Category: Business

Innovation: Looking To The Future & Learning From the Past

March 17, 2020 / / 0 Comments

On Episode 113 of The Edge of Innovation, we’re talking with executive advisor Scott Monty about looking to the future of innovation and learning from the past!

Sections

Introduction
Dealing With Skeptics
How to Approach Innovation In Your Business
Henry Ford: A Business Historical Perspective
Start With The Basics
Looking To The Future & Changing With The Times
Conclusion: “Stay Curious”
More Episodes
Show Notes

Innovation: Looking To The Future & Learning From the Past

Introduction

Paul: Good afternoon, everyone. Today we’re talking with Scott Monty of Scott Monty Strategies in Canton, Michigan. Welcome, Scott.

Scott: Good to be with you, Paul.

Dealing With Skeptics

Paul: So do you find that the people who engage you are because you have a track record in their mind?I know there’s probably a lot of repeat business, but then there’s this sort of subset, I would imagine, that are skeptical. It’s like, okay, I don’t know. You know, “I can see everything. I know everything about this. You know, what’s he going to add? He doesn’t even know this business.”

Scott: Yeah.

Paul: And how do you deal with that because… First of all, have you had that challenge? And then how did you deal with that?

Scott: So, the types of clients that I have right now, it’s largely referral and word of mouth. I’ve been writing a blog for,I guess, going on fifteen years now. So I’ve got a track record of what I guess you could call thought leadership. I won’t claim the mantle, but, you know, that’s what other people have said.

I certainly made a reputation for myself at Ford. And largely the people that approach me are people that are already believers. Like that dealer, you know. Here’s a guy who I didn’t have to convince him that something needed changing. He knew a change needed to happen. He just didn’t know how to get there. Right? And I find those are the leaders that I enjoy working with the most, is those who are naturally curious and those who are constantly pushing for something different, something better.

However, I will say that in my career, I have come across plenty of skeptics, and I actually had an opportunity to convert one of them, or so I thought, at a meeting of the entire C-suite at Ford Motor Company. This was back in 2011, I think. I was asked to give a presentation on the state of social media, more broadly and specifically what it meant for the company.

And I went into this room. And, remember this is late ’10, early ’11. So, oil and gas prices were still high. Every executive around the room had fuel prices on their mind as Ford was thinking about its way forward. And I acknowledged that, and I said, “Before I begin this presentation – And by the way, I happened to be seated directly in between the CFO and the COO. I was in the seat that normally the CEO held at these meetings. And I looked around the room, and I said, “Everybody has this at the back of their mind, so let’s see if we can get a little consumer research.”

So I went onto the Ford corporate Twitter account, and I asked the audience, “When you buy your next car, what’s the minimum MPG you’d like to see — miles per gallon — you’d like to see from it?”

And I, I hit “send,” and I gave my presentation, and about 20 minutes later, I opened up the Twitter feed, and all of these responses were in there — about a hundred or so responses. And it ranged from “Don’t matter the MPG as long as it got a V8 engine in it” all the way up to “300 miles per gallon.”

But most of the answers were in the 30s and 40s, which is exactly where Ford had been targeted over that two to three period range. So it validated the strategy. And the CFO, the guy who was the most skeptical of digital and social, who wondered whether people were wasting their time, whether this was productive for the company, he pushed back from the table and he put his reading glasses up on his forehead and he looked over at me and he said, “Do you know, if I had insights like this every day, I would find it invaluable.”

So, in that very moment, I made a believer out of a skeptic. And it was all about speaking his language, putting it in a frame of reference where he could work with it. Now, this isn’t a guy who’s going to be creating his own Instagram feed or you know, you name it. This is a guy who thinks about it from a utilitarian point of view. But until we actually packaged it in a way that was useful to him, he didn’t see the value in it.

Paul: Of course, yeah. How would he know? How could he perceive it?

Scott: Right.

Paul: It’s as good as not existing.

Scott: Exactly.

Paul: Fascinating, fascinating. Now, you said… Did he continue to, to believe? Or did he wane on that?

Scott: Well, he did because he was the guy we had to go to when we wanted funding. So, yeah. Obviously, we had to prove our case each time, but we didn’t have to prove the fundamentals to him. So, it became a less frustrating exercise and more of an exercise in creativity.

Paul: Okay, alright. That’s fascinating.

How to Approach Innovation In Your Business

Paul: So now, a lot of our listeners are small to medium-sized businesses. They’d love to be Ford, which was once a small business. But it took them a little while to get there. What would be your counsel to a… So, let me think about just different businesses we’ve talked to here in New England that… Let me think.

There’s a CPA firm. Typical. It’s tax season. They do taxes. That’s where they make most of their money. They do some advisory work, etc. You’ve got two typical partners and they’re busy. They do the work themselves. They’ve got a few people working for them. How would you help them navigate? And I know this is out of the norm. We’re taking a thousand horsepower person with you and putting them in a little two-seater here. So, it’s way oversubscribed.

But how would they approach innovating in their business in a way? And I’ve been asked this question before, and you don’t want to come up with this just real leap of faith. Well, you know, you can do… there’s one of the banks out there that now, it’s a restaurant and a bank. I forget which one it is. But, you can go and get coffee at the bank. And it’s like, okay, you know. It sounds like they’re reaching. So, I’ll let you sort of pontificate on that. What do you think about that?

Scott: Well, first, Paul, what I would say is that I don’t presume to know as much about their business as they do. That will always be the case. And I will defer to business owners for their level of expertise. But I do start by asking a lot of questions. So I’m at a little bit of a disadvantage here since we’re just creating this hypothetical.

But first I would start with kind of the Socratic Method, as it were and, and try to get more information out of them through a series of questions or observations. About a flow through or whatnot, I would observe what’s going on in the place of business.

Henry Ford: A Business Historical Perspective

Scott: But here’s the thing. Let me approach this from a business historical perspective as Henry Ford did when the Model T came about. His whole idea was… You know, he created the quadricycle, and that was his first opportunity to experiment with the combustion engine. Ford Motor Company came along in 1903 and the Model T debuted in 1908. So, there were years where this was in development. And his idea eventually was to create a car that could be used by virtually any American and would have a variety of utilities to it.

So, a couple of things happened. One, he began to produce enough cars that the cost per unit was driven down. In 1908 it cost, I think, $850, which was pretty expensive back then. But by the late teens the cost was $250 per car. So, by scale, he brought the price down. Again, simple math. In this process — and you probably are familiar with this phrase, he said, “You can have any color you want as long as it’s black.” Right? And people thought that was because he was not innovating. Well, the opposite was true. He was innovating so much, the car was in such high demand, he knew that black paint was the fastest drying paint.

Paul: Oh, interesting.

Scott: So it was the paint that allowed him to produce the more of vehicles. But when it comes down to innovation, he created his product in such a way that it could be used, it could be converted into a tractor; it could be easily adapted as a pickup. You could even put snow tracks on it and use it on the snow. Right?

So, he was already designing something with a better customer experience in mind. And it started small, and it got big, and I think the same thing applies to whether you’re a CPA or a real estate agent or what have you. It’s about making these observations at the minute level.

Start With The Basics

Scott: So, for example, you’re a CPA. Where does most of your business come from? Is it online? Are you competing with the TurboTaxes of the world? Or is it local business that you’re serving? And if so, how are you actually transmitting business to them? Are you meeting them at their place of business? Are you making them come to your office? Could you do sessions where you borrow a gymnasium for an afternoon and get a line of people queued up and run them right through? Are you associated with a collective of other similar businesses or related businesses where you can each feed off of each other? I mean, these are all very basic things. I’m kind of grasping at straws here. But again, it’s starting with the very basic.

It may not sound sexy. It may not seem like it’s completely scalable, but you’ve got to start somewhere because from those, from those initial tweaks, then you may see a bigger one, a bigger opportunity come by. Or you may run into something that you never expected. If you’re the bank that has opened the coffee shop, okay, I don’t know why people want to spend so much time in a bank. I’ve seen auto dealers with coffee shops. Well, people are getting their oil changed, and they want a more premium experience rather than the stale donuts and crappy coffee on the sideboard there. Okay, I get that.

But what reason are you retaining people in the bank? And, if you’ve got them in the bank, then what other opportunities are you making available to them? Would you have other small business owners available to do an open house with them one day per week at that coffee shop or a seminar or something to help them grow their business that’s a value add that doesn’t feel like it’s some kind of awkward square peg in a round hole?

Paul: That’s interesting.

Looking To The Future & Changing With The Times

Paul: So, I want to go back to something you mentioned about the initial years of the car with Henry Ford. So, there was a whole ecosystem pre-car that was taking care of the feeding the animals, the horses, cleaning up after them. Now, this is ultimate hindsight, but what would you have counseled the horse manure cleanup people to do? I mean, thinking about it from now, it’s like, okay, I go around. I’ve got some low-paid people, low-skilled, and I pick up horse manure. And that’s my job, and that’s my business. And I can’t imagine a world in which there are not horses on the street of New York. How am I going to pivot? Let’s go back. And what would you have counseled them? I’m even just thinking myself. What would I have counseled them? I know the rest of the story.

Scott: Yeah. We certainly have the benefit of hindsight now. What I like to help executives do is to think in terms of analogies. And I’ll give you an example.

Back when social media was first rearing its ugly head in business — and there were a lot of skeptics back then. I mean, again, something we take for granted now. But you think about the advent of Twitter and of Facebook and even email at a certain point. Somebody shared an article with me from a business journal. And it was kind of like a case study that all these employees were petitioning the boss to allow them to have access to this new technology. And again, the boss, very skeptical, was concerned that it would be a drain on productivity. But in order to assuage his employees, in order to, to get them off of his back, he said, “Well, let’s, let’s run an experiment. Let’s set up kind of a central kiosk out in the middle of everyone’s desks where we can keep an eye on this so we know that people won’t be wasting their time, and they won’t be giving away corporate secrets or anything like that. It will be kind of a publicly available thing.”

And do you know that that business journal was from the 1920s, and the technology was the telephone? Now, again, you think about how closely we use all of these utilities from telephone to email to, to digital and social. It’s just taken for granted. So, put yourself in the situation of the horse manure guy. The question is what kind of analogy could you present to him to help him understand that there will be change coming. We not know exactly what it’s going to look like, but you need to be ready to adapt.

It could be that, with the advent of street cars, let’s say, that began to reduce the the number of, or at least the routes of horses and carriages in the city. Alright, well, we’re only operating, on the side of the road now. You know, we’re not operating in the center. Or now we’ve actually seen more of our business driven out to the suburbs rather than the city center. Right? So, we can already begin to see some of these things. So, you know, my recommendation would be, if I were more farsighted than some folks… This is the interesting thing, Paul. I tend to pride myself on my knowledge of history and literature and the things that have already happened, but at the same time, I kind of think of myself as a futurist. Right? “What’s past is prologue.” It’s quite simple as that. Shakespeare knew what he was talking about.

So to say to the manure guy, “You might think about focusing on places where we know horses are going to be needed regardless of how this car thing works out.” Farms, zoos, circuses, wherever. Equestrian shoes. You know, wherever we see horse concentrations now get them to start thinking about alternative markets and how they can actually continue to be part of that niche rather than fighting what we all know is coming, even though we’re not be able to see clearly what it is.

Paul: Right. It’s very much like innovation. It’s like that’s not obvious, but once it happens, it was very obvious.

Scott: Exactly.

Paul: I think it’s the core of the issue here is how do you get people to take the leap to understand or even take the leap to consider understanding what might be.

Conclusion

As you’re aware we’ve been talking with Scott Monty of Scott Monty Strategies. There’s gonna be a whole bunch of show notes based on what we’ve talked about and we’ll have his contact information there as well.

So, Scott, thank you very much for coming on the show. We appreciate it.

Scott: It’s my great pleasure Paul, thank you.

More Episodes:

This is Part 2 of 3 our interview with Scott Monty. Stay tuned for Parts 3 coming soon! If you missed Part 1, you can listen to it here: https://saviorlabs.com/innovation-marketing-strategies-with-scott-monty/

Show Notes:

Stay Curious! Innovation & Motivation

February 18, 2020 / / 0 Comments

On Episode 111 of The Edge of Innovation, we’re continuing our conversation with inventor Falk Wolsky! This time we’re talking about why it’s important to stay curious as an innovator! 

Sections

Introduction
Stay Curious About Everything
What Makes You Unique is Curiosity
Innogate Tech
You Need To Have An API Strategy
Falk Asks About Paul’s Inventions
Is Automation a Good Thing?
Making People Useful Again
Training People Who Are Willing To Learn
How Do You Motivate People To Change?
Conclusion: “Stay Curious”
More Episodes
Show Notes

What Sets Inventors Apart From Other People? – Part 2 of Our Conversation With Falk Wolsky

Introduction

Paul: We’re talking with Falk Wolsky. He’s the Chief Innovation Officer with Innogate Tech.

Is there anything specific you would like to talk about in this interview that would be helpful, you think, that I haven’t touched on yet?

Falk: This is a hard question.

Paul: I know. I’m sorry.

Stay Curious About Everything

Falk: Yes, yes. I will not sell my product. That is not fair. We talked about innovation, but I’m very interesting, hearing about how maybe we all will see supernova very soon. Scientists are very interested in it because in the nebula of Orion, there is one star, and he lose in the brightness, right? And in these days, in these weeks. And people are very curious because it’s maybe a sign that he will have supernovas. First time we actually can watch supernova.

Why I tell you this? Because you come back to this curiosity. Now I might say, “Why I should care? It’s not economically relevant. It’s not relevant for my calendar. It’s not relevant for my relationship and so on and so on.” But somehow, we are all part of this very big game. Right? We are the very small bubble, in a very small blue planet, flying around the very small star, in a very small galaxy and surrounding us. Might say this is a wonderful to trigger to look up and say, “Wow. Cool. Amazing.” This wow-cool-amazing is a wonderful world.” Let’s come back and have a wonderful world for Michael Ende, one of my favorite authors as a child. He was writing “The Neverending Story.” He said if you’re getting adult but don’t stay a child, you’re not a human.

Paul: Yeah, that’s true.

Falk: But what it is, is the eyes of children, not everywhere to see wonders but to stay curious. The one is you cannot see any time. Again, you have seen the buck. It’s still a buck. Wonderful. And after a thousand times, it’s still a buck. You learned it. Nevertheless, there is so much interesting things and to keep curious and stay curious.

What Makes You Unique is Curiosity

Falk: When you ask what is to say, what is to talk about, this is the key. Staying curious. In our world, it’s the definition. Maybe even to connect it to Masamune Shirow’s “Ghost in the Shell.” It is one of the best and most accurate future prediction, some of any book I read. I read Asimov. I read Stanislav Lem and a lot of Strugatski. And so on and so on. Everyone has this vision how the future could be. But this Masamune Shirow was most accurate for fifty years. I’ll watch this because we get a good impression of what will be.

And there’s one scene – everything is very philosophical in this, and very military. It’s crazy all the time. It’s a shooting. It’s the special force of military for the government and so on. But there’s a scene with robots. They’re getting their own artificial intelligence, and they must curious. And that curiosity makes them special. And there’s one sentence in this time in which we live now, when everybody can have access to information as much as he need, because we all have internet. What makes you unique is curiosity. Because only then you will go and search and find and will build your own uniqueness. That’s a wonderful reward.

Paul: Yes, I think you’re right. I think, as I’ve been taking notes here, I underlined curiosity twice. I think that’s the definitive differentiator for an innovator. It’s somebody that’s really curious and how are we going to solve this in a different way.

So, one of the things that we will include in our show notes is some of the links that Falk has alluded to and also some of the things that he reads and frequents, both on the supernova and different things that he’s interested in as well as to his company, which… Well, tell us a little bit about that. You’re headquartered where? And what do you actually do on a daily basis?

Innogate Tech

Falk: The very first is it might be interesting. I live in two different countries, mostly likely in the hotels, because I work in Germany, and I work in Ukraine.

Paul: Okay.

Falk: Ukraine because I met my wonderful wife last year, and she was actually from Ukraine. I was, you will laugh about, curious to fly there and get in contact because she was reading, as one of the last people even I know — and then women — she was reading Strugatski. I said, “Not true. I need to get to know to you.” I come to Ukraine and we get in touch, and we fall in love, and we married. So, Ukraine. This is where Innogate reside.

Innogate is mainly focused to business applications. Roughly speaking about all this AP. And doing this for very big companies in the energy sector. In Ukraine you have DTEK for example. It’s a very big one. And what I dislike, they have, it seems to me still over 80% of charcoal to power. This is coal to power. Right? So, this is not really friendly. And in Ukraine, nobody cares. Right? They are not developed like, for example, Germany, when they look really close to the detail. How will we make electricity?

But they had a very good program and energy tariff in Ukraine to support solar and wind power. And this was a huge push also for this DTEK. And the baseline is still there’s people working there already. Roughly 300,000 people so far, I remember. That’s a lot. And they somehow need to work. And a workplace software all the time, contracted to customers, contracted to suppliers, management, field service — all this stuff.

And this kind of software Innogate makes. And, DTEK has a digitalization, master plan because they also understand when we do all of the paper forms. It will be a little bit slow. We cannot grow internationally. We cannot grow. We cannot save cost. And to digitalize, processes, is a huge thing.

Actually it starts very boring with the first question. Do you have everywhere Wi-Fi?

They say, “Huh? Yes, yes, we have. No, you mean office.”

“I don’t mean office. I mean do you have everywhere Wi-Fi? In the production sites, in the markets, at the stations where you go around?”

And then, ah-ha, okay, if you have everywhere Wi-Fi, people can work in a close network, and you have applications. Everyone has a smartphone that they need to access. That’s the first step.

You Need To Have An API Strategy

Falk: Then the question, do you have an API strategy? API is the possibility to offer you services for first to yourself. You will develop faster when you have a clear API strategy, and you can show others that you have these services. It was a very nice example. I worked once in Germany for E.ON, also energy producer. And they had to — you cannot believe. They had 800 internal — no. 800 external APIs and,1500 internal. It’s pretty lot. They said, “We have somehow we have 18 APIs only to get zip codes.”

Paul: Wow.

Falk: But these APIs, it’s a very good point when you can first invite developers, companies, and external service partners to go with you, together, and create a value. If you have smart meters, it’s very nice but how to connect and how to invite all the companies to invent something on that infrastructure, go with you? You need to have an API.

This, for example, I did also here in Germany, in GK where I worked for retail. This is one of the biggest companies producing software for retail. Whenever you go, for example, there’s retailers like Lidl, Walmart, we step by step. Also, go for American Market. And so, we go step by step then to produce software for the point of sale. One of the biggest, because this is a quite complex process. And it’s the same. I came to company and say, very brave actually, I said, “You don’t have an API strategy. You have to one. You have to have one.” We have now a very good API, and people, step by step, can integrate with us.

Falk: And that’s a very first point when you come in the sense of innovation, first make the basics. Right? Because you cannot invent something if you cannot connect to a company. API first, the right structure to scale. That is the point when you’ll come up, and then you can build step by step. I said, “Okay, we have to payment, we have to integrate with different software windows. We have to do this and this and that, and create products and so on.” And then teams, step by step, develop it.

Paul: Fascinating.

Falk Asks About Paul’s Inventions

Falk: Oh, okay. Now I have a question too. What about you? We talked a lot about me. Pretty boring. What about you? Who are you? And what you did? You’re also an inventor, I heard.

Paul: Yeah, I’m multidiscipline, done a lot of manufacturing stuff, a lot of technology stuff and when technology, computers come out, I saw a way to do a lot of the things that you would do in the manufacturing sector without getting your hands dirty. It’s like a manufacturing suite without – there’s no oil or grease. You don’t have to get dirt under your fingernails. I’ve done a lot of that over years, and I love technology. You know, the same stuff that you’ve done. We’re taking software, writing it. I’ve written software. Did a startup that was e-forensics in the email sector.

Falk: Yeah, okay. Very interesting.

Paul: Ended up selling that. I’ve done publishing software, publishing automation software for financial publishing and things like that. And the company I’m currently doing is sort of more a labor of love, but it’s an IT services firm, and I had an IT services firm in — let me think… I sold it in 2000, after about ten years. I really enjoyed that company. So, I started another one, IT consulting. And I’m sort of building that up right now. And that’s going very well and I’m enjoying it.

Falk: You’re so very early to potential in this software to automate everything. Right?

Paul: Yes.

Falk: This is the footprint I see when you told this.

Paul: Very much so. Very much so. There was an Apple campaign with Kinkos, very old, called Wheels for the Mind. And it really symbolized, or encapsulated, what you could do with technology. It was the ability to automate and give people more efficiency and basically amplify the number of people you had.

Is Automation a Good Thing?

Falk: Let me ask you something about it.

Paul: Yeah.

Falk: With my wife, we will build a foundation. And the foundation should take care about what we call the youthless society. I’m pretty sure you have heard already about it. Youthless society is the people, they get out-automated of their jobs. We have this discussion a lot, and I mean we have now a huge quote of people in the university already, and their jobs they later do still don’t exist.

And on the other hand, we have a huge amount of people, they will just out-automate, I say. As I see two directions as a very first — the truckers and the lawyers. The problem on them is they’re not high-skilled. If the trucks — especially the trucks are super easy in exchange to cars on the street in the city, but on the highway, it’s easier. And the big companies are very near to getting full-automated solutions of that in the range of five years. This is millions of people. Millions.

What they will do? They go to elderly care? I don’t believe so. They have, most of the time, no second job. And this is what you call the youthless society, and they will get more and more by this automation. So, one of the philosophical questions goes exactly this: If a human understands he can automate something, he will do. But it’s not always a good thing. How do you see this?

Making People Useful Again

Paul: Well, first of all, I mean, what we’re doing, we’re in the IT space. And the unemployment rate in the US is under 4%, under 3%. You can’t hire anybody. And what we we’re doing is we’re taking people that are unemployable or not skilled in technology and training them. If we can take a person who has good personality skills, we can add to them systems, automation, that can help them deliver technology solutions to a certain level.

I think that the new economy can be bent to the will of making people useful again. I think there’s a tremendous need for making them useful. And I think it’s going to be interesting because there’s going to be people who are not willing to want to learn something new. That’s the hardest thing to overcome, is how do you motivate somebody who has invested the large majority of their life into something that is now obsolete. And how do you get over that? I think that’s something that we need to come to terms with.

But I think it’s happened. There’s been industries. You know, you look at here in America, there’s been many industries that have come and gone that have been overseas moved to Asia or different countries. And, now many of those people, I don’t think were properly mentored or properly brought along, if you will. They weren’t really stewarded well. They were sort of allowed to just exist or have a basic subsistence life. But I think they also allowed themselves to have that basic subsistence life. And I think our society, in some ways encouraged that through welfare and things like that.

Training People Who Are Willing To Learn

Paul: There’s a big argument there is, well, we should take care of these people. But if you didn’t have it, and they were forced to go out and get a job, then they’d learn the new technologies, and so what I’m trying to do is, I want to take people and offer them free training and see if they’re interested in technology jobs and offer them… and hire people that have a good personality. Because that’s the one thing I can’t train is, if you have a bad personality, I can’t do anything about that. But I can teach you how to talk to a person and say, “Oh, what’s your issue? Oh, okay. Well, let me get the right person for you.” I can do all sorts of levels at that.

And so I think that, in some ways, we have a lot of green fields coming up. You know, that there’s a lot of opportunity in ways that people would have never imagined they could have worked twenty years ago or ten years ago. But it’s what we do with that. I think technology enables that, just like it enables all these other things. These people who are unwilling to change, I don’t think we just dismiss them and say, “Well, tough for you.” I think we need to, as a society, figure out how to shepherd them along so that they feel okay to…

In some ways, it’s sort of like “Well, you made the wrong bet. You went into the wrong career that isn’t going to be a long-lasting career, that you’re not going to be able to retire into.” I mean, even doctors nowadays, who knows what’s going to happen with them in America with the healthcare changes. If you were a doctor, you were set for life. Well, now it may turn into no. You have a standard wage, and that’s the way it is. It’s an interesting change.

So, I agree that we need to be good stewards of technology. And I do think that there is a tremendous potential for it to do exactly what you’re saying, that, for all these people to just be lost and not to be able to do that. I think what will happen is people will realize a little bit too late. I think we’re early realizing this. That they will realize that “Oh my gosh, we need to make these people useful to the technology economy because that’s the only way it’s going to scale.” So that’s my two cents.

Falk: Very good one. Very good one. I liked your answer a lot. Thank you very much. Some points I do agree. Some points are on my radar, let’s say two. Some are completely new.

How Do You Motivate People To Change?

Falk: What I take out of it is, what is not new is education, education, education. What is new to me, motivation. The big point is to motivate the guys who don’t want to learn new things. That is interesting. That is really a point when you say, “Okay, wow! How I do motivate them to change with the time?” And that is maybe the bigger one instead of education. Education you have all the tools in the moment. They’re electronic, classic. Right? You can do it. You can measure it afterward. But to motivate them, it’s a very good question. I will chew on it, I would say.

Paul: That’s the work. That’s the real work is to motivate them. So it’s an emotional thing is to…

Falk: True. That’s very good. This is something for my wife. She’s very good in all emotional stuff. She’s a marketing officer. She created a lot of brands. She’s very famous in Ukraine. [She has her own community, I might say. When she, step by step, going for international, and she is my emotional brain. So, I am the technical brain, and we are absolutely… Some people say we, as a couple, are complete. Might be. Might be.

Paul: I understand. I know exactly what you mean.

Conclusion: “Stay Curious”

Paul: Well excellent. We’ve been talking with Falk Wolsky. He’s the chief innovation officer with Innogate Tech, and you’re headquartered in — what would you say? Both Ukraine and…

Falk: Kiev. The one is in Kiev, Ukraine, and Germany, Berlin. Let’s say Berlin.

Paul: Okay. And we’ve had a great talk about innovation, and there’ll be a lot of links in the show notes to both his company and some of the things we’ve talked about. Any final words you’d like to say?

Falk: If I say now “stay curious,” it’s too, too simple.

Paul: Well. That’s a good one to say. Stay curious. I like that.

Falk: Stay curious. The final thought is that I’m very thankful for the talk. I enjoyed it a lot.

Paul: Excellent.

Falk: It was very good questions. Thank you also for that. And I wish all of us, especially in this times we have, in 2020 good year. Let’s come safe through to the year. This is concerning most of us in the moment, I believe.

And stay curious is the key. Right? Because, especially we see our future is more and more speed up, uncertain, flexible, changing. Everything is not like it was yesterday already. We will only survive if we are flexible and curious.

Paul: Yes, absolutely. Good words. Well, thank you very much.

Falk: Thank you very much too. It was a pleasure to talk to you.

Paul: It was a pleasure to talk to you too.

More Episodes:

This is Part 3 of 3 our interview with Falk Wolsky. If you missed Parts 1 & 2, you can listen to them here:

Part 1: Exploring Innovation & Inventing With Falk Wolsky
Part 2: What Sets Inventors Apart From Other People?

Show Notes:

The Ups & Downs of Running a Successful Company

June 11, 2019 / / 0 Comments

On Episode 93 of The Edge of Innovation, we’re talking with entrepreneur Paul Rush, about the ups & downs of running a successful company.

Sections

How Substantial Began: Starting a Consulting Company
Momentum in Business
Taking On The Leadership Role
Architypes of People Who Make Up the Entrepreneurship Community
The Ups and Downs of Running a Successful Company
Making Tough Decisions and Following Through on Them
Science Fiction & a Post Capitalist Universe For Humanity
Is Optimism Necessary For Entrepreneurs?
Do Entrepreneurs Have to Be Greedy?
Investors & Entrepreneurs: A Tenuous But Important Relationship
What Keeps Paul Going Every Day
Book Recommendations
Closing Thoughts
More Episodes
Show Notes

The Ups & Downs of Running a Successful Company

How Substantial Began: Starting a Consulting Company

Paul Parisi: Well today I’d like to welcome Paul Rush from Substantial.

So, you’re at this company and you close down after a few years. What was next?

Paul Rush: It was the immediate transition to Substantial. So, I’d had a bunch of people who really loved working together. It turns out when you gather a bunch of people with a strong common interest – our case was music and electronic music in particular – We all were very happy working with each other. We were all very unhappy not making money. And so I turned everyone and said, “Hey, how do you guys feel about doing consulting for a little bit and actually making some money?” And everyone said, “That sounds fantastic!”

Momentum in Business

Paul Rush: And the funny thing is that there was a sort of a change in the momentum or in the headwinds that is, I think, really important. It’s another thing I consider a big lesson, which is about momentum in business. The feeling at the digital music retail company was of pushing a boulder up hill and it was so hard, and it got harder the farther it went up. And we were tired. Then we started this little consulting business and it was like letting the boulder go and following it downhill. Within a couple weeks we had office space, clients, employees and we’re in the black.

When you get something that just clicks, you get a product that clicks, you follow. And I feel like that’s not something that I know how to do reliably but I know when you push too hard in the wrong direction, there’s a sign there. And there are moments when you’ll just get something that works and feels good and it’s worth paying attention to those signals.

Taking On The Leadership Role

Paul Parisi: Let me ask you a question. So, you were all together. Why were you elected to say, Hey, let’s think about doing a consulting gig?” Why did you fill that vacuum? Or was there a vacuum? Or were there other people who said, “Hey let’s go do this.” And you said, “No, I want to go this direction.” And people followed you. Right there, that is an example of entrepreneurial insight where you’re saying, “Let’s do this.”

Paul Rush: Yeah, I think this goes to some other things we were talking about earlier. I don’t understand how to identify these attributes and if they’re learned or granted with your personality, but I was the one who had started the previous company and so I was in that position – in the leadership position – and it just occurred to me as the right thing to do and so I made it happen. And it was as simple as that. I don’t think anyone else was even suggesting other ideas of what we could do next. I guess everyone else just assumed that they’d go get a job. What makes a person do that? Just have an idea that they can. That they can carve their own path. That they can go their own way at any moment. But that’s who I am and that’s who I know a lot of entrepreneurs to be.

Paul Parisi: I agree with you whole heartedly but was there anybody else who was saying we should do something or was it pretty much…. Because for me that was probably very obvious to you that that was a potential next step. Like blatantly obvious. But I’ll bet for the majority of the people that went with you, it wasn’t obvious. And when you mentioned it, it was like, “Hey, that’s s a cool idea.” and it’s like “duh.”

When you’re an entrepreneur, one seems to be so close to the ideas that it’s like, “Well, this is obvious. Of course, you’d do that.” And I’m wondering how you have some ability to look back on it? What can you offer or insight? Did that happen? Was it not even thought of? What happened? A little bit deeper there. “We like each other. Let’s go do something together.” Or what was it?

Paul Rush: I think I realized that I had something valuable which was a group of talented engineers and people that liked each other. And this sort of ethos around the VC world where VCs will generally look to who the leadership is and who the team is. Sometimes above and beyond what the product or concept is.

Paul Parisi: Right

Paul Rush: It was something that felt natural to me. That, “Hey, we had something valuable here, which is a collected group of people who are good. What can we do with this?” We could have gone and started a product but it didn’t seem practical given that we had negative money.

And I had known that there were people that were hiring for this kind of work. It was in high demand, so it was a natural answer of the question of, “What comes next?” But, I think that it is interesting that not everyone asks that question of themselves. “What can I do with what I have? How do I take what I have into the world in a way that is novel or non-traditional?” I guess.

Architypes of People Who Make Up the Entrepreneurship Community

Paul Parisi: So, do you think, as we talk about entrepreneurship and innovation here, that – see for you that’s not a scary question or a scary discussion to have to say, “Well, let’s do this?” Whereas some people may not even perceive it, let alone have the wherewithal to survive the scariness of it. They may be terrified of saying, “I’m going to go start a business.” Or, “Let’s do consulting.”

Now, me and you would come and say, “I have no idea how to do that but well, we’ll figure it out.” Some people are wired, maybe the majority of people, with, “I have no idea how to do that. I’m going to run away.”

Paul Rush: Right. Right. Yeah, I have thought about the sort of architypes of people who make up the entrepreneurship community and there are different ones. I think you and I might be more similar. I do know that there are people who work in the corporate world for fifteen, twenty years even, and then decide one day that they want to do this. Although I think that’s probably a lower percentage.

I really think that if it’s not something that was sort of given at birth, than I think the alternative is that someone turned you on to the ideas in a strong way, that you could do your own thing. That’s the reason why I want to teach entrepreneurship and why I care. I mean, I think it’s a very positive force for the world. So, at the source, it’s that. But I don’t think most people even know that it’s a possibility.

I can’t identify when, but I know I was exposed to this idea by different people. My father probably was one. He wasn’t an entrepreneur, but he was an independent. Knowing that you can get out there and do your own thing, is the seed. And when that grows with some amount of confidence and the desire to try, I think those two things are super important. And I think it is a shame that we don’t teach people more, that this is a thing that is possible.

The Ups and Downs of Running a Successful Company

Paul Parisi: Interesting. So, you were at Substantial. You founded Substantial. Now you’re back at Substantial. What happened in between there?

Paul Rush: Well, the first couple years of the company were fast growth. We hit the 2008 slowdown. That was a really really rough year. We survived it and then we started growing again and we were doubling year after year, for quite a while. And then, I think it was incredible because we never really intended to have a consulting company. It was an accidental start as a lot of companies can be accidental successes. And then suddenly, I wound up with eighty-five employees and a company that was doing very well, and people were excited to work at and we were just following our noses.

The problem with that is that following your nose only gets you so far. And people run into this at different points, I think, when they’re starting businesses but you do run into a wall of lack of experience and this sort of intuition that you have about where to go next, or the luck, or whatever you want to call it, sort of runs out. I got frustrated after a year, to a stagnant situation where I thought to myself, “You know, maybe I’m not good at this next phase.” We had hit a plateau We’d hit plateaus before and I’d figured out ways to get around them but this plateau seemed more difficult to overcome.

And so, I talked to people and was convinced that the right thing to do would be to let other people take over and I went through a big crisis of confidence, thinking maybe I was the one holding the company back. Maybe this is something that is my fault and I need to let it go and I owe the people at the company that. So, it was really hard to take these things a part. But that was what I ended up doing, stepping away from the CEO role.

I attempted to take a break and didn’t get too far into it when the company started performing worse and worse and I spent the next year trying to work from the sidelines to help get things back on track and it wasn’t working and I was kind of in denial of the fact that it wasn’t working. It was a very difficult time in life for lots of different reasons, but it was hard to watch a thing that you’d built, start crumbing. And people on teams you cared so much about struggling so hard. And then the financial reality set it. It got the point where we were in debt to the bank. And I couldn’t deny the fact that things were not going well any longer and I stepped back in and then went through a very difficult process of trying to pull us out of the nosedive that we were in. I managed to do it somehow and then had a process of figuring out who to run it next because I was still pretty convinced that this was the right thing to do. And found someone internally and prompted them. They were head of accounts, and she’s now running the company. She’s in the CEO position and I’m back full time in a sort of founder role, doing sales work and doing other things and trying to push the company in interesting directions.

But yeah it took two tries and the second try seemed to be doing really well. We’ve formed a great team and she and I, of course, don’t always see eye to eye, but we are working really effectively together, and the company, since we made those changes, has been profitable month over month every month.

Making Tough Decisions and Following Through on Them

Paul Parisi: Cool. Now were those changes ultimately in retrospect obvious?

Paul Rush: It’s obvious that we needed to change leadership.

Paul Parisi: Or were they unanticipated? The changes you needed to make, were they surprising to you or were they pretty obvious. This was what needed to happen it was just a matter of specifics and how we do that?

Paul Rush: It was a lot of the basics were pretty obvious and the reason why that can be such a problem is that it’s very easy to know what you have to do and it can be very hard to do them if those things are difficult.

Paul Parisi: Because you’re a nice person?

Paul Rush: Yeah, because you want to be liked. You want to like yourself. You want people to like you.

Paul Parisi: So, you must not have had any venture capital in this business?

Paul Rush: No. I did not raise any money for this.

Paul Parisi: Because that would be the equalizer. “We don’t care about people.”

Paul Rush: That would change things. That’s right. That’s totally right. And I’m a big believer in businesses that are done outside that. I think they have a lot more character and can leave the world in a much better place. But yeah, they were mostly obvious changes that I just dragged my feet on forever.

Paul Parisi: Because it’s hard.

Paul Rush: It’s so hard. That has got to be one of the hardest things. Making the tough decisions and following through on them.

Paul Parisi: So, this is an interesting question. It’s difficult dealing with people because it’s great when they do everything the way they should or the way you want them to, assuming that’s the right way, but there’s a lot of inertia to overcome. A lot of energy to put into people to say, “No, let’s do it this way or let’s do it this way.”And that’s hard hard work.

Paul Rush: It’’s so hard. It’s another one of those things that I think we will work out as a group of people on the planet, is figuring out how to get people aligned and moving in the same direction.

Paul Parisi: You’re a very hopefully man!

Science Fiction & a Post Capitalist Universe For Humanity

Paul Parisi: So, you said you were an aficionado of sorts, of science fiction. Which universe are you into the most? Is it the Star Trek universe? The Star Wars universe? I’m hearing the Star Trek universe because it’s the Utopian view of people finally working together and not needing money.

Paul Rush: Yeah, I was never a big fan of a Star Trek fan growing up. I was much more of a Star Wars person but the ideas that Roddenberry put into play and the world, particularly of Next Generation. Next Generation is such a fantastic TV show. It’s really worth checking out. It can seem a little cheesy at times but it’s this fantastic Twilight Zone experimentation of the limits of humanity and an understanding of a lot about how the future could work. It’s a really beautiful show. But yeah, Roddenberry paints a picture of a post capitalist universe for humanity and I think that it might be that the next evolution of, “Can we graduate to that level?”

Paul Parisi: It’s a lot of work to graduate to that level. We have a lot of things to do scientifically. Energy is one of the biggest problems. How do we provide energy?

Paul Rush: Well, if you know the whole thing about type 1 and 2 and 3 civilizations, that’s how much energy you’re extracting from your local star. We’re not type 1 even, which is harnessing the energy that lands on our planet. When we can get to even that place, then energy becomes basically free. It’s as free as air is which is not entirely free, but mostly free. And things change dramatically. You’re right. It is about energy. As soon as we have energy liberated, we are in a much much better place.

Paul Parisi: Well, we are but we have a huge debt to overcome of knowing how to react to circumstances that we’re not used to. Because all of a sudden, how do you – not you – but how does the non-entrepreneurial, non-innovative person react in a world where they can do that? And that’s a challenge because there are a set of people that, “Just tell me what to do. I’m not interested in that.” That’s going to be a difficult paradigm shift for people to go through.

Paul Rush: Of just having more time on their hands or more agency with their lives?

Paul Parisi: More agency I would say, in choosing what to do. We would like to think that everyone would be altruistic and take the better road potentially. The road less traveled. But we just have so much overwhelming, overcoming the inertia to do that.

Paul Rush: I kind of believe that it will get easier over time. I know I sound incredibly optimistic in everything that I’m saying right now. There is a lot, but I think human beings, by and large, gravitate toward things that are better for them over time. I mean, that certainly feels like how history has gone. We are in this, quote on quote, “best time to be alive” of history and most people are not talking about that. They are talking about all the problems that we see but it’s only because we’re so globalized and we see all the problems now in focus. We used to only see community problems. You could argue that pre-agriculture was a great time to be a human too but as we are, it seems like the trends are going in the right direction. We just have to get over a bunch of really gnarly problems around how to organize ourselves and then solve some science hurdles out there. But I think it’s possible.

Is Optimism Necessary For Entrepreneurs?

Paul Parisi: You mentioned the word optimism. Do you think that a pre-disposition toward optimism is a necessity for entrepreneurs?

Paul Rush: That’s a great question. I know people who are very cynical, and I actually think I am one even though I haven’t spoken that way in this conversation. But I think there’s something about being able to see that it is possible to get something off the ground and to make change happen in a meaningful way. It is an absolute requirement of being an entrepreneur. Because typically the process of entrepreneurship is going from something that doesn’t exist to something that does. And you have to have enough vision, imagination, hope whatever you want to call it, to see that that is a possibility. And of course, the hope and positivity to take a risk. So, you have to be optimistic when you’re facing a big risk, saying, “I think this is worth doing.”

Paul Parisi: I would challenge you on the word “cynic.” I don’t think you’re probably a cynic. You’re probably a skeptic. And the difference between a skeptic and a cynic, is that a skeptic, when shown what is possible, will be your best advocate. In other words, you can flip a skeptic to a champion. But a cynic you cannot influence.

Paul Rush: I like the term cynical optimist because it’s funny and self-contradicting but you’re probably right. I am probably not deeply cynical.

Paul Parisi: Well yeah. I agree. It is sort of an inflaming idea here to say, “Okay, what is that?” It’s a challenge. I’m a skeptic of most things but once I learn about it and test it all, and I agree, you’re not going to change my mind.

Paul Rush: Yeah, there’s definitely some stubbornness that’s also part of the entrepreneurship type where you have to be willing to stick with something long enough to get over the initial difficulties and hurdles and say, “It’s still going to happen! I’m definitely going to make this thing reality!” That perseverance. I guess people are calling it grit now or whatever.

Paul Parisi: The word of the day whatever it is.

Paul Rush: Just out of curiosity, do you think optimism is a requirement?

Paul Parisi: I do. I do. I don’t think it would be very fun without optimism.

Paul Rush: Yeah. That’s a good way to put it.

Do Entrepreneurs Have to Be Greedy?

Paul Parisi: Or you’ve got to be greedy. Gordon Gekko. Greed is good. That kind of thing. Greed has some bad connotations in society but go back and watch that clip. It’s a fascinating clip. I just used it in my class.

But I think, there is a dichotomy between the entrepreneur like you and like I have been, where we create our own worlds. Not in grandiose terms but we do. We’ve made the decisions. We’ve done the things and then when you start to get into venture capital and private equity and that whole world where they are concerned only with the money, it’s a very different world. I don’t think that necessary is a world of optimism. I think it’s a world of exploitation. And the almighty dollar is the bottom line and it’s a very tantalizing equalizer of interpretation, is the dollar. I’m not a big fan of that. And I’ve been involved with venture capitalists and I will never do it again.

Paul Rush: Good for you.

Paul Parisi: But that’s how they’re wired. They should be, because they want to make the money for their stock holders but I don’t see us as a planet getting very far with that methodology. You look at people like J. Paul Getty and things like that. The whole world of that early 1900’s Where did it get people? I don’t see a lot of value coming out of that except wealth. So, to make a long comment, yes, I think optimism is a requirement and mostly because I don’t think it would be very fun without it.

Investors & Entrepreneurs: A Tenuous But Important Relationship

Paul Rush: Yeah. That’s so weird that there’s such a tenuous but important relationship between investors and entrepreneurs because in some ways, they couldn’t be more different people. In some cases, you have to work with each other less than you might think but in some cases, it’s very important for real growth. Sometimes capital is super super important to have access to and to deploy before a competitor gets there, excreta. But the motivations really are just so night and day different.

And we’re seeing that with Apple now. I like to think that they can turn things around, but I think if you look at what Tim Cook is doing for the company, it’s really about optimizing the company for profit. And Steve Jobs was really working hard to make something new in the world. He had the entrepreneur spirit. And Tim has the sort of, operations hat on as the operations perspective. And it’s the same thing with all the investors that I’ve met. They really are looking for a return and it really doesn’t matter how they get it. And if you follow that logically, it can go to some places that are really not very positive for the people they are investing in.

Paul Parisi: I think the biggest problem for Apple is that Steve Jobs was a once in a trillion people, once in a billion people. There’s just not that kind of thought, that mixes those things up. I’m going to get a link to it. There was a PBS special in the late 90’s which Steve Jobs was in, and this was after he had been ousted from Apple and it was one of the most insightful interviews. I think I have it at home somewhere at home on a video cassette and that’s how old it was. But it was very insightful about be very careful about who you give your company to and what you do this way. But you always got the sense that, from what Steve Jobs was doing, it wasn’t about the money. It wasn’t, “How can I make more money at this?” It was like, “This would be really cool to have. I want this.”

Now, he had good taste, so if he said “Gee, I want triple stuff Oreos or quadruple stuff Oreos.” Okay, you know, whatever. He happened to have a vision for the way technology synergized together to say, “This is game changing.” And that doesn’t exist in a lot of places.

Paul Rush: Yeah, yeah. And I’m always so confused with people who lump him in with other, more traditional money hoarders, other billionaires, because the difference to me is just night and day. It’s a subtle distinction that’s super important because the characteristics of a person like Jobs and like Musk, are people who really want to see change in the world and they’re willing to work hard to lead towards it, as oppose to people who are just amassing money.

In my opinion, one of those things is not very useful for society and one of those is incredibly useful. It’s one of the things that has been at the heart of a lot of positive change in the world. So, I wish people could see the difference for what you can learn from it and the positive sides to emulate.

What Keeps Paul Going Every Day

Paul Parisi: Well, we’ve been talking with Paul Rush today of Substantial. And he’s been joining us from Seattle. We’ve had a great conversation about, a little bit meandering I think, but it’s a fun conversation about both entrepreneurship and innovation and businesses he’s been in.

I’d be interested in feedback from our listeners, other areas you might like us to explore. Whether it be science fiction or people problems or things like that.

I’m going to ask you a couple of questions in closing but what do you think when you get up every day? Is it, “Oh man. I’ve got to get this work done with this client?” Or is it, “Boy, I get to work with this great group of people!” Or what’s not heavy on your heart, but what fills your vision?

Paul Rush: I think these days being back at the company and being a lot more focused on trying to make it sustainably successful. I’ve been working with some different coaches which I highly recommend to people. Coaching is an amazing amazing process to go through, of self-improvement. I am very set on the goals that I’m working towards and so I’m usually starting off the day being excited to make progress, small but incremental progress on those goals and thinking about what needs to be changed in sort of a course correction mode to get there. So that’s what my mornings are usually all about. It’s getting up and orienting the day towards taking a step forward.

Book Recommendations

Paul Parisi: Cool. Recommend a book? What’s your favorite book right now?

Paul Rush: What kind of book do you want?

Paul Parisi: Doesn’t matter. Something that you’d say if you met someone in the entrepreneurial world. Not just a person on the street but a, “You’ve got to read this book!”

Paul Rush: Okay. I’m going to recommend two. We’ve hinted at it or talked about it at some point in our conversation. Sapiens. Everyone’s been reading it. It’s a fantastic book. It’s really insightful as to how we got to where we are as a species on the planet. By Yuval Noah Harari, it is fantastic.

And then there’s this science fiction book that I think could be the most prophetic book dealing with capitalism and artificial intelligence and a lot of other fun contemporary topics called Pandora’s Star by Peter Hamilton. And they both provide, I think, glimpses or ideas about where things could go. That’s something that I’m super interested in.

Closing Thoughts

Paul Parisi: Very cool. Well, okay. Any parting thoughts that you’d like to cover before we close out?

Paul Rush: No. This has been just so much fun. There’s so many more topics to cover on entrepreneurship and I’m just such a fan of getting out there and making your own path. I would encourage everybody to do it and to find help and inspiration because it can be difficult to get over the initial hurdles. But if you can make it part of your life, I think it really opens up a ton of possibility and enjoyment, purpose, and engagement in life.

Thank you so much for having me. I really appreciate it.

Paul Parisi: Well, thank you for coming on and I’m sure we’re going to invite you back.

Paul Rush: Looking forward to it. Thank You.

More Episodes:

This is Part 3 of 3 our interview with Paul Rush. If you missed Part 1 and 2 you can listen to them here:

Part 1: The Basics of Business & Entrepreneurship
Part 2: Get Out of Your Comfort Zone and Overcoming the First Hurdle of Starting Your Own Business

Show Notes:

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