A Little Q&A Never Hurt
I was recently asked a few questions and I figured, why not post the answers on my blog, and save myself the aggravation of trying to come up with something clever to write. So here goes:
Question: What “golden rule” of business have you most successfully applied to your personal life?
Answer: Be persistent. People ask us all the time how it’s possible that we’ve managed to beat the odds and build 5 successful technology companies in a row. The answer is simple – persistence. Each of these businesses evolved in meaningful ways throughout their life cycle. Take Groupon. We launched a site called thepoint.com in January of 2007 and after eighteen months, and dozens of iterative attempts to make the business model work, we finally evolved into groupon.com in October of 2008. We tried selling ads, we tried charging a fee for people using the site to raise money, we tried business development relationships, we tried merging with others… Eventually we tried daily deals using our tipping approach to build communities around local service offerings. Had we not been persistent and almost reckless in our continual attempts to try different approaches, there would be no Groupon.
Question: And vice-versa, what life lessons have you applied to improve your business or management style?
Answer: My roommate in college once told me that “life is like a round table, with every action creating a reaction”. The theory being that if you steal $5 from someone, you can rest assured at some point in life, maybe years later, someone will steal $5 from you. Something about the equilibrium of the theory resonated with me, and I’ve been trying my hardest to adhere to its basic principle of “do unto others…” every since. The challenge however is that in business, to a greater extent than in your personal life, the other players are not always subscribing to this theory which makes it difficult. The first day of my first class at Kellogg business school I read a plaque on the wall with the school’s philosophy. The first item was something like “be fair and don’t attempt to garner unfair advantage”. I remember saying to my students, that while this might sound great, it’s completely absurd in that most of the marketplace is spending every waking minute trying to find and exploit unfair advantage. Look at Google. Even in the midst of total domination of search and windfall profits, they are being accused of manipulating search results against their competitors. And look at Apple. Even as they totally dominate personal computing entertainment, they are using their market influence to crush Adobe who poses a competitive threat. So how to do you reconcile needing to be tough and ruthless in order to compete, with the basic tenets of being fair and doing right by others? The truth is that it gets a whole lot easier the more money you have. Success affords you the ability to make the right choices even at the cost of profits. For those who are still climbing their way up the ladder, I have no good advice that won’t (a) sound preachy and (b) be meaningless since I’m not in your shoes.
Question: Was there a turning point when your work and personal life became balanced, in perfect harmony?
Answer: Yes, from day one. But I recognize that my situation is completely unique and probably not repeatable by most. I don’t work at night. I don’t work on the weekends. I start my deal at 6am and end about 5pm, with basically no break other than about 15 minutes in the middle for lunch. It’s a frantic 11 hours of solid work, but then it’s over until the next day. I have always found that after a certain point (say 11 hours) my brain essentially shuts down and the quality of my thoughts become so diluted that I’m better off watching American Idol. My work schedule, which evolved out of personal necessity, created balance between my work and personal life.
Question: Please share a story of a time when you failed in a task – did you realize that you were doing something the wrong way, so you corrected it? And how did the negative experience help you to build a better business and a better life?
Answer: There is no greater fuel for success, in my humble opinion, than failure. Failure is the spark that starts the engine. In fact, I’m amazed when I come across people who have become very successful without having failed – to me, that phenomenon is perplexing. I think it’s because the way we succeed, as I discussed above, is persistence, hard work, trial and error. So I can’t understand how someone else could do it without the learning that comes from having done it wrong the first time. Our first acquisition, Brandon Apparel Group, was a complete failure. We acquired the company in 1994 for about $4 million. At the time, the company which was selling children’s licensed apparel, had sales of about $3 million and owned several domestic manufacturing plants. Over the next 5 years, we increased the sales from $3 million to $20 million, but also increased the debt from about $2 million to over $10 million. When the industry collapsed (in large part due to fashion trends), Brandon collapsed with it. The experience provided an education that at least for me, was unachievable through any other means, including a text book. Without having lived it, without having made the thousands of decisions that ended in ruin, I would not have gained the perspective I needed the next time around.
-Eric Lefkofsky
