Misfit Nation! Welcome to the Misfit Entrepreneur 2022 year in review where each year I attempt to boil down all of the incredible, useful information, strategies, and tips that our guests have given on the show into less than one hour for you…with a few surprises thrown in. Now, it’s impossible for me to go over every single best piece of advice and that is why I urge you to take some time and go through the Misfit Archives to see which episodes resonate most with you, but in doing this episode, my goal is to spur ideas – to give you a lightning strike that propels you down a path of action to better improve yourself, your life, and your business or career in 2023!

That’s why I do this show – to not only provide a treasure trove of some of the best information to succeed in life and business for my daughter, Hannah, for when she grows up, but to give you a place where you know you can come each and every week to get inspired and find real, tried and tested tips, secrets, and strategies to succeed in all areas of life, and to share different perspectives from some of the highest performing entrepreneurs in the world with you. I truly believe that one great episode can change someone’s life and that’s what we set out to do each and every week. ​

But, before I begin I want to tell you something. I want to say “Thank YOU.” Thank you for listening. Thank you for your support of the show and thank you for sharing our message. Without you and the amazing feedback members of this audience give me every week, it would not be half of what it is. Because of you, this show has reached hundreds of thousands of people in over 150 countries. I am truly humbled and in awe at what we’ve done together and I am excited about having an even bigger impact with your help in 2023. So, from the bottom of my heart, Thank you, thank you, thank you!

THANK YOU, THANK YOU, THANK YOU, and I hope you enjoy this episode as much as I did creating it for you! Show Sponsors

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This week’s Misfit Entrepreneur is Jordan Schindler. Jordan is changing the game and leading and inventing a whole new category of clothing, Healthware. He is the founder and CEO of Nufabrix, the #1 fastest growing company in the region as named by Charlotte Business Journal, the Deloitte Fast 500 #2 Fastest Growing Pharmaceutical Company in North America, and INC. 5000 #50 Fastest Growing Company in America. If that’s not enough, Jordan was also a 2021 EY Entrepreneur of the Year Finalist.

I love seeing entrepreneurs break through and create entirely new markets, true blue oceans and that is what Jordan is doing with Healthware. I’m excited for him to share his journey and lessons he’s learned on how to build a whole new market and succeed.

www.Nufabrix.com

Jordan has been an entrepreneur since he was a kid doing all kinds of things in Tucson, Arizona. He took a trip with his parents to China where he came across an MP3 player market and convinced his parents to let him buy 10 and bring them back to sell on eBay. This turned into a passion project in early High School.

He went to school in Seattle and after working around the area moved to North Carolina founding Nufabrix.

Tell us about the product and what you are doing with it and how you are creating new markets…

• He started Nufabrix to solve a personal problem. He had bad acne in college and learned about the link between your pillow case and bad skin where as you sleep dirt and oil builds up clogging pores.
• The dermatologist recommended to wash his pillow case 2-3 times per week which seemed a little ridiculous.
• It got him thinking about how it may be possible to deliver medication through fabrics with their skin touchpoint. With this, the idea for Nufabrix was born.
• The idea that instead of having to take a pill or put on a patch, what if you just had to get dressed in the morning and your clothing delivered a controlled release of medication or nutritional supplements, was intriguing and possible.
• At 7-minute market, Jordan talks more about the product line and its possibilities.

How do you get medication or supplements into the fabrics?

• It is like a transdermal patch.
• They took an active ingredient and invented a way to embed it into yarn.
• It can last through a number of washes and then the fabrics can be recycled.

You grew tremendously during the pandemic, what happened to cause this grow and how have you kept it going?

• They found a niche to help with PPE and facemasks in the pandemic. They converted one of their machines to make facemasks and had the facility to test and meet requirements onsite.
• They were one of the only suppliers that could meet demand on the timelines needed. In fact, the US Govt sent 3 Blackhawk helicopters to their facility to pick up 250,000 masks.
• They ended up being one of top 5 biggest producers of masks in the country with 6 employees!

What lessons did you take from the experience?

• “Next man up.” You never know when you can fill a need and your ability to meet a need quickly is where you can outcompete.
• The power of being willing to innovate.
• It was also a great lesson in making a decision and then taking action when an opportunity presents itself.
• It was also finding a way to help that leads to opportunity.

At the 17 min mark, we have a discussion about how we found ways to succeed in our businesses during the pandemic.

What’s your advice to go from idea to action and execution?

• Swim to the next buoy. Even if you take one small action, it can make a big difference.
• You do this enough and the world looks a lot different.
• There is something to be said about having some ignorance going into an idea. If you don’t know how hard it is, you are more likely to give it a shot and succeed.
• Focus on the things that are really going to make the most difference. What are the 1-2 or 3 things that if you just did those make the most difference in moving the needle.

At the 29 min mark, we talk about Stoicism and focusing on only what we can control.

Talk to us about raising money and what is like to keep up with the growth…

• They have taken a few rounds.
• A decent investment came from the Department of Defense.
• They went out and found the right individuals to help accelerate growth like family offices, angels, etc. in areas like pro-sports teams and former Walmart execs, etc. that had the knowledge and experience and can help them.
• It is important to stay true to what matters and build a business that can scale. If you need to take on investment to do so, do it, but do it smart and in a calculated way.

Anything you learned from securing investors that others should know?

• Treat an investor like a customer.
• Investors are consumers like anyone else and if they can themselves consuming your product, they are more likely to invest.
• Open communication is also very important. Don’t be afraid to overcommunicate.

Best advice for an entrepreneur just starting out?

• Learn and don’t re-invent the wheel.
• Get a mentor or advisor.
• Most everything you want to do or the challenges you have are not new and others have gone through them. Learn from them.
• Groups like Entrepreneur’s Organization are helpful as well.

Best Quote: “Next man up.” You never know when you can fill a need and your ability to meet a need quickly is where you can outcompete.

Jordan's Misfit 3:

1. Think of business like a conveyor belt of problems, challenges, and opportunities that keep coming at you. Pick up each challenge or problem or opportunity and put it on the conveyor belt. Each time you do this, you make progress.
2. All you can control is your reaction and your response. Don’t focus on things you cannot change or have an impact on.
3. As your company grows, you role must change, so take time regularly to assess what your role should be to ensure the company is on the right path.

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This week’s Misfit Entrepreneur is Derek Lidow. Derek has had a unique entrepreneurial journey in that he was CEO of a large publicly traded semiconductor company, a founder and CEO of an innovative and valuable startup, and now as a teacher and scholar of entrepreneurship and innovation. Derek is a professor of the practice at the Keller Center for Innovation in Engineering Education at Princeton University. He’s literally lived 3 very different entrepreneurial lives.

On top of all that he is the author multiple best-sellers including Startup Leadership: How Savvy Entrepreneurs Turn Their Ideas Into Successful Enterprises, Building on Bedrock: What Sam Walton, Walt Disney, and Other Great Self-Made Entrepreneurs Can Teach Us About Building Valuable Companies, and THE ENTREPRENEURS: The Relentless Quest for Value.

Derek is one of those guys, I could talk about every side of entrepreneurship with and we do just that.

www.DerekLidow.com

Derek thought he was going to be a scientist. During graduate school he found that it wasn’t for him. He finished his PhD, but then shocked everyone and went into the business world. He found success as a semi-conductor executive during the golden age of the industry. He contributed a lot to the industry and ultimately proved how to create great solutions saving the world billions in gigawatts in the power space. He was ultimately made CEO of a large global company and led it to be the leader in it’s vertical. After 5 years, he got the itch to start his own company. He retired from the corporate world and started a company from scratch. He built a data aggregation and visualization solution for the supply chain and with his previous experience was able to create a massive enterprise. The company kept finding success until a another company came along and had to buy them paying top dollar. Two weeks later he later he was recruited by Princeton to help create their entrepreneurial curriculum and teach.

For the last 10 years he has taught and immersed himself into studying entrepreneurship.

Entrepreneurship is more of innate state for human beings, but so many stray from embracing it – why do you think that is?

• Derek has studied the origins of entrepreneurship and how it started and took hold.
• He realized he was under-appreciating the value of entrepreneurship.
• Entrepreneurs are responsible for virtually everything.
• We should understand better what they do and how they do that.

At the 14 min mark, Derek and I have a good discussion of whether everyone is meant to be an entrepreneur or not.

• Entrepreneurs are self-directed.
• They decide which rules to follow and which to not follow.
• Entrepreneurs typically have a skill that those around them covet and want them for.
• Entrepreneurs entice others to give them something in return for their skill. They are not afraid to ask for a sale.

We further discuss how everyone is selling something, but don’t see it like selling unless it is in a business context. But, everyone is in sales of some kind.

We also discuss the real challenge for people tapping into the entrepreneurial gene is the willingness to take risk.

You’ve said that we are focused on the wrong aspect of helping and regulating entrepreneurs. What does that mean?

• It is impossible for Govts to create effective regulations that allow entrepreneurs to innovate and create without causing entrepreneurs to go outside the rules and cause problems.
• Regulations have not been very effective as a whole as entrepreneurs find ways to maneuver around them if they are harmful.
• Entrepreneurs themselves are far more effective at regulating other entrepreneurs.

At the 24 min mark, we talk about the FTX scandal and how entrepreneurs would be better to manage it than Govt.

Derek uses an example of Vanderbilt to illustrate how entrepreneurs are better at keeping things in check with each other.

From your study or entrepreneurs and the history of entrepreneurship, what are some of the lessons you’ve taken that people should know and understand?

• Great entrepreneurs are great at enticing people to want things that we may not really need.
• People need to get educated from a consumer standpoint on how they are persuaded. This will help entrepreneurs better create products and services that are more valuable.

What is your most important message from your latest book, the Relentless Quest for Value?

• Pay more attention to entrepreneurs and respect them but help them by giving them better feedback to create more effective solutions.
• Support smaller businesses and their entrepreneur journey.
• Understand that entrepreneurs are best equipped to solve the world’s biggest challenges.

You dedicated the book to Arel and Tiel. Who are they?

• Derek’s sons that are both entrepreneurs.
• One son is in Silicon Valley, the other growing slow and steady in his business.
• They are modeling creating great businesses with integrity.

​ 2-3 of the best lessons you personally learned on your own entrepreneur journey?

• Know yourself so you can understand what you are capable of and where to ask for help.
• You must put yourself in the shoes of your customers and dedicate yourself to their happiness.
• Be selfishly selfless. It is ok, to be selfish to be selfless with those around you.

Best Quote: Know yourself so you can understand what you are capable of and where to ask for help.

Derek's Misfit 3:

1. Feel good about asking for help.
2. Empathize with others.
3. It is ok to be selfish to be selfless in helping others around you.

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This week’s Misfit Entrepreneur is Jonathan Jay. Jonathan is a serial entrepreneur. He dropped out of college at 19 to start his first business and since then he has built and sold businesses in everything from publishing and digital marketing to education. During the pandemic, he made 48 business acquisitions alone.

Jonathan is a prolific deal maker who has a passion for teaching others how to buy and sell businesses. Through his company, Dealmakers, he and his team have helped over 12,000 clients from beginner to seasoned entrepreneur succeed in finding, acquiring, and/or selling businesses. He is also the author of the best-seller, Business Buying Strategies. In the book he shares some of his best secrets on how to buy a business with no money and that is one of the many topics I want to focus on with him in this episode.

https://dealmakers.co.uk/​

Jonathan dropped out of college at 19 to start a business. He spent several years bouncing around surviving as an entrepreneur. A few years later he had a publishing business that was doing OK when someone came along and offered to buy it and he realized that he would make money selling it than owning and operating it. This was an “aha” moment for him.

“In business, so many people are business operators who work every day to operate the business, where the real freedom and real money comes from selling businesses.”

Jonathan says that It is much easier to sell businesses that you have bought vs. built from scratch. Over the last 20+ years, he has sold companies and bought them. During the pandemic, he bought 48 businesses and has turned around distressed business making all the mistakes possible in his journey.

For the last 6 years, he has been teaching others how to buy their first while limiting the risk in doing so.

Why should someone consider buying a business vs. starting one?

• Jonathan has done both.
• It is very exciting but hard work to start a business from scratch and most fail as well as take a lot of capital.
• Buying a business is also very exciting that has been in business for a least 5 years is an easier way to go because it has everything and has proven it can sustain itself.
• Buying a business with cashflow makes money from day one instead of going through the struggle to get cashflow.

How do you find a business to buy?

• You are not finding a business as much as you are an owner.
• Owners are who you work with on a deal.
• Most go to a business broker which is like a realtor for a business.
• At the 8:15 mark, Jonathan does a good job going through the challenges with working with a business broker.
• Jonathan does not recommend going through a business broker.
• Jonathan teaches his clients to look for businesses that are not listed with brokers.
• You want to find a motivated seller who is looking to get out of the business.
• If a seller is motivated, does that mean it is a bad business? It can, but you would not buy a business that is failing.
• People have all kinds of reasons for selling a business. It could be retirement, or a health issue, or maybe a divorce. There are all kinds of reasons for sellers to be motivated.

Where do you find motivated sellers?

• We don’t know who they are.
• You must cast a wide net and go to a number of business owners, but need to do it smart.
• The approach that Jonathan teaches is to write and send them a letter. It is very scalable because you can send out a 1000 letters to businesses types you are interested in buying.
• The people call you from the letter that may need the solution you are offering.

What happens when you find a business owner that seems like a good fit?

• You will look at lots of businesses.
• Ideal you want a business that is B2B, that has good assets and is not dependent on the owner.
• Your first acquisition should be a $1 million on more business.
• Why? It is harder to buy small businesses than large ones as larger business are more stable and have a better management structure. They have systems and processes in place and good financial reporting.
• You then need to negotiate price, and this is the tricky part.

At the 16 min mark, Jonathan walks through his negotiating technique.

• Instead of making an offer, ask the seller, “How much do you need?” Not what they want.
• No one gets what they want these days but tell me what you need.
• They will give you a number and whatever number they say, you shake your head (flinch) and give a look of “this is not going to work.”
• You let them drop the price and keep shaking your head until you get to a price that is reasonable and fair.

How do you negotiate buying the business without putting all your own money on the line?

• You must work out what the business is worth to you. What do you want the business to make?
• You will need to look at a lot of variables such as hiring a CEO to run the business in place of the former owner.
• What are you prepared to pay for a business based on return from the profit it produces. This is typically between 2-4 years. So, you would pay a multiple based on that.
• If you cannot finance the acquisition, then you cannot buy it. You can use this in your negotiation with the buyer. If we cannot finance at that price, we cannot buy it.
• You then work together to make it work – maybe it is buying out of cashflow or small amount up front that you can do with a loan and then payments over time, etc.
• You can also get a loan against the accounts receivable for the business and use that to help fund the sale or even asset financing based on what the business owns.

Talk to us about the mistakes you made and what you’ve learned…

• Jonathan has made them all.
• An element of vendor finance should be part of every deal. Be wary if the owner is not wanting to put any skin in the game.
• The deals that have gone the worst are when Jonathan has just written the check for the business.
• Agreeing to pay the number a business owner needs without negotiating is not a good idea. Everything is negotiable. No is the most powerful word in negotiation. Every time Jonathan had not negotiated, he has lost money.
• Be careful not to underestimate how difficult integrating multiple businesses is to do.
• Make sure you are ready for what happens after the deal is closed and prepared to own the business.
• Do not become emotionally involved in the deal be the emotional buyer. The solution to this is deal flow. Having a number of businesses in your pipeline that you can make deals with solves the problem. Having options gives you power.

What are 2 of the best lessons you’ve learned to succeed as an entrepreneur?

• Jonathan has never had a job but would not change his journey at all.
• Jonathan is positive and believes the best is always ahead. It is hard to be in business and be negative.
• The most successful deal makers are the people that hang out with other people doing the same thing.

Tips to scale and grow a business?

• The ideal situation is you buy a business you don’t have to do anything with and just keeps on making the profit you are looking for.
• The reality is that we want to be involved. But, we need to be careful in the way we “tinker” with things.
• But, there is always opportunity to gain economy of scale or increase profit through cost reduction or find an easy way to increase revenue per customer, etc.
• Find someone who lives and breathes modern marketing and social media and hire them to be focused on internet marketing.
• One technique that does not involve using the internet is a joint venture with a complimentary solution that has clients that would want your product or service.

Best Quote: In business, so many people are business operators who work every day to operate the business, where the real freedom and real money comes from selling businesses.

Jonathan's Misfit 3:

1. Build your self- belief and self-confidence to be independent.
2. Save money. Cash is king. If you have cash you have a buffer or can weather a storm or take advantage of an opportunity.
3. Buy property. It is true asset and place to borrow against in the future.

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