In 1995, a graphic design teacher
named Lynda Weinman, and also an aspiring entrepreneur, decided to get the website Lynda.com. She did so because she needed
a sandbox to play in, with the new graphic-design tools, the digital tools that were being
developed at that time: Photoshop, Illustrator and many more. And she needed a place
to put her students' work so all could see it. Well, she put that website together, and the business began to grow. And in 2002, she discovered
it could be much, much more, so she moved all of her teaching online. Later, the business was sold to LinkedIn, who renamed it LinkedIn Learning, sold for 1.5 billion US dollars. Lynda is the poster child for what I call the counterconventional
mindsets of entrepreneurs. So I want to tell you
about these mindsets today, and here we go. So, number one, why do I call them counterconventional? First, these six mindsets run counter to the best practices, as we call them,
that are done in big companies today. They fly in the face of much
of what we teach at London Business School and other business schools about strategy, about marketing,
about risk and about much more. Now, you might say, “John, what do you mean by ‘mindset?’” A mindset, of course, is up here, right? It's those things, attitudes, habits,
thoughts, mental inclination which, when something comes our way, predetermines the response we make
to that something that comes our way, and those somethings,
as we entrepreneurs call them, are opportunities. So I want to tell you
about these six mindsets, and the first one, I call "Yes, we can." Now, B-school strategy 101
says the following: what we're supposed to do, in a company,
is stick to our knitting. We've got to figure out
what we're really good at -- we call them core competencies -- and we've got to build on them,
invest in them, nurture them, make them more robust. And if somebody comes along and says, “Can you do something different,
that’s outside of that?” what are we supposed to say? "No, I'm sorry,
we don't do that around here." Well ... A Brazilian entrepreneur
named Arnold Correia built a wonderful business that, today,
is called Atmo Digital, by disregarding those rules. He'd already reinvented
his business twice, to become a major provider of event management
and production services, when one of his customers said to him, "You know, I have 260 stores
scattered all around Brazil," and Brazil is a big country, "and I'd like to be able to broadcast
training and motivational events to the stores in real time. So, Arnold, could we put televisions
in the training room of all my stores, and could we build a satellite uplink so we can send all this wonderful
stuff to the stores?" So what did he say? He said, “Yes, we could do that,” even though he knew nothing
about satellite technology, had never operated outside São Paulo, but he got it done. Then, several years later, some of the other customers, one of them
in particular, Walmart, said, “You know, it’s nice that we have
all of these television screens in the back room of the store, but wouldn't it be cool
if we had them on the sales floor? Because then, we could run advertising, so when the customer
walks down the aisle for detergent, perhaps there's an ad
for Procter and Gamble's detergent in that aisle?" And what did Arnold say to that request? "Yes, we can do that." Over a period of years, Arnold reinvented
his business, fundamentally, four different times, by saying, when a customer
wanted something new that lay outside of his core competencies, "Yes, we can." The second one I want to tell you about, I call "problem-first,
not product-first logic." So in big companies today,
it's all about the products. So while I'm in the US, my family and I have used Tide,
for many years, to wash our clothes. And we get a chuckle, every now and then, because we can tell
a new brand manager has come along, because what happens,
they change the product, right? They take the blue speckles out of it and turn them green. And they call it "new, improved." Is this innovation, guys? I'm not so sure. Coca-Cola, what is there? There was Classic Coke,
and then, there was New Coke. That didn't work out too well. Then, there was Diet Coke, Coke Zero
and Vanilla Coke and Cherry Coke, lots of Cokes. I don't think this
is what innovation is all about. But for entrepreneurs, we don't focus on products,
we focus on problems. A guy named Jonathan Thorne developed a technology
that did something very useful. This instrument you see in front of you
is called a surgical forceps. It's the tool that almost every surgeon, in any kind of medical discipline, uses to do his or her work. But there's a problem
with these surgical forceps -- they stick to human tissue. So imagine you're having a facelift, and the plastic surgeon
is doing the final touches, but the tissue sticks to the forceps. Maybe it's not going to look
quite as good as it was supposed to look. And maybe the plastic surgeon
is going to get a little frustrated, and it's going to take longer
to do the work. And John said, "You know, that's a problem
I think I can solve," with a new silver-nickel alloy
that he had developed. It turned out the business
didn't grow very fast, focusing on plastic surgeons. So he said, "I wonder
if there's another surgical specialty that has an even bigger problem
that I could solve," and he discovered one,
and that's neurosurgeons. And neurosurgeons work
in two places on our bodies, in our spines and in our brain. So I hope you never have brain surgery, and I hope I never have it, but if they have to take
a little tumor out, I hope the forceps don't stick
to some other tissues, because I kind of want to keep
all the brain cells I can, right? John Thorne built a fantastic business, sold it some years later to Stryker. Stryker is very happy, John and his investors are very happy too. Why? Because John focused
on solving problems, not on thinking about products. The next one, I call it
“think narrow, not broad.” Like John Thorne, an entrepreneur I’m going
to tell you about focused on a problem but thought very narrowly
about the target market. But the big-company wisdom
doesn’t want narrow target markets, it wants big target markets, right? Because you've got to move the needle. Why would a big company
mess around with something small? Like John Thorne, Philip Knight and Bill Bowerman,
when they founded Nike, a company we all know very well today, had identified a problem, but it was a problem
that a very narrow target market had. Phil Knight was a runner,
a distance runner, and he could run almost, not quite,
a four-minute mile, and Bill Bowerman was his track coach. And there was a problem with their shoes, because running shoes, in those days,
were really made for sprinters. And when sprinters train,
they run around the track. It's a nice, smooth track. But distance runners
don't run around tracks. Where do they run? They run on country paths and dirt roads, and they're always stepping
on sticks and rocks, and so they get sprained ankles. And they run mile after mile after mile, and they get shin splints. Well, Knight and Bowerman said, "We need better shoes, shoes that are made especially
for distance runners, especially elite distance runners,
who really train a whole lot. So we're going to build a better shoe that's going to have
better lateral stability, a wider footbed. It's going to have
a little more cushioning in it, to protect against those shin splints -- and by the way,
if it's a little bit lighter-weight, a few ounces lighter, times all the steps in running
a mile, or a two-mile, or a marathon, it’s going to make
for faster race times too.” So we know what happened with Nike, right? Once they developed the skills to design shoes explicitly made
for a target market, a narrow one, and once they learned
to import those shoes from Asia, and once they learned
to get athletes to adopt those shoes, what did they do? Well, John McEnroe in tennis, Michael Jordan in basketball came next, and we know what the story is
with Nike today. They're the global leader
in athletic footwear and much more. OK, the next one -- “asking for the cash,
and riding the float.” Big companies today are awash in cash. Even in these tricky times
we are in today, there is cash all over the place, right? Merck, in 2018, spent all this money giving money back to shareholders
through stock buybacks and dividends, and they could only find
10 billion worth of R and D to do, with all that cash. Is something wrong here? I think this just doesn't feel right. But for entrepreneurs
like Elon Musk and the Tesla team, cash is the lifeblood
of the entrepreneurial venture. So when Musk joined the Tesla team, he said, "What's the plan here?" And that team had a plan, and it was to build
a really fancy sports car, make a lot of money from that one, use that money to build
a somewhat lower-priced car, make some money from that one, and then, we're going to build
a mass-market car that more people can afford. And in so doing, we're going to make a real dent
in the emissions problem that the global automobile
industry creates. Well, what Musk said is, "Let's go see if we can sell some cars." So ... they did a little road show in California, and they invited people,
on this little road show, with three characteristics. Number one, they cared
about the environment. Number two, they were wealthy. And number three,
they thought it might be cool to have the next big thing
parked in their driveway. Well, guess what? They sold 100 Tesla Roadsters
for 100,000 dollars each, cash on the barrelhead, paid tonight. How much? Do the math. How much money have they got
to start building Roadsters? 10 million US dollars
in the bank, in cash, before they had built Roadster number one. That principle has carried Tesla
all the way through its journey. So when they introduced
the Model 3, several years ago, nearly half a million consumers
put down deposits of 1,000 dollars each. Do that math. Half a million consumers,
1,000 dollars each -- half a billion dollars,
in the bank, in cash, with which to begin doing the engineering, build the tooling,
fit out the factory and more. Wouldn't you like to build
your entrepreneurial venture with that kind of business model? OK, the next one. I call it “beg, borrow,
but please, please don’t steal.” In B-school finance, we teach our students how to analyze
whether a project's any good. So you figure out how much
investment you have to do, and then, you figure out
what the cash flow is going to be, going forward, year after year,
for five years, 10 years or whatever. And then, you ask yourself, "Well, is that return
on that investment sufficient?" And if the ROI is good enough,
then you do the project. That's the idea. But for Tristram Mayhew,
and Rebecca Mayhew, his wife, who built a wonderful business
in the UK, called Go Ape, a treetop adventure business, they didn't think that way at all. They said, "We want to build
a treetop adventure business, here in the UK." They'd seen one in France,
that they liked, on a vacation. "So where can we get some trees?" Well ... Who's got trees in the UK? It turns out the UK Forestry Commission
has trees in the UK, lots of them, in all these Forestry Commission sites, and the Forestry Commission
was very interested in increasing their visitor count. Well, what better way
to increase their visitor count than to have a Go Ape
treetop adventure course on their land? So what Tris and Becs
essentially did was go to the Forestry Commission and say, "Look, if you'll give us a chance to build
five of these and show you that it works, we'd like an exclusive
for the rest of them, for 25 years." The deal was done. Today, there are more than 30
Go Ape adventure sites across the UK, there are a whole bunch of them in the US, and how did that happen? Because they borrowed
most of the assets they needed. They borrowed the trees, they borrowed the loos,
they borrowed the parking lots, all that stuff. All they had to do
was put their kit on the trees. Pretty cool. Now, entrepreneurs and permission
are kind of like oil and water. If you're an entrepreneur,
you kind of know that, right? But in a big company today, if you want to get something new done,
something entrepreneurial, something that’s maybe
a little different than the norm, you’ve got to pass it
through the lawyers first. Because there are a lot
of regulations everywhere, and you don't want to do something
that's going to land a top exec in jail. So it's really hard to get a "yes" answer to doing something
that's new and innovative, and it takes a long time. But it’s really easy to get a “no.” For entrepreneurs, however, like Travis Kalanick and Garrett Camp, who founded Uber, do you think they would have been
wise to ask the permission of the San Francisco regulators? "Can we start a taxi company
without any taxis?" No, maybe not, right? Because, had they asked, what do you think
the regulators would have said? "There's no way you're going to do that. That's going to threaten
the current taxi industry." So entrepreneurs don't ask permission, they just get on with it. Now, I don't condone
many of the things that Uber did, along their journey, many of them unethical,
some of them, probably, illegal. But the principle of entrepreneurs
just getting on with it, when the regulations
are perhaps ambiguous or haven't considered
what could be done today, digitally, that's when you get on with it. OK, so I want to close
with four questions for you. Question number one: Which of these mindsets
are embodied in you today -- maybe one or two of them already? Question number two: Which of the others can you learn? Are these learnable? I think they are. Question number three: Can you teach these
to somebody you work with, who has some challenges
for which these mindsets might help? And, more pertinently today: Is there a challenge you face today for which one of these mindsets,
or a couple of them, might help you get beyond the roadblocks
you're facing with that challenge? OK, so there we go. Six counterconventional,
break-the-rules mindsets that can help anyone, maybe you, change the world.
