During this week's Ranker Podcast, our guest Robert Herjavec is joined by Podcast One CEO Norm Pattiz for an impromptu business lesson for all entrepreneurs out there. They go into detail about the best tips, practices, and other nuggets you won't want to miss.
Listen above to hear that conversation in full and don't forget to buy Robert's new book here!
Starting a Business Today
Robert Herjavec: Norm, is it easier or harder to start a business today, and to be successful?
Norm Pattiz: That's a really good question. I don't think it's any different to tell you the truth. When I started Westwood One 40 years ago, there were tremendous hurdles. When I started Podcast One almost four year ago, I viewed the business as sort of a digital version of Westwood One, so I had the benefit of 40 years of experience. But I had to bring myself up to date on what was going on in the digital world, so I surrounded myself with people who knew that subject better than me. I always think there's a similar group of hurdles. They may be the same kinds of hurdles, but any successful entrepreneur is going to run up against roadblocks he or she never anticipated. It's about your ability to make your way through that maze. It changes all the time.
RH: I always think it's easier. This is the easiest and best time in history to start a business. The reason is the typical barriers to entry that you and I and our generation were used to, buying stuff and capital, are easier to get because you can do it on social media. The reason it's just as hard as it ever was, everybody has access to the exact same stuff. When I started my first business, I needed $80,000 to buy a server. Well guess what? Anybody who couldn't afford $80,000 for a server was really at a disadvantage in my business. Today, with cloud computing, everybody has that. I think it's just as hard.
NP: Yeah but everybody isn't Robert Herjavec.
RH: But it goes back to your ability to persevere. Here's a question I asked Tony Robbins and is one I ask of everyone I admire, like you. You built an incredible company and you're a legend to me. Why do most businesses that become large and scalable, why do so many people not get to that level? Why do most businesses get to good, but never get to great?
NP: First of all, a lot of businesses are founded by entrepreneurs. The skill sets that are required to be an entrepreneur are not the same skill sets required to run a business. As a matter of fact, they might be problematic. The transition from a small entrepreneurial company to not even a big company, but a much larger company where the entrepreneur got in and had a certain passion for what they do, has to do other things that takes them away and forces them to do something that they might not be good at.
RH: I agree with you. Most people who start a business want to do what they want to do and don't really want to run a business. Here's what Tony said: "Momentum. Most people take their foot off the pedal one step too soon." Would you agree with that that most people give up too soon?
NP: In my own experience and in this town? I don't know. I think most of the people who fail here get buried.
RH: In what?NP: I'm talking about the entertainment business and information business. I think that these people start out so driven that they don't realize that they've reached the point where they aren't capable of running the organization they started, but they have their foot on the accelerator and have all kinds of problems that they're ill-equipped to handle.
NP: I'm looking for an inexpensive car to shrink wrap.
NP: Just to put the Podcast One logo all over it.
RH: Does that work?
NP: Westwood One, a company that I founded a thousand years ago, did a lot of recorded concert dates. We had our own 50-foot mobile recording studio. We used to take that sucker out there and we used to do deals with advertisers to sponsor that thing and we'd shrink wrap it with their logo, just like we'd occasionally go to advertisers and ask them if they'd sponsor our studio so every time you're sitting down you'd say, "I'm in the Burger King Studio." I always looked at it as sort of a traveling billboard that went all over the country.
RH: This is why podcasts are so huge. People will ask me what's the best way to market and before you market or before you sell something, find out who you have to sell to. You need to target the right audience. If I was starting out today with a business, and I didn't have a huge amount of money, and wasn't going to advertise with you guys, what's the best way to market?NP: I think that marketing today needs to have two things that go for it: it needs to be convenient for the consumer - that's why I love podcasting because you can consume it when you want to consume it - and I think it needs to be authentic. When you sit in a room like this, how authentic can it be? The fans of this show interact with your fans with you being on this show. I think it is mobility, convenience, and authenticity.
Picking the Right Customer
RH: That's what I learned working in retail. How do I know which guy is going to spend more money than the next guy. Most guys dress like slobs...
NP: But it's fashionable to look slobbish.
RH: It really is. So most guys, even if they look like slobs and have money, will spend money on two things, what do you think it is?
DK: Shoes and a watch.
RH: Very good! Like my fancy Louis Vuitton shoes...
NP: I'm wearing my fancy Louis Vuitton sneakers!
RH: But what I've found out now is that it's cool to not wear to a Rolex and to wear an iWatch because it's tech. I'm not putting you down, Norm.
NP: Nah, you'd never do that. Why would you do that?BG: It's sort of how rich people are driving Priuses around town.
Why You Should Dress Appropriately
NP: I just came from a UC Regents meeting where everyone wears suits and ties, which I did yesterday. But on the second day, I feel that designer jeans, an open shirt, a jacket and some pretty cool tennis shoes are just fine.
RH: Guys, when you look at Norm and that story he just told us, isn't that the Mark Cuban element right there? He's going to the Regents meeting saying, "Look who I am."
NP: Let me tell you something further. Do you watch Billions?
RH: Yes, I love it.
NP: So do I. What it showed me was, if you want to command the room, you can wear just about anything you want if you have that certain aura. This guy wears jeans, t-shirts, and a hoodie, and I have a man-crush on him.
RH: I don't know if I agree with that. It's situational. Put me in front of a bunch of CEOs and I'm in jeans and a t-shirt, and I can command a room. But I think it depends on the occasion. If the presentation time is shorter, it's more important to get people. Here's a quick story: when I first started doing Shark Tank, I did the Canadian version called Dragons' Den, so I used to wear a suit and tie. In our fourth season, they came up to me and said, "We want you to be the young cool one" and had me stop wearing a tie. When I'd go visit customers, they'd say to me how different I looked without wearing a tie. I stopped wearing a tie at work because I didn't want to lose that first minute.NP: I went to the extent that I Googled him to see where he's getting his t-shirts and hoodies, and found the right brands. So of course they cost 10-12 times what a normal hoodie or t-shirt should cost. But my feeling is if you walk in and are wearing an expensive hoodie or t-shirt, you can get away with it if they read your bio.