Believing Your Own Hype — There is a delicate dance an entrepreneur must do. In the words of Steve Jobs, you have to ‘suspend belief’ and convince yourself, investors, and customers that you’ve built something bigger, better, and bolder than the competition. This sort of light bravado is helpful in powering through and getting your first proof points. However, we let that sense of invincibility spill into our decision making. It gave us unwarranted confidence in our ability to ‘get things right the first time’ and we failed to listen deeply to customers and data. Because of that, we made a lot of wrong decisions. My advice is to keep the BS out of your decision-making. Look truthfully at what the data is telling you and make decisions based on it. You’re generally not smarter than data.
As part of my series about the leadership lessons of accomplished business leaders, I had the pleasure of interviewing Steven Cox.
Steven Cox is the Founder and CEO of TakeLessons.com, a venture-backed education technology company. TakeLessons operates a platform that enables instructors to organize and offer their services for sale, and consumers to purchase and take lessons and classes anytime and anywhere — both online and in person. Over 25 million people a year use TakeLessons.
Steven has been building Internet startups since 1998. The companies he has been a part of have raised a total of over 150 million dollars in funding and include one IPO and an acquisition. He currently serves on the Board of Advisors for three tech startups and is invested in several technology and real estate businesses.
Steven graduated with honors from Eastern Kentucky University with degrees in Investment Finance and Human Communication.
Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?
It’s a pleasure being with you today!
My journey started when I was just a kid in Dayton, Ohio. I grew up in a very musically oriented family. My grandparents cut gospel records, as did my parents. So playing music and singing were part of my life from the time I was very young.
I played in bands and DJ’ed my way through college. After school, I quit a good-paying job with Eli Lilly and moved out west to join a new technology startup during the first wave of internet companies.
We were at the right place at the right time, and that company went from eight original employees to over 800 people in just three years. We went public and were one of the best performing companies of the year.
However, we learned that what goes up quickly can come down just as fast. Luckily, I was able to sell a few shares off before the first internet crash.
After a successful exit, I decided to take a bit of time off and joined an alternative rock band for fun. I was goofing off and enjoying the music experience, but my drummer, Enrique, was playing music full-time to make a living. One day, he came to me and said that he had to quit the band because he couldn’t make ends meet. That really bummed me out, because Enrique was a fabulous person and an incredible artist. He had studied his entire life, received multiple degrees, and was trying to do something that he loved. But it was difficult for him to earn a living, so he had decided to quit and give up on his dream.
I asked him if he was teaching. He told me that he was trying to get clients by hanging up his poster on a telephone pole. You know, the poster with all the little tabs and phone numbers at the bottom? Yep, that was Enrique. But he was having a hard time finding clients.
I asked him why he didn’t use the internet to find students, and he told me that he just didn’t know how to go about it. So I set off to help him try to gain more students for his teaching business.
Enrique and I set up a little office in a spare bedroom in San Diego, and we went to work building TakeLessons. We discovered there were hundreds of thousands of artists, teachers, and experts who wanted to share their passion and knowledge, but that most of them didn’t have the right outlets to earn a living doing it. On the consumer side, it was very difficult for parents and students to find a trusted instructor, read reviews, and to pay and book services over the internet. Our goal was to make it easy for learners and teachers to connect and transact online.
I’m happy to report that Enrique never quit being an artist, and still teaches on the platform today. It feels great to know we’ve helped so many millions of people do what they’re passionate about.
Can you tell us a story about the hard times that you faced when you first started your journey?
I self-funded the business for several years out of the gate. I went more than three years without a paycheck, and my original team started off making about five hundred bucks a month.
It was hard times for several years as we worked through the business model, talked to customers, and tried to build technology that made people’s lives better.
I wish I could say that we were an overnight success, but far from it. We had months where we weren’t sure that we were going to make it. We just kept our heads down, kept working, kept putting one foot in front of the other, and kept believing we could build a company that made a difference. I’m glad we never quit. 🙂
Where did you get the drive to continue even though things were so hard?
I grew up really poor; as in, well below the poverty line. My dad was a pastor and mom worked beside him as a traveling minister. Needless to say, that didn’t quite pay the bills. I remember watching my parents struggle year after year, and decided that I didn’t want to live that way. I didn’t want my future family to have to struggle. So I started looking for ways that I could Make a Better Living. Being a sort of rebellious kid, entrepreneurship seemed to fit me well. And after I got the bug, I never looked back. Giving up would have been much more painful than the challenge of pushing forward. So I just kept going.
So, how are things going today? How did grit and resilience lead to your eventual success?
When we first started the company, every dime that went into it was my own money. This was novel for a technology company. We didn’t have a big bank account or venture capital. That meant we learned how important it was to keep tabs on expenses and to focus on generating revenue. We also had the unfounded belief that we could build a great company that made a difference to millions of people. I said many times that the only thing that got us through was our refusal to give up. Frankly, there were many times the company could have died. We just decided not to. That level of perseverance is the only reason we are still here today.
What do you think makes your company stand out? Can you share a story?
Our value system is one of the things that makes us stand out, and helps us make a difference in people’s lives. Very early on, we started talking about what sort of company we wanted to have and the values we wanted to portray. Over time those values have kept us focused, and prevented us from veering off too much.
For instance, one of our values is: “Build things you’re proud of.” This came from a time very early on when we were struggling for cash, and had found a way to insert Google ads into our search results. People would click on them unknowingly, and Google would pay us. We did this for a couple of days and then decided that even though we were making money, it felt like we were duping people. My co-founder, Chuck Smith, said he wasn’t proud of it. Right then and there, we dropped the ads and decided we didn’t want to run a business that kept us up at night.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Remember that your business is not you, and you are not your business. Keep it in perspective. A thriving business doesn’t matter if you’re bankrupting your family. If you have a ton of money but you’re not healthy enough to enjoy it, what does it really matter? Just keep things in perspective and allocate your time accordingly.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Early in my TakeLessons days, I was fortunate enough to be asked to join an unpaid mastermind group. That group consisted of John Assaraf (best selling author), Darren Hardy (founder Success Magazine), Eric Berman (CEO, Brandetize), and Mike Koenigs (serial entrepreneur). Throughout the years, this group has kept me grounded and helped me in both my personal and professional life. I highly recommend all entrepreneurs find a group where they can be real, speak about the bad as much as the good, and find trust and help along the way.
How have you used your success to bring goodness to the world?
We believe that education is the great equalizer, and the more we can assist by helping others gain skills and knowledge, the better place this world will become.
Each year, over 25 million people use TakeLessons. It’s fulfilling to see educators — who are typically underpaid and underappreciated in our society — use TakeLessons to inspire others, teach their craft, and make a better living doing what they love.
What are your “5 things I wish someone told me before I started leading my company” and why. Please share a story or example for each.
Our company, TakeLessons.com helps people upskill themselves with online learning. We started in a spare bedroom, scaled to raise over 20m dollars in venture funding, and now serve over 25 million people each year.
Here are three struggles I faced that new entrepreneurs might also encounter as they look to build their business.
1. Going Too Wide
When we first started off, we developed a platform that allowed anyone to find a teacher across hundreds of subjects. We miscalculated how time-consuming and costly it was to go so wide. In fact, it almost put us out of business. About a year into it, we trimmed down and just focused on helping people learn music, and we got really good at it. This allowed us to get the product right for a group of people, and produce enough income to eventually add more subjects to our roster. If we hadn’t gone narrow, we would’ve gone out of business.
2. Believing Your Own Hype
There is a delicate dance an entrepreneur must do. In the words of Steve Jobs, you have to ‘suspend belief’ and convince yourself, investors, and customers that you’ve built something bigger, better, and bolder than the competition. This sort of light bravado is helpful in powering through and getting your first proof points. However, we let that sense of invincibility spill into our decision making. It gave us unwarranted confidence in our ability to ‘get things right the first time’ and we failed to listen deeply to customers and data. Because of that, we made a lot of wrong decisions. My advice is to keep the BS out of your decision-making. Look truthfully at what the data is telling you and make decisions based on it. You’re generally not smarter than data.
3. Some People Won’t Scale — And That’s Alright
Early on, I had a dream that I would find a group of like-minded people and ride the growth wave the whole way. One thing I wish I understood before I started TakeLessons is that most people you start building with will not be the company that you keep building with. There are people who do better when there is just a small group of five people in a loft, figuring out how to land that first customer. There are other people who do better when a process and infrastructure is in place. As a founder, your job is to know when someone isn’t going to scale, and be willing to have those conversations early and often. It will save you a lot of time and you’ll still probably be able to stay friends.
4. You Won’t Get It Right Your First Time
There’s a high probability that your first product release won’t meet the expectations of you or your customer. That’s why it’s really important to use a system like agile development, which allows you to very quickly iterate on your product, make changes, and continually improve your software when you get new information or data from the customer.
5. Don’t Skimp On Resources
A mistake I made early was trying to get by on a minimal amount of capital. Instead, I wish I’d raised more money sooner. It would have given me more opportunities to figure things out earlier. We call this ‘shots on goal,” meaning that you have a greater opportunity to try more things, fail faster, and build a product that hits the mark with your customers in an accelerated time frame. Another thing I realized is that we only have a few times in our life that we can start a company. So, the quicker you can find out if it’s going to work, the better. And the way you do that is to have enough smart people around you and enough capital to give your project a fighting chance.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
As a leader, I’m considering how I can make the biggest impact past my company. I’ve been reading on issues such as social inequality, the role of capitalism, and how our legacy as a nation should be tied to helping those who cannot help themselves. There are many problems to solve — from conservationism to polarization, and I believe I’m just getting started on being able to make an impact.
How can our readers follow you on social media?
Instagram at @mstevencox
LinkedIn at https://www.linkedin.com/in/stevencox/
This was very inspiring. Thank you so much for joining us!