Today’s guest on Hack The Entrepreneur is an entrepreneur and an inventor, that consistently earns millions of dollars licensing his ideas to companies like Disney, Nestle, and Coca-Cola.
He is not high-tech, but he knows how to take an idea and very quickly make it a global sensation.
Before becoming savvy inventor, he spent part of the 1980s as the head of design at Worlds Of Wonder. They had two number one hit toys that you may remember, Teddy Ruxpin and LazerTag.
Since this time he has started his own businesses, InventRight and Spinformation, and has sold 100s of millions of products.
He is the author of the best-selling book, One Simple Idea. He currently writes a weekly column on Entrepreneur.com and also writes regularly for Inc Magazine.
Now, let’s hack…
What you will learn in this episode:
- Why the multiplier effect is required to produce great wealth
- How creative people get distracted so often (and how to work through this)
- How to choose an idea that you can implement very quickly
- The one simple thing Stephen did that doubled his business in 8 months
- Why you should borrow ideas when you see them
Resources and links mentioned:
- One Simple Idea Book
- Stephen Key’s Entrepreneur.com Column
- A Beginner’s Guide: How to Rent Your Ideas to Fortune 500 Companies (Four Hour Work Week Blog)
- Stephen on Twitter
- Jon on Twitter
- Show sponsor: FreshBooks (30-day Free Trial)
How to Find a Multiplier Effect for Your Income
Voiceover: Welcome to Hack the Entrepreneur, the show which reveals the fears, habits and inner battles behind big-name entrepreneurs and those on their way to joining them. Now, here is your host, Jon Nastor.
Jonny Nastor: Welcome back again to Hack the Entrepreneur. I am so glad you decided to join me again. My name is Jon Nastor, but you can call me Jonny.
Today’s guest on Hack the Entrepreneur is an entrepreneur and an inventor that consistently earns millions of dollars licensing his ideas to companies like Disney, Nestle, and Coca-Cola. He’s not high-tech, but he knows how to take an idea and very quickly make it a global sensation. Before becoming a savvy entrepreneur, he spent part of the 1980s as the head of design at Worlds of Wonder. They had two number-one hit toys that you may remember: Teddy Ruxpin and Lazer Tag.
Since this time, he has started his own businesses, InventRight and Spinformation, and has sold hundreds of millions of products. He’s the author of the best-selling book One Simple Idea. He currently writes a weekly column on Entrepreneur.com and also writes regularly for Inc. Magazine. Now, let’s hack Stephen Key.
I want to thank today’s awesome sponsor, FreshBooks, not only for sponsoring Hack the Entrepreneur, but also for personally helping me fix one of my biggest problems. I am absolutely terrible at staying on top of my bookkeeping and accounting for my business. Now, rather than losing receipts and handing my accountant a giant box of papers at the end of the year, FreshBooks has an amazing app for my phone that lets me instantly take pictures of my receipts and sort them with the touch of a single button.
FreshBooks is designed for small business owners and is the number one cloud accounting solution that helps millions of entrepreneurs and small business owners to save time and get paid faster. FreshBooks integrates directly with three things that I use every day in my business: PayPal, Stripe, and MailChimp. Start your 30-day free trial today. Go to Freshbooks.com/Hack, and don’t forget to enter ‘Hack the Entrepreneur’ in the ‘How did you hear about this section?’
We are back on Hack the Entrepreneur. Today, we have a very special guest. Stephen Key, welcome to the show.
Stephen Key: Thank you very much. It’s a pleasure being here.
Jonny Nastor: Yeah, it’s going to be a lot of fun. Stephen, as an entrepreneur, can you tell me what is the one thing that you do that you feel has been the biggest contributor to your successes so far?
Stephen Key: I would say having structure in my life — that beyond being passionate about what I do, there’s a little structure. Although I have a lot of freedom, too, I can create my own structure. There’s a difference, I think, so that’s a very important part of what I do.
Jonny Nastor: Structure — structure of time, structure of energy, structure of idea — what do you mean?
Stephen Key: What type of structure? I’ve been self-employed for my whole career. So how do you have structure when you have all that freedom? I can do what I want. I can live wherever I want. I can basically have fun, I guess, all day long.
But I’ve learned that to really be successful, the structure is important for someone like myself. I get up at the same time basically every day. I walk to my office every day. I put in a full, too-long day. And on Sundays, I get ready for Mondays.
It’s very structured, and I make sure I have a list of things I want to accomplish each day, and each week, and each month, and I just mark it off. It’s interesting that you’re asking this question because you’d think that someone that’s creative would be all over the map, but tactically, I like to have that structure. Maybe because my mind is going in so many different directions, I need that structure. It helps me.
Jonny Nastor: Excellent. Yeah, I know. It’s one of those tricky things, because most of us in this world are of the creative mind, and we’re rebellious of nature, maybe. But there’s a time where you realize you do need more structure than you figured you would have. Otherwise, you really just thrash about and don’t get anything done.
Stephen Key: Maybe it’s ‘structured chaos,’ I call it.
Jonny Nastor: Here we go.
Stephen Key: Because thinking about it, even though I have the structure, there’s still a lot of freedom within that structure to do things I like: to research, to reach out to certain individuals, to study a market, to look at it and say, “Hey, there’s a certain opportunity here.” Within that structure, I can still play. Okay, that’s better.
Jonny Nastor: Yeah, I like that.
Stephen Key: It sounds like I’m a boring guy.
Jonny Nastor: No, not at all. I love the ‘structured chaos.’ That’s cool.
Stephen Key: I think that sums it up pretty well.
Jonny Nastor: You said you’ve been self-employed for most of your life, but I find that there’s a time in every entrepreneur’s life where one of two things happen. They either realize that they have this calling to make something really big or make a dent in the world or — which seems to mostly be the case of the people I’ve been talking to — they find out they just cannot work for somebody else. Can you tell me about when this time was for you and what it was that caused it?
Stephen Key: I have a severe learning disability, and I realized very quickly that I didn’t have any skills. I didn’t think anybody would ever hire me, so I realized I had to create my own job. I was a little frightened about that, so I went ahead and realized I was a pretty sharp guy. I can see things and find opportunities. I realized real quick that I don’t really want to work with anybody else, maybe because I think I can make good decisions. I have had a couple jobs when I was younger and worked for people, and I thought, “I’ll never do this.”
Maybe I just thought I was smarter than the other guy for some reason. I don’t think I have a high IQ. I just think I like to look at opportunities. I like to feel like I am making a difference. I have my own roadmap in my mind of what I want to do, and I don’t want anybody to tell me to do it differently. I struggled with that.
I have a couple partners in other things that I do, and I’m always struggling with those guys because they don’t listen to me. I love them, but they should be listening to me more all the time. I learned very early on that I did not want to work with anybody else.
Why the Multiplier Effect Is Required to Produce Great Wealth
Stephen Key: My father taught me a very important lesson. He said, “Look, if you ever want to create great wealth, first of all, whatever job you have, figure out your last paycheck. If that’s enough money, fantastic. Then you’re going to be happy. If you want unlimited income, you’re going to have to piggyback. You’re going to find a multiplying effect.”
That fascinated me to think that, “How can I find this multiplying effect that doesn’t require my presence, doesn’t require me being there?” That’s been my journey, is trying to find this way to piggyback on other opportunities so that I can keep my freedom to do what I want to. Working for somebody else was never going to work for me, ever.
Jonny Nastor: You said at the beginning that you could make good decisions and you can go with those decisions. I want to explore this a bit if we can. I think this is very key to success in entrepreneurship: the ability to come to a decision fairly quickly and to be sure about it, enough to go all in on it.
Could you think back to the past six months or a year, of some sort of business decision that you had to make that was important to you and your business, and how did you do that? Are you an analytical type, like you go over numbers, or is it a gut feeling for you?
The One Simple Thing Stephen Did That Doubled His Business in 8 Months
Stephen Key: Let’s talk about this last, let’s say, eight months ago. I was watching a movie, The Wolf of Wall Street.
Jonny Nastor: It’s a great movie.
Stephen Key: I’m watching this, and I’m watching the sales guy, and they’re selling stuff that’s not really worth anything, and I was fascinated by it, that they could sell something that didn’t really have great value. I realized that I have a great product, but I’m not selling it at all. I went back on Monday, and I told my group, “Look, we’re going to do one thing different. I want you to put on a schedule that you’re going to actually try to sell every day.”
That little thought, that little nugget in a Saturday matinee, changed my business. It doubled within eight months of putting it on my team’s calendar and saying, “Look, you have to do this every day, not just every once in a while. No. This is something you need to do every day and focus on it.”
Why You Should Borrow Ideas When You See Them
Stephen Key: Making good decisions, I think, can come from anywhere, anything. I like to read quite a bit. I like to look at other types of businesses and try to analyze what they’re doing right, and I borrow. I borrow from a lot of people. If I see something that’s amazing, I’d borrow it and use it right away. If it doesn’t work, I’m very flexible to change it. I’m never worried that if I make a mistake, I can’t change it very quickly. I’m not married to these decisions, but I do realize that you have to make them, and you have to live by them and accept that some of them will be a success, and some will not. If I’m right more than I’m wrong, I’m going to do pretty well.
I love making decisions. I love to own them. Not that I have to take pride that they work, but that’s part of being self-employed. That’s part of running the show. I like to make them. I like to make them every day, and I feel like I am confident enough that if they’re not right, I’ll change it. If they are right, “Hey, let’s move on. Let’s make another one.”
Jonny Nastor: Excellent. I love it. Okay, Stephen. Let’s move to work. You say you’re a very, very structured person. You need to set up your workday. This is a workday. You need to set it up to be productive and structured, so you can implement the stuff you need to implement. Can you walk us through, say, the first 30 minutes of that workday to set yourself up for this?
Stephen Key: Beautiful. Usually, the night before a workday, I’ll spend 30 minutes and try to — in my mind — define what my goals are. I always have that in front of me all the time. Then, of course, I’ve got my calendar. I look at, first thing in the morning, my calendar. What’s my day going to be like? I have to really understand that — the big picture. What do I have to do? I make sure I’m on time, and I’m doing everything correct. Then, I start by reading online news. I like to keep very current. I have a list of websites I go to, read as much as I can, see if can find something in there that’s interesting.
Then, the next thing I go to is all my social media, see if I’m answering questions right or if there’s something I missed. It’s always the same list every day, and that’s what’s interesting. It’s fun. I like it, but I don’t consider that work. That’s something I’m fascinated with. I do that really before my day starts. If my day starts at 8:00, which it does, I probably start about 6:30, 7:00, and I go through all those little things that give me satisfaction before my day starts.
Then, I always plan something in the afternoon that’s more enjoyable. All the crappy work, I try to get done in the morning because I try to reward myself. I realized you have to reward yourself. I’ll go through my list. I’ll make my hit list. I try to do the awful things first and get those out of the way. Then I try to reward myself, because at the end of the day, it’s truly — and I’ve learned this the hard way — the journey that’s magical.
Getting there? It’s okay. I never got excited about getting there. It’s never as great as I thought it was. It was the journey that I was fascinated with. Getting there is like, “Okay, done that. What’s the next thing to do?”
Jonny Nastor: That’s interesting. First of all, I want to say that I’m happy that it’s 2:00 in the afternoon so that when you tell me that all the boring stuff is first thing in the morning, I’m not one of those people now. I’m going to tell myself that I fit in to your joyous work time.
This journey thing — this is interesting. I was wondering if this was just me, and I’m realizing this as I go through it, that I love making the deal. I love putting a team together and starting an idea and sending it off, and I lose interest quickly. I can’t stay focused. I want to go to the next thing. I was wondering if that was me or if that’s an entrepreneur thing?
I like still following through with stuff, but I’m bad at management. I can’t manage people well. I can put people together well. I can get them moving and get them excited about a project and get them behind my idea, but then after that, I’m just like, “Ugh, where’s the next one?” I guess that’s it. I like the journey … or I like the starting of the journey.
Why Creative People Get Distracted So Often (and How to Work Through This)
Stephen Key: I think that’s very typical. In fact, I believe a lot of creative people have that distraction of what’s new and what’s fun. At the end of the day — Seth Godin says this perfectly –you have to ship. You really have to ship sooner or later, and it’s never going to be that perfect.
I like that first moment of, “Hey, this is a great idea. Let’s work on this.” You start building upon it, and then something else comes and distracts me, and I’m doing something else, but I didn’t finish. That’s why that structure helps me to do that and get that out of the way, because you’re right. I’d rather do other things and start projects off and have fun, but I would never complete projects if I didn’t stay on track with that structure.
Jonny Nastor: Yeah. I guess I should say that I love the shipping. I love launching an idea and a product, and I can work as hard. It could be two years, if it took, to launch that project, and then I’m just like, “I want the next one.” I love, I think, the fear and anxiety before launching something, the part where I can’t sleep for a week because I put so much heart and soul into this, and then it’s just, “Is this going to completely bomb? Is everybody going to hate it?” I thrive on that. I don’t know why. It’s probably not healthy.
Stephen Key: You have a lot of patience. A two-year product for me is eternity. I don’t think I could take a two-year. I’m more like a weekly guy. I like to get stuff quick.
Jonny Nastor: Yeah. My last project was VelocityPage. We launched it in March, and it should’ve been about four or five months, and it took us 14 months to launch the beta version. We didn’t call it ‘beta.’ We called it ‘0.9’ so we could charge money for it. But still, it took a long time, and it took a lot of just product and pushing. I literally couldn’t sleep for three days before because there was just so much anxiety. As soon as it’s over, though, I realized, “Wow, that’s what I live for. I live for that” — literally not being able to sleep. It’s terrible. It’s so unhealthy.
Stephen Key: You know, about the journey, it’s interesting — my wife says, “You’re happy, but you’re not content.” I don’t know if we all feel that way running our own businesses. I’m happy, but I’m never really content. I want to climb another mountain. I want to see what’s over the hill. I want to open another door. I want to see if I could do something I haven’t done before. I want to challenge myself, so I’m always looking for that. It sounds like a drug, right? I’m always looking for that.
Jonny Nastor: Yeah.
Stephen Key: Yeah.
Jonny Nastor: The next high.
Stephen Key: Yeah. Because once I get there and I looked around, I go, “Oh, I reached the top. This is great. Well, where is the next mountain to climb?” I’m trying to stop that a little bit. I’m trying to realize, “Steve, slow it down a little bit and enjoy it a little bit more.” I’ve fallen into that trap. I’ve caught myself. I’m trying to enjoy the journey a little bit because at the end, it’s never satisfying for me.
Jonny Nastor: Yeah. No, that’s actually something I’ve been struggling with. Discussions with my wife, I think, have turned to the same sort of conclusion — that I’m really happy with what I’m doing, but it’s true. There’s never a contentment. There’s never like a satisfied, “I’ve done it.” It’s like, “No, I haven’t done it. I have done things, yeah. I’ve done some really cool things, but look at the stuff I can do still.” It’s weird.
Okay. This is the top, right? We’re there. We’ve both done some cool stuff. We want to do more, but there’s also struggles, and there’s failures. Stephen, as entrepreneurs and as human beings, one of our greatest struggles is the fear of being wrong, making mistakes, and failing. Can you think back to a time where you were completely wrong and how you got through it and could continue on the other side quickly and keep your business going?
Stephen Key: That’s a long list there. I can tell you that I was in a lawsuit a couple years back, and I made it personal when it was just business. I sued a very small toy company called LEGO in federal court.
Jonny Nastor: LEGO? They’re a small company?
Stephen Key: Yes. Looking back, I was thinking, “What was I thinking?” In fact, I remember in federal court when I saw my name — “Stephen King Design versus LEGO” — I thought, “How the heck did I get here?” I looked back, and it’s not that I made a mistake. It’s something I do regret. I made it personal. Some people say business is personal. It is, but you still have to remove yourself and make good business decisions, and I didn’t have the experience to do that at the time. I was a little young, so I made it personal, and it took longer to complete.
It came out fine, but if I had the experience, I think I would’ve done it a little differently. Looking back, it was a good experience. Now, I can laugh about it. At the time, three years, I wanted to cry about it. I think that was a mistake of not having enough experience or rushing in and letting my emotions take over.
Jonny Nastor: Yeah. I guess that’s something that we all struggle with and learn, right? It’s hard. It’s super hard to completely separate personal emotions from something that is so personal. It’s your business. It’s your ideas. This is your life that you’re putting out there and building stuff with, right?
Stephen Key: I think the best advice is step away from the computer. Step away. Go for a walk. Have a couple drinks. Do whatever you can, but don’t react, right? Don’t do it. Just give yourself a little breathing room, and you’ll be fine. It’s the time that I pressed that ‘send’ button too soon. What was I thinking? I wasn’t. I wasn’t thinking long-term.
I also realize now that every business decision I look at or something that happens, I say, “How is this going to affect me a year from now?” That gives me a great perspective on any situation that is going wrong or maybe I want to respond to. I always say, “Hey, how am I going to feel about it a year from now?” Usually, when I put myself in that position, I look at it now, and I’m like, “Ah, no big deal.”
Jonny Nastor: It’s a good way to do it. I think the perspective of a year really helps. It really evens you out a bit.
Stephen Key: It changes everything.
Jonny Nastor: Stephen, you’re a co-founder of InventRight, which is inventions, I’m assuming with licensing, which means there’s a lot of ideas that probably come through or across your desk, say, or through your inbox. They’re not just ideas of other people, maybe, but of your own, or pitches, or just say ‘projects.’ I call them ‘projects’ as a general term, or ‘product,’ or whatever you want to call it — things that, say, you might want to take on in your business or an idea that you might want to run with.
How would you go about determining, at this point, what’s right for you and your company as a project that you guys should take and run with?
How to Choose an Idea That You Can Implement Very Quickly
Stephen Key: First of all, I’m very lazy, so I’m very picky now. I look at them very differently. I see a lot of ideas, but what I’m looking for is an idea that I can implement very quickly, and that’s based on my relationships within an industry. We all know that any project takes time. You’ve got to push it up the hill. It’s going to take a lot of effort. I do a lot of things, so if I see something I really love, it has to have certain characteristics that make it easy for me to call the people I know to implement it, or ask for an opinion, or bring it to market really fast given my experience in a certain industry.
I guess I’m industry-biased, and that’s the way I do it today. I’ve just been doing this for so long. I know how much work it takes. It takes a lot of work for anything you do, so I’m lazy. I do it the easy way and find something I can implement quick just because I have relationships.
Jonny Nastor: Nice. That’s excellent. Okay. Now, a big question for the end here. Stephen, if for some terrible reason, your career was to end today, would you be happy with the legacy that you’ve left behind up till this point?
Stephen Key: I would have to say yes and no. I still have a lot to do, but I started a company 12 years ago. It’s really a feel-good company, and I could run it any way I want to. I looked at all the other companies I was dealing with, and I wanted to structure it completely differently because I didn’t like all these other companies I was working with. I think they were doing it all wrong. What I mean by a ‘feel-good company’ is that we have customers, but I call them ‘students.’ I look at it very differently, and they’re really my friends.
That’s turned into a very rewarding situation that I wish I could do more and more with. I want to do more, but I made my mark, right? I think, along the way, I always wanted to be the best at something, and that’s hard to do in this world. But I think I’ve been the best at this business and building relationships, making people satisfied that we do things differently and they’re cared for. Yes. I would say I could walk away tomorrow pretty happy about what I have achieved.
Jonny Nastor: That’s a beautiful answer. Thank you. Stephen, we’ve talked about your business, and we’ve talked about you for the past 25 minutes. Can you leave my listeners and tell them where they should specifically go to find out more about you and your business?
Stephen Key: There’s a couple things. I write a column for Inc.com, Licensing Lifestyle. It’s about having the freedom of creating the type of business that allows you to have time. Also, for Entrepreneur, I do a weekly blog there, and they could go to InventRight.com. It’s InventRight — not wrong –where they could find additional information about licensing.
Of course, I write books. There’s one called One Simple Idea that you can find on Amazon or Barnes and Noble. It’s been a bestseller for over three years. It’s been translated in five different languages. So I’m pretty easy to be found.
I got this great advice early on that if you really know what you’re doing, if you’re really confident, give everything away for free because then people will follow you. I think once they see some of the stuff that I deliver, they’ll follow me, so I can be found.
Jonny Nastor: That’s amazing advice. I love it, and I’ll link to your book. I’ll link to your business, and I’ll link to your blog and your articles on Inc. because I think that they’re definitely amazing reads, and I’ll put them in the show notes for everyone to get to easily. Stephen, thank you so much for your time. I really, truly appreciate you coming, and it’s been a lot of fun.
Stephen Key: Thank you very much. I’ve loved every minute of it.
Jonny Nastor: Stephen, that was a lot of fun. I didn’t even know that much about you until you reached out to me, and then I did my research on you, and you’re truly an amazing person, and you’ve done some really big things. I agree that you should be absolutely satisfied with what you have accomplished up till this point, and I know you’re still going to go on and do some big amazing things, so thank you so much.
We’ve reached that time in the show. Did you get it? Did you find it? Let’s do it. Let’s find the hack.
Stephen Key: If you want unlimited income, you’re going to have to piggyback. You’re going to find a multiplying effect. That fascinated me to think that, “How can I find this multiplying effect that doesn’t require my presence, doesn’t require me being there?” That’s been my journey is trying to find this way to piggyback on other opportunities, so I can keep my freedom to do what I want to. Working for somebody else was never going to work for me, ever.
Jonny Nastor: That’s the hack. Stephen, it’s like you’ve read my mind. I love this. So if you are on my email list — which you should be, right? Go toHacktheEntrepreneur.com. Get on the list. I send out an email that I’m working my ass off on once a week with the things I’m going through, what I’m dealing with and struggling with. I sent out an email a few hours ago, actually. It was about “passive income means scalable, not sleeping all day.” Scalability to me is absolutely essential in building a business because it’s the multiplier effect.
I never actually thought of it in this way, but Stephen is absolutely right. It’s the multiplier effect that I can create something like my podcast once, today, and I can put it out there, and it can multiply and literally get listened to by tens of thousands of people around the world. That’s amazing. That’s not me going and knocking on a door and shaking hands with somebody and meeting them. That’s a multiplier effect, and it’s absolutely essential. That passive income, how it’s created, is in that way. Do things that can scale and become bigger than you ever could.
I create software products. Because I work on a software product once, like VelocityPage — I build it, and although we have to do ongoing development and maintenance — if I sell one license to VelocityPage a day or I sell a hundred, it’s no extra work to me. That’s absolute scalability, and he’s absolutely right. If you want unlimited wealth and the potential of being able to take yourself out of these equations at some point, you need to have that effect, and you can’t get that when you work for somebody else. That other person, if they’re the owner of that company, they get that multiplier effect. Thank you, Stephen. Thank you so much.
Again, I want to thank you so much. This has been a lot of fun. The iTunes reviews just keep rolling in. We’re at like 180 right now. I love hearing from you on there. If you have a chance, go on to iTunes. HacktheEntrepreneur.com/iTunes will take you right there. Subscribe to the show. Leave me a rating. Leave me a review. If you do and you are on Twitter, you should leave me your name on Twitter, your @ handle, and I can go talk to you on Twitter. I love it because I’ve been doing it all week, and it’s been amazing because unfortunately, I can’t respond directly to you on iTunes. I don’t know who you are. It’s just the way iTunes works.
Thank you so much for taking the time. I know there’s a lot of podcasts out there, and I’m just glad you’re giving me a half-hour to spend with you. It really means a lot. I’m Jon Nastor. This has been a lot of fun.[/episode_transcript]