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Founders Who Finish – a conversation with author Dave Saunders
1 Playsin 8 hours
How to build a real business that makes money without burning through your life savings, or losing your mind
Dave Saunders is a successful serial entrepreneur who identified that many people believe you need external investment to set-up a business. The reality is he says that most businesses are boot-strapped by founders.
In this episode of the Abeceder podcast The Independent Minds Dave explains to host Michael Millward the model he developed for successful entrepreneurship.
Their conversation covers
- Dave’s history as a successful entrepreneur
- Why entrepreneurs do not generally need external funding
- The impact that accepting external funding has on a business
- The important role of systems in entrepreneurial success
- How systems support effective leadership and delegation
- The value of being outside your comfort zone
- The Deming Cycle
This is the podcast for anyone who wants to be a successful entrepreneur
Discover more about Dave and Michael at Abeceder.co.uk
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As well as mentioning his own book Founders Who Finish, Dave Saunders references the ideas of Stephen R Covey and the Deming Cycle
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Transcript
Introduction & Sponsorship Highlights
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Speaker
made on Zencastr. Because Zencastr is the all-in-one podcasting platform that really does make every stage of the podcast production and distribution processes so easy.
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There is a link with a built-in discount in the description. Hello and welcome to the Independent Minds, a series of conversations between Abysseedah and people who think outside the box about how work works with the aim of creating better workplace experiences for every everyone.
00:00:36
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I am your host Michael Millward, managing director of Abbasida.
Guest Introduction: Dave Saunders
00:00:42
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In this episode of the Independent Minds I am meeting Dave Saunders, the author of Founders Who Finish.
00:00:49
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Dave is based in Baltimore on the east coast of the United States of America. If I ever get the chance to go i will make all of my travel arrangements with the Ultimate Travel Club.
00:01:01
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That is because as a member of the Ultimate Travel Club I get access to trade prices on flights, hotels, trains, holidays and all sorts of other travel related purchases.
00:01:12
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I have added a link with a built-in discount to the description so that you can become a member of the Ultimate Travel Club and just like me, travel at trade prices.
00:01:24
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Now that I have paid some bills, it is time to make an episode of The Independent Minds that will be well worth listening to. liking, downloading and subscribing to, and probably good enough to share with friends, family and work colleagues as well.
00:01:40
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As with every episode of The Independent Minds, we will not be telling you what to think, but we are hoping to make you think.
Becoming a Founder Who Finishes
00:01:49
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So now, hello Dave.
00:01:51
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Hello. Good to be on the call. Yes. I have spoken to so many Abbasida's clients who are founders of businesses who are poised, ready to listen to this episode of The Independent Minds.
00:02:03
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They want to know how to become a founder who finishes. Let's first of all find out a little bit about you. Are you a founder who finished? I am ah ah several times actually. I've been doing startups and a few stints in some large businesses over the past 30 years. I've brought about 40 products to market. Originally, those were largely internet-based products from before the internet went public. um I've also worked with SaaS, hardware, and most recently, surgical robotics.
00:02:37
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Surgical robotics. So that's robots doing operations on people. Yeah, um it's actually a really fascinating technology. Surprisingly enough, there's actually over 200 surgical robots in the market today. You know, some of them are the big ones. They're in the UK. You've got CMR. um But there's also a lot of very specific robots that help with particular kinds of surgery, like, for example, LASIK to improve your eyesight.
00:03:04
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right It sounds like we could have a whole new episode on that one then. But you are someone who has set up lots of businesses and also worked in the corporate world as well.
00:03:15
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And you launched 40 different products into the marketplace. So you are a founder and you did finish. You've sold businesses as well. What inspired you to start thinking about writing a book called Founders Who Finish? A lot of the advice that I keep seeing out there from you know gurus and the business books that are on the shelves seem to always be written for the same kind of company. VC funded, high growth, winner take all.
00:03:46
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And you know most founders really aren't building that kind of company. And I got tired of watching good founders fail because they were following the wrong playbook.
00:03:57
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Is there a right playbook? I'm not sure if there's a right playbook, but you know to take advice that fits where you're going, I think is is really important. A lot of the, ah certainly Silicon Valley mentality, you know high tech companies, and that's where a lot of your big flashy advice is coming from, is all based on this like startup unicorn.
00:04:21
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If you don't get your 16X valuation and exit right off the bat, then you might as well just shut down the business and do nothing. I've been working with too many businesses that are sustainable. They aren't bringing in VC.
00:04:34
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They're building companies that allow them to live and not have to work 100-hour weeks and and just exhaust themselves until they finally burn out. I think that's what most people want in a business.
00:04:47
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Sure, if if you just happen to like you know have lightning strike and you really do have a unicorn in the making and you're going to go out and find the Rothschilds to write you a giant check for your company.
00:05:00
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Sure, those opportunities occasionally come around, but I would say over 90% of the businesses never really need to raise a dollar from outside investment.
Building Personal Terms Businesses
00:05:11
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And so the whole conversation is about how do you build a business a way that's going to be on your terms, that allows you to live a good life and have a business that helps others at the same time.
00:05:25
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That's true because a you do, like you say, hear lots of stories of startups that receive a lot of series A funding. And I've worked in some of those organizations. I think you're quite right. There are lots of organizations that are started small businesses by people who are using their savings,
00:05:46
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money from their family to get them going. Apart from that, never really take out funding from in that same sort of venture capitalist, private equity type of way.
00:05:59
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They might then go to the bank for a loan, but that is all very much geared around specific type of activities with a plan as to when it would be paid back. But you're quite right. Most of the books, information, advice that you see is geared at something that isn't quite the way in which the majority of businesses are formed. And I've played that game too with investments with my last company, Galen Robotics. We did a $25 million dollars Series a Changes the heart and soul of your company because suddenly you now have to consider all of those investors that came in on your pool and you're appeasing them as much as you're building something that's ultimately going to help customers. um And in the case of, you know, that company helping patients, you know, hopefully, you know, more consistent surgical outcomes and things like that. You end up losing focus on those things because now you've got to care and feed for your investors on a regular basis as well. It it can be quite the distraction. If that's not something that you absolutely need to build your business and And there are certain industries where it's kind of difficult to build a business without a huge capital infusion right off the bat. Unless you're one of those, you're much better off either trying to bootstrap it on your own, go get a loan, or if your government local office of you know economic development has those opportunities. go for grant yeah know and and build your business that way.
00:07:28
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Might be a little bit slower, sometimes, sometimes not, but it allows you to build the business on your terms and it gives you much more control.
Defining 'Finishing' in Business
00:07:39
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Control isn't necessarily everything, but it does mean that your vision stays true. I agree with you. had a client financed this business from entering business plan competitions, which banks, insurance companies,
00:07:54
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where we're running. There's innovative ways to do things. But I suppose what we're saying is like how you finish can be dependent upon how you start. And if you are in an industry that requires a big capital investment, then you go down that private equity, venture capital route.
00:08:13
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But the vast majority of small business owners, founders don't actually go into that sort of route. It is savings and investments from family members that make it all happen yeah there's an element of when you start you have to if you're going to be a founder who finishes of the key parts of being like that is defining at the beginning how it is that you want to finish and there are different ways of defining what finish means
00:08:46
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One of the best books I think that anybody can ever read, of course, is Stephen Covey, Seven Habits of Highly Effective People. And one of those habits is begin with the end in mind. Like what what does finishing look like to you? And that can be a lot of different things. It could simply be building a profitable operation. It could be a strategic acquisition, you know building something to sell or to IPO or you know, whatever, or to build a sustainable ongoing business. And that could be a business that you own, but is managed by somebody else because you've set up systems that allow the business to be something that you can trust to be operated by somebody else. And you benefit from having that asset and the income that that kind of comes off the the top of of that business, but also creates jobs for other people, which I think is a great thing as well. Yes, I totally agree with you. Creating a job for someone else is a fantastic thing to do, but it also comes with a lot of pressure. Before you can pay yourself, you have to make sure that that person that you've employed takes home the money that is going to enable them to feed their children.
00:09:58
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That is a lot of pressure to take home. It is. thereve There have been many instances where I've looked at the bank balance and i had to make that decision where it's like, okay, Everybody else is getting paid and I'm not getting a paycheck this month because we just weren we weren't there yet. But, you know, those other people, they don't have the same, you know, equity advantage that you do by owning the company. And so sometimes you do have to take a little bit of a trust fall into your own arms and make sure everybody else is paid first. But that just means you're now going to have to really laser beam focus and make sure that you bring in money so that you can get paid as well.
00:10:40
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Yes. What we're saying is there are like three main definitions that people might put on that word Finnish. One is profitable. Hopefully, you know, that is something that happens very quickly.
00:10:52
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Then there's what you do when you have profitable business. Is that something that you want to sell to someone else, put through an initial public offering and go public?
00:11:03
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Maybe you want to sell it to your employees. There's all sorts of different ways. Oh, yeah. And then there is this thing that it This is an organization that is capable of operating without me.
00:11:15
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That's one of the things that many founders, I think, never actually get to the point where they've defined what and their organization that they've set up will be like if they take a day off sick or if they go on holiday.
00:11:29
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How would this organization survive without me? Having that type of attitude, it's easier to do it myself than show someone else to it. means that you recruit people, HR professionals hat on here, you recruit people who are never going to be capable of doing it without checking it with you first.
00:11:49
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Because you've got that attitude that you are the person who knows how to do something. Yeah. You have to tell them how to do it. You need as a founder to recruit the people who will do the things that need to be done better than you could do because you understand what your job as a founder is. And you need to let them do it as well. Yes. Yeah. Let them do it.
00:12:12
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I once worked with a CEO who approved every expense over $100, which you know just seems so bizarre. like You're going to hire other managers and other workers that are completely capable. They're adults. They know what they're doing. And yet you continue to maintain this like really tight leash on every dollar spent. you know What that makes you is just this executive approval machine for office supplies.
00:12:37
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I've ah worked with CEOs who've been doing that for years and it doesn't occur to them how much, not only of their own time that they're wasting, But that's a demoralizing thing to do, to have everybody that you brought in, you recruited them to come into your company and to share your vision, and yet you show them so little trust. you know that's That's kind of a sad thing if you if you think about it. You need to really build systems that not only allow your business to run sustainably without you,
00:13:10
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But you also need to build systems that engender trust in the people. That doesn't mean lack of accountability. You know, you should still have those controls in place, but you should also have systems, you know, in your company that are based on the fact that you're hiring people who you
Empowering Teams & Delegation
00:13:29
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trust. Yes. And if you can't trust them, then you have no reason for it to employ them. i think one of those systems, though, is if you are a founder who wants to finish you almost need to think about what the system is that is going to get you to the point of finishing.
00:13:46
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So how will you have to change the way in which you work from the day when you started your business and it was just you in that space wondering whether you could have afford to switch the heating on or whether you should buy yourself a vest.
00:13:59
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And then as your business grows and develops, how is it that your role will change as your business develops so that you are still serving in the best way possible your business rather than you as you've said wasting time checking things because you don't trust people It's a really important thing to consider. And i it's it's a trap that I've gotten myself into as well. You know, typically I'm in the kind of technical product manager. I've been CTO multiple times and I love to nerd out. Okay. I'm, I'm the geek. um it's yeah It's, it's, it's, it's my comfort zone, right?
00:14:39
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In fact, even with the surgical robotics company, I wanted to have literally an understanding of where every screw went. And so one week, I actually ran the entire manufacturing line. I literally assembled every single component in one of the surgical robots. It gave me a very deep understanding of how it was assembled, what some of the challenges were It gave me some perspective on what some of the quality gotchas could potentially be um as we started to manufacture that in mass. So certainly there was some value in that. But at the same time, i was really focused on literally turning screws for an entire week. You know, I got to the end of the week.
00:15:23
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I certainly learned things, but at the same time, it's like, hmm, what things did I neglect as a chief technology officer while I was working the line?
00:15:35
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Fortunately, i stopped that week. I mean, I could have continued to a whole month. I actually was having fun doing it. It can be a real trap where you get into times of stress as you know as the CFO or CEO, founder, you fall into the tasks in your company that are comfortable to you, that are enjoyable to you. And as you do that, you ignore the things that you don't want to face. Right.
00:16:04
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I think the reality of what you're saying, you can describe it in exactly the way that you you've just described it. Or you can say that you're going back to the floor and learning how the business actually operates. There's a lot of value in that.
00:16:15
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But if you overdo it, you are doing the things that are easy to do. You're not actually fostering respect from the people that work for you because you're doing what they should be doing.
00:16:28
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And what they're looking for is you to do the things that they can't do, that you should be doing from their perception, which is that you're running the business, you're making the decisions which make their job easier, that make their job secure.
00:16:42
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And then you need the systems in place in order to make that happen. So what sort of systems do you sort say are the priority ones to implement? Definitely when it comes to operation situations like you know how things are getting paid for, how much autonomy should people have to solve problems without having to go to you. you know Depending on where you are financially, could be you can spend up to $500 without having to ask me for it.
00:17:11
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ah Just giving that level of autonomy can be a huge win because now people who are right there, they know what the problem is, they're in the middle of things, They know what to solve. So give them the power to do it.
00:17:25
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And I think that's really important. And then other operational things, um ah for example, from running the manufacturing line. I realized that there were certain parts of the system that were very difficult to assemble unless you had a couple people there to help steady it and lift it. And so we ah designed a rigging system to allow one or two people now to safely lift the system into place. Just having that greatly improved performance.
00:17:57
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not only our ability to safely assemble the system, but it also became fun. Like people were excited about even just getting to use it and lifting it up because it gave them kind of that more sense of like, you know, okay, now it's not about coordinating um a bunch of people, one, two, three, lift. Now it became that, you know, hands-on system again. And allow those people that are experts in their jobs, I think this is what I'm saying, is allow those people that are already experts in their jobs to have the autonomy to do it.
00:18:31
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You make it sound so simple. yeah it's it's ah it's it's a it's a It's a very swampy area to to to to solve those things because what's very challenging for especially new founders is that systems are not about losing control. They're about designing how control works.
00:18:53
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And i think there's a difference between being in every decision and having a say in a decision. And, you know, there are certain things where it's like, okay, if if this trigger happens or if we have a customer that brings up this issue, now I want to know. I want to be involved in that special situation. Other than that, this is how things work.
00:19:15
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You know, go to it. Let's do it. Yeah. The systems that you've described seem to focus on people, making sure that you've got the right people in place and that you've set them objectives and parameters for their decision making.
00:19:33
Speaker
So you are creating an environment in which people can work. You mentioned the word autonomy and giving people that level of responsibility and autonomy autonomy to make decisions of their own without having to come to you.
00:19:51
Speaker
But it comes down to your part of that process is understanding the type of person that you want to work with. what the characteristics of that person are going to be over and above their technical job skills setting objectives because decision making without an objective is just a ah finger in the air right type of action they need they need to know what the objective is and with that then the parameters of the decisions that they are able to make and then when they can see the objective and the parameters of their decision
00:20:27
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it it becomes very clear when they need to be coming to you to say, actually, we need to decision about this. But what you want, I suppose, is the system that says, we need your decision on this. This is what we think is a good idea.
00:20:41
Speaker
And so you're then examining their idea and reinforcing their abilities, their confidence to do their job to the best of their ability.
00:20:53
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And the other thing that you're talking about is having a system which means that your organization doesn't stand still. So it's about quality improvement, quality assurance.
Setting Goals & Ensuring Growth
00:21:05
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That's what you described. I found out that this is how this product is made. I found out this is the difficult parts of the process. Therefore, we need to change that part of the process to remove the difficulty so that it's a lot easier for us to do it.
00:21:21
Speaker
And that means we collaborate with more people, we get other people involved. But the two things are, objectives, decision making, parameters and constant improvement and you seem to have a system there that will drive your business forward.
00:21:36
Speaker
And that's the Deming cycle right there. And it's, you know, I think it's a really important thing to mention, like, you know, when the words that you've used, you know, systems and cycle and process, these are all moving systems. They're moving parts. um You know, there's a quote that's often misattributed to Einstein. Maybe he said it, who knows, um that nothing happens until something moves. Yeah.
00:22:01
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And that's really, that's really, really important. um Because if your business is just sitting there, well, how do you, how do you know how you're doing? How do you know, you know, how how do you achieve your goals unless things are moving? And so when you're, when you're building those systems, you know, like you say, you there's a goal to them. There's a direction. And, you know, there's an overall company direction. You know, there's a North star, whatever your favorite metaphor is, you know, out here we say goals because we're all American football people. um
00:22:38
Speaker
And so you want everybody heading towards the same goal. So that's going to be your overarching gestalt, as it were. And then within any of those individual systems, they're all pointing you towards the same goal.
00:22:56
Speaker
But ultimately, every single one of them has to be something that's in motion. Because the moment one of those systems stops, um you know, that's that's probably the result of, hmm, we don't have actual business activities that, you know,
00:23:13
Speaker
result in, well, business happening. And so, you know, every one of those systems, every one of those, you know, things that you're delegating, those should all be about things in motion.
00:23:26
Speaker
yeah yeah it's It's funny, because my my eldest stepdaughter, is getting into advanced math today. and And she discovered much to her chagrin about how excited I get discussing calculus.
00:23:39
Speaker
Because not only was it invented by a 26-year-old with a quill tip pen, but it's it's ah it's a language of motion. And it's one of the most amazing things to me that you can have math that describes something that's moving.
00:23:56
Speaker
And that's ultimately what a business is. Everything in business should be in motion. It should be going in a direction. And, you know, those are things about founders who finish, right? You can't finish something unless you're moving towards something.
00:24:13
Speaker
And, you know, having those goals, having, you know, beginning with the end in mind, all those little cliches, um they may sound corny sometimes, but they're they're about moving you in the direction that you want to go and all of that rolls back to the very beginning which is you have to decide where you want to go in the first place you do and i think as well you probably also have to decide whether going into setting up a business is the right sort of thing for you to do yes if it isn't there isn't going to be much chance of you finishing anything that's right so
00:24:52
Speaker
It's like the first decision to make if is is being in a business, setting up my own business, the right decision for me. And have you any advice for people in that, for pondering that decision?
00:25:08
Speaker
Yeah. You know, you'll you'll sometimes see that kind of pithy advice on the Internet. You know, everybody can run their own business. I mean, technically, that's true. But at the same time, it's not. um If you really there there are certain people and and this isn't a this isn't a judgment in any pejorative way. but not everybody is suited to run their own business. Some people just, they need to be told what to do. And that's not necessarily a bad thing. And honestly, if you wanted to run a business, but you're also somebody who needs somebody to tell you to do ah what to do, then maybe you need a coach. Maybe you need a, maybe you have great ideas and you know how to like, you know, turn the wrenches and things like that. But you need a co-founder that is a little bit more execution focused and maybe can help you get aligned on things better. um I certainly have a coach.
00:26:03
Speaker
um And that's a great thing to have. um You know, sometimes having a personal you know executive coach, executive consultant, whatever you want to call them, um might be what you need to get you in motion.
00:26:17
Speaker
But certainly the thing to keep in mind is that um running a business, starting a business, being a founder, it's not for the faint of heart. Definitely not.
00:26:28
Speaker
You need to go into it with the eyes wide open. Definitely not for the faint hearted. You've set up all these businesses and been successful in them, and I congratulate you on that. I have set up a business and I'm starting to see it be successful as well. So once it starts to happen, you feel it and you know it, and it's really brilliant. But but today, you know, Dave, I've really enjoyed our conversation and you've helped me put a lot of things into perspective. So you've definitely made me think as well, but really do appreciate your time. Thank you very much. Well, thank you.
00:26:58
Speaker
you. I am Michael Millward, the Managing Director of Abasida, and I have been having a conversation with the independent mind Dave Saunders, the author of Founders Who Finish.
00:27:11
Speaker
You can find out more information about both of us by using the links in the description. If you are going to set up a business, one of the things you have to remember is that it can be very difficult to be ill.
00:27:23
Speaker
If you're not there, maybe something isn't going to happen. So it's important to be healthy and to stay healthy.
Health and Entrepreneurship
00:27:30
Speaker
One the best ways to stay healthy is to understand the risks early and get them dealt with.
00:27:37
Speaker
So that is why we recommend the health tests that are provided by York test, especially the annual health test. The annual health test from York test provides an assessment of 39 different health markers, including the risks of chronic illnesses like diabetes, cholesterol levels, vitamin levels, organ functions.
00:27:59
Speaker
The list is extensive. The annual health test is conducted by an experienced phlebotomist who will complete a full blood draw at your home or workplace.
00:28:10
Speaker
Hospital standard tests are carried out in a UKS accredited and CQC compliant laboratory in the UK and similarly accredited laboratories in the United States, Canada and elsewhere in the world.
00:28:23
Speaker
You can access your easy to understand results and guidance to help you make effective lifestyle changes anytime by your secure Personal Wellness Hub account. There is a link and as you would expect, a discount code in the description.
Conclusion & Listener Engagement
00:28:39
Speaker
I am sure you will have enjoyed listening to this episode of The Independent Minds as much as Dave and I have enjoyed making it. So please give it a like and download it so you can listen anytime, anywhere.
00:28:50
Speaker
To make sure you don't miss out on future episodes, please subscribe. You will probably also want to share the link with your family, friends and work colleagues. Remember, the aim of all the podcasts produced by Abbasida is not to tell you what to think, but we do hope to have made you think.
00:29:09
Speaker
Until the next episode of The Independent Minds, thank you for listening and goodbye.