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- So Entrepreneur Magazine just picked Bend as the next hottest thing in entrepreneurship.

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Yeah.

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So I think it's kind of appropriate that this discovery that I'm about to describe to you called entrepreneurial DNA gets released to the world on their stage, because entrepreneurship the way we know it, or the way it's taught today, the way it's being served today, and the way it's being done today, is broken.

And the reason I make that claim-- it's kind of an audacious claim. The reason I make that claim is because when you look at the systemic success rate-- some people call it the failure rates in business today-- and you go back 50 years, the rate is about the same. And that's strange, isn't it? Because you think of the unprecedented improvements that have happened for entrepreneurs.

I mean, think about it. Today, things that weren't even available 10 or 15 years ago-- I mean, millions of web pages full of resources and tips and downloads for the entrepreneur, small business development centers where you can walk in and get free advice, accelerators and incubators popping up everywhere you go. Can you think of a single college or university in this country that hasn't launched an entrepreneurship program? Angel networks forming, crowdfunding-- I mean, there's more money available to entrepreneurs today than ever before.

But the failure rate is the same. So that would suggest to me, and hopefully to you, that there's a bottleneck somewhere. Something is suppressing the entrepreneur's capacity to be successful, even though there's all these great tools and resources available. So I stumbled across what I believe is that bottleneck, and I'm going to share it with you today. And I think it is the game changer for entrepreneurship as we know it.

I want to demonstrate that to you, though, with kind of a silly set of pictures. Take a look at the characters on your screen right now.

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Are they the same? Yeah, they're dogs. They bark. They have fur. They leave landmines on the yard. But are they really the same? Are they gifted to do the exact same things? If you had to bet your life savings on that beagle taking on that greyhound for a race around the track, would you do it? Silly, right?

So about these two characters, if there was a job interview for scary guard dog--

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--uneven playing field, would you say? Silly analogy to ask this really important question-- are all entrepreneurs the same? Now, the reason I ask that question is to say, are all entrepreneurs wired to start the same types of businesses, follow the same sales and marketing strategies, build billion-dollar businesses? You say, of course not, Joe. Come on. Entrepreneurs-- I mean, no. That's not true.

Well, then, why is it that since entrepreneurship has existed, we've operated with the ridiculous assumption that all entrepreneurs are the same? There's a pigeonhole that all entrepreneurs are put in that basically says-- and this happens in every college, every university, every high school teaching entrepreneurship, every business coach, every book, every workshop you go to will say, what worked for one entrepreneur will work for every entrepreneur, because all entrepreneurs are the same. It's a one-size-fits-all approach to entrepreneurship.

And my friends, that is the root cause of the suppression of true entrepreneurial capacity. Just like those little dogs we saw, we're about to discover how different entrepreneurs really are. So the way I kind of stumbled across this is, I was running an incubator from about 2005 to 2010. I had sold a company and was bored, didn't know what I was going to do when I grew up, and started helping entrepreneurs start up their businesses and grow them.

And what I found was, one size wasn't fitting all. I was taking my amazing best practices of how I had built companies-- and I had read all the books on how to build marketing strategy. I'd take it and give it to one entrepreneur. They had an absolute home run with it. Oh, good for Joe. Take the exact same game plan, give it to the next entrepreneur-- they'd fall flat on their face.

And it wasn't that one was smarter than the other. It seemed like some entrepreneurs would take to sales and marketing like flipping on a light switch. For another one, it was like pushing a bowling ball through a garden hose. So one entrepreneur-- we take them to do their investor pitch, and investors are writing him checks left and right. They just seem so charismatic and dynamic. And another entrepreneur had a better product, better business model-- couldn't get a check written for 50 pitches.

And there was no way to predict what was going to happen. So it was kind of like trial and error. There was this buffet of business strategy presented to all of us. I was like, well, I'll try a little bit of this, and I'll try a little bit of that. And this worked for Sue, so it'll probably work for me. And Jim hired that VP of sales, and they did a great job there, so I'll hire him, too. And that's what's happening in entrepreneurship today-- a lot of trial, mostly error, and a suppression of what the true potential of these businesses really are.

So I just got frustrated with it, and I just started asking entrepreneurs questions like, hey, why did you go into business in the first place? Help me understand why. Or what motivates you? What are the things that energize you in your business, and what are the things that absolutely drain you? What do you think your strengths are, and what do you think your weaknesses are? And then ask the business partner, hey, what are their strengths and weaknesses?

And you start to ask enough entrepreneurs that question-- 20, then 100, then 400 over 1,000 entrepreneurs later, we discovered this. It's called the BOSI quadrant, and it basically segments entrepreneurs, business owners-- and not just business owners, even entrepreneurs in corporate America, I believe there's an entrepreneur in all of us-- into these four very different DNAs, actually 16 combinations. I'm just going to cover the four of them with you.

I want you to picture these as characters in an act. They're almost like presets on your radio, where when you push one, a whole predisposed set of behaviors pop out. A whole different matrix for decisions pop out. And when you push the next preset, everything changes. This is what I consider the game changer because, I'm going to give you some case studies of what's happening for companies that have this aha moment.

So let me run you through these four real quick. B stands for Builder. This DNA is found, or this profile is found, in people who tend to be serial entrepreneurs. They'll build these highly scalable businesses, sustainable businesses, very, very fast, and they'll break past $5 million in revenue and go to $20, $50, $100 million. And then that same entrepreneur will sell that company, go start a completely unrelated company, do the same thing again, go to another company, do the same thing again.

And those people who don't have this DNA look at it and go, what in the world? How? What? Can I read your book, please? And then they write the book, and no one can do what they did, because it's a totally different wiring. These people tend to have a Pied Piper-like predisposition. They can attract things like capital and investors and great talent almost effortlessly. And it's very frustrating to not be this person.

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They tend to be very controlling, very excitable, almost obsessive-compulsive in how they do what they do. Very, very driven individuals. And they measure success very interestingly. When you say how do you know you're having a good year, it's never personal income. It's infrastructure. How big is our office? How many square feet? How big is our payroll? How many trucks do we have on the road? How badly did we crush our competition this week? That's what drives these people.

And because of that, they approach strategy, and they approach team, and they approach everything with infrastructure in mind. And that's why they build these highly scalable businesses. It's pre-wired into them. You know you're dealing with a builder when you see these huge growth rates in their business.

Now, lots of great talents, lots of great capacity. Weaknesses, just like any of the DNAs we're about to learn about. The number-one weakness of this group is relationships. People. They blow through people like a tornado in Wichita. In the weakness of their DNA, they will just use people. And you'll see-- if you look at a classic builder and you look back on their history, you'll see a wake of dead bodies.

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Key employees, spouses, children-- it's just part of who they are.

O is Opportunist. This DNA activates, or this behavioral profile activates, in entrepreneurs when they want to get rich quick. They want to be at the ground floor of something, jump in on a money-making deal, and make as much money as fast as possible, and then cash out, sit on a beach, sip a Mai Tai, and never have to work again.

Have you ever had that feeling? That's your opportunist DNA. And it has a whole decision-making matrix that comes with it. Opportunist DNA causes the entrepreneur to really look at business as a vehicle. That's it. So if they're driving along in a Honda of a business opportunity, and you pull up next to them in a Ferrari of a business opportunity, a good opportunist will gladly vacate that Honda and jump in the Ferrari with you. And that's why you'll see these people jump from deal to deal to deal. It's real estate, and then it's this, and then it's that. It's a behavioral profile.

This DNA also makes the entrepreneur extremely optimistic. They could lose $1,000,000 on a deal today, wake up tomorrow and call you and go, OK, OK, OK, OK, OK. I know we lost our shirts on that thing, but this new one, this next thing-- this is the one. That's opportunist DNA-- highly incentive driven.

So most professional salespeople, most great salespeople who do a lot of new business development, will show this as their behavioral profile, because it's all about the carrot. I don't really care about how much I make now, even though that's important. But how much will I be making when I hit those sales numbers and break through those barriers?

Multiple streams of income is really what this group is about. So if you ever found yourself saying, oh, I'm going to do a little bit of this, and maybe I'll buy some real estate on the side, and maybe we'll flip some-- do some day trading, that's your opportunist DNA wanting to get to the goal faster. And with this DNA comes a lot of great gifts, like you're seeing.

One key weakness is the area of focus, much like that beagle sniffing around for the next great thing, juggling lots of things at the same time. And so an opportunist in their weakness will show up-and-down income. Make a whack of cash, lose it all. Make a whack of cash, go backwards. Make a whack of cash, and then nothing. That's opportunist DNA.

S, or Specialist DNA, shows itself up in the experts of our world, people who go through years of schooling, apprenticeship, on-the-job training. They'll develop some great skill-- doctors, lawyers, accountants, graphic designers-- and this DNA activates in them. And they pick one industry and will stay in it almost for a lifetime.

Then you'll see that these people tend to be very analytical in their approach to decision-making. They almost slow every buying decision down to a crawl-- completely opposite of opportunist DNA. Very methodical, very risk averse in what they do. They plateau in growth very, very quickly, too. They'll go through a revenue jump when they first start their business, and then the business plateaus.

You know why? Because they measure success very differently than the others do. They measure success based on personal income. If I ask a classic S, hey, how do you're having a good year, they'll typically go to the adjusted gross income on their tax return. And that's a healthy six- or seven-figure number-- good year.

So when they hit that goal in their business, the business plateaus. And it's almost impossible for them to leapfrog that business out of that realm without some changes, some significant changes. If you generate most of your business through referrals and networking, S is your primary DNA. It's a given, because S's hate selling, so they would much rather have the phone ring than someone call them asking for help. The number-one weakness of this profile is in the area of demand generation and lead generation. They really struggle with that-- standing out in a crowded marketplace.

I's are the innovators of our world. These are people who are the accidental entrepreneurs. They were doing something they loved, and a business kind of just popped up around them. And their friends are like, oh, you've got to start a business. This is the most amazing thing ever. And they're kind of forced into entrepreneurship. And you'll find them saying, I kind of don't want to. I just want to make stuff. I don't want to be at the cash register. I don't want to be balancing the checkbook. I don't want to.

That's because as soon as they have their presto invention. If you picture Mark Zuckerberg in the movie The Social Network, you'll see innovator DNA activating. Facebook had to be cool. It was about changing the world. It was about the mission, not the money. And that's innovator DNA in action. These people are driven by mission and control most of the great intellectual property of our world. Unfortunately, they hide in dungeons, so they're very hard to find.

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And that's the challenge for those of us that are in the ecosystem, to find these people and bring their great IP into the world, because they are horrible business operators. So if you take their great capacity and put them in business, they start to struggle and in many cases fail, because they're outside their gifting.

Old-school entrepreneurship would say, well, just go take the MBA class. You've just got to learn how to write a business plan, or you don't know how to hire and fire. And this person is like, I still don't want to do that. And so it's really empowering for an entrepreneur to realize, OK, so if I'm an I, I don't have to do the things that the others are doing. It's game changing.

And so for me, the tip of the iceberg was to realize that we're different. But that was just the tip of the iceberg. The big thing, the big aha for me, was realizing that tied to every one of these profiles is a completely different path to market. That blows my mind, because in old-school entrepreneurship and the colleges and universities and everywhere we go, we're teaching, oh, no, no, one size fits all.

A couple of quick examples. Right here in Bend, Oregon, Kombucha Mama.

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So they discovered their entrepreneurial DNA about two years ago-- had the aha moment that Michelle was an I, showing all the traits we just described. Jamie shows all the traits of an O. And so as a company, they have what's called a right-quadrant thing, opportunist-innovator. A lot of creativity. People love their product. People can't stop talking about it.

But when it came to growing their business, they were really struggling. How do we get to that next level? How do we expand and grow. Old-school entrepreneurship would have said to them, well, just figure it out. Go write the business plan. And they're like, but we don't want to.

They had their aha moment that they were missing the other side of the quadrant. They brought in a builder. They optimized their business around who they really were. They doubled in revenue last year. They're about to quadruple in revenue. That's the pace they're on this year. They're opening a brand-new facility right here in Bend, hiring new people that are going to be new jobs right here in this town, just by activating what these people were really gifted to do and not telling them to be someone they're not. Pretty awesome, right?

Well, just so you don't think that this is just about startups, here's a 25-year-old insurance company in my hometown of Chicago, frustrated that the growth had stopped. The CEO is like, things aren't working the way they used to. We're out of fresh ideas. We're not growing, we're not scaling, and we're not bringing a lot of new business development.

Here's what their organization looks like entrepreneurially. And you start to see that there's no builders. There's no innovators. So sure, it's not going to scale. There's not going to be all the creativity. And we've just got a couple of people with the opportunist profile, the rainmaker profile. No wonder new business isn't coming in the door. And also, no wonder the customers are so satisfied with the service of the company, because we've got a bunch of S's working for us.

You start the conversation here, and you can now start to build strategy. We can now start to say, OK, what can we do based on who we are as a company, rather than trying to be the guys and gals next door? So the impact of this for entrepreneurship and for business owners is huge.

But the real impact of entrepreneurial DNA will be seen, and we'll experience it, when the entire ecosystem starts to adopt it, when the academics, the people teaching entrepreneurship, start to say, OK, no longer will I assume that every student in my class is designed to start the same type of business or employ the same business development strategy. That's broken. We're hurting these entrepreneurs. We're setting them up for the next five years of a lot of pain while they figure it out themselves.

Let's change that ahead of time. When you look at all these nonprofits and governmental agencies pouring money into entrepreneurship, let's not do that until we start to see these people through the lens of who they really are-- business advisors, business coaches. Which, if you're a business advisor listening to this, you're like, oh, I totally get it. I can totally see all my clients, [INAUDIBLE], and I can understand why they're doing what they're doing and why they're not.

But the big thing is for financiers, people writing checks to these businesses. Don't write another check until you know who's sitting across the table from you, because even though the investor deck looks sexy, and the business model is scalable, is the entrepreneur sitting across from you the person who's going to pull it off? And if not, before you write the check, make sure they put the right people around them, just like Kombucha Mama did. And now they're probably one of the most investable companies in the city of Bend.

So for me, here's my mission. Here's my goal-- the number 5%. When we started, we talked about the systemic failure rates and success rates that have been stagnant. I did a quick back-of-the napkin calculation to say, what would happen if systemically, not just here but across the globe, there was just a 5% improvement in the success rate or growth rate of businesses? It's trillions of dollars of economic impact. It's enough to raise entire cultures and countries out of poverty.

When I moved here from India, India was a third-world country in 1988. Today, it's on the verge of becoming a superpower. Entrepreneurship did that, and it did it with its arms tied behind its back. Imagine what will happen as we start to unleash the true power of these entrepreneurs and allow them to do what they're really gifted to do. It's going to be game changing.

So I invite you on that journey with me. Spread the word about entrepreneurial DNA. Have conversations about it in your companies, in your offices, and see it takes-- let it take a life of its own. And we'll start to see globally the tide start to raise these boats of these entrepreneurs, and then the entrepreneurs will go change the world. Thank you.

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