[This transcript has been automatically generated by a digital software and will therefore  contain errors and typos. Please kindly take note of this and only rely on the digital transcript for reference.]

00:00

Hey guys, welcome back to the show. This is Ted, your friend and host speaking and on today’s show, we have Tony focused on who will teach us how to find, validate and execute our business ideas. Tony is the founder and CEO of the just life group of companies, which is listed on the New Zealand Stock Exchange. As a serial entrepreneur who has launched over 50 businesses, Tony shares his tips on how he finds validates and executes on his business ideas, his journey behind the just life group, and how he teaches the next generation of business leaders. Now Tony shares a ton of his experiences over the show. So I’m sure you’ll come away with something useful as well. Now the show notes, tools and all resources are available online at Ted Teo Comm. That’s t dt o.com. Now if you’d like to support the show, then the best way you can do this is to subscribe, leave a review and to share this with someone who will find it useful as well now as a way to say thank you and to show my appreciation to you guys, if you actually do subscribe and leave a review on Apple iTunes by the end of September, then you stand a chance to win $50 worth of gift vouchers from Amazon. Now let’s dive right in. Tony, thank you so much for joining us today. It’s such a pleasure to have you here.

 

01:03

Hi, Ted delighted to be on

 

01:04

Tony Lister, I have a simple icebreaker so we can all get to know you a bit better. Could you share a verse who is Tony Frankenstein when he is not working?

 

01:12

Or Tony Frankenstein is a first thing that comes to mind as a tennis player. But that to me work as a game. It’s like a game of Monopoly. And I love playing that game. So I probably work a lot longer than other people would say I work a lot longer than I do. But I I just love playing this game. But also like going out in the garden and, and walking and certainly put a lot of effort into exercise and balance in my life.

 

01:38

A work life balance is really important. So Tony, could you share with us your journey of just water? I know when you first started out your company was that you were renting out fax machines. So how and why did you pivot to the water industry from there?

 

01:52

Well, we rented out fax machines, and we really looked for other products that we could rent out. And I saw what a call is on the Lucy Tyler show, actually, what a way to get inspiration. And at the time, New Zealanders were starting to get into more jogging and talking about the health pyramid and what have you. And I thought maybe there’s a market for drinking water. And everybody said to me, nobody will ever pay for drinking water. And anyway, I bought six water coolers and ran a horrible ad in the local paper, which said your water is full of all these, all these little gems. And anyway, the six water coolers went. And within a couple of months I was selling a container load of them are renting but we always rented always rented.

 

02:38

Well, we proved him wrong. So Tony, you’re a seasoned entrepreneur and you’ve launched over 50 businesses to date, walk us through your process on how you source, validate and execute on your business ideas.

 

02:48

Well, one of the things is having an idea as well, entrepreneurship is having an idea and then execution. And I don’t really like doing doing research that much. Because I’d much rather research in the marketplace. So even when we went into water coolers, I said I’ve got $20,000 to lose. And and I bought water coolers, and it was really testing in the marketplace, whether it would work. And you know, very, very quickly is the same when I first started my first business with fax machines, same thing I took $1 amount. Now, today, I take much bigger amounts. And and so it’s a Yeah,

 

03:30

I’ve got I’ve got more to lose. Tony sounds like you’re very focused on getting your minimum viable product to the market as soon as you can. But What tips do you have for maybe selecting and choosing the right product in the first place?

 

03:40

It’s a very old marketing concept, which is the four P’s, which is product, price, promotion, and place or distribution. And I really try to find something unique in one or two or three or four of them if I can get all four. I know I know I’m on to a winner.

 

04:00

Tony, could you walk us through this process and show us how you actually came up with one of your actual ideas.

 

04:05

Okay, the being a public listed company, I probably can’t tell you some of the ideas I’m exploring but if I go to the past I launched a brand of sunglasses cordless fix. And, and so if I looked at the product, many people were were producing many sunglass producers were making sunglasses and all sorts of and Krylon and nylon etc. But I said I’ll take the product and make it out of one sub one out of one component which was Krylon Krylon is very, very flexible. And so I was able to serve as a product. It was made out of Krylon I call it lis fix giving it a fringe connotation of fashion. I put the trade color on on the frame. I sold it in the tri color bag in terms of price, whereas people had Variable pricing, I said, let’s make it all one price 4995. And I could sell in lots of 50. So didn’t have the have the retailer wanting to choose his own models, I said I’ll sell it on sale or exchange. So something doesn’t go in your study will exchange it with other products that do. And then in terms of promotion, we ran a very much a French ad, which was very much sitting on your sunglasses, and everyone breaks their sunglasses. And we offered a seven year guaranteed we’ll replace them, whatever happens, we’ll replace them. And then in terms of distribution, I did pharmacy only didn’t go into supermarkets. And so we got 50% market share the very, very first year, which was quite phenomenal. And every one of those four P’s, I will be able to do something uniquely.

 

05:52

Now Tony being a good businessman is so be able to be emotionally detached from your business ideas. So what advice would you have for an entrepreneur apart from experience on how they can identify when their business idea is not a good one? Or is not working? And they should walk away?

 

06:06

Yeah, I think that’s the that’s the point is being able to walk away. Lots of people, you know, you’ll hear them say never give up, never give up Never give up. Sometimes you have to give up your product isn’t there at the right time for the market or whatever. So, so so my you know, my personal belief is that is that you you know, you do try and get a product that is going to work that in, you know, an entrepreneur can normally see is normally going to be an optimist that but don’t get emotionally involved. Don’t be ready to abandon. And we have a policy ESA, which is euphoria, skepticism, abandonment, and that as you take, get very excited about a product, you think this is going to be a winner. You then think of all the things that could go wrong and you know, and you know, often you are, don’t be negative, but you do want to think all the things that could go wrong. And if there are too many, you go to a abandonments

 

07:05

guys to recap, Tonio place the four P’s on product, price promotion and place to find his business ideas. Next, he goes through the process of euphoria, skepticism, and abandonment. So he’s found his four piece and he said, the euphoria stage where he’s excited about the business idea when you also begin thinking of all the things that can go wrong with this business. And this is where he’s probably testing his minimum viable product. And if there’s too many things that can go wrong, this is where you abandon it without being overly emotionally attached. Now, Tony, could he share with us some of your worst failures and how you felt about them?

 

07:36

Probably the worst failure in my life was I introduced a product called v watch. And z watch was an opposition to swatch which was just launching at the time. And so I discovered from the receptionist at the company that was bringing them in, what their, what their product was all about how many models etc, what their pricing, and their promotion and distributions. And so I did, something’s better and all those. So really, I was doing everything, according to my formula that worked. And, and so and so with that, I launched the product. And between, you know, in three months leading up to Christmas, I sold four times as many z watches as swatched it, but the problem is the product, the plasticizer, and the product had got brittle over those three months. And the straps broke immediately. And they all came back or 27,000 of them. And it was an absolute disaster. And but it was it taught me a lesson. You know, I know I had to, obviously, if I bought a product, because the product was only three or $4. If I’d paid another 50 cents or $1, I would have known I would have had a product that had been tested by say Walmart or or whoever the plasticizer would have been, right?

 

08:58

Well, so how do you feel in all 27,000 units were returned,

 

09:01

I offered a two year guarantee. So it took two years to for them to come back. But it certainly was the worst. worst disaster. I just what I found it took me a really a year because I went into another company. And I thought before I was really giving good decision making. It took 12 months for that to happen. And so to clear my mind again, it wasn’t the money I lost that didn’t let them worry me it was I mean, it was most of the money I had at the time. But I knew that I could do something again. But it was more just getting getting my thinking. Right.

 

09:38

So I think from what you just shared, one of the important points is that in the manufacturing or production, business, quality control is very important. Especially when you’re giving a warranty. You really have to think about how your profits may actually be eaten away as time goes by.

 

09:53

Yes, I mean, I mean, I’m quite conservative, really, I mean, I’ve put in always have lots of provisions for the world. For bad debts and things, and over provide for that. So I have to incorporate that into my margin that I will have something coming back.

 

10:09

So guys, Every business has his ins and outs is important to get involved so you can really fully understand it. And it’s important to remember that the four piece was useful for finding a good business idea does not mean there will be foolproof and bulletproof. The only way to find out is to get a minimum viable product and test out in the market. If it does not work, make sure you walk away, not only let’s circle back to your company, just water after you decided to actually pivot to the water cooler distribution business. What was it like growing the business in his early days? And right now?

 

10:40

We’ve gone through a, you know, really interesting journey from you know, banks wanting their money back. And, and yeah, it’s it’s been ups and downs the whole way. The the journey, the journey was I mean, it, it went very, very quickly and went up. And we did extremely well, I think we we made a very good decision by saying we will rent, but that costs, you know, there’s a lot of money upfront, and you’re relying on the banks, in my case to give it to you, which they did until they decided they wouldn’t didn’t want to. But we got through that. And I mean, it’s very, very exciting. Now the market and this is very typical with any any product. Well, it’s just their product life cycle. So you know, it goes, it goes right up at the moment, it’s a mature market, most, most buildings have water coolers, most offices have water coolers in them. And, and so now you’re back because we our rental product, it it, the cash just keeps on coming in. So even though you stay fairly flat in terms of numbers, but you’re not buying stock anymore.

 

11:55

Now there’s a very interesting business model that you have there, Tony, by providing a rental service, you always have this constant stream of recurring revenue and cash flow, as opposed to a one off sale of maybe a water cooler to the customer itself. By having a more predictable revenue and cash flow stream. This probably gives the financial institutions more confidence in your business. So Tony, please share with us how has sticking to this business model over the years help you company?

 

12:19

Well, I think so first of all, I learned from the watch business, I needed something that was long term, and rental businesses a long term, the thing I learned we went into a into an international market, and it was a disaster, and we lost a lot of money. Now the bank never turned off the tap, they said, Hey, we know that that money that you’ve got rolling in from you, from your current operation is going to is going to keep on rolling in. So we went under $70,000,000.20 $7 million worth of debt. And we’ve re repaid that over about four or five years.

 

12:57

So guys by having a rental business model, this gave Tony’s company a constant stream of revenue and cash flow. And this is what gave the banks that confidence to actually not call back their loans, despite the failures that he suffered overseas. So try thinking about it, would having a rental business model maybe be beneficial for your company? Now back to you, Tony, I know your company is listed on the New Zealand Stock Exchange, what was the process like and what were your thoughts about it,

 

13:23

I had been chief executive of another public listed company. And I thought people weren’t taking companies when taking the marketing advantage of being listed. So so that was the reason I did the listing of what was in just water. And I and we really didn’t raise we only raised $8 million. It was we didn’t have to raise money, but it was just to be public. Now what I get a being public is that you look bigger than you are. And you get a lot of publicity, you can put out statements to the stock exchange, and they get under the paper so I’d better than normal tr. So that was a big, big thing. And even now today, the biggest company in New Zealand light is say Fonterra, they would never move from us because we look as our a big company. And that is true. Like we can’t afford to do anything cut any corners, or we test our water on the hour every hour, we have to make quite sure that hey, if anything happened, were to merely shut the shut down production, have a recall, etc. And, and big companies really appreciate that.

 

14:31

Mm. Tony, you actually managed to retain about a 70% shareholding in your company despite its public listing. So that’s very interesting to me. This means that you should gave very little equity away during earlier days as you built the company. Yes. In fact, since you just shared that you were actually borrowing from the banks and you were in about $27 million worth of debt you actually resist the whole idea of giving your shares Despite all these troubles that you went through. Yes,

 

14:56

I I suppose I am the optimistic entrepreneur. I remember One time, we were very, very close on our bank debt. And one of the partners of Price Waterhouse, Cooper said tiny, I’ve got someone who will put in a million dollars into your business for 50% of the business. And I was quite astounded. I said, What I there’s no way I would do that. And, and because I could see the value of this rental flow just coming through. And so and so I’m sorry, I tried to do step by step. Now, what I’m seeing today is graduates come out from business schools, and the first thing they do is want to raise raise money. And, and if their idea is very good, chances are they really just become like an employee, because it’s a venture capitalist comes in, and, and he invests, and then when they need more, if they grow, he needs more, he needs to take more capital. And in the end, the the guy who started the business is just an employee, and probably will be fired at one stage, if it gets big enough, good. He’s not going to be the best chief executive.

 

16:10

Yeah, Tony. But unfortunately, that seems to be the current culture behind venture capital and private equity fundraising entrepreneurs anymore concerned and proud of the money that they have raised, supposed to protect a building. But what he failed to realize maybe is that when they’re raising these funds, they’re giving a huge part of the company away. And that means giving their control away as well,

 

16:31

not only a portion of your company, but you gave away the future of your company. And like now, you know, we probably will do a capital raise shortly, which I won’t be able to fund 70% of it. So, so we’ll be giving capital away, but it’s at a much higher price. And when we first lifted, so I think that’s all right. I’ll still be in control. But I’ll have I’ll have a lesser amount, but be able to buy more things quiet.

 

17:00

So Tony, what do you think about the younger entrepreneurs these days who seem to be able to raise millions of dollars, just by their projected numbers into spreadsheets,

 

17:07

now, I think a lot of talent gets wasted because they they want to be the next Airbnb or something. And they think they have the greatest idea. It’s been a lot of time because chances are the developers or working with developers, and and they may have a good product. But it’s, it’s, you still have to market that product, you have to get it get it to market. And to me, I just I think it’s almost the fault of business schools that they that’s, that’s sort of a big part of entrepreneurship courses in fundraising.

 

17:38

Tony, you do agree that a lot of telling gets wasted because maybe sometimes young entrepreneurs don’t have the right experience or the skill sets that they need to actually lead a company properly. So let’s talk a little bit about corporate careers. So when you had a very successful corporate career before you ended up studying all your businesses, so please share with us what experiences Did you have and how it benefited you over time?

 

17:58

Well, I remember when I worked for us multinational, and every quarter, they are required, they required a forecasting, what are you going to do the next quarter for the next 12 months, rolling 12 months, in the next three years, every quarter. And I was I remember being well, and saying, in fact, man, if I if we, if they gave us time to run the business, we’d make a lot more money. But what it gave me was a discipline that you do have to keep on looking at your business, you do have to keep on planning and looking at what’s out there in the future. And, and so that was a very big one I learned. The second one that I learned was look bigger than you are. And this was a PR thing. And that’s part of the reason we went public. But we go out of our way to to get to get publicity on all sorts of things. So being public gives me immediate access to the media. But also make comments on on you know, I if the media are talking about obesity, a chances are they will ring me. And and that’s good, because that’s something I’m personally keen on it. it correlates with our water business.

 

19:13

Yes, this is a very important point, which is brand strategy is how do you want to position yourself in a market? And what are the areas of expertise that you have? If they can think about you when they think about this subject? You know, you’ve done it well, and you’re actually providing an extra channel of traffic to your business? Yes,

 

19:28

I think there are, I think your own personal profile is really important. That’s why I’m honored to be on the TED to podcast here. Because you have to you have to keep on building your own profile, as well as your company profile. And and I think that is really, really, really important to do.

 

19:50

Yeah, exactly. In today’s day and age, everything’s on social media, everything’s online, and people can’t find you they want to and that may make or break their impression of you as well. So it is a very important info So on.

 

20:01

Yes. So I’m, you know, I’m, in fact, just starting a series on entrepreneurship on YouTube. And I’ll be running this running the series. And again, it’s just so that people, you know, there’s some recognition. Oh, interesting. So

 

20:15

what I’m going to share on the YouTube series,

 

20:17

I’ll be sharing. Yeah, really just going through the experiences I’ve had, that, that would relate to people starting up a business. And and the things that, you know, how do you get that big idea? How do you execute? How do you use the right, the right people around you, you know, because you have to be nervous about using consultants, because chances are, they’ve never they’ve never run a candidate. So I’m very big on, you know, lawyers finding a lawyer who has commercial, because most lawyers just want to tell you the exact law, and often you only want to go, you want to look at what are the odds of the other side doing something, often, you just don’t want to be the only one to go 90% of that way, rather than 100%, which a lawyer will always go for 100%.

 

21:04

Tony, I know, you’ve also set up a business school in 2003. So you clearly enjoy teaching, what do you enjoy about the teaching process? And what keeps you going?

 

21:12

Well, I like I like people from I think the next lot of entrepreneurs actually come from, from low socio economic communities. And so this business goal was at a low socio economic school. And because those people understand about being desperate, or, and maybe that’s too strong a word, but they know that you have to, you have to work, your parents have had to struggle, too. And so they’re more likely to be thinking, How do I do this? How do I get out of here, etc. So, so they, you know, they’re the sort of kids that will work during the school holidays, and that just becomes a norm. So, but what they don’t know, they don’t know how to how to get to that title to the whole world, they, the world is quite small to them, it might be just their little city or or suburb. And I want to teach them how they can go go out to the world with their, with their product or service.

 

22:12

Tony, can you share a little bit about the program, so the curriculum that you’ve provided for them,

 

22:17

like I will teach us a very, very one dimensional, so I looked at it from a marketing point of view, and see what the kids like. And they at that state, they like being on screens and looking and shooting at each other. So we did business games on screens. We had when the teacher taught them a theory of say pricing. At the beginning of the week, they would sit the next day and develop 100 questions, 50 questions. And then every two students were assigned a local business. Some of them were just like the local bakery, or some were much bigger businesses. And they would go there on the Friday afternoon, and ask them about pricing. And they’d find all sorts of, you know, people, the baker local bakery might say, well, at Easter, we we put the cross on the Easter band, and we mark it up, you know, 200%. And so it was quite different to what they learned at school, the theory of it, but it meant they could answer the questions in their exams a lot better.

 

23:15

I see. So on top of the lessons that it takes to have practical experiences, because they actually get to book and speak with the local business owners this great idea,

 

23:24

right? And then we took 15 of them every year, either to New York, or to Silicon Valley. I know New York very well. So you know, if they went to fetch in 5g, the stock exchange, Wall Street lawyers, lots of startup businesses, the banks, we’ve got Deutsche Bank, etc, order Silicon Valley, and again, three startups and, and larger companies like Microsoft and Apple.

 

23:53

So what’s been your favorite memories from these trips?

 

23:56

Wow, there’s so many memories. Um, I was certainly going to Wall Street lawyers were just quite they’re quite aggressive, I suppose. And, and the same with venture capitalists. So going to a venture capitalist, and they were very direct. What do you want? What do you you know, what’s your business tell us what you what you want to do. And so very set out very, very simple. In both cases, very, very simple in tell us what your concept is. And because I say listen, we get I go, what do you sit about, you know, about 1000 ideas a month come through, they, they look at about 100 of them, they sought them out down to about 100. And they probably see about 10 people and probably get about one they will fund. So it’s not an easy thing. So they want to they want someone who can think simply and clearly on exactly what their product or concept is, and how they’re going to execute. Now Tony,

 

24:52

I know you wrote a book called the ABCs of business, never hire person who walks slowly. Could you share with us some of the tips that you have inside as well?

 

25:00

Okay, well, in effect that was the ABC of business. And, and it probably is to never hire a person who walks slowly. But, but I’ve gone through it and looked at, you know, just all things. I mean, I just it’s an A to Zed. And it’s a, you know, I start off with just that. The articulate and competent, who is the person who wears the suit and the beautiful suit tie, does everything right writes reports, but nothing happens to you know, talking about what how the Dream Team operates, how you get an idea how you execute, talking about lawyers, I said before, talking about the habit getting into into good habits, talking about keep it simple. You know, talking about niche, looking for a niche, I you know, that’s one thing I do I look to, you know, elite. It’s not legal to be a monopolist, but it is legal to own a niche. And I tried to find a niche that I can own. And so in effect be the monopoly in that niche. I then look for you know, how you find opportunities, time management, all those things, a lot of them are not the sort of things you’d normally read in textbooks, often they’re they’re a little bit, they’re a little bit contra, contrary to what you would write what you would read in textbooks.

 

26:21

Tony, if the listeners only remember one thing from today’s conversation,

 

26:24

what would you like it to be? Probably focus and keep it simple. You know, just don’t try and get too complex. Most people try and be complex.

 

26:34

So Tony, how can our listeners get in contact with you?

 

26:37

My email address is Tony F, at just life.co.in Zed. And my phone number is New Zealand. Oh 21950856 if anyone’s Welcome to get hold of me at any time.

 

26:53

Tony, thank you so much for joining us today.

 

26:55

Thank you, Ted been a pleasure to speak with you.

 

26:58

guys. Thank you so much for joining me, Antonio, today’s show. Now if you’re looking for a business idea, why not literally apply the four pieces Tony shared on product, price promotion and place, get your minimum viable product out in the market and make sure that you test it objectively. If it doesn’t work, make sure you’re okay to walk away. Now the shownotes tools and resources are all available on my website at Ted Teo comm that’s t dt o.com. And remember to support the show by subscribing leaving a review and sharing it with someone who will find it useful as well. And don’t forget about the Amazon gift voucher giveaway. If you actually do subscribe and leave a review on Apple iTunes by the end of September. Then you stand a chance to win $50 worth of gift vouchers from Amazon. That’s all for me today. I’ll see you next time.

[This transcript has been automatically generated by a digital software and will therefore  contain errors and typos. Please kindly take note of this and only rely on the digital transcript for reference.]

00:00

Hey guys, welcome back to the show. This is Ted, your friend and host speaking and on today’s show, we have Tony focused on who will teach us how to find, validate and execute our business ideas. Tony is the founder and CEO of the just life group of companies, which is listed on the New Zealand Stock Exchange. As a serial entrepreneur who has launched over 50 businesses, Tony shares his tips on how he finds validates and executes on his business ideas, his journey behind the just life group, and how he teaches the next generation of business leaders. Now Tony shares a ton of his experiences over the show. So I’m sure you’ll come away with something useful as well. Now the show notes, tools and all resources are available online at Ted Teo Comm. That’s t dt o.com. Now if you’d like to support the show, then the best way you can do this is to subscribe, leave a review and to share this with someone who will find it useful as well now as a way to say thank you and to show my appreciation to you guys, if you actually do subscribe and leave a review on Apple iTunes by the end of September, then you stand a chance to win $50 worth of gift vouchers from Amazon. Now let’s dive right in. Tony, thank you so much for joining us today. It’s such a pleasure to have you here.

 

01:03

Hi, Ted delighted to be on

 

01:04

Tony Lister, I have a simple icebreaker so we can all get to know you a bit better. Could you share a verse who is Tony Frankenstein when he is not working?

 

01:12

Or Tony Frankenstein is a first thing that comes to mind as a tennis player. But that to me work as a game. It’s like a game of Monopoly. And I love playing that game. So I probably work a lot longer than other people would say I work a lot longer than I do. But I I just love playing this game. But also like going out in the garden and, and walking and certainly put a lot of effort into exercise and balance in my life.

 

01:38

A work life balance is really important. So Tony, could you share with us your journey of just water? I know when you first started out your company was that you were renting out fax machines. So how and why did you pivot to the water industry from there?

 

01:52

Well, we rented out fax machines, and we really looked for other products that we could rent out. And I saw what a call is on the Lucy Tyler show, actually, what a way to get inspiration. And at the time, New Zealanders were starting to get into more jogging and talking about the health pyramid and what have you. And I thought maybe there’s a market for drinking water. And everybody said to me, nobody will ever pay for drinking water. And anyway, I bought six water coolers and ran a horrible ad in the local paper, which said your water is full of all these, all these little gems. And anyway, the six water coolers went. And within a couple of months I was selling a container load of them are renting but we always rented always rented.

 

02:38

Well, we proved him wrong. So Tony, you’re a seasoned entrepreneur and you’ve launched over 50 businesses to date, walk us through your process on how you source, validate and execute on your business ideas.

 

02:48

Well, one of the things is having an idea as well, entrepreneurship is having an idea and then execution. And I don’t really like doing doing research that much. Because I’d much rather research in the marketplace. So even when we went into water coolers, I said I’ve got $20,000 to lose. And and I bought water coolers, and it was really testing in the marketplace, whether it would work. And you know, very, very quickly is the same when I first started my first business with fax machines, same thing I took $1 amount. Now, today, I take much bigger amounts. And and so it’s a Yeah,

 

03:30

I’ve got I’ve got more to lose. Tony sounds like you’re very focused on getting your minimum viable product to the market as soon as you can. But What tips do you have for maybe selecting and choosing the right product in the first place?

 

03:40

It’s a very old marketing concept, which is the four P’s, which is product, price, promotion, and place or distribution. And I really try to find something unique in one or two or three or four of them if I can get all four. I know I know I’m on to a winner.

 

04:00

Tony, could you walk us through this process and show us how you actually came up with one of your actual ideas.

 

04:05

Okay, the being a public listed company, I probably can’t tell you some of the ideas I’m exploring but if I go to the past I launched a brand of sunglasses cordless fix. And, and so if I looked at the product, many people were were producing many sunglass producers were making sunglasses and all sorts of and Krylon and nylon etc. But I said I’ll take the product and make it out of one sub one out of one component which was Krylon Krylon is very, very flexible. And so I was able to serve as a product. It was made out of Krylon I call it lis fix giving it a fringe connotation of fashion. I put the trade color on on the frame. I sold it in the tri color bag in terms of price, whereas people had Variable pricing, I said, let’s make it all one price 4995. And I could sell in lots of 50. So didn’t have the have the retailer wanting to choose his own models, I said I’ll sell it on sale or exchange. So something doesn’t go in your study will exchange it with other products that do. And then in terms of promotion, we ran a very much a French ad, which was very much sitting on your sunglasses, and everyone breaks their sunglasses. And we offered a seven year guaranteed we’ll replace them, whatever happens, we’ll replace them. And then in terms of distribution, I did pharmacy only didn’t go into supermarkets. And so we got 50% market share the very, very first year, which was quite phenomenal. And every one of those four P’s, I will be able to do something uniquely.

 

05:52

Now Tony being a good businessman is so be able to be emotionally detached from your business ideas. So what advice would you have for an entrepreneur apart from experience on how they can identify when their business idea is not a good one? Or is not working? And they should walk away?

 

06:06

Yeah, I think that’s the that’s the point is being able to walk away. Lots of people, you know, you’ll hear them say never give up, never give up Never give up. Sometimes you have to give up your product isn’t there at the right time for the market or whatever. So, so so my you know, my personal belief is that is that you you know, you do try and get a product that is going to work that in, you know, an entrepreneur can normally see is normally going to be an optimist that but don’t get emotionally involved. Don’t be ready to abandon. And we have a policy ESA, which is euphoria, skepticism, abandonment, and that as you take, get very excited about a product, you think this is going to be a winner. You then think of all the things that could go wrong and you know, and you know, often you are, don’t be negative, but you do want to think all the things that could go wrong. And if there are too many, you go to a abandonments

 

07:05

guys to recap, Tonio place the four P’s on product, price promotion and place to find his business ideas. Next, he goes through the process of euphoria, skepticism, and abandonment. So he’s found his four piece and he said, the euphoria stage where he’s excited about the business idea when you also begin thinking of all the things that can go wrong with this business. And this is where he’s probably testing his minimum viable product. And if there’s too many things that can go wrong, this is where you abandon it without being overly emotionally attached. Now, Tony, could he share with us some of your worst failures and how you felt about them?

 

07:36

Probably the worst failure in my life was I introduced a product called v watch. And z watch was an opposition to swatch which was just launching at the time. And so I discovered from the receptionist at the company that was bringing them in, what their, what their product was all about how many models etc, what their pricing, and their promotion and distributions. And so I did, something’s better and all those. So really, I was doing everything, according to my formula that worked. And, and so and so with that, I launched the product. And between, you know, in three months leading up to Christmas, I sold four times as many z watches as swatched it, but the problem is the product, the plasticizer, and the product had got brittle over those three months. And the straps broke immediately. And they all came back or 27,000 of them. And it was an absolute disaster. And but it was it taught me a lesson. You know, I know I had to, obviously, if I bought a product, because the product was only three or $4. If I’d paid another 50 cents or $1, I would have known I would have had a product that had been tested by say Walmart or or whoever the plasticizer would have been, right?

 

08:58

Well, so how do you feel in all 27,000 units were returned,

 

09:01

I offered a two year guarantee. So it took two years to for them to come back. But it certainly was the worst. worst disaster. I just what I found it took me a really a year because I went into another company. And I thought before I was really giving good decision making. It took 12 months for that to happen. And so to clear my mind again, it wasn’t the money I lost that didn’t let them worry me it was I mean, it was most of the money I had at the time. But I knew that I could do something again. But it was more just getting getting my thinking. Right.

 

09:38

So I think from what you just shared, one of the important points is that in the manufacturing or production, business, quality control is very important. Especially when you’re giving a warranty. You really have to think about how your profits may actually be eaten away as time goes by.

 

09:53

Yes, I mean, I mean, I’m quite conservative, really, I mean, I’ve put in always have lots of provisions for the world. For bad debts and things, and over provide for that. So I have to incorporate that into my margin that I will have something coming back.

 

10:09

So guys, Every business has his ins and outs is important to get involved so you can really fully understand it. And it’s important to remember that the four piece was useful for finding a good business idea does not mean there will be foolproof and bulletproof. The only way to find out is to get a minimum viable product and test out in the market. If it does not work, make sure you walk away, not only let’s circle back to your company, just water after you decided to actually pivot to the water cooler distribution business. What was it like growing the business in his early days? And right now?

 

10:40

We’ve gone through a, you know, really interesting journey from you know, banks wanting their money back. And, and yeah, it’s it’s been ups and downs the whole way. The the journey, the journey was I mean, it, it went very, very quickly and went up. And we did extremely well, I think we we made a very good decision by saying we will rent, but that costs, you know, there’s a lot of money upfront, and you’re relying on the banks, in my case to give it to you, which they did until they decided they wouldn’t didn’t want to. But we got through that. And I mean, it’s very, very exciting. Now the market and this is very typical with any any product. Well, it’s just their product life cycle. So you know, it goes, it goes right up at the moment, it’s a mature market, most, most buildings have water coolers, most offices have water coolers in them. And, and so now you’re back because we our rental product, it it, the cash just keeps on coming in. So even though you stay fairly flat in terms of numbers, but you’re not buying stock anymore.

 

11:55

Now there’s a very interesting business model that you have there, Tony, by providing a rental service, you always have this constant stream of recurring revenue and cash flow, as opposed to a one off sale of maybe a water cooler to the customer itself. By having a more predictable revenue and cash flow stream. This probably gives the financial institutions more confidence in your business. So Tony, please share with us how has sticking to this business model over the years help you company?

 

12:19

Well, I think so first of all, I learned from the watch business, I needed something that was long term, and rental businesses a long term, the thing I learned we went into a into an international market, and it was a disaster, and we lost a lot of money. Now the bank never turned off the tap, they said, Hey, we know that that money that you’ve got rolling in from you, from your current operation is going to is going to keep on rolling in. So we went under $70,000,000.20 $7 million worth of debt. And we’ve re repaid that over about four or five years.

 

12:57

So guys by having a rental business model, this gave Tony’s company a constant stream of revenue and cash flow. And this is what gave the banks that confidence to actually not call back their loans, despite the failures that he suffered overseas. So try thinking about it, would having a rental business model maybe be beneficial for your company? Now back to you, Tony, I know your company is listed on the New Zealand Stock Exchange, what was the process like and what were your thoughts about it,

 

13:23

I had been chief executive of another public listed company. And I thought people weren’t taking companies when taking the marketing advantage of being listed. So so that was the reason I did the listing of what was in just water. And I and we really didn’t raise we only raised $8 million. It was we didn’t have to raise money, but it was just to be public. Now what I get a being public is that you look bigger than you are. And you get a lot of publicity, you can put out statements to the stock exchange, and they get under the paper so I’d better than normal tr. So that was a big, big thing. And even now today, the biggest company in New Zealand light is say Fonterra, they would never move from us because we look as our a big company. And that is true. Like we can’t afford to do anything cut any corners, or we test our water on the hour every hour, we have to make quite sure that hey, if anything happened, were to merely shut the shut down production, have a recall, etc. And, and big companies really appreciate that.

 

14:31

Mm. Tony, you actually managed to retain about a 70% shareholding in your company despite its public listing. So that’s very interesting to me. This means that you should gave very little equity away during earlier days as you built the company. Yes. In fact, since you just shared that you were actually borrowing from the banks and you were in about $27 million worth of debt you actually resist the whole idea of giving your shares Despite all these troubles that you went through. Yes,

 

14:56

I I suppose I am the optimistic entrepreneur. I remember One time, we were very, very close on our bank debt. And one of the partners of Price Waterhouse, Cooper said tiny, I’ve got someone who will put in a million dollars into your business for 50% of the business. And I was quite astounded. I said, What I there’s no way I would do that. And, and because I could see the value of this rental flow just coming through. And so and so I’m sorry, I tried to do step by step. Now, what I’m seeing today is graduates come out from business schools, and the first thing they do is want to raise raise money. And, and if their idea is very good, chances are they really just become like an employee, because it’s a venture capitalist comes in, and, and he invests, and then when they need more, if they grow, he needs more, he needs to take more capital. And in the end, the the guy who started the business is just an employee, and probably will be fired at one stage, if it gets big enough, good. He’s not going to be the best chief executive.

 

16:10

Yeah, Tony. But unfortunately, that seems to be the current culture behind venture capital and private equity fundraising entrepreneurs anymore concerned and proud of the money that they have raised, supposed to protect a building. But what he failed to realize maybe is that when they’re raising these funds, they’re giving a huge part of the company away. And that means giving their control away as well,

 

16:31

not only a portion of your company, but you gave away the future of your company. And like now, you know, we probably will do a capital raise shortly, which I won’t be able to fund 70% of it. So, so we’ll be giving capital away, but it’s at a much higher price. And when we first lifted, so I think that’s all right. I’ll still be in control. But I’ll have I’ll have a lesser amount, but be able to buy more things quiet.

 

17:00

So Tony, what do you think about the younger entrepreneurs these days who seem to be able to raise millions of dollars, just by their projected numbers into spreadsheets,

 

17:07

now, I think a lot of talent gets wasted because they they want to be the next Airbnb or something. And they think they have the greatest idea. It’s been a lot of time because chances are the developers or working with developers, and and they may have a good product. But it’s, it’s, you still have to market that product, you have to get it get it to market. And to me, I just I think it’s almost the fault of business schools that they that’s, that’s sort of a big part of entrepreneurship courses in fundraising.

 

17:38

Tony, you do agree that a lot of telling gets wasted because maybe sometimes young entrepreneurs don’t have the right experience or the skill sets that they need to actually lead a company properly. So let’s talk a little bit about corporate careers. So when you had a very successful corporate career before you ended up studying all your businesses, so please share with us what experiences Did you have and how it benefited you over time?

 

17:58

Well, I remember when I worked for us multinational, and every quarter, they are required, they required a forecasting, what are you going to do the next quarter for the next 12 months, rolling 12 months, in the next three years, every quarter. And I was I remember being well, and saying, in fact, man, if I if we, if they gave us time to run the business, we’d make a lot more money. But what it gave me was a discipline that you do have to keep on looking at your business, you do have to keep on planning and looking at what’s out there in the future. And, and so that was a very big one I learned. The second one that I learned was look bigger than you are. And this was a PR thing. And that’s part of the reason we went public. But we go out of our way to to get to get publicity on all sorts of things. So being public gives me immediate access to the media. But also make comments on on you know, I if the media are talking about obesity, a chances are they will ring me. And and that’s good, because that’s something I’m personally keen on it. it correlates with our water business.

 

19:13

Yes, this is a very important point, which is brand strategy is how do you want to position yourself in a market? And what are the areas of expertise that you have? If they can think about you when they think about this subject? You know, you’ve done it well, and you’re actually providing an extra channel of traffic to your business? Yes,

 

19:28

I think there are, I think your own personal profile is really important. That’s why I’m honored to be on the TED to podcast here. Because you have to you have to keep on building your own profile, as well as your company profile. And and I think that is really, really, really important to do.

 

19:50

Yeah, exactly. In today’s day and age, everything’s on social media, everything’s online, and people can’t find you they want to and that may make or break their impression of you as well. So it is a very important info So on.

 

20:01

Yes. So I’m, you know, I’m, in fact, just starting a series on entrepreneurship on YouTube. And I’ll be running this running the series. And again, it’s just so that people, you know, there’s some recognition. Oh, interesting. So

 

20:15

what I’m going to share on the YouTube series,

 

20:17

I’ll be sharing. Yeah, really just going through the experiences I’ve had, that, that would relate to people starting up a business. And and the things that, you know, how do you get that big idea? How do you execute? How do you use the right, the right people around you, you know, because you have to be nervous about using consultants, because chances are, they’ve never they’ve never run a candidate. So I’m very big on, you know, lawyers finding a lawyer who has commercial, because most lawyers just want to tell you the exact law, and often you only want to go, you want to look at what are the odds of the other side doing something, often, you just don’t want to be the only one to go 90% of that way, rather than 100%, which a lawyer will always go for 100%.

 

21:04

Tony, I know, you’ve also set up a business school in 2003. So you clearly enjoy teaching, what do you enjoy about the teaching process? And what keeps you going?

 

21:12

Well, I like I like people from I think the next lot of entrepreneurs actually come from, from low socio economic communities. And so this business goal was at a low socio economic school. And because those people understand about being desperate, or, and maybe that’s too strong a word, but they know that you have to, you have to work, your parents have had to struggle, too. And so they’re more likely to be thinking, How do I do this? How do I get out of here, etc. So, so they, you know, they’re the sort of kids that will work during the school holidays, and that just becomes a norm. So, but what they don’t know, they don’t know how to how to get to that title to the whole world, they, the world is quite small to them, it might be just their little city or or suburb. And I want to teach them how they can go go out to the world with their, with their product or service.

 

22:12

Tony, can you share a little bit about the program, so the curriculum that you’ve provided for them,

 

22:17

like I will teach us a very, very one dimensional, so I looked at it from a marketing point of view, and see what the kids like. And they at that state, they like being on screens and looking and shooting at each other. So we did business games on screens. We had when the teacher taught them a theory of say pricing. At the beginning of the week, they would sit the next day and develop 100 questions, 50 questions. And then every two students were assigned a local business. Some of them were just like the local bakery, or some were much bigger businesses. And they would go there on the Friday afternoon, and ask them about pricing. And they’d find all sorts of, you know, people, the baker local bakery might say, well, at Easter, we we put the cross on the Easter band, and we mark it up, you know, 200%. And so it was quite different to what they learned at school, the theory of it, but it meant they could answer the questions in their exams a lot better.

 

23:15

I see. So on top of the lessons that it takes to have practical experiences, because they actually get to book and speak with the local business owners this great idea,

 

23:24

right? And then we took 15 of them every year, either to New York, or to Silicon Valley. I know New York very well. So you know, if they went to fetch in 5g, the stock exchange, Wall Street lawyers, lots of startup businesses, the banks, we’ve got Deutsche Bank, etc, order Silicon Valley, and again, three startups and, and larger companies like Microsoft and Apple.

 

23:53

So what’s been your favorite memories from these trips?

 

23:56

Wow, there’s so many memories. Um, I was certainly going to Wall Street lawyers were just quite they’re quite aggressive, I suppose. And, and the same with venture capitalists. So going to a venture capitalist, and they were very direct. What do you want? What do you you know, what’s your business tell us what you what you want to do. And so very set out very, very simple. In both cases, very, very simple in tell us what your concept is. And because I say listen, we get I go, what do you sit about, you know, about 1000 ideas a month come through, they, they look at about 100 of them, they sought them out down to about 100. And they probably see about 10 people and probably get about one they will fund. So it’s not an easy thing. So they want to they want someone who can think simply and clearly on exactly what their product or concept is, and how they’re going to execute. Now Tony,

 

24:52

I know you wrote a book called the ABCs of business, never hire person who walks slowly. Could you share with us some of the tips that you have inside as well?

 

25:00

Okay, well, in effect that was the ABC of business. And, and it probably is to never hire a person who walks slowly. But, but I’ve gone through it and looked at, you know, just all things. I mean, I just it’s an A to Zed. And it’s a, you know, I start off with just that. The articulate and competent, who is the person who wears the suit and the beautiful suit tie, does everything right writes reports, but nothing happens to you know, talking about what how the Dream Team operates, how you get an idea how you execute, talking about lawyers, I said before, talking about the habit getting into into good habits, talking about keep it simple. You know, talking about niche, looking for a niche, I you know, that’s one thing I do I look to, you know, elite. It’s not legal to be a monopolist, but it is legal to own a niche. And I tried to find a niche that I can own. And so in effect be the monopoly in that niche. I then look for you know, how you find opportunities, time management, all those things, a lot of them are not the sort of things you’d normally read in textbooks, often they’re they’re a little bit, they’re a little bit contra, contrary to what you would write what you would read in textbooks.

 

26:21

Tony, if the listeners only remember one thing from today’s conversation,

 

26:24

what would you like it to be? Probably focus and keep it simple. You know, just don’t try and get too complex. Most people try and be complex.

 

26:34

So Tony, how can our listeners get in contact with you?

 

26:37

My email address is Tony F, at just life.co.in Zed. And my phone number is New Zealand. Oh 21950856 if anyone’s Welcome to get hold of me at any time.

 

26:53

Tony, thank you so much for joining us today.

 

26:55

Thank you, Ted been a pleasure to speak with you.

 

26:58

guys. Thank you so much for joining me, Antonio, today’s show. Now if you’re looking for a business idea, why not literally apply the four pieces Tony shared on product, price promotion and place, get your minimum viable product out in the market and make sure that you test it objectively. If it doesn’t work, make sure you’re okay to walk away. Now the shownotes tools and resources are all available on my website at Ted Teo comm that’s t dt o.com. And remember to support the show by subscribing leaving a review and sharing it with someone who will find it useful as well. And don’t forget about the Amazon gift voucher giveaway. If you actually do subscribe and leave a review on Apple iTunes by the end of September. Then you stand a chance to win $50 worth of gift vouchers from Amazon. That’s all for me today. I’ll see you next time.