1: Start With Why – Mike McFall

Doing a startup feels super weird. That's the best way I can say it. You don't really know what you're doing, but your ego feels the need to project confidence and you're trying to be your authentic self, but you're also trying a little bit to copy the people that you see on TV and on Twitter and the people who've been successful that you read books about. So I remember that feeling really, really well. And this podcast is the gift I wish someone had given me back in 2006 when I was in grad school starting my first company. The episodes they are short and they have a point. Every one of them has a lesson, a short simple lesson that's paired with a short true story told by somebody other than me. The story isn't meant to illustrate the whole point. It's just kind of like a touchstone that goes along with the lesson as a pairing. Not everybody's going to appreciate and like listening to these episodes. Here are the two things that we're assuming about you as the listener. If these two things are true, I think you're really going to like it. First, you want to start a company, but you also have a lot of other things you could do with your time, maybe internships, or a job out of school, or you have a career that you're not very sure you want to leave to do a startup. So that's why we're going to be really honest about the good and bad parts of doing a startup, so that you can make the right decision about whether this career path is good for you. Assumption number two is that you're smart and driven, but you don't know exactly where to start building your company. So it might be a little bit overwhelming to look at the whole list of things that you need to do to start a successful company and you're not sure where to start. Anybody can make this seem complicated and our job on this show and on this class is to prove that it's not that complicated. The key is to pick one or two things to work on at a time, knock it out of the park on those one or two things, and as long as you're picking the right things, you're going to be successful. This is the very first episode in the series. The theme is Start With Why and the stories told by Mike McFawn. So here's the background. You can start a company, no doubt about it. You're plenty smart. There are enough opportunities out there. The more pressing question is whether you actually want to do it. Everybody likes the idea of doing a startup, but it's a lot of hard work, and 90% of them fail, and the outcomes are highly variable and it can take longer than you expect. Plus there is this opportunity cost to skipping your internship or leaving your job and messing up your career to go do it. So before you commit to doing a startup, it's important to articulate why you're doing it. What is it that you hope for? What are you afraid of? What would happen if the company failed? Is there a less risky way that you could pursue the thing that you're excited about? I acknowledge the title of this episode is exactly the same as Simon Sinek's famous TED Talk, but the guy totally nailed it. And he said it right. You got to start with why. So the story you're going to hear is told that Mike McFawn is the co-founder and co-CEO of Big B coffee. There are more than 250 Big B coffee locations around the world and they're growing like crazy. He just wrote a book called Grind, which is a practical guide to starting a new business that skips past the NBA and goes right to the nuts and bolts of building a successful self-sustaining company. I read the book. It's great. I recommend it. Most importantly, Mike is the new co-instructor for this course. Ha ha. He and I are going to be teaching Finding Your Venture Together in an Arbor on Thursday afternoons this fall. The story Mike tells is a throwback to the early days of Big B when they were just getting off the ground. And it's about the level of commitment and passion that both he and his co-founder had and how he knew it was going to be a good partnership. My business was formed on a handshake with my partner. We had gone for a four-hour walk through East Lansing. At the end of that walk, we shook hands committed to starting a business together. And I knew him and I enjoyed the business, but I didn't know him well. And I think back to, in my opinion, a business partner that you're going to work with, to me, passion and commitment is the number one ingredient. And like I said, I knew him. I didn't know him well. One morning, one after, I used to, sorry, I used to come in at three o'clock and do the closing shift. And I walked in one day and he was there and he approached me and he said, he said, "Hey, Mike, you're aware that we always have some of the cash register every minute of every day to greet the customer within three paces of the door every time." I'm like, "Yeah, of course, Bob." I mean, yeah. Okay, well, well, last night between 1038 and 1047, there wasn't anybody at the cash register. I don't know what they were doing on or they were, but there was nobody at the cash register. And I said, "Oh, you know, I'm sorry, I wasn't aware of it and I make sure it doesn't ever happen again." And then he said, "Well, like, how did you know that?" And he kind of sheepishly admitted that he was sitting across the street with binoculars staring into the front window of the store watching what we were doing. I think at that moment, I realized this is a guy I want to be partners with. I mean, this is a guy that cares enough about his business, that he is going to sit in the middle of the night, essentially, with binoculars on watching the operation and bringing value the next day on what he saw. Instantly, at that point, I knew his passion, his commitment for the business was like unshakable. 25 years later, he hasn't proven me wrong. I love that story, especially the part about the binoculars. Okay, let's contrast that against a story about someone starting a business who doesn't necessarily have that same passion. And this one is about one of Mike's franchisees. We operate a franchise company. And so our role is to support people in building their businesses. And but it really takes the owner operator to be there, to be engaged, and to be executing, minute in, minute out. And that's one of the primary ingredients to the success of the businesses, their commitment to enthusiastically engaging the system and so on. And I remember, we always use open stores on Tuesdays. For many, many years, we always open them on Tuesdays. And I still don't know why, but we did. And so I remember we opened the store on Tuesday, and I called the store Friday afternoon to check in. I had something I needed to communicate to the operator. And so I asked for him. I said, "Hey, it's the owner there." And the the barista who had answered the phone said, "No, he's not. He's taking his family to their condo up a point for the weekend." Instantly, I knew a guy who is going to leave his business three and a half days after opening for a long weekend that that business wasn't going to work. And it proved out, right? And I never could understand that mentality. We were, when we started our business, you know, we were in it every day, fully for a decade, right? We didn't start taking vacations. We didn't say, "Yeah, it was full on commitment to it." And so that, that, I knew instantly that that that guy wasn't going to make it. As an entrepreneur, you are the power source of your business. You are the energy source of your business. And your attitude fuels the business and fuels the attitude of everybody there. And I've always said, "You're never going to have an employee who's going to be more enthusiastic and more committed to the business than you are." So if you're not that committed and you are not that enthusiastic, that's how your employees will represent you. If you set the example of being completely fired up and being there engaged and committed, they will too. And that will be the expectation. And so it's like, and I think people underestimate how important the energy and the attitude of the business, which is essentially the people in the business, is to the success of the enterprise. And it always boggles my mind, right? Like, you walk in and you ask somebody a new business, like, "How are you doing? How's the business?" You know, it's okay. We're struggling a little bit, but you know, we're going to see it through. What? Like, I don't care if you, how you present that answer is how your business is in the mind of that consumer, right? So you present it like, "Oh my God, it's exceeding our expectations. It's been amazing. It's been exhausting, right? But we're loving it and, you know, we're super thankful that we engaged into this, right? Like, that's an answer where people walk out going, "Man, that place is happening, even if it isn't." Like, saying it exceed our expectations is not a lie, right? Because nobody knows what your expectations were, right? As an example. So that to me is what happens is you see the commitment level, the energy level, the focus, just start to diminish when the owner operator is detaching. When my partner looked at me through binoculars and I learned that story, I was like, "Wow, we're playing majorly ball here. That was a cool moment for me." So the lesson of episode one is start with why. Understand why it is that you want to start a company and make sure you have the energy and the enthusiasm to actually see it through. And before I go, I just want to say a couple quick thank you. Thank you to the University of Michigan for supporting me and building this podcast as a supplement to the course. Ellie from Academic Innovation, thank you very much for your help. Thanks to my family for allowing me to convert our living room into a podcast studio. Thanks to Evan Eufer for pushing me to do a good job and see this project through on our morning drive to the gym. Thank you to the Ann Arbor Tech community, which is so full of interesting, cool, generous people who are willing to share their stories and be supportive. The song that you're hearing on this episode was created by [email protected]. There are going to be 13 episodes in this first semester of the podcast. Each one maps to the lesson for that week in the class. The next one is on Business Fundamentals. It's also a story told by Mike Benfall. I hope you'll check that one out along with all the other really great stories right behind it.