Founder's Story - Disruptive Genius: Founder’s Story with Tina Sharkey | S2: E24

Episode Date: April 16, 2024

Today's episode is brought to you by BiOptimizers, whom I LOVE their MAGNESIUM BREAKTHROUGH product that has helped me sleep better, stay focused and feel all around healthier. Check out their products at http://bioptimizers.com/danrobbins use promo code FOUNDERS for 10% off any order. Tina Sharkey, a trailblazer who notably coined the term "social media," has left an indelible mark over three decades of entrepreneurship, guiding companies to public success and significant exits. In a recent episode of Founder’s Story, Sharkey shared insights into her journey, emphasizing that her drive was never for the title of an entrepreneur but to effect meaningful change. With a vision that transcended the norm, she founded Brandless to democratize access to quality products at fair prices, reflecting her ethos of doing something impactful when nobody else is. Sharkey’s approach to entrepreneurship is rooted in problem-solving and intentionality rather than seeking acclaim. Her work within large corporations and startups alike showcases her ability to be a change agent, irrespective of the environment. This mindset has been pivotal in her remarkable career, from building a global online community for women to advising the next generation of leaders and entrepreneurs.  Our Sponsors:* Check out PrizePicks and use my code FOUNDERS for a great deal: www.prizepicks.com* Check out Rosetta Stone and use my code TODAY for a great deal: www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

Welcome to Founders Story, the podcast where trailblazing entrepreneurs share their extraordinary journeys, uncover the passion, grit, and vision that drive the world of business. Hey everyone, welcome back to another episode of Founders Story. Today we have a true pioneer. This is somebody that's credited for coining the term social media she's brought companies public she's had some major exits incredible career the last how many decades tina have you been doing this oh my gosh um i think i can now say three so three decades, Tina Sharkey has been an entrepreneur, paving the way for people and success. I mean, really incredible career. Before we dive into all these things with you, Tina, I wanted to ask you, because going back to the beginning, I know this is what the 90s now, I guess, in the 90s, when you said, I want to be an entrepreneur, what was that spark? You know, it's funny. I don't think for me, like some people want to be entrepreneurs. Like they actually want that job.

I never wanted that job per se as a job class. As an entrepreneur, I wanted to do stuff, right? So I wanted to join up with some colleagues and build a giant global community for women online. Like when we started Brandless, I wanted to democratize access to great things at fair prices. So it was much more about the intention of wanting to do something great. And since nobody else was doing it, we did it. But I've also been an entrepreneur where I worked in big corporate environments and been a change agent within those environments at J&J, AOL Time Warner, other places. So for me, it's more about the intention of like wanting to see something happen in the

world. And I like to make stuff happen. And so I feel like I bring that entrepreneurial spirit, whether it's in big corporate environments, in my academic institution, in my startups with co-founders. For me, it's about that more than it is about wanting the title entrepreneur. That's amazing. It seems like you really solve problems, which is so important. So a lot of people, they want to go into business and I think they get stuck at the first phase of just taking the leap. And you've really been a pioneer where you've done things before other people have done them. That means you didn't even know if it would be successful.

So how do you do that? How do you get the guts or what do you tell to entrepreneurs about that first leap? Well, the first thing, the leap is before you think about all the psychological barriers that may be holding you back. For me, it's about what problem do I feel like needs solving in the world? And then the second, and I say this to my students as well, and then how are you going to solve it? And then, you know, then the next question is, OK, well, who else is trying to solve that problem? And why are you going to be better, different? You know, what are you doing that's different? And then how big is that market like that you really feel like you can go after? And then what do you think is a fair guesstimate on if you're wildly successful, what your fair share of that market could be.

Do you think you can build something that has like defensibility, as we like to call a moat around it where, you know, you're not building, I mean, you can build a hot dog stand and you can have a very successful hot dog stand. You can probably have thousands of hot dog stands, but that doesn't mean that other people can do the same thing. So it's like, what can you do that's going to make your business successful? Or are you going to disrupt a business that's already doing that, but you think you can do it in such a bigger, better, more efficient, more cost effective, more scaled, what have

you? It depends on the company kind of way. So I think there's a lot of things you need to think out. But it always starts for me with what problem do I want to solve? What do I see out there that doesn't exist or exists, but not in a way that I think could be so much better or so much different. So once you figure out the problem that's going to be solved, or maybe you have entrepreneurs that you're helping, people in business. When do you look at funding? This is a space I have never really gotten into funding, but I've always wanted to figure it out and try it.

So when does somebody look at that? Do you see it like pre-revenue or should you test the model and figure it out first? Does it depend on the industry? What are you looking at in terms of like, okay, now we need to go get funding? So it really, so the answer is everything you just said is correct. It depends. It depends on whether you, are you able to invest in yourself? Like, what do you need to live? If you're willing to go after this idea, what do you need? And what are the conditions under which you can bring this idea, company, movement, what have you, to market?

And that's going to be different for everybody and everything based on what it is. What do you need in order to put this idea to work? Is it engineering support? Do you need to build factories? Do you need to acquire equipment? Do you need to acquire equipment? Do you need to create some defensible IP? Like what do you, you know, everything is different.

So what do you need? Do you need to physically manufacture goods? Do you need suppliers? Do you need designers? You know, what do you need to actually bring this to market? And then working backwards from how are you going to get to it we will return to our show shortly but first let's talk about today's sponsor magnesium breakthrough by bio optimizers did you know four out of five americans don't get enough magnesium crucial for over 300 biochemical

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So check out biooptimizers.com to learn more. And back to the show. An MVP, a minimal viable product. How are you going to get that in the market? And sometimes an MVP doesn't have to be physically fabricated. It might be something else. Every business is different. Do you have to start paying paying rent do you have to do all those things so when you raise money you know I always like to encourage entrepreneurs to wait as long as they can like get as far as you can before you raise money because you're creating more value in what people may invest in and so like I said before what problem you're solving how are you solving it what's the T, the total addressable market that you are building into? What is your competitive, you know, differentiation? What is your like, I would call it a visual value proposition? You know, how do you, why do you believe you can exist? And can you, can you demonstrate demonstrate that can you show me that what is your um your initial

business model like where are you going to start and and what's that going to cost you have a sense of what you're we like to call cat to ltv ratios the cost of acquiring a customer and then the lifetime value of that customer you're not going to have hard and fast answers but if you know that it's you know on average through testing and learning and all you know that it's, you know, on average through testing and learning and all the rest that it's going to cost you a hundred dollars to acquire that customer. And they're really a one and done. They're not going to come back because by the way, not every client service product is going to come back, but if the margins are high enough, then it that's okay. But if you can get a sense of what that lifetime value ratio is,

and maybe you're building something that doesn't need any marketing. It would be a very unusual, but it may be that. Or maybe you're building something that doesn't need a lot of ongoing manufacturing. You might be building some enterprise software. So the cost of the software and the cost of selling in customers,

but the manufacturing of the software is like a sunk cost that you're gonna amortize against all of the software and the cost of selling in customers, but the manufacturing of the software is like a sunk cost that you're going to amortize against all of the software. So it really, really depends is the answer. If you are a first time founder, it's going to be different than if you have a track record and you have people who have either invested in you or watched you or been customers of yours and things like that. So every situation is different, but I really encourage entrepreneurs like there's a lot of ideas out there. It's really about the team, your ability to execute and your ability to bring something to

market in what timeframe. So all of those are factors to consider, but every situation is different. I think I've had maybe 10 ideas that I've started that failed. So I can understand that about the ideas. How about you when it comes to when do you know when to exit or say you have a company and you're like, wow, I want to exit the company. When do you know that? Or on the flip side, when are you like, okay, this isn't really working out. I need to move on. It really did. The answer again, like everything you've said in the past, it all depends. You know, it really depends on market conditions. So maybe you built something that was a completely disruptive thing until potentially you got disrupted. So you either need to disrupt yourself and like reinvent the business or you're going to be, you know, disrupted. Or it could mean that your company, you're realizing that your cost of operating your company, the cost of acquisition is really high, but potentially there's a bigger company that already owns all those customers.

And so maybe there's an acquisition opportunity where they don't have your feature. They don't have your service. They don't have your platform. They don't have your experience. You know, it all depends, but they have all the customers. So maybe it makes more sense to join forces with them. Or maybe you have all the customers, but you don't have the other things. So it really depends on the market conditions. It depends on who your investors are and what they're comfortable with. It depends on who your team is. And maybe that team, if you're talking about exiting, maybe that team was the right team for the hiring of the company but isn't the right team now and maybe there's another team that can take it to

another level i mean these are all extreme examples but you know it really depends on market conditions um for all of those things your cap cap table, your track record, your momentum, your ability to stay ahead of the market, your competitive moat around the company where you still feel like you have opportunity to continue to grow and disrupt and maintain some distance from competitors or potential people who are going to try and move into your space talking about disruption i mean the last 30 years you have been at the forefront of technology i mean coining the term social media that's incredible i village like going all the way back you've done amazing things i'm sure people thought like this is a crazy idea now with with disruption, AI is like everywhere. It seems like every industry

might be disrupted in some sort of way. So what are you looking at? What are you thinking about for the future in terms of AI? So it's a great question. I just in my new academic chapter have kicked off some research with colleagues at USC around generative AI and society. And so what can we be building? How do we inspire founders to take this extraordinary new tool, these large language models, and actually build them for good and build them for, you know, an enhancement of a better society? And so when I think about disruption today, there's still some really wonky markets that are super mom and pop, but they're very big,

but they're what I would call atomized in lots of different places and spaces. And some of the most successful businesses have been able to sort of put their arms around those fractured markets. So Airbnb is a really good example. You know, people had stayed in people's houses before HomeAway, which I was on the board of before we sold it to Expedia, and now it's Vrbo.

But those vacation rentals, that market was like very fractured, right? People have been renting properties, people have been renting rooms, but there wasn't a platform that put it all together. I'm an investor in a company called Brightwheel, and they went we do not have good daycare infrastructures. And so there's big ones like Bright Horizons, but then there's also lots of mom and pops, people who, you know, but they still have to have accreditation

and things like that. And so they went there and they made enterprise software for these small mom and pop shops, open table. You know, restaurant business is a very small business relative to, you know, it's, there are restaurants everywhere, but there wasn't a platform to superset it. So I think at times we think, oh, everything has to have AI. Well, you could argue that machine learning and, and, and AI are in so many things that we use constantly, and we're not even aware of it. When your email automatically fills in someone's

email address, that's, you know, the learning of the machine is to make that faster for you. When somebody is spell checking, you know, people think the metaverse is like a whole new area. We're in the metaverse right now. Like we're actually having this conversation virtually in two different spaces and places. So I think sometimes people think of technology, innovation and disruption as something that is over here and you have to like get on a rocket ship and disrupt. But oftentimes it's just thinking about how can you do things better? How can you enable, you know, commerce for good? I'm an advisor to a company right now called Good Movement, and they are trying to use commerce for good. And they're trying to launch a movement of social entrepreneurs using commerce and give

back and clubs and teams and missions as part of their reinventing the Girl Scout cookie, essentially. And so because you could argue that that's commerce for good. So there's so many different things that are, one could argue, hiding in plain sight of new ways to do things. There are so many industries that have yet to be disrupted that are massive industries.

The construction industry, massive industry, gigantic. But really there hasn't been a ton of innovation there in many years. So there's lots of places and spaces to look for the opportunity to do it more efficiently, better using enabling technologies. And then there's building technology to actually create that disruption itself. So we just saw with this last wave of iOS, Apple, you know, when Steve Jobs got on the stage and said, it's a phone, it's a music player. He didn't say taxi, but ultimately Uber and Lyft and all of these companies based on GPS and other geolocations and personalization and all the rest, iOS became just

a massive trillion dollar launch platform that brought ushered in a new category well Apple just launched Vision Quest OpenAI just opened up I mean chat GP opened up the chat GPT APIs so people are building on these ecosystems so there's lots of different places and spaces some are industries that where robotics and other things can do jobs that humans don't want to do or humans can't do as well. I have a friend who just invested in a robotics company that, you know, cleans the sides of ships where, you know, barnacles and things are on ships. Well, it's very hard to get people to go and do that work, but that's a great work for a robot so there's lots of ways where you're like oh you don't have to invent a new ship like that's that's something that had

to be done it's always had to be done but there's less people to do it or want to do that work so thinking about disruption you have to think not only what are the enabling technologies, but what are the inefficient businesses, places where a platform or something can make it more efficient because you're doing it at scale. Back to that mom and pop, you know, home daycare. Each one of those individual houses are not going to build their own software. Plus, today, parents want to have a bird's eye view into what's going on with their kids and everybody has phones and video cameras. So is there a way to give parents, you know, a window into that? You know, there's just so many, you also have to look at consumer behavior and enterprise behavior. So now BYOD, I don't know if you know what that stands for, it's bring your own device.

So never would you have thought years ago that you would like the tools that you use for business would be your laptop, your phone, etc. But now the enterprise world needs to think about the BYOD movement so that their applications are sitting on your equipment. So, you know, there are some firms that say you have to use our phone and our laptop and only use it for our stuff. But for the most part, their software applications are sitting next to your consumer applications. So your fluency with Facebook and WhatsApp and all the rest, those enterprise software applications have to be, you know, consumer enabled in such a way that the design and the experience is as good as the things you're using for other parts of your life, because they're literally sitting next to each other. So what I've kind of given you a scope of

is thinking not only about what is the technology in the world of AI that you just talked about, not only, you know, what are the places where labor can be enhanced? What are the mom and pop places that can be optimized? But then also, what are the ways to think about consumer insights and societal insights that might be sparks for a new behavior change. And behavior change usually ushers in new opportunities. It's been amazing, Tina. I mean, I am now more excited about the future because I wasn't sure if I should be grim or excited before,

but now I am even more excited. You're not at one. You're not a grim person. And two, optimism. You know, there's been times in our history that are much more grim than today, even though that sometimes people forget that. And we are so privileged to be living in this time

with access, with community, with connectivity, and with democratized tools and democratized education where people can learn, people can connect, people can innovate in ways that they never were able to do before. Well, I know that you are a professor at USC, so people can learn more there. But if people want to get in touch with you or find out more about what you are doing, how can they do so? I would say that, you know, for the most part, I don't spend a lot of time on social media because I just can't afford to fall down that rabbit hole. But I am on LinkedIn. And so people can link in with me there

and follow what I'm doing there. That's probably the best way. Well, Tina, we are honored here at Founders Story to have you today and to continue watching how you have reinvent new companies. And you're always a pioneer. And thank you for being so positive with us today. And I think the audience is really going to take away a lot. And who knows, maybe the next disruption is going to come out of somebody watching this show today and being inspired by you. So thank you for that. Thank you. And thank you for spotlighting great stories and great people and building community along the way. Because as I heard in one of your last talks, it's not how many people you're reaching.

It's the impact with every single one of those connections. And so make it matter. Spotlight people. Make people feel seen. And let's just use our privilege to do great things in the world. I love that. Thank you, Tina. Thank you. Thank you for tuning in to Founders Story. Keep exploring,

keep dreaming, and join us next time for more inspiring entrepreneurial journeys.