Welcome to the Eventual Millionaire podcast. I?m Jaime Tardy and today we have Andrew Darbyshire on the show. Andrew owns a company called PacSoft and he also wrote the book called Think Big and Live Large and I am really excited to talk to him today. I think it?s really cool because actually how we connected is I got a random phone call and I didn?t know who it was from and apparently it was from Andrew. He had heard about the millionaire interviews. He is a millionaire. He said, ?I?m from Portland, Maine. I have an office there.? He?s actually out in Australia and we ended up having drinks and I really got a great chance to know him and I asked him to be on the show. So thank you so much for coming on today, Andrew.
ANDREW DARBYSHIRE: Thanks, Jaime. It?s a pleasure.
JAIME TARDY: So let me start off with something I actually read in your book. Normally I talk about the business and we?re definitely going to get into that but this one thing really intrigued me from the book and I don?t know if I can post it so everyone can see it but I am going to read that. That?s a report card from you and I am going to read it because I think this is really interesting and this was in 1975, the report came out and it says, ?Although Andrew has ability he has an overrated opinion of his ability. He must learn that blindly thinking he will conquer all will not get him by. He must start to listen, think and apply and above all stop fooling around. If he comes down to earth, he may do well in the electrical field.?
Now I thought that was huge and I wanted to read that on the show so everybody sort of has an idea on what you were like as a kid. So apparently a teacher thought that you were sort of fooling around too much. How did that work and how did that progress to where you are now? Did you think it was an asset or a liability?
AD: It was an asset because I haven?t changed.
JT: See, I remember us talking about that before. So tell me why that?s a good thing.
AD: The most important thing to do I think in life or the three most important things to have good mentors that are either close to you or people you observe to seize opportunities and continue to be persistent with them but most importantly is to dream. I think it was Einstein who said that imagination is more important than knowledge and when you have a vision and a dream and you get there the journey is more fun than the outcome and there has been many experiences I?ve had in business and in life where the dreams do come true.
JT: So how did you do that? Like I said, we?ll talk about your business in just a little bit, but how did you vision? How do you envision stuff and how do you dream?
AD: Things come to you sometimes. Recent example, not so much business related but it?s an example of how it happens, in about 2001 my daughter was very sick in the hospital for two months and I?d spend these horrible days looking out the window across the park of the children?s hospital in Melbourne and in the distance was the Royal Melbourne Zoo and I immediately got a vision as to why there wasn?t a relationship between the zoo and the hospital. After 12 years of people saying that I was absolutely crazy lobbying, dealing with bureaucrats in government, the queen opened a new hospital next door to the old one last October and the biggest feature of the hospital was a meerkat enclosure which was the outcome of that dream.
JT: So you were looking out the window, you just had this crazy idea that you should blend the two and then how many years later it actually came true?
AD: Twelve years and lots of roadblocks along the way; lots of bureaucrats and people who couldn?t see that vision who thought it was absolutely insane.
JT: So what made you keep going though? I mean especially if you ran into so many roadblocks.
AD: Because I knew it was a significant vision and it just had to happen in my mind. I wanted to have a legacy to my daughter?s experience and something positive come out of it and I just saw the benefits that children would gain from having animals in a hospital. There are now hospitals throughout the world looking at that hospital as a benchmark for what they might do in similar instances. Who would have thought not that long ago that people would be walking around brushing their fingers across a piece of glass and it would be fun. Someone had a dream for that and persisted with it.
The processes and the experiences that Apple had to go through to find, I mean they got Dale Carney involved in inventing a new form of glass in order to achieve that outcome. And if they had just thought well there?s no glass that could do it so we can?t do it, we?ll do a cable, the iPhone and the iPod touch and those sort of devices and the iPad and all the other tablets would not be around today because someone had a vision and someone decided to track it down. There?s an interesting article I heard about the other day called ?iPencil? and it?s not Apple related. It?s not an ?I? product but it?s a little three-page document that talks about the fact that not one person in the world has the ability or the knowledge to make a simple pencil.
If you think about it, not one person knows, not the same person who knows how to refine the graphite doesn?t know how to explore for it, where to find it or how to dig it out of the ground, the processes. The same person who cuts down trees and mills the timber into the pencil that gets that little bit of graphite up the bit of timber, they?re all different people and I?m reading a very interesting book at the moment called The Rational Optimist and it talks about this and it talks about how much a better place the world is today and will continue to become one even though there?s lots of gloom and doom around because of the collaborative efforts of people throughout the world and the more people get involved in developing technology and ideas, the more advanced the world becomes.
Every year that goes by, so every year that goes by lengthens the average lifespan by three months. So it would be possible in a number of years where people will live to 200 because the technology enhancements and all the stuff that?s going on and the rise of people out of poverty and persecution is just the right of change is massive and it?s exciting and it?s good.
JT: You?re talking my language. I love this stuff. I love talking about the advancements in technology. There is a great book by Peter Diamandis. I am still trying to get him on the show. It?s called Abundance and it really talks about the rate of technology and how fast things are going and how a long time ago, even JFK when he was in the White House doesn?t have the capability that somebody in Africa has from one cell phone. You know what I mean?
It?s really amazing what has changed in just a short amount of time so imagine 20/30 years from now what will change. We can?t even predict some of the stuff. That?s really interesting though about the way that you said it. Why do you think that is? Why do you think us becoming, paying more attention and more technically specified to one specific thing like the graphite people are really specific on that, the timber people are specific on that, why do you think that?s helping?
AD: It?s the combination of them coming together and the mixture of them coming together and that?s one of the reasons, as you mentioned, my office in the United States is in Portland, Maine. Our head office is here in Melbourne, Australia.
JT: Nobody ever comes to Portland, Maine. I?m so excited you did. You have no idea.
AD: The reason, Jaime, I spent half of yesterday booking flights to get there. I forgot what I was going to say. Looking at people connecting. Oh that?s right and I?ve been looking at whether, we?re currently involved in a university program where we have five MBA graduates over the next six months, I?m coming over in two weeks time to spend a weekend with them to brief them and their thesis, their study for their MBA program the last semester of their program is to do a case study and a business plan for my business. I?m looking at the possibility of moving the head office more west. I?ll leave people in Maine because it?s very hard to get people out of Maine.
JT: I know. That?s why I was excited for you to be here.
AD: But I?m going to spend some time in Silicon Valley and I sat down with a friend of mine the other day and we were talking about, he had a very successful run in Silicon Valley, he started in the mid ?70s and built it into a billion dollar company, which is still flourishing. I think it was acquired by another company and they do neurological tests on people, monitoring. I wanted to have a chat with him as to why he ended up in Silicon Valley.
It was absolutely by circumstance because his wife was going to the University in San Francisco when they first got married. But as circumstance came about, he?s sitting there soldiering away building these neurological test devices to go on people?s heads and he?s talking to the postman one Saturday morning and the postman says, ?Oh the guys next door do that? and he nearly wanted to kill because he thought he hit on something special but they actually didn?t do it. What they did was, when he went and knocked on their door, they did printed circuit board assembly.
So from that day to this they still do the printed board assembly for what became a billion dollar company. One of the reasons why Silicon Valley is the heart of everything is because there are people around that are in the like industry. So there are printed circuit board manufacturers, there?s an integrated circuit chip manufacturer. There?s software engineers abundant and more importantly, there?s venture capitalists so you can get in the car and see 10 of them in a day. You can?t do that so easily in Portland, Maine. You can?t do that in Aspen, Colorado where they are probably spending most of their time there on their holidays. It just means that business goes where, you know like the heart of a lot of retail businesses is in Minneapolis and in Chicago because that?s where the support mechanisms grew out and together with them so it became a combination of people working together.
When you actually understand that and acknowledge it, it makes you even more aware that in business you should stick to what you know and refine that and get very good at and not try to do what everybody else does and not do a half ass job of it to actually marketing needs a marketing specialist area. Graphic artwork is a specialist area. If you are a software writer or a builder or any sort of business, you should focus on what you?re best at and not try and do everything on the cheap to save some money. It takes time to actually accept that and acknowledge it but when you reverse engineer the successful businesses, that?s what they do. They have groups of specialists come together and it?s sum of the parts that makes something great.
JT: It?s great to talk about teams, especially because this day and age anyone can start a business and be yourself and have all the technology to do graphic arts and do all this stuff and assume that that?s sort of the best way to go and sometimes it is but if you?re trying to build a big company or something bigger than just you, you?re going to have to branch out and get those people that really matter and do what they do best comparatively to everybody else. Why don?t you tell us a little bit about your business because right now, I don?t think anybody knows right now what you actually do, so why don?t you tell us about what PacSoft is and sort of how you started it.
AD: PacSoft is a software company. We produce software for lumber and hardware stores throughout the world. We?ve got around about 2,000 clients between Australia, New Zealand, The Pacific Islands and North America, of course. How I started it was by accident. I had a background in electronics and engineering and broadcast engineering and I always had this urge to be in my own business because I came from a family of business people that were builders and my father went broke in the credit crunch of the ?70s and I watched that and what that did to him and he gave up and he drove a taxi for 25 years because he knew he could ate what he caught and no one would take it away from him as they did in the building.
He instilled watching what happened to him and instilled a strong sense of a need of financial independence within me and to this day that is probably the bedrock of what drives me is to be financially independent and to provide wealth for my children and I have far exceeded what my expectations were. My expectations initially, when I was in my early late teens/early 20s was to own a house when I got married and be able to provide hopefully for my children?s private education. Now I?ve got houses spread in a number of countries and we go on holidays to exotic locations and live very fortunate lives.
But I still constantly review what I am doing and think about why I am doing it and a good bit of doubt is also handy from time to time to keep you from the cliff. But anyhow, I was working in electronics and I was living in Santa Clara in 1979 working for a company over here learning a new product for broadcast stations to do with FM radio stations and I can remember being there when Steve Jobs moved out of his garage and started Apple and moved it into a factory because everybody was talking about it around the lunch cart.
I then came back here and worked for a number of other people. I was involved in scientific instrumentation and involved in technical machines for the FA fighter jet project and I was back in Massachusetts on the east coast, Silicon Valley at a company called J.M. Red being trained for a couple of months by a really neat guy called El Guy was his name and his best mate was Ken Austin who had formed Dick back in the late ?60s and he had all sorts of stories and he was a mentor to a degree for me.
When I came back here I was doing that for a year or two and I just had this urge inside of me to start my own business and I didn?t know how I was going to do it or what I was going to do but I used the skills that I?d learned in electronic engineering and broadcasting and I started manufacturing some broadcast equipment at nighttime and selling that and taught myself software programming on the kitchen table and at the same time reversed engineered accounting and created an accounting product. As you read, I left school when I was 15 and failed math so to learn the formulas to calculate something simple like gross profit, I had to sit there and mess around with the math until I came out with the right answer. But when you learn something that way, you don?t forget it. It stuck forever.
JT: What made you decide to go that route? If you failed math, what made you decide to make accounting software? It seems like that would be not something that you would normally choose.
AD: Didn?t think any better at the time. I had forgotten I think.
JT: I forgot that I failed math so it didn?t matter anymore.
AD: I just kept going and learned. Ultimately I had to leave my full-time employment because the opportunities were there and I rented a $35 a week office in a very dodgy part of town, went out and bought $200 worth of secondhand furniture, painted up the office and I was in business and lived off of MasterCard for six months and slowly sat down, got some tapes from a company called Ed Bray which was an English sales training thing like a John Clay sales. Sat at home all weekend, went through the tapes diligently, wrote down the steps of selling and went out and did it one foot in front of the other.
Hit the yellow pages, picked out some businesses. I?d send them lead letters. Every week I?d send out 20 lead letters, follow them up with a phone call, lots of rejection. You get one lead and you might get one silo in a 100 but just kept on going about it and it slowly grew. One day, by circumstance, I got a lead for a hardware store that wanted a system and I went and saw him and showed him what I was selling. He decided to go with NCR, a big corporation, and so probably the best letter I have ever written in my life was a letter of thanks for his time, which there?s a copy in the book, as you probably know, and to my surprise six months later he rang and said, ?It?s not working, come and see me.?
So I went down and by that time I had started writing my own software and he said, ?I?ve got confidence in you? and I sat in his hardware store for six months and wrote the system which is today the cornerstone of what we?ve got a couple thousand clients around the world with. Of course, it has evolved. It has been rewritten for Windows. I have a team of developers now and I am up there. I work out the strategic direction and what we?re doing with iOS technology and all that sort of stuff, which I think is very disruptive and which is good and away we went.
JT: So what I want to do is sort of go back a little bit because number one you told us that your dad had sort of failed in business and went back to a job. What made you decide that it was a good idea to go in business, especially like you said the first six months you sort of were running off MasterCard and getting rejections all the time? If you had such a background of it might not work, what made you keep going even though it didn?t sound like it was working at first?
AD: Well you get little snippets of success along the way that keep you going. To this day, you?re in for those peaks and when I?ve got friends that are doing it tough just look from one peak to the next, forget about the valley because you?ll go from one peak to the next but you do often traverse the valley along the way. It?s a matter of keeping that vision clearly in your mind. I?m not saying it was easy. For 15 years I worked 16 hours a day, often 6 and 7 days a week, but I did it because I enjoyed it and I did what I enjoyed doing.
I slowly built a team of people and come over there in ?93 and took over the business in Portland, Maine. Since then I?ve commuted a lot which is fortunate. I love flying. In fact, after about 6 or 8 weeks I get quite ancy in one spot. It?s just being committed. I know a lot of people do run out of money and end up going out of business but often it?s this whole ?90s/turn of the millennium view that it?s acceptable to have a cash earn figure. I think that?s a load of hogwash. Business 101 is the money coming in has to be more than the money going out.
Opportunities will come and they?ll go and you might miss a whole heck of opportunities because you don?t invest a heap of money that you don?t have and try to get technology but all of the success stories we hear, there are thousands of failures. The trick is to work towards success and not away from failure but also be aware that it is there and to not blindly spend money. People will blindly spend money. They?ll take on and some of them are successful businesses which started and operated for a long time in someone?s living room.
Businesses like Facebook and Google even though they?re freaks of nature. I don?t think anybody could have planned the vision. None of them really knew that they were going to be so hugely successful but they lived on a shoestring for awhile until they proved their model. So many people come into this office with investment and all sorts of ideas and I just don?t even give them the opportunity. I?ll give people advice but I won?t invest in businesses that people want investment when they haven?t done the hard outs themselves and done it themselves and back themselves and been paid to work the extra hours to get the work done.
It?s a matter of prioritizing what you do and I used to, when I was writing programs, I would predominantly write them in the evening because 8:30 to 5:00 was time I needed to spend in front of prospects selling. So it was foolish to be writing programs when I could be selling and talking to people but then go home and punch out what needs to be done in the timeframe you need to do it. I think anybody who thinks they can start a business, work 8:30 to 5:00, have a stable and balanced family life in the first 5 to 10/15 years and get capital investment, they?re deluding themselves.
JT: This is what I want to ask about because that?s what I?m trying to prove, right. I?m going I have small kids, I want to build a business, and I work 20 hours a week. I?m running into obstacles and going like I can?t push anymore, I can?t do anymore because it?s just not possible in the time I have. So the hard thing is that most of the time we hear well it takes 16 hour days, it takes making it your top priority. If you had kids at that time, what do you think would have been different?
AD: Probably not a whole lot because I suppose, if you?ve got kids and you?re married to someone, then you?ve got someone that can share the load, the burden with you and yes it?s good to spend time with your children, of course, but they are also fairly self sufficient in a lot of ways. It depends on what the priority is. If the priority is to build something successful in order to provide for your children long term, I think that?s a priority in this day and age because it?s going to become more competitive and tougher for children to do the things that we?ve done because the world is changing so dramatically.
If you have the skills and the ability and the drive to do it, then it?s a bit like creating a mentality where you?re providing the platform for which they may be able to springboard from. If you think a lot about the entities that?s around, that?s exactly what has happened. One person has built the hard yards and got some momentum going, then the next generation got greater momentum going and then before you know it, it?s full steam ahead. So I guess it?s a matter of measuring what is the priority to you and as I said, my priority was always financial independence because of watching what happened to my father and how he scraped by. Now he is a happy man, totally happy, but it?s not for me from watching what happened to him, the injustice. So I believe that part of fatherhood, for me, is providing a secure lifestyle for my children.
JT: I have a question then. Back up for just a second because you said, ?I think it?s going to be harder in the future for our kids with what is going on and stuff like that.? What makes you say that?
AD: Well technology is simplifying things and to a degree, even though it?s complicated, it is dumbing down things and there are sectors that are simply disappearing and they?ve been replaced by conglomerates. You think of the number of small bricktilers that have been replaced by Amazon for instance. I go for a walk every morning and I look at the retail shops and I just wonder how there?s going to be enough restaurants open to fill their space because the retail shops, the ones that are saying it?s not affecting me now, are going to get affected.
Who would have thought would have accepted buying clothing over the net and what?s worse now people go in and they measure their size and their style and then they go on the web and buy it so the retailer is just providing a showroom for someone else. Or books, you know. People just don?t go and buy books anymore. I know, for me, a friend mentioned a book the other day, I would have forgotten about it except for having my iPad, I pulled it out and picked up the Kindle version straight away.
So what does that put out of business? It puts out print shops, it puts out paper manufacturers, retail bookstores, the coffee shops that are associated with retail bookstores ? all sorts of industry have gone from multiple various types of industries where people can start up small businesses and grow to one large corporate. Even though I am positive about the future, I?m not too sure I know where it?s going or whether it?s going to be that easy for people to start smaller businesses because unless it?s a trade that you can?t replicate, such as a building trade.
They?re going to be impacted because someone will design more fabricated buildings and that sort of thing. So much will be built in factories but not so much that laborers at this stage but there are sectors of the community that are in strife. Restaurants might get affected because people always want the experience, the entertainment. If you remember in the ?80s, movie theaters were decimated by the VCR. Today it?s IMAX because people wanted to have the experience. So it?s really having a vision where the future is.
At the end of the day, that?s one of the reasons why Facebook has been so successful is because Zuckerberg was for the four months a psychology student. That gets buried. They think he was just a geek but he was actually a psychology student who also taught himself programming and the whole Facebook phenomenon is a social experiment realized. I say experiment because I don?t believe it has got a longer term future.
JT: I?ve been reading a lot of articles on the web. I know it doesn?t sound like that. I have a question though, because you deal with a lot of iOS mobile stuff. Where do you see that going in the future?
AD: Huge and it?s huge because it?s breaking down the processes to personality based computing. Our business, for instance, is an example. We have a product optimizer which has accounts receivable, accounts payable, inventory control, general ledger and point of sale and it?s a monolithic product. It?s all one executable on servers and everybody goes and does bits and pieces on the software. Whereas we?re creating a mobile app. In one of the apps is a report tool which is a dashboard where they start and then they can drill down into the dot to see what their account receivables are, what the ones they are outstanding on and click on an account and then click on the transactions that made that balance.
Who would use that? The manager would use that and he would take it home and he?d use it after work when he has played with his kids and they have gone to bed and he can analyze his business. Similarly we wrote an application which is a delivery application. So the delivery driver get his list of deliveries on the iPhone, he delivers it, takes a photograph of the goods on site, signature and puts the transaction in the database. So he would use that application where previously someone in the office would print a running sheet for him, a heap of picking slips, he?d go and deliver them and then re-input.
We have an inventory management app which the person on the shop floor would use for their inventory count. It?s where these people, employees of a retail store, in our case hardware stores, would have to learn the actual core product to do their job functionality and after. Currently now they have to learn a little bit of it and it?s their function. It?s the person now that?s computer so it means that our main desktop server application becomes a lot easier to learn and thinner. It?s a complete paradigm shift once you get your head around it. I think that?s where, let?s face it, apps are basically little executable programs that do what a web page does but it?s stable. It doesn?t resize and all of the stuff you go through with web browsers. Nothing more, nothing less.
That?s all it is. It can?t do it to data or in someone else?s server in the cloud in most extent, most circumstances but it is because of that stability and that ease of use that it has been successful and will continue to be so. There aren?t a lot of, I don?t think, there are a lot of very actual useful apps when you sit down. I often sit down at night and look at some of the apps that are there and 90 percent of it is crap.
JT: Wait, I have a really cool flashlight app on my phone though. It makes itself a flashlight. Then it?s cool, right?
AD: I bet you that when you?re in that dark restaurant and you?re trying to read the menu, you?ll forget that it?s there to use because that happens to me.
JT: I know, right! I probably would.
AD: It would be interesting to rank the most used apps you have. In my case, probably the most used app, which I should get rid of because it?s only depressing is Bloomberg to see what?s happening on the stock market. If I come back from that, it?s email and contacts and diary on my phone. If I am traveling, it?s the weather app. I look at the mortgage calculator app which is great for working out loans and the payment pay down process of loans, but other than that, there?s not a lot of stuff that I?ve got that?s actually hugely, it?s not revolutionary stuff. I forgot about a calculator app. So what, you had a calculator on your desk for the last 30 years.
JT: I know, it just looks different now.
AD: It?s very, to a large degree, it?s just convenience and subtle change.
JT: Do you see that changing though? Do you see the phone becoming the next computer where I could do anything and more with the phone comparatively or do you think it will just sort of be the way it is?
AD: No, you try using, what?s it called, Apple Words or whatever it is to write on the iPad. You use it for five seconds. I?ve used it where I?ve had the little keyboard and I?ve just typed in text to then come back to my desktop to form it into a Word document. But at the end of the day, it?s a lot easier to sit at a PC and do that stuff. It?s not built for that and I can?t, it?s in lots of stuff but it?s really simple stuff. There?s a great app for when you?re skiing, it tracks your course and your speed and that sort of thing but again, that?s a toy. It?s an enjoyment thing.
It?s a great thing but I don?t know if anybody has ever done the sums to look at whether it actually saves you money using data download versus analog phone and the ability and the convenience of it. But it certainly, there are business applications that are integrative with business processes like what we?re doing. I think they do bring huge efficiencies to businesses and again, a lot of the stuff that we do has been possible over the last 30 years on devices but they?re specific. They are very specific to business processes.
I don?t know. It would be interesting to hear from some of your listeners what serious apps they?ve found that really made a huge difference to their lives.
JT: It makes me want to go and look through it and find out, like does any of these does it really matter. Does any of these really improve anything comparatively to just having fun. I know Twitter and Facebook I use quite often. I?m not really sure how beneficial they are to my life. Connecting with people I think is huge and I?ve done that. I?ve been able to connect with amazing amounts of people but really I could do that in other ways too so it?s not necessarily.
AD: You could do it on your PC. But getting back to your original question, there isn?t a lot of processing that you do. I think the greatest use of particularly an iPad is to read the newspaper because the compound effect of that on the environment, on the businesses on the newsprint business. They don?t need as many staff, they don?t need tracks, you don?t have a recycle bin full of paper every two weeks to put out with the rubbish and you just download it and read it. For me, personally, I like reading the traditional newspaper in the original newspaper form on the iPad.
I don?t like where they?ve changed it to a webpage because I?m not used to reading that format. I like to better read page 1 to page 60 and the journalist has worked out what the important stuff is or I know where the business section is coming up or whatever. But to have it all thrown at you I think is a bit confusing.
JT: It?s funny to think. There?s a book by Nancy Duarte called Resonate. It?s an eBook and it has got so much more. Someone was just telling me about it that I need to still download it for the iPad because it has got so much multimedia experience and I think that?s the cool thing that we see. It?s not necessarily that much of an improvement but it makes it a lot more interactive and hopefully better as far as learning. I see that stuff being really cool. But like you said, it?s more like convenience and cool stuff instead of like life changing oh my goodness I?m going to work differently nowadays.
AD: You?ve got to be careful you don?t get wrapped up in the stuff and start wasting lots of energy and time doing things differently for the sake of doing it differently. What you say, I don?t know, Rupert Murdoch launched that new paper called The Daily which is driven around and video and stuff like that, but personally again I preferred to just press download the paper, go get a cup of coffee, come back, walk away with it and be able to sit there and read it. But if you?re doing all this multimedia stuff and you haven?t got good web access and you click on a video and all of a sudden it has gone away for a minute to download a video, it slows your day down. It doesn?t give you that, you end up a slave to a tool not the tool giving you information you need quickly.
JT: Yes, that?s the problem in general. I want to talk about one more thing before we end because I know you do have to get going in a little bit. You talk about mentors and I really want to ask you about how you found your mentors and how you sort of formed that relationship because a lot of people ask me well wait how did you get your mentors especially because it?s not as though we?re going and finding a coach, business coach and then paying them. Mentors to me are totally different and I think they?re different to you because we talked about it before. So how did you get your mentors and sort of if you have any advice for anyone listening on them.
AD: My first mentor was working at the radio station that I first worked at when I left school at 15 and he just inspired me. He was a grumpy 60-year-old man that had been retired. It sounded old then but it?s not now that I am getting close to it. He and I we?d go to lunch every day to a place in Melbourne called Pelligrini?s where I am actually going to go today and have a bowl of spaghetti because I?ll be in the city. It was 35 odd years ago and we?d talk about life and his experiences in radio. He had come from the old school. Every year he would go to Hawaii for three or four weeks and he would come back looking like he had been under a sunlamp and just talking about his stories of Hawaii just inspired me to explore California.
So I came all the way over there as a 16 or 17 year old on a paid 21-day tour that I saved up my money and bought and that led to me being interviewed for a job in Santa Clara, which is where I worked for a year. So one thing sort of led to the other and it?s hard to connect the dots going forward but it?s easy when you have done it and to connect them backwards. He was a mentor because I was listening to what he was doing in his life experiences. I then got one of my first customers when I started my business, a little Greek guy and he turned up in a Porsche with gold all over him, leathers and gave me an order in 1986 for $110,000 computer system, which was a lot of money then, a lot.
We became friends and are still friends. He actually became a partner for awhile but I bought him out. Other mentors I?ve had I would say observing someone like Rupert Murdoch, only because he?s from our hometown Melbourne and how successful he has been at what he does. You just sort of observe what they do and how they do it. You may not be able to do the same things or replicate because you might not have the staff or you might not have the guts to bid everything every time. You think there?s a point where you get comfortable.
I think that?s a very important thing for people is to accept their comfort level and not be driven by what they see around them because a lot of it is timing and luck. You?ve got to have the vision and the drive and you?ll always achieve a degree of success, but to achieve mega success like the steady jobs of the world that involves a lot of other circumstantial stuff. I heard him speak about three weeks ago and after he talked I actually went and spoke to him because his description of the ?70s, for him, was very similar to me. Had an electronics background, he used to play with little kits and put stuff together, which I used to do, which is why I ended up working as a radio engineer and so on and so forth.
He was an engineer at Hewlett Packard and someone introduced him to Steve Jobs. Steve Jobs could see his engineering ability. Steve Jobs had zero engineering ability.
JT: This is crazy to hear.
AD: But he had an eye for design and a bit like the likes of Donald Trump near enough wasn?t good enough. He?d make them redo it every time until it was perfect. It was almost an obsession. And Wozniak had put together this little like big computer, the Apple One and then Apple Two and Jobs basically created a molding case around it and they by circumstance sold a heap of them to Sunnyvale Computers and the rest is history. But it took Jobs five tries to get Wozniak to join him.
JT: Oh really?
AD: Wozniak wanted a career at Hewlett Packard. He was happy at Hewlett Packard. He did not want to leave Hewlett Packard. He didn?t see an opportunity and Jobs pestered and pestered and pestered the hell out of him. Finally, he joined him and if that had not happened, I would suspect that Wozniak would still be an engineer at Hewlett Packard and Jobs probably would have ended up in a caste house or something similar. It started with the whole conversation to come and get right individuals with the right skills that the combination of the two created more than two things. The sum of the parts was greater than their share.
So where I started with this is and something that I?ve learned as I?ve gotten older is watching successful people, not so much too closely, but thinking you can replicate what they did, can actually make you quite miserable. It?s actually sitting down and dissecting how they?ve done it and reading all the information about it and looking back and saying, ?Would you have done that?? If you say, ?No, that?s not my nature? then accept who you are and do what you know best and be very happy with that because otherwise you?ll be forever miserable if you measure yourself against someone else?s success. There?s a lot in there.
JT: Yes, definitely. That?s great advice. For the last question that I always ask for everybody and I didn?t give you a heads up, usually I give people a heads up, I always ask what?s one action that listeners can take this week to help move them forward towards their goal of a million?
AD: You?re right, you didn?t give me a heads up!
JT: I know, usually I do. I?m so sorry. I?ll buy you a drink next time you?re in Maine.
AD: Is to focus on the purpose of why you?re doing it. Because if you focus on the purpose of why you?re doing something, now in my case the purpose was financial independence so I never found myself in the situation that my father was in and that will get you through the tough times and it will also make you aligned with and it?s important if that purpose is also aligned with your customer?s needs, if that?s possible.
Now, you might say my financial independence is not aligned with my customer?s need. You?re right it is. I?m a small software business. If I want financial independence and I go out of business, I have a lot of very at sea customers. There are lots of other purposes in our lives and purposes why we do things but you have to have your core purpose of why you?re doing it and why you want to be successful and if you can?t articulate that enough then in a lot of people?s cases, they?d be better off actually potentially going back to base, getting the ground, getting most of that purpose and going and getting a job, in the meantime. A lot of people that are stuck in small businesses and they?ve bought themselves a job and they?re miserable.
JT: Yeah, I?ve heard that too much.
AD: They?re not going to make a million dollars doing that. They?d be better of saying I really don?t know why I am doing this and sucking it up and moving on. It?s like when you buy a bad stock, it?s very hard to sell it for a loss.
JT: Easier to keep it and see it keep going down than to sell it and know that.
AD: It?s also a matter of is that going to go up faster than something else you might get into that might go faster. It?s leveraging where you?re going to get the greatest return. But if you asked me that, I would say be prepared to work 16 hours a day, 6 or 7 days a week, focus on where you can get your best return during business hours, do the stuff that you don?t need to do during business hours after hours and keep at it, because success comes after. On average 10,000 hours takes a musician to know what they need. You read so much about the rule of 10,000 hours and it?s the same in business.
JT: I?ve heard that so many times from the millionaire interviews, it?s just crazy. Hammering it into our heads is really good because otherwise we won?t do it. Otherwise we assume we can do it without it. My 20 hours a week, it?s going to take me a really long time to get 10,000 hours.
AD: Also extend that a bit, Jaime, and it?s something I?ve done once. I sold a business and I bought it back four years later and I?ve invested money, I?ve lost millions of dollars in investments along the way but I?ve made more than I?ve lost fortunately. I was approached last year to sell the business for two digit million sum, the second decade of two digits and I thought that?s all right. When you sit down and look at it, what would you do with that money to make the money because you always sell on the multiple, and what would you do to make the money, the same sort of money.
By the time you pay capital gains tax and if it?s 10, 20, 30 million dollars, it still doesn?t matter. In order for you to maintain that net present value and make income, you?ve got to make high 20 percent returns in an area that you do not know. If you look at the business you created and it?s in an area that you do know and do know backwards, why would you get off that and go and try to do something else? For a lot of us, it?s a self esteem thing that we can?t believe the success we?ve created and we still have that needling self doubt.
So if someone else is prepared to pay you some money and you go sure, of course, got out of that but into something more difficult. It?s a matter of being in touch with the timing in life when you do go up and sell a business, because everybody, well a lot of people, particularly groups, mentoring groups, talk about preparing your business for sale. What?s your exit strategy and all those sort of things? I think it?s good to have a little bit of a focus on that so that you know what you?re striving for but that?s really a vision. Not to jump at everything unless you?re a buddy with manufacturing business.
If you?re a business that?s going along and growing, stick to what you know because you?re in an area where you don?t know what you?re doing, you?ll get conned by people, quick returns. Why invest in someone else?s drain when you?ve got yours now and stick to it.
JT: That?s really interesting.
AD: A lot of people just don?t see it that way. They say oh I built this business up someone is prepared to give me $20 million.
JT: Take it and run. They?re like woo hoo let me take it and run, don?t think about after and then you sort of hit yourself with the rest of it.
AD: Yes. So you?ve got to make that net return after tax, due to lifestyle, with a less than sense of purpose in your life. There?s only a certain amount of international travel you can do of sitting around and doing nothing. So you?ll get ancy, you?ll want to do something. What do you then do? Go on to something you don?t know. You don?t know it, you get into strife. So that surprises me that our culture is to sell your business.
JT: Okay, I have one more follow-up question. I know you only have a second. If you were to sell your business though, I mean there?s so many people, like entrepreneurs have ADD where they have a thousand business ideas, so some want to just switch over to one and go ahead and go that route. Are you not like that? You said you were a dreamer. I am surprised you wouldn?t want to sell and then start something new from the ground up.
AD: No, I wouldn?t want to start something new from the ground up because adds the 10/15-year rule and I read somewhere that the most important thing that Steve Jobs used to do is spend most of his day doing the same things.
JT: That?s awesome. Thank you so much for coming on, Andrew. We have a giveaway for the books. He sent me a bunch of books so go ahead and check it out on the website, if you go to EventualMillionaire.com and comment on this one, you could win a book from Andrew. Thank you so much. Is there any way we can reach you online or can you give us your website address so we can check it out?
AD: Sure, Jaime. My website is www.andrewdarbyshire.com.
JT: Awesome, I?ll definitely link it up too so everybody can click on it and check it out and so go ahead and comment so you can win a book and thank you so much for coming on today, Andrew.
AD: Thanks, Jaime.
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