8 Entrepreneurship Lessons That Counter What You've Learned
John Lemp started his own lawn-mowing business at the age of 14 before building websites and a search engine called Gatewaytothenet -- and he hasn't slowed down since.
In the early 2000s, Lemp created a marketplace where visitors could share instructional videos and build community sites. This eventually lead to his biggest success, or his “baby,” Clickbooth, which outsources monetization via social or affiliate marketing.
Today, however, Lemp is playing the native advertising game with his latest project, Revcontent. The company has skyrocketed in its two years of operation, earning more than $200 million in revenue since its launch.
Despite competing against established companies such as Gravity, Taboola and Outbrain, Lemp says that Revcontent has “built the only completely transparent image-tag-driven ad restriction system to fully put publishers in control of their ad restrictions.” That has resulted in the company reaching 88 percent of U.S. households, or about 290 million unique U.S. users each month. Revcontent has also created a patent-pending audience re-targeting technology for native, which Lemp says will be “the first step to giving control back to the people.”
While it may appear that everything has worked out well for Revcontent, Lemp has experienced his fair share of ups and downs throughout his entrepreneurial journey -- all of which have given him a unique perspective.
In fact, Lemp’s unique experiences throw some of the most common entrepreneurship tips right out the window. Here are 8 lessons that Lemp has learned over the years.
1. You don't have to fund your startup.
It’s no secret that fundraising has changed drastically for startups in recent years. Gone are the days of securing bank loans or grants and connecting with venture capitalists and angel investors. Today, it's easier than ever to raise money for your startup with creative techniques such as crowdfunding.
Or, you can just bypass this process altogether.
Lemp says that Revcontent hasn’t raised a cent. That’s right. Zero dollars. “One thing many people don’t realize is the true cost to taking in funding too early and what that can do to a truly world-changing mission,” he says. “This is why we have actively chosen from the start to not be a company that takes funding.”
Instead, Revcontent only seeks funding from the right strategic partners and steers clear of the “classic Silicon Valley model, which is more focused on raising money at all costs and finding out a business model later.”
2. Build value, not valuation.
“Being bootstrapped in all of our existence, we tend not to think about these things,” Lemp says, “but as an Entrepreneur and CEO, surprisingly, it comes up in conversations a lot more than I would expect.” He adds, “For me, the number is pretty meaningless because our inherent goal is to build value, not valuation.”
Lemp stands in contrast to a majority of entrepreneurs, CEOs and investors who hold valuation in high regard. In fact, Guy Horesh, founder of Target Business Development, writes that valuation is important “not only because it indicates the founders’ understanding of their business and industry, but also it is important because it eventually determines what is the [sic] stake.”
3. Use failure to solve problems.
Failure should be expected. It’s a great way to learn and grow. But there’s a common belief that you fail only once or twice before experiencing success. For Lemp, failure is a constant occurrence.
For example, when he was just starting out, Lemp was guilty of trying to do too much at once, which resulted in mediocrity. This ultimately led him to discover the importance of focus. He also says that there were times when he extended too much credit at his last company and had to pay millions of dollars out of pocket to partners that he never got paid on. "That taught me diligence,” he says. “I feel I make dozens of mistakes each day, and now actually look forward to discovering learning moments from these mistakes.”
These problems, a.k.a. failures, are also Lemp’s greatest opportunities.
“The first way we try to solve any problem typically fails," he says. "That's why, in the way we look at things, every decision is a fifty-fifty chance of being right. So the principle is, if you want to hack that formula, then make more decisions in less time and learn from them.”
Lemp concludes, “Many people will tell you success is ‘the opposite of’ failure. That's a lie. It's 'the result of’ failure.”
4. Don't force philanthropy.
It's essential for startups to give back to their communities. After all, being charitable can improve your bottom line. Lemp, however, discovered that you don’t have to force this onto your team.
“We have a culture where I am amazed each and every day by new initiatives people in our company come up with to help foster change in the world,” he says. “I love when our initiatives are interactive and involve the whole company, such as our tradition of all helping local families in need to get Christmas gifts for their children, and also our tradition as a family of buying, wrapping and sorting through those gifts together.”
Even so, Lemp doesn’t believe that he’s doing enough.
“When looking at impact and giving back, I am constantly challenged by the biblical parable where the poor woman gave her last two pennies, which was everything she had, compared to the wealthy that gave a percentage of their wealth to create an impact on the world," he says. "I want to be more like that woman.”
5. Inspiration comes from anywhere.
There is no one-size-fits-all source of inspiration for startup founders. For example, Neil Blumenthal, co-founder Warby Parker, finds inspiration through Jack Kerouac's 1958 novel The Dharma Bums, while Ben Kaufman, founder of Quirky, is inspired by the construction of the Empire State Building.
Lemp is inspired by a potential world in which Revcontent does not accomplish its mission. He explains his personal belief in the importance of avoiding a “world where one company controls all of the media consumed and closes this to only people utilizing their ‘social platform,' a world where all the ideas being heard are the ones this company wants you to hear, a world where the very fabric of our world democracies are put at risk.”
He adds that the “future of truth and the freedom to speak that truth is a war we cannot lose. It's the voice that we don’t want to hear that becomes the voice that leads to the change our world so badly needs.”
Lemp also finds inspiration in the Bible and the “Revcontent family and the brilliance and creativity they use to solve problems and push each other and me to constantly be better.”
6. Character traits grow teams.
“Unlike many companies, we hire solely on character traits and not on experience for the majority of our positions," Lemp says. "We typically look at hundreds of resumes, then call back 20 to 30 people for a quick five-minute call. Lastly, we interview five to 10 people in order to hire for a single position.”
Lemp says that the team at Revcontent knows that the people they hire today will define the future of not only the company but also each member of the team individually. "By surrounding ourselves with individuals we can look up to and learn from and people that continue to motivate us and each other, it pushes us all to continue getting better,” he says.
His best advice when hiring is to ask yourself, “Do you want to work for this person?” Lemp hires people that he can visualize being his boss. “Then all I have to do is stay out of the way and empower them to make their own decisions, and it tends to work itself out.”
Lemp also believes in "creating an environment where those amazing people aren't afraid of failure and, as a result, can own their success.”
7. Culture is monumentally important.
No matter the size of your business, you must always maintain your startup culture.
“When I was building my last company [Clickbooth], also in a bootstrapped manner, we had gotten it to a $100 million run rate in three to four years, and I suddenly hit a point where we had 135 people working for me, and the culture I knew and loved was gone,” Lemp recalls. “I got up to go to work, and it suddenly became just that -- work. I had built a company I didn't recognize, a company just like every other company out there. In hindsight, I realized the sole responsibility to foster and emphasize the culture of the company fell on me as the leader of the company, and I was not valuing our culture which is what truly makes us different.”
Eventually the company wasn’t unique, and it started making more mistakes and becoming more bureaucratic.
To resolve this problem, Lemp asked “the executives and the team what our values were, what made us different as a company and what was the mission as they understood it. Then, we actually wrote down our mission and our values and used those to litmus test our future decisions.”
Very quickly, hard decisions became a whole lot easier, and people were encouraged to start new traditions.
8. Businesses are built around people.
New businesses often team up with larger, established businesses in order to develop a customer base and attain success. And, while this is a proven tactic, Lemp and Revcontent took a slightly different approach by working with people -- and not just tapping into a new target audience.
“We have built a business around people and surrounding ourselves with the best of the best,” Lemp says. “The media business has always been a business driven by people, and the goal of tools such as Revcontent is to empower media businesses to be in greater control of their relationships with the users on their sites.”
The result? Revcontent has been able to partner with brands such as Forbes, CBS, Fast Company, Lexus, PayPal and AirBnb.