your hopes and your dreams that, you know, as an entrepreneur, if you don't get off the floor, it's over, it's like being hit with a knockout punch. If you're gonna, you know, you're on the ground, you can either lay there or you can get up.
[00:37:55] And so I got up, but it was, really, really hard. And I. A lot of different situations like that I've had issues with, you know, the founding partners, you know, where we had different visions for where the company should go and you know, it didn't end well. We had to like separate our ways. Those were very, very tough times.
[00:38:15] And so I empathize with entrepreneurs. I know what you're going through. I've been there. and. You know, not every venture I tried works out. I also tell entrepreneurs, don't worry about it. Like, don't beat yourself up. Certain things just don't work in the world. And the last thing, if you're gonna be a great entrepreneur, is you wanna dwell on that?
[00:38:34] You wanna analyze it? You wanna figure out like, where did I make strategic decisions that weren't as smart as I could have been? And in the future, what decisions would I make looking in hindsight? And then you need to move. You need to move on and keep going 
[00:38:52] Blake: live and live and let go a little, you 
[00:38:54] Steve: know?
[00:38:54] Yeah. And you know, and there's a lot of stress. Like entrepreneurship is, is a rollercoaster ride. There are moments when you're just completely stressed out. You need to learn to control that stress. So I'm a high-energy guy, passionate guy. I also feel stress intensely. So I had to spend a lot of time training myself to let go, to let, to calm myself down.
[00:39:16] So I didn't overreact to situations so that I could deal with them in like you see now in a more positive, constructive way, rather than a way a lot of us do is getting sucked into the wormhole like sucked into the black hole of 
[00:39:30] Blake: whatever. Yeah. Sometimes taking three steps backward and looking at the bigger picture can be helpful.
[00:39:35] I you know, I know that so many people that listen to this love mindfulness practices and things like that. Is there anything that you do to kind of help you out when you're in the 
[00:39:44] Steve: wormhole? So to mind mindfulness practices. Are wonderful. And I encouraged everybody to do them. One thing I like to do is whenever you feel stressed and it can be about little things during the day, even little things can, you know, create a lot of stress, a disproportionate amount.
[00:40:00] Remember whatever's happening right now? Will I remember this? Will I even remember that this happened? Well, I'll tell you most of the little things in your day that cause you stress, you won't even remember in three months, let alone a year, let alone three years. Like they will ha have absolutely zero.
[00:40:17] They won't even be in your consciousness. So why am I feeling stressed now? Like, I don't need to feel stressed. Like I won't even remember this. Like it's not a big deal. And even the big one. Like the big ones. It fades after a few months after six months, even a big stressful event won't mean that much.
[00:40:34] And you'll see that if you look back in your life, you've had so many of these events you thought were kind of the end of the world, or that was so important. That didn't matter that much. they weren't nearly as important as you're, you know, we tend to inflate true things in our mind. You know, when, when those, when, when, when.
[00:40:54] When our blood is pumping, the adrenaline's going, we're, we're feeling all this pressure. We are creating those into much bigger situations. So nipping it in the bud is the key before it, it gets it, it consumes you. 
[00:41:06] Blake: Absolutely. You know, I, I had to navigate through stress myself and, and try to learn how do I manage things and, and look at them a little more objectively.
[00:41:15] And I, I love everything that you've, you've said about it. And for me, something that always helped is recognizing. You know, I'm somebody that I, I appreciate getting to tap into my creative side and every time a problem, as this arises, that's like the ultimate opportunity to be creative and the ultimate opportunity it is, you know, it's a 
[00:41:33] challenge.
[00:41:34] Steve: Yeah. You should take all of these things that could be negative as challenges. Now let's see if I can solve this. Its 
[00:41:40] Blake: it's kind of fun when you look at it the right way and in a, in a, you know, in a. You know, 
[00:41:44] Steve: It is like, even if your business is on the line and you're about to go under it, let's see if I can pull this off.
[00:41:49] Yeah. Like this crazy thing. Like, I need a loan in the next three days or we're going down and, and I've been there, but let's see what I could do. Yeah. And it's, and, and you have to tell yourself if I can't do it, I can't do it. Like, it's just, that's the way it is. And I like to think of my life as a story.
[00:42:06] So all these things are great chapters in your story of yours. Like, however, they work out. Great stories. Things don't go smoothly. In the stories we love, the hero or heroin is always in a predicament that seems impossible. And a lot of times they get beaten down to the ground. This is your life. So look at it like you are a character and your own story and these dramatic events are just making it more 
[00:42:29] Blake: fun.
[00:42:30] Absolutely. Right. And yeah, I, I love that you share that, share that philosophy and you know, something that I feel is tied up in all of this. To get somewhere, you always have to take a few risks. I, I feel like the risk is, is essential to push your 
[00:42:46] Steve: comfort zone. It's built into the equation of being an entrepreneur.
[00:42:48] Yeah. And the bigger, the risk, the bigger the reward. So if you're gonna try to extract risk, minimize risk, you're minimizing opportunity. You have to remember that like I'm minimizing risk. I'm minimizing opportunity. It doesn't mean do stupid things like of course, but you're just, you know, there's fundamental risk in trying anything.
[00:43:07] And there's fundamental risk in going out there and starting a new business, absolutely working with new people, learning a new industry, all of that. And that's also the fun. That's why we do it. We love it. So we gotta take the risk 
[00:43:19] Blake: with that. Absolutely. And you've also done so many different speaking engagements.
[00:43:23] I was on YouTube and I saw your Ted talk, and I was like, oh yes. Oh my gosh, this is a little out left field. But yeah. Tell me, tell me a little, I just thought it was fascinating. 
[00:43:34] Steve: The brain chips. People want it. Yeah. If just go to founder space.com and you can click on the video, they have lots of videos there, but the one on brain chips yes, that was one of my Ted talks because I'm fascinated with the technology.
[00:43:48] So I'm fascinated with brain-computer interfaces, how they're G we. We're not there yet. It's still in the future, but at some point in time, instead, phones are very clunky. Yeah. Right. We carry them around and tapping on them is very slow. Takes a lot of time to input information into the, and even talking to them is slow.
[00:44:08] Imagine the next big leap is we don't have a phone between us and the internet. The internet is connected to our heads. Like we will have, it might be. It's crazy to think about more. more than likely for most people, it's going to be a non-invasive invasive device. It's gonna be a headband.
[00:44:27] Well, the simple headband yeah. Or something you put behind your ear, literally built into your, you know, whatever listening device you're using, you know, Bluetooth headset, whatever it is, earbuds, it'll be built into that. It'll it will read your brainwaves. And this device will the one who develops this device and more importantly, develops the operation.
[00:44:48] System for this device that will be the next windows iOS, Android, right? It will be the first one to develop a brain OS will, that will rule the world because it will control the interface between all of our minds and the internet, and then the power out there. And I won't go into it all because it's a long time.
[00:45:07] Yes, yes. But the power out there, once we connect our brains to the internet, once we can exchange information, once we can exchange ideas, All of this will completely transform, not just how we live our lives and do our business, but how we think of being human. What is it to be human? When you can suddenly get inside somebody else's head, potentially access their memories, exchange, memories, exchange emotions.
[00:45:32] What does it mean to be a human being? To me that, that, that fascinates 
[00:45:35] Blake: me. It's incredibly fascinating. And, you know, watching that Ted talk, I was. One thing I noticed is it's back in 2017. So I can't imagine the strides that we've made since then, too, you know 
[00:45:47] Steve: of? Yes. Well, it's been harder than a lot of people.
[00:45:50] So a lot of people like Elon Musk is trying with his neural link and there's Ker and a whole bunch of other it's, you know, doing it. We're making huge progress. And, and I put a lot of this into my book, the five forces. I have a whole section on brain-computer interfaces and their current state.
[00:46:10] R and D in that area. Yeah. But it's amazing. What we can do now is literally, if we get a chip in somebody's brain and we're doing this, we're chipping people who have who are basically, they've had a stroke and they're disabled. So having a chip in their brain, you know, they're completely paralyzed, helps them.
[00:46:25] They can communicate through the brain chip to people on the internet, literally talking, they can do that. We can do that. They can drive themselves around in a wheelchair. They can turn off and off at lights. They can control an iPad and can do all of this with a brain chip. So the technology works.
[00:46:40] The question is how do we make it easy and safe enough for the average person to adopt? 
[00:46:44] Blake: Absolutely. I love that. There are so many things that you've made clear our a direct inspiration to you, you know, and, and drive you down a path of, you know, full curiosity, finding out more and more, and. What are some of the things that you think are inspiring you right now in what you're doing?
[00:47:01] Steve: So many areas that I'm interested in. So another one is gene editing technology, absolutely fascinating technology. You, you think of it. We have decoded the source code of life, not human life, all life. Literally how we create any species of plants and animals. We can do this with CRISPR gene editing technology.
[00:47:24] We now have the ability to create new species of plants and animals that never existed. And we're doing that. That's unreal. There's there you can. And the five forces I talk about are the gap. The geek, what is a gap? It's a cross between a goat and a sheep. It exists now. It, these are hybrid creatures where we took genes from two different things.
[00:47:44] We combined them and it's a goat and a sheep. It's half goat, half sheep. We can create chimeras. They're called great mythology of animals with genes from other animals. We could put, like, I don't know if you've seen the old film, Dr. Morose island, the island, Dr. I've seen that.
[00:48:02] Okay. It's a classic film and it's, and it's an HG well story actually before that. But basically, he imagined what if we created a new species, of the animal. What if we combined human genes and ape genes, other genes, we are doing that now in the lap. It's really scary, but this is going on around the world.
[00:48:22] People are experimenting with what if we took human genes and put them in a monkey. You know, what would change in the monkey's brain? All of these things, we, we have the ability we're gonna have to genetically modify ourselves if we're gonna have a decent life in outer space, because our bodies were built for, for the earth.
[00:48:42] Yes. They were not built to live on Mars. They were not built to live on the moon over long periods. It's really bad. So we're gonna have to do this. We also have huge. With gene editing to eliminate every disease. They're using gene therapies now to eliminate cancer and all these diseases extend our lifespan to potentially make us more intelligent.
[00:49:04] Wow. You know, things like that make it's, there is a whole new horizon out there and all the plants we eat and stuff like that. I was in Chi. Giving a talk in Chile for this big malt, they make a lot of the fruit ship to sure. Especially during winter, because it's summer there. So the biggest fruit company in Chile, they're working on gene technologies now and their head that scientist was talking to me and saying, look, you know, we can make berries so that they can be transported more easily.
[00:49:33] Berries crush right over long distances and remain fresh. We can also cross like a raspberry with blueberry or raspberry with an apple. How would you like apples? Does that taste like raspberry? Like, oh my gosh. That would be amazing. They could, we can. Or a banana that, that, that tastes like a strawberry, yes, strawberry banana.
[00:49:54] As it tastes like a banana and a strawberry, you know, we can, people haven't started doing it yet because it's kind of freaky and weird, but it's quick, also kind of wonderful. Like if we create this new amazing enhance the flavor of fruits and vegetables and create new varieties, we've been doing it through selective.
[00:50:12] For, for centuries sure. Human beings, but we can now use this more precise technology to do things that we could only dream of. And so there are so many things in this area that 
[00:50:23] Blake: I'm super excited about it. Wow. That's incredible. I just listened to a podcast about gene editing and everything that goes into it and the capacity for us to even.
[00:50:33] Pain from our lives and things like that. 
[00:50:36] Steve: And, and yes, remove, and especially people with chronic pain, like people with chronic pain now, you know, they're on drugs and we all know Oxycontin, what that does to people. People turn them into heroin addicts, you know, are there other ways of solving these problems?
[00:50:49] Yes. You know, pain exists for a reason, like most pain we need. Sure. Because we would damage ourselves and not know it. So pain is there, but you know, people with chronic pains and things like that. We can do that. You know, in Florida, at the University of Florida, they are making cows cattle that are heat resistant by altering their genes.
[00:51:08] So climate change. Yeah. Right. You know, places in the world are heating up. The cattle are dying. Well, what if we made cattle so they could survive extreme heat? What if we in, another company called AquaBounty have just gene-edited? Why would you gene edit salmon? Well, they can make it grow twice as fast.
[00:51:28] Wow. Twice as fast, which means twice as many salmons. Yes. Bigger profitability. Yes. So you can imagine, and that's commercially available now in Canada and the United States. So you may be eating gene-edited food. You don't even know it. There are cattle ranchers now that are cloning prime, cattle, prime, and beef cattle.
[00:51:48] Now it's still too expensive for cloning to be worth the money to make it a big industry. Sure. But they can do it and they can sell it. All of these things are 
[00:51:56] Blake: out there. Golly. I, yeah. I, I love how you're able to. Just stay so tapped into all of these things. You know, I'm, I'm like that too, in the sense that, well, it fascinates 
[00:52:06] Steve: me and people like you.
[00:52:08] I think we love it. Yeah. Right. We wanna know how the world is changing. We can imagine our future, but the more we know about this, the better we are, we can imagine what, what our lives will be like 20, 30, or 50 years from. Absolutely. 
[00:52:19] Blake: You know, I think growing up something that I, I learned about myself was that I, I was always very novelty brained, and I kind of thought that was.
[00:52:27] A weakness of my mind is that I would obsess over something for extended periods. It didn't matter if it was bearded dragons or Russian scooters. I would, I would only think about that and talk about that for an extended amount of time. And now I've seen that you know, everything bleeds into everything, and having passions and all these different areas ends up.
[00:52:46] You know, abstractly impacting exactly what you're doing now, too, 
[00:52:50] Steve: you know? Right. And if you look at what humans are really good at it's that, so we can get machines to do all the routine work. All that routine work is going away with AI and everything like that. Sure. But the ability to combine things in unique ways to see opportunities to imagine.
[00:53:06] Different scenarios and models different futures in our heads. That's a very human trait and it's not that computers can't do it, or can't enhance our ability to do that. But that's where the greatest demand for people in the future is gonna be people with brain cells. Absolutely 
[00:53:19] Blake: agree, Steve in closing, I always like to ask two quick things what would a little bit of advice be that you might give somebody that wants to go down a similar road as you, and then what's your favorite thing that you're doing right now?
[00:53:31] And then. Kind of the last thing is just please shout out anywhere that people can find you and see 
[00:53:37] Steve: what you up to? So my biggest piece of advice is don't be afraid to try new things. Trying new things is. It opens up doors, you would never expect. So even if it's a risk to quit your job, to try some crazy thing, you can look at my thing.
[00:53:55] I've had more careers than cats have had lives. Like I've tried all these different careers and a lot of them didn't work out, but they led me to where I am today. I encourage you to do that. Number two Well, if people wanna find me, I'm super easy to find. You can simply go to founders space.com or founder space.com.
[00:54:14] I, you can contact my contact form. Are there tons of videos? Tons of material. My books are there. And you can also find me on the internet. I'm on every social network. My nickname is captain Hoff or Steve Hoffman or searches for founders face. A great place to reach out to me is LinkedIn. Wonderful.
[00:54:29] Blake: Steve, thank you so, so much for hopping on this was great. I love getting to learn a little bit more about you and our audience has so many just tangible things that they're gonna be able to take from this and, and, and just, you know, put into action. So thank you, for taking the time to do it.
[00:54:46] Thank you, Blake. It was one pleasure. All right, everybody. This was the gem series. Hope everybody is having a wonderful day and talk to you soon.
[00:54:58] Thank you for joining us on this episode of the G.E.M series, the podcast for anybody dedicated to investing in themselves. If you'd like to see the resources mentioned in this episode, learn more about what we are up to at a rocket level, or come over and join our team. Just click on the links below until next time.
[00:55:14] This is Blake Chapman, and remember to be awesome and do awesome things.