Jeff Hays is a serial entrepreneur and a filmmaker who’s been short-listed for an Academy Award for his film, On Native Soil. He’s completed 8 consecutive successful crowdfunding campaigns and has been featured in Forbes as a crowdfunding expert.
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Entrepreneur on Fire 769. What’s shaking, Fire Nation? Johnny Dumas here, and I am fired up to bring you our featured guest today Jeff Hays. Jeff, are you prepared to ignite?
Jeff: I am.
John: Oh, yes. Jeff is a serial entrepreneur and a film maker who has been short listed for an Academy Award for his film On Native Soil. He’s completed eight consecutive crowd funding campaigns and has been featured in Forbes as a crowd funding expert. Jeff, I’ve given Fire Nation just a little insight. So share more about you personally, and then expand upon the biz.
Jeff: So I am 56 years old. I’m a serial entrepreneur. I’ve started tons of companies. I’ve had huge successes, and I’ve also had stunning failures. And I’ve got to tell you, my greatest value has come from the failures. It’s not anything I would wish on anybody, but it’s certainly where the vast majority of my experience has come from. And I started making films 20 years ago. And about three years ago, I started doing that almost exclusively. I’ve always kind of gone back to that in between entrepreneurial ventures. But we’re really starting to get a handle on a niche in the market. And this crowd funding piece is really an astounding tool not just for film makers but for entrepreneurs.
John: So Jeff, we’re in luck because we actually talk a decent amount about failures here on Entrepreneur on Fire. So it’s pretty fortunate for us that you have some absolute stunning ones. But before we get to those stories, we always start, Jeff, with a success quote. So share that quote and why you chose it.
Jeff: So it’s funny. This is on every email I’ve sent for the last three years. And it’s the surest way to happiness is to lose yourself in a cause greater than yourself. And I lifted this from a mentor named Louis Portelli. And I asked his permission to start using that because I found nothing could be more true. The surest way to happiness is to lose yourself in a cause greater than yourself.
John: So Jeff, I love this for so many reasons because, for me, I look at my journey. And when I was turned inwards, when I was focused on my success, making money for my bank account, trying to do me, me, me, I kept burning out. I kept hitting walls. And I kept feeling unfulfilled. But then when I turned things to the outside, I tried to just become a person of value, first and foremost, things changed. Things changed. My entire attitude about life changed. And then my success with the ventures with that attitude, Entrepreneur on Fire being the most specific, absolutely changed.
And there’s actually that great quote by Albert Einstein, “Try not to become a person of success but rather a person of value.” So Jeff, thanks for sharing that, my friend. And now, let’s kind of move forward here. And let me give you a little run down of how Entrepreneur on Fire is different than your run of the mill interview podcast because we don’t just talk about why you’re such a rock star right now. I mean, we’re going to get to that because you are a rock star. But Jeff, before that, you’ve had your ups. You’ve had your downs. Let’s analyze one of these stunning failures. Jeff, tell us a story.
Take us to that moment in time right before you failed. Walk us through that failure. And then let’s talk about some lessons learned.
Jeff: Yeah. And this one was fairly recent. In 2004, I made a movie that was a response to Michael Moore’s movie Fahrenheit 911. I did a movie called Fahren-Hype 911. And I got Dick Morris to host it and Senator Zell Miller and Mayor Ed Koch, and I put Ann Coulter in it to make everybody mad. And I had literally shot this film from start to finish in 28 days, which you can’t do the pre-production in 28 days. It was an impossible task. We got it done. And on the 29th day, I got a call from Patrick Burn at Overstock.com, and he ended up that day buying it from me for $2.6 million. And it cost me $500,000.00 to make.
And so and he had great success with the film. I took the money that I made from that, and I launched a company called Pod Fitness. We ended up raising a total of $20 million. And the idea – we did downloadable, customized workouts for your iPod. Now, again, remember, this is 2005. There was no such thing as an iPhone. There were no such things as apps. I have eight patents on what we created. We were wildly ahead of the market. Our market was really 40 year old females, mothers for exercise who it turned out; they weren’t really able to use iTunes. They had their teenage son load their music on their iPod for them.
And so we had completely missed the market. And I did not want to admit that I was wrong. And so I kept raising money and pouring money into the company. And five years later, we were still putting money in when I finally quit. And my partners were mad at me for quitting. The founder can’t quit. But I just said if I’ve proven anything, I’ve proven . But the thing is, if I was to peel it back and tell the truth, I knew six months in that were on the wrong path.
Jeff: And I stubbornly said I’m going to make it work. And so discerning between when it’s time to pivot and when it’s time to completely admit the market doesn’t want this dream product of mine, if I was to be honest with myself, I knew. And every dollar that I raised from investors past that point was immoral.
John: So Jeff, using that phrase being able to discern when it’s time to pivot and when it’s time to quit is so powerful for our listeners. And there’s a great book by Seth Goden that a lot of people get the wrong impression of because, unfortunately, they don’t read it thoroughly. The book is called The Dip. It’s about how every business is going to hit this dip and this valley. And sometimes, you just need to power through it. And so many businesses give up right on the precipitous of that success, one foot away from that goal. And it’s so sad to see. But there’s another angle of that book that Seth talks very eloquently about where he says sometimes, when you’re in a hole, you just have to stop digging.
That’s the only way to get out of that hole. And Jeff, that’s where you found yourself. You found yourself in a hole. And unfortunately, in that situation, you just kept digging. So what would you want to kind of break out of that and share with Fire Nation as maybe a way that we, the listeners, can learn from this experience? What would you have done differently at the onset before you got in deep of that hole as you ended up getting that could have really helped you out?
Jeff: Well, there’s a whole new way of doing start ups that completely – I want to say completely eliminates risk. And I’m sure you’re well familiar with the lean start up methodologies and creating a minimum viable product and then iterating with your customer. We came from a model of that we were so clever, we needed to release – the world was just going to love what we had. And so we were $5 million into the project before we did anything that could resemble a market test. And now, that kind of hubris doesn’t deserve to be rewarded. You might get lucky and get away with it.
But sooner or later, the market will slap you down for that kind of cockiness. And so this knowing that all we have is a focus group of one or me and my team, we love this. The only thing that matters is how does the market react to it? And then pivoting or changing based on the reaction of the market to your product, it takes the ego out of it. J. Abraham always said, “Don’t fall in love with your product. Fall in love with your customer.” And I fell in love with my product. And it deserves to be punished. And the market is really good at that.
John: It’s an efficient market sometimes, Jeff.
John: And you know, Eric Reese is an amazing entrepreneur. We’re blessed to have him as alumni of Entrepreneur on Fire. He was a great past guest. And he talked so well and thoroughly about that minimally viable product about how the sooner that you can get that potential product in the hands of your perfect customers to get feedback, to get those mothers telling you, yeah, this is a good theory, Jeff, but I’ll never use it because I don’t know how to use an iPod or iTunes, that’s critical, critical knowledge that you need to garner, Fire Nation, as early as possible.
And the great founder of Linked In, Jeff, gave this quote. “If you’re not embarrassed by the first product that you shipped that means you’ve waited way too long.” His point behind that is listen, you’ve got to get something out there that vaguely resembles your dream, your overall end vision, just so you can start getting reactions as soon as possible. So Jeff, great takeaways, amazing story. And let’s use the story vibe itself as we move forward to another point in your life. And this is going to be the other end of the spectrum. This is going to be, Jeff, an ah-ha moment, a light bulb moment.
I mean, you’ve had many of these. I mean, you’ve been short listed for the Academy Awards. You’ve been featured in Forbes as a crowd funding expert. I mean, you’ve had a lot of wonderfully bright epiphanies. But just tell us one of those, Jeff. Take us to the moment in time of one of these epiphanies. And walk us through the steps you took after having this idea to turn into success.
Jeff: This was another – it was just a gift. I grew up, my dad used to listen to records while he was shaving. He had a battery powered record player that he would sit on the back of the toilet, and he Earl Nightingale [inaudible] Think and Grow Rich. And The Strangest Secret from Earl Nightingale, both of which he got from the Success and Motivation Institute in Waco, Texas. And I grew up, I remember being 6, 7, 8 years old listening to these albums. Later, when I was in my 20’s, I ended up owning a company, and one of my offices was in Waco, Texas. And I went down to the Success and Motivation Institute and went on a tour and listened to their founder.
And he said that he made the decision – his company, he had two values. 1) Was to make an impact. 2) Was to make a profit. And I was 24 or 25 at the time. And it sounded good to me. I was busy assembling my philosophy of life. And so I adopted that. And that single phrase, I repeated it – I can think of two times last week when people were talking to me about doing something. I have two requirements for anything I do. 1) I want to make an impact. 2) I want to make a profit. And this gives meaning to your life and sustainability to your life. So the films that I make, I don’t – there are lots of things that I could make for just the money.
I had a mentor that used the phrase was always, Jeff, it’s not just can we but should we? I won’t do something just for the money. At the same time, I won’t do something just because it makes an impact if it’s not sustainable. Those are the two pieces that allow me to stay in business and to have meaning in my business.
John: Now, I love that, Jeff. And I’m actually so excited that you brought up Earl Nightingale. I mean, he, to me is really somebody that Fire Nation needs to get to know more intimately and the work that he’s done. And my favorite quote from The Strangest Secret by far, Jeff, is that the key and the actual realization of success and happiness is the gradual realization of a worthy ideal. And what really struck me early in life, Jeff, about that phrase that success and happiness is the gradual realization of a worthy ideal is that it’s not just the realization. It’s not getting to that finish line. And it’s not just any ideal. It’s a worthy ideal.
So it’s gradually realizing a worthy ideal. That is the strangest secret. And what are your thoughts on that phrase? How do you interpret that? How can we really share with Fire Nation the importance of just that magnitude of the statement?
Jeff: What’s so funny is I haven’t heard or thought that thought in that phrase in at least 20 years. And as you quoted, I’m like oh, man, it literally takes me back to – I remember when I was a 26 year old siding salesman riding with my partner between Amarillo and all of these tiny little towns in West Texas in the pan handle, Shamrock and Border and Dumas.
John: My last name, Dumas.
Jeff: It was named; I’m sure, after one of your great family members. It’s not a great town, I’m sorry to say.
John: I know. I’ve been there.
Jeff: And so my partner, Red, I said, “Red, I want to make movies for a living.” And Red said, “I want to be a pilot.” And he’s like, “How do you make movies?” And I’m like, “I don’t know.” At that time, all I’d done is watch movies. And I said, “I want to have go places like Miami and LA and New York not [inaudible] and Dumas.” And it’s funny. He’s now finishing a 30 year career as an airline pilot. And he delivers and trains airlines how to fly air buses. And I’ve been in the film business for 20 years. And I live in Utah. My office is in New York. Yesterday, I was in Dallas, and tomorrow, I fly to Indonesia.
We are both living what we dreamed of when we were in our 20’s. And it is the progressive realization of a worthy ideal.
Jeff: I mean, I’m aware of it every day. I remember having the dream and having no clue how do you get from pitching – knocking on doors making siding leads and selling house siding to creating documentaries that are reviewed by the New York Times? From a West Texas bumpkin to shortlisted for an Academy Award? And not that these are the – I mean, I look around. Not that these are great achievements. These were my goals. This is the progressive realization of my worthwhile dreams. I look at other – Élan Musk and people that – I’m constantly impressed, Peter Diamondis. I mean, good grief, these mines are mining asteroids in space.
And I think man; I’ve been asleep at the switch. But this is the life that I dreamed of as a young businessman. And to have listened to those albums at 6, 7, 8 years old and to hear Earl Nightingale’s deep, resonant voice as he read these, this is it. This is life.
John: No, I love that. And I just love, Jeff, too, how this just shows that you need to put your hopes and your dreams out there in the universe. You didn’t just keep this to yourself. You were talking about it with your friends. You put it out there in the universe. And that’s the only way that the laws of attraction will ever start to work in your favor is if you get it out there, if you speak of these things. And it’s just so powerful in so many different ways. And Jeff, on that note, you’ve had so many proud moments. I mean, we’ve talked about a lot of them. But if you could just take us to a moment in time, your proudest entrepreneurial moment, what would that story be?
Jeff: I’m going to strip a word out. And the word entrepreneurial, I’m going to take it out of that. I spent the weekend with four of my adult kids. And this is such an important lesson that it’s – and spending it, it was a very emotional setting in Taos, New Mexico at a rehab center for one of my adult children. And all of my kids and I were there. And I heard the most amazing – my kids are all in their 30’s. And I heard the most amazing honesty and integrity and quality people speak. I was able to say this is the finest group of people I’ve been around in a long time. And it was my own children.
And so to any of the entrepreneurs, it’s business and entrepreneurship, there is nothing that produces more excitement and energy. And sometimes, you have to negotiate with yourself to say okay, if I can just play Legos with my 4 year old for 30 minutes and stay fully present, then I’ll allow myself to read Eric Reese’s book, do all the things I want to do in my business tonight. But right now, I need to be with my children. My same mentor that used to say it’s not just can we but should we always said, “You’ll never be happier than your unhappiest child.” And when you’re investing in your children, you’re investing in your own future happiness.
So to just remain – and me at 56, I enjoy business as much or more than I ever did. I love the journey. I love starting new companies. I’m doing it all the time. But the advice that I would give to anybody in their 20’s or 30’s that’s doing this is to make sure that you put it in its proper place.
John: Jeff, so many value bombs you’re dropping throughout here. I just want to take things to present times right now because you’re leaving for Indonesia tomorrow. You have a lot of really exciting things right now and right on the horizon. But talk to Fire Nation. Share with our audience the one thing that has you most fired up right now.
Jeff: Well, the thing that I think is – that I really want to communicate to this group is to have everybody take a look at crowd funding. And it’s funny. There are a lot of reasons to crowd fund and a lot of reasons not to crowd fund. Most people, when they start thinking about crowd funding, think it’s for somebody else, or they get intimidated by it because it seems like oh, I don’t want to go out with my tin cup out asking for handouts. It’s quite the opposite. I think of the Arkyd space telescope. This is a company that is owned by 10 billionaires. I mean, literally, 10 billionaires. Élan Musk and Larry Paige and Serge and Jeff Bazos and Richard Branson.
And they raised $1.5 million in crowd funding for the Arkyd space telescope on Kick Starter. Talk about a tall assignment when you’ve got 10 billionaires saying would you please give me some money. But that was not the presentation. The presentation is we’re going to do something epic, and we’re inviting you to join us and participate with us in this. And that’s the key thing. For once, entrepreneurial – I’ve raised $100 million for entrepreneurial ventures in my career. For once, entrepreneurs can raise money without giving away equity in their company.
So you combine this with lean start up and raise less money and raise the money you need to create a minimum viable product, suddenly, you can finish the deal. I’ve done VC funded deals that by the time we finished financing them, we owned so little of the company, we didn’t care what happened. And this now, suddenly, in the film business, I’m able to raise money for films with very few investors and then make the film. And then instead of selling the film to a studio the way we used to, now, I can release it online and own the distribution from start to finish and build a customer list out of each film.
This is a spectacular time to take control of your own business and your own life. And crowd funding is a tool that everybody should have in their toolkit.
John: So Jeff, Fire Nation is excited about this. But where are a couple of areas that you feel like we could go to to learn more about how to crowd fund the right way?
Jeff: What’s great about it is every success and every failure is captured for perpetuity on Kick Starter and [inaudible]. So if you launch a program, and it fails, you will be able to see it. There are some – everyone will be able to see it forever. So you can look at things in your area and see what made them work and what made them not work. And again, this is the tip of the iceberg. It takes some intelligence to ferret out what’s really happening. But the main thing people need to know is that there is no crowd. And for some reason, people think well, I’ll put something up. And if it’s magic enough, then the crowd will fund it.
There’s nobody going to Kick Starter and searching going how can I get rid of some of this extra money I have. And so it’s just like you putting up a podcast. Lots of people put up a podcast. That doesn’t draw the crowd. It’s whatever strategy you adopt, you better have one, of how do I drive people to this page? And then it’s just web marketing. How do I get traffic to this page, and how do I make my page convert? And that piece of the equation people generally go stupid on. For some reason, they record a video, and they write copy that says please help me. And people aren’t worried about helping you.
They’re generally worried about helping themselves. And the pitch on the page has to be written with what’s in it for them. So, answering a question that to that viewer of what is in it for them. And those two things, those two simple realizations, are like the 90 percent. Those are the big chunks that make it work. You want to be able to deliver something for the viewer that’s a value to them, not stand there and you reached this goal because I really want to serve a mission in Africa. That just doesn’t work.
John: No, Jeff. I love your insight about how studying case studies, I mean, Fire Nation, there’s no better way to actually learn about what works and what doesn’t work than actually studying case studies. And as Jeff just revealed, there are endless amounts of case studies in every niche and every region sitting there right now at Kick Starter and Indigo Go. So go ahead and check it out. And Jeff, we are about to enter the lightening round. But before we do, let’s take a minute to thank our sponsors. Jeff, welcome to the lightening round where you get to share incredible resources and mind blowing answers. Sound like a plan?
Jeff: I hope I have some mind blowing answers.
John: What was holding you back from becoming an entrepreneur?
Jeff: It’s funny. I’m the exact opposite. I was propelled into entrepreneurship. My mom died when I was 11. And I ended up dropping out of high school. I was a door to door encyclopedia salesman. My sister has been a professor, was a professor at a medical school for 20 years, a PhD and the other end of the spectrum. But I remember having a toy sale where I had all toys were marked down to a dime regardless of what my parents had paid for them. And when I was a kid, I sold seeds, and this is where I learned there’s a difference between gross and net. I wasn’t supposed to spend the money that I was supposed to send to the seed company.
So this was lessons from 7 years old and 8 years old and paper routes. But the reality is I was propelled into entrepreneurship by having no education and a high ambition. This meant that my journey through entrepreneurship injured lots of people because my education was paid for by friends, neighbors, and enthusiasm and as I got my entrepreneurial education at their expense. That with now the much smarter ways – one of the films I’m making is the Wealth Gap where we’re talking about smarter ways to be an entrepreneur where you don’t have to injure everybody around you for your first decade. It’s just not necessary anymore.
John: I love that. Jeff, what is the best advice you’ve ever received?
Jeff: Again, this is right out of left field. But the best advice I can give anybody that was given to me is always make sure you pay your withholding tax. And I’m telling you, over and over, when I look at businesses that we were – that were in trouble that we would want to go in and help, and there was always this – have you paid your 941 withholding? And there’s always this – well, we had been, but we kind of quit paying it as the business started . And this is the one that can follow you personally. It’s the only player on the field that you can never get away from. Don’t do it.
John: Jeff, share one of your personal habits that you believe contributes to your success.
Jeff: This is a new habit. I used to have people in bus dev working for me that went out and met people. And when I started doing films full time, I started attending events myself. And I realized how foolish I had been of sending people out to do the social part of business for me. Now, after three years, my database is full because I didn’t have anybody to do it for me, and I do it for myself. And those relationships are mine. They go with me. They’re not the company’s relationships. Nothing is more important than my business contacts and the business friendships and relationships that I’ve developed. It’s not something you want to outsource ever, even if you’re an introvert.
John: Jeff, I couldn’t echo that sentiment more. I mean, so many people ask me over and over again, John, how did you grow Entrepreneur on Fire into a multimillion dollar business in just two years? And I say it’s the 769 relationships that I have built during these daily interviews with successful and inspiring entrepreneurs and actually caring and valuing those relationships. That has been so critical to my success and so many other entrepreneurs. And Jeff, do you have an internet resource like an Ever Notes that you can share with our listeners?
Jeff: I’m one of the early converts to Ever Note. I don’t know how I would be without that and [inaudible] for managing tasks for personal and for our teams is hugely invaluable.
John: Love that. Jeff, if you could recommend one book for our listeners, what would it be and why?
Jeff: Oh, I send out 20 books a month to friends. Whatever book was my favorite from the last month. And so I just go through my list. I’ve got a couple hundred people. I picked 20 people that I think would benefit from that book and mail it to them every month. And this month’s book was Scrum. And it was written by the guy who created Scrum Agile software development methodology. It should be read by every business person and every creative person. I always like whatever book is last, but this seems like it’s going to be my favorite for a long time.
John: Awesome. Well, Fire Nation, I know that you love audio. So if you haven’t already, you can get an amazing audio book like this one for free at EOFirebook.com. That’s EOFirebook.com. Jeff, this next question is the last of the lightning round. But it’s a doozy. Imagine you woke up tomorrow morning in a brand new world identical to earth, but you knew no one. You still have all the experience and knowledge you currently have. Your food and shelter taken care of. But all you have is a laptop and $500.00. What would you do in the next seven days?
Jeff: Wow. So again, all I can think of is I would look for groups that I could be of service to to start establishing relationships to start over.
John: Jeff, all about relationships. I love it, my friend. And let’s end today literally on fire with you sharing one parting piece of guidance. The best way that we can connect with you, and then we’ll say good bye.
Jeff: So anyone can reach me. My email is [email protected] And there’s no E in Hays. [email protected]lms.com. Again, different groups deserve different advice instead of some blanket piece of advice. But what I would guess the people on this group that I would project on them is 1) don’t do something just for the money. It needs to make an impact and make a profit. And 2) remember that the greatest joy that I have in my life is the relationships I have with my adult children. And so don’t neglect that part of your life.
John: Fire Nation, you are the average of the five people that you spend the most time with. And you have been hanging out with Jeff and myself today. So keep up the heat and head over to EOFire.com. Just type Jeff in the search bar. His show notes page will pop right up with his resource, book recommendation, email, you name it. And Jeff –
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