hi this is Dan Sullivan and I'd like to welcome you to the very first episode of a new podcast series called inside strategic coach and my partner on this entire series is going to be Shannon Waller who probably knows more about what's inside strategic coach than any person on the planet so in this inside strategic coach podcast we're going to start off the very first one with talking about why the world needs entrepreneurs so let's talk about who entrepreneurs are why they're so important and what makes someone be an entrepreneur as opposed to somebody else first of all our definition of entrepreneur as far as I can tell goes back to 1804 it's a Frenchman by the name of SE John Baptist SE who was a great fan of Adam Smith who is considered the father of modern economics he came up with a definition of entrepreneurism which I think is as good as it's ever going to get and he said an entrepreneur is someone who takes resources from a lower level of productivity to a higher level of productivity and when he was asked what kind of resources he said any kind of resources that human beings value anything that someone is willing to pay for if it's better than what they had before this really puts the emphasis I think on where human progress really comes from Shannon because a lot of individuals think that technology is the cause for human progress but actually entrepreneurs are the cause for human progress first of all what entrepreneurs do what their impact is but the other thing is that it hasn't been throughout history that entrepreneurs were really recognized and admired by the general population this only goes back as far as I can tell to maybe about 1700 and it was the first time that individuals no matter where they came from how they were were born how they were raised if someone could get an idea for making something better and in doing so produce something that other people wanted to buy and that could be a product it could be a service that person who made things better for other people and took a risk doing it and used their own Ingenuity and do it that person for the first time in human history in the 1600s and 1700s right around that point that person began to be admired and people said there's a great deal of dignity in people who make things better not people who are born into privilege not people who are born into power but people who just use their own personal resources and make the resources of other people better that person is admirable and then you get this explosion of entrepreneurial activity and it starts showing up in 1800 and since 1800 there's been more progress since 1800 than than all of whatever the number of hundreds of thousands of years of human history was before that so it's this one individual type of individual that creates human progress and I'll stand by that because I've really studied this and I've worked with thousands of entrepreneurs so it sounds like almost everyone's economic well-being increases when you've got someone who's willing to take the risks and as a result of that be both respected and rewarded for taking those risks so I've heard you talk about a statistic in terms of what percentage of economic growth people have experienced since the 1800s well there's three measurements that we can use Shannon to actually talk about the impact that entrepreneurs have had the first one is total population and the second one is individual lifetime expectancy and the third one is per capita income so if you just use these three you can see that we live live in a totally different world exactly so Dan it's a big thing to say that entrepreneurs have created all of this so what are some examples of the improvements of how things are faster easier cheaper and bigger that have helped more people stay alive in the planet life expectancy to go up and per capita income to go up so what have entrepreneurs done specifically yeah well just to get to the numbers for the three in 1800 there were For the First Time 1 billion human beings on the planet number two the average life expectancy was about 26 and that wasn't too much different from what it had been at the time let's say of julus Caesar which is about 50 BC you have juliia Caesar and about 26 the Roman statistics kind of indicate us and number three the per capita income in 1800 in present dollars is about $300 per person on the planet so if we take those three so just in terms of population we've gone from 1 billion to it's about 7.3 billion right now so 7.31 you know it's huge I mean all of a sudden took all of human history to get to 1 billion and then suddenly in a little bit more than 200 years you're at 7.3 billion I say entrepreneurs were responsible for that number two is longevity human longevity has gone from 26 to an average somewhere in the neighborhood of about 70 5 75 it's jumped about 49 years and a lot of that has to do with reduced infant mortality yes it does yes it does it has to do with first of all the idea that we should be improving our cities and cleaning things up and having modern plumbing and everything like that and what you'll see is these are thought of as Civic projects but basically it was where individual entrepreneurs would take a section of the city and they would clean it up and they would provide products and services and provide all sorts of skills that actually increased human hygiene which was the biggest one and then the other thing is the per capita income on the planet right now has gone roughly from about $300 per person to $5,000 per person some people have a lot of $5,000 and others have just a little but it's actually that so you've got some huge jumps so you've got 7.3 times in population you've got a 49-year increase in human longevity and you've got roughly a 17 times increase in per capita income and my basic feeling is all of this has grown because of the growing admiration that the entire first of all local publics then National publics and then Global public have of these individuals who make things better called entrepreneurs I really love that perspective because that has hasn't always been the case and sometimes you and I both know thousands of entrepreneurs and sometimes they haven't always felt appreciated or they're different from their families or they're not professors they may not be professionals but these are the people who actually do do things and make things and create things that are value to other people and that's a very essential role for human progress is what you're saying first of all there's two problems that keeps you from actually appreciating entrepreneurs number one is the vast majority of activ as far as the observing public goes is invisible because there's just millions and millions and millions of little transactions per day millions of improvements per day and they don't advertise themselves it's just somebody getting on with business for that day so that makes it very very difficult the other thing is that the people who are responsible for recording things and commenting on things generally speaking are not favor aable towards entrepreneurism so the news media the academic Community government bureaucrats I would say the cultural communities this would be theater and the Arts that these individuals actually form another part of society you could call it intellectual Society but these are individuals who think that your worth is really in relationship to your learning and your education and that these individuals unless you have a degree to actually do something then you don't really have a right to just put yourself out in the marketplace and say I can do this for something because you haven't gone through the necessary tests and you haven't gone through the necessary courses and got credentials to do this so actually what you have is a kind of an Envy on the part of what I would call the the intellectual classes it's the best word that I can use because it's a big enough umbrella but they're the people who are in charge a lot of the major Communications in the world and they will typically if you watch an evening's television and a business person is depicted that person is depicted as greedy there's almost like they're false they're untruthful they're doing Secret deals they're not depicted in a good way they're depicted as mean they're depicted as ruthless and everything like that but you have to understand that this has no bearing to the actual reality of what goes on in the entrepreneurial world this is a group of people who actually are not entrepreneurs and who feel a great deal of Envy towards the entrepreneurial class and that kicked in very very interestingly right around the middle of the 19th century so this would be the 1840s and 1850s and sort of this depiction of the entrepreneurial class as a negative a negative in society and that people have to be protected from the Entre entrepreneurs and the reason was that the intellectual class itself wasn't creating anything that was making things better and they could see that entrepreneurs were being rewarded some individuals became very wealthy they became famous and the intellectual classes really felt that there was something morally Rong morally Rong that is the big thing is that entrepreneurism is morally Ron or at least suspect this carries on today very very much so so entrepreneurs for the most part don't know this history of their own significance and then of course they're being depicted in a negative way and so they tend to keep a very low profile so that they don't become a target of criticism but actually all the progress that's being made in the world it's not that all the progress comes from entrepreneurs I'm saying that all progress is triggered first of all by entrepreneurs okay so let's delve into that a little a little bit cuz that's an intriguing statement so all progress is forwarded by entrepreneurs so what does that process look like are other people making things up or entrepreneurs making things up how do things actually come to the marketplace to benefit everyone yeah somebody's making something up and you've been coaching and selling and doing all sorts of really interesting things here at strategic coach for 25 years now and you've actually coached entrepreneurs in a more full way than actually I have because you've coached all their teams you've created our team program here at strategic coach but what's the image that comes through from all of your coaching because these are the team leaders and the team members that you have in your strategic coach programs who are all entrepreneurial companies what do they say about their entrepreneur well it's really interesting if I think about the clients I've coached in the team leaders and the teams that I've coached it's that they're doing real work it's kind of the reality it's the backbone I think of of society and one of the things I love most about entrepreneurs they're such genuine and authentic people they're not trying to please anybody else and so that may be why the intellectual class doesn't relate to them very much but it to me they're just again so genuine you may like or not like what they're doing or what they're saying or how they're saying it but they're very clear there's no politics with entrepreneurs is what I find and they're doing good work that is creating value for other people because if an entrepreneur is doing something that isn't creating value they don't get paid you know there's a very essential formula in the marketplace I think a ton of people forget that the only reason why entrepreneurs make money is because they're creating value and as you've taught me creating value is in the eye of the beholder yes you may think you're doing it backstage but in fact the only value creation is front stage and so that's what I really noticed about working with our clients and other entrepreneurs I've met is that they're clear they're grounded they're authentic they're real and they're always focused on actually what do people need and how can I fulfill that need and how can we do it profitably so that we're both benefiting and both growing so to me it's such a you know I was looking for who I was going to work with after graduating from University and by the way my perspective on University is that's where I went to learn what other people already know there wasn't anything new there's no original thought from those intellectuals so I recognize because I like new things that if I'm going to work with a group of people I need to work with people who are creating something new so that for me has been the total joy of the last 20 years is doing that with them and creating things that create value for them too so it's kind of a long answer to your question but that's is I was reading a book yesterday it's by a really terrific Economist by the name of dearra MOSI who comes from the University of Illinois in Chicago she said that the proper word for what's happened in our world since 1800 is trade tested progress and I think it's such a great great name in strategic coach we have a concept test only on checkwriters in other words I always tell the entrepreneurs who are in strategic coach program that your ideas have absolutely no value until you've tested them on someone who could write you a check and if they write the check that means there's value to what you were created if they refuse to write the check there's no value to that idea until you come across someone who's willing to pay for it if we can just zero in on this Shan I think this is a very harsh reality for a group of people in society who have essentially spent from the time they were four years old till possibly their late 20s in the school system where they were told all sorts of things about how important they were how important what they were learning was and that they were really kind of a privileged class of people because they were educated and they went to these prestigious universities and they have these kinds of degrees and then they graduate and they go out into the marketplace and all of a sudden their entire existence for almost their entire life is kind of put under the spotlight and someone says you know you have a lot of interesting ideas and everything but is there actually anything that you can do that would benefit me or benefit anyone else and they said yes but you understand that I studied this philosopher and studied this philosopher and I know this term and this term that in itself should be valuable and the person across from says no I don't have any use for that whatsoever doesn't interest me and I think that how the person responds because it's a rejection you know it's a rejection saying I don't care what you've studied and what you've been through for the last 25 years of your life I just want to know if you can actually do something so that's a very harsh reality and some I think some individuals it infuriates them that this world out there doesn't respect what they've been through so this is a fascinating thing but in fact the people who are really doing the good in the world are not the people with big titles bureaucratic titles they're not part of big famous organizations they're actually just individuals who are in a million different marketplaces around the world offering for sale millions of different kinds of products and services and every day they're being tested to whether on that given day they're doing something that someone else wants to pay them for and this constantly increases their knowledge their skill their wisdom about what the world wants and what the world doesn't want Dan the thing I want to talk about now is how again it's kind of that response to that rejection because entrepreneurs you've talked about it in the sense they make two very different decisions than most people do so can you describe what those are CU to my mind they really also in addition to the definition of being an entrepreneur they really kind of lead the path for how someone becomes an entrepreneur or if you are an entrepreneur the two decisions that you made in order to get there yes and just to talk statistically Shannon is that if you're using all the different forms of self-employment as our definition of what an entrepreneur is in other words that you are relieving someone else of the job of actually paying you at you're going to go out and get your own money for yourself the first decision is that I will depend entirely on my own abilities to ensure my financial security and success so in other words I'm never going to be in the job market I'm going to create the means to pay myself and that's an incredible decision on the part of any person to make when the news and everything is just filled with the whole concept of job job job job job good job job good job not enough jobs these many jobs entrepreneurs completely bypass that they just create their own independent Financial existence in the marketplace huge huge distinction from the general population that's the first entrepreneurial decision so Dan what's the second entreprene decision and I really like this one because to my mind it touches on what we already talked about it also means that you're doing some good in the world yes and the second decision is that I will expect no one else to give me any kind of opportunity or any kind of reward or support until I first created value so what I'm saying is that nobody owes me anything nobody has any particular obligation to open a door for me before I even encounter someone I've got to think of a way of creating value for that person and I'll take my chances that I smart enough and I'm insightful enough that I'm going to find a way of creating a value for this individual this group of individuals this Market of individuals I'm going to do that before I expect anything to come back the other way again a radically different way of looking at life when you look at you see the protest of students saying you know you you're not giving us this and you're not giving us that you're not giving us opportunity and jobs and support and everything else you can see what a radical different mindset entrepreneurs are operating with so they're really willing to do something much riskier and depend upon their own their own creativity and capabilities to make it happen and to learn as they go what percentage of the population are entrepreneurs how many are willing to take that risk yes and this is pretty uniform by age so 100 years ago this was the number and it's pretty uniform around the world it's 5% of the working adult population that's the only thing you can measure here but on the other hand there's lots of children some by necessity and some just by the huge opportunity of this special age that we're living in the microchip age you're getting children now starting companies below 10 years old there's instances of 12y olds forming an IPO on the stock market so I think there's been a spreading down younger when entrepreneurism starts and I think it goes much later because for a period of the 20th century we had retirement age but entrepreneurs can go into their 70s ' 80s '90s and I personally have Ambitions of being even more active and more successful in my 90s than I am right now in my 70s very cool so Dan we've covered a lot of different aspects of entrepreneurs and so why the world needs entrepreneurs and the fact that it really happened around 16 1700s where people actually were respected and rewarded for taking that risk and that led to increased individual freedom and dignity and just the growth of population of lifespan and of basically their per capita income that's really been a result of it but those people have to make that very very personal decision to not count on someone else for their economic well-being to First create value before you expect opportunity for someone else so I think if you're listening as an entrepreneur hopefully you really just appreciate how unique you are in the world compared to everybody else yes and I would say this that nobody has to do this Shannon nobody has an obligation become an entrepreneur and don't become an entrepreneur to save the world it's not about that become an entrepreneur to expand your own sense of your own personal freedom and expand all the other rewards that can come with your freedom and this is the interesting thing I think it's another point of anger that the intellectual classes have towards entrepreneurs they don't need a cause to be motivated entrepreneurs are self-motivating and it almost comes across to the intellectual classes that they have to have a big Global cause to feel meaning in their life and they observe that entrepreneurs don't seem to have these big causes but they have the daily cause of creating more value tomorrow than I created yesterday and being rewarded to a larger degree tomorrow than I'm rewarded and this drives people crazy there's got to be bigger than that and they don't understand that this very activity of entrepreneurs just expanding their own personal freedom by expanding the value creation to their particular very specific customers and clients they're doing more good for the world and they're triggering more new human progress than anything the intellectual classes are doing with their causes and their ideas and they're also creating more jobs which is a kind of fun irony and if you look at developing countries when you can support for example a woman in the community and help her become an entrepreneur that's what changes the entire economic structure of her community yeah so entrepreneurism is definitely a massive value Creation in the world compared to anything else yeah and again it's incessant it now in one way or another involves billions of people either as entrepreneurs or as parts of entrepreneurial organizations and it's taking on incredible new forms with social media you know which we'll get into in a future podcast about how I believe right now that the government statistics which measure progress in the marketplace are flying fairly blind right now because I think that there's an enormous amount of value creation that's happening electronically that just doesn't register in any statistics and in fact the world right now which is the wealthiest World we've ever had the most well-off World we ever had my feeling is that it's a far wealthier and well off world than the statistics SE actually tell us right now and this is the beautiful thing about the podcast series we have here because we're talking about strategic coach as a specific company but the whole point is that this specific company called the Strategic coach is designed from day one to help talented successful ambitious entrepreneurs to expand their personal freedoms obviously to better their own lives but before they can better their own lives they have to better the lives of all their clients and customers and the communities that they live in so it's inside strategic coach from a lot of different perspectives I love it Dan thank you very much the context around this in terms of entrepreneurism and why the world needs entrepreneurs and the value provide is I think a totally new and very succinct insight into that so I appreciate it and next time we're going to talk about the key entrepreneural problem which I think will be a great conversation too thanks a lot Shannon thank you Dan