Rich Christiansen - Parallel Entrepreneur, Entrepreneurial Expert

One of my good friends and a individual that I just love to associate with is Garrett Gunderson. Garrett is the author of the New York Times Best selling book Killing Sacred Cows.

Garrett Gunderson

The financial capital was the most insignificant part of the success formula. You already had millions of dollars of intellectual capital and relationship capital.

Garrett was right! I loved it and since that time, I have used this formula in EVERY presentation I have done. This is indeed a Bootstraper’s magic formula for success.

Drum roll please, here is the world changing formula dissected:

Intellectual Capital + Relationship Capital = Financial Capital

Intellectual Capital
The number one thing that you need to do is be smart and be intelligent. If you are not smart or intelligent, then you need to study, go to seminars, read, and learn. Incompetence and Competence always show their head and in order to make money, you have to be smart at what you are doing in order to create value. If you are not adding value then anything you do is temporary and … here comes some hard words …. you are a sham. Don’t be a flim flam man, GET SMART!

+ blend it with or add it to

Relationship Capital

Now that you have some grey matter in your head, build relationships and use your intelligence to serve and help people who have influence and are like minded. This is the #1 key that most people miss. I think this is the most important part of the equation. If you serve those around you, solve problems for them and develop relationship capital just like you do money in a bank, when you go to take action you will be able to call on these individuals.

Draining relationship accounts is just like running your bank account into overdraft. But it is longer lasting. People do not like to be around someone who drains their relationship account. It is easier to go get more money than it is to just go get new friends and associates.

Put tons of deposits into the key relationships and you will NEVER go wrong.

= Business is the conduit for financial transactions and it is why we are all entrepreneurs

Financial Capital
Wealth creation and money will naturally come as a by product of combining Intellectual Capital with Relationship Capital in the form of a business.

Cool huh? ….. The best part is it is true and it works.

I remember early in my career staying late one night setting up the computers to perform perfect, then cleaning the floor until midnight for a big demo we were doing. I did this to serve my mentor and make him look good. I did not consciously think through the implications, but indeed I got a raise for this.

Intellectual Capital + Relationship Capital = Financial Capital

I just love this concept and challenge you to now go get smart and go serve people.

PS …. want a bonus learning? Here it is. The way to turn the + (plus) in to a * (multiplier) is to do leverage events such as write a book or speak in public. This adds value and intellectual capital in a multiplication impact rather than a single additive. That is unless it is really crappy work, then it is a / (divider) and that is not a happy thing.

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We did it!

Yesterday, CastleWave was formally sold to Imergent. CastleWave will be used as a key infrastructure component in Crexendo which is IMergent’s venture into creating a nationally dominant SEO Marketing Agency.

This was a cradle to grave (hopefully not grave) exit in 2 years 3 months and 10 days. CastleWave was formed on November 1st, 2007.

As all of you know, this business was created with $5,000 to prove the principles in the book. CastleWave indeed was profitable from day one, generated over $1MM the first year at 50% margin and this past year did apx $1.4 MM. We have offices in both NYC and Utah and presently have 23 employees and apx 30 active clients ranging from smaller companies like Bank On Youself to large customers such as OpenTable and IMax.

What an amazing ride the past several years have been. We have built an amazing little team which was initially based on 4 teenagers that we affectionately refer to as our linker boys. The team now has 5 amazing account managers, several project managers, and a whole slug of off the chart smart linker boys.

The main thing I will miss will be the association with this high energy can do little team. I personally thank this rag tag team for their efforts and want to let them know of my confidence and belief in them in their future careers. I expect great things from you guys.

CastleWave Team

I am thrilled that we were not only able to talk about the principles in BootStrap Business, but prove it. Indeed, we ate our own cooking and went through the entire process from chapter 1 to now chapter 19 the exit.

It is really a satisfying feeling to be able to write this post closing both chapter 19 in the book and in the business.

With this exit, I will now be freed up to be much more active in dialog, discussion, and yes posting to the blog. It is perfect timing with the blogs on the book now coming to the end of the book. If you have any specific blog topics or discussion items you want me to cover, please email me and I would be happy to hit them. rich at bootstrapbusiness dot com.

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‘They’re the best and the brightest. The hip and the happenin’. The bold and the brave.’

Rich was recently recognized by Utah Valley Business Q magazine as one of the ten coolest entrepreneurs in Utah Valley! With the incredible amount of entrepreneurs and small business start-ups here in the Valley, this was a really fun recognition to receive. You go cool cat!

Here is a quick sampling of the article:

‘Rich Christiansen is the definition of entrepreneur. The tried-and-true businessman has founded 28 companies - eight of which had been multimillion dollar successes. He even co-wrote a go-to guide for entrepreneurs called “Bootstrap Business” and founded an uber-successful company (CastleWave) simply to test the principles in the book. We know, right?’

Check out the full question & answer article in the Winter 2009 issue of BusinessQ:
http://utahvalleybusinessq.com/winter2009/cover.html.

Congrats, Rich!

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Attaining and maintaining an abundance mentality is absolutely crucial to your success as an entrepreneur. Although this truth ties in nicely with the idea that life gives you what you expect it to, it deserves its own consideration. What is an abundance mentality?

An entrepreneur with an abundance mentality has the ability to recognize opportunities. Look out your window. Do you see $100 bills lying in the streets, just waiting for you to pick them up? They are out there; you simply need to learn to see them.

Benjamin Franklin often quoted the old saying “A bird in the hand is worth two in the bush.” To a certain extent, this is true. It’s better to have something than to have nothing at all. But here’s the thing: the world is absolutely brimming with bushes, and those bushes are bursting with birds! How did you get that bird in your hand in the first place? Can you do it again?

Remember that old Ben also said, “He that would fish must venture his bait.” Surely there’s a balance that needs to be found. I recall a young man who asked me to lunch to discuss an idea of his. He was sure it would change the world. The only problem was that he clutched onto the idea so tightly, so afraid of losing it or having it stolen by someone else, that he shared it with no one. As a result, this young man will likely take “the idea of the century” to the grave with him. He suffers from the opposite of abundance mentality: scarcity mentality.

Scarcity mentality causes people to cling tightly to their “bird in the hand” because they fear being left with nothing at all. This mentality results in individuals distrusting any or all who would be their partners and collaborators. They fear jeopardizing the “great idea.”

On the other hand, an abundance mentality allows you to plan and dream, work with others, and have faith that there are more opportunities out there than you know. Not only does this mindset allow you to relax and see things for what they are, it’s a lot more enjoyable!

When Ron and I began partnering on our business Ron was living the scarcity model. He had just been through a layoff and was focused on the risk rather than the opportunity. For me, it was different: everywhere I turned there was an abundance of prospects, just waiting to be plucked from the bushes. As the year went on, we did a flip-flop! Ron had learned to trust my abundance mentality, and in doing so, began to see and trust the opportunities himself. I had been through a tough year. After a soured partnership, I went into survival mode.

As you maneuver your way through business ventures, you may fluctuate between abundance and scarcity mentalities. Learn the warning signs, and be able to take applicable action to ensure your happiness, sanity, and success.

The Warning Signs
• You are paranoid that partners, outsourced workers, or the UPS guy might steal your great idea.
• Instead of surveying the situation and reacting accordingly, you find yourself sticking to an original plan, regardless of how things have changed.
• You are reluctant to expand, add new people, or make choices that will require you to branch out of your comfort zone.
• You buy antacids in bulk.
• In the back of your mind, you feel like any success you’re experiencing could end at any moment, so you’re constantly on guard.

Does that sound like you? If so, you need a course correction!

Porter’s Points—Abundance Mentality

• Spring for the office lunch or buy some Girl Scout cookies when your partner’s daughter comes around collecting orders. It’s good for the soul, and reminds you that things are not as tight as they may appear.
• You are the driving force behind your idea. Without your passion, it wouldn’t be the same. Take the right steps to protect your intellectual property and get going!
• Bend in response to new opportunities or setbacks. A small business’s agility is its trump card: large corporations don’t have that luxury.
• Give! Philanthropy is the surest way to release you from unnecessary panic. Giving is a surefire cure for scarcity mentality.

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Life gives you what you expect it to.

If you expect success, everything you do translates into success—even your failures. If you expect failure, everything you do translates into failures—even your successes. If you expect to be loved, you will be loved; and if you expect to be taken advantage of you will be taken advantage of. Life is a self-fulfilling prophecy.

This concept seems to be popping up everywhere lately. I attempted to trace it back to its origin, the law of attraction. I found it in Buddhism, Confucianism, in the philosophy and psychology of William James, and the 2006 bestseller called The Secret by Rhonda Byrne.

My conclusion: this truth resonates throughout time and applies to our lives today. We all know people who seem to get all the breaks: the woman down the street who wins all the beauty contests, the guy in the office across the hallway whose putts always fall. Everything they touch turns platinum.

Contrastingly, you likely know people who fill the casting call for the “Eeyores” of life. You’re not sure whether to pity them or appreciate how sparkling your personality seems in comparison. They have low expectations and their mood persistently commiserates with the dismal, melancholy little rain cloud that seems to hover over them everywhere they go.

What made them this way? Luck of the draw? Lightning bolts on the equator? The truth is it’s no accident. It doesn’t just happen. They’ve expected nothing less, or more precisely, nothing more! They have used their will to make it so.

I don’t watch a lot of television, but on more than one occasion I’ve come home to find my wife queuing up the TIVO and commanding me to sit down and watch Oprah. I’ve witnessed, from a distance, Oprah’s amazing ability to live this principle. From my perspective, she chose to expect the best from life. She chose to love. She chose to succeed. She chose to forgive. She will get everything from life she expects. And if you think she has fulfilled her expectations by now, my bet is that you’re very wrong. I conclude that Oprah expects more great things of herself and the world she lives in and loves, and always will.

Golfing great Jack Nicklaus seemed to convey genuine surprise every time he missed a shot. He literally expected each and every shot to be a winner. He knew what he could do, and did not waste time timidly hoping the putt might fall.

Decide what you want out of life! Write your expectations down. Call them goals, call them resolutions, call them whatever you want. Get your dreams down on paper, write them in your heart. Believe you will achieve them and go after them.

Viktor Frankl, survivor of the horrors that took place in Auschwitz and Dachau under a Nazi regime, wrote a book called “Man’s Search for Meaning.” This book is required reading for my team. In the midst of the worst possible scenarios he chose to expect the most out of life. His works kept him alive to become a paragon of this principle. “We can’t always choose what happens to us but we can choose how to respond to what happens to us. It is our ultimate and final freedom. I had wanted simply to convey to the reader by way of concrete example that life holds a potential meaning under any conditions, even the most miserable ones. And I thought that if the point were demonstrated in a situation as extreme as that in a concentration camp, my book might gain a hearing. I therefore felt responsible for writing down what I had gone through, for I thought it might be helpful to people who are prone to despair.” (Frankl, Viktor E. “Man’s Search for Meaning”)

I add my humble but zealous voice to those who have, do, and will yet live life against the backdrop of this truth: life gives you what you expect it to.

Porter’s Points – The Secret
• Internalize this truth: Life really does give you what you expect it to.
• Employ your will to make your success a reality.
• It is not enough to just dream about what your success looks like. Exert the discipline required to achieve your dream.

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As you’ve tried to start a business, have you ever felt like a failure? Maybe not such a bad thing, as we learn today!

Ron and I have a dear friend named Roger Reid who exemplifies the type of mindset and attitude necessary to thrive in times of turbulence. Roger was one of the most successful college basketball coaches in the United States during the 1990s. In 1996 Roger was involved in a nasty termination from a major university. After the termination, I stopped by his home to express my support. We talked for a while and after a bit he stated with a knowing smile, “I have finally found out how funny my jokes really are.” Chuckling, he continued: “Before this experience everyone always laughed at my jokes. Now people only laugh when I’m actually funny.”

You will have times of turbulence as you build your business. Determine now how you will respond. Will you transform your failure into a step toward success? Will your failures provide you an opportunity to gutcheck your jokes? Roger went on to achieve multiple successes in his chosen field. Roger Reid is wired for success. So are you.

Does failure break your heart? I sincerely hope not. Reality dictates that you will experience failures as you start a business. Many of my most valued experiences have been my biggest failures, resulting in my biggest opportunities to learn and change. One of my favorite sayings is:

A stupid man never learns from his mistakes.
A smart man always learns from his mistakes.
A wise man learns from others’ mistakes.

As you shift into this mindset, you will learn to embrace failure and realize that it is part of the process. I have observed that great entrepreneurs seem to handle failure in a calm, competent, and confident manner. Become passionate about understanding your failures. It is the only way that you will learn from your mistakes and progress beyond them.

Thomas Edison failed hundreds of times before creating a filament for the light bulb. Despite the rough beginnings, he refused to become discouraged or view anything as a failure: “Every wrong attempt discarded is a step forward.”

One of my favorite sayings is: “Competence or incompetence always shows its head. It may take a day, a month, a year, maybe even 10 years or longer, but sooner or later it will show its head.” If you are competent, a failure is nothing more than a turn in your journey’s road, a step forward. It can actually make the process more exciting. You just have to refuse to allow your negative thoughts or naysayers to convince you that a setback or even a series of setbacks constitutes incompetence and marks you a failure.

Years ago I heard a story from one of my peers about a seminar where the speaker used an object lesson to illustrate this principle. He took a $100 dollar bill out of his pocket and asked the audience:

“Who wants this?”

Every hand shot up. He proceeded to crumple the $100 in a small ball and asked again,

“Who wants it now?”

Again, every hand shot up. He took the C-note and threw it on the floor and began jumping up and down on it.

“Who wants it now?”

Once more, all hands were in the air. Then came the real gem:

“You mean after I’ve crumpled it, jumped on it, and literally beat it up, you still want it? Why?”

One of the participants volunteered the answer. “Because its value has not changed!”

So it is with you. You will get beat up, you will fail. But your value does not change. It doesn’t diminish. In fact, the rough treatment will actually increase your value! There is definitely value in having a selective memory when you are an entrepreneur. Mark Twain captured the feeling: “The inability to forget is infinitely more devastating than the inability to remember.” Do not linger on the bad experiences. Take stock of where you are and appreciate how you got there.

Starting a business is not like baseball where it’s three strikes and you’re out. If you set it up properly, you can take as many pitches as you like and all that really matters is eventually getting the bat to connect firmly with the ball. It doesn’t matter if it takes one pitch or twenty. Just keep at it. Tweak your swing, change your grip, try a lighter bat, or move up in the batter’s box. You will find the right combination and sooner or later you will connect.

Frequently as I gather with my entrepreneur buddies, our banter turns to battle scars. Near-death stories are told with relish and pride. They are badges of honor. Why? Because the journey, the failures, the experiences, and the lessons learned are the fun parts!

Porter’s Points – Embracing Failure
• Learn to enjoy, embrace, and savor your failures.
• Don’t be too hard on yourself, you can’t gain experience without failure—it’s a natural cycle.
• Keep a journal of critical decisions and how they turned out. Write advice to yourself to follow in similar, future situations.

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Today we learn about the loneliness of leadership:

Great leaders are often required to stand alone. They must make difficult decisions and stand by them, sometimes facing immense opposition. Many business owners confuse popularity with good leadership. In truth, as you learn to make the hard choices and have the courage to follow through, popularity may be one of the first things you sacrifice.

Do you remember your most inspirational teacher? I do: Coach Tuft. He was tough! Coach Tuft taught with a unique structure and approach, and always expected significant effort for the results he expected.

He may not have been the most popular, but he truly exemplified great leadership. Coach Tuft was honest, straightforward, demanding, and cared enough to give me relevant and, at times, piercing feedback. He held me to a higher standard than I ever dreamed of holding myself to.

But don’t be such a strict taskmaster that you make enemies at every turn. My mentor,
Dr. Peter Horne, told me something very important: “Be nice to the people on the way up because you’re going to see them again on the way down.”

What about your easiest teacher? Remember her or his name? I can’t! I do, however, remember his face, and the shenanigans I used to pull in class from time to time. The same principle holds true as you lead. Leaders need to be honest, straightforward, and able to elicit an individual’s best work far more than they need to be popular.

Consider an example found closer to home. What happens when parents attempt to win popularity contests in an effort to be best buddies with their kids? Anarchy! Children want and need their parents to set boundaries, provide structure, and elicit excellence. They neither need nor want parents to win popularity contests, even on their grumpiest of days.

The same is true of a business leader. A strong front may leave you out of the fun lunches from time to time, but know that the line you are guarding is an important one. The success of your business hinges on your ability to motivate and inspire, not your ability to make your team laugh at the Friday afternoon get togethers.

One of the greatest leaders to walk the earth did so two thousand years ago. His life exuded loneliness from birth to death. This is how Jesus Christ expressed his understanding of this principle: “The foxes have holes, and the birds of the air have nests; but the Son of man hath not where to lay his head.” Bible (King James Version). Matthew 8:20.

Porter’s Points – Loneliness of Leadership

• Do not fear to stand alone. Popularity does not make a great leader.
• Hold yourself to a higher standard.
• Set high standards for your team in order to elicit each individual’s best work.

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As an entrepreneur, you can’t just rely on textbook solutions: you need to learn to trust your gut.

Want to make a really big mistake? Don’t follow your gut. I can’t say enough about that little feeling known as “intuition.” Some of the biggest mistakes I’ve made in business resulted from following pure logic and ignoring intuition. Yes, it is important to do your homework and know the numbers, but don’t put yourself through hours of effort and then ignore your gut.

I remember one occasion when I ignored one of those “gut feelings,” and, as always happens, regretted it later. I grew up in southern Utah and still travel south down I-15 every so often to visit home. On one specific trip I had a thought while driving down the off-ramp headed home: this exit would be a perfect spot for a McDonald’s. I knew that it was the stopping point between Las Vegas and Salt Lake. However ingenious the idea, I didn’t follow my inclination. Two years later a McDonald’s went up on that exact spot. Last I checked, it was one of the highest dollar-volume McDonald’s in the state of Utah.

Learning to let logic and intuition work together is an integral component of the art of entrepreneurship. It may feel a bit loosey-goosey. It may go against the grain of the MBA classes you took. It may fly in the face of your nature. Nonetheless, I’ve learned not to argue with results. Some of the worst hires I’ve made were after reading the resume, checking the GPA, calling all the references, and matching the best candidate to the job description. On paper, one particular candidate was the most qualified, but my gut was screaming to go with the next guy.

I first internalized this concept from a seasoned entrepreneur, Ladd Christensen. Ladd is a successful businessman who co-founded Huntsman Chemical and Huntsman Christensen Corp, founded Vinca Corporation, founded Petrosource Corporation, and was a founding partner with Deer Valley Resort’s primary partner, Edgar Stern.

While I was working for Ladd on a project, he became frustrated with my “economist” mindset. He accused me of being excessively and exclusively logical. At the height of his frustration, he challenged me to provide him with an accurate definition of entrepreneurship.

Caught off guard, I rattled off a somewhat lame textbook answer. His response: “Wrong!” Then Ladd shared this thought: “Entrepreneurship is the courage to wander into the fog when you are not sure where you’re going.”

Ladd went on to explain what he meant, and his metaphor showed me I needed to course-correct. I had parts of what was necessary to be successful, but I was missing something big. Ladd explained: initially, when you set a goal, you look to that goal in the distance like a beacon. After understanding where you want to go, you shift your gaze to analyze how you’re going to get there. After surveying the terrain, you set off through the foggy swamp, desperately attempting to keep your feet going in the right direction.

Every so often you find a clearing in the fog, and you have the opportunity to get your bearings and reassess where you are in relation to your beacon. The respite does not last long, however, and you must jump back into the mud and press forward, your confidence in yourself and trust in your gut as your only solace and inspiration.

Ladd told me that while I was out there wandering I would have feelings, thoughts, and insights. He warned me not to ignore them. I came to realize that it was my intuition that would bring me to the clearings where I could take my bearings, apply logic and analysis, and dive back into the fog.

Why does the gut matter? Why does the gut work? We all have enormous amounts of information hitting us on a continual basis. Some of that information remains in the realm of consciousness and some settles into the subconscious. It’s the subconscious data that guides us without our being fully aware that it’s happening. But the information we process intuitively is just as valid as the data we search out.

Intuition and entrepreneurship go hand in hand.

Following your gut will allow you to create, mold, and model things that have never been created, molded, or modeled before.

Porter’s Points—Trusting Your Gut

• Unite focused preparation and analysis with the power of intuition.
• Because the entrepreneurial path is not always clearly laid out, you must develop the ability and courage to follow your instincts.
• You will wander in the fog—don’t fear the occasional detour.

If you have much experience as an entrepreneur, you know there is a certain amount of loneliness in leadership. We’ll talk about that idea next time.

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Today I’ll key you in on what is needed to win as an entrepreneur.

There is a man named Minesh Doshi who lives in Ahmedebad, India. He wanted his own computer hardware company, but didn’t have the capital for a full-scale start-up. Despite daunting obstacles, he began to work toward his goal, slowly.

He bought all the components he could afford from the local market, put computers together on his own, and then sold them to local business owners. All the transportation of parts and machinery was literally done on his bicycle. He worked aggressively, providing stellar service and support until he became well-known and well-respected in this local area.

As a result of his reputation and hard work, he got a hardware contract from the Indian government. Now, Minesh’s company, Semaphore Software, is a major engineering outsource resource in India. I prefer to work with him and his team of almost 400 employees over any other team in India. When you deal with Minesh, there is no question; you are doing business with a doggedly determined individual.

John Adams, American patriot and second President of the United States described his position with respect to the fervent fight for independence as “unalterably determined.” He could not and would not be swayed from the defined objective, freedom. This mettle, this unalterable determination is also the foundation of your entrepreneurial success.

Let me impress upon you this truth: the race very seldom goes to the fastest, the prize to the smartest, the award to the most beautiful, or the brass ring to the cleverest. The individual who simply refuses to die and continues to press forward will eventually get the win. That is unalterable determination.

In the 2004 Olympics, Puerto Rico played America in basketball. On paper, America was the “A-team,” Puerto Rico falling far behind, the B-team. Were you shocked as you watched the underdogs school the more talented Americans? I wasn’t. It was a classic occurrence of A players giving B efforts and B players giving A efforts. Larry Brown, USA’s coach, commented on the B team’s win: “I’d like to congratulate Puerto Rico… They played so much harder than we did, so much better as a team… From our perspective the only thing we can do is to find out what we’re made of.”

I’ll take a B team giving A effort any day of the week.

As you read the following sections, analyze your mental and emotional foundation. If you’re not the strongest man or the cleverest woman, know that it has nothing to do with your promise as an entrepreneur. Your unalterable determination can and will carry you to victory.

Porter’s Points—The Race Seldom Goes to the Fastest

• Approach each endeavor with “unalterable determination” – and if you don’t have any, get some!
• Continually press forward and course-correct as required.
• So you weren’t MVP or valedictorian. Focus on what you are! Make a list of the qualities in your heart and head that will get you where you want to be.

Besides having unalterable determination, you also need to learn to trust your gut – more on that next time!

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Today we begin Chapter 12 of Bootstrap Business: The Heart and the Head of the Entrepreneur.

How many “do-it-yourself” books have you read? Of those, how many did you pick up a second time? And what about chapters you’ve read multiple times?

Scan your bookshelves. Invariably, you’ll come across a book with tattered pages and cover, a dog-eared and underlined favorite. Your favorite book naturally falls open to “the best part,” a chapter that fills you with motivation and confidence. This chapter is one of those chapters.

If you want to run the entrepreneur’s race you must understand this truth: the attributes and skills required to experience success deal directly with what you have in your heart and in your head. Nothing else is more important. The stamina essential for entrepreneurial success springs from your mental, emotional, and spiritual reservoirs. In this chapter, Rich discusses some of his favorite principles and topics for getting your heart right and your head on straight.

WHAT’S IN YOUR HEART?
The Race Seldom Goes to the Fastest
Trusting Your Gut
The Loneliness of Leadership
Embracing Failure

WHAT’S IN YOUR HEAD?
The Secret
Abundance Mentality
Breaking Through the Mental Barrier
The Zone
Do the Hard Thing

We’ll dive into these sections next time and you’ll see why it’s a favorite chapter for anyone starting a business….

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