Patrick Bet-David On What It Takes For Entrepreneurs To Find Success [Interview]
Patrick Bet-David is an entrepreneur and advisor that shares thought-provoking perspectives on succeeding in business.
He’s the author of Drop Out And Get Schooled: The Case for Thinking Twice About College and
Doing The Impossible: The 25 Laws for Doing The Impossible.
Pat has a passion for teaching the fundamentals of entrepreneurship, and a first-hand understanding of what rags-to-riches means. With a desire to inspire others to become entrepreneurs and achieve their dreams, he has become a motivating recent success story for others.
Pat… welcome - thanks for taking the time today.
For the few readers or listeners not familiar with you, could you share a bit about yourself?
I was born and raised in Iran, and lived there for 10 years. We had escaped 6 weeks after Khomeini died on June 3rd, 1989. We left July 15th and went to Germany where we lived in a refugee camp for about 2 years . We then came to the states and moved to Glendale, California.
I went to school right afterwards, then went into the military where I joined the 101st Airborne. When I got out, I decided to become a financial advisor the day before 9/11. It was exactly a Monday when I became a financial advisor, series 7, 66, 31, 26.
After that I went to Trans America for about seven and a half years, and in October of 2009 I started an agency called PHP agency with about 66 agents out of Northridge, California. Now we have over 5,000 insurance agents in 49 states.
At about the same time, I started dabbling with a little bit of social media, and a few friends suggested I start a Youtube channel, which I did in November 2012. That kind of grew from what it was back then to about 450,000 subscribers now, and it’s been a fun journey with that Youtube channel called Valuetainment.
It’s grown quite a bit and become a fairly popular channel.
I appreciate that, thank you.
What do you think it takes to be a successful entrepreneur?
I think the more clarity you can have on what you are solving. What I mean by that is a lot of times, you’ll have somebody that will say I want to be the next Mark Zuckerberg, or the next Elon Musk, or the next Steve Jobs, or whatever it may be. You’re almost always going to be disappointed with that because if the solution is purely coming a place of competition, there’s always going to be somebody bigger than you in the marketplace.
They made a joke Jeff Bezos (Amazon) because he became the richest man in the world and it lasted four hours, then Bill Gates took over, and he’s back at the top again with a hundred billion dollar net worth. It’s always going to be changing, nobody stays at the top from the beginning and dies being at the top forever. There’s always going to be competition.
The first step is being clear about the industry you choose. You have a lot of different industries, and typically I suggest you choose something that you’re familiar with.
For instance, let’s just say my dad was a realtor that owned 17 properties. And I watched him negotiate, under stress, and going through some highs and lows. I was looking at him when he was doing very good and the market tanked. When it did, he capitalized on this, and I saw some of the areas he made a mistake and others he did good in. So maybe I have a little big of an extra edge on somebody because I saw my dad do real estate my entire life, so maybe that’s something I can get into. Somebody else may say ‘when I was growing up, I was a bodybuilder or an athlete and went to the college level. When I was at the college level and I played football, I noticed I don’t like the equipment. It sucked in high school. What if we can find some that’s not Under Armour or Nike price that I can get to be made cheaper and the quality is good. Then I can compete with that market, and start up with some high schools because I know that.
The next step is positioning, and what I mean by that is, it’s always important if you can have somebody to watch or shadow. Bruce Lee had someone to shadow before bringing his art to the states. Every single person had someone they shadowed. Jordan shadowed David Thompson and Julius Erving. Kobe shadowed Jordan. Lebron shadowed a lot of these guys; Magic, MJ, Kobe. If you can find somebody you can watch and shadow, and work in an environment where you can study what’s right and not being done, that helps you.
The last one is realizing where you fit well, and what I mean by that is, am I the sales guy? Maybe I’m good with numbers. Maybe I want to be a CFO, maybe I want to be a good Chief Operating Officer. Maybe I make a good founder or innovator, maybe I’m the idea guy. Maybe I’m the engineer. Sometimes we think entrepreneurs is just about always you starting the business. Sometimes you may start a business with a few other people, get a few equity there, and you’re using their strength in a way that helps you build the business. And you still own a piece of that, so you still end up getting a victory. There’s not really one way to provide an answer to that question, but those are some of the things I would share with someone that wants to become an entrepreneur.
Most know that for entrepreneurs to succeed it requires hustle and commitment.
Is there a formula for success or something that gives them an edge?
If you choose to become an entrepreneur, and you’re not willing to have 60, 80, 100 hour weeks, the game is not for you.
Because someone is going to put you out of business. It’s just not going to happen, you’re not going to be able to stay competitive enough in a marketplace. Depending if you want to scale your business. You have to have a work ethic.
I remember when I first got started, my dad was a 99 cent store cashier, and when we lived in Iran, if there’s one thing I saw my dad do, it’s that he worked hard. He would leave everyday at five in the morning and come home every night at 9 PM, and he did that six days a week, because in Iran your Sunday here in the states is Friday in Iran. So I picked up the work ethic from him, and when I got into business my confidence came from knowing I’m not afraid of working hard.
The second thing is, your speed of learning and your speed of improving. So back in the day when Bally’s total fitness used to be around. I’d watch these guys making phone calls, and their style of selling, and I was frightened of making phone calls.
I would look at one guy and note how he uses charisma, everytime he makes phone calls he’s smiling. Or I would notice the other guy, and how his pacing is so smooth that he’s not talking fast. Or the way another guy talks, if he called me like that I would have never done business with him. So it was good for me not to sound like that. Or I like how one guy sounds non threatening, or that questions was phenomenal, or I really like what he said when that person gave that objection.
So I would make a list, and grab my recorder and give all the objections and rebuttals. Then all of a sudden I became rookie of the month, rookie of the quarter, rookie of the year, and I’m running one of the bigger clubs. I watched a lot of my peers and how they took their time on improving.
They weren’t that detailed about how to improve their game. They learned the basics like everybody else, and then stop paying attention to the details.
So, number one is outwork, number two is out-improve, and number three is outlast. Let me explain why outlast.
Business is purely a game of momentum.
Anybody that we see who might be ‘god-like’... some people might say ‘oh my gosh, that guy has some genes. He is just absolutely amazing, so fantastic, and he’s so much above everybody else’. We look for so many reasons.
To bring you to a lower level, a person could be a realtor in Vancouver, and there is this one realtor in Vancouver that everybody knows. Her picture is everywhere, she’s on every brochure, bench, billboard, and magazine. Everywhere you look, you see her face. And another realtor says ‘well, the reason she does so well is she’s attractive’. Or other excuses might be she has a nice car or something else. But the reason she did well is because she lasted.
Momentum compounds. If I go fully focused at 60 hours a week for three years, you go for five years, and another guy goes for ten years. Even if the guy that goes for ten years has half the talent that you or I have, but what he has is that he lasted longer than us. And because of that, he has the bigger opportunity for compounding effort and exponential growth to take place in his business.
You don’t hear many talking about exponential growth or compounding effort because we’re always trying to figure out the secret right now. To give you an example I’ll share what happened yesterday.
I just flew into L.A. 2 hours ago. I’m based out of Dallas, Texas right now. I run an insurance company. Yesterday we sold more insurance in a single day than we sold in my first five years of being in business. That’s roughly 1,800 days. How is that even possible? I’ve been in the business for 15 years, and the compounding efforts of this has gotten to such levels that’s no longer fair because the doubles are bigger doubles. Unfortunately, very few people can last that long because they eventually have a certain level they hit, get on cruise control, and wonder why they’re not having the next level of success.
You have to be able to outwork your marketplace, improve very fast, and you have to have stamina. You have to be able to last, to give yourself a standing shot of making it in business.
If you choose to become an entrepreneur, and you’re not willing to have 60, 80, 100 hour weeks, the game is not for you.
How important is it for entrepreneurs to have a mentor?
I think it’s very critical. If you look at the formula and how the man upstairs created it, he may even gave us a model for that. Kids need a mentor. The way the system was created, kids will eventually become mentors to their own kids. Our first mentors that we have are our own parents, and our siblings, then teachers and other people.
Some people will say ‘there’s just not that many mentors in the city I live in’ or ‘most of my mentors are dead mentors’. Your mentor doesn’t necessarily need to be a face to face mentor. There’s a lot of ways to find a mentor nowadays. We have access to YouTube where someone can sit to watch hundreds of hours of video. And the person teaching has no idea that a viewer has been studying him and takes his business from $200,000 a year to $2.8m.
Mentors are everywhere. If you are one of the fortunate ones that has access to somebody locally, that can give you direction, that you can shadow, and watch what they’re doing, you have an edge. But if you don’t have that, the alternative is better than it was 20 or 30 years ago.
What sort of hurdles do you believe prevent entrepreneurs from realizing their full potential?
Full potential is different than success, because almost everyone I know starts that’s started some kind of a business experienced some results. Full potential is self-sabotage with victories.
Let’s pick a guy named ‘Bob’. The most money Bob has ever made is $4,000 in a month. You will learn a lot about Bob when he makes $20,000 in a month. Because when he makes that, there’s typically a few different way to respond to it.
One is when they respond with ‘oh my gosh, I just made $20,000 this month. That’s five months of my income’. So they go on cruise control for the next five months, before they run out of that money and then they’re back into panic mode. Then they start making money again because they’re panicking. The only way they’ve made money is to survive. Another guy will make $20,000 in a month and say ‘oh man, I made $20,000, but Jack’s making $30,000. So I have to make $30,000 so I can get that Mercedes Benz AMG package, and he drives a 7-series, so I have to get an S550 Mercedes, that’s what I need to do and I need to get to 30K. So I’m going to get that car, buy a Rolex, buy a new suit..’. And they buy, buy, buy, thinking they’ve already gotten there.
Then there’s another guy that makes $20,000 and he tells himself ‘I made $20,000 but it’s not going to become financially free, I need to make a lot of money. And the money becomes based on a freedom number, for instance ‘I will be free once I have three million dollars in the bank account’. There’s a formula to it, if they make that money. Then there is the last person, who makes the money based on a purpose that they have. What I mean by this is the purpose isn’t just to make the money. So you have the lowest level, survival. Second level is status, such as ‘I have to do better than my cousin, sister, brother, best friend..’. Number three is freedom. I actually need two million dollars to be financially free so I can pay off the kids schooling, maybe I’ll pay off the house, and have some money set aside for retirement.
The last one is purpose. Purpose is bigger. I’ve been put on this earth, have an incredible life, I’m grateful for my parents and the country I live in, the money I’ve made, the industry I found, the wife, family and friends, and all this other stuff. I don’t think I was put on this earth just to make money, I’ve got to make a difference, and I’ve got to give back. So I’m going to go out there and contribute. I’m going to build some leaders, develop some people, and do something that’s going to benefit other people. Then it becomes purpose.
When you ask that question on full potential, I want to make sure I unpackage so it’s not just giving a general answer because the biggest enemy people have on why they rarely reach their potential is success. They reach a little bit of success and they don’t know what to do with it.
When you think back to when you started out... are there ways to deal with or avoid common issues that entrepreneurs experiencing in early stages?
It’s habits. If you have a big month, you get comfortable. You make money, you spend money, and you overspend. You just hire people you know, and you can’t hire people that are better than you because your ego is too big where you can’t hire somebody better than you because you’re threatened by it. You’re afraid of them.
Habits. Once you learn a few little tricks to the game, you stop improving, you stop reading books, you stop developing. You stop getting out there like you once did.
I think a lot of it is in habits. If you give me somebody that is winning at a high level consistently for a decade, and if we were to talk with the same guy to give us other people within the same field who at one point were beating him, and sit down and say ‘so what happened with that versus you?’. You will know that the difference between the two people are generally habits.
There are a lot of athletes who were amazing, who had bad habits. Darryl Strawberry, Dwight Gooden, Lawrence Taylor, the list is a long name of lists. These guys had bad habits, and they could have been bigger than what they were but they had some bad habits.
In business sometimes, if you’re running and gunning, and you don’t have an outlet to talk to a community that’s similar to you, you may have an escape that nobody else knows about. For instance, you can’t come home and talk to your wife about the business because she might say ‘why don’t just go get a job and be an engineer like you once used to be, I told you not to start a business’. All of a sudden you’re escape becomes in the middle of the day you have two shots of whiskey, or do drugs on the side, or have a gambling habit. Every one of these things I’m telling you I have advised somebody who was going through this. And they were going through it alone, because of the lingering issues of them needing an escape led to these bad habits.
Sometimes having an escape is talking to people similar to yourself who are startup entrepreneurs that are facing similar struggles and preferably somebody that’s maybe a phase or two ahead of you, and can say ‘what you’re going through is normal. Be patient. Don’t make the big mistake, it’s all going to work out’, so you don’t think you’re all by yourself going through it.
To learn more about Patrick Bet-David be sure to visit Patrickbetdavid.com and follow on Facebook or Twitter.