This week’s Misfit Entrepreneur is Steven S. Hoffman. Steve is the CEO of Founders Space. Founders Space is one of the leading startup accelerators in the world, with over 50 partners in 22 countries. In fact, Forbes and Entrepreneur Magazines ranked it as the #1 incubator for overseas startups.
Steve is also a venture investor, a successful entrepreneur multiple times over and the author of several best-sellers including his latest Surviving a Startup. He’s found success everywhere from Hollywood to Silicon Valley, but his biggest passion is helping other entrepreneurs succeed.
My goal is to squeeze as much wisdom and advice as I can from him and his experience in our time together in this episode.
Steven has had more careers than cats have had lives. He began as an electrical computer engineer. His real passion was film, entertainment, and games. He went to graduate school for film and then went to Hollywood. He worked his way up the ladder and began a television development executive at a large TV production company. While there, he started to see the future of video games and the growth they would have. He’s made over 100 games in his career. He met the founder of Sega and was offered a position at their Japanese headquarters coming up with new ideas for games, specifically for the US market.
He then came back to the US and launched his first company, LavaMind. The first product he launched was a game that taught people how to become entrepreneurs called Gazillionaire. He did it all himself and put all his money into it. It took off. After that, he saw the opportunity for gaming on the internet. He partnered and launched another business that was an interactive TV/Gaming product with MTV. He then did 2 other ventured startups and took a break.
During the break, friends that were starting their entrepreneur journey would come to him for help and advice and out of that grew his incubator, FoundersSpace.
You’ve worked with hundreds of entrepreneurs in you career, alongside your own experience, what would you say is the main ingredient needed to succeed as an entrepreneur?
- Most entrepreneurs never make it.
- Ideas don’t matter. Where you start doesn’t matter. Just start.
- The most important thing is that you don’t lock onto your idea. More startups fail because entrepreneurs fall in love with the idea and their passion for it.
- Go out into the world and start exploring. You may not have the magic idea in the beginning.
- Google started out as non-profit to allow academics to search for peer papers.
- Yelp didn’t think reviews would be a big part of their product. It was just an add on.
- YouTube started out as an online dating site.
- Many of the biggest companies you know are far different that the idea that started them.
What is the process that people should go through to find the right version of the idea?
- It’s best to pick a direction vs. picking an idea and holding to it.
- Try a number of things in that direction
- Engage deeply in that area and figure out who your customer is.
- An entrepreneur’s job is not to sell a customer on your idea; it is listening to them. The best ideas come from the customer. What do they really need that they are not getting?
- Your job as entrepreneur is help solve the customer’s problems.
- Entrepreneurs are demand hunters. They cannot create demand, but they can find it and fill it.
How important is it to focus before branching out?
- Think small. The majority of entrepreneurs succeed with very small ideas.
- A small idea that can tap into a big pool of demand is powerful.
- YouTube was a great example of this.
What is it that you look for in a company you invest in?
- Venture capital is like rocket fuel for a business.
- But the rocket needs to already exist and be pointed at the right target.
- Is the business solving a real-world problem and is there demand?
- For a startup, the potential is in the team. A great team can help even a poor idea get off the ground and improve it from there.
- The CEO must have great leadership qualities. They need to be able bring together the right people, motivate them and lead them.
“An entrepreneur/CEO, put 80-90% of your time into finding an amazing team.”
What are some of the biggest lessons you’ve learned and put into practice?
- Small businesses are not a good fit for venture capital.
- A business with linear, steady growth is not a good fit either.
- If you are growing exponentially and can prove you can sustain it, then you have a shot with venture capital.
- The business model that produces more “unicorns” than any other is a recurring revenue business.
- A business where the customer comes back over and over again or needs a subscription to keep the service is key.
What are principles that you’ve developed to help guide you and build your businesses?
- How you communicate to your employees is critical.
- Culture is not ping pong tables and plush couches – building a great culture comes down to one word – Trust.
- Your need to trust you and trust everyone else on their team.
- If they know you have their back and everyone else on the team has each other’s, then they will own it together.
- The way you get it is by, duh, trusting your employees to do their job and helping them be part of the success by engaging them and giving them a say.
You wrote a book called “The Five Forces.” Tell us about it and what are the 5 forces?
- The Five Forces shows where we are headed in the future.
- These forces will change all of our lives.
- They are as follows:
- Artificial Intelligence
- Brain Computer Interfaces
- Space Technology
- Human Computer Intelligence (AGI/ASI)
Best Quote: Entrepreneurs are demand hunters. They cannot create demand, but they can find it and fill it.
Steven's Misfit 3:
- If you fail, don’t internalize the failure. You are not your failures.
- Don’t settle for what you think is possible. Growth comes from pushing yourself a little further.
- Listen to what you say to yourself. Are you talking to yourself in a negative or positive way? If it is negative, you have the power to change it and it will transform your life.
Aloa (20% for 4 months!):
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