#100: Jeffrey Stern's Reflections on 100 Episodes — Entrepreneurial Motivations, Where Ideas Come From, and The Importance of Culture

INTRODUCTION

Welcome to the Lay of The Land podcast, where we are exploring what people are building in Cleveland! I'm your host, Jeffrey Stern, and today will be a little unlike most Lay of The Land episodes because today is the 100th episode and instead of hearing about what someone awesome is building, we're going to hold space for reflection and speak to some of the themes that pervade the stories of entrepreneurship at large we've all now tuned into for the last two years now.

Before we dive in, I just want to start from a place of gratitude and thank everyone who has been a part of this show, from every single person who has come on to share their story to all of you listening in, to all those behind the scenes who have helped make this a reality, with a special shout out to Eric Hornung and Jay Clouse over at the upside network and Nathan Todhunter, who keeps this podcast sounding as good as it does, without all of you, this show would not be! So, thank you all very much.

One of the best parts of this podcast is that not only has it become this repository of inspiring people who are building in Cleveland and throughout northeast Ohio, but it has also become an accumulation of geography-agnostic experiences and stories. For me personally, it has become one of the most reliable ways I've come across to learn from great people recounting their trials and tribulations of building. This isn't a novel insight really, it was personally one of my own motivations for doing the podcast in the first place, to learn from people who I may not otherwise get to interact with during my day-to-day life. it's something I first came across when I learned about Charlie Munger who talks extensively about mastering the best of what other people have already figured out and is well articulated by many entrepreneurs, athletes, creators, and artists who all look to learn from those who have come before them, to stand on the proverbial shoulders of giants. to this idea that there are thousands of years of history in which lots and lots of very smart people worked very hard and ran all types of experiments on how to create new businesses, invent new technology, new ways to manage, and new ways to lead, and they ran these experiments throughout their entire lives. At some point, somebody put these lessons down in a book. For the cost of that book and a few hours of time, you can learn from someone else's accumulated experience, and there is so much more to learn from people's past experiences than I think we often realize, you can productively spend your time recounting the experiences of great people who have come before and you learn something valuable every single time. while the medium may have changed from books to podcasts, I've found the underlying exercise is the same thanks to the graciousness of those Cleveland and northeastern Ohio leaders who've given their time to recount their experiences and lessons on here!

While everyone who has come on to share their story has their own unique story, there is much that can be gleaned as universal wisdom, applicable regardless of a startup's specific situation. For one, I think most startups actually have a very similar set of problems most of the time, they are not precisely the same problems, but, it was surprising to me to learn how similar the problems are regardless of what that startup is focused on solving and how much of that actually mapped to my own experience navigating startups particularly as a cofounder of Axuall and on the founding team of Votem before that.

So With that, I want to explore some of those universal lessons across the entrepreneur's journey, and I hope they should feel familiar as we've encountered them throughout the 100 or so stories we've heard so far on the podcast for today, I'll do my best to synthesize extensible learnings I've taken with me from this podcast, from what draws people to entrepreneurship in the first place, to where do company ideas come from, to the importance of culture, and I hope you all can take these learnings with you as well.

WHY ENTREPRENUERSHIP?

I think we have to start with the question of why entrepreneurship at all? and I think we actually then have to start with people, which, is where we will also arrive at when we conclude with culture, it always comes back to people, without an entrepreneur there isn't entrepreneurship. What draws people to entrepreneurship has always been fascinating to me because there are evidently so many reasons not to do

The all-encompassing nature of it, that anything but relentless focus is fatal, the deluge and ubiquity of rejection, the emotional rollercoaster with exhilarating highs and devastatingly demoralizing lows, the probabilistically low likelihood of a positive outcome, that if you have the aptitude to be a founder, you could likely find a stable well-paying job. the list is personal and daunting and goes on; the persistent struggle of it all is a critically humbling exercise, but again, evidently, people try to build things anyway, we've seen just about 100 examples of that so far, and I think if you take stock of entrepreneur's motivations, you can understand why and you find some combination of a desire to captain your own ship, literal ownership. Founders seek to succeed or fail on their own terms, to own the actual outcome, to have the kind of autonomy that means nothing will happen unless you make it happen. you also find a desire to operate in the kind of culture that is representative of your values, a topic which we'll revisit later in this discussion. you'll find a desire to work on the creation of something that is impactful in the world, that creates real value, and addresses problems we all face. and to say the one less spoken about out loud, you do also find a motivation of wealth creation. when things go right, when you solve a sufficiently impactful problem and unlock real value in the world, or create something that the world wants, it can be a highly lucrative endeavor. while most startups do not realize this outcome, the reality is that most wealth comes from ownership of something valuable, and that is embedded in the structure of startups.

For those motivated by these core tenets, by ownership, by agency, by autonomy, by culture, by impact, if you are looking for opportunities that fall at the intersection of these motivations, more often than not, you'll find an empty set of existing opportunities and have to create this opportunity for yourself. When this manifests in practice, it often manifests in the form a startup.

And again, this is never an easy endeavor. as John Nottingham, co-founder of Nottingham Spirk and inventor of some of the most ubiquitous global products spoke to on episode 65, most all ambitious ideas were once considered impossible, they were considered impossible until you actually break down what would need to be true so that a future exists where in aggregate, those truths enable the idea, the idea becomes possible, and then you take the requisite steps to make that future happen. if you assume something difficult is impossible from the onset, then you'll never even try.

So, assuming you're sufficiently motivated and have opted to embark on this journey and attempt the proverbial impossible to build something impactful, traversing the unknown, mapping uncertainty to certain risk, you need to have a sense of where you're trying to go, what ambitious idea you're trying to explore.

And people often discount ideas. you'll constantly hear folks in the context of business mention that ideas don't really matter, they are all a dime a dozen and when it comes to building something, it's all ultimately all about execution. while I understand where that sentiment comes from and I think there are aspects of truth in it, where you're trying to go and what problem you're trying to solve very much matters. Some ideas are actually better than other ideas. The idea, what problem you are trying to solve, and what company you're trying to build in order to solve it. it matters at a fundamental level actually.

ORIGIN OF IDEAS

One observation from all these conversations through the podcast is that the most interesting people to listen to are the very people who are most interested, interested in their idea, interested in that problem they are trying to solve, they exude passion, and it comes through in spades in their stories. And this passion I also think is requisite and is tied to the importance of the idea itself. many, from guests on this show like John Nottingham to famed entrepreneurs like Steve Jobs, have noticed the reason why you have to have a lot of passion for building something is because if you don't, any rational person would give up. If you don't love it, you're going to fail relative to someone who does love it. So, you've got to love it, you've got to have passion.

Where does this passion come from though, where do the ideas come from?

A pattern has emerged through the conversations we've had on this podcast, and this pattern holds with my own lived experience as a founder, with the stories of other founders I've read about, with research conducted on the origin of business ideas, and with those founders that I know personally. generally, that passion and those ideas come from a few places. I'll caveat that I don't feel these are entirely mutually exclusive categories, but I think we'll be able to clearly define a few distinct categories here.

ORIGIN OF IDEAS, SOLVE YOUR OWN PROBLEM

I'd say roughly half of the founding stories we've heard on this podcast have come from within, and by that, I mean from people paying attention to their own problems and exploring their own intellectual curiosities. Most commonly, origination stems from someone attempting to solve a problem that they experience themselves and recognizing that the value they've unlocked for themself by solving this problem is extensible to everyone else who is experiencing that same problem. Just to highlight a few examples of this on episode 11 with Nicole Paolozzi, we learned her founding motivation stemmed from the challenge she repeatedly encountered over the past 20 years trying to find safe, reliable, on-demand in-home family care and how difficult that undertaking proved to be, she built OndeCare to solve that exact problem she was facing.

on episode 24 with Ryan Cleary, we learned his motivations for founding FloatMe, which has raised close to $50mm in funding so far in its mission to increase financial literacy and combat overdraft fees & triple-digit interest rates, stemmed from he and his co-founders encounters with the acute predatory dangers of payday lending

on episode 29 with the NOOMA bros, we learned Brandon and Jared Smith set off to build NOOMA, which stands for No More Artificials, because they became sufficiently fed up with the unhealthy products given to them as college athletes and pro hockey players and wanted to create a better beverage

on episode 32 with David Edelman, we learned that he founded Thrivable after experiencing the disconnect firsthand between what diabetes patients want and what healthcare companies are actually building for diabetes patients. so that's the first bucket

ORIGIN OF IDEAS, FOLLOW YOUR OWN CURIOSITY

the second bucket, but closely related to solving your own problems are the stories of founders who were highly dialed into their own curiosities and took the time to explore and tinker and who unlocked real value as a consequence of that exploration. Here we have examples like

Mac Anderson, co-founder of Cleveland Kitchen, formerly known as Cleveland Kraut, who on episode 20 recounted his experience growing up working with Ohio farmers and at farmers markets since he was a child, where familially, he had cultural heritage and had fallen in love with the art of fermentation and noticed, even amidst the growing the farm to table movement and growing food scene here in Cleveland, there wasn't a sufficient sauerkraut offering. The company was ultimately born out of his, his brothers, and his brother in laws shared love of fermentation and making sauerkraut themselves.

On episode 39, AC Evans who is the founder of Drips, one of the 20 fastest-growing companies in North America and which arguably created a new market industry around automated, humanized conversations at scale via conversational texting, Drips stemmed from ACs fascination with automated marketing which he discovered at a young age and mastered over a decade before founding Drips in the wake of that exploration.

David Davis on episode 79 has a similar story, we learned his fascination with the internet at a young age allowed him to explore various direct-to-consumer eCommerce projects generating over 7-figures in revenue all before he turned 21, he was then able to leverage that experience to found FBA Flip, a marketplace to service the emerging world of eCommerce M&A transactions in the Amazon ecosystem which he had been tinkering in for the past decade.

On episode 88 with Anne Skoch, we learned about how she was ultimately able to marry art and business in Anne Cate, her Made in America accessories brand and manufacturer firm, by pursuing her long-practiced passion for fashion as a profession

On episode 56 with Dr. Dan German, we learned OrthoBrain, which has now raised roughly $10mm in pursuit of transforming the delivery of orthodontics and addressing the global orthodontic skill shortage stemmed from his genuine fascination with orthodontics as a practitioner for over thirty years and his depth of knowledge in the industry.

And the list of these examples here goes on, from Scott Colosimo of LAND energy and Cleveland CycleWerks who explored his passion for motorcycles to Lindsay Watson Founder of Augment Therapy who leveraged her passion as a practicing pediatric physical therapist to explore ways to utilize augmented reality to engage kids to exercise.

ORIGIN OF IDEAS, INSPIRATION FROM WITHOUT, WORKING WITH PARADIGM SHIFTS AND BACKWARD FROM THE FUTURE

So, passion can be found within, solving your own problems, exploring your own interests. Passion can also be found without. and here, without refers to external forces that come from the world at large and pays attention to societal advances, paradigm shifts, riding the proverbial waves of technology, of mobile, of AI, of social media, of all those things that technology can compound exponentially, and then, working back from some future which does not yet exist, but in the eyes of the founder, should.

My own founding stories fall in this bucket. These were the questions we were asking that lead to the founding of Votem. Why is it that people cant securely vote from their phones? why is it that those who have physical accessibility considerations are forced to navigate a process they physically cannot in order to vote? why is it that members of the military living abroad, those who are directly putting themselves on the line for the democratic process are the demographic most disenfranchised from it? The future of voting is mobile, that was the inspiration.

The origins of Axuall, which I co-founded back in 2019, also fall into this category. The problems of Axuall weren't problems directly experienced by myself or by my cofounders, Charlie and Lucky, they are problems felt acutely by healthcare practitioners and health systems. The healthcare industry itself is anachronistic in many ways, often overlooked and hard to reach by the technology startups that have proliferated in social, commerce, and other sexier, but less consequential and foundational industries like healthcare, manufacturing, financial, and government infrastructure. The paradigm shift taking place now though is one of innovation in these unsexier but critically important industries whose archaic frameworks and infrastructures, misaligned stakeholders, and under-structured, siloed data poses some of the most impactful opportunities technology can address. At Axuall, we asked why on average does it take 100 days to onboard a clinician at a hospital? We asked why don't clinicians have ownership over their own identity and data like their state licenses, board certifications, medical education diplomas, dangerous substance registrations, and so on, which are the primary bottleneck in this credentialing process that spans 100 days? From the very beginning, we had a clear vision of zero-day credentialing, a future of automated clinician onboarding and digital credentials that should exist and since then, have been working backwards from that vision to unlock real value for everyone involved.

Similarly, we have Dallas Hogensen's story from episode 86 where he discussed his thinking behind Felux. Dallas expressed that he was highly motivated by and was explicitly exploring highly fragmented industries with low NPS scores, meaning industries where those working in them are effectively detractors of the products available so referring to those types of overlooked unsexy industries that haven't historically garnered the innovation found in other industries, where he could then thoughtfully apply the leverage of software and vertically integrate a solution to simplify a valuable product offering. Having raised over 24 million dollars since inception, under Dallas leadership, Felux has grown exponentially over the last few years in their effort to digitize the $2 trillion traditional, paper-based steel industry as they've built out their platform to manage the entire steel sourcing process, from procurement to logistics and financing, facilitating many hundreds of millions in transactions. The future of steel procurement is digital.

In the same vein, we have the story of Signal Cleveland from episode 89. From 2000 to 2020, why did the newspaper industry's advertising revenue fall by an estimated 80%? Why did weekday newspaper circulation fell from 55.8 million households to an estimated 28.6 million from 2000 to 2018? Why have over 2000 papers have closed since 2004? Why has there been a 60% reduction newsroom jobs since 2008? These were the kind of paradigm shifts happening in local news and the questions that Lila Mills and her partners at the American Journalism Project were asking when they founded Signal Cleveland to realize a future where everyone has access to local news.

ORIGIN OF IDEAS, OTHER

Alright so we have inspiration from within, people solving their own problems and paying attention to their curiosities. we have inspiration from without, leveraging paradigm shifts and working backwards from the future, but there are even more places where ideas come from! The last solid category is related to a concept we've discussed before on the podcast, which is this idea that a business a company ultimately succeeds with is most often not the business the company started with, it can be so difficult to discern at the onset of the entrepreneurial journey exactly what product and market will result in the elusive product market fit, what will actually result in business success. So much of the startup journey is just trying to survive long enough to continue to ask new questions and refine the value you're unlocking. So, in some sense, ideas in this category come from recognizing what is working, what is not working, and reorienting around or doubling down on what is working. Sometimes this manifests in what people refer to as pivots. Sometimes this manifests as spinouts from one company. Sometimes this manifests as completely new companies addressing a similar problem as before. so, to explore a few examples of what this looked like in practice

At the founding of Boxcast, Gordon Daily explained in episode 26 how the company ultimately pivoted from a niche service offering funeral live streaming at its onset to an automated end-to-end live streaming product platform available across many industries.

Anthony Hughes on episode 17 explained how after running the Software Guild down in Akron, he felt confident he had validated the software apprenticeship and coding boot camp model which he could then double down on when he later founded Tech Elevator, leveraging the lessons learned from Software Guild, Anthony was ultimately able to scale Tech Elevator to a larger state and exit to Stride, a leading education company.

On episode 35, we learned about how Kate Volzer was able to navigate Wisr through a successful pivot during the pandemic by shifting from a focus on alumni engagement to helping universities ensure enrollment of prospective students, the latter is where the company ultimately found its product market fit and is what enabled Wisr to exit to EAB in 2021, another leading education company! Finally, following this last category, there's the long tail of other places where passion and ideas come from that I wasn't quite sure how to neatly categorize but includes a variety of other niche inspirations, like technology transfer from academic institutions, which applies to companies like Folio Photonics and Sweat ID back on Steve Santamaria and Dr. Chelsea Monty-Bromers episodes, 99 and 77 respectively.

CULTURE

So now with some semblance of what motivates entrepreneurs and a framework to understand where ideas come from, there are many directions we could take it from here, we could follow the lifecycle of startups and talk about what happens after the idea, how you identify customers and users, how you craft your pitch, how you solve problems and iterate on your product, how you scale your business, we could revisit the ecosystem around startups that we explored back in episode 50, but instead, I want to focus the rest of this on exploring culture.

Culture is something that nearly every single person who's come on the podcast has spoken about, and I think that in and of itself is worth paying attention to. Why is it that everyone speaks about culture? why is culture fundamentally one of the most important pieces to the entrepreneurial puzzle?

My own perspective on the best way to understand culture is by observing how people behave, As Leo Pena, co-founder of Presta, addressed on episode 92, it's very easy to talk about the values you aspirationally want to uphold as ideals, it's very easy to pay lip service to culture, but often you'll observe a discrepancy between what people say they will do, and what they actually do, a discrepancy between the values you espouse and the values you practice. Culture is what you do in practice, not what you aspire to do in theory.

It's hard to pinpoint exactly what culture looks like at any given organization but it can be gauged by observing

what kinds of behavior are rewarded and punished

how people are actually spending their time, attention, and resources

which rules are enforced, and which are ignored?

what happens when someone fails?

how is risk assessed and handled?

how are decisions made when management is not in the room?

how prevalent is encouragement and how prevalent is shame? how do they manifest respectively?

As Leo concluded, culture is ultimately revealed when things are tough, and the espoused values are tested. These kinds of questions can help you discern what exactly is that gap between what values are espoused and what behavior is practiced. Again, it's very easy to state values, whether those be transparency, integrity, commitment to diversity, whatever you're aspirational saying is important to you, but in practice, what you state doesn't matter, what you do is the only real reflection of what you value and what kind of culture you actually have.

Why does all this matter though? Why do so many focus so intensely on curating a specific kind of culture? There's the proverbial wisdom I'm sure many of you have come across that culture eats strategy for breakfast, which like many aphorisms resides in some truth, but I've come to believe that people spend so much time and attention on culture, because when there is a discrepancy between what you say and what you do, people disengage, stop taking it seriously, and ultimately stop caring. Outside the most obvious reason startups fail, which is by running out of money, most startup problems are people problems and people problems generally stem from culture and how some of those questions we just went through are answered.

consider how this can manifest in a startup. Imagine a hypothetical culture. To me, the best kind of culture is one that facilitates and promotes both vulnerability and accountability, where people feel comfortable talking about risks and surfacing things that are not going well, where leadership sets the vision and communicates to people so clearly their worth and value that they feel inspired to achieve and realize their own potential.

What happens when the gap between espoused and practiced values grows, when culture breaks down, what happens when the opposite becomes true, when you instead create an environment where people question their self-worth and competency? What happens you vitriol is normalized? What happens when you care more about being right than understanding what is reality?

What you may start to observe in that environment, as you make your way through those prompting cultural questions, is that success is not celebrated, failure is punished, mistakes are lambasted, risks cease to be effectively escalated, and ultimately, a self-reinforcing downward spiral where now from a place of fear or disinterest rather than of inspiration, people optimize their time for avoiding mistakes rather than achieving excellence and doing the best job, which actually requires making mistakes. At a company level, it kills an organization's tolerance for risk, and risk aversion fundamentally kills innovation. At an individual level, people will check out and it becomes a prescription for employee attrition.

You'd find yourself with a pernicious culture. it is the exact kind of fatal scenario you want to avoid and its why culture matters

I feel Doug Katz on episode 94 said it best when he expressed that the best of leadership and cultural tenets stem from the lessons you learned in kindergarten.

Culture doesn't have to be complicated, most kindergarten lessons are pretty simple, but that doesn't mean its easy, especially because culture isn't a static thing, it's dynamic and present, intentionally maintaining a culture requires diligence and attention, and care! If something feels off-culture, and it's not addressed, that becomes the new culture which you now have to reconcile with.

What we've heard from most guests who have come on the podcast and it is something that I feel at the deepest level is true, is that a company's most valuable asset are its people, one of the many trite but true things, business is just people, and cultures importance follows from that.

And with that, I'll wind down this reflective monologue! Thank you for sticking with me so far, know a soliloquy can be tough sometimes, but I hope you all found this exercise as valuable as I have. Over 100 episodes in, entrepreneurial motivations, where ideas come from, and the importance of culture, those are some of the main patterns I've observed and a few of main learnings I think we can synthesize from everyone's collective experience!

Thank you all again. if anything here resonated, if you disagreed with anything, if you have any feedback on the podcast, if there are people whose stories you'd like to hear, or just want to say hello, please do reach out. I welcome any and all feedback and appreciate all of you. Next week, we'll be back with another guest on Lay of The Land, until then.