Misfit Nation! Welcome to the Misfit Entrepreneur 2020 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 2021!

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, in just a couple short years, this show has reached hundreds of thousands of people in over 140 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 2021.

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

Misfit 3:

1. Listen to 2020 Misfit Entrepreneur Year in Review
2. Pick 3 things from the episode to take action on in your life and business.
3. Make 2021 your best year yet!

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This week’s Misfit Entrepreneur is Patti Plough. Patti is a serial entrepreneur and the President and CEO of Excel Legacy Group. The company works in conjunction with leaders in the ESOP advisory industry. They specialize in tailored solutions to help their clients achieve their ESOP goals. Their unique approach focuses on the goals and strategic priorities of each selling shareholder in addition to the creation of an employee-owned business.

For those of you that are not familiar with an ESOP. It is an employee stock ownership plan. The plan gives workers stock in the company as part of their compensation and they get to share in the benefits of being an owner in the company.

There are a lot of benefits to both the employees and owners of a business and this is one subject that I think every entrepreneur should know about and Patti is the go-to expert in the space.

https://ExcelLegacyGroup.com/

Patti’s background is in nursing and she spent the first 15 years of her career as a bedside nurse before becoming an entrepreneur. She then had what she calls a “divine appointment.” She was contacted by the company she was working for to do an insurance screening on a VIP for a big railroad. When she got there, the gentleman asked her if the company did wellness programs. She checked into it and her company did not.

She had to find a wellness company and found the one and only around. She contacted them and found out the owner had just lost his only client to budget cuts. She decided to partner with them and bring the service to VIP. From there, she kept going and built the company into a multi-million business in the corporate wellness space and after many years, turned the company into an ESOP.

She created other businesses along the way using the same attitude and persistence.

At the 8 min mark, Patti tells the story of how they went from potentially selling their business to private equity to choosing to do an ESOP.

• Patti’s biggest concern was what would happen to her employees if they sold.
• Patti and her partners would come out favorably in a transaction, but there was uncertainty about the fate of the employees.
• While meeting with a financial professional to discuss the transaction, the concept of the ESOP was brought up and discussed.
• It was like a light bulb went off.

Take us through the entire concept of ESOP and the benefits to the employees and owners in choosing this route…

• The benefits to the employees including them keeping their jobs, ownership in the company, etc.
• The benefits to the owners are that they can get fair market value for the company.
• ESOP is like a retirement program for the employees, but they are now owners and get shares. They can cash those shares in after a vesting period.
• The employee can retire and cash in their shares.
• The owners can still be active in the business.
• As the company grows the value of the shares grow.
• It also gives the ability for tax deferral as it functions like a 401k type plan.
• The ESOP is free to employees and as the shares accumulate in value and that is the retirement fund.
• Owners realize the value by the company buying the shareholders out over time.
• There is benefit to selling 100% of the shares as it allows the company to become a tax free entity, like a 501c3
• The savings in corporate taxes helps produce enough revenue to pay the owners out over time.
• Leveraged ESOP allow owners to sell their shares over time to the corporation over a period of time (typically 5-10 years)

At the 21 min mark, Patti talks more about the tax side of things.

Other things we should know? Any risks?

• There is an opportunity to get a second bite at the apple and sell shares twice.
• The reason Patti is so passionate about the ESOP is that she feels there is no risks and only benefits to the program.
• It is important to make sure you systems and process are well honed in and the company is not dependent on the president or CEO. It helps valuation.

Talk to us about how you roll out an ESOP to an organization…

• First, you do a very high level valuation.
• Then, take time to discuss and understand the structure possibilities and vesting schedules.
• Decide how the owners will get paid for their shares
• Decide how you will do payout while keeping the company healthy.
• Make sure the employees can benefit in the best way possible.
• You will them select a trustee and do financial due diligence and valuation. This is typically done behind the scenes and worked through before announcing anything to employees.
• You will then finalize with the trustee to agree on a number an finalize the ESOP.
• Lastly, you announce, rollout to employees, and celebrate!

What have you learned about how to build a great business?

• It’s the people that see your vision, believe in your vision and help you to build and grow that vision.
• The credit goes to them.
• You have to operationalize and do all those things, but your business will only be as good as the people you have in it. Take care of them. ​

Advice for someone starting out today in a new business?

• Do NOT give up. Never, ever give up. It took 15 years for Helix to grow and become what it is today.
• Never give up on your vision and dream.
• Push forward.
• Passion and persistence. Things don’t typically happen as quickly as you anticipate.

Best Quote: What have you learned about how to build a great business? "It’s the people that see your vision, believe in your vision and help you to build and grow that vision."

Patti's Misfit 3:

1. Always listen to your first witness, follow your gut.
2. Surround yourself with people that are more success than yourself and learn from them. True mentors.
3. Passion and persistence. Stay committed to your dream. Do not give up.

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This week’s Misfit Entrepreneur is Samit Patel. Samit is World’s #1 Crowdfunding Marketer. He is the founder of Joopio and several other businesses that help grow, scale, and get companies known. He and his teams create “done for you” campaigns that are unique to each product and service.

Samit has been featured everywhere from Forbes, Fast Company, Alphr, and is tapped by many of the world’s biggest influencers and companies to help them get their products and services off the ground or better known.

Samit has created a process that ensures products and services get the attention needed to be funded and sell into the future. They do everything from making sure pre-launch is right all the way through to E-commerce after launch. And that is what I want to dig into with him in this episode, to have him teach you how he and his teams do it.

www.SamitPatel.net

Samit got pushed into business when he went to university to help pay the bills. He set up an events company that helping make $1000 or so a week as an 18-year old. He graduated in 2009 into a horrible job market. And after making $1000 a week, was not going to take a job for less, so he started a number of other businesses in sectors like travel, beauty, and he says, “You name it, I tried to do it.” He then got into a partnership for a new business where he worked for over a year to make it come to fruition and just when it was about to launch, got kicked out of the partnership.

He was dejected and lost and hit a bottom. It took a freak accident that happened to his younger brother that led him take a consulting role for a startup and had success. It took him about 10 years and pretty much giving up before things happened for him and he found a big success.

The freak accident that happened was his brother drowning and being brought back to life. It made him realize that he needed to rethink his whole life and really get focused – a wake up call that he was nowhere near where he wanted to be.

It was in this startup that he built a campaign to launch the product it did over $1.3 mil, one of the top crowdfunded products at the time. He then went on to another product in the skiing industry with great success and further honing his skills. And nowadays, he raised over $30 mil launching product across 40 different industries.

Why is Crowdfunding such a good way to launch a product or business?

• It’s a great way to validate your product or service and see if it is truly worthwhile.
• It allows you test it out with consumers and get feedback.

What are the pitfalls or bad side Crowdfunding? What mistakes do people need to be careful to avoid?

• If you look at Crowdfunding as your only channel and pin your hopes solely on it, then most will be disappointed.
• Think of Crowdfunding as a part of a glorified PR campaign introducing your product to the market, but you cannot just stop there – you need all of the other marketing, engagement, resources and actions to go with it (social media, e-commerce, etc.)
• You also should use a multi-platform approach across the different crowdfunding platforms across the world.

Take us through your process and how you do what you do. (it’s best to listen, but here are some short notes)

• First, you don’t necessarily need to create your product. You could go to Alibaba and find a product that is close to your idea and use that.
• Second, create a landing page which has the product, 3 core features, and why people should buy it.
• Third, you can start advertising and sharing it on Facebook groups or spend a little money on Facebook advertising. You will be asking for their name, email, etc. and your goal is to get at least 100.
• Fourth, you will put them in a VIP or community group, so when they sign up, on the thank you page and you can push them to be part of the group.
• These groups are critical because they give the feedback you need to make your product great and give you ideas for ancillary products.
• Fifth, you can jump on a call with each of the 100 people to walk through the product and discuss it in detail with them – and sell it to them.
• At this point, you will have validation of interest in the product or not.
• You can also test pricing at this point to see if people will pay for it or put a “deposit” down for it once it is available.
• Sixth, scale the whole process up. If you spend $20k, you should be seeing a 3x return and give you 10-15k leads when the campaign goes live.

What else should we know about how to launch a product right?

• Samit will always launch on Crowdfunding first because it gives validation and gives early adopters.

Samit has a system he calls TLFES:

• Traffic
• Leads
• Funnels
• Engagements
• Sales
• You should also put your face behind the product – it will separate you and help you connect with your early adopters.

At the 30 min mark, Samit and I discuss other nuances of launching.

• When you launch, you want to get 200 sales as that will get you trending and get the platform promoting your launch. Samit says it takes about $20k spend to achieve that.

At the 32:30 mark, Samit explains more about how Crowdfunding platforms work…

• Crowdfunding platforms have algorithms just like social media and if you generate 200 backers on your first day, you will trend on the platform.
• Kickstarter, for example, has “Projects We Love” that highlights products that are trending. 200 sales are the key.

​ What are the lessons you’ve learned being an entrepreneur? What are the principles you use to succeed?

• Structure is important.
• Samit has had to become a lot more patient and less YOLO.
• Putting systems in place are very important to success in anything. Personal, business, etc.

Best Quote: You should also put your face behind the product – it will separate you and help you connect with your early adopters.

Samit's Misfit 3:

1. Don’t be ashamed of getting a job to help you while you are getting your business off the ground.
2. Work to replace yourself. Create process and SOP’s for the actions you do so you can hand them off.
3. Create the structure for yourself. Health, family, etc. Beware of chasing the money. You do not get time back that could have been spent with your loved ones and friends. Make time for it.

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This week’s Misfit Entrepreneur is Per Sjofors. Let me ask you something…How do you know how to price your products and services? How do you know which customer segments to focus on that will pay your top dollar for your product and services?

For most, it is a shot in the dark. They either price based on their costs and build in a margin or do what they “think the market will want or be in the range of the competition.” But is that reality? What if there was science behind pricing that could help you know exactly how to price your products and services and the best market segments to sell to with pinpoint accuracy?

Well, that is what Per has dedicated to better part of his life to doing. Per is a serial entrepreneur creating businesses that have gone from $0 - $72m/2 years, $10m - 28m/3 years, 0 - $15m/2 years. His methods have helped over 700 businesses all over the world and has been featured everywhere from the WSJ to the Street. His latest business is called Atenga and it is a culmination of all his work on pricing into a AI powered solution that shows companies how to price their products the best way and the best markets to sell to.

I bet you can guess why I’ve asked him to be on the show and that is to share his wealth of knowledge about what he has learned on how to price products and find target markets. ​

www.Atenga.biz

Per had a chance to run a couple of companies in Europe before coming to the U.S. to run companies and build them here. Pricing products and services was always a challenge and hit and miss. Everything per studied was very academic and theoretical that is couldn’t help them understand why some pricing strategies worked and others didn’t. Per saw a gap in the market in helping companies not only price their products and optimize the market fit, but to also find the right target markets to drive the highest sales volume and profitability.

He started a consulting firm providing those services.

What is the #1 thing companies get wrong when it comes to pricing their products and determining their target markets.

• The first mistake is that companies guess or price on “what feels good.” Doing this leaves money on the table.
• The second mistake is looking at your competitors and price based on them. But companies have no idea how their competition arrived at their pricing?
• The third mistake is to price based on the cost of the product. The buyer doesn’t care about the cost – they care about the value they get or perceive to get.

At the 11:40 mark, Per goes through his method for pricing…it’s best to listen

• It starts with market research that allows prediction of sales volume at different prices. This gives the base.
• Then, the prediction needs segmented with anything about the buyer to get the persona of the buyer that will buy at the highest prices and see real value. (Attributes that describe a customer – age, net worth, industry, where they live, interest areas, etc.)
• You then look at the features and benefits that generate the highest sales volume at the highest price. Some things may need developed or created based on the buyer’s need.
• You will also look at all sales channels and marketing messages to see what works and what doesn’t, so you can focus in on just what works in conjunction with the other areas above.

Can you give some action steps in each area that an entrepreneur could take on their own?

• Go talk 2 dozen potential customers and present your product or service.
• Then ask them 2 very simple questions.
  • What do you think is a price for the product or service that is so low that you don’t think the product or service can continue to deliver the benefit that you expect?
  • What is the price that is so high that is so high that it doesn’t matter, however good the benefit, that it will just be too expensive and you would not buy it?
• Once you have these answers and data, you can take the averages and you will have a good range where your pricing should be.
• This gets you in the ballpark and let’s you know where your price should fall.

What goes into increasing a customer’s willingness to pay?

• There are tricks you can use to increase sales volume and value perception.
• We as humans are fallable.
• When we make buying decisions, we are influenced by our environment.
• We also make decisions based on emotion first.
• Whenever we make decisions, we are always making it in context.
• Every time you sell something you have to make context.
• One of the most effective ways of doing this is by price anchoring. This is where you present price in context.
• For example, start by presenting something very expensive and then from there provide options that are less expensive and what you really want to sell.

A great example is the gold Apple watch for $17,000 when Apple really wanted to sell the $349 watch. The press was covering the $17,000 and made the $349 look very affordable.

• You should have a “good, better, best” strategy. You start by presenting the best, then the better, and then the good.
• The idea is to make the option you want to sell your product at look inexpensive and the best value in context to the other options.

At the 28 min mark, Per talks about how buyers lie in giving feedback…

• Buyers lie because they know the next time they are going to buy from this company, they want a better deal. They want more features and want a better price.
• This typically ends up with a product having too many features and benefits at a price that is too low.
• This is why buyer feedback should be done by a 3rd party and anonymously.
• A great way to think about it is when you go and buy a car. You don’t come right out and tell them the one you want, and you’d be happy to pay a little more to get it. Instead, you act more reluctant and work to get a deal and cheaper price.
• When working to figure out pricing, you have to put your own buyer hat on.

What advice can you give on starting and growing a business?

• The hardest part of the entrepreneurial journey is really to understand the customer.
• Customers may not think like you or see the need or problem like you. Remember, that a customer is not you and you really need to work to understand your key customer types.
• The #1 thing is to get sales. If you cannot sell, you cannot survive.
• You must focus on creating a sustainable sales operation in your company
• Make sure your investment in the company really helps drive sales results – especially in the beginning.
• Another thing that is really important is NOT TO DELAY! Get started and going. Beware of the “we just need to do X to get going…” There will always be the “X”, Get going! ​

Any other advice for entrepreneurs?

• People are the most important asset in any company.
• The one thing that is most important for people is to feel that they have a role in the company.
• Management needs to open to share successes and mistakes and include your people in your process.
• It’s about everyday inclusion and appreciation for the people in your company.

Best Quote: Buyers lie when giving feedback, because they know the next time they are going to buy from this company, they want a better deal. They want more features and want a better price.

Per's Misfit 3:

1. You are going to make a difference. Only you can make your difference for your business, your personal life, and those around you. It is only through your actions that you can do this.
2. Data makes the difference. Gut feel is not going to get your business to its best place. You must have data and need to focus on meeting objective you set based on data.
3. Hire the best, give them leeway, include them, and reward them when they do good. Work with them when the screw up, because like you, they will.

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This week’s Misfit Entrepreneur is Ty Montague. Ty is co:founder and CEO of New York-based co:collective. co: is a growth accelerator that works with leadership teams to develop purpose-led business strategy and to implement that strategy through innovation in the customer experience. Founded in 2010, the co: team has been fortunate to work with everyone from Google to IBM, MetLife, PUMA, Microsoft, Capital One and many more of the Fortune 500.

Ty has been named one of the 50 most influential creative people of the past 20 years by Creativity Magazine, as well as one of the Top Ten Creative Minds in business by Fast Company magazine. He is the author of the best-selling book, True Story: How To Combine Story and Action to Transform Your Business.

And that is where I want to focus with him in this episode – how we can best tell our story and use it to grow our business and ourselves.

https://cocollective.com/

Ty was an unlikely entrepreneur and somewhat of a late bloomer. He started out in New Mexico and didn’t really know what he wanted to do with his life. He worked as a raft guide and an auto mechanic before moving to New York where he worked as a bartender.

He met someone across his bar that was in advertising and told him to explore it. He took to it and was good. He ended up working at some of the top firms with a lot of success. About 15 years ago, Ty began to notice the differences between advertising and what companies actually were doing. He also saw a new kind of business, one that had a story and conveyed the story through action and the customer experience than through paid media.

Ty came to call these companies “story-doing” companies rather than “story-telling” companies. As he compiled his list of these companies, he found a new passion for them. This caused him to leave traditional advertising in 2010 and create Co-Collective to help companies define their higher purpose or quest - then help them put their quest to work throughout their business and with customers.

Talk to us about story-telling vs. story-doing…

• The first company Ty noticed that was a story-doer was Starbucks. He noticed they didn’t advertise traditionally. Starbucks built their company on a quest and creating an experience like no other for customers.
• Others included companies like Redbull, Tom’s Shoes, Tesla and others.
• As he studied these companies, he found that they operate in a different way.
• Ty then codified it.

Take us through what you codified…

• Companies need to figure out their quest. People want to do business with companies that share their values – and companies need to define their values.
• A quest is a crystallization of your higher purpose as a business, the generous change you want to see in the world, and the rallying cry that want to use to get all of your employees and customers to follow you to the goal you want to achieve.
• This comes from experience, truth, and the company’s’ DNA.
• The story has multiple parts.
• It has the truth about the protagonist which is the truth about the company’s – the challenges/opportunities they face and secret weapons the company has.
  • It has the about the stage they are on. The truth about the market and landscape that the company’s story plays out on.
  • It has the truth about the participants or customers. Who is the company for and how can the company help the participants get what they need out of the relationship.
  • The truth about the antagonist. Who is the dragon the company is working every day to slay?
  • Once these are defined, you use them to become a story doer.

At the 13 min mark, Ty gives an example of a company using Tesla that has all the elements of the story and what they are…it’s best to listen.

• A good quest should be the answer to the question, “What business are you actually in?”

The protagonist and antagonist are half of the quest, what is the other half?

• It is what you do with a quest once you have it.
• It is important the CEO participates in this and signs off.
• Once you have the question, you determine the actions to make it a reality.
• The business model is defined by the quest.
• The things you do inside your company is defined by the quest.
• It should determine the things you celebrate and reward in your company, so it is real for employees.
• The quest informs more traditional marketing. Your branding, messaging, communications.
• The quest also determines your capabilities.

At the 19 min mark, Ty talks about Apple, it’s quest, and the changes since Steve Jobs’ passing.

• Steve Jobs referred to Apple computers as bicycles for the mind.
• Believe it or not the most efficient form of transportation ever created is the bicycle. It is easy, simple, and efficient. Apple’s quest lives in that.

At the 22:30 mark, Ty goes through a checklist of questions a company needs to answer about its quest.

• Do you have a clear purpose in the world beyond making money?
• Have you done the work to define and align on your quest?
• Does your purpose frame the business that you are in and are you using it as a tool to define your internal culture and customer experience?
• Is your purpose being used to drive and action and engagement with employees and your customers?
• Does your purpose define a clear enemy, so it’s not just what you are for, but what you are against?
• Have you focused on a few transformative actions that bring your purpose to life in the world?
• Are people outside the company engaging?

How does “story-led innovation” fit into this?

• Ty uses the example of Redbull in thinking they are the action sports sports company that is on a quest to help us push out limits and live our lives to the extreme.
• Redbull created their own event Flutag, instead of putting their name on advertising at events and now it has hundreds of thousands of participants a year.
• Your quest will help determine where you innovate and how you differentiate.

What is something an entrepreneur can do today around story-doing that will make a difference for them?

• Ask the first question. What is your purpose outside of making money?
• How is your purpose going to make the world a better place, inspire employees to want to help accomplish it, and inspire customers to be a part of it and tell others about it?

What other trends are you seeing in business, entrepreneurship, and marketing?

• Diversity on your team is something every entrepreneur needs to think about.
• Millennials and Gen Z consumers will pay attention to that.
• Beware the shadow side of being quest led it being a novelty. Authenticity matters. If you are not doing your quest, people will call you out and expose you.

With all you’ve done, what has surprised you most on your entrepreneur journey?

• How much Ty loves it.
• He worked for people into his mid-40’s and it felt like a real risk.
• His only regret is not doing it sooner.
• Make the leap!

Best Quote: Companies need to figure out their quest. People want to do business with companies that share their values – and companies need to define their values.

Ty's Misfit 3:

1. Quit caring about what anyone else thinks. The best most successful people pursue their truth and don’t let people get in their head.
2. Figure out what you would do if you won the lottery and start doing it right now.
3. Try to leave the world better than when you came into it.

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