Last week we had the pleasure of having John Suh, LegalZoom CEO and serial entrepreneur, on CredibilityLIVE. During the interview hosted by Karen E. Klein, John explored some fascinating ways that business owners can learn from his experiences in order to build a successful business!
Karen: How do you go about finding ideas, thinking about ideas, and deciding which one is the one you want to go with?
John: “I think somewhere in the DNA of every entrepreneur is a problem solver.” Entrepreneurs look for problems to solve and part of success is finding the right problem to solve. You can find inspiration all around you. John points to the concept of luggage on wheels as a simple concept that no one thought of for a long time. He also talked about the founding of LegalZoom based on a lack of affordable legal services for most Americans. That problem led to the start of LegalZoom as a way solving the problem. John notes that many of these problems come with “no, duh” fixes, but asks how many times you’ve had moments where you never tried to solve the problem.
Karen: Is there a process by which you come up with ideas and winnow it down to the best one?
John: You have to ask yourself if there is a solution to the problem you are having. By being more self-aware and finding something that bothers you during the day, you may be able to come up with a solution. “Problems big and small can create huge businesses.”
Karen: How important do you think the idea is? Where does that fit into the hierarchy of how to get a successful business up and running?
John: “I think ideas are really important but I think the ability to execute is far more important. I would rather invest in a team with a good idea and a great team then I would in someone with a fantastic idea that is mediocre or average. Because great teams will adapt and if their solution is not correct they will figure it out and keep moving.”
Karen: When talking to those looking to fund ideas, the first question they always ask is who is going to execute these ideas.
John: In a study of entrepreneurs, it was said that in an early stage venture there were only three things you would need. Team, team, team. John has found this true through much of his life as a serial entrepreneur.
Karen: So, how do you go about building a team?
John: “It starts with you.” By being self-aware, you can know and understand your strengths and weaknesses. Based on this understanding you can find someone who has different strengths and weaknesses to balance out your own. John feels that thoughts of a solo entrepreneur are a myth, thought you may not know their is a number two, there probably is someone who is keeping the business going behind the scenes. The one-two is incredibly important as are the first five hires. As a business gets larger, a team becomes critical to success.
Karen: How do you recruit for a start-up, especially if it is a risky venture?
John: “Heart, mind, and stomach. And not necessarily in that order.” You want to enjoy the people you are working with, so the team is a critical part. The mission of your business is also important. At LegalZoom, John feels that having people who care is vital to success, especially if they can go home after work and feel good about what they did. Those who don’t care are not a good fit for his business. There are different ways to achieve this idea but a key is a mission that inspires. This is the heart side of a business. John feels that the mind side of any business is fairly traditional. The critical ingredient in most start-ups is free food, or the stomach. When they could not pay people, the offered free donuts once a week.
Karen: What resources are available today to start a business? Online? Free?
John: “It is so much easier today to start a business. Everything is at your fingertips.” Web.com can launch a website very quickly, Logoworks can help you get a logo in a few days, Vistaprint can help you get business cards when you need them, Multifunding can help you find a loan, Dun & Bradstreet Credibility Corp. can help build your credit, LegalZoom can help you incorporate. “At the end of the day, the internet is an entrepreneur’s best friend.”
Karen: Are there any lessons you have learned from your failures that you would like to share?
John: As an entrepreneur you have to realize that you will make mistakes because of the nature of moving quickly, so just try to avoid catastrophic mistakes. John feels one of the bigger problems can come from people taking funding lightly. It is so important to get funding to launch a business and now many traditional sources have shut down. In looking for an investor, you should treat it like a marriage. John explained that “divorcing” an investor can be a painful process for all involved, so you should get to know your investors before committing to each other. Some businesses (venture backed) don’t always need an investor, but angel investors can be great because they usually don’t get involved in the day to day operations. “Take the decision seriously and do your homework.”
Karen: How do you go about delegating and is that one of the critical things to building a business?
John: You should have your leadership transition as your business gets larger. In early stages of a business, you end up doing everything you need to but you can’t have that attitude as your business grows. “Great companies are built by great teams.” John points out that building a great company should be based around “empowering great people.”
Karen: When you are able to delegate some of these things as a CEO, what do you do in day to day operations?
John: “Hire great people, give them the right resources, make sure we’re moving in the right direction, and then get out of the way.” John focuses most of his time on communicating where the company is going and making sure everyone is aware of where the business is going.
Karen: From Tyrone on Facebook, when you’re bootstrapping your business, how do you fill that in with capital?
John: It is very difficult to get credit these days but there are loans available that people are not aware of. You have to look to yourselves and decide if you want to keep going. You can get resourceful by looking to family and friends to help fund the business. John believes the discipline that comes from being bootstrapped can help to become intensely focused on the customer. This will benefit you greatly later on. “In hard times you just need to work harder. That is when the DNA of a company is formed.”
Karen: What is your favorite business book?
John: John cites Predictably Irrational as a book that has taught him about how people think. People don’t necessarily think rationally all the time but you can sometimes predict it. It isn’t a business book but it has great implications in business.
John’s closing thought: “As an entrepreneur you should keep an open mind.”
That covers a good amount of what John talked about in his interview but we do recommend you watch the whole video because there is a ton of great information from John about how to build a successful business. And one more time we’d like to give special thanks to LegalZoom for hosting CredibilityLIVE and to John Suh and Karen Klein for participating in the series.