6 rules to break for successful entrepreneurship

Discover the 6 unconventional rules for entrepreneurial success with John Mullins, a renowned thought leader and London Business School professor.

Dive into the transformative power of confidence and innovation with insights from John’s 20+ years of executive experience in high-growth retail firms, including ventures he founded and took public.

John shares practical tips and personal anecdotes, offering small business owners advice to boost their confidence, navigate challenges, seize opportunities, and build sustainable businesses.

Learn how to break the rules, innovate, enhance your leadership skills, and develop a strategic mindset.

Here is his unfiltered advice below:

• Becoming a professor at the London Business School
• What are the blind spots for would-be entrepreneurs?
• Don’t let your competition change what makes your brand unique
• The best leaders are authentically themselves
• How Gap became the best place to buy jeans
• Build your confidence one step at a time and measure your success
• What are the 6 rules to break for successful entrepreneurship?

1. Yes we can
2. Problem first logic
3. Think narrow not broad
4. Create something that customers don’t even dream that they want or need
5. Ask for the cash and ride the float
6. Borrow the elements you need to start your business

• Successful alumni
• What’s the difference between the entrepreneur that succeeds and the one that doesn’t?
• Entrepreneurs are not good at taking risks—they’re just good at managing them
• Find an industry that aligns with your interests

Becoming a professor at the London Business School

Bex Burn-Callander:

So why don’t we start with how you got started down this path. Why your interest in helping would-be founders, current founders build better businesses? Where did it all start?

John Mullins:

Well, I think it started at midlife. I was in my 40s and I’d been in the retailing industry in the US for 20 years and I felt like I wasn’t learning enough anymore. I was doing the same thing over and over again.

And so I started to think about, well, maybe should I do something different in the second half of my career? So I got some career counselling to figure out what I might do and came up with 2 ideas actually.

One of them is to do what you do, which is to be a business journalist, and the other was to be a professor.

And I said, “Well, I could test the other one, the professor idea.”

So I called a couple universities in Denver where I was living at the time and said, “Could I teach marketing 101 for you next term?” And it turns out they both said yes.

So I ended up teaching 2 different groups of students the same material but on 2 different schedules, and that turned out to be great fun. So I said, “Okay, I’m going to do this.”

And I went and got a PhD at midlife, which is not the time most people do that. And it’s been a fantastic second career. I am so lucky to be able to do what I do.

Bex Burn-Callander:

I’m very, very glad you didn’t go for the journalism route because you’d put me out of a job.

You started with the marketing, but you now teach. Your course seems to cover everything from accounting to go to market strategies. So how did you blossom into a more one-stop shop for the entrepreneur?

John Mullins:

I always had a marketing perspective.

I always had a perspective when I was working in retail about what’s best for the customer, because if you don’t have a customer, as Peter Drucker said, you probably don’t have a business either, so you got to understand the customer and deliver value to that customer.

So that had always been my perspective. But when I went off to do my PhD, I was going to actually do it in entrepreneurship and a couple of people I trusted said, “Oh no, don’t do that. You’ll never get a job.”

Because back in those days, entrepreneurship was just thought to be war stories and nothing of very much interest. So I said, “Okay, I’ll get a PhD in marketing.”

But once I got employed, I said, “What I really want to do is I want to teach entrepreneurship.” Because I’d spent most of my 20-year career in retail doing that. I worked for the Gap stores when it was small and helped make it bigger. That was highly entrepreneurial.

And then I did 2 startups, one of which I took public, that one failed so there were lots of lessons there. So I wanted to focus on helping entrepreneurs start and grow their businesses and that’s what I’ve been doing for decades now.

What are the blind spots for would-be entrepreneurs?

Bex Burn-Callander:

And I guess you have this unique perspective because you have been teaching for such a long time. So are there perennial things that come up again and again, gaps, blind spots in would-be entrepreneurs vision that you like to help correct early on and can you tell me about a couple of those?

John Mullins:

There are a couple of them. One is the myth that we always hear that entrepreneurship is a solo sport. These Branson-like founders who somehow succeed against all odds.

But actually, it’s not a solo sport, it’s a team sport when played to win. And I think that’s the first eye-opening message that people running small businesses need to get.

If you’re going to grow that small business and turn it into a big one, if that’s your ambition, and it’s not the ambition for everybody.

But if that’s your ambition, then figure out what kind of partner you need who will complement your skills, not a clone of your skills, but who will complement your skills and bring to the party something you don’t bring, and then maybe you’ll get yourself on a better growth path. That’s number one.

I think the second one is there’s often a focus on competition. How can I beat the competition? But most entrepreneurs with really good ideas actually don’t have a lot of competition because they’ve identified a customer problem that isn’t well satisfied by the current offering.

So it’s not about the competition, it’s about satisfying that customer. And so the second one is, don’t worry so much about competition, worry about your customer.

Serve your customer well you’ll be in good hands.

Don’t let your competition change what makes your brand unique

Bex Burn-Callander:

I often hear that just watching the would-be or supposed competition, it’s just a distraction anyway.

And if you try and watch what they’re doing and accidentally copy something that they’re doing that might not be the right thing for your business.

That might’ve been why customers are moving away from them in the first place.

John Mullins:

In the last couple of weeks, I’ve been reading about Southwest Airlines in the US, which I flew with yesterday actually. And there’s one of these investors who’s taken a big stake in Southwest because he knows how to run Southwest better than Southwest knows, of course.

And he thinks Southwest has not kept up with the times and needs to do things that other airlines are doing. Well, Southwest has been the only airline to make money year after year after year when most other airlines don’t make any money.

So the last thing you want to do is do what the other airlines want to do. You want to continue to be unique, and Southwest has done that.

Bex Burn-Callander:

For anyone in Blighty who hasn’t flown Southwest, you want to just tell us a bit about what makes that airline unique? I know a little bit, but as you’ve just flown with them, I’d like to hear your take on it.

John Mullins:

Well, number one, it’s fun. All the people they hire are people people. They’re on the plane to have fun themselves and have fun with you.

And so instead of the boring, perhaps tape recorded, or video recorded presentation you’d get on how to buckle your seatbelt and all that stuff, you might get a rap song about how to do that. It’s just really fun.

And the people who work at Southwest clearly love their jobs. And in a service industry, if you take really good care of your people and your people love their work, guess what? They’re going to take really good care of the customer.

Bex Burn-Callander:

I love that. I’d love to just hear all my safety briefings in the form of rap. That would be perfect for me.

The best leaders are authentically themselves

Bex Burn-Callander:

And your first point, John, was about how entrepreneurship is not a solo sport. And I wanted to talk to you a bit about leadership as a theme because you help people with that.

You help people become better managers of people, more adept at sharing their vision and their mission.

And I’d love to hear a bit about what you teach and what you would advise people who are really hoping to get the right on the bus. How do they become better leaders? Is there a mindset they should adopt or is there a particular winning formula to being a great leader?

John Mullins:

No. There isn’t a single winning formula. Every leader is different, and the best leaders are authentically themselves. They are who they are. They’re comfortable in their own skin, they know where they want to take the bus, and they’re very good at articulating that vision.

Here’s where we’re trying to go, and would you like to be a part of this? And if you can do that effectively, you’ll bring on great employees who want to serve that, follow that journey with you.

You’ll have a better time getting customers on board because customers want to be part of something special as well.

And often you’ll get better breaks from suppliers because your suppliers say, “Well, yeah, we can sell our stuff to anybody, but let’s sell it to these guys because they’re going to do something really special, and we’ll be part of that journey.”

And I learned that at Gap when I worked there all those years ago. It makes an enormous difference.

How Gap became the best place to buy jeans

Bex Burn-Callander:

So what happened at Gap then? How did you see that leadership coming to the fore when you were at gap? One of the most recognizable brands of the last 30, 40 years.

John Mullins:

So Gap was founded by a guy named Don Fisher. Don is 6 ft 4, really tall guy. He was a real estate developer at the time, which meant that he wore jeans every day on the job.

But he’d go to a department store to buy jeans, and they would never have his size because he was a big guy. So he said, “There’s a problem here. Maybe I need to start a business and solve that problem.”

And in those days, we didn’t have point of sale systems that would tell the store exactly what had been sold every day. We now have those systems, but then we didn’t.

So what would happen in a department store selling Levi jeans, for example, which is what Gap sold for the first 10 or 15 years of its existence, when the pile of Levi’s on the table got smaller, the store would say, “Okay, we need more Levi’s. Give us the standard size assortment.” And Levi’s would ship it.

But do you want to guess how many stock keeping units there are in a Levi’s 501 jean? How many different size length waist combinations would you guess there are? Give me a number.

Bex Burn-Callander:

30.

John Mullins:

81.

Bex Burn-Callander:

Oh, okay. Quite a lot more.

John Mullins:

Astonishing. And that’s just one style. And then there are 505s and 517s and so on. So what Don and our team figured out is that we can put in place a system whereby we’ll put 2 price tags on every garment instead of 1.

And when the customer buys it, we’ll tear that tag off, put it in a cigar box under the cash register, and at night go key the code into a tape-recorded device that would be polled overnight.

And the distribution centre would say, “Aha. The store number 101 sold a pair of Levi 501s in size 32-34. We need to replenish it this week.”

Not rocket science, but it took thinking out of the box to put in place a system that eventually technology put in place. Now everybody can do that, but at that time it didn’t.

So we became the Go-to place to buy Levi’s, because guess what? We had your size in stock, and we merchandised the store in those days by size.

So I would walk into a Gap store, I know my size, 32, 34, and I could walk up right to the part of the pants wall, and there are all the 32, 34s. The denims, the corduroys, the chinos, everything. It’s all right there. That’s my store. I didn’t need the rest of the store.

So we did some remarkable things. But it was because of Don Fisher’s leadership that we’re going to go be the best place in the world to buy jeans. And we were.

Bex Burn-Callander:

That is such a cool example, but my goodness, the horror I felt when you were talking about manually keying in all the numbers from the barcodes and keeping the labels in a cigar box.

Call progress a pain sometimes, but that’s definitely progress for the greater good that we’ve got automatic systems to do that. Wow, that must’ve taken hours.

John Mullins:

Well, Reid Hoffman was quoted recently as saying, “In order to scale a business at the beginning, you have to do things that don’t scale.”

That wasn’t a particularly scalable thing to do, keying in all those things one by one, but boy, was it effective.

Build your confidence one step at a time and measure your success

Bex Burn-Callander:

And we’ve got a loose theme on this series of the show about confidence. And I know that you touch on confidence when you talk about the entrepreneurial mindset.

Can you tell me a bit about how maybe someone who’s earlier on in their journey can start to build confidence?

Because often that comes with success. It’s a validation and then you become more confident. But how do you build that before you have that validation?

John Mullins:

Well, you just said it, Bex. Confidence is built through demonstrated performance. When you’ve done something and you’ve done it effectively, you build a little confidence. Then you do it again and you’re successful again, you build some more confidence.

So there’s no magic way to say, “Aha. I’m going to do something I’ve never done before, but I’m confident about it.” Actually, it’s a pretty open question.

We know what the prior odds of entrepreneurship are. Most businesses fail and many of them fail very quickly. So the prior odds are tough. You can’t go in and be blindly confident.

The way you get confident is you take one step at a time, you measure. So metrics become crucially important. You measure the progress.

And as you begin to see the metrics telling you you’re delivering good value to your customer, then you get confidence. That’s how you build it.

Bex Burn-Callander:

So you’ve got to put processes in, I guess, to measure those successes almost on a granular level quite early on, because that’s actually the feedback you’ll get. It will have a bigger impact, I guess, on your ability to perform because you’ll be taking in these little nudges that you’re doing the right thing.

John Mullins:

Exactly. And then you have data. And with that data, not only does it build your own confidence that you’re on the right path.

But it also helps you go to your supplier and say, “Look what we’re doing here. We’re going to grow this. I now need to give terms. You need to give me 30-day terms where I was maybe paying you in advance at the beginning.”

Or you go to customers, and you show them the progress. These other customers are doing this. Do you want to be a part of this? And with your employees too. The metrics make a big difference. That’s how you build confidence.

Bex Burn-Callander:

That’s great advice. And what about in your life? What role has confidence played in your career? Have you ever had to fake it before you make it or come back from a crisis of confidence? Could you share a period of time where confidence was hanging in the balance or not?

John Mullins:

Somehow, I grew up being a problem solver. I think it was because my mum and dad let my brothers, and I make our own decisions. They didn’t tell us what to do. We didn’t have helicopter parents.

So we were pretty lucky that we learned to carve our own paths. And every once in a while, you fail, but a failure isn’t a failure, it’s a lesson, and you move on.

So I always had confidence that whatever the problem was, I can solve this problem. And I still feel that way today.

What are the 6 rules to break for successful entrepreneurship?

Bex Burn-Callander:

And I guess it takes confidence to break the rules. And I know that this is the subject of your latest book. So can you talk to me a bit about rule breaking? So which rule should we be breaking? When?

We’ve got some product placement. Anyone watching on the video, here’s the beautiful book. 

Tell me about how entrepreneurs have rule breaking mindset, and what do you mean by that?

John Mullins:

Well, first, let me tell you what I don’t mean. I don’t mean breaking the law.

But what’s happened over the last you 50 years maybe since business schools began to be really the key developers of top level talent around the world to run organizations of all kinds, not just businesses, but NGOs and parts of government as well. What’s happened is the set of best practices has developed. Here are the things you should do to run a business.

Well, it turns out that entrepreneurs, many of them, not all of them, but many of them do things that fly in the face of these commonly accepted rules that have kind of developed mostly in big companies over the years.

And it’s that ability to break those conventional rules. I call these entrepreneurs counter conventional entrepreneurs because they break the conventional rules and that enables them to mitigate risk.

It enables them to pursue opportunities that a bigger company wouldn’t pursue. And I’d be happy to talk through them if you’d like to do that.

Bex Burn-Callander:

Yeah. I need to get some examples of these kinds of rules, and I’m sure our listeners are keen to see how that works in practice.

1. Yes we can

John Mullins:

So the first one comes out of the sense that in a big company, what you’re supposed to do is stick to your knitting.

You figure out what you’re really good at, that’s what you do. You build a set of what are called core competencies. You make them more robust, you invest in them, you nurture them.

And if somebody asks you to do something that falls outside of that, you’re supposed to say, “No, we don’t do that. We stick to our knitting.”

Well, entrepreneurs don’t like to be bound by that.

So when Jeff Bezos realized that the physical book business was about to be disrupted and turned digital, he said, “Oh my goodness, our physical distribution business is at threat here. We’re going to have to get into the e-book business, and that means we’re going to have to build an e-book reader.”

Because there wasn’t any good one at the time, and there wasn’t much demand for e-books at the time, but he saw the trend coming. And the result, of course was the Kindle.

But did Amazon have any ability to build a hardware product? Of course it didn’t. But off they went and did it anyway.

So I tell some stories in the book about companies that when they see an opportunity presented to them by trends in the marketplace, as was the case for Bezos or by a customer asking for something that’s off the beaten path, you go, “Yeah, we could do that.”

And then you go back to your office, or your kitchen and you go, “Oh my God, how the hell am I now going to deliver on what I just said I could do?”

But entrepreneurs are comfortable doing that. Or maybe not comfortable. They’re challenged by doing it, but they’re problem solvers and off they go.

So the first rule is what I call, yes, we can. You don’t have to be bound by what you did yesterday. You can do some new things, and that new path may take you to the promised land.

Imagine what Apple would be today if they had not pivoted from making Macintosh PCs to making the iPod, iTunes, and now the iPhone? Vastly different business today. Well, there are stories about that. So that’s the first rule.

2. Problem first logic

John Mullins:

Second one is what I call problem first logic. So in most big companies today, think about Coca-Cola, for example. They used to be just Coke, and then there was Diet Coke. That did pretty well. And then they said, “Okay, let’s do New Coke.”

Oops. That one didn’t work. People wanted the traditional taste of Coca-Cola, not New Coke so that was a bomb.

But they’ve continued to do all these new Cokes. So we have Diet Coke and Coke Zero, and there was Coke Natural in a green bottle for a little while. That didn’t work either.

But these are all just little tweaks. Is this innovation Bex? I don’t think so.

And the same thing with Tide. In the UK we use Ariel, but when I’m in the US we use Procter & Gamble’s Tide. That’s the detergent our family’s used for years.

And we laugh because we can tell every time the brand manager changes for Tide because they might change the scent from say, mountain fresh to sea breeze, or they take the blue speckles out and they put green speckles in, and they call it new improved.

Come on. They’re all focused on the product.

But good entrepreneurs don’t focus on the product, they focus on a problem.

So I tell the story in the book of Nike whose founders said the running shoes are made for sprinters. The running shoes back then at the origins of Nike, were made for sprinters.

They weren’t made for distance runners. And distance runners don’t train by running around tracks. Where do they train? They run on dirt roads and paths, and they’re always stepping on rocks and sticks, maybe some rodent holes.

They get a lot of sprained ankles, and they get shin splints, so we need a better cushioned shoe, and we need a shoe with more lateral stability so when you step on a rock, you don’t twist your ankle.

Well, that’s not rocket science.

But that thinking about the target market’s problem is what led them to create the first running shoes.

And it took Phil Knight 5 years selling shoes out of his station wagon at track meets in the Pacific Northwest in the US until people started winning gold medals at the Olympics wearing Nike shoes.

And then guess what? Other runners said, “Oh, maybe we need to wear Nikes.” And that was a really small target market, which I’ll come to in a minute.

But once they had solved that problem of making a better shoe for distance runners, elite distance runners. That was the target market.

Then it’s pretty easy to call John McEnroe and say, “Do you want to do tennis?” Or call Michael Jordan and say, “Should we do basketball?”

And of course, we know what Nike is today. It’s become the far and away leader in the category. But they did that not by tweaking the product, they did it by focusing on the customer’s problems.

3. Think narrow not broad

John Mullins:

And the other thing they did well is the third rule that I think good entrepreneurs often break, and that’s thinking narrow, not broad.

So in a big company, you can’t do something new unless it moves the needle. Big companies don’t want to mess around with some little thing. If it’s not big enough, they’re not going to bother.

But the target market for those running shoes in Nike’s early days was elite distance runners. That is people who could run nearly a 4-minute mile. How big is that target market? It’s tiny.

But again, once you solve the problem for the initial target market, however small, and because you define that market very narrowly, it’s got some unique needs like distance runners had that weren’t being satisfied.

Once you solve those needs, you learn a whole lot of stuff that can then take you elsewhere.

So Nike learned how to design shoes. It learned how to import shoes from Asia. It learned how to get athletes to endorse those shoes and so on.

Well, once they put all those lessons to work, it was straightforward to do tennis, basketball and more.

Bex Burn-Callander:

And thus a global juggernaut is born.

John Mullins:

Yeah. Exactly. And there’s a fantastic book called Shoe Dog that Phil Knight, the founder of Nike, wrote. It’s a great read. It’s a hilarious read. Some of your viewers might enjoy it. It’s a great story about an iconic entrepreneur.

4. Create something that customers don’t even dream that they want or need

Bex Burn-Callander:

I’ve got another rule that’s broken by entrepreneurs. I’ve just thought of one where the accepted wisdom is always, give the customer what they want, and the customer is always right.

But some of the great brands that you’ve already referenced, someone like Apple, no one would’ve thought, I want the iPhone. They just want the next iteration of the available technology.

But you create something that customers don’t even dream that they want or need, and then that becomes the thing that captures the imagination of the world.

John Mullins:

Great point. As Henry Ford said, people wanted a better horse, right?

Bex Burn-Callander:

Yes. And you gave them the motorcar.

5. Ask for the cash and ride the float

John Mullins:

So let’s see, that’s 4 of them.

The fifth one is what I call ask for the cash and ride the float. So in a big company, there’s this whole focus and process around return on investment.

So if somebody wants to do something new, what they have to do is figure out how much you’re going to invest, and then you figure out what the cash flows are going to be going forward.

And you run some maths, and you say, “Okay. Is the return on that investment sufficient for the company to approve the project?” And then you get to go forward or not.

Well, entrepreneurs don’t think in ROI terms. They think about, “Well, gee, can I get the cash from the customer so I don’t have to make an investment?”

So think of Tesla. Probably most people aren’t familiar with the early origins of Tesla. Musk was not on the founding team, but he joined the founding team early on and he said, “Guys, let’s go see if we can sell some cars.”

They hadn’t built any yet. And so they did a road show in California, and in 3 weeks they sold 100 Tesla Roadsters, none of which had yet been built for $100,000 (CAD$136,382) each, cash tonight. Do the math.

Bex Burn-Callander:

Who was buying these cars sight unseen?

John Mullins:

$10 million (CAD$13,382 million), unseen. So who was buying them? People with a lot of money in California who were environmentally conscious and who thought it would be pretty cool to have the next big thing parked in front of their house.

So they sold literally 100 Tesla Roadsters for a $100,000 (CAD$136,382) each. That’s $10 million (CAD$13,382 million) you now have to go out and do the engineering, begin production, and eventually deliver the cars.

Well, people think that Tesla is a venture capital-backed company, and they did raise some money in the early years, though most of it was Musk’s money that had made it PayPal.

But most of the money that has grown Tesla has been from the deposits we pay. So when they introduced the model 3, half a million people wanted to be customers. But there were no model 3’s yet.

Half a million model 3 customers put down $1,000 (CAD$1,3600) each, do the math there. Half a billion dollars in the bank with which to now design the model 3, tool it up and let some cards roll off the assembly line.

So asking for the cash and riding the float lets you do all the other things you have to do in the business with the customer’s money, not with investment.

So again, big companies don’t think that way. They have so much cash they don’t have to think that way. Entrepreneurs have to think that way because they don’t have any cash.

6. Borrow the elements you need to start your business

Bex Burn-Callander:

Although that comes back to confidence, because my goodness, you have to be confident to go and pitch and sell something that you have absolutely no physical creation of yet.

It’s just a literal idea sketched on the back of a piece of paper. And to take $100,000 (CAD$136,382) off someone for that, you need to have some serious chutzpah.

John Mullins:

You do. That’s what it takes. It’s another place where confidence comes to play.

And then the last one, the sixth one, it’s what I call beg, borrow, but don’t steal. So it’s a similar idea to asking for the cash.

But instead of asking for the cash here, you’re saying, “Well, what do I need to start this business? Maybe I can borrow what I need instead of investing in what I need.”

So there’s a wonderful business in the UK called Go Ape. They run 30 some fantastic outdoor adventure courses.

Bex Burn-Callander:

I know Tristram Mayhew. It is a great business, isn’t it?

John Mullins:

It’s a fantastic business. But the existing adventure zip line courses and stuff were all built with telephone poles.

Well, he and his wife, Bex, came across a forest adventure business on a vacation in France and said, “Oh, we could do this in the UK.”

So they went to the Forestry commission that controls a lot of the woodlands in the UK and said, “We’ve got an idea that might bring more people to the woodlands,” which of course is what they’re interested in.

And they said, “This is the great idea that we didn’t know we were looking for.”

And so essentially Tris and Bex were borrowing the parking lots. They were borrowing the trees, they were borrowing the loos. They didn’t have to build any of that stuff. All they had to do is put their kit on the trees.

And that business today is a wonderful business that enables people to live life adventurously as they like to talk about it. But again, they got their start by borrowing the things they needed rather than investing in what they needed.

So those are the six mindsets. They run counter to what we teach in business schools like mine, they fly in the face of what big companies do, but these are the mindsets that enable Bezos and Musk and Tristram Mayhew to do what they do.

Bex Burn-Callander:

Although presumably you are now teaching these mindsets at the London Business School, so perhaps you are tweaking the syllabus a bit.

John Mullins:

Well, people can choose to take entrepreneurship courses, or they can choose to go the traditional route. But interestingly, as many as a third of our students at London Business School today come explicitly because of our strength in entrepreneurship. They used to come just for finance and career changes.

Now they come to be an entrepreneur. They think they’ll find an idea, they’ll find a business partner, and they’ll probably find some money. It’s a great way to start, actually.

Bex Burn-Callander:

And I’m fascinated by all these case studies.

I imagine that you must spend so much time trawling through newspapers and online reportage about businesses to see what’s working for these really successful companies, what strategies they’re using, because it feels like you’re literally tugging down all these threads to weave together a blueprint, I guess.

John Mullins:

That’s exactly what I do. But it’s the most rewarding part. Well, maybe the second most rewarding part. The most rewarding part of my life as a professor is being in a classroom with 50 or 60 entrepreneurs.

What could be possibly more fun than that?

But the second most is finding these really interesting, messy, difficult, challenging stories of real entrepreneurs who have somehow pushed the bricks out of the road and circumvented the obstacles and built fantastic businesses and finding them and then writing about them.

Back to the journalism piece. A big part of what I do is I write, and I’ve written 50 some case studies now, and they are the basis on which I was able to think about and then write Break The Rules.

Successful alumni

Bex Burn-Callander:

And I have to ask, looking back at your alumni, you’ve taught so many students, have any of them gone on to become mega successful billionaires? Can you tell us about them or would that be a breaking confidentiality?

John Mullins:

Yeah, I can tell you a couple.

But successful billionaires is not always the goal. Keep in mind that’s what some people want. Other people want to build just a very nice lifestyle business that’s going to make them and their family comfortable and all of that.

So there’s no rule that says, well, you have to be on a glide path to the moon. You don’t have to do that. But there’s one in particular, a guy who was in our MBA class back in 2009 who’d worked for the UN. He was a Somali native.

And he was aware of the fact that there was a huge remittance industry where African expats would go to London, or other places and they’d make money, and they’d send it back to their families. Huge business that was being done manually at the time.

He said, “This is way too expensive to be taking these fees. It’s a digital world today. Can we start a business to make that more efficient?”

And in my class, he conceived this idea that is today called WorldRemit, that helps people. It’s not the only such digital remits business around today, but it’s worth some number of billions of dollars.

But it happened again because he saw a problem. He saw a problem and he said, “We can solve this problem. We can do it much better than going to a store, taking some cash, paying an agent, and then at the other end, the same thing. We can solve that problem much better.”

So that’s maybe the biggest one that’s come out of London Business School. But there are tons of them. And we do something called Entrepreneurship Summer School every year.

It’s a 2-year program, and in the summer, most MBA students go get an internship at Goldman Sachs or McKinsey or somewhere. But those who want to be entrepreneurs can do the Entrepreneurship Summer School.

And we take only 60 of them every summer, and they figure out whether the idea they have is actually a good enough one to take them forward. I developed and taught that course for many years. I don’t teach it anymore.

But the data at the end of when I did that, we did a survey to see what the success rate had been. Of all the startups that there had been to that date, which was hundreds of them, 84% were still in business. Staggering number.

Bex Burn-Callander:

That’s fantastic.

John Mullins:

They weren’t all unicorns. They didn’t all want to be unicorns. But they were successful.

But the really cool data point was after going through this summer process of developing a feasibility study based on my first book, The New Business Road Test, two-thirds of them chose not to pursue the business they studied in summer school.

So they went out, did the homework and said, “Yeah. I want to be an entrepreneur. This feels really good. But not with that idea. I’m going to tweak it or I’m going to abandon it and do something very different.”

So I think that’s a powerful lesson. The plan A idea you have is maybe not how you’re going to get to the stars.

What’s the difference between the entrepreneur that succeeds and the one that doesn’t?

Bex Burn-Callander:

And on that theme, you must have heard so many phenomenal business ideas. A lot of great ideas coming through. And then seeing how many fell by the wayside versus the people that were really able to execute and build on that idea.

What would you say is the fundamental difference between those two types of entrepreneur? Who was it? They both had great ideas at the start, but what was the difference between them that meant one got there and the other one didn’t?

John Mullins:

I think there are a lot of differences.

In the book I just mentioned, The New Business Road Test, I argue that you need to understand the market that you’re going to serve and determine is that really an attractive enough market? You need to look at the industry in which you’re going to compete.

Do I actually want to be in this industry, airlines, big pharma, whatever it is? And third, look at your team. Do I have the right team? Have I assembled the right team that can actually deliver on the critical success factors that are required in that particular industry?

So I think the successful ones are pursuing opportunities that tick most of those boxes. You’re never going to find a perfect opportunity, but you want one that’s going to give you at least a fighting chance for success. So I think that’s one thing.

I think the second thing is persistence, tenacity, whatever noun you want to use to describe that. It’s really hard being an entrepreneur.

Given the prior odds no person in their right mind would choose to set out on that path, and yet large numbers do it every day because it’s incredibly rewarding psychologically, as well as sometimes monetarily if you get there.

So having the persistence and the tenacity to keep going in the face of adversity and to have a dream, a clear vision of where you want to go and why you want to get there.

My daughter, Heather makes jewellery out of recycled skis, and her passion is keeping stuff out of the waste steam. She also builds furniture out of recycled stuff.

But she gets these skis at the end of the ski season, rental skis that are at the end of their life, she’s given them, so she has no cost of goods.

She slices them into little slivers, and it’s called Après Ski Jewellery because the ski now has a second life as a piece of jewellery.

She doesn’t want to build a rocket ship to the moon, but she’s able to support herself very nicely selling jewellery made out of skis. And she’s doing not just to do that, but she’s keeping all this stuff out of the waste stream.

Entrepreneurs are not good at taking risks—they’re just good at managing them

Bex Burn-Callander:

It is interesting that you say that because I was going to ask you about appetite for risk, but in your example with Heather, that is a pretty low risk business because you’re not spending anything on the upfront cost.

That is definitely not a high-risk business, yet we always associate the idea of entrepreneurship with that ability to take risks, albeit calculated risks. So do you think that’s a myth?

John Mullins:

That’s a big-time myth. What entrepreneurs are good at is not taking risk, but managing risk and finding ways to mitigate it or pass it off to somebody else. And that’s actually what the six mindsets do.

So if you’re going to beg or borrow the assets you need to get started, that takes away the financial risk. If you’re going to have a really narrow target market that you really understand, that’s going to take a lot of the market risk away.

So that’s really what the six mindsets do is they mitigate risk and give you a much better chance to be successful.

Find an industry that aligns with your interests

Bex Burn-Callander:

And John, I’m just going to ask you a personal question to finish, which is if you could go back and change anything in your career, a wrong turn, I know you said earlier that there’s no such thing as a mistake, there’s only a learning opportunity, but if you could go back and change 1 thing, what would it be?

John Mullins:

I knew you were going to ask me that question Bex, and I thought about it. And I think what I would’ve done differently is when I finished business school at Stanford a long time ago, I met some people in the retailing industry on a job interview on campus, and I said, “Those seem like really fun guys who really like their work and they’re getting responsibility really quickly because you have a bottom line to manage very quickly in retailing if it’s a store or a part of a store.”

And I said, “I think I’ll go be a retailer.” And that’s what I did. And I did it for 20 years.

In hindsight, I’m not a person who likes to shop. I’m not particularly materialistic. I’m not fashion oriented.

Why was I in that industry? I have no idea. Did it serve me well? Yes, it served me very well.

I learned a ton there that I now can apply in my teaching, and the fact that I have done what I teach makes me unique among most entrepreneurship teachers. I’ve not only studied it, but I’ve done it.

So it served me well, but retail isn’t the best industry. It’s long hours and nights and weekends and all that stuff. I probably could have chosen a better industry to start my career, but no regrets.

Bex Burn-Callander:

What would it have been though? What is an industry that you feel deep engagement or you really delights you? What could it have been if it had been a different job interview, what would the industry have been?

John Mullins:

I haven’t thought about it, but I’m an outdoor person. I hike, I ski, I love the mountains. Maybe it would’ve been something there. North Face or something more outdoor oriented.

Bex Burn-Callander:

I can see you in a chalet at the top of a mountain and you are the guide, and you take them through the Sitka pine forest. I think that would be epic.

John Mullins:

That sounds like fun. Sounds like great fun.

Bex Burn-Callander:

Still time. Still time, John.

John Mullins:

Maybe in my next lifetime, Bex, that’s what I’ll do.

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