Sep 13, 2023
It’s natural to not like competition, but having it is key for successful entrepreneurs. In this episode of the Class E Podcast, we talked with Fred Cary, a serial entrepreneur and thought leader who has over thirty years of experience. Cary discusses the various successful companies he has taken to the next level and shares how his current company, Idea Pros, provides anyone a path into the entrepreneurial world. He also encourages entrepreneurs to view failure and competition as good things in their ventures.
Guest: Fred Cary
Host: Mary Sturgill
Producer: Isabella Martinez '24
TRANSCRIPT
MARY: Hi, everyone. Welcome to the Class E Podcast. I am your host Mary Sturgill. As you all know, this is the podcast that's brought to you through a partnership between the Hill Institute for Innovation and Entrepreneurship, and the Communication Studies Department here at Furman University. Our hope with these podcasts is to share the story of innovative and entrepreneurial thinkers in hopes of inspiring you. And today we welcome, serial entrepreneur and thought leader with over thirty years of experience in that space, Fred Cary, has created transformational strategies that have resulted in billions of dollars in corporate value, and these stories cross boundaries. He's built high-growth businesses in finance and software, mobile technologies, data, retail, consumer products and E-commerce and probably a lot more. Through all of that, he's acquired of course thousands of lessons along the way that he is now going to share with us and he's sharing in his latest venture Idea Pros, which is an entrepreneurial startup services company. Fred, welcome to the show.
FRED: Well, thank you so much. I'm not sure I'm gonna I'm going to share thousands of lessons but we'll hit some of the big ones.
MARY: We'll share what we can with the time we have. So you have a… just to give everybody a little bit of background on you, you have a background in law with the Thomas Jefferson School of Law and Harvard and you have an MBA in business from the University of Liverpool. But I suspect that your history with entrepreneurship started kind of way before long, way before you did any of that stuff. What sparked innovation and entrepreneurship for you?
FRED: The fact that I didn't fit the mold. I always felt kind of like an outsider from the way that my childhood and teenage friends approached what they thought was going to be their adult life. And the way that I did it, I was always all over the place. And I was always thinking about how to do things the different way, in a more unusual way, than my friends were. So that's really… by 21 I knew I could never work for anybody else.
MARY: So you knew at that point that you were just going to create whatever you needed to create at that point in time to work for yourself?
FRED: Absolutely.
MARY: Yeah. You've… we've listed briefly some of the ventures that you've had. What I'd like you to do, just to give everybody a little bit of background, can you go… take us through some of those, just briefly, maybe your favorites and briefly talk about what they are and where you took them.
FRED: My favorite companies?
MARY: Yes, yeah.
FRED: Historically?
MARY: Yeah.
FRED: Ok. So I think one of my favorites was Boxlot. And the reason for that is it was a company that was going to be a disaster. We started in 1998. And we were chasing eBay. eBay was literally a year ahead of us with their app and well, their website mostly at that point, and we just couldn't catch up. We had an auction website, we did better auctions than they did, much finer quality things than they did. And we ended up being just a distant second that we couldn't change. We had a lot of money that had already been invested in us. And it was time to either shut the doors down or figure something else out. And we had to make a really, really big pivot. I don't like quitting, and so, our pivot became let's be a technology company. The reason was a lot of the underlying technology needed for options, reverse bidding, bitter buy, accepting multiple bids, automated bidding increments, and a lot of that technology didn't exist. And so we turned ourselves into a technology company and re-sparked everything and all the biggest companies in the world started using our technology. And we ended up getting an agreement 18 months later for $125 million acquisition of our company which it was something that should have been in the assets. So I think that's a good one for me.
MARY: Yeah, that's huge.
FRED: Yeah. Another one's Imagine Communications. When HD first started penetrating American households, the cable industry was in really bad shape because the cable that would go to the home would only support one megabit of data and they needed back then 1.5 megabits to deliver an HD signal. And so it was going to be disaster for the cable industry. We came up with a technology that we approached the cable companies with our proposed technology and they said if you can make it we'll buy it and my engineers said, “You're crazy. We can't make it.” But we did. And nine months later, we came up with a technology that could in different residential communities that actually took their infrastructure and we quadrupled their throughput. So instead of only being able to handle one standard definition signal, they were able to deliver to HD and one standard using all the same infrastructure they had in place. So that company now, Imagine Communications, does probably $750 million a year in revenue and you know, it started from an idea that couldn't happen.
MARY: Right, that people thought just wasn't possible at the time. Yeah, that's amazing. And then what would be your third one?
FRED: Well, my third one is IdeaPros, the company I’m in right now. It's the hardest even though I brought a couple of companies public, it’s the hardest I've ever worked really. And it's because we become co-founders with entrepreneurs and it's expensive to work with us. It's not cheap at all, but the entrepreneurs that we're about ready to go out and spend 100, 200, 300, $500,000 to build an app, build a company, do all the engineering for physical products, we approach them or they approach us most likely to be the co founder and they will pay us an upfront fee, a fixed fee of around, it's around $100,000 and they give us 30% of the company we're going to form together and then we do everything. We do all the heavy lifting from research and competitive analysis, customer profiling, branding, naming, positioning, development of the website, development of the app, development of the physical product, engineering, and all the way through marketing and then launching while we're training the entrepreneur how to really, really be experienced in a year period of time. So that's been very, very fruitful. I've had 100,000 applications in the last two years. We’ve taken 400 companies and we have about 24 of them that we think are going to be worth around $100 million dollars each. So $2.4 billion worth of value right there. So that's been very rewarding and very stressful at the same time.
MARY: Yeah, I bet so because I mean, I know, and you probably experienced this in your own journey that, you know, you have this great idea, but sometimes, a lot of times, you don't necessarily have the skills that it takes to make that idea into a company or a viable company, right? And you guys seem like you're providing that for some of the idea people.
FRED: You know, when I was a kid, the rich people were the doctors and lawyers and the businesses down the street and the movie stars, the athletes…now when people think about wealth, it’s about entrepreneurs. When you have social media, it makes it look easy, but if you look at the underlying data, literally 94% of the multimillionaires and billionaires are entrepreneurs, went to really great schools, over 60% of them got advanced degrees from those schools. They know how to be an insider, they know how to play that insider game. And the rest of us the 95% of us, including me, we were all outsiders. We don't know the rules. We don't have the connections. We don't know what we're supposed to build and that's why the biggest cause of failure for new companies in America is that entrepreneurs build something there's no demand for. How crazy is that? You think the number one thing would be not enough money. The number one thing is that you built something that nobody wants. Your mother won't even buy it and that's really devastating to think all those dreams crushed. And so we started Idea Pros to really turn those outsiders into insights.
MARY: Yeah, so that's what I was gonna say is you're taking those outsiders and giving them the path to get on the inside.
FRED: Exactly.
MARY: Yeah. Yeah. I love that. So can you talk about a couple of the companies that you're working with?
FRED: Yeah. And I have to be careful because I'm just launching in semi secret mode. But we have one company that is, it's an app company. It's basically if you think of it as Uber for the construction industry, and it's called Grunt. You can find them at trygrunt.com. And basically, what it is is this, this founder came from the construction industry, always breaking tools, running out of supplies, and they need to go off the job site and you waste the day, waste a couple days and a couple of people that are going out there for hours. And with Grunt, you can place orders for whatever you want. Grunt drivers pick it up, deliver it to your site within an hour and in some cases two depending on how many places they need to go to. And so it really sells a major problem for the industry. On top of that, we're trying to make Grunt drivers sexy, you know? I can't tell you the number of guys in their 20s and 30s that probably hate delivering groceries to grandma at 8 o'clock at night. You know, it's not a very compelling side hustle. Be able to tell your girlfriend you're gonna go out and pick up some lumber and that's part of what you do in the first place. We want to make it like UPS when UPS first started coming out their drivers with the sexy shorts and everything was a big spin on things. And so we're doing the same thing with Grunt to try to make it a side hustle that you can be proud of doing if you fit that profile.
MARY: Yeah, and that's actually… I agree that's so much needed. I volunteered for Habitat for Humanity, and it was my job to get that project… get them all the materials we needed for whatever project on site and it does take a lot of time away if you're not prepared for that.
FRED: Yeah, yeah, anything can happen. You get there and then it's the wrong, the wrong thing.
MARY: Absolutely.
FRED: So, we're gonna do really, really well with that. There's another one that talking about kind of, Habitat for Humanity and things like that, there's another one called Exhale. Exhale is a web based solution. Our partner has been in health care for many years, and she's dealt with people with lung issues. And insurance companies only cover you when you get to stage four lung disease, which is insane to me. It's like okay, we're gonna help you die. Stages one, two, and three is where people really really need the help and it’s not covered. So we built this company called Exhale. It's all… hundreds of videos, advice on how to eat, how to sleep, the types of exercises you do, you have groups. You put it all together and she's launched. She's doing really, really well. There's a lot of doctor groups that are signing up with her. She actually got picked to be on the board of the National Board of Directors for the American Lung Association, because of this work. So that's been a really noble work that’s's really really taken off so that I think that's another good example.
MARY: Yeah, absolutely. What are some of the criteria that you look for? Because I'm sure some people have come to you, they've had the money. But you've looked at… you've done your due diligence and you look at them and you just don't think this is viable. What are some of the things that you're looking for?
FRED: You know, I was the first person doing this and so I've made a ton of mistakes, speaking of thousands of lessons. When we first started, we were really mostly interested in the idea and of course, the capital you had contributed or my model didn’t work. If you don't have skin in the game, you're not as motivated as if you do. That's one lesson that I learned historically. So now, the entrepreneurs are actually even more important than the idea, because we can take an idea as long as it's a decent idea, we can take it and we can massage it and we can turn it into a great idea but you can't turn somebody into a great entrepreneur, if they don't have the heart if they don't have the grit and determination, not able to accept failure as a step towards success. If you don't have those things, you're not going to make it no matter how great of an idea we turn this into. So ultimately, obviously, got to be able to fit the financial profile. But then the very next step is are you somebody who's not going to quit? And if you got those two things going, now let's take a look at your idea. And let's see what that real market need is and whether or not this thing can go in and become a dominant player in that space. Those are the things that we look for in that order.
MARY: What's one of the problems that you wish that you discovered in any of your processes in any of your companies that you wish someone had told you beforehand?
FRED: Um, well, I think the most obvious one is things never work out the way you intend. And everything's gonna take twice as long and cost twice as much. And that's just the way it is, you know, and we have, we as entrepreneurs, we look at things and we see that there's a real need, and we believe that the world is going to come running towards us with this new great solution. And it's really, really a long process. I mean, if you look, everybody talks about Elon Musk and, and Tesla and everything. Number one, he wasn't the founder of Tesla, it's two other guys that did it. But number two, the first electric car 1890.
MARY: Right.
FRED: 1890.
MARY: I literally just read that the other day.
FRED: Oh you did?
MARY: Yeah.
FRED: I got my facts. So, the reality is that things take a long time and just because you're first doesn't mean you're ever gonna make it. And sometimes, I think the second lesson I learned is sometimes it's good not to be first. If you're second, third, fourth, you're making something but you're making it better because you've had the first ones go in there and crash and burn and try to do things but not do it well. And now you have a market demand, you have people who have penetrated the market, you have customers that are screaming about that one star component of the solution, and you can make that one-star thing, your five-star thing. So I would say don't be afraid of competition and understand that things take a really long time. So don't be afraid of failure either.
MARY: I think a lot of times and correct me if I'm wrong, because you probably know more about this world than I do, but I think venture capitalists sometimes look at the competition aspect of it. Is there competition in the marketplace already? And that kind of almost contradicts what you just said about it's okay to be the second or third company.
FRED: Yeah, well, you know, if they were worried about that, they would have never taken HelloFresh after Blue Apron or Lyft after Uber. There's always room for more than one. And if you look at, for example, the food delivery apps, there are at least a half dozen… ones that are doing really, really well.
MARY: Oh, yeah.
FRED: So venture capital, there's no venture capital firm that would give a dime to Quicken. When Quicken first started, he literally went door to door to every venture capitalist in Silicon Valley. Now over 240 of them, not one would give him a penny. They thought it was a stupid idea. Of course, after he really started kicking butt everybody wanted to give money at that.
MARY: Of course.
FRED: One thing you have to understand or the audience needs to understand about venture capital or any other type of investor, they don't know everything. A lot of times they haven't even ever started their own company. Some of them are just finance people, and bankers, and they are theoretically inclined, as opposed to being able to really find that target market and understand that there's an opportunity so don't be discouraged. If you can't find money in one place, go find it somewhere else. Because eventually you'll get it. Yeah, venture capital…To me, somebody comes in right away and says, “Hey, I have no competition. It's awesome.” If you have no competition, there's no demand, right? Because competition fills a demand that is generated by consumers or whoever the ultimate customer is. And if there's no demand and you're doing something so revolutionary that you have to actually build a demand where none existed before, then that's billions of dollars probably to get there. I mean, people..I use the example of the first car you know, somebody could argue that there was no competition when the first car came out, but the competition was horses. You know, that the issue was transportation. And so the demand was there for to be transported. You just had a different way of transporting people. And you're going to compete against that horse in the beginning. Cars were actually slower in some cases than horses and buggies. So, there's always competition and if there isn't, you know, you're gonna be one of those that fail because you created something that there is no demand for.
MARY: Yeah, I think that's a very good point. Let's see, do you have and I kind of feel like you do, just from our conversation, do you have kind of an entrepreneurial philosophy of entrepreneurism?
FRED: Well, my first philosophy is, don't.
MARY: That’s what everybody says.
FRED: Look, if you want to be an entrepreneur, you need to understand it's a lifelong struggle,no matter how far along you get. I mean, Elon Musk with SpaceX, he was one rocket failure away from losing everything that he had after he'd already had a couple of successes. A big payday for PayPal. And yet, still having those issues, problems with testing, problems with Twitter. There are always fires. And if you're not comfortable wearing a fire suit, you shouldn't be an entrepreneur. But if you are, then I think for me, the kind of mantra for entrepreneurship is be comfortable with pain. Because you know that in the end, you can help a whole lot of people. Whatever it is that you're doing, if you're doing it for the right reason, with the right purpose, the right determination that you're a potentially a world changer, and you can't change the world without hurting yourself. And as long as you're willing to do that, and do things for the greater good, you're going to be able to make it no matter what you're trying to do.
MARY: I think that's a great mindset to be in because I think you're going to be more prosperous if you're in the mindset that I'm doing a greater good, rather than I'm going to make money. The money is going to come.
FRED: Yeah, yeah. And I say that all the time too. Don't chase the money, chase your dreams. Make it a reality and as long as you have your dream and be really strategic about how you take that dream and actualize it. When you can actualize your dream, the money will follow. It's as simple as that because doing it the right way, doing the research, understanding what the real need is, and being able to deliver on that need results in capital coming your way. But when you’re focused instead on the dollar, you end up being like the Enron's of the world and no matter how big you get the corruption of chasing the dollar can take you down really, really hard.
MARY:
And fast. You know a lot of people create business ventures obviously we talked about, that they're not always successful. Is there another piece of information that you're thinking or advice maybe that you're thinking that people need to understand or know that they might not know?
FRED: Oh, yeah, we don't know anything when we start a business, you know? When I talk about that… literally the way that we approach entrepreneurship, nobody would do that in something like sports. Can you imagine if I wanted to hire you as my coach for a sports team, and you're asking me like, right, well, what sport is it? And I tell you, I don't know. Do you have any competitors? I don't have any clue. But I think I'm the only one. And well how big is this sport? I don't know, what are the rules? I don't know. How do you get all of the spectators to root for you? I don't have a clue. Right? But that's how we go into entrepreneurship. We don't know the market. We don't know the market size. We don't know the growth. We don't know the holes in the market that we can exploit. We don't know what those personas really want and how to take them not only as customers but as passionate advocates of a brand. So what I would say to our entrepreneurs or want to be entrepreneurs, you need to do your homework. Think about it. That you’re a coach of a sports team. DO you know all the rules? Do you know all the competitors? Do you know how to win? And if you don't know those things, you gotta get them. You know, I have on my website a free resource. It's called the insider checklist. And you can just go to ideapros.com and download it. As I said, it's absolutely free and it gives you seven points, seven highlights of the things you need to consider when you're starting any business. And then on top of that, for the next seven days, you get an email from me, and each day that email will cover one of those seven points and cover it in a lot greater detail and there's an embedded of 20 minute or so video on that subject from me. And so by the end of the seventh day, you'll not only know all those seven points, but you really get in depth knowledge about them. They're a critical foundation for anything that you want to do as an entrepreneur.
MARY: Do you recommend that people do that before they approach you as far as becoming partners with you?
FRED: Yeah, oh, yeah. You know, you need to understand what it's all about. And if somebody wanted to be my partner… Excuse me, that was a lingering allergy cough. But if somebody wants to be my partner, I would definitely suggest going through those things first. And you know, one of the things that we did…Idea Pros ended up becoming a drinking out of a firehose. There was just so much incredible demand. And I only had this one holding solution. But now we have a lot of things that are really inexpensive like I have master classes on purpose-driven entrepreneurship, we have things… for $1,800, we have a program that will take your idea and completely… everything I said about the market research and everything, will completely dissect that idea. Look at all these things you need to be looking at. Give you back a 40-page report on exactly what that market is, how you should exploit it, who your personas are, and how to go out and raise capital and you're going to need to go further up that food chain. So we do have a whole lot of things. If any of your audience wants to reach me or learn more…my executive assistant is not in the room because she always kills me when I say this, but you can write to me directly fred@ideapros.com and I'm happy to kind of steer anybody where they need to go.
MARY: Yeah, and you can check that out on Fred's website as well - ideapros.com. Fred, you've talked about the videos a little bit. Am I mistaken, don't you have a TV show like on YouTube?
FRED: Um, we actually have a TV show coming up. It's not, it's not out there yet. But, I do have over half a million followers on Instagram and I provide advice on personal development entrepreneurship every single day. I encourage you to go there. It's official fred cary, C-A-R-Y. And that is… I put my heart into that. I never have a script, I never have bullet points and never know what the heck I'm going to be saying. I'll just start talking and I'll put it down there but I think you could spend a minute a day on just going and seeing what I'm saying today, it will give you a good foundation to be a better person and be a better leader.
MARY: That's… how important do you think social media is now for companies for startups?
FRED: For a startup, well most startups, it's critical. Your persona is represented digitally nowadays. You don't have a real storefront. You have digital storefronts, and everything that you do is measured by what is seen online whether it's your website, whether it's your blog posts, whether it's your LinkedIn or Instagram or Facebook or YouTube channels. Everything you do is what you're being measured by. And so if people look at you… Suppose you're a web development company and you go to your website, your website doesn't look great, or you have that copyright 2021 on there and instead of 2023. You know, these little things, that's how people would look at you in the real world before. And so social media, in the sense that it is addressing your customer base, it's critically important. You always want to have what you believe is your persona. It's the clear representation of your company and your belief system is projected in everything that you do online.
MARY: When you say persona, you're talking about brand?
FRED: Yeah, yeah, your brand. People think your brand is what you write down. Your brand is what people, your customers think of you. And so you can have, you can say your brand is this or that or whatever it is and write it on all the walls in your office and make every employee chant it when they walk in in the morning. But that's not your brand. Your brand is how you're perceived by your public, by your audience, by your customers. That's what your brand is. So that's why it's so important - social media and otherwise, every engagement with your audience. It’s really important that what you want your brand to be is projected in such a way that your audience believes that as well.
MARY: Yeah, I just finished ghost-writing a book for a local businessman and so I'm totally stealing this from him.
FRED: Let’s tell his name.
MARY: I'm not sure he wants me to, but I'll ask him first. But he says perception is reality. So it's going along with exactly what you're saying that how your audience or your customer base perceives you or the community that you're in perceives you is the reality of the situation.
FRED: Yeah, and you're, you know, no matter what you want that to be, you're never gonna get unanimity. You're never gonna get 100% of people buying into it. I mean, even in what I do, you know, but look at venture capital. Venture capital, 90% of their bets fail.
MARY: Right.
FRED: I'm trying to make my percentages way higher than that. But even so, let's suppose I have a 25% failure rate. That means 25% of my clients, my customers, my partners, probably think Fred is…you know, they don't feel that highly of me because their dreams have not been able to be met. So trying to manage your brand essence is very difficult when you can never make everybody happy. So you really have to make sure that what you're doing affects the most people so that you can curate. A lot of people don't like Apple, but their brand is very, very powerful and their brand… they do that in everything they do. You know they start with their why as much greater speakers than I did a really good review on but they start with their why and everything that they do, you know, at the end is we just happen to sell iPhones and computers, but that's the last part of the statement. They don't lead with that. They lead with the essence of being different or thinking differently, in creating unusual things. And you can see how powerful their brand is because if I told you that, I just heard that tomorrow Apple is releasing its first ever electric toothbrush. I wouldn't have to say another word. Not true at all. But you would know it's going to be sleek. It's going to have Bluetooth, it's going to tell you whether you're brushing right. It's going to crash and break into little pieces as other stuff does. But you're going to know the essence of… what this thing…you have it, you're imagining it in your head because they've done such a great job of creating their brand imagery for you. And that's what you need to strive for.
MARY: Yeah, and that’s branded loyalty. Because Apple customers are super loyal.
FRED: I argue they’re prisoners. Both of my daughters have Apple and I have Apple stock.
MARY: Well, that's good. I’m an Apple girl all the way. I call myself gadget girl all the time because I have so many gadgets and most of them are Apple. And Apple did not pay me for that little plug there either.
FRED: Nor did they pay me for that toothbrush. If it comes out, you guys are my witnesses.
MARY: If they come up with it, yeah. You heard here first folks. Fred’s idea. Fred, what is next for you? And maybe Idea Pros, or maybe you want to separate that into you personally or Idea Pros.
Fred: Well, with Idea Pros, we still have a long journey ahead of us because as I started this company, previously, we only had this kind of flagship product. You know, all in co-founder. And there are a whole lot of entrepreneurs who need help at some level. Once you decide to be an entrepreneur, even if you fail miserably your first time, and you go back to corporate America, you’re going to come back out. And so, we want to create this kind of umbrella that really addresses entrepreneurship from the very nucleus all the way through larger companies that need strategic consulting advice. So, they’re a lot of programs, a lot of new solutions, that we’re building with Idea Pros, and that’s gonna keep me busy for a while. We’re out raising capital right now and what hopes to be our last round before we think about going public within the next couple of years. But so, that’s a big journey, but I think one of the big things for me personally is finding a way to balance my life a little bit. You know, I tell everybody else to do it and I do spend the first hour of the day or more trying to take care of me, working out, mediating, things like that. I’m working 10, 12 hours a day, working on the weekends, and I gotta find a way to calm down and relax a little bit. Maybe make, you know, three months out of the year working out of Italy.
MARY: Oh, that’s a great idea. I just went to Malta and I worked from Malta when I was there so I think it’s a fabulous idea.
FRED: Yeah, yeah.
MARY: Well, Fred, thank you so much for this great conversation. I’ve just thoroughly enjoyed it.
FRED: Thank you. I did as well. And I’m looking forward to crossing your path again.
MARY: Yeah absolutely, We need to get you to come speak at Furman.
FRED: I would love to do that. I think if you can educate people early enough…one of our partners, client partners, actually they had double MBAs, from prestigious schools…so she came and decided to work with us and she said the first six months of working with me, she learned more than both of those programs together, so I’m happy to speak to young people and try to let them know what they’re getting into and let them know how to deal with the fires ahead.
MARY: Alright, listeners remember if you or someone you know is an entrepreneur or just has an idea that they’ve been thinking about launching, our Greenville Starts program is a great place to learn what you need to know and to make some of the connections that you’re gonna need that can help you make your venture happen. The Fall cohort is full though, I will tell you, but you can get on the list for the Spring cohort and all you have to do is go to the Hill Institute for Innovation and Entrepreneurship website and go, I think it’s the very first thing that pops up and put yourself on that list so you can get into that cohort. We’ve had some fabulous launches from that group. That does it for this episode of the Class E Podcast. Remember this is the podcast that’s brought to you through a partnership between the Hill Institute for Innovation and Entrepreneurship and the Communication Studies department here at Furman University. Remember you can catch the podcast two ways now wherever you listen to your podcasts and also we have a brand new YouTube channel where you can watch the podcast. So you can go to YouTube and check that out as well of course, it’s just under the Class E Podcast channel. To make sure that you don’t miss an episode, make sure that you hit that subscribe button to YouTube or wherever you get your podcasts. This episode and most of our episodes are produced by student producers, currently Isabella Martinez is our student producer. So she will have created this podcast for you. We want to thank you for tuning in. I am your host Mary Sturgill. Until next time everybody, dream big.