Success Unveiled: Strategies with LaSean Smith for Lucrative Markets & Business Growth

Punchline for me is defining the word market. When we talk about who's your customer, I have a very prescriptive definition of the word market. It is a set of individuals who share a problem that is recurring, urgent, and painful, and I'm only looking for businesses that have all three. The more you relax those three attributes, I find the weaker the market. Now, if it's a great market, it has all of those things. And those people have the wherewithal and the financial means to actually pay to solve that problem. And so what you're doing is you're in this stage going out to validate your market. And once you have it, as I said, those also become your future word of mouth advocates. Welcome to super entrepreneurs podcast. I'm your host Shahid Durrani. Today we have with us Lashan Smith. Lashan is a business creator and software developer who helps people predictably navigate their entrepreneurial journey. Welcome to our show, Lashan. Hey there. Great to hang out. Look forward to this discussion. It's great to have you as well. Looking forward to this chat. So I see that you have quite a unique journey from a mobile candy store, then going through different roles. How does that experience shape you in entrepreneurship? And if there's any kind of information you can share with the audience that you learn from that journey, that could help someone. Sure. I, to your point, I've done all sorts of things, running small businesses when I was a child through high school, my teenage years through working in big tech and starting multiple businesses. And the thread for me through all of that is really twofold. If you continue to increase your skills, your skill stack, keep acquiring skills, you will continue to become someone who's very unique in the market. And for me, what I found is the best way to activate those skills is through owning a business. And I believe it's a little different in different countries, but for the most part, business ownership is one of the most predictable paths to financial independence. So in a world where it's not always fair, it is not always going to treat us the way maybe we should be treated. Creating value through business has really been the unlock for me. And what I really get excited is to kind of show folks how to not necessarily accelerate. I don't believe in the get rich quick. I like to say get rich slow is the better way, but I do believe it can be a more predictable, less anxiety written journey. And sometimes people are learning on the fly. And for me, where I spend a lot of time is helping people think about the process and implementing the right process in their business, because a lot of times that can save pain down the road. You speak about your personal principles that guide your path. Can you speak about those principles? I believe balance sides and fight fear and how they help you shape your decisions and building your own businesses. Yeah. So I've written two lists. The first one is a very personal list. I call it my North stars, my compass to help me make decisions through the month, the week, the day. And that's six words, three sentences, know thyself, make things stay free. And that's just a reminder that when I stray away from those things, I get myself in trouble. And then I have a broader list that you were alluding to that really dives into the type of people I want to be around, the type of promises I want to make to customers, potential people that I'm working with, if I'm running a business that has investors, making sure we have those shared values. And that really is, I think, critical. A couple of those that are near the top of that list is really staying curious. I almost look at entrepreneurship as a kind of an excuse to keep learning. And I find that the most successful entrepreneurs that have coached and mentored me have two common things in or two things in common. Number one, they are always learning. They are hyper curious, willing to change their mind. They're not necessarily going to say this is the way I thought it was years ago. And now I still think that if they're presented with new information, they will change their mind. And then the other piece is a, I call it productivity density, but it's an extreme bias for action. They're not going to swim in their head and say, all right, let's keep thinking about this. Let's keep talking about this. They just go do it. And the more you do what is almost counterintuitive, the more you will fail. But there's a saying, double your failure rate, double your success rate. And so those are some of the principles I try to lean into. So how would you help someone create a stomach for failure? Because failure is a huge component in the success of an individual, but a lot of people, they want to avoid it. Like the plague, they just don't want anything to do with failure. They just want it to be a win, but unfortunately that's not how it goes. Can you share some kind of advice that could help someone, what they could do to develop the stomach to, like you said, fail more to get to that success? First a quick story. And then something that may be a bit more technical. Yeah, I went, this is probably about four years ago. I went and spoke and had interviews with over 30 people over 50. And the question was, what would you change in your life? And I was using it both for myself, but also to share with others where appropriate to figure out for people who have moved through their life, what would they change? And pretty much everyone said the same thing. One anecdote for one, one of the women I spoke with, she said, I have a regret that I didn't dive in and start trying some of the things that I spend my time on today earlier in my process. And so that's just something that stuck with me from that set of conversations. Moving to maybe the more tactical usable advice. Uh, what I like to have is a challenge going to first principles and saying, what does failure even mean? And sometimes it is us creating dissonance between reality and what we've made in our brain, and we're allowed to just reshape that. Another issue that sometimes people struggle with is the perception with their friends and family. Oh, you had a good job. You quit it. You started this business and look, it didn't work out. You're a failure. And that's just a, to me, we have not only just the opportunity, but we have the autonomy to go and reshape that definition ourselves. And what I like to tell my friends and family is if I'm starting something I'm asking for your support because I'm going to be learning the same way I might learn in university. The same way I might learn in a new job. And part of that learning is I'm not going to pass every class with a perfect grade. And through that lens, if you have supportive people around you, they will realize it is more of a journey. And then it ties back to that bias or action. You have to keep it up. If you let yourself move slowly, you will fail in not trying. And to me, that's the only failure that is not excusable. So were you in a situation where you went from corporate, you went from a job, open a business, you failed and family and friends made comments in that tone? Yeah. I've been really fortunate in that I don't have per se haters. People are like, Leshawn, you can't do that. Instead I have people around me who care, but they're afraid. So they are projecting their fear onto me. And they're like, Leshawn, I don't know if that's going to work. Oh, that's usually the case though. No. Yeah. Don't you think? Um, and that to me is it comes from a place of love many times, but it can be, it can still be just as limited. And so that's something that we have to get a handle on. Even speaking with my mother, I've had businesses, I've had multiple businesses fail. And so I think that's an important thing to call out, but I just kept trying. Right. So now on my fifth business, excluding my kind of corporate endeavors, I've done pretty well, but I didn't have an acquisition in a cell of my business until business number three, and I didn't make any real money until business number four. And so had I given up on business number two, I'm like, I'm just a failure as an entrepreneur. That's how I would have seen things. And we have different responsibilities. Maybe you have children or you're a caregiver for other folks in your family. So I'm not promoting the idea of being reckless. I am promoting that there's a systems based approach to go and tackle this. And that's why I started with process because many times when people's business are failing, and I'd love to hear your perspective on this is they're off to build the product or to deliver the service before they figure out. Is there a demand for this? Is there an actual market? And then do we know the right way to repeatedly sell this product and for better or worse in today's world, many times choosing the right market and having the right sales and marketing motion is more important than the product or service you're delivering. And we might hate to hear that, right? Let's say you run a bakery or you build a piece of software or you're a furniture maker. You might say building those things, that's the value. But unfortunately we're so inundated with all these different options. When somebody else shows up and say, I built that, I sell that. Um, if we don't do a good job explaining why it fits in our lives, many customers will just ignore it. And I don't know, what's your take on what you've seen? Maybe people get the order out of control or out of order when they're building a new business. When they're building a business, I find that there's a lot of emotions involved. There's that, it is mine. This is what I've created. Yeah. So they jump the gun on the market research and trying it out and testing it. They just have that faith. They believe so much consciously. Maybe not subconscious, but consciously they believe that this is it because they're so emotionally connected to it. When for your own children, you always feel like your kid is doing the best. The same way with that business. You just feel like you're going to, it's the best. Whatever you're doing is perfect. Yeah, that is it. And I'll give you a quick tactic that maybe the audience can find some value on. When I was working in big tech and some of the early investments that I did, we had a rule that no one gets a dollar of investment until they've documented conversations with at least 100 people. This isn't like a literal 100 conversations that you've had. And I found over time, this isn't a tactic just for kind of big businesses. This works for the smallest of business. In fact, it's probably more useful there. And to your point, I love that concept of we do have this idea that it's mine and it's dangerous for two reasons. Number one, you need to be a steward of solving the customer problem. But number two, when it starts to shift, you start feeling like my ego's under attack, I'm under attack because you've so closely connected your identity to this thing. And what I love about the hundred conversations is invariably on conversation 17, 19, you start running out of people. So now you've got to think, where do I find more people? Conversation 29, 33, you start finding that the real problem to solve is maybe a little different than you originally thought. By conversation 57, 58, you start hearing that, oh, I need to use these different words when I explain how I'm going to solve this problem because people connect differently. And when you go through the end of that journey, what you have is this very durable set of feedback that is going to expel much of your fear. Not only that though, now you have a subset of those folks you can come back to and say, Hey, I listened to your feedback. Thank you. I've built this new product or service. I'd love for you to try it out. A subset of those can become customers. A subset of those can become case studies. That's your social proof. And now without spending any money, those hundred customers have become your launch pad or those hundred interviews, your launch pad, your business. Yeah, no, that's wonderful. I like the hundred interview concept. Now, can you share some tips on getting stuck with the friends and family at the 17 mark to look for the ideal people that you want to interview that could potentially be your customers? Yeah, sure. So let's start, I'll go fire round on these, but I'll start very simple. Figure out where the customers are already hanging out. That doesn't mean it doesn't matter if it's IRL in real life or that's on some digital place. And the reason that's critical is if you can articulate where they're already aggregated, you're going to have a hard time selling to them in the future. And so the first thing I do once I move out of the friends and family is I go look at the professional network. So who do I have in LinkedIn that I'm connected to? Maybe a former coworker that you still have their email and you reach out to say, Hey, I'm looking at a new customer problem. A space maybe for a business idea. I'm not sure, but would love 15 to 25 minutes of your time. Could we catch up? And, and so before you get off of that call, you say, Hey, are there two people that you can think of that might be interested in participating in this conversation as well? And so you use that social capital to immediately expand the footprint, right? So you're like, I only know five people. Guess what? They know they each know five people and you're not going to hit a hit rate on all of them, but that's the process. So that's the first piece. The next item is if there are any online forums for maybe some of the younger folks, there might be discord groups, wherever people are actively having conversations, show up and start answering conversations there. And I don't have a technique that says, how can I ask these questions to our new community in 24 hours? But if you go spend a few weeks in a community, and again, when I say community, this could be a true community, or it could be something as simple as a Reddit forum. There's a whole spectrum here. And you start asking questions. You will quickly find if you're adding value and being authentic, you will start to source some, you'll be able to set some interview calendar appointments to go have those conversations. And then locally, you can do the same thing. There are all sorts of meetups in almost every city. So if you type your city meetup and whatever the interest area that you're focused on in your business, you will see a calendar of events and you just need to And it's not, you're not there to network or ask for a job or look for investors. You're there to see who has problems. And the punchline for me is defining the word market. When we talk about who's your customer, I have a very prescriptive definition of the word market. It is a set of individuals who share a problem that is recurring, urgent, and painful, and I'm only looking for businesses that have all three. The more you relax those three attributes, I find the weaker the market. Now, if it's a great market, it has all of those things. And those people have the wherewithal and the financial means to actually pay to solve that problem. And so what you're doing is you're in this stage going out to validate your market. And once you have it, as I said, those also become your future word of mouth advocates. The final thing I'd say there, those are very simple things that almost anyone can do without any real dollars. You want to start getting a bit more sophisticated. I've done this multiple times with folks where they say they have an idea. They're on the road and they're like, but I'm not sure if my messaging is correct. I'm not sure if people are going to connect with these words. I'm not sure how to find more folks like, like me. These same people might go to a conference or buy a course. And I'm like, listen, maybe you're very attached to your earlier point. You feel very attached to this company that you named and create a logo for. What I've helped folks do is just say, go find a throwaway name, go get a $10 domain and start buying a few ads on Facebook, LinkedIn, whatever is the right channel for your business, and start taking the headline that you have and seeing if people click through. And then you can click them through to anywhere. You don't, you can do a free landing page on many of these website builders. So within an hour, you can have this throwaway identity that you can go test to see if people will click through on your message and you can do this as cheap as $50, right? A $10 domain, a $5 landing page, free landing page, and $40 worth of ads. And at the end of that, you're going to have real data. And so to me, it's a combination of these qualitative conversations and getting some quantitative data from this pipeline. And what I love about these particular set of techniques is there's no excuse that I need funding to go run these experiments. These are things that you can do without capital and it's a really great way to de-risk your future business. LeSean, I got to tell you something, man. I like the way you think. Cool, man. Yeah, I like the way you think. So what are the three that you mentioned? I want to just make sure we get those three market components that you look at, that there's a extreme pain point that you're solving and what are the other two? Yeah. So shared group of people with a problem that is urgent, reoccurring, and painful. And the reason those three are, so you need a sense of urgency, right? You want it to, you want a problem that after you solve it, they might need you to solve it again. You're just going to have a much more durable business if you're not always finding new customers to keep cash coming in the door of your business. And then finally, you want it to be a painful problem. There's a great talk where folks say you can sell candy, you can sell vitamins, or you can sell painkillers. And the further you are away from selling painkillers, the harder it is to convince someone to give you money in exchange for solving their problem, right? It's why entertainment products are so hard to sell because they're really just candy and you're competing with the Disney's and all these major corporations who are really good at selling candy. In some cases, literal candy, sugar sells. And when you look at this, this piece, it's, there's a lot of competition when you're selling candy because it's so easy to communicate that. The closer you get to selling a painkiller, the less people are going to say, oh, do I actually want to buy it from this company? They're like, I just need somebody to solve this problem. And so I love those three pillars of urgency, reoccurring, and pain point, because those are going to help you define folks who are ready to pay. So that's what you follow when you acquire businesses or launch businesses, correct? Exactly. So I'm looking for a great position in the market, which has those attributes. I'm looking for a company that directionally either has great process or relatively easy. We can institute better process. And I want to make sure that they have the right attitude. The people are folks who are consolidated and ready to go on a shared mission. And when you have those three things, most of the other problems in a business can be fixed. So there's no need to even talk about a specific industry. This could be cross the board in any kind of industry, as long as you fall under those three requirements. So I have the unique privilege of being able to see other people's businesses and I've purchased all sorts of business and I use this same process. I also, now I'm looking at very different businesses. I own a web application development company. I own a identity services company. I own a few SAS, three SAS products. And these are very different businesses. Right now I'm looking at commercial roofing repair companies. Like it's very different than a digital business. But the process is the same. And so that's, I think one of the takeaways that hopefully the audience gets. And when I look at a business, it's very clean. I want to, you get what's called a teaser and a CIM, a CIM, that's a confidential information memorandum. And it breaks down the business and it has a bunch of numbers. If you sign the NDA, you'll get bank accounts and all those things. I can look at that in about 30 minutes and see, is this business in directional order? But I don't want my emotion or my bias to taint that. So I have a CPA where I send those financials and then she spends about two hours that I just pay her on an hourly rate to go give me a thumbs up or down on the financial state of the business. The cash flows look money that the owners take out weird things for personal use. Like she goes and sorts that all out. And then what I'm focused on are these leaders, the type of people who've created the right culture. What we were just talking about on people. Can I go bring the right process muscle to this organization and have they chosen the right market in time? Again, what's valuable about that is sometimes companies have gotten to the point where the founders burnt out. They're ready to sell, but the business is out of shape. They have the wrong market. Their process is all out of whack. There's all these things broken. And now they're saying, could you please buy me? And if you want to really treat your business as a financial asset, you want to think about, all right, what type of shape would I have to be in to sell this business? And even if you never sell it, if you get yourself in that condition, your business is going to be worse. Yeah. Yeah, no, that's excellent. Now, when you find these businesses, are you investing with your own money? Or is there another way that you use to, to utilize, to purchase these businesses because they're ongoing? You're buying more and more businesses. Sure. So it's a compounding thing. So today I buy relatively small businesses, all deals below $5 million. So I'm using my own money. At some point I will tap out my own personal capital and I'll use what's called OPM or other people's money. Other people's money. Yeah. And so I have a couple of family offices that I have partnerships with that are ready to fund that. But the magic here is even if you're starting very small, let's say there's a business that let's say it makes $300,000 a year. U S I'll use USD for just a reference. And, but it makes $50,000 in profit. You don't buy the company for a multiple of the revenue. You buy it for multiple of the profit. And so depending on the industry, that business making $50,000 of profit might get a three times multiple on the profit, which means even though it's making $300,000, you can buy it for 150 and the powerful part of that is if you can bring in some simple changes to the business, you might be able to lift the profits by 10, 20, 50%, and the cash that you make, the profit you make, you use that to go buy the next business. And so if you are being thoughtful, you're not in a rush to deploy all of your capital, even if you're starting from a very small position, you can get pretty far and so one of the reasons I own service businesses is service businesses don't, they're not worth much when you sell them, when they're acquired, you don't get a great multiple, but they're great for generating cash. And so I use that cash to go build up enough to go buy the next business. It's exciting stuff. I'm so glad that you left the corporate world and this ownership realm. I love these stories. I love what you're doing. Yeah, it's great. You're going to create more jobs, create more futures for people and not just on your personal side, growing these businesses, but actually helping other entrepreneurs do the same. Thank you so much for sharing everything that you shared today. Other people's money, it brought to mind that I'm an affiliate with the, one of the largest marketplace funding marketplaces in America. So if you're ever need funding, I could send you an email, some information that you can take a look at. That sounds great. Yeah. Leverage is really critical to all of this. Naval Ravikant said it best. I think that you need leverage from capital, labor in today's world, media and code. And so it's always great to have a good plan for the next step. So thanks for that offer. No problem, my friend. Thank you so much for coming on our show today, spending your valuable time, and I'm wishing you all the best. All right. Shy ahead. Take a great, have a great day. Thank you. You too.