John Warrillow is the creator of The Value Builder System, a statistically proven methodology for improving a company’s value by up to 71%. He is also the Author of The Automatic Customer: Creating a Subscription Business in Any Industry, and Built to Sell: Creating a Business That Can Thrive Without You.
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Worst Entrepreneur Moment
- John couldn’t get a flight into NYC for an INCREDIBLY important meeting… so he took a taxi… from TORONTO! $1,300 later he was there and realized a huge lesson: you can’t be the only person your business relies on. John’s business was un-sellable, and that day he set out to change that!
Entrepreneur AH-HA Moment
- Sell a few things to a lot of people, Fire Nation… that will change EVERYTHING!
What has you FIRED up?
- Built to sell radio (Podcast)
Small Business Resource
- Eventbrite: Brings people together through live experiences. Discover events that match your passions, or create your own with online ticketing tools.
Best Business Book
- The Automatic Customer by John Warrillow
- Built to Sell by John Warrillow
- Small Giants by Bo Burlingham
- GIFT for Fire Nation!
- The Value Builder System: A Statistically Proven Methodology For Increasing The Value Of Your Company.
Interviewee: I in deed.
Interviewer: Yes, John is the creator of The Value Builder System a statistically moving methodology for improving a company’s value by up to 71 percent. He’s also the author of the automatic customer creating a subscription business in any industry, and built to sell. Creating a business that can thrive without you. All right, John, take a minute fill in some gaps from that intro and give us a little glimpse into your personal life.
Interviewee: Yeah, sure. So I mean I’m busy week two kids and a spouse and a wife so personally lots of what is going on. But professionally we help companies build their value over time. So you mention that intro, we help these and grow the value of their company, but up to 71 percent. So that’s what I do professionally.
Interviewer: Well, John, we’re entrepreneurs and fire nation are entrepreneurs, small business owners, cypreneurs and one thing we all have in common. We’re looking to create viable businesses and that means we are going to generate revenue. So how do you John Warrillow generate revenue?
Interviewee: Yes, so I mean we license our platform to advisors business sketches and consultants who then in turn offer our solution – our methodology to business owners. So we license it to professional advisors. We got thousands of advisors around who license our platform and then they pay us a subscription fee every month to do that.
Interviewer: Nice, nice fire nation, there’s a lot of ways you can look at the monetization streams, and you know diversification is a good one. And when you have thousands of clients that in of itself is diversification and John, we’re all about the stories here? You know we’re all about your story and specifically your journey as an entrepreneur. And you have had some great times; you have had so not great times. But take a minute and talk to us fire nation about what you consider you’re worst entrepreneurial moment down to the ground level take us up there?
Interviewee: To in capsulized it, when I was running my last research company we were – I had a meeting with American Express and we had – this was the first meeting we had and I was in charge – the president of American Express opened a ways in New York City and so I arrived at the airport, and of course the night before the meeting. And of course all the planes coming in and out of New York, where jammed because of the major thunderstorm that was going on in the area.
So couldn’t get into New York. And so I ask for Hartford Boston. I think I’d figure I’d take a train down but I couldn’t get into New York at all. So I walked out of the airport and flag a taxi and I spent all night in a taxi, in the back of a taxi and it was about 4:00 or 5:00 in the morning, maybe three quarters of the way from Toronto, New York. And I can hear the tires of the taxi hitting you know, the side of the – of the road where they had put those ridges in the road to wake up the truck drivers.
And I look up at the taxi driver is falling asleep and so I get him to pull over and I eventually convince him to let me drive the taxi in to New York City. So I drive the last probably 200 miles into New York. I get to office about 8:30, meeting is at 9:00 and I remember this overwhelming sense of two things:
1. One was just tremendous satisfaction that he had actually got there, you know over this crazy, 10, 11 hour drive.
2. But then a sense of kind of despair.
Frankly because I was – you know, I was at the point in my business where perhaps some of you listeners can empathize with. The business was depended on me personally and that’s why I had to go to New York that I had to get in a taxi and spend all night to do that. And I – it was just that the business was really depended on me and I realize that at that moment and it was a really tough relaxation for me. Even though we had scaled up to a good size business it was still pretty depended on me personally.
Interviewer: What was the taxi bill?
Interviewee: I didn’t even get a discount, John, for driving half the way. Can you believe that?
Interviewer: I cannot.
Interviewer: But I will tell you that guy probably did not pick up of fear from New York back to Toronto.
Interviewee: I’m guessing not, I’m guessing not.
Interviewer: So I mean fire nation there’s so many takeaways here. I mean number one that I get on the positive side is:
1. You have to do whatever it takes to succeed.
When you’re starting off on your entrepreneurial journey. You do have to be you know the cat of all trades. You do need to be able to wear a lot of different hats because you are to business when you’re starting. And I think that to day one, of your fire, I was doing everything that came. All the production. All the social everything and that’s just how it had to be, but you also need to say hey, what’s the game plan for growing here?
You know you don’t wanna always be having to jump in a taxi and drive the 11 hours to New York City, you know whatever that might be for you. Because just not how we are going to sustain a viable business or it’s not going to be the kind of life that you want to live so John figured it out. That’s my big take away John and I love to have you the personal experience story kinda give us the fire nation the wrap up. I mean like what’s the one take away that you really want to make sure that we get?
Interviewee: Well, for your business to be valuable it’s really got to be able to succeed without you personality calling the shots. I learned that one – I went after that trip to New York John to post script. I went to see a guy named Perry Neillia. And Perry Neillia runs a Mergers and Acquisitions firm. And I said you know what Perry I’m done with this business it’s too – it was successful. We had lots of revenue, lots of customers, always blue chip clients, but I said you know, if it means me getting a taxi to go to New York, I’m not running this business anymore, I’ve got other things to do.
So I went to this guy Perry is a nominated guy and I said, “What does it worth?” And he said, “Well, you know, I can probably give you a sense of what it’s worth. But let me ask you two questions first.” And I said, “Sure fire away.” And he said number one,
1. You are in the research business, right?
And I said, “Yeah.” And he said, “Okay, when does the research?” And I said, “Well, I’m involved in some of it.” He said, “Okay.” Question number two:
2. Who does the selling?
And I said, “Well, those are my sales guys.” And then he peered over his glasses at and he paused for two or three seconds and he said, “John didn’t you just come back from New York taking a taxi all the way from New York? Are you sure you’re not personally involved in doing the selling?” And I said, “Okay sure, I guess I’m involved in doing it.” And he said, “Well, that’s fine because I can’t sell your business it’s worthless.”
And you know to hear that even though we had like lots of revenue, employees, and blue-chip customers to hear that it was worthless in his eyes was just that huge hit. So that was tough to hear but in Perry’s defense. It was the inspiration for me to make some changes in my business though, and to ultimately make it sellable at the time.
Interviewer: Such an important take away fire nation. We need to know right now what type of business are we looking to build. One that is potentially sellable at a certain point in the future. One that can take a step back from and it can still keep moving forward like a well-oiled machine. Now, John, let’s talk about another story. This one is going to be an epiphany, and aha moment that you have had and you have had but now you know the audience is a little bit.
We are these entrepreneurs nitty-gritty persevere in trying to get things off the grounds, what’s an aha moment that you have had that you think is going to resonate with our listeners and again really take us to that moment in time that you had that idea?
Interviewee: Well, it actually goes back to the same office where I met with Perry and I said you know – so he said you know, “It’s worthless” And I said, “Okay help me make it worth something. What do I need to do?” And he said, “Well, you gotta create some recurring revenue and some of this business that that can kind of go beyond just personality being involved in everything.” And I said, “But tell me more.” And he said, “You right now selling lots of things to a few customers.” And at the time we were a classic services company. We were selling lots of different services. So we would do focus groups, quantitative market research, in-depth interviews, and desk research.
We did a bunch of different things and truth to be told we did all of them you know pretty well. Not quite pretty well, but we had a few customers. And he said that’s the definition of an unsellable business. What you really need to do is stop selling lots of things to a few people. Instead sell a few things to a lot of people. And when I say those things, even when I say them out loud now they sound like the same statement, but they are actually diametrically opposite. A lot of people go up and they said lots of things to a few people. And to make your business more valuable, scalable, so you can teach it to employees.
You can create a subscription of model to it so you can actually scaling it up. But what you really need to think about is selling a few things to a lot of people. And I spent days after that meeting, brainstorming, how do I re-gig this business so that its focus on just a few things. We ultimately use this trifecta of scale model that I spent some time on which scrutinizes all your product or services. Basically categorizing them all on [inaudible] [00:09:20], which they are teachable to employees, valuable to customers and repeatable TVR.
And if so it’s through that lens that you can all the product and services that you sell and it’s really identifying the ones that score the highest in aggregate that that are teachable to employees, valuable to customers and repeatable. It is when you identify the ones that are highest and aggregate that you know you felt something that could scale. Again, the key is focus in on selling fewer things to lots of people.
Interviewer: Trifecta of scale. I love that. And fire nation. This is probably one of those rewindables where you go through it a couple of times. Because John, just said a lot of things in just a few sentences and I do love that one phrase, selling a few things to a lot of people. So sit back, fire nation and what’s really working in your business. Going back to that 80/20 rule. You know what’s the 20 that’s really working? Maybe those are going to be your few things. Why don’t you just forget about the rest and really dive into that. And again, John, you did a great sum up there at the end but just what’s that one take away that you really want to make sure fire nation gets from that epiphany that you had?
Interviewee: There is a cost to doing too many things. And many people will say well you know, I get revenue from all of these things. I sell 19 different products and services because I get revenue from all 19 different products and services. But the hidden cost of selling 19 different things is that you can’t train an employee to deliver 19 different. Employees really thrive on repetition, right. We all thrive our deal to do things is to get it again and again. You become such a great interviewer because of done more than 1000 interviews.
We all thrive on repetition and employees are no different. And so, if you ask them to do 19 different products and services. Guess what they are probably really good at selling and delivering three of them. And the others, the other 16 they’re probably just okay at and so there is a hidden cost for doing too many things. And yes, you may be getting revenue but at the same time, you may be putting a ceiling on your growth. Because when your employees get stuck who do they come to? They come to you, the entrepreneur. And as soon as they are coming to you there is a ceiling but you just can’t grow.
Interviewer: You know somebody just started a podcast that I haven’t listened to yet but I am looking forward to what I think it really echoes what you just said John. Jack Welch just launched a podcast and his book the 4 E’s of leadership and he said when he took over GE. You know, he said, “If we got the number one or two in any given product category we are out. Like we are out. I'm not wasting my time be number 10 or 15 or 20 where out of there." And so he came in and just wipe things off the table and Steve Jobs did the exact same thing when he came back to Apple for the second time.
And that so critical to really walk away with fire nation you want to really figure out your thing or a couple of things. Now, John what’s your biggest weakness as an entrepreneur?
Interviewee: Complexity so as soon as things get overly complex I shut down. I get frustrated I start making comments that I shouldn’t make and so I get really frustrated with complexity. And I just I can’t – I’m not one of those people that I think Elon Musk if you put Elon Musk in a room and give him a lead complex challenge he could just plow through it and sit there for hours and hours and hours of working through it, thinking about it from different angles.
I just blew up my brain is just not big enough. I just don’t have the horsepower to think about something really complex. I need things very sort of bucketed, simple. It’s probably why you know, for me, I started and exited five companies but none of them had been more than 10 million in annual sales. Anything that gets bigger than that with more employees and more moving parts I just blew up.
Interviewer: That’s interesting and I will say that my response whenever I feel like things is getting a little too complex in my business is I always go to my team or I go to growing my team. To bring people in to really kinda take over those areas that starting to kinda create that overwhelmed in my mind. So I think team can be great here and build in the right one is critical. Now, John what’s your biggest strength?
Interviewee: I guess it’s somewhat related to my biggest weaknesses. I think I have somewhat of an ability to distill reasonable complex stuff into relatively simple ideas. So I miss a lot of the nuance and it detailed on people who are super detailed oriented get really frustrated in dealing with me because I’m like okay stop saying all the details. What you’re really saying is acts are this is a little bit like you was in an analogy to try to distill what is very complicated thing.
And so for me if I’m working with someone that’s really detail oriented. We are going to be like sandpaper because therefore they’re going to want to tell me every last minute detail of some product they’re working on or some project they are working on. And I want sort of the mountaintop. I want to 3000 feet just give it to me in an analogy that I can understand.
Interviewer: Well, John, you do have a lot of awesome things going on right now, but share with us what the thing that you are most fired up about today?
Interviewee: So we have recently done some research. We’ve had 17,000 users that go through value better system and we have discovered, yeah it’s pretty cool. So we have discovered that those businesses on average get offers for their companies when they go to sell them, at 3.5 times pretax profits. Which frankly, John, it’s pretty low. It’s pretty crappy. But what is interesting is when we isolate the people who get 80 or greater out of a possible 100 on the value better score questionnaire which is our first step in the 12 step process.
Those businesses are getting offers that are 71 percent higher. And so what that does it gives us the quantitative proof to say if you do these 12 things you are going to improve the value of your company. And that’s – because it’s such a big sample size, we can see really confident about it and that’s getting me pretty charged up.
Interviewer: Well, fire nation. I’m pretty charged up because we are about to enter the lightning round. But before we do, let’s take a minute to thank our sponsors. John, are you prepared for the lightning rounds?
Interviewee: I am.
Interviewer: What is holding you back from becoming an entrepreneur?
Interviewee: Probably growing up in a household with entrepreneurs. It was just not something that I thought about. It wasn’t in our lexicon in our household. It wasn’t a dinner table conversation. So when I got out of University. It was okay, what kind of big company can I go work for? And I did that for a year and that was probably holding me back. It was just my own sort of private references, what other jobs are out there?
Interviewer: What is the best advice you ever received?
Interviewee: It’s a quote that I can remember. I remember it from the guy started college pro painters which you may or may not know is a large franchise organization. And I was asking him about what life is like as an entrepreneur. He said, you know my best advice is, don’t get so high on the highs and low and the lows. Entrepreneurship is a roller coaster and if you get ramped up when things are going well and too downs with the bills when things are badly you can really make life difficult.
And so just kind of the edge off both those peaks if you will, and values. And just kind of stay moderated when it gets really good you know it’s not that good. There is still problems and when it gets really bad now that it’s not that bad. And that quote always stuck with me.
Interviewer: Yeah, yeah, I love that never as good as it seems. But it’s never as bad as it seems. And John, what’s personal habit that contribute to your success?
Interviewee: One big rock every morning, so I’m a big Stephen cubby fan so before I do the email and everything else there is one project – hopefully it is something created. My brain – I can creative stuff. I can write for about an hour, after which I blew up. By this time we are doing this at 3:00 in the afternoon. I’m a basket case, I can hardly put two words together. But in the morning on eight hours of fresh sleep, yeah I can punch out about an hours’ worth of creative thoughts. So that’s when I try to do the big stuff.
Interviewer: Huge. Do you have any Internet resource like ever note you can share with our listeners?
Interviewee: It’s not that sexy, you’re not that new, but I’m big fan of Eventbrite and the reason I really like it. Eventbrite allows you to manage events both online and off-line. But what I really like about Eventbrite. It actually integrates into a lot of websites and so we have a website where we have actually integrated the platform. So people never have to leave our site to book an event that we are running. And I think – it’s a pretty slick integration and it looks really sharp and it makes us the way bigger like where punching way above or weight using that so it’s kinda cool.
Interviewer: Love that. Well, fire nation the automatic customer built to sell two books that I’ve read. I’m actually rereading the automatic customer as we speak.
Interviewee: That a boy.
Interviewer: Yeah, thank you. A lot of great stuff in there. Now, those are going to be two books on the bookshelves of most people in fire nation, John. But if you could recommend one of the book for our listeners. What would it be and why?
Interviewee: I’m a huge fan of Bo Burlingham anything that he has written. I love to consume. The best book he has ever read in my mind – wrote was called Small Giants and it was about companies that really choose to be great instead of not necessarily big. And for me it’s one of those reminders of yeah, entrepreneurship is at the base level it’s a creative process. And I think it’s one of reason I love being an entrepreneur is that it is a creative process. I can’t draw, I can’t play a musical instrument, but at some level I feel like building is creative.
And what Bo did Small Giants is really captured that idea that there’s more to running a business, then just chasing profits and revenues. There is a soul of a company that you need to nurture and it needs to be built over time, with nurturing, and it needs to be steeped in its own juices and it’s just a great book. I highly recommend it.
Interviewer: Well, fire nation. I know that you love audio, so I teamed up with audiobooks and if you haven’t already, you can get an amazing audiobook for free at eofirebook.com. And John, this is the last question of the lightning round but it’s a doozy. Imagine you wake up tomorrow morning in a brand-new word identical to earth, but you know 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?
Interviewee: I’d probably create a private Facebook group for built to sell readers. People interested in the concept of selling, I think in the private Facebook group when allowed me monetize it. So, it on a subscription basis. I do it up 99 bucks a month are something like that and really build that a very kind of private, very rich experience that would hopefully grab some cash and allow me to kind of continue on building another business, but that’s probably what I would do.
Interviewer: Well, John, we started today on fire. Let’s and on fire. Would you share one parting piece of guidance the best way that we can connect with you then will say goodbye?
Interviewee: Yeah, for sure. So if one thing you can do to drive up the value of your company, it creates recurring revenue. And you are interested the automatic customer.com/fire. There is actually an e-book there. It includes the nine subscription models that I read about in the book the automatic customer. You can down load it for free. It doesn’t cost you anything. There’s a bunch of videos there that we show you how to drive up the guide of your company. But the nine model e-book shows you sort of how to adopt subscription revenue with current revenue and books within the industry. So go to automatic customer.com/fire.
Interviewer: Love that. Well, fire nation. You’re the average of the five people that you spend time with been hanging out with John and JLD today so keep up the heat and head over to EO fire.com. Just type John, J – O – H – N into the search bar. His show’s page will pop right up with his book built to sell, the automatic customer. His book recommendations, resource recommendation, everything we have been chatting about today. And of course a gift is waiting for you fire nation. The automatic customer.com/fire take action, make that happen become built to sell. Now, John, I just want to say thank you for sharing your journey with fire nation today. And for that we salute you and we will catch you on the flipside
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