014: The Mind of a Disruptor with Jay Samit

The SaaS (Software as a Service) Business Podcast

Jay Samit is a serial disruptor, a change agent, an innovator, an educator, and the author of the international best-seller Disrupt You!: Master Personal Transformation, Seize Opportunity, and Thrive in the Era of Endless Innovation. For over three decades, he has been at the forefront of global trends. He has pioneered breakthrough advancements in mobile video, Internet advertising, e-commerce, social networks, eBooks, and digital music used by billions of consumers every day.

Combining innovation with commercial success, Jay is a dealmaker. He has raised hundreds of millions of dollars for startups. His list of partners and associates includes Apple, Bill Gates, Coca-Cola, Facebook, McDonald’s, Microsoft, Paul Allen, Reid Hoffman, Richard Branson, Steve Jobs, Steven Spielberg, United Airlines, the Vatican, Verizon, and the White House.

He has held senior management roles at Sony, Universal Studios, and SeaChange International, a leading global multiscreen-video-software company.

Jay is a trend spotter. His predictions of the future tend to be accurate because he is constantly working with those creating it.

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Key Segments

Click any timestamp to start listening at the noted location.

• [00:17] “I got into this field and was amazed when you wake up one day, and dozens of your friends have become billionaires, and it’s not like anybody went to special schools or had special this or that, but 70% of the world’s richest billionaires were all self-made. They have the same 24 hours in a day that you and I do, so there must be something different that they’re doing with their time. What is it? How can I learn to do that? How can I emulate it, and how can I do it no matter what continent, what country, what city, [or] what education I have? Most of these people didn’t go to top universities. Many didn’t even go to college. Sir Richard Branson, [who] started 12 companies now that have market caps over a billion dollars, didn’t even go to school. What is he doing [that’s] different? Can I do that? That’s what Disrupt You!, disrupting yourself, is all about.”
• [04:05] Jay’s book is split into three parts: (1) self-disruption, the internal process of disrupting your personal value chain; (2) business-disruption, the process of disrupting the value chain of a business or industry; and (3) world-disruption, the process of using the principles of disruption to solve big, non-business, world problems (like climate change, education, and healthcare). Jay says Disrupt You! is a new paradigm with predictive and repeatable methodologies for breaking the patterns that limit personal success and growth that anyone can use to become a disruptor.
• [04:46] Jay says that the need to disrupt starts out in our childhood. Parents, teachers, and others who mean well constantly reinforce and tell us what we can’t do, what we won’t be, and what we’re not good at. We grow up and begin to believe that we have a certain type of personality, that we’re not good at math or public speaking. “We put blinders on and then society gives us shackles. In fact, you are completely malleable, and once you realize you can change your preconceived limitations, it then makes it easier to look at the world as having the same flexibility, the same porousness, the same [potential] for you to disrupt. And so when you look at the self-made billionaire in their 20’s, that’s what they’re doing, and they have the advantage that they don’t have the preconceived ways of doing things that we have developed into habits.”
• [05:40] Changing yourself into a disruptor is a matter of introspection. Jay likes to say, “It’s akin to major surgery, but you’re holding the scalpel.” Becoming a disruptor is a state of mind; it’s about becoming a silver-lining person. When you have problems, instead of saying “woe is me,” ask yourself if others have them too. Maybe the problem has scale. Maybe if you solve the problem, you could solve it for millions of people. Your phone now connects you to 6 billion consumers. If you’re right for just a nanosecond, you could become a billionaire.
• [06:30] “Once you get into [the mindset of a disruptor], you realize that our world has changed so dramatically, that we have access to tools that weren’t around 2, 5, [or] 10 years ago, [and] that you may be the first person to apply these tools, that somebody else invented, to solve a problem.”
• [06:45] Jay uses a popular traffic app, Waze, which sold for a billion dollars with no revenue, as an example of the size of the market potential that technology allows us to reach with our ideas. You don’t have to be in the technology business to use social, mobile, and broadband to scale up.
• [08:20] How did Jay begin to understand the concept of disruption? Jay discusses a friend who found great success manufacturing and selling PC accessories like dust covers when PCs were new. Without ever learning how to use a computer, this friend sold his company for 135 million dollars. Jay asked himself what his friend had seen that he was missing. His friend had seen a simple opportunity. A similar thing happened when the iPhone came out. People ran out to buy the phone and then bought a $15 case to go with it. It’s about looking for the holes in the market.
• [09:49] The value-chain concept comes into play because so many people look at the totality of a business, but most parts of a business don’t generate a profit. Focus on capturing value and find the link you can disrupt. Jay gives four examples of businesses that have disrupted their markets: (1) Airbnb, the world’s largest hotel chain, has no hotels; (2) Uber, the world’s largest taxi company, owns no cars; (3) Facebook, the world’s largest media company, creates no content; and (4) Alibaba, the world’s largest retailer, has no inventory. All of these businesses were basically just a big data play. Take the essence of eBay, or any other two-sided marketplace, and realize that you can do this in any category and retain the value.
• [10:43] There’s a new way to look at a business that involves focusing on the part where you can capture the most value and not bothering with all the other parts. In the book, Jay states that a business or product consists of the sum of the value of five links in the value chain: (1) R&D; (2) design, (3) production; (4) marketing and sales; and (5) distribution. People think that they have to reinvent the entire thing or that billion-dollar ideas come from having an epiphany, but it is really about isolating the one piece of a business you can disrupt and creating a better value chain.
• [11:57] Jay says that the number one business for failing is restaurants. People think that if they have a good recipe, they could open a good restaurant, but recipe is probably the least important factor in a restaurant’s success. Somebody took a look at restaurant value chain and figured out that if you have too many items on the menu and people don’t order all of them in sufficient quantity, wasted food becomes lost profit. Jay gives a detailed example of Benihana, a nationally recognized name in the restaurant industry, that has built its success on a limited menu to reduce food waste and using shared seating arrangements to fill tables.
• [12:47] In the process of looking at the value chain, you look at the value chain as a whole, drill down to take a closer look at individual links in the chain, and find the one link that can be disrupted.
• [13:04] Jay asks what has changed in the way people do things that you couldn’t do before? He encourages us to apply modern tools to habits and problems nobody has developed a solution for yet. Jay challenges people to write down three problems a day for a month as an exercise. He gives an example that someone found through this exercise of monitoring prescription drug compliance with a timer integrated into the cap of the container.
• [15:30] If you disrupt a technology or product, you either create an entirely new market, consumer base, or user, or you destroy or displace the market for the technology it replaced. Jay uses a fun example from the movie Raiders of the Lost Ark where Indiana Jones shoots a sword-wielding opponent to illustrate the technological shift from knives to swords to guns. An example of a modern technological shift is the smartphone’s replacement of a wide variety of devices and tools. Jay asks, “What does that new world of people living with this device open up that you couldn’t do before? … When we talk about wearables or the internet-of-things, what are the next things that you can now do that solve problems that we didn’t have a way to solve? … This isn’t just for techies. We all use technology.”
• [17:25] Jay takes a glass-half-empty look at some technologies that are expected to displace workers in the years to come. According to Jay, “Disruption isn’t about what happens to you; it’s about how you respond to what happens to you. So, if you know all those things are happening, where [are] the opportunities? What are all the new things that you can do that put you surfing the wave of change as opposed to drowning under the tidal wave?”
• [18:29] Jay discusses an innovative and humanitarian application of 3D printing. An entrepreneur is using 3D printers to manufacture prosthetics for growing children. He can provide affordable prosthetics to young children who formerly would not have received one until their growth had slowed because of the cost to custom manufacture the device. To make this even better for the children, he went to Disney and licensed characters so that children can have a cool, character-themed prosthetic. This entrepreneur didn’t invent the technology, but he found a link in the value chain that he could disrupt, serves an underserved audience that will line up to buy his product, and makes the world a better place.
• [20:00] Jay discusses slaughter-free meat and plastic in over-fished oceans as opportunities.
• [21:41] Jay is dedicating the last third of his life to teaching people how to do this because he believes that our society is fundamentally changing. There are 2.3 billion millennials in one generation, more people than were on the planet in their grandparents’ generation. There won’t be enough corporate jobs for all of them. The educational system designed to produce factory workers will not give people the skills they need in a world that doesn’t need as many factories. This situation brings about the disenfranchisement of people, which leads to instability, can bring down governments, and changes our society. Jay suggests that we show all these people how they can be a couple of clicks away from knowledge, prosperity, great new markets, and equal access to consumers because most goods are digitally available globally.
• [22:51] Jay’s concept of becoming a disruptor and looking at your personal value chain involves seeing yourself as The Brand of One, the individual as a product. Why would somebody not buy you-the-product and how do you improve it? Jay’s concept of disrupting your personal value chain has four links: (1) R&D is perceiving your environment; (2) production is your actions and responses; (3) marketing and sales is how you present yourself to the world; and (4) distribution is how you spend your time and focus your energies. You start by understanding your personal value chain then present yourself to the world in a different way to rebrand yourself.
• [25:04] Jay talks about getting out of college during a jobless recession. He wanted to work in Hollywood creating special effects, but he couldn’t find a job. For $1, he printed 100 business cards for a non-existent computer graphics company (for which he did not even make himself the boss). With some hustle, he got hundreds of thousands of dollars of post-production work and then hired people with talent and skills who wanted jobs.
• [25:55] “Where do 3D printing experts come from? Virtual reality experts? Bitcoin experts? Internet of things experts?” They started like Jay did when he had $1’s-worth of business cards. Jay says, “They’re self-proclaimed experts who then work hard to grow and defend the turf they wisely stake out. There’s nothing stopping anybody from being the expert of the next big thing.”
• [27:58] According to Jay, “You’ve gotta be a little creative to rise above the noise in anything. If you’re looking for a way to blaze a new trail without creativity, wrong! No one ever led a nation or a company by following in the footsteps of somebody else. … There’s so much opportunity. Ideas are easy. Execution takes work. Success isn’t guaranteed, but if you work at it, you will find out what it takes to be successful, and you will be successful.”
• [28:32] In the book, to get yourself into the mindset of figuring out where you’re going and what you want to do, Jay gives four different segments to develop steps for a disruptor’s map: aspirations, priorities, resources, and deadlines.
• [28:54] Jay states, “If you don’t know where you want to be in five years, congratulations, you’ll definitely not be there. If you don’t know how to get to there, that’s OK. Work backwards from a goal but give it a deadline. … So, you work backwards … and you don’t need to know all the steps ’cause here’s what’s gonna happen: once you have that insight, you only need insight and drive to succeed. Those are the only two things [you need] in life. Everything else can be hired. Once you have that insight, you’re gonna start exploring down that path. You’re gonna’ start talking to potential customers. You’re gonna do all these iterations of your business in your head when you’re not burning capital, when it doesn’t cost any money, and everybody is trying to kill your idea until you come up with that zombie idea that can’t be killed. And when you’re doing that, you’re going to uncover things that nobody else [has] discovered yet because nobody’s gone that far down the path. And at that point in the path, you may pivot in a direction that you didn’t even see.”
• [28:50] Jay gives an example of three guys who started an online video dating service named Tune-in Hook-up. Nobody wanted to use the dating service, but they looked at their data and noticed that a lot of people were watching the videos. They pivoted into YouTube and became billionaires. Most successful businesses have pivoted. LinkedIn started as a resume repository. eBay started as a place for collectors to find old, used things. Jay says, “You’ll find [your pivot] if you’re looking at your data and you’re paying attention.”
• [31:22] Jay discusses his concept of the zombie idea: “Everybody always tells you, ‘Nurture your idea. Fondle it. Help it to grow.’ That’s [wrong]. You wanna figure out every way that idea’s gonna fail because … the second you go in the marketplace, that’s what your competition and reality [are] going to do to it. [F]ind … ten people who will benefit from this business and will spend time with you (not friends or family). … [H]ave them tell you [what’s wrong with it] … [and have them] come back again and again until they come back and say, ‘Oh, I would pay for that. That makes sense. Wow, that’s useful!’ Then go with that data [and get funding]. … There is no shortage of capital. VCs last year put $40 billion into the hands of startups. Crowdfunding is now greater than that.”
• [32:23] Jay believes that there is only one advantage the United States has on the rest of the world, and that is that we do not have a fear of failure. He uses the example of two guys who started a company to synchronize traffic lights. The idea was way ahead of its time and bombed. But they didn’t give up when their first company failed. The next company Bill Gates and Paul Allen started was Microsoft.
• [33:27] Jay discusses the difference between failing and failure: “Failing is trying something that you learn doesn’t work; failure is throwing in the towel.” Jay suggests that you could talk to people involved in the early stages of any now large and very successful company and have them tell you a story about a board meeting when they were thinking about pulling the plug before they pivoted or made some other change. Google was once on the table for Excite to buy for $600,000, but the deal fell through.
• [34:03] Jay goes on to say, “We call private companies that have market caps over a billion dollars unicorns. There are now over 200 unicorns. The size of our market now that we’re all interconnected is massive. You can scale from zero to a billion very, very quickly, and it doesn’t take anything special except really looking at the market from a disruptor’s mindset.”
• [34:30] To help listeners, Jay offers a free copy of his 40-page companion workbook toDisrupt You! at jaysamit.com or by reaching out to him on Twitter @jaysamit.
• [34:56] To find ideas, start with simple problems and start looking to see who else might have that problem. Jay emphasizes, “The more people you solve [a problem] for, the more money you can make.”
• [36:13] Concerning the ability to get started, Jay says: “Now, there’s no excuse. You can get the learning for free. You can reach your market for free. You have social media. The cost of launching a startup is 95% cheaper than it was ten years ago because all the networked architecture is in place. All you have to do is be the catalyst for what the change is, and Disrupt You! tries to spark you.”
• [37:24] Concerning our ultimate motivations, Jay says, “The purpose of life is to live a life of purpose. … If you’re not fulfilled by what you’re doing, and you’re staying in a job you don’t like, how long are you gonna stay? A year? Two years? Five years? Are you gonna trade your whole life, and why would you give up the only life you have for something you don’t want? … You can be what you want. You can be successful in the field that you choose to be. The only thing stopping most people is fear.” In the book, Jay refers to “the illusion of security.” Many people are fooled into thinking they have security because they have a good job. Jay cites that of the original Fortune 500 companies, only 57 are left on the list. Jay states that this “illusion of security” robs us of ambition and autonomy.
• [38:59] Jay briefly discusses positive thinking stating: “Scores of scientific studies have proven that visualizing success makes all things possible. … When you are in a positive state of mind, it releases dopamine. It lights up the neurotransmitters across your synaptic nerves like a Christmas tree, and suddenly … you are more creative, you increase your intelligence, you increase your energy, and you even close more sales. Success doesn’t make you happy. Being happy creates success.”
• [40:17]: See chapters 9 through 13 of Disrupt You! for additional information and examples about disrupting each link of the value chain.
• [40:25] Jay discusses the concept of using other people’s money (OPM): “What if I told you that I could get you millions of dollars from people who don’t want you to pay it back, aren’t gonna charge you any interest, and don’t want equity in your company? You should be leaning into that speaker right now and listening. Here’s how it works. You’re going after a specific audience. Solve for that audience and [ask yourself], ‘Who else wants that audience?'” Jay gives an example of getting $60 million from McDonalds to help him launch Sony Connect (a digital music store to compete with iTunes). Through a large campaign, McDonalds had an increase in same store sales and Sony Connect got 20 million new customers; everybody was happy. “Solve for others and you’ll solve for you.”
• [42:32] Jay gives the following recommendations for things that have had a profound influence on him: (1) “Have kids. It’s a great motivation. You don’t wanna let ’em down. You won’t give up. I think fear either immobilizes you or pushes you to challenge your perceived limits.” (2) “Find a mentor. I really think you can find people from an earlier generation that have wisdom, knowledge, [and] connections to share that would just like [to have the validation] that they have learned something that they can pass on.LinkedIn is a great tool for that.” (3) “Travel. … Getting outside of your norm and your culture allows you not just to see the world different, but you’ll see yourself and what you think of as the normal way of doing things [differently], and you’ll get insights from that.” (4) “Life-long learning. Commit to life-long learning. Learn something every day. Get out of your comfort zone. Expand your universe.” (5) “Enjoy the journey.”

Resources Mentioned

• Disrupt You!: Master Personal Transformation, Seize Opportunity, and Thrive in the Era of Endless Innovation – Book by Jay Samit about disruption. According to Jay the book breaks into three part: (1) disrupting yourself; (2) disrupting a business or industry; and (3) disruption to solve big, non-business, world problems. Click to listen at [04:05].
• Disrupt You! Companion Workbook – 40-page companion workbook to Disrupt You! available at jaysamit.com or by reaching out to him on Twitter @jaysamit. Click to listen at [34:30].
• LinkedIn – An online social network for professionals to connect with colleagues, companies, mentors, and more. Click to listen at [42:32].
• The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work – Book by Shawn Achor. Click to listen at [38:59].

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