December 9, 2025 – Capital Evolution Seth Levine and EO Founder Verne Harnish

Transcript – 12/09/2025

Intro 1  0:04
Broadcasting from am and FM stations around the country. Welcome to the Small Business Administration award winning school for startups radio where we talk all things small business and entrepreneurship. Now here is your host, the guy that believes anyone can be a successful entrepreneur, because entrepreneurship is not about creativity, risk or passion, Jim Beach.

Jim Beach  0:26  
Hello everyone. Welcome to another exciting edition of School for startups radio. We got a fantastic show for you today, and I hope you’re getting ready for a holiday season of fun, no matter what holiday you are celebrating. And then we all celebrate your new year. I hope you’re ready for some fun. And the show, we got a great one Seth Levine is with us, venture capitalist and author of a new book called New capitalism evolution. I think that’s the title. I’m not 100% sure on that. We’ll check and get it right here in a second, but it’s on new capitalism and how the system needs to change. And so I cannot wait to hear about that, because our system is on test every day, and a lot of people are voting in the other direction against capitalism. So I’m a capitalist, so I can’t wait to talk to Seth about this after that burn Harnish is with us as a greatest hits. He was on the show a while ago. He is, of course, the founder of EO entrepreneur organization and perhaps one of the top 10 leaders in the entrepreneurial education space. This is one of our greatest hits. As you may know, our server went out of business, and so we need to get a lot of stuff reloaded back up for you to listen to the greatest hits. This is certainly one of them. Vern is someone you need to know about and hear from. So this is a greatest hits and part of our great show, we’re gonna get started in just a second with Seth. 

Jim Beach  2:04  
We are back and again. Thank you so very much for being with us. I am very excited to welcome back to the show Seth Levine, he is a California, I’m sorry, not California, Colorado based boulder venture capitalist. He is partner at Foundry, which he started back in 2006 he was on the show three or four years ago to promote his book, The New builders. And today, we are excited to talk about his new book with Elizabeth McBride, who’s been on the show twice before. The new book is called capital evolution, the new American economy. I’m very excited to talk about it, because the American economy is changing right now, and I’m excited to learn about that Seth, welcome back. How are you doing?

Seth Levine  2:52  
Hey, Jim, good to be back. Thanks for having me your fifth visit.

Jim Beach  2:56  
We do give you a green jacket, just like at Saturday Night Live.

Seth Levine  3:02  
So sounds good, or the masters. I’ll take one of those two of them into that.

Jim Beach  3:08  
Before we get into the book, I have been arguing that the venture capital market is frothy with AI silliness. I have, you know, been judged the world by the pitches that come across my desk. I’m very much like you, and I get different pitches for people who want to be on the show. And, well, it was one AI, and then it was three AI, and then it was 12 AI, and now we’re at 100 AI, where we get silly stuff, you know? AI for your farming equipment, you know, which? I know that there are some amazing innovations in farming, but AI for farming, let’s get real. That’s not a market opportunity. Is the market frothy?

Seth Levine 3:58  
The market is definitely kind of remind I’ve been in, I’ve been in, I’ve been in venture for a long time. So I’m going to date myself with what I’m about to say. It reminds me a little bit of the sort of right at the beginning of the.com bubble at late 90s. And everyone sort of appended.com to their name because they wanted to make them seem more kind of internet savvy. And I think there’s a little bit of that going on in AI, but of course, there’s, there are a lot of AI native companies that are being funded, or they’re trying to be funded, but, but everyone else is adapting their story to include some AI angle. Now I would say this, and this might be curious to get your response to this. I, you know, I used to think of these, these sort of asset bubbles inside of venture specifically, right? So this private market asset bubbles as as problematic at times. But now I’ve come to realize that there are believe that they’re more a feature than a bug, and that actually it’s not such a bad thing to have a sector sort of blow up in the way that AI did venture historically over funds, every new, bright, shiny object. Yeah, but then what happens is a bunch of interesting things kind of fall out of that and, and maybe that’s fine, right? And, of course, there’ll be a bunch of venture funds that are, you know, funded by pensions and other things like that, that that have challenges because they fund too many companies at too high valuation, and those companies don’t end up being worth anything but, but that’s a very isolated effect inside of our economy, and the overall effect to the broader economy is this sort of acceleration of new technologies. So it’s, I mean, on the one hand, I’m cautious, just as a technology investor, I don’t want to be that fund that, you know, invest in overpriced AI companies. So we’re being careful about that. On the other hand, as I think about it, from a systemic perspective, you know, maybe this is what our economy actually needs as we think about new technologies.

Jim Beach  5:47  
What do we need? What specifically, you talked for two minutes and then said, This is what we need. What specifically is what the economy

Seth Levine  5:55  
Let me try to be clear that the idea that we it’s hard to predict exactly, exactly where new technologies are going to impact the economy most. And so it’s not necessarily a bad thing that you have a lot of entrepreneurs chasing AI or chasing quantum right? And that’s okay, and that those that a bunch of those entrepreneurs get funded, we don’t know at the time of funding which ones are going to be successful, which ones aren’t going to be successful. So maybe successful? So maybe it’s okay, too much funding going into this new sector that has so much promise. At an individual investor level, a bunch of people are going to lose money at an economy level, we actually accelerate that the pace of innovation. That’s what I’m trying to say

Jim Beach  6:37  
I didn’t I thought you were trying to be very specific, mean for you to say the whole thing again. Yeah, I 100% agree, as long as it doesn’t spill over and hurt. You know the non investor, you know the plumbers, 100% as long as they aren’t hurt by the economy collapsing or having a major adjustment that gets them out of work for two years. I don’t think right now that the tech bubbles will have as much impact as the.com bubble did. I think that we’ll be a little bit more immune to it now, and it’s not going to be as large a percent of the economy, I just don’t think that it will have as much impact. What are your thoughts?

Seth Levine 2  7:28  

I mean, in terms of the bubble eventually deflating? I think that’s absolutely true, and your point is very well taken. Right? Asset asset bubbles broadly, can be dangerous. Right? The housing asset bubble was not good for our economy, and specifically it was not good for the economy because it touched so many people in our economy, whereas the AI asset bubble at the moment is very much contained within the venture asset class. And so not great if you are holding a broad set of funds in the venture world, at least the wrong funds, but not necessarily bad for the plumber. Now AI as a technology has the potential to be very disruptive, sort of, broadly across our economy. And those that conversation actually is separate from whether this is an asset bubble and and you know, whether that bubble is good or bad, and that’s something that I think we should should be very careful about and thoughtful about, right? And one of the things we talk about in the new book, is it’s not sort of a book about AI. It’s a book that traces the history of capitalism, talks about why capitalism itself works, generally speaking, quite well, but also raises the alarm for the type of capitalism that we’ve been been sort of operating under for the last 50 years or so, and talks about some of the lessons we didn’t learn from, for example, the 90s, when we had a similar disruption in the overall markets. In that case, it was sort of the globalization of the supply chain and outsourcing of quite a few manufacturing jobs. We didn’t do a very good job of being thoughtful about the disruption to our economy that that took shape then, and we’re we’re seeing the ramifications of that still reverberating here, 20 years later.

Jim Beach  9:04  
I used to work for the Japanese government Seth, specifically the part of the Japanese government that plans for the economic future of Japan. They have a organization called MIDI, M i T i. Then it changed to m e, t i, the Ministry of export, trade and industry, I guess, now, and they set economic goals and then go and tell all of the companies this is what we think you should do. They’re the people who went to Toyota and said, Toyota, you need to go upscale as well. But then they also told that to Honda and Nissan, and everyone else. Does America need that kind of thing? Some sort of economic planning system that’s part of the government.

Seth Levine  9:51  
No, hard stop. I just I don’t believe that collectivism, communism, however you want to sort of describe that.

Jim Beach  10:00  
It’s 100% suggestive. You know, it’s the smartest people in the government are actually the entire system. Go there. That’s the most prestigious job there is. They just sit around put out white papers.

Seth Levine  10:13  
Yeah, that’s not, sort of my view of the economy, and I am a capitalist. I sort of joke that I’m a capitalist by by job title as well as inclination as a venture capitalist, I think that the markets do a better job of that. Now, there’s certainly a role for government to play in setting broad economic policy right. We, and we’ve seen this both under the Trump administration, right in a in some ways, His tariff policies are an attempt to do that. We certainly saw it…

Jim Beach  10:43  
Tell, what did you think of that?

Seth Levine  10:46  
I think that picking specific companies is crony capitalism. And I think what he did with with Intel did not make sense. I think if, if they, if the government had wanted to attach some sort of equity upside for the American taxpayer to in that case, the chips act, I think that would have made a lot of sense. It should have applied to all of the companies, right? Why single out Intel? It was one of a couple of dozen companies that received money under that same act. So I’m not quite sure why Intel, all of a sudden, had to turn around and be subject to that. And again, it’s not because I don’t think that that the Act should have included that. I think that makes sense, that if we’re going to do it for Intel, we should do it for the other couple of dozen companies that receive funding under the exact same mechanism and same same bill.

Jim Beach  11:35  
What kind of deals are you looking for at Foundry?

Seth Levine  11:38  
So we continue to be quite active, sort of across the tech landscape. We really like marketplace investments. We in particular, are interested in a very specific kind of AI, which is like verticalized AI, so AI that is very specific to certain industries. And then we, as we always have, we really like what we call glue, but connected technologies. So something that a CIO or CTO might might purchase, we think that there continues to be a lot of innovation in these spaces. So that’s, generally speaking, what we look at, but it’s, you know, Foundry is a pretty broad platform. Now we have nearly 4 billion in assets under management. So there’s, there’s quite a bit there.

Jim Beach  12:23  
All right, what’s broken with our economy today?

Seth Levine  12:28  
The way that we describe it in capital evolution, the new book, is that, and this won’t, I think, be a surprise to anyone who’s been paying attention, the overall economy has done, done reasonably well, but we run the risk of sort of the old Jeff Bezos joke that Jeff Bezos walks into a bar and the average person in the bar is a billionaire. It tells you absolutely nothing about who’s there. And what we’ve done is we’ve ignored the specifics underlying the economic growth in the United States. And what’s happened is that economic growth has been highly concentrated, and that’ll be a surprise to no one who’s paying attention. But by every measure, income, wealth, etc, too much of the gains are going to too few people. And we make the argument that that’s that’s not good for anyone, including the people who are concentrating the gains, because it’s creating instability in our economy. It’s a byproduct of the type of capitalism that we’ve been operating under for the last 50 years, which you could call neoliberal capitalism. You could call Friedman style economics, after Milton Friedman, who described a form of capitalism where shareholders were the only constituent that mattered. And that’s starting to change in 2019 the Business Roundtable, which is a group of CEOs of 200 or so of the largest companies in the US came out with a statement that said, hey, actually, there are other stakeholders in businesses that corporate leaders, boards, CEOs should, should care about, including suppliers, employees, the environment, etc. And our book talks about this shift from this very strict form of of shareholder only capitalism to something that recognizes that companies have other constituents and that for their long term benefit, they should, they should be paying attention to more than just the short term bottom line, and by way of example, that neoliberalism really hasn’t been working, that effectively, the half life of the Fortune, Fortune 500 is 20 years, right? So it’s not like short term thinking and neoliberal capitalism has led to the perpetuation of this sort of same set of businesses, right? 20 years from now, 250 of the companies are currently on the list of the Fortune 500 largest companies in in the US won’t be there anymore, right? So it’s not even necessarily working for the individual companies. So the book is a sort of a call to action for that, while also being a defensive capitalism, which it feels like right now is is actually important, right? We just elected a socialist mayor in new. Work and people and Seattle, yeah, good point. We essentially had that in Minneapolis for a little while. They’ve now kind of retreated back. You could argue that we had a version of that in San Francisco, again, has retreated back under Daniel Lurie. And so it’s probably, I mean, as crazy as it sounds, it’s probably a good time to defend capitalism a little bit, and even more so now than when we started writing the book. So we got lucky on timing from that perspective.

Jim Beach  15:26  
All right, I am also very much a capitalist and believer in it, but your Bezos hair salon analogy is profound, and it took me a second to figure that out. I assume what you mean is, if there’s 10 people in there, all plumbers and Bezos walks in, the average of the 11 is now a billionaire, and the plumbers are now, by statistically, billionaires as well, because he has so much wealth in one spot. My favorite thing. Seth, by the way, I just released a new book on the environment, and my thesis in the environmental book is that entrepreneurs are already saving the Earth, you know, already. And I introduce there’s 216 that we identify, and I highlight five here in the United States that are already solving the environmental problem, and point out that, anyway, I’m going to go off tangent there.

Seth Levine 16:30  
No, I like that, though. Jim, right? I mean, I think what you’re describing is very much how I feel as well, which is, I’m a techno optimist, right? So I, you know, we talk about, sort of the challenges that we have. And I would put AI in this category as well, like I’m I ultimately believe in the long run that technology, humans, human ingenuity, will solve many of these problems, but we need to be deliberate about it. And and we talk about the environment in the book, and we also talk about the middle class in the book, is kind of the same, same sort of actors in our economy, which are, these are things that we extract from under our sort of neoliberal form of capitalism, right? So the environment was, was a resource to be exploited, and the middle class was also treated as a resource to be exploited. And so we want to, we argue in the book about ways to get away from that, right, that ultimately is not long term, sustainable, and we think, frankly, is what’s responsible for the rise of populism in the US, that some political instability that we’ve been seeing on, by the way, on both the left and the right, right, if you look at it’s the reason that so many Mamdani voters in New York were also Trump voters, which you would think would be anathema, right? Mamdani is a socialist. Trump, clearly is not but the underlying economic pain that each of those two politicians have tapped into is the same.

Jim Beach  17:50  
Well, the idea that Elon will be a trillionaire in Bezos with his two yachts, I was gonna get to the fact that he has two yachts that follow him around, a one for him, and a yacht to support the yacht that he is on, which, to me, just boggles the mind. Crazy. You know, when I hear that we’re having trillionaires or people close to it, and the bottom half, or the bottom 75% is struggling mightily, even I wonder if the system has gone askew. You know, the idea is we have to have money flowing from the top. Okay, well, what if there’s too much money at the top and it just sits there? Or, I don’t necessarily believe that, but that would be the easy argument for mandani to make. It leads to…

Seth Levine 18:42  
Well, when you don’t feel, Jim, like you have a stake in the system, in the market system, it’s easy, I think, to decide that, well, socialism sounds great, like people are just going to give me stuff. And I think that, and that’s not to in any way trivialize the challenges that a pretty large group of people in the United States are facing, and I think we ignore it, for those of us that care about sort of the overall vibrancy of the US economy, we ignore it to our peril, right? And so one of the arguments that we make is that for people like you and me, who have been successful in this economic this market, free market system, we have to pay attention to the success of other people in the in the system, or lack of success of other people in that system, if we want that system to perpetuate. And there’s no better example than Mamdani being elected on a on a very clear socialist platform, which, by the way, history shows will not work, right? There is, there is, there is tons of examples in history of socialism collapsing on itself, and there’s really no example of socialism actually working. And the longest socialist experiment is Cuba. And right now, if you go to Cuba, you can’t get even as a tourist, where you have plenty of money. You, you actually can’t get basic food. And your needs matter. If you go there you, you would be well advised to pack a lot of energy bars and things like that, because you doesn’t matter how much money you have, that economy is completely the market has completely failed there. So you know, those of us that believe that and that, or that know that, I would put that in stronger language, I think would be served well to at least look around us and see what happens when people feel like they don’t have a stake in the system. And you know, we spent a lot of time in the United States talking about, how do we Slice the Pie up? And I understand why that’s an important discussion. I would prefer to spend at least some amount of time talking about how we make a bigger pie.

Jim Beach  20:43  
So what are the conclusions of the book? We only have about four minutes left Seth, so what changes need to be made? What do we need to do?

Seth Levine  20:53  
Yeah, well, I won’t give the whole book away, and hopefully that this, hopefully this conversation, has peaked some listeners interest in going and picking up you can find it on Amazon. You can find in your local bookstore. Book title is capital evolution and so but ultimately, the book is pretty optimistic, right? I mean, I think that that, and I think that’s reflective of of my own views, of my co author, Elizabeth McBride’s views as optimists around how we can change some things about our economy and and provide more opportunity for more people. By the way, we’ve done this in the past, right? And we had a highly concentrated economy going into the late 1920s obviously, that eventually resulted in the Great Depression, which is not great. I’m not saying we’re headed to that, that level of of challenge, but, but it is a time in our economy that was somewhat similar, and if you look at particularly the period after the second world war through about 1970 which is when Milton Friedman came out with his shareholder only idea, the economy was actually growing much faster than it is today, and was doing so by providing more opportunity for more people. So the book outlines a bunch of very specific ideas for how to get to that. So if you if you’re interested in that, you can check it out. It’s sort of towards the end of the books. We really try to set up why all of this matters, and then talk about how to do things like create a broader ownership economy, how to grow the pie larger, and how to share prosper, prosperity more broadly, while not taking more from the people who are sort of doing best in our economy, but instead lifting up those people that are struggling, getting more people, frankly, into the capitalist class. And one of the big, big arguments in the book, is creating more capitalists, more people that have a stake in the market economy.

Jim Beach  22:39  
Does the dollar remain the default method of, you know, global business and transfer? Does some other currency become a global the global currency?

Seth Levine  22:56  
I don’t see another currency taking over the dollar. And frankly, I think we would be in real trouble if something something did. I think that they’ll, I’m very interested in stable coins, and I think there’ll be a rise of stable coins specifically for transaction processing and but ultimately, I think that that’s, that’s still dollar denominated, right? Stable coins are still backed by US Securities. Frankly, they’re they’re safer than money in the bank in some respects, because they’re back to dollar by dollar, as opposed to your, you know, your deposit in the bank, which is backed more like 20 cents on the dollar, from from a reserve perspective. But I don’t see another currency taking over the US, US Dollar as the sort of global reserve currency. I hope you feel the same way

Jim Beach  23:42  
For a while. You know, there was talk that there would be a Petro something or another, a petro dollar or something. I you know that would still, I would still remind America everyone that America has more oil than they do, and so.

Seth Levine  24:00  
100% we’re also the largest oil producing agent. Nation in the country, or, excuse me, the world.

Jim Beach  24:05  
So you know, maybe our dollar should be dominant there as well, you know. And go back and put your idea away. So I believe the dollar will remain. There was a question. We get really political here, when I find weak leadership in Washington, the petrodollar becomes more discussed, and when we have strong leadership in Washington, those ideas go away.

Seth Levine  24:33  
Oh, yeah, absolutely and I think, but I think that the reality is, at least for the medium term, there’s no alternative, right? And I think there will be constant, there will always be noise around this and but the challenge for the for other countries is the next largest economy is China, and China is not a reliable that you want, is not a reliable reserve currency in any way. No one’s no one is considering that, right? So for the moment. There was a there was a time when maybe the Euro was sort of going to be this, but it’s just, it’s too it’s too fractious. There are too many central banks trying to manage the euro. There’s no sort of integrated policy. And so I just, I just don’t see any other currency that it’s going to usurp the dollar, certainly in the short to medium term

Jim Beach  25:21  
A huge percent of my searches are answered by AI. So instead of Googling them, I might go into chat and find my answer and then not have to go any further. I think a lot of people are doing that. We’ve already had guests Seth, they’re coming on the show to talk about AI. You AI ing, your site, making your site get found better in an AI world, you know, sort of like SEO, but instead of that chat. EO, what are your thoughts on the half life of Google? You brought out that half life of the businesses global, 250, or 500 or half of them are going to go away. Does Google finally have a threat?

Seth Levine  26:09  
Yeah, I think that. I mean, look, this is a great example of of creative destruction, right, which is this sort of wonderful aspect of of capitalism, where sort of small startup companies, new ideas nip at the heels of these larger players. And you know, you don’t need to look any further than chat, GP, open AI or anthropic, and there’s a bunch of companies that are, are coming to challenge the dominance of a platform like Google. If you’d asked me a year ago, maybe a year and a half ago, I would have said I thought Google was in real trouble because of the exact sort of features that you’re describing of AI, which is that you get one answer. I actually think Google has done it, and I was worried that they were going to do, I don’t know what AT and T did back in the day, which is to sort of hold on so tight and allow themselves to be disrupted rather than disrupting themselves. And I’ve actually been really impressed with what Google has done to adapt its search and its and sort of how it monetizes that search in an AI world. They also benefit from having this massive advertising platform. And you know, that’s cash flowing so, so large. You know, the numbers are so large that they’re able to, they’re able to actually support a bunch of other businesses. But you know, if you look at their last quarterly reports, it’s actually, it’s really strong, what they’ve done in AI and so I well, I thought they were going to get disrupted 18 months ago. I’m much more optimistic about Google, and again, I think that that’s actually the process of creative destruction working quite well, which is it’s forcing existing players to adapt and adapt in ways that somewhat threaten their core business, but sort of for the long term, are ultimately in their interests. And I give Google some credit for that. I think that many companies would have held on really tightly to their sort of core search assets and just said, Well, we’re just going to keep doing it the way that we were doing it. And instead, they have, and you can see this if you go search for anything on Google, they’ve actually adapted to the new AI world quite quickly. And by the way, they’re they are putting a lot of money into Gemini, their AI platform, and to make sure that it’s keeping up with open AI and Claude from anthropic and grok and others.

Jim Beach  28:30  
How do we get a copy of the book? Follow you online. Send a proposal to foundry, All that.

Seth Levine  28:34  
Yeah, appreciate it. You can find the book at the capital evolution.com or just search for capital evolution book, and you’ll find different places that you can buy it. You can find me at Seth levine.com all my contact information is there as well.

Jim Beach  28:49  
Thank you so much for being with us, and we’ll look forward to having you back for your third time soon.

Seth Levine  28:55  
Thanks, Jim. I’m going for that green jacket.

Jim Beach  28:58  
It’s a valuable, valuable thing people fighting for of course, I love it, and we will be right back.

Intro 2  29:19  
Oh my gosh, I’d love the opportunity to do this. Thank you, Jim, wow, that’s, that’s, that’s a great one. You know, that is a phenomenal question. That’s a great question. And, and I don’t have a great answer. That’s a great question. Oh, that is such a loaded question. And that’s actually a really good question. School for startups radio.

Jim Beach  29:35  
Welcome back to school for startups Radio. Thank you so much for being with us. I hope you’re having a fantastic holiday season, getting ready for some family fun and festivities, some wonderful food, and getting ready to make your New Year’s resolutions for a 2015 that is quickly coming upon us. I am very. Excited and honored to introduce you to my first guest today. His name is Bern Harnish, and he is the owner of a company called gazelles, which does around the world entrepreneurship education. He is also the founder of EO Entrepreneurs Organization, which is one of the best organizations out there, and he was the chair there for 15 years. He is also a syndicated columnist called the growth guy for a little publication you may have heard of called Fortune Magazine, and he has written one of the most definitive business books out there, and he’s got a new update to it, called Scaling Up, mastering the Rockefeller habits, 2.0 why a few companies make it and the rest don’t burn. Welcome to the show. Thank you so much for being with us today

Verne Harnish 30:51  
Jim, thanks for hosting me. I greatly appreciate it here at the end of 2014

Jim Beach  30:55  
Well, did you have a good year as an entrepreneur? Burn? I know you’re also a dad, you’re also a writer, you’re a husband, you’re magician, you have so many hats to wear. Let’s talk about entrepreneurship. Good Year bad year 2014 for Vern the entrepreneur,

Verne Harnish 31:13  
Yeah, you know, Jim, it was a great year. And so very, very busy. I think the whole world is obviously coming out of whatever slump we thought we were in. I think all signs point up with this big kind of bubble moving through the global economy, this billion four people moving into the middle class. So my view is, if you can’t make more money, not that that’s the only reason entrepreneurs are in business, but can’t make more money this decade than you ever thought possible? No, it’s because we screwed up the markets there. The customers are there.

Jim Beach  31:47  

I love it. I love it. It’s up to us then. And is a new year a good time for resolutions? Are you a goal writer? Are you going to write down some new ideas for the next year? What are your recommendations as we move into a new year.

Verne Harnish 32:01  

Vern, well, we do. Jim, we you know, the thing we’re probably best known for from the original book mastering the Rockefeller habits, is this one page strategic plan. You know, we talk about as entrepreneurs, we got to get, you know, everybody on the same page. But you know, you have to have the page for everybody to get on. And so we’ve had about 40,000 companies now use this on a regular basis. It’s something I developed when I was chairing and running that executive program that we hosted at MIT for growth companies. And we’re really excited. We’ve got a new tool we call the one page personal plan, and we know that, particularly as entrepreneurs, we’ve got to be clear what our own personal goals are, and by being clear, then it’s much easier for us to align and set what are the company goals. And so we’re excited about this new one page tool and and this kind of 15 minute daily routine that we’ve designed for people personally, that mirrors this 15 minute daily huddle that, again, we’ve become well known for, to help people actually execute their plans in 2015 and beyond. All right, all outlined in the new book.

Jim Beach  33:14  
Tell us about the one page plan. What goes on there, what does not go on there, what are the important pieces?

Verne Harnish 33:22  
Well, I think the first key is, at least there’s there’s not a lot of the places, there’s not a lot of space to write. Now, if you can’t state what it is that you’re trying to accomplish, simply from your core values to your purpose to those three brand promises that you’re making to the marketplace. You know the reasons to buy from you instead of someone else, and then ultimately, what is that single priority you’re going to focus on in the next 12 months, in the next 90 days, that’s all encompassed there on this one page plan. And we have a tool we call division summary that lets you kind of summarize it so you can share it with everyone around the world. What we’re really against, by the way, is these vision statements. You know, people write these kind of long paragraphs, they angst over them, and the reality is, no one’s going to read remember it the minute it’s been printed. And one of the reasons why we break our phone numbers up. You know, if somebody gives you seven numbers real quick instead of three numbers and then pause and then four numbers, you know, it’s much harder to remember when it’s all jumbled together. And so we like people to be very clear, these are our handful of core values that any startup ought to be, you know, aware of from the beginning, what is the, why? The real purpose, the thing Simon Sinek has been pushing, you know, through his writing, what’s this, then, big, hairy, audacious goal, you know, what’s for Everest that we’re going to we’re going to achieve where we go within the next 10 years? And then a few more of these, like our brand promise and our priorities, that’s it. And keep those set. Don’t jumble them together.

Jim Beach  35:02  
All right, what are the brand promises that really ring strong? Burn? Are there any categories that we can copy from others, any examples that we can use? What does a good brand promise look like?

Verne Harnish 35:17  
Well, again, it’s typically three things. It’s not four. It’s not two. That’s Robert Cialdini, you know, the king of influences work if you’re going to try to convince somebody to buy from you. Olis to 10 is disastrous. And it’s like Southwest Airlines, you know, from the day they launched, Jim, it’s always been low fare. There’s always one you lead with, and theirs is low fare. Then there’s always two others that support it, lots of flights. So it’s one of the things that make them popular. If you missed the five o’clock, there’s a six o’clock, a seven o’clock and an eight o’clock that you can catch. They promise eight flights a day between points, and then lots of fun. And so low fare, lots of flights, lots of fun. They call it the three Olis, or sometimes they shorten the three F’s. And it’s a really focused promise that they deliver on. My good friends over at Rackspace, Graham lesson, student of mine at 1999 today, I think companies were something around six to 7 billion. You know, they labeled their overall promise, Fanatical Support. In fact, that became, you know, the key brand, bigger than almost Rackspace. But underneath that was three very measurable and that’s the key. These things have to be measurable, not just hollow promises. And so they said, Look, first thing we’re going to do is promise uptime. Now you want your servers to run, and I’m sure a lot of your audience uses, as we do, rackspaces servers. Number two, if something does go bad, you want to be able to pick up the phone and not get an automated attendant, but you want it answered, and in their case, within three rings by a level two tech, because that leads to number three. You do not want that call to be transferred, and so that’s what they mean. It’s very, very concrete. That’s what Fanatical Support means. And Graham and the team have been able to take that company to something north of 6 billion in market cap. With those three promises

Jim Beach  37:20  
Are measurable goals always numeric then, Vern?

Verne Harnish 37:23  
Well, there’s different kinds of goals on the one page plan. So if you’re looking at something like a purpose, you know, Sony said we really want to change the poor quality image of products in Japan now, at some point, yes, you can measure that and know when it may be crossed over that point. So that’s maybe a little fun here. But everything else on the one paying strategic plan, absolutely, you’ve got to be able to boil it down to hard metrics.

Jim Beach  37:57  
All right. How did you get started as an entrepreneur? Vern, let’s jump back to the beginning of the story. Just quickly. Did you leave school thinking you were going to be an entrepreneur? What was your background like?

Verne Harnish 38:11  
Well, you know, I think it happens a lot of entrepreneurs. It’s kind of thrust upon you. And back when I launched, I’m 55 so this is many, many years ago, 40 years ago, in fact, first it wasn’t cool to be a young entrepreneur. I remember, you know, the days when everyone’s attitude was, I mean, the corporate man was still the goal. And parents attitudes towards students, their children was, hey, that’s cute, but when are you going to get a real job? But our case, I grew up around entrepreneurs. My grandparents were entrepreneurs. My dad had a company, and then he and his partners lost it in the 73 recession, and on my 15th birthday in 1974 we moved out to Kansas, and I went from having this kind of beautiful, privileged life in Littleton, Colorado, to my dad and I jumping into a little business. We launched repairing appliances for Marvin Ryan and his Sears store catalog star in Kinsley, Kansas. That was the start of it. Then did appliance repair business got in the HVAC business and the rest of history. And then in 83 co founded this group called ACE association of collegiate entrepreneurs while I was in college. Tell us about that. Well, I was fun. We you know, again, it wasn’t a real popular thing to be an entrepreneur, but the entrepreneurial movement was picking up at the colleges and universities. I think primarily because Steve Jobs. I’ve always considered Steve kind of the guy that finally proved to the world that a kid in his 20s could build a multi billion dollar company. And so in 83 co founded this group called ACE early participants, Michael Dell, Mark Cuban, 1986 I hosted the big event that was Steve Jobs, first public speech after being fired from Apple. Something very, very painful, obviously, for him. And it was in that organization that that we took worldwide, that morphed in 1987 into Yeo, Young Entrepreneurs Organization, which today is just called EO, because all this young folks turned old, and we, we got rid of the why, and today it’s the largest entrepreneur membership organization the world. We got almost 11,000 members and 147 chapters, and I think 42 countries, or something like that.

Jim Beach  40:39  
All right. And why is it worth the money? It’s not free, it’s expensive. It’s, I don’t know, a couple $1,000 a year or something. Why Vern, should my listeners join EO? What will they get out of it? What is the intrinsic benefit?

Verne Harnish 40:57  

Well, you know, I I borrowed from my dear friend, Joe Mancuso, who wrote one of the original kind of business plan books, this idea that it’s okay to be independent, but no reason to be alone. And as you know, being an entrepreneur at the end of days a very lonely affair. You know, you quickly, you know, become almost alienated from your your friends, and you’re often isolated away from your family because how busy you are, and there’s things that you need to discuss with someone that only other entrepreneurs are going to understand. And so it’s a place where we share and learn and grow and and have some fun together and and more importantly, you have now got an unbelievable global network. There’s not a City Gym I go to in the world where I don’t have an instant connection and network. I need to get something done

Jim Beach  41:57  

Well that is valuable. That is incredibly valuable. How much time you know, like with Rotary Vern, you have to go every week and all of that. How much time will EO take up in my already busy calendar?

Verne Harnish 42:13  
You’re talking about a chapter meeting every month for a couple of hours. The most intensive aspect of eo is what’s called the forum where you with seven or eight or nine other peers, and we meet for half a day every month, and that’s sacrosanct. We put those days in our calendar a year in advance. You know, out of 12, you might miss one or two. That’s okay, but generally you keep to that half a day and then, you know, usually two or three days a year you attend one of the national or international or regional conferences where you kind of connect up with several 100 other of your peers. So that’s kind of the time commitment, a few hours and months and a few days a year.

Jim Beach  42:59  
All right. Talk to us about your or the second the update of your book, scaling up. Why a few companies make it and why the rest don’t? I gotta know. Why did some companies make it in the rest don’t, Vern?

Verne Harnish 43:11  
Well, one of the things we’ve got at the scaling up.com website is folks can download for free the one opening chapter called barriers, and it outlines the three key barriers to get in the way of almost every entrepreneur. And I’ve moved in almost 1500 through that executive program at MIT, and we’ve got 2000 active clients any one day, and they all face these same, three barriers. And if you don’t get over those, you’re going to get stuck. And in fact, we set the barrier to get it to EO at a million dollars, because only 4% 4% of companies get over that hump, only four tenths of 1% get over the 10 million hump. So it becomes quite an elite crowd as you scale up. So there’s three of these barriers that are outlined in that chapter. All right, what are the barriers? Vern, well, simply, first, leadership development. Can you and your team and then ultimately, your middle management grow fast enough keep up with the growth of the organization. Normally, our companies outgrow our teams, and it’s a sad, you know, situation, and you’re so busy you don’t seem to have time to learn. That’s one of the reasons why do is important for the CEO and gazelles has been a resource then for the rest of the team. The second is, do you have scalable infrastructure primarily processes? You know, we get, we get so obsessed with our functions. You know, I got to grow a bigger sales function and got to get marketing going, and I’ve got my accounting function and it but real work cuts across those functions. And not enough entrepreneurs are obsessed with the D. Tales around process. So they end up being getting really sloppy and just having to throw bodies at the problem. So the book deals with how you really reverse that situation. And then, number three, it really boils down to marketing effectiveness. You know, if there is a general weakness in almost all growth companies, it’s not having a well functioning, I mean, on fire marketing function, separate from sales and generally, because the entrepreneur is the one that’s been driving marketing, whatever is their strength, ultimately starts the weakness of the organization, because they get so busy doing so many other things, that marketing starts to trail off, and that’s function is to get you not just new customers, but people forget. Marketing is needed as much to attract talent and investors and publicity and attention as it does customers. So there’s a lot of important things to get done, and if that’s not a well running function, the company is going to get stuck. So leadership, development, scalable infrastructure, mainly through clean process, is in the organization, and then real market of effectiveness.

Jim Beach  46:19  
All right, great. I love all three of them. Which one is it fair to say that one of them is your primary problem in a company, and the others you’re a little better at? Should I focus on one of these first or all three at the same time?

Verne Harnish 46:36  
Generally, without work? Jim, it’s all about picking the one. You know, the books organized around. Then these four big decisions you’ve got to get right, full strategy, execution, cash and look, if any of us are growing, you got problems in all four, but you have to choose the one to focus on first. That’s why we’ve got this for the assessment folks can do online to kind of figure out, all right, where do I start? And that’s the key. Now, what are the next steps I’ve got to take in order to get over whatever hump I’m facing and continue to grow the company?

Jim Beach  47:15  
All right, tell us about the one page personal plan, please. Vern, how is that different from the business plan. What does it focus on in terms of my personal life, and is it only for business, or does it include religion in my kids and all that kind of stuff too?

Verne Harnish 47:32  
Yeah, In fact, it’s, it’s more the other stuff than it is business. It’s, it’s, by the way, it’s designed around the same poor decisions, people, strategy, execution and cash. So we changed it to personalize it so people is really about your relationships, and we talked about what Jim hansberg calls the 5s are you strong in your faith, your family, with your friends, your fitness? Then, obviously finance is important, but it’s the fifth and most anyone when they reach towards the end of their life, Jim found, I don’t care what their wealth was, that those were the five major priorities in that order. So we keep you focused on kind of how you’re doing in those five areas. And so it’s relationships, then it’s your achievements, that’s kind of the equivalent of strategy. Then it’s your rituals, kind of our equivalent of execution. That date night you do Tuesdays is my date night with my daughter Jade, my wife and I, every six weeks, tried to escape the four children and go someplace for a couple of days the family reunion you have once or twice a year, that the time you spend with your five is dear, your five dear friends. These rituals that I think are critical keep these relationships strong. And obviously the last category is wealth. So relationships, achievements, rituals and wealth. And it’s all about long term, 2015, and what you’re going to start and stop doing in the next 90 days. It’s all on a sheet of paper.

Jim Beach  49:09  
All right, I love it. It’s something that sounds like we desperately need to do it at this time of year. You’ve mentioned routine and ritual several times, and you talked about the 15 minute routine that you have every day. What’s in that 15 minutes?

Verne Harnish 49:23  
Well, and routines are critical. You know, everyone is going to be setting these goals and New Year’s resolutions, and they fizzle out after about three weeks. And reality is, if you don’t change your daily routine, goals are just hollow. Now, routines without goals are aimless, and so you need both. And so on this one page personal plan, like our daily huddle for the company, there’s really three, kind of five minute activities that I find will help you really drive your plan for. First five minutes of meditation, and I named one of the top five business books of 2014 in my venture column and fortune. This book by Dan Harris. Dan is one of the ABC correspondents, and he wrote a book called 10% happier. And his ultimate conclusion was, if you can just kind of focus on deep breathing for five minutes a day. You don’t have to be meditating like, you know, the monks, but if you can get five minutes of just some breathing and focus on it clear your head, that’s useful. Then I’ve really fallen in love with this four minute Tabata exercise routine, this whole paleo diet, Paleo exercise thing is caught on. It’s this idea that really you only need to exercise four or five minutes, you know, a few times a week to get the equivalent of folks that kind of drive themselves crazy, you know, working out hours a week. I found that to be the case. So four minutes to bottom and then the power of gratitude and taking a few minutes to kind of count your blessings. Journal, if that’s your thing, I’ve got kind of a breathing exercise that goes with that. And then I conclude it takes about 30 seconds. This is the key. This is if everyone can just do one thing, if every entrepreneur listening this Jim could just do one thing that is take this idea from Marshall Goldsmith out of the top you know, CEO coach in the world. And it’s the power of having a peer coach, not a mentor. That’s that’s a different kind of relationship. This is up here, and for me, it’s my good friend, Sebastian Ross here in Sabaton in Barcelona as his own company as well. And we commit based on our business and our personal one page plans, five things that’s it, five things that we’re going to do more of or less of every day in order to be a better father, be a better husband, be a better leader of our company. And what we do is we email each other every day. Marshall says, Call, but we’ve never made that work. So we just email each other every day, and we have to report, did we do it or not? And then we meet once a week, typically it’s Friday at 1115 where we’re there just to kind of support each other again, being a better an entrepreneur, father and husband, so one page plan, and then do a little bit of meditation, do a little bit exercise and and be grateful and reporting to your peer coach 15 minutes. And I’ve never experienced anything that’s moved the needle quicker for me, Jim than that. That routine.

Jim Beach  52:44  
Great, I love it, and it’s perfect at the beginning of the new year. Now for people to start. I love it burn. How can we find out more about you? Buy your books, read your articles, get in touch with you, follow you on Twitter, all of that kind of stuff please 

Verne Harnish 52:59  
Just go to scaling up.com and there we’ve got the one page personal plan people can download for free, and instructions on how to fill it out for free, and this bonus chapter for free, and all of our tools for free. It’s just all there to help out. And the book, if you buy a copy or two that’s helpful. Explain how to do all of this as well, but just head to scaling up.com and hopefully sign up for my weekly insights. Every Thursday, I put out stuff to about 50,000 entrepreneurs that seems to be helpful.

Jim Beach  53:35  
Seems to be! Vern, thank you so much for being with us today. Great information. Hope you have fantastic holidays, and hope you’ll come back soon. You too. Jim, thank you so much.

Verne Harnish  53:46  
All right!

Jim Beach  53:47  
We are out of time, but back tomorrow. Be safe. Take care. Go. Make a million dollars, everyone. Bye. Now you.