We’d like to introduce you to one of our brave souls that will be joining Team Zig Zag down in St. George, Utah for the Triathalon. Nathan Gwilliam has taken on this challenge to join our team to swim, bike and run–all in the name of The Zig Zag Principle. Since his youth, Nathan has been a goal setter. In high school he read The Seven Habits of Highly Effective People by Stephen R. Covey, and it changed his life. Since then he’s set goals that have molded him into the successful entrepreneur he is today. He likes to say, “If you don’t know where you are going, you’ll never get there.” This attitude makes Nathan the perfect addition to the Zig Zag Principle Tri Team.
You’d think the finish line would be his favorite part of the triathalon, but it’s not. Nathan loves the training leading up to the big day. He really enjoys training as a team–especially when it’s a team of good friends. Also, Nathan said he enjoyed improving his time and working toward better health. But, if he had to pick a particular part of the race that’s his favorite, he says that he’s most comfortable with the running.
Nathan has quite an impressive resume on and off of the field. Currently he is the owner of Social Nexus, an organization that grows world-class Internet, mobile, and social ventures. Meaning he can help you with:
Digital Strategy
Design & Development
Social Marketing
Digital Monetization
He has zig zagged all over the place from founding Adoption.com and building it into the world’s most-used adoption service to developing the initial strategy and site for Law.com. He has built a variety of other ventures, such as Families.com, Ofertas.com.br (a Groupon competitor in Brazil), Viajamos.com.br (a Brazilian travel social network) and WeSpeak.com (a language-learning social network).
With such a varied and impressive background, Nathan has great advice for the apsiring entrepreneurs.
From an early business failure, Nathan learned that entrepreneurs can become very distracted on things that don’t matter. The best advice that he would give a new entrepreneur would be to focus on getting your product to market as quickly, inexpensively and effectively as you can. The power of stability comes from profitability.
Nathan said it’s important to understand a few business myths:
- He believes in the rule of 3’s….It always costs 3 times more than what you think to get your business going and you end up with ⅓ of the profit. Therefore Nathan strongly believes that bootstrapping a business is where it’s at. Do anything possible NOT to borrow investment money.
- Another one is the myth about entrepreneurs ~ that they are risk takers. The reality of it is that they don’t take “more” risks, they just take “calculated” risks.
- And lastly, that being an entrepreneur is unstable. The truth is, if you own your own business, you will be the last one to get fired! You have more stability working for yourself than working for a large company.
In conclusion, Nathan says “Life is so short, pick something you love and something that makes a difference. Not just something that makes you a buck, but something that makes a difference. You’ll have left the world a better place when you retire.”
Best of luck Nathan to you with your Zig Zagging during the race and with all your business adventures!
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Here I am just off the coast of Sicily, approaching the active volcano Stromboli. As I’m observing this right in front of me, I see there are some idiots that have built their houses right at the base of this active volcano (a volcano that’s been active for thousands of years). There are lava flows coming off of this thing. There are puffs of smoke going up in the air, yet despite all of these warning signs—some individuals have chosen to build their homes on the volcano.
Let me set this one right straight up front for you! In business, the only thing more dangerous than surrounding yourself with really volatile venders, really volatile suppliers, and really volatile customers—is being volatile and angry yourself.
Indeed sitting on a volcano is a very precarious position to be in. I observed this yesterday in Pompeii. I spent the day in Naples and went out to see some of the sights in Pompeii. The most unfortunate, amazing, and predictable thing happens when a volcano blows. It buries and kills everybody.
So when you’re in business, learn to recognize the really volatile individuals and do everything that you can to avoid them. If you find yourself being the one who is volatile and quick to anger, I’d strongly encourage and advise you to get a grip on your emotions. At all costs, avoid building your home or your business on a volcano.
In the last chapter, you assessed your resources and figured out what kind of vehicle you have at your disposal to take on your journey to success. Now let’s talk about clearly identifying your destination. Where do you want to go? What is your beacon in the fog?
Imagine there are two groups of friends who want to take a trip, and both groups start out with identical resources. The first group spends 
considerable time researching travel ideas on the Internet. As they explore various options, each mentions a long-held dream of seeing France, so they set a goal to travel there together in one year. When their income tax returns arrive, each person deposits the money in a special fund created just for this trip. They cut expenses wherever they can in order to build their savings accounts. They each get a credit card that gives them double miles, which they then use responsibly (so they’re not wasting the money they’re saving on interest). They even put their change in a jar at the end of the day.
A year later, they are able to purchase their airline tickets with frequent flyer miles; in fact, they have enough miles to upgrade to those oversized business class seats with the individual video amenities. Soon after, they are ready to take off. They fly into the Charles de Gaulle Airport, then head to the luxurious Hotel de Crillon. While in Paris, they schedule adequate time to stroll through the Louvre and see some of the world’s most famous paintings. Of course, the Mona Lisa is at the top of the list. They climb to the top of the Eiffel Tower, counting each step as they go. Their evenings are spent in famous French restaurants that serve croissant au beurre, thinly sliced French fries, and sweet crepes. After enjoying Paris, they make their way down the beautiful French Riviera to visit Nice and Cannes. They even take a day trip to Monaco to visit the raceway and winding streets that meander along the sheer cliffs. After spending two weeks of leisurely, deliberate enjoyment, they return home, relaxing in business class.
The other group of friends kind of jump in their car one day and say, “Hey, let’s take a trip!” Once they’re all in, they open their wallets and see they have a total of $17.93 between them. That doesn’t seem like much, but one person has a credit card with a $500 credit line (at 29 percent interest). No one has a strong opinion about where to go, so they flip a coin to see if they should travel east or west. The quarter lands on tails, so they head west. As they leave town, they stop at the local Gas-n-Go to fill up and buy some snacks and soda pop. They charge their credit card for the gas and drinks, and off they go. After about 200 miles, they realize they are in a remote part of Northern Nevada, where the inhabitants consist mostly of rabbits and rattlesnakes. Not surprisingly, they realize they have no idea where the closest town is, which concerns them because their gas tank is getting low and they are almost out of drinks. Suddenly, they begin praying that they have enough snacks and gas to get them back home. And, in the midst of those silent prayers, they find they are getting on each other’s nerves.
In both cases, these are trips that are going to be talked about for years to come. But the nature of the reminiscences will vary considerably!
Many people live their lives much like the friends who took the second road trip. They take whatever comes and live day-to-day or paycheck-to-paycheck. They do not have a plan or a goal for where they want to go, let alone end up. There is no beacon guiding them toward where they have determined they want to go.
We’ve wound our way up to West Yellowstone to the most delightful restaurant called Buckaroo Bill’s. I’m enjoying time with family (although a few of them are carsick from the twisty roads, which of course got me thinking again about The Zig Zag Principle.) Zigging and zagging is such a powerful concept in nature. It is how we live our lives. It’s how we travel and move, it’s how streams wind their way to large rivers. Zig zagging is how we find success in our lives. Yet in business we frequently race quickly towards a goal, only to find failure. Is it any wonder why nine out of ten small businesses fail?
Since I’m here in this gorgeous setting, surrounded by nature, let me briefly share The Zig Zag Principle, the most powerful concept that I have come up with in business so far. Zig zagging sounds undisciplined, but indeed it is a very disciplined pragmatic approach—like a big river zigging and zagging it’s way to the ocean.
The first thing that you do is…set a crazy, big-hairy goal out there. (I am very goal oriented and I encourage everyone to be so too.) So you set this large goal out there. Then you assess your resources. Next you create a catalyzing statement or the emotional fuel to get your team to join you. Once your goal and your values are in place, the first thing you do is, you divert!
You drive to profitability.
Zig #1 is always drive to profitability. Getting to profitability and operating in the black is much more powerful than operating in the red. It’s comfortable, it’s logical. And it also allows you durability. It’s just that profitability might not always be in a straight line with your main goal.
Zag #2 is always to add processes and resources.
Zag #3 is to add scale.
The other key component in zig zagging is what I call the guardrails. These are the components that keep us from getting lost and going into the weeds. Guardrails are the things that keep you focused on your big long term objective.
The road to success is never a straight line. Instead, zig and zag with confidence and you’ll get there.
Chapter 2
Beacons in the Fog and Catalyzing Statements
Midway through my career I was working for an incredibly shrewd and successful businessman named Ladd Christensen. One day, in a moment of frustration, he called me into his office and bellowed, “Rich, define ‘entrepreneurship!’” I rattled off some lame textbook answer, and he responded, “Wrong. Wrong! Entrepreneurship is having the courage to wander in the fog.”At the time I didn’t really buy it. My style was to move from point A to point B in as direct a line as possible. I was (and still am) a goal-setter, and wandering aimlessly held no appeal; in fact, it seemed antithetical to getting where I wanted to go, either in business or in life.
Although I disagreed strongly with Ladd at the time, the point of his tirade became much more clear years later when I read an article by a well-known educator and religious leader who told how he had once asked for clarity from his file leader on an assignment and received what initially seemed to be a puzzling response:
He [told me], “The trouble with you is you want to see the end from the beginning.” I replied that [yes] I would like to see at least a step or two ahead. Then came the lesson of a lifetime: “You must learn to walk to the edge of the light, and then a few steps into the darkness; then the light will appear and show the way before you.” (Boyd K. Packer, “The Edge of the Light,” BYU Today, March 1991, p. 000)
Despite my natural inclination to always want to know exactly where I’m headed, I’ve learned that, whether we’re talking about starting a business, completing a complex project our boss has given us, or helping a trying teen get through high school, our lives inevitably involve some wandering in the fog. Very seldom do we have a crystal ball showing us every step we should take and everything that is going to happen.
Finding Our Beacon in the Fog
It is one thing to wander aimlessly, which some of us, unfortunately, do. It’s a very different matter to identify and set our sights on what I call a big, audacious goal, which becomes our “beacon in the fog.” With that beacon firmly in mind, we are far better equipped to head into the darkness, knowing we may not always be able to see where we’re going with crystal clarity, but still knowing where we’re headed. Airline pilots do this all the time. They barrel through storms and massive cloud banks at 500 miles per hour, unable to see ten feet in front of them, and we passengers are accepting of this insanity because we know they are fixed on a clearly identified bearing.
If we’re smart, we do the same thing. We start out with a big goal to guide us, and every once in a while we hit a smaller goal, which provides a break in the fog that lets us catch sight of our beacon before we take those next steps into the darkness. The process is more messy and risky than it is clean, pristine, planned, and calculated. But if you have a solid, clearly defined beacon in the fog to move toward—and a foundation to travel on—then you will arrive at your destination, just as you’ve planned. But only after some inevitable zigzagging!
In business one of the most important decisions you make is who you choose to be on your team. The only decision that is really more important is who picks you to be on their team. That is something I’ve heard Roy Williams say many times over the years.
Last week I was able to go to dinner with my dear friend Takahiro in Japan. Takahiro was my colleague very early in my career, when I was working for Novell. As I was finishing my MBA, we took an Asian trip as part of the final class. The trip included some time in Japan.
When Mitsubishi signed up to be a strategic account of Novell, no one else really had any Japanese experience, so I was assigned the job.
I was picked to be on that team.
That experience has opened many doors throughout my entire career. The experiences I had and the things I learned during that period of time are really what launched my career.
Last week, as I sat with my dear friend Takahiro, we exchanged fun stories about the zeal of youth and the wild business decisions that we made. Early on, we simply didn’t know better, so we went out and did some really cool, crazy things together. These actions have served Takahiro and I well.
I appreciate the types of deep relationships that you can form while working with the right team. Although Takahiro and I haven’t seen each other in person for thirteen years, the connection is still very strong and we greatly enjoyed reminiscing and catching up on the wonderful things that have happened in our lives.
I (virtually) observed Takahiro get married, and I actually delivered the congratulatory address, remotely. Takahiro has watched my young children grow via email and phone calls. We’ve also shared in the simultaneous and exciting launch periods of our careers.
My advice to everyone is:
1. Behave competently early on in your career.
2. Make sure that you perform.
As David Owens used to say, (and as I quoted several weeks ago) “You work for yourself.” Your competence and incompetence will always show its head, so be competent and in those early stages, irrespective of where you are at in your career…perform. Make a difference and really contribute. It will be something you take with you your whole life. It will allow you the opportunity to, someday, reflect back with your first dear colleagues. It will let you think back on your early days in fondness.
Throughout this book, I will provide proof from my own experience that the principles I’m putting forth work. So, to summarize our need to identify our resources—which should include a combination of mental capital and relationship capital—here’s an introduction to the company I will be using to prove the points of this book. This company’s name is Froghair. I’ll return to it in each of the following chapters.
In 2001, I was running a technology company and had a very bright employee named Abbie Hunter. She was an aggressive young woman who had dreams of her own and who told me one day that she wanted me to help her set up a company. And she meant it! After thinking through what I’d be willing to get involved with I said, “Okay, Abbie, I’ll help you with whatever idea you come up with, but it has to involve the outdoors and golf.” Why? Because I had plans to go climbing in the Himalayas, and I am also an avid golfer. I figured if I was going to add anything to an already very full plate, it had better be something I was passionate about.
Abbie went to work on ideas and a few weeks later came back with a business plan involving selling outdoor and golf equipment. I agreed to combine my mental and relationship capital with hers, and we started a company with almost zero financial capital.
Well, the business did okay and we had some fun working on it, but it was not a high priority for me or for Abbie, and eventually she left to take a well-deserved job on the East coast. I was now on my own with it, and it turned into something my boys and I ran out of our garage. Orders would come in; the boys would label, clean, and pack the products; and then semi-trucks would pull into our small neighborhood to pick up the orders. One time I actually slept in the garage to keep my eye on a particularly large order. I had fun and scored some nice equipment, my boys learned some good lessons and discipline, but the business was never something my wife and I fed our family off of.
A couple of years into this, I developed a relationship with Curtis Blair, who shared my passion for golf. He had experience and knowledge of the golf market. He also had knowledge of Latin America and spoke Spanish. He decided he wanted in on this deal (maybe for the free golf balls?), so we agreed that he’d come onboard to develop markets in Central and South America and expand the corporate side of the business, which he did with considerable success. We were able to combine our mental capital and relationship capital to establish a small stable of commercial accounts with whom we made a point of maintaining very strong relationships. We also built relationships with several high-end, name brand suppliers, all of which loved doing business with us because we always paid our bills on time, often well in advance of what their terms called for. (The know-how around both the need and how to do that is part of my mental capital.)
The company grew to the point where, when we wanted to get out from under it, we were able to sell it for a tidy profit. However, we cared about the relationships we had formed during our years together, so we were very careful about screening the buyer, who turned out to be a man in Arizona who had an abundance of financial capital and a similar passion for golf. His idea for running the company, though, was that he would turn the operations over to a college student our buyer would leave town for a month at a time to play golf. The outcome of his brilliant business plan was a disaster, which might surprise some people because the man we sold the business to had all the financial capital needed to take our germ of an idea and make it a huge success!
Not that we wanted it, but when the new owner fell behind in the payments he owed us, Curtis and I ended up taking back our ownership in 2009. Gratefully, we still had our relationships with suppliers and clients, we understood the markets and business processes, and we hadn’t lost any of our passion for being outdoors and playing too much golf. The one change we did make was that we renamed the company “Froghair” and then set out to achieve our long-term goals (which I’ll share in the next chapter).
There was a lot of zigzagging involved when I first started that company with Abbie. There was a lot more when Curtis joined up with me and took us into markets I didn’t know anything about. And there was even more when we regained ownership. But that zigzagging was possible because we identified our mental and relationship capital.
Summary
Whether you’re looking to start your own company, to excel in the company you work for, or to achieve goals in your personal life that have always eluded you, the first step in building your foundation is assessing your resources. Just as Donald Trump’s jet can fly him around the world, my Audi can easily get me across the country, and my son’s kick scooter can get him down the block, we can each start with what we have right now and then decide where we want to go with our own unique vehicle. Then we can trade up as we acquire more resources.
Now that you’ve begun identifying your resources, it’s time to learn about setting your beacon in the fog.
Building relationships is an important and never-ending opportunity that will set the foundation for your zigzagging. It will open more doors for you than you could ever imagine. It’s also a process that needs to be looked at from the right perspective. I would recommend that you remember two important principles: First, do the right things for the right reasons. Second, don’t ever use people. 
We live in a selfish world where some people believe the world stopped revolving around the sun on the day they were born. Some have the mindset that everyone but themselves are disposable and that they can just burn through as many people as necessary to get where they’re going. My experience and observations have taught me repeatedly that a far better way to live is to have a genuine concern for others and seek ways to serve those around you. That said, our motivation should never be anything other than doing the right thing.
I recall one young man who I was eager to help. He was incredibly bright and talented, and I saw a lot of potential in him. On several occasions I put myself out there to help him. When I was leaving the department where I had been his boss, I made sure he had a good position. A few weeks later, he complained to me that he was not happy in his new job and was looking for another. I opened my network of friends to him and helped him find new employment. A couple of months later he had burned through those relationships, and I found myself having to apologize to close associates for the messes he had created. I recommended him for several other jobs and offered my advice whenever he called. I even helped him get into a prestigious MBA school.
I never received a thank-you from him, nor any offer to reciprocate for the help I had given him. In fact, one time I asked a very small favor of him, but he was too busy. Another time I overheard him pointing out some of my weaknesses to a group of associates. We should not help others with an eye toward what we can get in return, but when all we get back is a lack of gratitude and a sense of being used, that becomes burdensome. In this case, though my “friend” continued to call for help from time to time, I simply quit responding to his demands and returning his calls. No one likes to feel used.
Application
Wherever you are and whatever you plan to do, you’ll benefit from making a list of the resources you have at your disposal. Start with what you have today and dig deep down into your pocket. Look for resources that you might otherwise overlook.
Value Equation 
Mental Capital + Relationship Capital = Financial Capital
- List your mental capital: What are you good at? What are you passionate about? What skills do you have?
- List your relationship capital: Who are ten people that can help you get closer to your goals?
- If you do not have ten people you can call on, what can you do to build relationships with ten such people? How can you serve these people?
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Building networks of relationships does not happen overnight, and it takes attentiveness and hard work. I’ve seen people who set out with a very clear goal to build a network as quickly as possible. They see their goal, and they see others as a way to reach the goal. And they often bulldoze straight ahead, leaving expendable bodies in their wake. Some of the greatest relationships I’ve been fortunate to enjoy have come at the end of zigzagging that took place over months and even years—and could never have been envisioned if I had sat down and tried to map out who I needed to know and where knowing them would get me. 
As part of my MBA program while I was still working at Novell, I had the opportunity to go on a trip through Asia to study various businesses in Japan, Korea, and China. When I returned, Mitsubishi had just signed a contract with Novell for some strategic engineering work. As it happened, I was the only one in our department who had ever been to Japan. So, even though I did not speak the language, I got assigned to be the strategic engineer for Mitsubishi.
During this time the president of Mitsubishi’s PC Division, Dr. Peter Horne, traveled from Japan to Utah several times to meet with Novell’s CEO, Ray Noorda. My job was to pick him up at the Salt Lake City airport and drive him to our Provo office, which was about an hour away. I suppose I could have viewed this assignment as something of a chore, but I chose to see it as an opportunity to get to know a very bright, talented, capable individual. So, I would wash my car, (thank goodness, I had recently traded up from the Dodge Colt!) and would try to think of some interesting topics of conversation.
Dr. Horne and I had made the same trip several times when something happened that changed my life. As he climbed into my car on a Wednesday afternoon for another trip back to the airport, Dr. Horne tossed his jacket into the back seat of my car, unbeknownst to me. When we pulled up to the terminal, he grabbed his luggage but inadvertently left his jacket behind. I drove home, dropped off the car for my wife, and then got a ride to a Boy Scout activity I was helping to chaperone.
This was before cell phones, and while I was gone my wife got a frantic call from Dr. Horne letting her know that he had failed to retrieve his jacket and that his passport and wallet were in its pockets. Without a second thought, my wife loaded our three kids (all under the age of six) into the car and drove like crazy up to the airport. My wife and these little kids ran through the airport as fast as they could in order to get the jacket to Dr. Horne before his flight took off. (If you can remember ancient history, this was before the days of airport security.)
A few weeks later my wife received a package in the mail with a beautiful hand-carved jewelry box and a thank-you note. In the note Dr. Horne commented that his wallet had contained a substantial amount of cash and that not one cent had been touched. He expressed amazement that we would have the integrity to return his wallet without even looking inside. He was also grateful that my wife would drive up, even though it was clearly an inconvenience. In a subsequent conversation, Dr. Horne told me that if I ever decided to leave Novell, he would like to talk with me. Indeed, the time did come when I left Novell, and through a series of fortuitous events I became the general manager of Mitsubishi Electrics PC Division in the United States. Meeting Dr. Horne was one of the first real breaks I had during the early years of my career. What started out as a small act of service on my wife’s part was rewarded with a strong mentor, boss, and a dear friend. I will be forever grateful to Dr. Peter Horne.
Relationship Capital
If you take your smarts and your intelligence and do nothing but sit in a dark room and think about how bright you are, then obviously nothing is going to come of them. But if you take your smarts and your intelligence and use them to the benefit of people around you, the relationships you build will propel you toward your goals. Likely, you won’t find yourself traveling in a straight line; but, even with twists and turns, you’ll get there.
While I was still in college, I worked in technical support for a startup company named Netline. Everyone in the company was busting their guts to make this little leading-edge technology business work, and we had advanced to the point where we had attracted the attention of a billionaire who was coming to see if he wanted to invest in the company.
The day before he was to arrive, we set up a demo wall and prepared everything needed to show him the technology. I was just a peon in this company, but as I was getting ready to leave that night, I noticed our cement floor had not been swept or mopped, and the place was filthy. We were a startup, and we were so focused on the technology that those small details were overlooked. But I guess I had learned enough from my mother to feel embarrassed to have this incredibly successful businessman see our offices looking as they did.
So I drove home and got my wife, and we went back and cleaned the building. As it happened, everyone was gone by the time we started, and the next day I didn’t feel any need to point out what we had done.
We made our presentation to the businessman, he was impressed with the technology, and the company got the funding it needed. As we celebrated, there was a buzz about who had cleaned the building; and even though I didn’t say anything, someone figured out who had corrected a glaring oversight. As simple as my contribution was, it created relationship capital with the vice-president of marketing, who asked me to be his technician. Before long, he was promoting me within the company and inviting me to travel with him to trade shows.
I didn’t have much mental capital at that point, but—without even intending to do so—I formed relationships that have lasted for years, simply by knowing which end of a broom to hold onto.
Several years ago I traveled to Lake Tahoe to deliver a lecture. Before the appointed time, I had the opportunity to meet with a group of about twenty young entrepreneurs from Canada who had asked if I’d spend an hour with them answering questions on starting businesses.
We had a delightful exchange, and, as we got to the end of our time together, they asked me what they could do to help me. Not thinking anything about it, I said something like, “Oh, everything’s good. Thanks for the offer.” As I was heading to the presentation I had come to make, one of my associates told me we had misplaced the handouts we were going to use. He was a little panicked and was hoping we could find a copy machine in time to make new copies.
The next thing that I knew, Ernistina, one of the young Canadians, had gathered her team together. They figured out where to make the photocopies and then took the time to hand them out to the group of people who were gathered in the lecture hall. Because of her awareness and service, the event went off without any glitches and was a success. I was so grateful to Ernistina that I instantly invited her to a seminar we were teaching on entrepreneurship. We, of course, waived the tuition and even helped with her travel expenses.
Ernistina certainly hadn’t met with me with the plan that she could then turn her energies toward making photocopies, and I can only assume that she had other things to do after we finished our discussion. But by being willing to serve me, she was able to expand her relationship capital considerably. And I was able to make a new friend.
