What It Takes To Grow A Successful Business And Keep Your Spot On Top With Alec Stern

Growing a business is not a walk in the park. But Alec Stern, also known as “America’s Startup Success Expert” and Co-Founder of Constant Contact, has made his way to the top and speaks with Dr. Diane Hamilton on growing successful businesses and scaling companies among various industries throughout the years. He shares his insights on the different ways business owners can propel their way to success, pointing out the importance of what you do with your idea and how you can use it to your advantage. If you’re ready to make your business work and grow, learn Alec’s secrets and make your way to the top.

TTL 839 | Successful Business

 

I’m glad you joined us because we have Alec Stern. He is the Cofounder of Constant Contact. They grew the company from startup to IPO to a $1.1 billion acquisition. That’s not the only company that he’s been involved with where they’ve done amazing things. I’m excited to have Alec on the show.

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What It Takes To Grow A Successful Business And Keep Your Spot On Top With Alec Stern

I am here with Alec Stern who is an Entrepreneur, Speaker, Mentor and Investor. He’s become known as America’s Startup Success Expert for performing hundreds of keynote speeches worldwide for his popular sessions at top conferences like Secret Knock, CEO Space International, City Summit, Powerteam International and a list of others. There’s so much that he’s done. It’s going to be fun to jump on in. Welcome, Alec.

Thank you for having me.

I was looking forward to this. This is interesting. The first thing I did was look you up on your site and I’ve got a lot of questions about some of your pictures. I want to get a backstory on you because a lot of people may not be familiar. It’s always nice to see what was the journey that got you to this point. Can you give me your backstory?

I’ll jump through a couple of quick highlights but we can cover any ground you’d like. Mom was from Boston and Dad was from New York. We were living in Connecticut when my mom was pregnant with me and separately with my sister. She came up to Boston because her network was here, the doctor, family, etc. I was born in Boston. My birth certificate is from Boston. I lived here five days and then moved back to Connecticut. I’m probably the shortest resident of Boston. I’m in Connecticut until I was a teenager and then to New Jersey, Upstate New York, Syracuse University in College.

Since I was eight, I kept saying that I want to move to Boston one day because we had relatives up here I used to visit. I did that after college and then started in big business. Somebody, many levels above me, left to join a startup. I had about $4 million to $5 million of business sitting on the table that I was going to book within the next nine months or so. He said, “I’d love to bring it to the startup and give you a key position but I got two things. One, we may not be around in six months and I may not be able to pay you.” I was like, “Why would I do that when I have all this other stuff sitting here?” I noodled on it and closed some of that business. Three months later, I called him and said, “I want to come.”

I joined my first startup, which in five years to the day we took public, it sold after that. I’m an eight-time cofounder and founding team member of startups with five exits, two IPOs, three acquisitions, and most notably, co-founder of Constant Contact. I was one of the original three in an attic when we started. It was an overnight success in eighteen years and we had our initial public offering in year ten and in year eighteen we sold for $1.1 billion. I was there throughout with an amazing management team and 1,500 employees, 750,000 customers and 8,000 partners. It was an incredible run being the first mover for email marketing/digital marketing for small businesses.

That’s quite an accomplishment. Knowing many people who are in startups, everybody wants to have a unicorn company. Did you expect that to reach that level?

I’m a dreamer but I don’t live by the dream. I’m a little bit more of a realist. I knew we were onto something and it was because we went to our target market early even before we had a product and discuss what we were doing and what we could bring to them. We saw them and get wide-eyed with the idea. That’s what motivated me and others to continue and charge forward. I knew we’re onto something. It wasn’t until we figured the secret sauce on the scale that I said, “This is real. This is going to go somewhere.”

The flywheel of the business getting going is tough if you’re dealing with small businesses because you can’t go walking down Main Street in every city or every country. You’ve got to figure out that secret sauce to scale and getting the revenue flywheel going. All kinds of things take time. Getting partnerships and channels going takes time. Once some of those things started to come into play with several of the startups and not just Constant Contact, we knew that we were on to something, and then it wasn’t just being passionate. Small businesses and startups are in my DNA so helping them energize me every day. I wake up and want to do more for them. With several startups were on to something and it came to fruition.

After a couple of years of grinding it out, we started to see the revenue curve go up to the right with $160,000, $400,000, $850,000, $1.6 million to $2.4 million and so on. Once we started seeing that, I knew we were onto something. We took external funding so there’s always the plan that there will be an exit. We were able to take that year ten to an initial public offering and eight years later, to a $1.1 billion acquisition.

The best prospect for a new business is our current customers. Click To Tweet

Naveen Jain was on my show. He thought it was easier to run a billion-dollar company than a million-dollar company. Do you think so?

For sure. One of the core things that I live by is to stay in my lane. It’s what I’m good at. I know where I can contribute. We brought in an amazing leadership and management team. We had incredible investors and strategic advisors. There are a lot of things that helped along the way. Back in the day, when we started Constant Contact, Software as a Service did not exist. Imagine that you had to install a CD.

In the earlier days, I went out and found four customers. The key thing here is don’t go to family because you tell them, “I’ve got this great idea.” My mom would say, “I’m proud of you. It’s going to be so successful.” That feels good but it’s not going to help. Don’t go to other people you know or people you’ve done business with. Go to strangers. If you can pitch them on what you’re doing and they get wide-eyed, get excited by it and you say, “Is this something you would pay for?” If they say yes, then you know you’re onto something. I got four initial customers and that was the proof point.

We had to install the product. I remember driving out with the CD, plugging it into their computer, and then on the way back to the office, “There’s a bug. You got to bring them another CD.” SaaS was an application service provider. ASP was the first name for SaaS, which shows SaaS to cloud. I’m sure it’ll be something else in a few years. We were one of the first two SaaS offerings for Constant Contact and some of the other companies that I was involved with.

We’re an early first mover. In most cases, if you’re a first mover in a space, you have to build a category awareness first and then the brand awareness. These are my stats. Eighty-five percent of the time, someone is creating a product or service that’s already in existence but the industry has been asleep at the wheel or, “This is how we always use to do it so we’re doing it this way.” Someone can wedge in and execute on something better. The other 15% are those ideas that didn’t exist before like Airbnb, Uber, and Constant Contact for digital marketing for small businesses.

It’s fascinating because you say how we always did it. That’s what I talk to companies about because of my work with curiosity to get them out of status quo thinking. As you’re talking about this background, it made me think of when I sold System/36 and System/38 in the ‘80s and what used to exist and what doesn’t exist and SaaS. I’m teaching a class that’s an entrepreneurship course. A lot of them want to offer that as the company that they create. I’ve had Guy Kawasaki on the show talking about the deck of how it shouldn’t be too complicated. It should have certain things when you’re getting funding. What do you think is the hardest part of creating the deck when you’re trying to get funding?

The biggest thing that I see often is we can go into the deck, which has the normal flow. There’s this large market and here’s the problem with it. Here’s how it’s being served. Here’s what makes us unique and why we’re better. You start and go through these normal things. The one thing that seems to be left out or not identified or known is scale. How are you going to scale this? In some instances, if you were selling to small businesses on Main Street, the answer is not to hire 100 salespeople if your product starts with a free trial and $15 to $20 a month. That doesn’t scale and you’re going to have a major expense bringing all these people going door-to-door. There has to be another way of identifying the scale opportunity.

A lot of times, it’s where’s the channel in your business? Where are the strategic alliances, the partnerships, the affiliates, all of the folks where your target market is hanging out? If they’re an intermediary and you work through them to get to your target market, you can get to a lot more people en masse with some of those bigger ones. At the other extreme, the ones that are local trusted resources that your target market would rely on for either suggesting new things or potentially setting them up with new things or doing it for them. In this case, it’s the small businesses. That piece seems to be missing. When someone is going to go out and seek funding, it isn’t so that we’re going to go figure out how we’re going to scale it. You have to have some view into that and most people don’t.

You mentioned that it took you eighteen years. What advice would you to anyone reading? A lot of people want the 3 to 5 year IPO or whatever you want to do to get out in 3 to 5 years. Is that a realistic timeframe? Could you have done your eighteen years in less time?

TTL 839 | Successful Business
Successful Business: The voice of the customer has always been front and center to anything.

 

We were first mover for small businesses with regard to email marketing and digital marketing. We were first on a SaaS platform. There were a lot of things that exist now that would make it easier and possibly could speed some things up. At year ten, we went public. Our initial public offering was a huge milestone and no one was sitting there saying, “What’s next? Who’s going to buy us?” At that point, we were successful in managing the business with this incredible leadership team to continue having that revenue curve go up to the right and have our growth. On the back end, we’re successful in keeping our churn low.

The second problem I see with a lot of businesses is whether they’re good at recruiting folks to take on products or services. How many are active in total? Sometimes, that’s a subset. How many are churning? How many are losing? Sometimes the churn numbers I’ve heard were 50%. You have to ramp your business the next month and then your growth on top of that. You’ve got to be managing it on all ends in which we were successful in doing. A couple of years to get it all figured out and then start that flywheel. It had to ramp to a point where the number of customers, revenue, expense management and all kinds of things had to be aligned for us to go public.

I’ve been in situations. I had another initial public offering that was five years from the day that we started. I’ve had acquisitions and the shortest one was nine months. I have a vision of this succeeding but it’s more about helping the target market. We would set a vision on how do we revolutionize the success formula for five million small businesses or whatever it may be. Put your focus on that and worry about building up the business. Many will say, “I want to exit in 3 to 5 years.” What happens at year 6 or 7 if it hadn’t happened yet? Are you going to leave, quit or give up? The focus is on driving customer success, delight the customer, grow the business, make an impact, and then the rest should come.

You’ve known what it takes to get this level of success. When I was looking at your website, I realized that you won the 2020 City Gala Visionary Award. Did they have that with all that’s been going on? I saw a picture of you with Demi Moore.

She was a recipient of a Visionary Award as I was, Richard Dreyfus and Mark Victor Hansen who wrote Chicken Soup for the Soul. Noel Lee, who invented Beats and Monster headphones. We all won. There are a few Legend Awards in there, which I prefer to hold off getting that one just yet.

You want to do more before that.

I’d like to get a visionary or some other awards maybe first and move to legend later in life. I did get a Legend Award for Entrepreneurial Achievements. I was fortunate that in the last five conferences that I’ve spoken at, I’ve gotten an award – a couple were virtual but the others were in-person, I’ve got a different award for entrepreneurial achievement and success. Also, keynote speaking and a few other things. I’m honored that that was the case. I never expected it would be that many and in a row. The City Summit Gala was amazing. The Oscar weekend was incredible. The founder and chairman host passed within a couple of months after the last one that we had, which was so unfortunate and a terrible loss, Ryan Long.

I didn’t know that. I’m sorry to hear that.

It was put on hold for that and all the other stuff that happened. They’re teaming up with Secret Knock, which is one of my other top favorite conferences and also one of the top conferences to attend. In September, there will be Secret Knock. On the last day of Secret Knock will be a black-tie gala with the World Summit.

Is that in LA as well?

Curiosity is powerful for creativity and figuring out where you are going to go with something. Click To Tweet

It will be in San Diego.

Was City Gala in LA?

It was a celebrity gala around Oscar night.

I went to one. They were pretty fun. I liked going there. I’d like to do it again. I missed two but I was there a couple of years ago. They were cool events.

It’s coming back with the assistance of Greg Reid and the Secret Knock team. I’ll be speaking at the conference and attending the gala. I’m excited for that and let the legacy of what Ryan had created continue.

You’re starting to see more in-person events. I know Thinkers50. I’m on the Thinkers50 radar out of London. They were having it virtual until they can hear more. It may be both kind of hybrid. What are you seeing for events? Are you seeing more live conferences coming on the horizon?

I did my first one. I spoke at Sticker Shock Speaking Academy with Daniel Gomez in San Antonio where I was fortunate to get a keynote speaking award, which was amazing. That was live and great. I did a follow-on with something that same trip in a live TV show. I was in Dallas. I did a live TV show in Dallas and then we moved on to an event in Houston. My next event is at the beginning of June in Montana. I’ve got a few others trickling in and coming to the fall. I’m starting to see things coming back. Things are being managed well. The last ones I did were spaced out. One person per table and they were all social distanced between. They were asked, temperature checked and hand sanitized. It’s well organized. They have to make sure that it’s safety-first.

Do you ever play the drums at any events? My dad was a drummer. I was fascinated that you played with Toby Keith’s band in Vegas and different things. Do you ever use drumming as part of your talks at all or is that something you do on the side?

I did an event a couple of years ago that the venue had a drum set up on stage. During the sound checking and all the stuff early in the morning before the event started, I went to the sound guy. He’s testing and playing music. I said, “Any chance that I could drum along to some of that music? I’ll make sure I’ll take good care of that set.” He handed me a set of sticks. I was up there drumming. All the staff and all the speakers were milling around but nobody knew that I was drumming because it went along with the music. Once they saw that, the host was like, “Oh my god.” People came running up and took some photos and video. At the end of the conference, they called me up to get on the drum set. This was the hardest thing. They’re like, “Do a solo.” It’s funny. There’s no music.

TTL 839 | Successful Business
Successful Business: If you are the first mover, you run the risk of competitors showing up and getting a ride along.

 

Did you do it?

They put on something to end the conference so I drummed along to that. They got some footage with it. I’m pretty adept at using two knives, some glasses and a couple of plates turned over. I’ve done that to a few other conferences with others. Some other friends would bring their guitars, we do sing-alongs and I would drum along. A lot of Facebook and Instagram lives were caught and pushed out for others to see. That was a lot of fun.

It’s fun to look at your success. I was looking at the things that you’ve done. In addition to all the people who read this, I also put these into my courses. Since I teach a lot of entrepreneurship, I’m curious about the main topics that you pick when you speak. You talked about look big, act big, become big. That made me think of the book by Reid Hoffman and Chris Yeh. Chris was on the show and we were talking about the “fake it until you make it” thinking in some of these startups. What do you think of that? Do you risk the Theranos situation where you’ve faked it too much?

The general topics are usually early days lessons learned and what I’ll call pillars for achieving startup success. Those are a bunch of principles from my own experiences of having started several companies and empowering folks with some ideas of things they can do in the earlier days. Some don’t cost money but are important to take your idea and bring it forward. Once you have the idea, how do you move it to start to scale? Look big, act big and become big is around perception. It’s less about faking it until you make it. It’s more about perception.

I’ll ask the audience, “Show hands. How many have a business email address that ends in Gmail, Yahoo, etc.?” Half the room, hands go up. I’m like, “How serious is someone going to take you if you can’t afford the $5 a month to pay for a business email address? You have your website, MyCompany.com. What about You@MyCompany.com?” Start there. With perception, it moves into the things for looking big. We get on phone calls and we’re going to call a strategic customer, a mentor, an investor and a partner. Oftentimes, we want to have a quick conversation. Some people won’t even put anything in front of them. They want to chat and see if there’s a fit.

I say to people, “You should create a five-slide presentation. Who we are, what we do, what makes us unique, what our customers are saying, and how we might work together or collaborate in a partnership.” You brand that with your logo, put your colors in there, create this deck, you get on a call and say, “I’ve created a few slides.” Set up the call, “Would you be okay if we kick it off with those?” They always say yes. Now, you look big. They don’t know that this is your first call of this type. It doesn’t matter. You look big and you’re acting big. You’re professionalizing what you’re doing. You save the PDF and you send it to them. They talk about it with the team and then they say, “Let’s have a follow-on call.” Now you’re on with the team and you say, “I know you saw the deck. Some of you may or may not have seen it but I would love to kick off the call, level set and share a couple of slides to frame the conversation. Would that be okay?” They always say yes. You’re owning this and you’re looking as best you can.

The other thing is when you’re out and about. You’re going to several companies. We couldn’t afford to even have a booth at a conference or even pay to go to the educational portion but we would go to the free exhibit hall to walk around. We had badges of attendees and try to stop them to talk or whatever it was. Talk to some of the other exhibitors and the speakers. We would put on branded shirts. The 3 or 4 of us be would be walking around with a button-down, it’s all branded with our logo and a tagline. We would have pens and we’d have our business cards. To a person, they’re like, “You guys must be big.” I remember this one conference, there were four of us there, we were dressed in our shirts, and we had brought on four interns that week. Somebody was like, “You guys must be big.” I said, “We are. We doubled in size this week.” It’s all perception.

My last book was The Power of Perception, I love that you’re talking about perception. When you’re talking about this deck, that’s like an elevator pitch to some extent in visual form. People need to have these things set up. I know a lot of my students, we talk about these things. In my research, I found the factors that were associated with perception. It was a process. You evaluate, predict, interpret, and then you correlate to come up with these conclusions. People take all this into their thought process when they’re creating what they think of you or what they think of your products. It’s challenging to understand perception when you’re working globally. What are some of the global cultural type of perceptive issues that you’ve helped people deal with? I know you do mentorship and you do many things. I’m curious what you hear in terms of that challenge.

You would probably know the topic better than I. From my experience, there’s some common ground no matter where you go. Sometimes, we’ll overcomplicate things or we want to get down into the weeds. It doesn’t matter where someone is at around the world. You might confuse them or you might lose them. One of my phrases is spray and pray. I’m going to keep talking, sharing more, and pray that you saw something that interested you. We have to back up. We have to qualify and understand them in the role that they’re playing. What they’re doing with stuff may be similar to what you’re bringing to the table.

When it’s your turn to present back, that’s when you’re like, “Imagine if we could do X, Y or Z, would that be of interest to you?” You’re leading them down this path for them to perceive that there’s a good fit here because you’ve listened to what they had to say and you’re playing back what you’re doing that could help them in some ways with what they’ve said. It’s qualifying and asking questions. It all starts with listening. You have to listen first. Oftentimes, we’re more concerned about what we’re going to say next than listening.

Oftentimes, we're more concerned about what we're going to say next than listening. Click To Tweet

If you took the letters of the word listen and move them around, it’s spelt silent. You have to be silent, present and listening to what they’re saying because they’re going to give you the cues. No matter what culture or where you are in the world, if it’s talking to a customer or a partner, there’s going to be a lot of common languages that you would identify. You want to leave them wanting more. You’re going to give enough for them to be like, “Tell me more. I want to hear more about that idea.” It applies wherever you are. Be thoughtful and adapt what you’re saying to the audience.

You hit that on the head and it’s important. Most of my research is based on curiosity. You have to ask questions and you have to listen. You have to have the question to listen to sometimes. Sometimes they’re not going to talk about some of the things you need to know about. What’s fascinating to me are the things that inhibited curiosity, which are fear, assumptions, technology and the environment. We’re afraid to ask. We don’t want to look stupid and all that kind of thing. We make these assumptions. We have this voice in our head, “I’m not going to be good at this. This is not going to work out well.” Sometimes, we over and underutilize technology. The environment and everybody around us sometimes influences our abilities because they said, “You should go this direction or that direction.” I’ve worked with companies to avoid issues like, “I’m turning out to be the next Blockbuster and Kodak situation.” What advice would you give for people who maybe are stuck in status-quo thinking? How do you know you are? How do you get out of that? How important is curiosity to this whole picture?

I’m an idea guy and I’m an innovator. Every day, I’ll think of another new idea. I’m curious about how things work. Ever since I was a kid, we used to go to a lot of flea markets, antique shows and stuff like that. I used to go up to all the vendors and be like, “What is that? What’s that for? How does it work? Why would someone use that?” I was always curious. Curiosity is powerful for creativity and to figure out where you’re going to go with something. People would come to me and say, “What do you think of my idea?” My response always is, “What does your target market think of your idea?” “We haven’t gone to them yet. We’re in stealth mode. We got to be close to this. We can’t talk to them. We’re not ready. The website is not done.”

In several companies before, we had a product. I went out and talked to small businesses and pique their curiosity by asking them questions first and get them talking. What’s your goal and vision of the business? Where do you see it going in the next three years? What do you have that you want more of? What don’t you have that you wish you had? Are you looking to save time, money, increase revenue or increase engagement with your customers? Do you want more customers? What do you want? They’ll tell you. They’ll give you a little bit of a roadmap, then leading back and say, “If we could provide you a product or service that could do X, Y or Z, would that be of interest to you?” Now, they’re curious to be like, “They have something that can help me.” You’re not leading with the spray and pray of, “I’m going to keep talking and hope, ‘Did that interest you?’” They’re like, “No.”

They get that “build it and they will come” mentality sometimes. I’ve heard some famous people don’t even go to their customers but they’ve built such a following that they’re in a different position than somebody who’s starting out. To me, it makes much more sense to do what you’re saying. How do you even know if this is even filling a need? Sometimes people don’t know what they need until you give it to them. Do you ever feel like that’s the case?

Especially if you’re doing something new or different than the way it was done before, which is both scenarios of a brand new idea that didn’t exist before or executing on something existing that the industry has been asleep at the wheel, there’s a better way to execute it and you have that. In either case, you’re bringing something to somebody. You’ll pique their curiosity and their interest. First, they’re going to see that you care about them. You listen and care about what they have to say. Now, you’re playing back something that you’re going to bring to the table that could help them in one way or another to the goals or the vision for what they want in their business. You’ll pique their curiosity and then it leaves the door open for them to want to hear more. Of course, saying, “Would this be of interest to you?” You share a little bit more. “Tell me more,” and you share more.

It’s like, “Is this something you see yourself paying for?” They say, “If you could do that for me, I would pay for it.” It’s leading them down a path in a conversation that will have success one way or another. A success in knowing that there’s a fit, they want this and they’ll pay for it. If it’s not for them, then it’s like, “Can you explain to me why you don’t see this as a fit?” All of this is amazing for you to figure out what it is that you have. They’re going to say, “I was thinking it was going to do this instead of that.” You’re going to hear it from them. For me, getting out there early and often and talking about the target market certainly will help. If you’re successful and you’re going to go do it again, you have a following, you’ve been able to get a lot of investment and you can pour a bunch of money into marketing out of the gate and drive people to it, they’re going to come to you because you have a proven track record or know you from an industry. It’s like, “So and so is doing it again. I would love to use whatever they’re doing.”

The reality of it is that when we’re starting, we don’t have that unless you’ve got a lot of money from friends and family or maybe because you’ve done it before and you get some early venture funding or Angel investing, whatever it may be. You got to work with what you have. That’s where you go to your target market and get that feedback for what you’re creating. They might give you some insight as to what you should change or add to it versus going and build it, bring it to them and they’re like, “This doesn’t satisfy what I’m looking for.” You then do it again.

As you’re saying that, it reminded me of how you started early before things had developed in SaaS and different other areas. I was wondering, is it easier to be second to market? There’s already Myspace and you come in with Facebook. You make it better, 2nd, 3rd, 4th or whatever to market. What early lessons did you learn based on that?

TTL 839 | Successful Business
Successful Business: You have to take time for yourself. You have to step back. There are times when you have to think about working on the business and not in the business.

 

With eight startups under the belt, a couple were first movers and others were executing on something better than what was out there to date. I’ve done both. The thing about a first-mover scenario is you have to educate them on this new category of an offering. You have that challenge and you have also potentially the expense around educating them on a category. Once they know about the category, it’s then moving over to tell them about the brand and your business. It has an extra layer and a challenge there. If you are the first mover and you’re educating on the category, you’re at the risk of competitors showing up and getting a ride-along.

There are some additional challenges, a little bit more time and possibly some additional money that’s going to come into play as a first mover. I’m all-in for being a first mover in a category. It’s a branding exercise and messaging exercise. You figure out your target market fit and then the scale of opportunity. I’ll take that all day long. If you’re in that pole position and you want to stay there, you can’t sit back and be like, “We’ve created it. Let’s sit back and get tons of customers.” You got to keep iterating, getting feedback and enhancing. You can stay ahead of the others in the race by continuing to do that and get some land grab of customers. In a few cases, being the first mover, the next thing you know 50, 80, 100 companies show up doing what you’re doing. They’re like, “We can do that.” What are you doing to set yourself apart, be different and stay in that pole position?

You were talking about it being a branding exercise. It brought to mind, I wrote a brand publishing course for Forbes. At that time, I remember going to the CMO conference at Forbes and all these CMOs are struggling with creating messages that touched the customers. They feel like they’re personalized messages but doing it at scale. How much did you struggle with that?

I’d leave that to the marketers because they are those who will give you a more specific answer. The thing that I think about is that customers are sitting there saying, “Do they work with people like me? Do they work with small businesses in general? Do they work with restaurants? Do they work with real estate firms?” You’re going to be marketing to the general of small business. Of course, back up on that and say, “Define a small business.” If you went around a room of ten people and ask them, “What does a small business mean to you?” You’re going to get ten different answers, small and medium business, size, revenue, number of customers and so on.

You have to be granular and specific to who your target market is. Also, understand how big of a market opportunity is for that specific target market. The small businesses on Main Street, which are solopreneurs or maybe 5, 10 employees. Understanding that and then getting prescriptive about your messaging to that audience and stick to it. Oftentimes, we feel the pressure to be like, “Let’s go out and market too. Instead of having 1,000 customers at $20 a month, we can get one larger customer.” Of course, that sales cycle is longer and it’s a different offering. You’re chasing features to add and stuff to keep enhancing at the enterprise level. There are a lot of challenges there.

Knowing your target market, get an offering out there that works and then survey, ask them and understand what else do they want in terms of the user interface so it doesn’t have friction. What else do they want with features? What else do they want with the offering? Listening to the customers and letting them know that you listen and that you care. Oftentimes, we’re rushing to go get the new customer. Our best prospect for new business is our current customer because they’re a sphere of influence, trusted resources, telling others and so on. We lose sight of some of that. The voice of the customer has always been front and center to anything that I’ve been involved with.

That’s important. I’m imagining all of these things that happen to get you to this IPO status and probably things you had never considered. You were one of the original three who started this company in an attic. I know you do a lot of mentorships now and all that. Should people get into masterminds and that type of thing? What do you think of masterminds?

I was one of the original three in an attic. That’s correct. The flywheel of the business hadn’t started yet but we took in funding because we want to accelerate everything that we could do. We brought in an amazing leader, Gail Goodman, as our CEO and president and then a great leadership team. As we were moving toward going public, we had an eye on all of the systems and processes. We were making sure we were all buttoned up on all the things that would be required if and when that were to happen. When it got to the point where we had hit the levels we needed for us to do so, we were in good shape. I’ve seen a lot of businesses that are like, “We got to double down and spend millions to get ourselves set in all these things that are going to be needed.” Our team was great and brought in the right people who had an eye toward that so we weren’t reading books on what you need to go public with. We had the right talent to lean on for having done that and what was required and the extension of an amazing team. I wanted to touch on that first and foremost.

I was curious what you thought of masterminds and going in that direction.

Generally, you got to take time for yourself. You’ve got to step back. There are times you have to think about working on the business and not in the business. Especially when you’re a startup, you get heads down working in the business. You got to step back. A lot of these things, you’ll it hear from others. You’ll get educated on and get some great golden nuggets from different people as they’re speaking. Move over to a mastermind where you’re qualifying that the leaders of that mastermind have been there and done it.

You have to be present and silent to listen to what others are saying. Click To Tweet

The audience of the other attendees within the mastermind is of like mind and maybe similar in terms of size or where they are in their journey. You can learn from each other. You also hope that some are ahead of where you are so they can foreshadow and tell you some of the things and what’s to come. I’ve spoken on many masterminds. It creates this collective. It’s a community and everyone can learn from each other and help each other. It’s a great thing. It’s worth investing in yourself for the ultimate success of you as a leader of a business but also the success of the business as a whole. There are a lot of things you can take away from those experiences.

You’ve taken away a lot of great experience from all the things that you’ve done with eight startups, five exits, two IPOs, three acquisitions, everything that you’ve done. You talked about, “Effective immediately, you’re a thought leader.” I thought that was an interesting statement. Can you expand on what you mean by that?

Anyone who’s starting a business is passionate about what they’re doing and they’re trying to do something different. If you’re in the 85% of someone who saw a product or service and said, “That product, if it had these features, it’d be better. If that service was delivered this way, it would be better,” you’re doing something unique. Package up what you’re doing without giving away the secret sauce and talk to the thought leadership and the best practices. It will pull people into the mix to want to follow you, interview you, feature you or partner with you. Think about what that is.

In a conference, I’ll have everyone raise their right hand and I dubbed them all, “Effective immediately, you are all now thought leaders. Give yourself a big high five.” We have to have the mindset of thinking about what is it that’s our unique value prop and package that up for what we’re doing is better and unique from what else is out there. There are billion-dollar markets that there’s an opportunity for someone to come in and create a new product or service. I see them all the time. I’ve created some companies and some ideas in some of those markets. If you want to go off and see what’s out there and it’s something you’re passionate about and work something in that 85% grade. Maybe it’s something brand new and the 15% that doesn’t exist. Be innovative in creating something for a target market that hasn’t existed yet.

What market do you think is right for reinvention? We know education needs some help and transportation got Uber. Is there something that you think is the next big thing?

A day doesn’t go by that I don’t experience a product or service and say, “That could have been done better.” We’re not talking about meeting our expectations. We expect them to exceed our expectations. When they don’t, that’s an opportunity. That is around the operations of a business. Sometimes, it’s the service delivery or it’s offering itself, “This is how we always used to do it.” I’ve seen it in medical devices. I’ve seen it in consumers. I’ve seen it in a lot of general categories.

The opportunities abound with the supply chain, transportation and health care. Education is a general theme but it’s in different vertical industries as well. There are a lot of places. If someone is passionate about an area and they dig into it a little bit and experience it, they’ll be like, “There’s an opportunity here.” Package something up and go talk to your target market. You don’t have to wait until you finish a product. Go talk to them about it and see if that would be of interest, “Is this something you see yourself paying for?” When you get that, yes, you may be onto something.

You’re an idea guy. I’m curious, what are you excited or passionate about now? I know you’re speaking and doing all these things but what’s next?

The old African proverb, “If you want to go fast, go alone. If you want to go far, go with others.” I don’t do anything alone. I’ve been fortunate to team up with others in different areas. One thing I’m excited about is we’ve created an innovation think tank. I’ve two other cofounders that are rockstar mechanical engineers. We’ve been developing products, B2B, B2C and medical devices. We’re looking at markets and disrupting different markets that hadn’t been disrupted in a long time.

TTL 839 | Successful Business
Successful Business: Anyone starting a business is passionate about what they’re doing, and they’re trying to do something that’s different.

 

We’ve spun out four different products. It’s all product-related, manufactured out of metals and molded plastic. We sold one to a leading company in the industry, a medical device. We have another disruptive medical device and we’ve got a consumer product that’s in the market. The medical data of the medical device is underway and getting funding. We’re doing feasibility studies and so forth. We have a B2B product that’s in the market and selling. We have a consumer product. I’m excited about that. I’m also excited about some stuff on the tech side that I’ve helped cofound. We’ve got a couple of things launching that I’m excited about.

Any new books on the horizon?

I’ve been doing a lot of collaboration books where I’ve been a contributing author. I have book one and possibly two. I’ve got to focus on it. I’ve got pillars for achieving startup success with a different name. Some of the ones we’ve talked about here on your show, I see that as possibly book one.

I would love to read it. I’m fascinated by all the work that you do. I knew this was going to be an interesting show. I know many people are going to benefit from this. They probably want to know how they can follow you or find out more. Is there some site or something you’d like to share?

If you go to AlecSpeaks.com, you’ll find all my social channels. You can see what I’m up to, see some other prior talks and so forth. If there’s an opportunity to message in about mentoring or if you need a speaker for an event, I’m always open to talking about different ones.

You can also see a great picture of you with Demi Moore. On your site, you had some great content. I was looking around and a lot of people could learn so much from you. This was such a great show, Alec. Thank you so much for being my guest.

It’s my pleasure. This has been a great interview. I appreciate the questions and the conversation.

It was fun.

I’d like to thank Alec for being my guest and Mark Victor Hansen and Crystal Hansen for introducing us. It was such a great show. We get so many great guests on this show. If you’ve missed any past episodes, you can catch them at DrDianeHamilton.com. You can go and find all the stations where we air. I hope you enjoyed this episode. I hope you join us for the next episode of Take The Lead Radio.

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About Alec Stern

TTL 839 | Successful BusinessAlec Stern is the Co-Founder of Constant Contact where he grew the company from start-up to IPO and $1.1 billion acquisition. He’s been a co-founder or founding team member of 8 startups with 5 exits – 2 IPOs and 3 acquisitions. He is an entrepreneur, speaker, mentor, and investor. He has become known as “America’s Startup Success Expert” for performing hundreds of keynote speeches worldwide and for his popular sessions at top conferences like Secret Knock, CEO Space International, City Summit, Powerteam International and Habitude Warrior.

 

 

 

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