Starting Your eCommerce Business – Your Road To Fortune With David Hestand

Andy Splichal 0:02

Welcome to the Make Each Click Count Podcast. This is your host Andy Splichal. And today we're happy to welcome a fantastic guest to discuss the subject of starting an Ecommerce business. He is a successful coach, business owner, public speaker and writer. He holds an MBA from Bellevue University in Omaha, Nebraska, and a BS in both business administration and architectural engineering. He specializes in working with those who have an entrepreneur's heart and a business idea but where they have no concept or idea of where to start. To be more blunt, he helps people open their businesses and he coaches them through all the complications that are sure to arise. He is David Hestand. How are you doing David?

David Hestand 1:39

Andy, How are you?

Andy Splichal 1:40

I'm good. I'm good. Thanks for joining us. Did I get the intro right?

David Hestand 1:46

Yes, that's, that's perfect.

Andy Splichal 1:48

Cool. Now before we dive into today's topic, which is starting your ecommerce business, your road to fortune, let us first hear your backstory and what ultimately led you to doing what you are doing now?

David Hestand 2:03

Sure, well, I've always had an entrepreneurial spirit and heart. When I was 10, I had to sell tumblers for a sports team that I was with. And I sold the whole damn stock. And then then then some. So well, on top of that, when I was about 12 years old, I started mowing lawns, and shoveling snow to make a little bit of extra cash and before lie had a full blown business. So yeah, that's how I bought my first car, by the way. So entrepreneur spirit is in my blood. And

Andy Splichal 2:36

You know, it's funny how many entrepreneurs start with lawn mowing and snow removal. That seems to be a common theme.

David Hestand 2:45

Yeah, well, it's easy to access and you describe your mom's law more your dad's law more head out.

Andy Splichal 2:51

Sure. Sure. Now, how did you hear you got the background? You're you're an entrepreneur by heart young age. But how did you get into helping others?

David Hestand 3:02

Well, that's that's an interesting question I got into helping others is because I'm standing in the grocery line, meet people Rotary Club. I teach also, the universities around here. And people always ask me, how do you start a business? And I say what's funny? It's pretty easy. The number one question I always have is, gee, I want to start a business. But I have no clue where to start. So I say well, let's sit down. Let's talk a little bit. And if I had a magic wand, and I gave you that magic wand, what would what would it look like So?

Andy Splichal 3:37

Okay, great. Now, can you share a story of where you have started helping a person with an idea and it's gone on to create a company out of it?

David Hestand 3:48

Actually, I had an opportunity come my way, that was quite unique. It was back in 1999. I don't know if many people leap remember this, but there was the what we call Dot-com era, and the company was called HS grads.com. It was for those people that wanted to connect with classmates. But when you graduated from high school back then they just floated out into the ether and you can never really find. So the former CEO of Nashville label had put together a group of folks and we created a product that was exactly like Facebook. In fact, funny enough, it was sold to Facebook. But see, we didn't use this methodology. I teach nouns because it wasn't invented yet. We did it the old way. We wrote a business plan. We sold the business plan to the bank and to the VCs and then we created a product. Well, it went okay, but there was a lot of wasting time and costly trial and error. Today, there's a much better way of starting a business much less risk.

Yeah, no, I can see and and when you're wasting time and somebody else was working on the same thing you could lose a footnote will hold real quick. I'm sure.

Absolutely.

Andy Splichal 4:53

You Now, what if somebody has the product and they're ready to go live? Where where's the first place they should start?

David Hestand 5:07

Well, if they have not created a business, a business idea, using that lean methodology, I would ask what the system is called. It's called the lean methodology. I would start by piling up cash because the risks are huge, about 70 startups that will fail using the old The old way. But given that they've qualified, viable products, and they've taken the steps and lean startup, the product would have already gone live, believe it or not, you just have to profitably scale up, and most importantly, scale down costs. So you want to follow those steps.

I see, you said that 70% of startups fail?

Correct. Yeah. That was a research. Yeah, back in 2013, Harvard Business, Harvard Business Review, had conducted a study and found that 70% of startups fail.

Andy Splichal 6:00

Wow, is that in the first year? What timeframe was that?

David Hestand 6:04

It's usually within the first 18 months is what they focused on.

Andy Splichal 6:08

First 18 months. So what are some of those reasons that you've seen? What are some of those reasons for businesses failing?

David Hestand 6:16

First of all, it's because they create a product that nobody wants. They have an idea. It's a wish and a prayer. They start making the product in the prototype, and then they figure out how to go get manufacturing, or they hire a bunch of people to help them code a very sophisticated website. Then they launch and it you the product just goes thunk and nobody really wanted it to begin with. There was a left handed wrench sharpener. Just no, nobody wants a wrench, the left handed wrench sharpener. I used to always ya know, I always call it the pocket wasp and hornet teaser.

Andy Splichal 6:56

Okay, and anything, anything else? What are there besides no demand?

David Hestand 7:02

No demand means no customers, and then you very quickly burn through your cash or worse off somebody else's cash. And so you end up with, you have no time left, we call this the runway. So when you started your company, you have X amount of dollars. And it's just like an airplane, you have X amount of room to take your airplane off the ground. So if you run out of dollars, then you run out of a company, there's there's no there's no money left. So you have to figure out how to get your customers excited and buying early, and then adapt your product to what the market wants. That way you guarantee that there's a there's a via something we call a viable, qualified viable product.

Andy Splichal 7:45

It's a great picture that was would you say the runway analogy?

David Hestand 7:48

Yeah, this though. We call it in entrepreneurship. We call it your runway. What is your startups runway? Okay, that's you don't want to crash?

Andy Splichal 7:58

Now ecommerce, you know, it just continues to grow. And with COVID hitting over the last year, I mean that that curve of acceleration is just just gone nuts. Where do you see ecommerce going from here?

David Hestand 8:16

Ecommerce, I think that every business should have an Ecommerce storefront. I really do. In fact, I think that some someone some companies shouldn't even have doors to begin with having bricks is a lot of risk. It really is. So if more companies 10 ecommerce platforms, this would allow them to pivot quickly and discover future wants for their needs and their products in the marketplace that they serve.

Andy Splichal 8:43

Okay. Now, if somebody had a great idea for a business, they think it's a great idea, at least. But they keep saying, you know, I'm really busy right now. I'll get to it eventually. What advice would you give that person?

David Hestand 8:59

Sure, I would tell them just start, stop talking about starting something and just do it, you can start very simply start by identifying your early adopters, those people that have a problems that you're trying to solve this validate your hypothesis. And your first goal is to get is just to get things started. For example, in the next 10 days, I will have identified tenant over the adopters and set up 25 interviews with them. Excuse me, find 25 individual early adopters and then set up 25 interviews with them. And you're looking to validate your hypothesis around the problems that you're looking to solve for the, the for the customer, and you're specifically looking to tackle the risks. Remember, entrepreneurs jobs, the main job for an entrepreneur is to eliminate as many risks as you possibly can. So you're looking to tackle at what you're looking, what are your products, what's the problems that you're trying to solve? Who's the competition that's in that marketplace? And what's the pain point people don't buy unless they're paying. I've got a check for you to sign. Oh, great, fantastic. What's the check for? It's a million dollars. Great. All I need you to do is sign right here. Well, I don't have a pen. Well, I've got a pen, it costs $2 million. You don't I mean, you're gonna, you're gonna figure out how to buy that that's from the Wolf of Wall Street. By the way, you're going to figure out how to get that money.

Okay, great.

That's a pain point.

That is a serious pain point. Now, what is the biggest success story that you can share of a company you've worked with?

Well, I'll tell you about a company I used to own. It was a bakery called butter wooden desserts here in Buffalo. The company made high end desserts, we sold it to local restaurants. I wanted to expand the product offering across the state eventually to the rest of the Northeast region of the United States. But I had no idea how to do this. So there have been a blog I've been reading by Eric Ries, he authored the now famous book, Lean Startup. And here's where I started to learn about interviewing customers and starting with a minimum viable product. So I asked questions, I refined the questions that I asked and refined my product line that I was offering. And then I pivoted for the products that people didn't want. And then I expanded once I found what was the unique, viable product for each one of those product lines that I wanted to launch. Well, we ended up with 15 distributors and 10 states before I sold my shares to my partner.

How did you put up your put together your methodology? How did it all come to be?

No, it's funny ask. So first of all, I had to commit to the lean startup methodology, the one on one barrier to explain, you got to document your business models. Now, this doesn't mean using an old timey business plan. This is using something new, called a lean business Canvas is one sheet of paper. And it just focuses all your efforts on identifying the risks, then you want to follow the customer driving development path. This is where you start solving the problems, not your problems, but you want to solve what the customers problems are, then you establish a problem fit solution. Now I know that sounds backwards. But this means working from your goals to calculate the type of response you need from about 1% of your target audience. This is what we call the 10k approach. I learned this from Danny Sullivan. From the strategic coast, it's real simple. One, set up a specific measurable, attainable goal, where you'd like your company to be in about two to three years, let's say it's 2000 customers. Then step two, you divide your goal of 2000 customers by 10, which gives you 200 customers. And then step three is to divide your first release goal of 200 customers by 10. And that focuses on conducting interviews with about 20 Typical early adopting customers, then you want to launch small, this allows you to make those little adjustments on the fly. And if you do find a problem, like somebody who doesn't want a left handed wrench sharpener. This allows you to pivot and create a left handed wrench instead of the wrench sharpener, maybe that'll work. And then you rinse and repeat until you end up with something that we call a minimum viable products. This allows you to capture the true value of your product. You want to focus on early adopters and customers who need your product because that's the that's where the pain points are those people that are willing to really give you a lot of information. The goal is to find traction, that's the proof of the customers really want your product. This makes for a successful business much easier and attract investors and bankers. Remember, minimize risk, instead of going all in investing big on your first product, which probably isn't the product that you need to be starting with anyway, you start small validate features and functions of your product and then move from there. So then the next part is to scale up. Now that you're sure of the product service that you're building is awesome, make it better make it better. There's a saying that hurts find best press. So instead of getting really big, once you get really, really good, get a better product out there. And being great isn't hard, but it's a step that most entrepreneurs steps over much of their mistake, I'm sorry to say that. And then you find a business model that can sustain profitability. And then what I always like to say and people laugh at this but I say relax because you get ready to do it all over again. The market always changes

Wow, well that that was that was a mouthful. Hey, you know going back to the beginning of of what you just said, where you want to start small and minimize your risk. Do you find with your methodology that it is even needed to try to find outside invest testers or typically would you be better off not doing that?

Yeah, I would say don't start off with that sort of as you're not ready for the primetime, until you've actually proven that you've got a great product. Today's investors, today's VCs, starting all the way back to about 2013. They are only looking for custom for for companies that have found their customer markets. And they found that products that actually solve the problem that's in that customer market, then they're willing to invest on that. And you should take that what we call the VC mind, you should take that VC mind also when say, well, we don't know if this is going to solve the product. This is not the product solution that we need to be offering. So let's refine it until we're absolutely sure that and people vote with their dollars. That's the best way to find out if people are interested in your product. There's no biased.

Great line. I love that people vote with their dollars.

People vote with their dollars.

So I've been kind of halfway through the interview. I've been playing a new word association game with my clients, just to kind of get a feeling of where they are. And you want to you want to play that game.

Sure, sure. Feels like old timey, Charades Test.

That's right. Kinda like that. Okay, here we go. Ready as a baseline first.

Run

Fast

Stop

Why?

Fun

Funner

Now into some business terms. Here's a 10 word. Business

Business, Freedom

Success

Freedom

Family

Love

Email

Big gigantic ships stuck in the Suez Canal

Promote

Pardon?

Promote

Promote, Marketing

Gratitude

Doing it right.

Wealth

Wealth, freedom

Clarity

Did you say 30?

Clarity

Clarity, doing it right.

Growth

Growth, doing it right.

Nice. Well, that sounds very insightful. Do

My whole, I eat live and sleep this.

Freedom and doing it right.

Freedom and doing it right. Yep, doing it right. And that's because if you do it right, you do get the freedom. So I believe in that.

You know, speaking of living and breathing, what's your motivation and working with companies? You know, in other words, what, what gets you out of bed in the morning?

You know, I believe big corporate America has commoditized the workforce to the degree where people don't matter anymore. Big corporations don't care about you. They, they you're just a worker to them. Now, I know that sounds kind of bitter. But if you don't perform with the job boards, like, like indeed and monster, and the like, there are about 3000 people standing right behind you qualify just as well as you are, and waiting to take your place. And everybody working from home now has made that even worse. So the concept of that I was taught you are taught work hard and get ahead in corporate America that is completely dead. So what wakes me up, I believe that it's time to take back one's destiny. You live on your terms, not a big corporate America's terms. Step out and be the woman or the man that you're meant to be enterprise or inertia, entropy, excuse me, entropy, entrepreneurship and enterprising can be taught and learned. So I need to help as many people that I can in my life that I have left to live.

So taking taking back your own destiny, how, what kind of what services you offer? And how are you helping people do that?

So I much through that we've talked about I help people build the dream business that by using this mean, this lean methodology we just talked about, in fact, you don't need an idea. Andy, believe it or not, the market will tell you what they want. You need to dream, you need to have the desire. But if you have an idea, that's even great, you're in a much better position. But most people I talked to don't have the idea. But they want to be a business owner. And so that's what we do. We help you identify the business opportunities, find out what the market wants help you build that product or service or SaaS services of software and get you going into that direction. Now it doesn't stop there because leadership is also part of what you need to learn. So there's a group of people that I'm a member with, that helps teach leadership and entrepreneurship so that it becomes engraved.

Now, what would you say if a listener out there right now? I mean, they're listening and they got a great idea they want to connect with you. How?

Just go, you just go to smallbusinessstartupcoach.com. It's easier if you remember if you capitalize the start of each word. And there you can find a free download that you can get to see if you are the type of person that has a dream or an idea. And and then you can find out more information about contacting me and we'll get going on this on this dream of yours.

Okay, and what's the danger of sitting on a great idea not getting started?

You know, I'm working for corporate America. That doesn't sound appealing to me getting hired and fired the way they want you. That's any that's no way to live. Live in a dream is the right way. I think the right way to go.

Now, before we park, can you paint a picture of what life could look like? For someone who had a great idea one year from today? If they started acting on that right now?

I think it'd be quite far. You know, starting a company is similar to watching your kids grow up, but it goes a lot faster process. My kids are teenagers now and watching them grow become adults have been one of the greatest things that I've ever done. Besides starting my own business, starting a company similar to that your babies grow up, they become successful adults. In this case, it's a business and you just get filled with joy.

Well, that's all I had for you today. Is there anything before we sign off? And you can say, Man, I can't believe you didn't ask me this?

No, I just like to add never in the history of mankind and put this into your thinking cap here. Never in the history of mankind has starting a successful, profitable business been easier than today. Think about that. There is a cornucopia of help and resources available to most of the whole world and definitely to those in America. You just got to reach out and take an apple.

Perfect. Well, thank you, David. That is it for us today. Remember, if you liked this episode, please go to Apple podcasts and leave an honest review. And if you're looking for more information regarding David, or connecting with him in order to bring your idea to fruition, I'll put a link to his website in the order notes. You can download that free one sheet at that website, and you'll just click on it below. So in addition, if you're looking for more information on growing your business using paid ad requests to join the Make Each Click Count Facebook group I've been releasing some new, all new free trainings and there'll be more happening really soon. Meantime, remember to stay safe, keep healthy and happy marketing and I will speak to you in the next episode.