Welcome back, everyone. This episode we're going to be talking about how do you create something of value? I teach entrepreneurship at the University of Oklahoma been a part of founding and starting several startups. And I've learned a lot along the way. And we want to talk about practically, what does that look like? What are some of the traps and pitfalls today? In 2015, two guys that I had worked with for several years approached me and said, we've loved working with you, would you be open to starting a company with us. And we did something that seemed insane to most of our friends and family, we decided to start a drinkware company. So this is, like I said, 2015 2016, there were already a lot of very popular drinkware companies, it felt like maybe the most saturated category in the entire world. There were companies that had literally been around for more than 100 years, for like Stanley and thermos, there were new companies that were great brands like Hydroflask, and Yeti was just blowing up. And yet, we got really excited about creating a drinkware company. And one of the things that I do is a part of being the entrepreneur in residence at who you is, I will guest lecturer in some classes, and I was guest lecturing in a class. And they would have an exercise they would do before the lecture where students would break down a prospective like investment like a company, and then they would kind of talk about it, you know, what are the pros, what are the cons and make a recommendation of would this be a good thing to invest in? So the professor and I thought it would be funny to give them simple modern without telling them my affiliation with simple modern, and the first 10 minutes of class, we're basically the students just ripping the idea to shreds. And I did my best to like not react, and I got up and I taught the entire class. And then at the very end, I mentioned that it was my company and some things that they might not have known. And they were like, wait, wait, we want to we want to change our mind, we think we might want to invest. But it was really indicative of just the tone that we got from a lot of people because it did seem crazy, especially when you take the kind of traditional view towards starting something creating something that has value, which is you come up with a totally unique idea that nobody's ever thought of before. And that that's kind of your advantage is that you're the first mover and you're going to you're going to create something in a new space. Well, today, our company does more than 100 million in annual revenue. And want to talk about why that is and the myth that people believe about creating things that have value. So here's the trap. The trap is thinking that the way that you create something of value is you do something that no one else has ever done before. One of the things that I tell students is that if you really truly start a business that no one else has done before, or nonprofit, or anything else that no one else has done before, then one of two things has to be true either. Number one, you have stumbled across an idea that no one else has had the intuition and wherewithal to start across all countries and people in the world. The second possibility is that many other people have had this idea and there is some kind of a fatal flaw that you don't know about, which is the reason why you don't see a bunch of these types of companies or organizations in the world. And so the trap is thinking that all great ideas are totally unique and haven't been tried before. The reality is almost 99% of new things that are created that have value are really derivative of something that already existed, they are taking something that really clearly there's already a need. And there's already solutions and they're creating a better solution, or a better way to address that need. And that was the approach that we were taking towards creating simple modern, we are constantly surrounded by different things vying for our attention vying for our money, and you're not going to be able to create an organization or a product that's immune to that. The sooner you embrace that, actually, the quicker you can start the process of really creating something valuable because you stop asking the question of Is This totally unique or can I avoid competition? But more is this something that people want? And what it turns out the most important question you can ask And answer is, can I create something that's better or differentiated from the solutions that already exist. And if you think about all of the most successful products that we use today, the iPhone, Apple was not the first person to invent a cell phone, right. But they made it better. The introduced things like the App Store, and their introduction of cameras. So there was this innovation that made an existing need better. Netflix didn't invent movies, or stories, but they invented a better way for people to access it through streaming, even the most innovative companies in the world aren't coming up with totally new products, totally new solutions. But they're coming up with differentiated and better solutions that address different people and different markets than existed before. And that's really what we tried to do when we created simple modern, what we realized was, in this see this, like red ocean of competitiveness, that there was still these pockets of places where we could do better. One example that really stood out to us was none of the companies that existed, were really focusing on E commerce and the potential to sell on Amazon, one of the most interesting things you can do is you can look at companies that exist in a particular space. And you can say, well, what are all their strengths? And what are their strategies. And when you focus on that, it can be intimidating, for sure. Because you're you're thinking about what are all the things that make this company great. But if you turn that on its head and you look at it from the opposite angle, what you'll start to see is all the things that they aren't good at, and that they don't want to do because of their strategy. And that that's where the whitespace lives. So if you look at like the insulated, drinkware market, for example, you had all these companies that did exceptionally well selling into specialty retail places like REI, and they had grown and experienced great profits as a result. But because of that they weren't focused on selling on the Amazon marketplace and growing that business as much as they were focused on their physical retail business. Another example that we noticed, Yeti was doing exceptionally well selling stainless steel, 30 ounce and 20 ounce tumblers, they hadn't even introduced any colors. And so really, they were focused on having this great product and insulated drinkware is a great product, when people see it for the first time. They're like this is magic, like it still has is like a day later. But they hadn't focused on an aspect of that product that people would ultimately want. And it's one that we realized is that we're not really just selling something functional. We're also selling an accessory that has like this kind of fashion or ornamentation perspective, kind of like a watch or like shoes or like a purse, that yeah, there's this functional piece. But there's also like the how it looks piece. And so the combination of seeing, hey, there's white space when it comes to this channel, Amazon, and just really digital in general. And then there's this whitespace around making them distinctive through their ornamentations. And that's where the idea of simple modern as it is today was born, there was tons of competition. But even within that competition, there was room for differentiation and creating something of value. I wrote about this once on Twitter. And one of the comments was, I'm skeptical that if these are really the answers that you just be sharing them in public. And my response was pretty straightforward. That the point is that there's always room in any industry for another well run company that no industry is ever to fool to take another really well run company and that that's the trick, if there is one, that there's always an opportunity to differentiate yourself and to serve customers that are underserved right now. So how can we apply this? Well, there's three simple things that you can look for when trying to start something new. The first is, have you identified something where there's obvious robust demand, you see people buying it today? You see people asking for it, and there's people selling it, there's competition? Second, what are the strategies that the current companies or firms or organizations are employing? What are they good at? What are they not good at? What are the things that their strategies and their success make them unwilling or unable to do? Third, what are the skills that you bring to the table? This can be the experiences this could have have to do with the fact that sometimes the skill is being smaller and more agile than your competitors. But what are the the internal capabilities and skills that you have in creating a new organization that maps well to the things that competitors can't or won't do? Those are the places those are the white spaces where you're going to see the best opportunity. Another example is differentiation through business model and or like revenue model. Great example, this from the nonprofit world that we'll hear from today is an organization called water for that's addressing the clean water crisis in Africa. And they have a very unique approach where they build water wells, and they build stores and they actually sell water clean drinking water. Africa for very, very low prices. But that selling of the water creates a revenue stream that actually ensures that the water continues to be available that the pump is maintained and that the people take ownership of the pump. And in a world where there's tons and tons of clean drinking water organizations, water for has been able to establish a real voice of leadership, and really make a difference through a different approach. I think anybody who looked at that space 10 years ago would have said, it's very saturated, we don't need another clean drinking water company. But the reality was, the world didn't need another clean drinking water company. It just needed one that thought about things differently and took a different approach. So let's take this and turn it into an application three simple questions you can ask yourself to put this into action first. Do I have an idea where there's proven robust demand? What are the opportunities? I'm looking at that it's clear that people want and the customer is already there a second? Do I have a clearer understanding of the strong competitors? What makes them good at what they do? Do I understand their strengths to understand their weaknesses? Do I understand the things that they want to do and the things that they don't want to do? Third, do I have a clearer understanding of my abilities and the unique things that my organization brings to the table, take stock of the things that you do well, that unique abilities, unique assets that you have? Now compare those to your previous list? Do those map well to the industry that you're trying to get into the organization you're trying to start? Are you able to really effectively address the whitespace with the unique skills and giftings that you have?