Sara Blakely Teaches Self-Made Entrepreneurship: (7/10)

Quote from Ali Scarlett on August 19, 2021, 3:39 am

Sara Blakely Teaches Self-Made Entrepreneurship (Masterclass): Summary & Review 

Sara Blakely Teaches Self-Made Entrepreneurship is a 14-lesson online course on entrepreneurship in which Sara Blakely, the course instructor, teaches bootstrapping tactics and her approach to inventing, selling, and marketing products that consumers love.

Full Summary

About The Professor: Self-made billionaire and founder of Spanx, Sara Treleaven Blakely is an American businesswoman and philanthropist. Blakely was named in Time magazine's "Time 100" annual list of the 100 most influential people in the world.

Lesson #1: Finding Your Purpose

#1: You don’t have to start in a “perfect” position

Blakely: “I started Spanx as a frustrated consumer. I had no experience. I had $5,000 set aside in savings. I’d never worked in fashion. I’d never worked in retail. And, I had never taken a business class. I just simply wanted to be able to wear white pants to a party and have nothing show underneath it.”

This is how entrepreneurs get started. They either:

1. Solve a problem
   OR
2. Make something better

#2: Be willing to learn along the way

Blakely: “One of the most common misconceptions of entrepreneurs is that we had it all figured out before we even took the leap. That is not the case at all. We figured it out along the way and so can you.”

#3: Stay connected to the “why”

It’s important to stay connected to your WHY because it will fuel you throughout the up and down roller coaster that is the entrepreneurial journey.

Blakely also describes purpose as being one’s anchor throughout the process. 

And, she defines it as the intersection between three things:

Lesson #2: Developing Your Big Ideas

#1: Let your mind wander

“Give yourself some room to dream by putting yourself in a creative mindset. Go someplace where you know you won’t be interrupted—your bedroom, somewhere in nature—and start by getting quiet. Spend a few minutes wiping your mind of other tasks and worries. Focus on creating a blank slate upon which to sketch some business ideas. Sara finds her blank slate in the car. That’s where she came up with the name ‘Spanx.’ (Well, it’s where she came up with ‘Spanks.’ She later switched out the ks for an x, having read somewhere that made-up words do better as brand names than real ones.)”

For Sara, her best ideas come when she’s driving (she will even go on “fake commutes” by driving around aimlessly in order to give herself the space she needs to generate her ideas). And, for Albert Einstein, his best ideas came when he was shaving.

Find your space (and perhaps your activity) where your best ideas come to you. Then, leverage that.

#2: Ask yourself “why”

“Sara is constantly asking herself why: Why doesn’t a certain product exist? Why isn’t a rudimentary task done in a more efficient way? Why hasn’t any product within a specific space evolved in a while? 

Life is full of inefficiencies. It’s important to remember that most everything around you was created by other (fallible) human beings. The answer to why something doesn’t exist may be that no one’s been able to make it well, or no one’s had the time—or even the idea.”

So, here’s her process:

1. Find out where you do your best thinking and where you have your best thoughts.
2. Log it. Don’t ever lose a single idea.
3. After you have your list of ideas, prioritize them and filter which idea is possibly the best to go for.

#3: Filter your ideas

Ask yourself these questions for every idea on your list:

• How hard is it going to be to make this product?
• How much will it cost to make? 
• How many manufacturers will it take? 
• How much will it cost to ship?
• How heavy is the product? 
• How big of a team do you need to help you make and sell your product?
• How big is the need for this product?

“Start by doing some basic Googling of your industry—look up its history, or better yet, go to your local library and take out some books about the field you’re entering. That will prepare you with a knowledge that manufacturers may not expect from someone just entering their world and could engender some respect. 

Now back to Googling. Look up manufacturing plants that make products similar to the one you have in mind. Find a phone number or an email and see if you can get someone who works there to grab coffee with you. The dialogue might sound something like, “My name is _______, and I’m super interested in getting involved in your industry. If you have some time in the next few weeks, I’d love to take you to coffee and talk shop.” 

Yes, some people may hang up on you or ignore your email—but be patient and be persistent. Chances are that someone will be open to talking to you about what they do—and don’t underestimate the joy it brings people to get a chance to talk about themselves and their work.”

#4: Name your idea early

It will make the idea and product seem more real. Blakely describes it as “giving your idea energy”.

#5: Only share your idea at the right time

Avoid sharing your idea for validation purposes because the people you share your idea with are liable to “poke holes in it”. And, it’s not always out of meanness. Sometimes they’ll provide reasons your idea won’t work simply because they believe they’re protecting you by doing so.

So, if you bring your ego into the process too soon, you’ll wind up spending the majority of your time defending your idea instead of pursuing it.

Only tell the people who are necessary to get the prototype out into the world. (And, when Sara told those select few players she needed, she had as many of them as she could sign an NDA.)

#6: How to know if you should patent your idea

Blakely: “I also have had a lot of people ask me, should I patent it? Should I not? Well, when I ask them a few other questions and they say, ‘I have $10,000 to my name to do this company and this idea and the attorney quoted me ten grand,’ the answer is ‘no’.”

Blakely says that, especially in the beginning, it’s very important to be very careful with where one allocates their money for their idea.

“Patent writing requires the use of specific language and structure—something Sara was unfamiliar with until she went to Barnes & Noble and bought a book about it. Using that knowledge, she wrote most of her first patent herself and hired a discount lawyer to add in some of the legalese. 

Sara decided to patent Spanx early on because to her, a patent was akin to a marketing asset. She thought it would garner press because it meant she’d done something: Having a patent pending indicated that her idea was both real and unique.”

#7: Providing a service

It doesn’t have to be a tangible product. Many businesses have been built on entrepreneurs offering themselves and how much they care to consumers in order to do a service for them better than anyone else can.

#8: Establish how you’re different

“If you’re lucky enough to be first to market with your product—the way Sara was with Spanx—chances are you’ll generate some easy hype because your idea has never been done before. If, however, similar products or businesses to the one you’re working on exist, it’s a good idea to get to know your competition.”

Blakely’s process:

1. Write down the three closest products to your idea that exist.
2. Write down what you like about them.
3. Write down what you don’t like about them.
4. Write down how your idea is different.

Blakely recommends a test of looking in the mirror and asking yourself, “Why am I different? Why is my product different? Why is my company different? Why is my idea different? Why am I different?” And, be able to answer those questions in a minute or less.

When you’re doing this test, be convincing. Avoid words such as “maybe”, “like”, or “I think”. Change those words to “I know” and “I believe”.

Lesson #3: Entrepreneurial Mindset

Blakely notes that the first big key component to being an entrepreneur is one’s ability to manage self-doubt.

#1: Choose how to think

Blakely mentioned that, in school, she learned what to think but not how to think.

And, she only began to learn how to think after listening to Dr. Wayne W. Dyer’s How to Be A No-Limit Person.

It covers topics such as:

• Not caring what others think about you doesn’t mean you don’t care about them
• You don’t have to own people’s negative reactions to you. (If someone sends you negative energy, you can send it back and move on with your day.)

#2: Set your intention

“‘A lot of people think Spanx started the minute I cut the feet out of my pantyhose,’ Sara says. In fact, it started well before—beginning with the ‘work’ she did on herself as a teenager after discovering Wayne Dyer’s tapes, all the way up through the manifestation exercise that led her to Spanx.”

Blakely: “...I have been a student of manifesting, visualization, law of attraction for many, many years...I looked up and asked for an idea. I said, ‘Universe, give me the idea and I will not squander it.’ And, it was two years later that I cut the feet out of control top pantyhose to wear under white pants.”

#3: Aim high

The higher you aim, the higher you’ll reach when pursuing your goals.

Similar to the old saying, “Aim for the moon and, if you don’t make it, you’ll still fall amongst the stars.”

#4: Redefine and then repeat failure

Blakely: “Growing up, my father used to encourage me to fail. And, he would actually, at the dinner table, ask me and my brother, ‘So, what did you guys fail at this week?’ And, if I didn’t have something to tell him, he would actually be disappointed. And, I can distinctly remember coming home from school and saying, ‘Dad, dad, I tried out for this and I was horrible.’ And, he’d go, ‘Way to go!’ and high-five me. And, I had no idea at the time, but he was completely redefining failure for me. And so, instead of failure becoming about the outcome, it simply became about not trying. And, that truly is the only failure, is to not try.”

#4: Honor the feminine 

Blakely believes that business, in general, has been a very masculine construct and that it’s important to have a balance of both “the masculine and the feminine”.

She came to this conclusion after meeting a group of men who mentioned that they’d read about her in the paper and laughed that they’ll be “going to war” with her.

After that experience, Blakely now encourages her students to win in business with more of “the feminine principles” which she lists as:

• Being vulnerable
• More collaboration
• Not wanting to annihilate the competition ever
• Viewing one’s business as abundant

#5: Bob’s advice

1. Focus is imperative for strong leadership.
2. Define, share, and reinforce your strategic priorities regularly.
3. Clarity is an essential ingredient for good leadership.
4. Evolve and adapt to the times.

Lesson #4: Prototyping

Blakely: “Every person in their life has had a million-dollar idea. No doubt. No doubt. It’s just, are you going to take action?”

#1: Goals of the first prototype

1. To bring your idea into the world
2. To see that it can be made
3. To see that it can be done
4. To educate yourself on the strengths and weaknesses of your prototype (by comparing it to the competition)

#2: How to get started

The first step to getting started is to learn from your first prototype. 

And, Blakely provides this advice on creating that first prototype of your idea: 

“It’s okay to Frankenstein parts of existing products together to create your first prototype: Steve Jobs didn’t invent the camera. Nor did he invent the phone or email. But he brought all of those things together in a single device. 

When Sara was prototyping, she borrowed ideas from different products, taking her fabric inspiration from one line of pantyhose and her waistband inspiration from another. When making your own prototype, don’t be afraid to gather intel on other products like yours to see what works and what doesn’t. Then, take what works and innovate on it.”

#3: Collect feedback

“Try your first few prototypes on yourself. If you wouldn’t buy it and it was your idea in the first place, who would? If it passes the “would I buy it?” test, great—now step it up. Give it to some trusted friends and family members to try. At this stage, you’ll be looking for constructive criticism. Vapid encouragement is nice when you’re feeling down, but when you’re trying to improve a prototype, don’t welcome it.”

Ask your testers:

1. What do you like about this product? 
2. What are three things you would change about it? (Asking for three or more critiques will force testers to come up with real, useful suggestions— ask for only one and they might give you something lame, like, “It’s not exactly my size.”) 
3. Would you use this?

And then move them to elaborate:

1. When would you use this? 
2. Would you recommend it to a friend? 
3. Could you see this being your first choice compared to similar products that exist on the market? Why? 
4. Do you see a need for this? 
5. What are my product’s three greatest flaws?

#4: Anticipate and embrace objections

By embracing objections, you’re able to identify your product’s weaknesses and turn them into strengths.

“Figure out how [you’re going] to sell people on your prototype as you make it.”

#5: Keep your costs in mind

“You can start to determine a reasonable retail price for your product by looking at the competition. If you’re making something that’s similar to an existing product, you should have some semblance of a pricing road map that works...If you’re making a product in an entirely new category, then you may have more leeway to charge what you want.”

Blakely says that you should be able to sell your prototype in the marketplace for at least five times the manufacturing cost. And that, if you can’t, your idea may not be a viable business for you.

*Note: The “manufacturing costs x five” rule is only for wholesale distribution. The numbers may be different if selling direct-to-consumer.

#6: Obsess the customer

Care for and about the customer’s experience with your product. Always think about the consumer.

Do innovation to bring a better experience to the customer. Do not do innovation for the sake of innovation (e.g. keeping up with the Joneses, trying to stand out with no features even if they bring no benefit to the consumer, etc.).

#7: How to know if your prototype is ready to sell

“It took two years for Spanx to go from idea to marketplace. Of course, your timeline may be different depending on the product you’re creating. Spend as much time as you need on perfecting your product before it goes public.”

Repeat the above testing process(es) until your testers stop coming up with flaws.

#7: How to know if your prototype is ready to go public

• It solves the problem you set out to solve. 
• It gives you the results you’re looking for. 
• It differentiates itself from other similar products on the market. 
• It’s the best option out there.

#8: How to know when it’s time to pivot or abandon

It’s time to abandon an idea if:

1.  It’s not solving the problem.
2.  It’s not the best option out there.
3.  It’s not giving you the results that you want.

#9: Iteration never stops

“One of the most important lessons in maintaining a successful business is to never stop thinking about your customers. 

An entrepreneur’s job is to solve problems by making things better and easier for people. The world is always changing, so solutions can’t remain static. Think of how often Apple comes out with new iPhones. Sure, the company is creating a somewhat artificial need to upgrade, but at the same time, people are beginning to expect new and better technology.”

Lesson #5: Make It

Blakely: “Speak in definites when you’re talking with a manufacturer. If you show any doubt … about your product, you’re out the door.”

#1: Know where to put your focus

You don’t need a business plan. You only need to focus on three things:

1. Make it.
2. Sell it.
3. Build awareness.

And, that’s where all of your attention and energy needs to be focused in the beginning stages. The rest are details.

And, this is similar to what Lucio recommends (see “Drop vanity metrics, likes, and logos: do the REAL work”).

#2: Take “no” as a compliment

Receiving a “no” on your idea means your idea is brand new. 

Blakely says that people are often more accepting of the ideas they’re already more familiar with.

So, having the crazy ideas that cause many people to say “no” are the only ideas that break real ground.

#3: Choosing a manufacturer

“Sometimes you have to settle with the only manufacturer who will make ‘your crazy idea.’ (Sara did.) Still, there are methods to finding this manufacturer. 

Screening manufacturers over the phone can save you time and money, but showing up in person is the most effective way to stick in a maker’s memory. If you have the luxury to visit manufacturers, try to see several in one fell swoop by doing a little research...

...If you don’t have the funds to visit several manufacturers, stick with calling. Just remember to be persistent—it may take longer to get a response, but the squeakier the wheel, the faster it gets the grease.”

If you have options, here’s what Blakely recommends:

“If you are in the position of choosing between manufacturers, you’ll want to consider your proximity to the manufacturer, his or her size and experience, the company’s industry connections and financial stability, and finally the amount of collaboration you’re looking for.”

#4: Make no assumptions, ask your manufacturer questions

Also, remember to vet your manufacturer with strategic, prepared questions. (Don’t assume that because they’re a professional manufacturer it’s OK to skip gathering information from them.)

Ask:

• Is this prototype scalable? 
• How quickly can you make this product? 
• What are your payment terms? 
• Can we negotiate? 
• Can you make every part of this product at the same rate? 
• What is the minimum amount of product I can order at once? 
• What will my total costs be? 
• What happens if you don’t ship me my products on time? 
• Are there any circumstances that might cause this manufacturing price to change?

#5: Ensure quality from the start

“Sara didn’t have funds for massive quality control early on. But, when she learned that her manufacturer was sizing her product on plastic molds instead of real women, she decided to do something about it. Sara took her prototype to women she knew who wore the sizes small, medium, and large, and asked them to wear the prototype around. They made adjustments and comments: One woman ended up cutting the waistband. Another noted that the Spanx kept sliding down her legs. Their feedback was much more useful to Sara than a plastic mold could ever be. 

‘That’s the way we’ve always done it is a line Sara heard repeatedly from manufacturers. If that’s a barrier you keep hitting with your own product, come up with a polite way to reason with the logic. Sara’s rejoinder was, ‘We put a man on the moon. Maybe we could do this?’ It worked for Sara because she struck the right tone. If you don’t think you can pull off that tone, come up with your own variation.”

#6: Negotiate minimums

“‘Nothing can kill a good idea and a start-up business faster than investing in too much inventory,’ Sara says. It’s your job to make sure that you’re not over-purchasing and that manufacturers aren’t overselling you. 

Production minimums can range widely depending on your industry. In addition to asking about them upfront to avoid any surprises (and a garage full of unwanted prototypes), do some research in your particular industry before you even approach a manufacturer. Know what a standard minimum is so when you’re quoted too high, you’ll be able to call B.S. 

Once you learn a bit about minimums, do the math. If the minimum is 10,000 prototypes, and your prototype costs $10 each to make, you’re getting asked to spend $100,000 upfront. If that’s not something you can afford, you’ll need to find another manufacturer.”

#7: Diversify to gain leverage

“Once your business starts to grow, you can put your eggs into a few different baskets and start using multiple manufacturers. Diversify your distribution, too: If you find yourself selling to one account, start looking for other buyers to be conduits for your product. 

Ultimately, your manufacturer spread and your distribution spread should look similar.”

Lesson #6: Sell It

#1: Don’t sell the product, sell the problem

Blakely: “People are more emotional about their problem than they ever will be about your product. So, don’t go rattling off your features…”

Now, I paraphrased that one a bit, but the main, overarching point still stands:

“You may think that when you’re selling your product, you’re selling your product, but that’s not the case. You’ll be selling the problem that your product solves. 

Part one of your pitch should convince your manufacturer, customer, or buyer that there’s an urgent problem that needs solving. Appeal to their emotions and get them to either identify or empathize with the problem. Ask, ‘Has this ever happened to you?’ If it hasn’t, make them feel for the people it does happen to: ‘This is something that my friend/mother/coworker has had to cope with her whole life.’ 

Part two of your pitch is showing how your product alone is the solution to this urgent problem. 

Part three is something we discussed in Chapter Four: Prototyping—anticipating the objections your customer might have. As you roll out part two of your pitch, integrate objection anticipation.”

#2: Understand your audience

Blakely executes her sales strategy based on the teachings of Dr. Tony Alessandra in his book, The Platinum Rule.

“Dr. Tony Alessandra’s book, The Platinum Rule, offers an alternative to the Golden Rule: Instead of ‘do unto others as you would have them do unto you,’ Alessandra suggests you ‘treat others the way they want to be treated.’ This concept led him to delineate four different personality types that entrepreneurs (or anyone, really) might have to sell to on their business journey:

• The Director: “Someone who wants you to get to the point. If you’re pitching to the Director, be concise. Don’t spend too much time dwelling on the problem before you present your solution.”
• The Socializer: “Someone who wants to get to know you. If you’re pitching to the Socializer, tell your story, starting from your early background.”
• The Relator: “Someone who wants you to connect with them and care about them personally. If you’re pitching to the Realtor, talk about how you care deeply about the people whose problems your product will solve. You’re in this together!”
• The Thinker: “Someone who wants to know every detail about your product. If you’re pitching to the Thinker, explain the problem you’re solving analytically, and get to the nuts and bolts of the materials and methods you’ve used to solve it.”

This approach of adapting to the personality of the prospect is similar to Tai Lopez’s approach to sales, the P.A.S.E. system (see ”The 7 Strategies of Sales: What They Didn’t Teach You In School” -- minute mark: 26:26).

#3: Develop your listening skills

Blakely says there are two ways to listen: through the verbal and the nonverbal. And, Blakely encourages her students to become a master at the nonverbals. She says that “...the nonverbals will tell you more of what you need to know...than the verbal”.

Here, Blakely tells a story about reading the nonverbals of one of her prospects and identifying that, at some point, she was starting to lose the sale. 

So, upon reading those nonverbals, she took a risk by inviting the prospect to go to the bathroom with her where she demonstrated the Spanx and ended up closing the deal.

#2: Turning a “no” into a “yes”

Blakely’s approach is to angle “no’s” into an incentive for the prospect—a WIIFT.

Here are some tactics to turn a “no” around (and how to avoid being pushy):

• If you have an anecdote about a buyer or manufacturer who previously told you no but has since told you yes, share it: “This account first told me no, but then they decided to give it a try and their overall sales went up by X percent.” 
• Be thoughtful about when to go back to a prospect after hearing no. Give them time to consider what you’ve offered before asking them again. In the meantime, who knows what could happen—you may gather even more examples of people who’ve shifted from no to yes while you wait. 
• Use humor. Don’t take yourself too seriously, and maybe even play on the fact that you’re obviously trying to sell something (what Sara refers to as “calling out the humanness of the situation”). If you can gently mock your position, people will feel more relaxed around you and may be willing to give you a try. 
• Don’t ignore timing. If you get a yes, strike while the iron is hot. Use that yes as a case study to show all of your no clients why they’re making a mistake.

Also, Blakely mentions that a rule in “Sales 101” is not to leave a message. 

When selling Spanx, Blakely called her prospect for three straight days at odd times until she finally answered the phone—never leaving a message.

#3: Leverage yourself

“For the first two years that Spanx was being sold in department stores, Sara trekked to those stores and sold her product in person. She got the salespeople at the department stores excited about selling her product by meeting them face-to-face and giving them her sales pitch. Even though they didn’t work for her, they found themselves on the Spanx team.”

#4: Face your fear

“Many entrepreneurs fear public speaking, failure, and being embarrassed. Ultimately, a fear of selling comes down to the very human fear of rejection. The only way to chisel away at that fear is to expose yourself to it. Getting rejected again and again will anesthetize you to the letdown, and it will stop stinging so much.”

Here are some classes you can take to get more comfortable with selling:

• Take a straightforward public speaking class—anything to get you more comfortable in front of a crowd. 
• Take an acting or stand-up comedy class (Sara did the latter). Both will force you to confront your vulnerability and get you accustomed to talking to strangers. Plus, you’ll learn the importance of good timing and delivery—a skill that is as key in sales as it is in acting and comedy. 
• Take a debate class. It will push you to analyze two ways to look at an issue. This goes back to anticipating objections that potential customers may have to buying your product.

Lesson #7: Build Awareness

#1: Spread your story

Paid advertising vs organic advertising:

• “Paid advertising for your product or business could mean a couple of different things: Maybe you decide to pay a spokesperson or an influencer to talk about your product in a sponsored Instagram post. If you have very deep pockets, maybe you buy a page or a spread in a magazine that your target audience reads. Regardless of what you choose, though, know that buying advertising probably isn’t going to be cheap.” 
• “Remember, Sara started out with organic advertising. Instead of paying someone to show off her product, she sent Oprah a free pair of Spanx in the mail; she showed up at department stores that carried her product and talked to sales reps about what she’d made. As she started to get more visibility, Sara used a mild sort of shock value—she would flash her Spanx during public appearances. Then, other women wearing their Spanx would flash them at Sara as they walked down the street. It became a movement—one that didn’t cost any extra money to start.”

External PR vs in-house PR:

• “Keeping an external publicist on retainer—one who works at a large company and is available to you on a regular basis—can be pricey but valuable: Publicists can write and send your press releases, interface with journalists, and help you organize events. These things may not be in your wheelhouse, so a PR firm could be helpful.” 
• “Sara happens to be pretty good at orchestrating her own PR. She opted for an in-house publicist (in fact, it was one of her first Spanx hires) because keeping PR in-house means maintaining as much control as possible over your brand voice—something you don’t want to let slip away as you’re just getting the word out about your product.”

Sara also mentioned that, if she were in the shoes of the people being called by members of her PR team, she’d want it to be from someone who represents the company, not an agency that represents multiple companies. That’s a large part of why she opted to go in-house.

#2: Speak to your customer authentically

Speak to your customer in your brand story and brand messaging the way that you would naturally speak to them. 

Or, better yet, the way you would speak to a friend if your friend was a customer.

Speaking with that authenticity and care will help present you and your company as someone who cares about the purpose and “why” behind the company.

Elaine Welterworth also encourages this authentic communication as well (see “Designing Your Career”).

Speak in a way that allows you to better connect with your audience. Avoid speaking in a way that makes you sound too much like an “expert”.

#3: Who can you pitch your brand story to?

You can pitch to:

• Radio/podcasts 
• TV news 
• Talk shows 
• Magazines 
• Newspapers 
• Digital publications 
• Social media influencers 
• Celebrities

“Notice the phrase ‘brand story.’ The story of your brand is what you’re going to want to tell people when you’re marketing your product. That’s what journalists want to write about, that’s what radio hosts want to talk about. Have you overcome something to start this business? Where do you come from? What was this idea born out of? The more open you’re willing to be about who you are and what you stand for, the more likely that people will relate to you and therefore your product.”

#4: Use your packaging to stand out

“Every part of your packaging is an opportunity to make your customer smile. Think about what it feels like to open a beautifully wrapped gift: The paper, bow, and presentation can be as delightful as whatever is inside. That’s the note you want to hit with your packaging.”

#5: Strategize social media

“Sara uses these questions to help shape her content: 

• Will it make people feel good? 
• Will it cause people to laugh or smile? 
• Will it make viewers learn something? 
• Will it help someone? 

If the answer is no to just the first one, then that should be enough to keep you from posting it. You want people to associate your brand with positive thoughts.”

#6: Obsess the product

“‘Under promise and over deliver’ is some of Sara’s best marketing advice. Expectations are everything, and you don’t want your buyers to be expecting one thing from your product only to receive another. This doesn’t mean you should sell your product short...Use your marketing to set reasonable expectations. Spanx promised to remove visible underwear lines and make it easier to wear white pants in style. And it did.”

This is a bit different from Kolenda’s advice. Kolenda doesn’t say to convey “reasonable” expectations, he says to convey high expectations (see “convey high expectations”).

Lesson #9: Pricing & Positioning

#1: Product, Price, Placement, Positioning

“You might have an amazing product, but it’s not going to sell if you don’t put it on the market for the right price. In the past, Spanx put out great products that failed to sell. Then, years later, Sara’s team put some of those products back on the market at different prices, and people started buying.”

Blakely: “I wanted [Spanx] to feel like a gift people were buying themselves.”

This isn’t to confuse Blakely’s idea of “gift” to mean that she priced her Spanx at nearly free.

As a matter of fact, the workbook notes, “...she wanted it to be the highest-value product of its kind on the market, not the cheapest one. And she wanted Spanx to be premium and perceived as a high-end purchase.”

#2: Create perceived value

“As you’ll recall, before Sara sold Spanx, she sold fax machines. Those fax machines had the brand name DEX and were competing with a brand you probably know well—Canon. DEX was cheaper than Canon, but lots of Sara’s potential customers went with the Canon anyway. 

'Why are you buying the Canon?' Sara would ask. 

'Because I’ve never heard of DEX,' they’d answer. 

Sara kept trying. She’d change the DEX price to match Canon’s to see if that would help. It didn’t—people still hadn’t heard of DEX. So, Sara tried raising the price again, this time to be slightly higher than Canon’s. Finally, she had potential customers’ attention. 

'Why is this DEX more money than the Canon?” they’d ask. “What am I missing?' 

Keep in mind that perceived value often has little to do with your product’s price—it really hinges on whether you can convince customers that your product can and will satisfy their personal needs. The same product can be more or less valuable to different people regardless of its manufacturing costs.”

#3: Strategies for creating perceived value

• Increase the price of your product: “Just like Sara did with the DEX fax machines”
• Play up the exclusivity or scarcity of your product: Consider the effect of phrases like “limited time only” or “special offer” on potential buyers
• Back up the excellence of your product: Eliminate customers’ hesitancies about whether or not your product works by offering a money-back guarantee. A guarantee shows that you believe in your product as much as your customer should.

#4: Strategize discounts

“People like sales. This is a universal truth. But it’s not always the right time to put your product on sale. Consider sales as a strategic tool, not a default mechanism. 

Stores and brands put products on sale to drive purchase volume. Almost without fail, a sale will mean a spike in purchases. But once customers get used to getting your product or service at a discounted rate, it’s very hard to go back to your standard price.”

So, be careful not to overdo the discounts. You could end up accidentally priming your prospects to believe that the discounted price is what your product is worth (see “anchor their perceptions”).

Lesson #11: Building a Culture

Blakely: “If someone is super talented and not a culture fit, we will not hire them. Culture fit trumps talent.”

In other words, Blakely believes in hiring for your culture fit, not for “talent”.

And, this is somewhat opposite of Elaine Welteroth’s recommendation to “hire for your blindspots, not your culture fit.” (see Designing Your Career).

#1: What to consider in early hires

• Scrappiness: “You’ll want people who are versatile—who can, for example, jump from speaking frankly with manufacturers to wooing shop owners.”
• Budget Awareness: “Those who play fast and loose with money probably aren’t a fit for you right now.”
• Emotional Resilience: “People who feel easily flattened by failure don’t do well at start-ups—you want your early hires to be able to bounce back after hearing ‘no.’”

#2: The interview process

“‘Hiring is 50 percent luck,’ Sara says. You will inevitably hire some of the wrong people, and there’s no way around it. Strategic interview questions, however, can limit your number of wrong-fit hires.”

This is the interview template that Blakely provides:

• “How would you describe yourself in three words?”: Their answers will tell you how well your applicants know themselves, how they might fit into your company, and how decisive they can be. Narrowing your personality down to three words isn’t easy, and doing it with confidence could indicate a good decision-maker.
• “What are your three greatest weaknesses?”: “Asking for three weaknesses is key, because otherwise, you’ll get those stock interview answers like ‘I’m a perfectionist’ or ‘I work too hard.’ By asking for three, you’ll force your applicant to choose at least one real one.”
• “If you had a million dollars, what would you do with it? And where would you get it?”: “This is a way to ask about an applicant’s passions without saying, ‘What are your passions?’ (To which you’ll get answers like ‘Art’ or ‘My dog.’) You’ll make them think by phrasing the question more creatively.”
• “Where do you see yourself in five or 10 years?”: “Some of your hires will be short-term, and others you’ll want to stick around. Both types of employees are important to building a company. Depending on the answer, this question can help determine which position—short term or long-term—an applicant is right for.” 

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Blakely also notes here that when it comes to firing, “If it’s not working for you, it’s probably not working for them either. And, in many cases, if it’s approached and handled with love and kindness...it’s a fit issue.”

And, there will be cases where the fit is right for a few years and then not anymore.

This also leans toward Welteroth’s point that if someone isn’t performing well, it’s sometimes because they’re not operating from their zone of genius. And, in those cases, you’re also doing them a favor by letting them go (see “fire faster”).

Basically, the idea here is as many other entrepreneurs also preach: “hire slow and fire fast”.

*Note: Blakely uses “PIPs” (Performance Improvement Plans) in order to give employees a warning period of time to work with them to make them a better culture fit before taking any immediate action. And, this is because Blakely believes that one weak link affects the entire chain—one poor-performing employee negatively affects the entire team.

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#3: Be wary of “experts”

“The more success you get, the more people will start coming out of the woodwork to get in on that success. In the business world, those people often come in the form of experts insisting you need their help to grow. 

In some cases, this may be true. Don’t turn your nose up at every expert who offers advice. On the flip side, though, you might find that you can perform some of the skills those experts are peddling just fine on your own.”

#4: How to know when to turn an expert down

• “Are there readily available materials that can help you do this thing on your own? Think of Sara reading a book on patent writing and getting the majority of that work done by herself before having to hire a lawyer for only the most technical parts.” 
• “How expensive is it to hire the expert? What is the cost/benefit here? An expert may be pricey, but if it’s going to take you a year of grad school to get the education you need to do what the expert does well, then maybe your time is worth more than the cost of the expert.”

#5: Tips for defining your company culture

• Trust: “Trust your employees and they’ll trust you”
• Empowerment: “Don’t micromanage—empower your employees to make their own decisions.”
• Clear Goals: “People need to know what they’re aiming for, so they feel like there’s an ultimate point to what they’re doing every day at work.”
• Purpose: “Give your employees a reason to be at work beyond making money.”
• Fair Compensation: “Show your employees that you value their time.”
• Shared Wins: “When the company has a success, your whole team has it, too. Consider treating your employees to some spoils when you hit a home run.”
• Appreciation: “Thank your employees when you know they’re working hard.”
• Freedom to Make Mistakes: “Don’t punish your team for its failures. If the people at your company get scared of making mistakes, they won’t make bold moves.”

#6: Give back with your team

“As the owner of your business, you may have specific causes and charities you’d like to invest in. You want to make sure that your employees feel like they’re helping, too. After all, they earned that money with you.”

How to give back with your team:

• Allocate charity bonuses: Give employees funds so they can choose exactly which charity they’d like to donate to. 
• Give your employees a paid day off to do volunteer work at an organization of their choice. 
• Take a paid day off as a team to work together at a charitable organization. This becomes a group bonding activity as well as a way to give back. 
• If your company has provided aid to a specific person (let’s say you helped get another entrepreneur’s business off the ground), have that person come in and talk about their success so your team can see the effects of giving firsthand.

Lesson #14: Sara’s Survival Guide

Blakely: “How do I cope with the ups and downs? Tequila.”

“At its core, entrepreneurship is obstacle management. In building your business, you are more or less raising a child. And yes, it will poop the bed.”

Similar to Welteroth (see "build your network"), Blakely also uses a board of advisors when she felt the downs in her entrepreneurial journey.

#1: Build a support system

“Lean on family, trusted friends, and partners for a pick-me-up, or join an entrepreneurs’ group to network with like-minded people. You can also turn to inspiring content, like self-help books and your favorite pump-up playlist. And, if you can afford it, therapy can’t hurt.”

#2: Take calculated risks

“Sara didn’t quit her day job until she landed both Neiman Marcus and Saks Fifth Avenue as Spanx sellers. Play it safe to the point that you’re able to pay your rent and eat, but don’t let a safety net or back up plan distract you from your primary goal.”

#3: Start small

“That Sara started Spanx with her own cash and never took any outside investments is rare. If you are offered outside investments as you get your company off the ground, ask yourself this question first: Are you taking this money because you absolutely need it to move your business forward, or are you taking it because it will be easier to solve some initial problems with money that you could otherwise solve with your own time, effort, and wits?”

#4: Bucket your time

“When you’re running a company, you have to deal with everything from accounting to product testing to employee management. To stay focused and keep burnout at bay, put your time into ‘buckets.’ For Sara, this means dedicating specific days of the week to various tasks: Wednesdays are for creativity and branding, and Thursdays are all about [the] product. This schedule lets her employees know when it’s best to approach her about certain subjects.”

#5: Figure it out as you go

“You don’t need to go to business school to start a business. ‘What you don’t know can often become your greatest strength,’ Sara says. Don’t wait until you’ve figured out the full trajectory of your future business before getting started on your big idea. Everybody is constantly learning as they go, including Sara. If you look at someone and think, ‘They’ve got this whole business thing down pat,’ look again and imagine yourself in that person’s shoes. What kinds of thoughts and insecurities might you have in their position? 

Everyone is human, and everyone has doubts. Everyone is faking it till they make it, at least to a certain extent. Combat self-doubt by practicing personal affirmations and educating yourself about the field you’re attempting to break into, and you’ll feel prepared for anything.”

Cons

• Recommends the law of attraction

She recommends the law of attraction in a way that doesn’t feel very productive, practical, or realistic (see The Seven Spiritual Laws of Success or The Secret).

And, it made other aspects of the course program seem less serious (e.g. she tells stories of bringing her “lucky red backpack” with her to do her sales pitches).

• Confuses the principles of femininity with the fundamental life strategies of power

Blakely lists collaboration as a “feminine principle”. And, describes some of the mindsets behind the enlightened collaborator as being “feminine in energy”.

And, I agree that men can be more competitive in nature, but I also feel it’s unfair to label collaboration as a strictly feminine principle because that leans toward implying men are less capable of collaboration than women.

And, I believe that both men and women have an equal capacity for both competition and collaboration, it all depends on the preferred social strategy of the social strategist.

On this note, I also hold the same feelings on some of the other “principles of femininity” that Blakely listed in her MasterClass.

• A bit unclear on when to abandon an idea

One of the reasons Blakely gives to abandon an idea is if it’s not giving you the results that you want.

But, that means you would wait to see results for how long? After a week? Two weeks? A month?

Many talk about success as an entrepreneur being reserved for those who are willing to stick with the pains of building momentum in a business until it can take off. And that, in those early stages where one is working to build that momentum, they may not see the results that they want to see for a while.

Unfortunately, Blakely is unclear on this point about how long to stick with an idea (or a business venture) and endure seeing no results before concluding that it’s no longer worth pursuing.

• Somewhat unclear on hiring practices

Closer to the beginning of the course, Blakely recommends prioritizing hiring for culture fit over hiring for talent.

In the final lesson of the course, Blakely recommends hiring for blind spots.

And, while it's clear we should hire for both (culture fit and blind spots), this leaves one to wonder which should be prioritized in the hiring process.

• The workbook’s recommendations are disconnected from Blakely’s 

Blakely enthusiastically encourages manifesting what you want and following the law of attraction by putting your dreams into the universe. 

However, the workbook says, “Not everyone is going to ask the universe what to invent and get a tidily packaged answer two years later, but Sara’s message is really about setting goals.”

And, in this lesson’s section, Blakely never even used the words goal-setting. 

As a matter of fact, she mentions that her best friends—who she calls her brothers—had placed bets on how long she’d last in business because, as she put it, she “didn’t have a formal business plan” and “kept telling them she was going to ask the universe for signs”.

So, it feels like whoever put this course’s workbook together also put their personal opinions or interpretations inside. 

• Believes and teaches that “everything in life is sales”

And, I disagree. For example, sales is not seduction.

• Misattributes psychological principles

Blakely told a story of having her friends come to listen to her pitch and pretend to be exceptionally interested potential customers (while she pretended not to know them) so she could draw more attention to her product. And, on that strategy she says, ”...if there’s one or two people standing around there, looking like they’re interested, it draws attention. And, that’s just true. That’s, like, the law of the universe...”

And, while I think she might have been joking, it’s difficult to tell because she told a story before this about how she achieved her dreams by putting them into the universe. 

Pros

• Presents common information with newer approaches

When Blakely begins to talk about purpose, one of the methods she teaches for discovering one’s purpose is to ask yourself, “How do you want to serve the world?”

And, many instructors teach their students to discover their purpose by only answering that question. Yet, Blakely goes about it a bit differently. She encourages her students to answer this question by instead answering another question, “What breaks your heart?”

And, given how WHYs can be so interconnected with the pain/reward dichotomy, this approach resonated with me a lot.

• Great quotes that illustrate ideas clearly

For example, "'Culture eats strategy for breakfast' is one of Sara’s favorite quotes. Strategy means nothing without the right people to execute it.”

And, I found that quote pretty catchy as a light bulb went off when it was explained to me.

• Presents effective motivation

I absolutely loved hearing the stories of the risks Blakely took and the hard work she put in to achieve her goals. From the dogged hustle she put in and the clever ways she navigated her obstacles in entrepreneurship, it's truly no wonder she became a self-made billionaire so early.

• Encourages the antifragile ego

The stories of her father dispensing emotional rewards for her efforts and not for her outcomes were quite inspiring to listen to—and I couldn't help but smile as I heard how her father went about encouraging a learner's mindset in his kids.

Review

Pretty good, I especially enjoyed the information on building a team culture.

Given that Blakely is known for having sold fax machines door-to-door for seven years, I was expecting more in the “sales” and “overcoming objections” sections.

That said, this is a course on entrepreneurship, not sales. And, for a course on entrepreneurship, it provided a great overview alongside its workbook.