How To Find Courage After Startup Failure

Featuring Guest -
James McKinney
November 10, 2020
| Evolve
047
hosted by: Brandon Stover
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James McKinney is the Founder & Host of the Startup Story, a weekly podcast for entrepreneurs with over 65,000 monthly listeners worldwide. After being director of a Startup grind chapter, he discovered the power of sharing stories about the daily grind, the grit, and business trials of others. So he embarked on launching the Startup Story, which has had over 500,000 downloads, been a Top 10 Entrepreneurial podcast in all of iTunes in the USA, UK, and Australia, and shared the stories of founders such as Ben Chesnut of Mailchimp, Jamie Schmidt of Schmidt’s Naturals, Michael Littig, the Co-founder of the Zuckerberg Institute.

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Want to hear another entrepreneur who failed multiple times before success? — Listen to my conversation with Ketan Anjaria, founder of HireClub, an immigrant, designer, developer, & serial founder who has paved the way to success through facing his own hardship and focusing on the power of community.

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Into The Depths Of Entrepreneurship

Brandon Stover: [00:02:34]  I'd like to start with that first major business that you had in 2008 and kind of the rise and fall as an entrepreneur that you had. Can you share the story of that first business?

James McKinney: [00:02:46] Oh, yeah, man. So, to go back a little bit, I have not been a, career entrepreneur. I mean, in fact, I avoided entrepreneurship for most of my life. My dad, ran a print shop. The CFO and lead sales person, stole clients and embezzled money. And so I saw the hardship of that business shutting down as a team.

And I didn't want anything to do with it. I was like, man, I just want a steady nine to five like that. Like I saw, I saw the heartbreak that my dad went through and then, some of the challenges the family went through because of it. so with that said, you know, as a punk kid, my only. My only opportunity outside of high school was, the Marine Corps.

So I joined the Marine Corps, paid for college. I had ambitions of being a teacher. in the pursuit of trying to be a teacher, I had to take like an accounting course for some general ed saw how easy it was. And so I started selling bookkeeping services on the side with, again, not knowing that the entrepreneurial gene was embedded in me.

I'm just like, Oh, I can make some money off of this one class I took. And then as I had a book of catalog, a catalog of it, customers. I thought, man, if I'm going to do this for like, for a service, I should probably know more than accounting one Oh one. And so I started taking more business classes and had this catalog of, clients.

And I S I changed majors. I went to business instead of liberal studies to be a teacher. And it wasn't until the last semester where I looked back at that man, like, I wish I was going to be a teacher, instead of this. And, but I'd built this business. This was a side gig just to help make ends meet.

And, I had, you know, 20 to 30 customers at any given rotation. so I kind of built something small, but I still didn't want to go that route. Full-time because again, I remember my history as a kid, seeing what my dad went through. And so. Yeah, it's a say numerous careers, numerous job opportunities.

And I was working for a real estate investment firm, had our first kid at the time. And. We're pregnant with our second. And I was like, man, I just want to do something creative. Like I know in the online space, like I can just create something. And so I launched what was the very beginning called all business calendars.

It was a URL or businesses can go get promotional product calendars. And that's the only product I sold was that singular product. And, you know, being online, it started to grow slowly. And it got to a point where I was like, man, like, this is the only product I'm selling. You know, I'm already strapped from a bandwidth perspective, because I hadn't streamlined some of the processes or anything.

And I thought, man, what if I did this full time? You know, like what could this be? And at this point I'd kind of forgotten a little bit about my childhood and the church challenges my dad went through. And so I had, kind of got that itch to do something again, not knowing it was really just a part of who I am.

And so I, I left that real estate investment firm went all in on my, what I call what I consider my first startup, you know? Yes. I, I do consider somebody early grade school hustles with the bubble gum and the Gulf war posters, which would totally not fly from a political correctness these days. I'm just gonna put that

Brandon Stover: [00:05:57] right.

James McKinney: [00:05:57] but, So I started all business, which was a PR printing and promotional product brokerage. So brands would come to me needing product catalogs, stationary, wherever the case may be. And I would find a source for it. I had this vision for being almost like this, this aggregate buying resource where, you know, multiple brands would commit to some annual spend with me and I would then leverage and manage it for, greater resources for them because I was getting them prime dollar at a book level.

So I was going, let's say, for example, you know, for those that are on the West side of the United States, you know, in and out burger, right. I, I pitched it out burger, like, Hey, We, I know what you spend in printing in these categories. If I combine this with what, you know, Kaiser Permanente and HMO was spending, if I combine the buying power of both of you, I could get you a savings of about 20%.

but I was a one person show. So they were like, okay, who's this kid, like, what does this, what is this, you know, 29 year old thinking that they can accomplish? Or I guess at that point I was probably 32, maybe. you know, and so that, that idea didn't fly. But I continued to have a growing business and, got into the government space. Government space for anyone out there listening.

Who's in sales. Or has a product they think the government might be interested in, man, I'm telling you, government procurement is fantastic on so many levels. That's a whole nother conversation. Feel free to hit me up on LinkedIn. And I'll happy to kind of give you my insight into the government procurement process.

but like your intro said, I had secured, a $110 million contract. I was one of 11 people permitted to participate. I was the only solo preneur in that whole list. The rest were facilities and manufacturing plants, but I had put the package together and was able to participate in it. Well, I thought it was pretty hot stuff.

I thought I was like, man, like, dude, I am killing it right now. And I began to, to really kind of shut off mentally from hearing what other people had to say in my life, because I was like, I nailed this. I just got, I just got participation $110 million contract. Like what input do you have to say into my life?

I'm I'm firing on all cylinders. Well, that will, That will destroy you period. Like that mindset will never bode well for you. And so what had happened was I got, under that contract, I got a purchase order with the LA County Sheriff's department for, USB drives and it was a sizeable contract. I was getting USB drives made overseas.

And being young and again, not wanting to listen from guidance from anybody. I went down my own route on how to source out of China. And so I had purchased product. That required me to put 50% up front prior to order and 50% upon when the boat left the dock. And so, so I did that, and I was out, you know, 300,000 plus dollars leveraged all the credit cards, the house, 401k, like all the things the wife didn't know, because this was going to come right back to me.

They, you know, I was going to get paid as soon as they hit, as soon as they hit land, I was going to ship and I was going to have that thing paid. And I was going to have the cash in bank in 30 days from shift from when he left China, that was, that was, it was all planned out and pictured perfectly. And I was going to make, you know, I was going to double my money basically.

I mean, it was a $700,000 PO and I was only, it only costs me 300 grand. And so. It was all great, but, like many entrepreneurs, no, you cannot, you cannot, forecast the economy. You cannot forecast political, bills that are signed into place. And at that time we were entering the worst recession in us history.

so to put a date stamp on it, we're looking at Oh eight Oh nine. when things were really starting to unravel and inside of that, in fact, The, federal stimulus package has just gotten signed. Well, part of what that did was that package canceled funding and some categories and reallocated to other categories.

Well, one of those categories that I canceled was the funding that the LA County sheriff was using to pay for. And again, I was a small piece of all the things that got canceled, but it was a big piece to me. It was everything to me. And so I got so as the three or four days after, I sent the final payment and the, the USBs were on a boat to the U S I get a cancellation letter from LA County sheriff.

And I have never been more sick in my entire life. Like as I, I didn't see, I didn't see the letters on the page. I saw. My house. I saw my 401k. I saw all the credit cards and even more. So I saw my wife who didn't know what I had done and how I had leveraged us. And so, I mean, it was a, it was a long, long, I mean, man, it was a tough, tough space.

And so as a, as it got to land. I hear, I have these USB drives that I can't do anything with. they were branded on them. you know, I ended up selling them on eBay for pennies. I mean, absolute pennies, to, to someone else who was able to do something with them. a lot of third world countries is where they went with all these things.

But at this point I knew the business was not recoverable. Like I had, I had to tell my wife, and, I go into great detail in my own personal story when I share it on my podcast, I started the story. But, you know, for those, I think it's pertinent for you for those listening. because I want to talk about a little bit about how dark the failure got, because I think it's important to understand that, to understand how I got out of it.

in my mind it plays out like it was a dark and rainy night. I don't know exactly if that's how it was, but I remember coming home and knowing that there was no recovery from this, like w that we were going to lose it all and sitting, as my wife to sit down and, kids are put to bed.

And I just told her everything, told her how I had leveraged the house without her knowing, drain the 401k is maxed out the credit cards. She had no awareness of it, how he lost everything. she was a stay-at-home mom from the moment we had our first kid. And so there was a lot of things that, I didn't know, she would process through.

I just knew all the bad that I had done. As I'm telling her this my mind tells me, there's no way she's staying with me. Like now my God, I'm going to lose everything else. Like now I'm gonna lose my wife and my kids. And she doesn't remember it this way, but I will never forget it because of what it meant to me, the, her first words after I had unloaded everything, her first words were okay. I trust you now. What?

And like, in that moment, The amount of courage that I had internally. Was as if I was an entirely different person and you know, we use the word encourage, like it's a hallmark card, right? Like, Oh, wow. You're so you're so encouraging. Like the re the word itself means to place courage inside of some, like it is.

So if I'm encouraging you, I'm giving you courage to do something. I'm not making you feel good. Like that's a compliment, right. People, people say encouraging when they really say, wow, so complimentary, like. Like in that moment, she had actually placed courage inside of me to just kind of raise up and I didn't have answers.

And I told her I'm like, I don't know him. I don't know. I, I said, I, I'm pretty sure we lose the house. I'm pretty sure we're going to go bankrupt. and I'm pretty sure I had to get a job to figure all this out, but I just didn't have answers. and at that point, you know, I had really. Reached a place that I had to acknowledge that I didn't have the answers, which was 180 degrees different than the place I had gone to.

When I thought I was hot stuff with all those contracts that I won. And so it really was this roller coaster of pride and humility. To understand where to navigate. There were so much grace when I was humble, so much isolation and arrogance. When I was prideful, I was just like, it's, it's so crazy. The polarities in which they operate.

but in that moment, I was just, I was a new man. And from that point on, it was a slow rise again. so that does answer your question about the early days.

Gaining Courage After Failure

Brandon Stover: [00:14:25]  I'm curious, once you had that courage, what gave you the confidence, you know, after you worked for Disney and whatnot, to start thinking about doing it again, I mean, that's a huge undertaking. You went through quite a bit and be like, you know what, it's time to get back on the horse.

James McKinney: [00:14:42] So, you know, to get people perspective, it was five years. So, you know how I got a job at Disney still amazes me organizations that big, like, you really need to know somebody. I knew nobody and which is rare because  one of my strength is strength as being a connector. And so the fact that I knew no one kind of surprised me.

I went to look and I saw a job on the board. I'm like, Oh, I got to know somebody in that. And I didn't, but lo and behold, I got the job. So I was so blessed for that, but it was five years of just, you know, licking my wounds through the process, healing the family a bit, you know, getting us stable financially and from a home perspective.

And then what happened was, one day as I was getting ready to go to work. everyone, you know, I'm sure your listeners as well will resonate with it. Like everyone has a place where they just think more clearly than others. Like it's, there's no distractions. It's just, it's you in that space, in that quiet environment, whatever it may be.

for me, it's the shower. And

Brandon Stover: [00:15:42] Yeah,

James McKinney: [00:15:44] And so as you know, and again too, and maybe part of it is because, you know, I have kids that are at the time were older and now they're even more. Yeah. But you know, it's like, it's the water just drowns up noise. And it's just like, I'm thinking about my day. And in the process of thinking about my day, I started thinking about just what could be in future ideas or whatever.

So in that moment, this idea for. A mobile app came to be. And so I come downstairs, I'm like, Hey, I had an idea in the shower and I wish your listeners could like picture this moment, but she's, you know, I'm at, I'm at this bar. That's on the one end of the, of our kitchen. You know, ready to eat breakfast and she's at this sink and it's, you know, I'm, I'm directly to her left by about, you know, 30 feet, but I'm at, I am, I am not in her peripheral vision.

So without even moving her in her body at all, she just turns her head on a swivel and looks at me. Cause she knows what that means. She's like really a shower thought. Huh? So, and so that really started to spark the conversation, but, but my posture. In how I pursued was so differently than anything else before, because now I knew I had learned what all the, not all the mistakes, but I learned from many mistakes from my past one.

So I went slower. I went smarter. I planned, I planned better and I had more communication with my spouse, with my wife. then at any point in time before, because now. I had, I knew what I kept from her before. Again, it wasn't, I wasn't trying to keep anything from her. In fact, I remember telling myself when I was refinancing everything to pay for that PO, like I was trying to, protect her from the stress of it all, because I knew it was a for sure thing, but the reality was, and she told me this later, she was like, the best way you can provide that to me is to communicate to me.

Like you just tell me everything like, and that way I'm never in the dark. And I was like, wow, I would've never guessed that to be true. And so I just navigated this mobile app differently. And so, in that process, the mobile app was an interesting concept. I still believe it to this day that it has, a place in the market.

at the time everything was going to AR cameras, right? So you hold your camera up to a location and you could see information about the location, but from a use case, like, I don't want to hold my phone camera up to see a location, but we all use television remotes. And with location data, I had this vision, like, why can't I just use my phone?

Like, yeah. Television, remote, where I just pointed out. They're like at like, I want a TV remote and push a button. And I see all the information about that place. And the idea was, starting with restaurants, but my, my hope was to have built it to be like everything. Like if you're in Paris example, tower, you push a button and you all send us like information about the Eiffel tower.

Maybe you see something video is about it's it's, you know, a time lapse video of it being built. Like just content around the location. at the push of a button, not the use of a camera, I'm not, I personally, not a fan of that. Google says otherwise, so they keep putting money into AR and that's where it's going.

I raised money, to build it. I, you know, I did it so much in my mind, so much more intelligently. and slowly I did it while working at Disney, I didn't jump the gun right away. I went from Disney to another job, while still doing this.

And then even when I was getting ready to come to market, my developers. needed a sales person and because most developers aren't salespeople. And so, you know, I said, Hey, I'll sell it for you. Keep building my app. And so I, I tried to be more intentional in that process, but it just couldn't get it anywhere.

you know, the. The loss of not being able to grow that and build that it wasn't a personal loss from a financial perspective. I did lose my friends and family. I lost their money. you know, so that weighs on me still to this day. I hope to, at some point, have the liquidity where I can just pay them back for their trust they put me obviously, you know, they'll still have lost the time value of money, but. The principal, I would still love to just pay them back because they've placed trust in me and I couldn't, I couldn't deliver at the time. but that, but inside of that, I learned a ton about, you know, not being a technical person, trying to build a technology company.

I want to just make it clear, like it took time to get there. Right. And during that five-year period, there was never this, this weight of, No, I failed as an entrepreneur. The, the weight I felt in those five years was, you know, I let my family down, you know, I embarrassed my wife, you know, cause this was a home that she was entertaining in.

And now she's got to explain to friends and family that we're moving. Why? Oh, because James lost the business. you know, she was, she was kind in the way she described it, but the reality was I dropped the ball.

Once, Twice, Third Startup Is The Charm

Brandon Stover: [00:20:23] So now you've cycled twice as an entrepreneur, with, you know, a few different ideas and you're coming up on the third one with the startup story. what gave you the passion to jump into this one? Why such a fire for it?

James McKinney: [00:20:37] So when I, when I realized I wasn't going to be able to do what I wanted with simple deal, which was the name of the mobile app, I had such a hard time. Believing that it was me, like in my mind. And it wasn't from a position of, of arrogance. Like my first one, the, the idea that I had a hard time believing it was me came from this idea that I don't necessarily believe that successful entrepreneurs are that different than you or I or your listeners.

But I didn't have any, it was just an assumption. I didn't have any data to back any of that up, you know, there are the anomalies, there are the Steve jobs and the Elon Musk's right. the Mark Cubans, but they are the anomaly. It's not the norm, but when you're building, when you're building a technology startup, you know, you're reading and Crunchbase, all the fundings, you're reading on tech crunch, all the stories.

And you're, so you're, you're, you're building this framework of what a successful entrepreneur looks like. And you begin to believe it, but I didn't believe it. I was like, I don't, I don't see it that way. And so I started reaching out to people that were more successful than I, and just having conversations with them, like coffee, just, I would say, Hey, I'm coming off of my second failure.

I just want to learn what I might've done wrong. Can I take you to coffee? And I kid you not, I mean, I maybe had in all of my outreach, I maybe had like two or three that said, no, you know, I'm, the entrepreneurial community will, will always show up if the intentions are right. I truly believe it. Like, I mean, people say it all the time, you know, how do you get these people?

Like my intentions are right. Like I truly want to learn, you know, it's not, I'm not coming in like, Oh, can you teach me? Oh, Hey, by the way you want to, can you buy this? Like, I'm not like I'm not a snake oil salesman. Like I truly want to learn. And so, And then as I was having these coffees with these incredible entrepreneurs, I started sharing the stories and the learnings with other people.

And all of them were like, man, like, like, can, can you like. You know, do something and you record this China's is a pre podcast. Well, pre podcast, my awareness, I should say, can you like to record this? And I'm like, well, maybe I just do like a live events. Right. And so got hooked up with startup grind, which is a great, like global community entrepreneurs.

They have like local events, at a small scale and. And I started doing this and I, we quickly became one of the larger chapters in the U S where we'd have a hundred to 200 people come to hear these stories of entrepreneurs, as I'm talking with them again, same thing I was doing at the coffee talks, but now just an ticketed event where people would pay, you know, 20 bucks to come here themselves.

And it was amazing again, from a value perspective now is like now not only was I getting to learn, but I was helping. Everyone else in there learn. Right. And so. you know, I, there is a bit of a salesman in me when it comes to like, I'm not going to lie. There's a lot of salesmen and me when it comes. So, so like, as I was, you know, I was always trying to reach for that, like that next level of founder, just to kind of create a bigger draw in a bigger community.

but I also wanted to hear their stories, right? So like, you know, in the live event I had Larry namer, the founder of entertainment television, you know, came to this again, you know, Santa Clarita, which is where, where these events were held. Was, miles wise, it was like, you know, 20 minutes North of LA time-wise is about a day and a half because traffic is so bad.

But like, so it took a lot to get people there. But the entrepreneurs I reached out to were so gracious with their time, like, yeah, I'll come in, I'll help out. I'll give you give some time. But in that moment, in those moments and those events I'd have people come up to me. And this one in particular, after Larry namer, the co the co-founder of entertainment television, I had three people come up to me.

And said, you know, James, do you have a podcast? Cause if you had a podcast I'd listened to it. These three people didn't know each other, they were independent occurrences. And I thought that's really weird for something like that to happen in one night. And so I started giving it and I was listening to podcasts at that time.

And so I started to give it a little bit of credence because it just how unique the situation was. And I was like, at the time I'm running sales for a software development company, I'm back into government procurement. you know, things are going really well. We're getting ready to move to Texas at the time, out of Southern California.

So like all things were firing and you know, at this point I'm a year outside of simple deal. and I thought, huh, a podcast. Well, I guess I could sell some ads and sponsors and make a little side money. Like it really was. More. So to keep my, desire of connecting with entrepreneurs, to, provide way for people to hear the same guidance that I'm hearing and if I can make some money on the side. Great.

And so that's kinda how it, how it happened. And so I remember talking with my first sponsor Mobo cash and I said, Hey, I want to do this. They were one of my live event founders. I said, Hey, I want to do this. Would you help fund it? You know, sponsor number one, he said, yeah, absolutely. And so, that really January 15th of 2019 is when we launched our first three episodes.

And, it's been rolling ever since. And so, yeah, it's been an amazing journey.

The Power Of Hearing Another Entrepreneur's Story

Brandon Stover: [00:25:53] Can you speak to a little bit to why storytelling is so important? You know what the value of hearing another person's story is?

James McKinney: [00:26:00] That's a great question. you know, and I, I want to answer this, not from my own personal desire. I think the value of story has to be that I believe it can, reveal a person's true intention. It can make them more transparent, more authentic. And the reason, let me back up a bit, the reason I say that is. For my podcast. People ask me all the time and you didn't, you didn't give me any questions. So for all the listeners, like Brandon doesn't provide questions. It's a conversation. But I think had you provided questions just, which is why I don't provide questions. We begin to frame up pitches in our mind.

We may say, it's not a pitch. We may say we're just having a general conversation, but I begin to frame up something in my mind that shines me really well. Like, is it, we are. You know, we are people that want inherently help ourselves protect ourselves. if you will protect our brand, our, our public persona.

And so whether it's intentional or not, I, for that reason, I don't provide questions ahead of time. That's the power of story, right? In general conversation, when it's truly. An organic conversation and storytelling comes into play. I believe you will actually see the true heart of the individual. Like you will begin to see authenticity and transparency and I don't care how successful the individual they are, how successful the individual is.

Within the context of just storytelling about their life and their journey, you will be, you will see moments of joy that they, that they probably haven't spoken of publicly before, because it was just organic and they'll see moments of, of processing as they grieve a moment again. Right? Like it's, it's, it's been unbelievable.

The conversations that I've been able to have, by just hitting, you know, again, exploring a person's story, but I believe storytelling, we inherently, as people, we. We view our lives subconsciously as a story, I truly believe it. Like, you know, we want to be the hero. Like again, fundamentally our internal ego wants us to be a hero.

That's a story element, right? So if you need a hero, who's the bad guy. Well, we make up who our villains are and our enemies are right. They may not be, you know, who's the, who's the damsel or the, you know, the night in distress, whatever it may be like, you know, we, we, we place ourselves into this. Story narrative.

It just is a little subconscious a lot of times.

Brandon Stover: [00:28:27] Yeah. And I think, entrepreneurs do this quite a bit. I mean, you know, most of my listeners, basically, you're trying to build businesses. To, you know, solve something in the world. They're trying to be a hero in some way to, you know, whoever they're serving.

James McKinney: [00:28:40] Yeah. I mean, there is, entrepreneurship is very much a, I, A great story. I said it so many times. Like there are so many stories I hear that I wish I can make into a movie, you know, like, and then, you know, everyone knows the social network when they did it of, Mark Zuckerberg's story.

And that was an amazing movie, but I've heard stories of, of cookie manufacturers. That I know would make a great movie. I've heard stories of an Instagram influencer that I know would make a great movie, a florist. I mean, I've heard so many stories like Christina stumble, a farm girl, flowers, her story would make an amazing movie, but.

whether or not Hollywood sees it that way, but we as entrepreneurs, we know for sure the entrepreneurial journey, what makes for a great story and all your listeners have decided to place themselves into the role of the hero. And they're trying to conquer whatever challenges ahead of them. That challenge, maybe right now, it could be COVID.

You know, the economy in general, that challenge may be, you know, technical challenge. They may be a, an obstacle with hiring ed. There's so many, there's so many things that we have to battle through the muck and the, to get to our end goal. Like it is very much a story that we have placed ourselves in the middle of sure.

Brandon Stover: [00:29:54] Absolutely. What skills, or you as a storyteller, how do you pull that story out to provide that value to your listeners to get that out of your guests?

James McKinney: [00:30:05] I, at some point I'm going to take that question and have a better answer for it. Cause I've been asked that numerous times and maybe I will, after this, maybe I'll just make a note to, to jump in the shower and think through a better answer. Cause since that's what I think clearly, but like this past week, let me, Give a framework. So, on September 29th, we released an episode, with Jennifer Beck communications, their PR firm, on both coasts LA New York. And. After the episode aired. I never give my, my guests the ability to listen ahead of time. Like they hear it when the general public hears it. I'm the same thing.

When I released video content on entrepreneur.com, my guests don't get to see the final product. Like it is what it is. if you want to be a part of the show, you're just going to trust me that I'm, I'm doing this to serve. And so the content is going to shine a light. She's going to shine a light well on the lots of people.

And so. As they were hearing the episode and the firm was hearing the episode for the first time. someone reaches out to me from the office that helps schedule it all and said, James, our Slack channels are going crazy right now with how proud everyone is of the episode. and she just starts, you know, giving me this, these incredible grand compliments and she makes this statement.

so it is so apparent that you do so much research on your guests. And as a, as she's giving a compliment, I, I said, you know, can I, can I be honest with you just said, yeah. And I said, I won, I receive all the compliments I receive. I thank you so much for it, but I'm gonna be telling me to tell you the truth.

I don't do research on my guests. And she's like, what? And this is, you know, a publicist, right? A public, you know, publicity for them. They do lots of research, you know, to try and craft stories and things. And, and, I said, I'll tell you why I don't do research. I said, because I want to hear their story from them.

I don't want the media to take me. I don't want my own research to have this idea of what their journey looks like and why they made decisions. They made. I want to hear it from them. And from that conversation is where the rest of my questions come. And, and here's why I think to answer your question, how, like the skillset she responds with again, the first time I've heard it, my wife has never said it to me.

She, she said, wow, you must be an amazing listener then. And I was like, Oh, that must be it. And I will it's from a skillset. I will say, I, I guess I am a good listener, you know, but I'll even peel that back. Additionally, from a tactical perspective, you know, if someone wants to know, like, where do you learn this?

Where do the skills come from? I'm a good listener, but I'm a good listener because I truly care about people. I care about the person I'm talking to. Like I do not glance on my phones when I'm with someone at, for coffee, you know, I, when I'm scheduling or recording a podcast, I may glance at the clock for times.

I want to keep things on a certain pace, but I am in that moment with that person. and I care about their story. I care about how that story is presented to the world. I care about them looking like the expert that, that they are, regardless of the stumbles they've had. And I care about the listener.

And delivering true value, connecting somehow with my guests, a story with the listener in their car, running, working out, whatever the case may be, whether they're listening to the startup story. I care about trying to figure out how do I connect this mazing moment I'm having with this founder to that person.

Who's listening. Like, those are the things that run through my mind. And yet I'm still actively listening in the moment. So from a skillset perspective, I guess it would be a great listener and I care so much about the person I'm talking with and the person who will hear it later.

Brandon Stover: [00:33:53] Absolutely. I think that's a really good skill set. And I think what comes out of it too, is, you know, not looking beforehand a sense of curiosity, really wanting to hear their story. I'm somebody that researches quite a bit beforehand. We'll look things over and you know, pre-write questions.

James McKinney: [00:34:09] And there's nothing wrong with that. Like, I want it, you know, like, I love that you do that. And I love that many people do that. I mean, I've heard some amazing interviews because of that. Like, there's probably things I miss by not doing that. and I think I'm okay with that miss for right now.

How To Monetize A Brand In The Attention Economy

Brandon Stover: [00:34:23] Let's talk a little bit about the nuts and bolts of startup story, because I think every business going forward in the attention economy is going to have to be a media brand or some sort of media to their, their company. what strategies have you done for monetization since you launched?

James McKinney: [00:34:45] Yeah. So, so January 15, 2019, we launched, sponsorships and in episode ads have been my monetization. I'm not a huge fan of affiliate revenue. I know I'm leaving money on the table by not doing that, but the reason I'm not a fan of it is. If in all of my email communication, which is really where affiliate revenue actually takes place.

I mean, you can do affiliate in the episode, but there's too much leakage. Like, you know, you may, you may hear a brand like you may hear me say like, Oh, make sure you visit express VPN and use code startup story for it. Like you'll remember express VPN chances of you possibly murmuring the code are slim to none.

So like in episode affiliate, I'm just not going to do, but email. If I'm going to do it, that's why I'm gonna do it. But I just don't want my email communication to constantly come across as though I'm selling through affiliates. Now there are things that I will sell and, but it's very clear that this is a sale, not just a, Hey, check out this, you know, this kit list of everything that I use to create a podcast in my email communication, because that's obviously an affiliate link I want to just constantly, you know, deliver value.

So the, my main monetization sources were sponsorships and in episode ads, Then at the end of 2019, I thought, man, like this all kind of started with live events. I want to get back to live events. And so I started brainstorming this idea for startup story live. And when I say brainstorming this idea, like it was a pretty grand idea.

Like we were going to be at the Dallas Cowboys global headquarters here in, Dallas metroplex in Texas. you know, the facility would hold 12,000 people. I wasn't going to have more than 1500 people. Like I was, I, you know, I, I didn't think I knew I couldn't sell that thing out. And so I was only to have like, you know, 1500 people or so, and, and so big plans for it though.

I mean, it was, it was going to be. You know, and, from a financial perspective with tickets and sponsors and advertisers and everything, it was going to be a half a million dollar deal for me. And as we announce it in late February, I had my guests as me Baron Davis, NBA, all-star early stage investor in vitamin water with 50 cent, like a big deal, dude.

Right. I had Jamie Schmidt was Schmidt natural. She's going to be one of Luke Fox of white Fox defense technologies, which is a drone security company, unbelievable technology, Jamie Smith. Story's amazing from kitchen acquisition and seven years for over a hundred million dollars, like an unbelievable story.

So it was going to be an amazing event. And, we announce it mid to late February, early March. COVID becomes a real deal. And at the time, I truly didn't think this was going to be anything, you know, cause I'm talking to sponsors who are wanting to spend significant money. I was talking to one brand who wanted to be the title sponsor for that event and my buy event that was going to take place in the fall in Austin.

Like we were talking a big deal for those two events and lost some other opportunities. And they're like, well, what are you going to do? You know, if we have to cancel because of COVID, I'm like COVID is going to come and go. I've seen this thing before, like this is, you know, end of March, we're not talking about this anymore.

And they're like, okay. you know, I'm glad you feel confident about that. And so just as we were getting ready to sign the final contract, President Trump comes in and shuts everything down for the month of April. And I was like, Oh, this isn't going away. And my sponsors are like, this isn't going away.

And so all the conversations, not just the title sponsors, all the conversations I've had that were about sponsoring this event were gone. Now my ticket sale question becomes, do I sell tickets? Because my event was going to be, I think it was going to be early or mid may, I think was the initial date. And now the month of April is canceled.

Like, no one's going to buy tickets to a live event. If they, if they're being told live events are dangerous, you know, of course, South by Southwest it canceled, like all these other things that canceled take place. So that was gone. My show sponsors and advertisers started pulling out because they're keeping cash close to the vest.

As most businesses work is they had no idea what was going to come up all of this. So I had no, I mean, starting in April, there was no revenue coming in and all I kept thinking to myself was, Oh man, please don't let this be a replay of 2008. I just, don't let this be a replay of 2008. and so it just, it forced me to just kind of rethink and re-engineer like, how, how do we monetize?

How do we monetize? And so I pivoted that live event to be a virtual event. you can't really charge upfront for a virtual event. it's a tough sell. And so we did it for free. but I did have an upsell that if they paid. before the advent of they pay $29, they'd have access to all the video content from the things that they could watch it whenever they wanted.

they have an increased price of that, but that event launched what is what I call startup story inner circle, which is a, subscription membership that allows you access to view all my video content from live events, private, podcast recordings and allows you to attend live recordings of my podcasts.

You can, then when we're done recording, you can ask my, the founder guests like questions directly to get their questions answered. I mean, I had Ben Chestnut of MailChimp for crying out loud. And my inner circle members got to ask this guy who bootstrap meant for those who don't know, MailChimp is an email service provider. They, he bootstrapped it all completely didn't take any investment capital in fact said no to investment capital. They're valued over $5 billion and he did it with zero investment money. It's an unbelievable story. And so like those in my inner circle got to ask him questions directly. There was a, a lady in the inner circle makes, You know, upscale pajamas, and she's asking Ben Chestnut questions about distribution. It's like, this is unbelievable. And for me it was, it's awesome to see someone have access to someone. They probably wouldn't have access to otherwise.

And so that, so COVID screwed a lot of things up. It did force me to rethink and kind of bring this inner circle to the table a lot sooner. So it's been an interesting journey and I mean, not only to do that, As the audience kept growing.

and I started seeking counsel and guidance from more founders on like, how are you navigating COVID? and I was sharing kind of our own personal journey. So many people said to me like, James, if your audience keeps growing, you need to find a way to monetize that audience regardless of sponsors or ads.

Like you've got to have something. You know, you know, that you can sell, I'm like, Oh, the inner circle, like, yeah, that's a digital membership. That's great. You need to have a physical product. I'm like what a physical product. So I started brainstorming, just trying to think through like what, what would be organic, authentic, what would continue the mission of serving through stories and providing resources to entrepreneurs?

And what came to me. This is, you know, again, one of those shower moments, I got it again for all your listeners. Think about your place. Like you have a place, you have it, you have your quiet place where ideas go. Think about where you came up with the idea for the venture you're working on right now. Like everyone's got a place.

So, so one of those shower moments, I'm like every entrepreneur, like this really truly started with me having coffee with founders. Like, this is how it started. I'd reach out and have coffee. Like every, every founder, every entrepreneur loves coffee. I'm like, Oh, coffee, subscription service, Mike. Yeah.

But how does that serve my audience? Like how does that really deliver the tools and resources? Is that just a money play? And I'm like, Hmm, let me think about that. And so. What it became was this quarterly box that would have, you know, really well-made crafted coffees and entrepreneur. We don't like crappy coffee.

Like we drink it cause we, we need to sustain life, but we want good coffee. So it's not always as good coffee, but. It's going to have a cool mug as well, but the resources from brand partners are going to be in this. Like, so as an entrepreneur, what are the things you would have productivity, hacks and life hacks that you need?

What are resources you need to build your business from an infrastructure, a hiring perspective. and so all these resources come into play, but again, from all my various learnings, I started talking about this idea with other founders and all of them were like, James is a great idea. I haven't seen anything like this before.

but. You know, and I want to, I want to thank, you know, my good friend, Chris George at the subscription trade association, he said, James, so you need to think through the use case of your founders. Like, what do you mean? It's like your founders listening, you know, they, at the middle of the day, they'll have answered thousands of questions, answered thousands of questions.

They're probably stressing over payroll trying to figure out cashflow. Like they have challenges in their life and here comes this beautiful black box. So the brand is called . That's the name of the brand we're launching. He get this beautiful black grindology box. They know what's inside. They're excited for it.

They open it up and there's a bunch of stuff from brand partners. It's no longer a joy. Like you've got to figure out a way to present all this better. Yeah. I'm like, Oh, that's interesting. He's like now what if that same founder gets this beautiful black box, they open it up and inside is a grindology magazine that has all the resources, tools, productivity hacks from your, from your founders, that, you know, all the stories and all the resources.

It's all within the, almost like a, how to manual for a specific topic for that quarter. And then inside, they see their coffee in their mug and they have their magazine. It's like, that's the experiment. That's it. So grindology now, it's, it's available. I mean, pre-launch is available. You can go on and sign up to be notified when it does launch.

but  is a coffee subscription service specific for entrepreneurs, makers, creators, and those who have, trying to create something into this, into this universe. But there's going to be a magazine that is all about educating, providing tactics for the individual. They can live it, my hope for this magazine, because it takes a lot of work to pull off a magazine is so different than a podcast.

You know, my hope for this magazine is that it truly is. For the, for a three month tactical strategy for a founder on a specific topic, each quarter we'll change the topic, but you know, to have someone like Ben Chestnut chime in on user acquisition, like it's going to be in there to have Larry namer chime in on what it means to have immediate and content strategy.

Like he's going to chime in, like it's all centered to provide the founder with actual tactics for the next quarter. I'm super excited about it.

How To Have Resiliency As An Entrepreneur

Brandon Stover: [00:45:02] Amazing. Well, something that I want to pull from that story. And your first story. both in 2008 and then now in 2020, like we have some very turbulent times going on, you've gone through a few failures of a startup. How have you built your resiliency in, you know, being creative during those times? Being able to think through it, keep going forward.

James McKinney: [00:45:24] It's all about perspective. you know, and I say it, so, you know, blahzay, I mean, it sounds so simple, but it's simple because it's true. Like, I have been in my mind to the darkest of places, you know, because of what had happened in Oh eight and Oh nine. And even in. That dark situation where we lost everything.

I didn't lose my wife and kids. Like I have nothing to fear at this point. Like I'm never going to fail more than that moment. Now, startup story may fold. Grand Knology may not take off, like I'm not saying that I will be successful, but what I'm saying is the manner in which I failed in Oh eight Oh nine is the worst manner in which I'll fail ever, because I'm not communicating better.

I'm serving more people in mine. My wife is well informed of everything going on with the business. And so, so if it does fail, she's not surprised because I'll have been talking with her for quite some time about it. So, because I've gone through what I went through in Oh eight and Oh nine, and I didn't lose my wife and kids.

Like there is nothing. That I am a afraid of now, you know, do I, do I want my ventures to succeed? Of course I do. Like I don't want to go through financial ruin again. I'm not, I'm not chasing financial ruin again. I'm not, I'm not being, reckless in my investments and cash management and decision-making, But I also know it and it's worst case scenario.

I still have my wife and kids. Like it perspective is everything like for your listeners, like, think about this thing that is causing you, fear and an anxiousness about your venture and play that scenario out to whatever degree that you want to go. Like, however, dark you want to take this thing, just play it out.

One, it's never going to get to that point, unless you just don't have a really good imagination then at some point, I mean, if your worst case scenario is you lose your car then. Yeah. I mean, there's a chance it goes there, but, but nine out of 10 times, like our imagination is pretty dark. One. It's never going to get there.

And two, what are the most important things in your life and will these decisions you have now? Impact those things? My decisions had an impact on my family in Oh eight Oh 9 100% they did. But you know, the, the worst thing that I thought going into that conversation didn't happen. And so now I know there is nothing.

And My, my wife has told me numerous times, it's like, it's like, babe, I'm in this forever. Like, period. again, another courage moment, you know, so I truly, it is, it is, my resiliency is solely based on the perspective that I've been given through my journey. and God's good grace, because I'm telling you, like, there are some things that just don't make sense about my life as to where I am now with the opportunities I've been given now, that I would be foolish not to acknowledge.

God's kindness on my life. but perspective is everything for me. That is, that is truly what keeps me going forward.

How James Believes We Can Push The World To Evolve

The world will only evolve to the benefit of all those in it if the parts are thinking of the whole while they're growing. I'm all for personal growth. I'm all for development and learning. But if it is solely to your benefit and not, how can you serve? Not how can you be a better wife or husband? How can you be a better employee?  How can you be a better entrepreneur? If the heartbeat of why you're trying to grow and learn is self seeking, then the benefit of that growth dies with you. But if your growth and your personal development and evolution is so that you can serve those around you better, then that has the legacy impact.
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How To Find Courage After Startup Failure

Featuring Guest -

James McKinney

hosted by: Brandon Stover
047

November 10, 2020

James McKinney is the Founder & Host of the Startup Story, a weekly podcast for entrepreneurs with over 65,000 monthly listeners worldwide. However James has his own amazing startup story. Imagine you are launching a business in the middle of a recession, you score the biggest government contract of your career, leverage 300,000 dollars worth of your own assets, and then lose it all… Would you get back up again and start another business? James has not done this once, but numerous times. From Disney's corporate world to the launch of his SimpleDeal Mobile app, this serial entrepreneur has ventured, stumbled, ventured, succeeded, and then ventured again. Which is why he is so focused on bringing authenticity and transparency to the entrepreneurial journey.

After being director of a Startup grind chapter, he discovered the power of sharing stories about the daily grind, the grit, and business trials of others. So he embarked on launching the Startup Story, which has had over 500,000 downloads, been a Top 10 Entrepreneurial podcast in all of iTunes in the USA, UK, and Australia, and shared the stories of founders such as Ben Chesnut of Mailchimp, Jamie Schmidt of Schmidt’s Naturals, Michael Littig, the co-founder of the Zuckerberg Institute.

Whether from his time in the marines, selling accounting services, having over $280 million in career sales, raising $140,000 for an app, or Increasing Disney’s revenue by 271% within the first two years there, this wealth of knowledge continues to impact hundreds of thousands of entrepreneurs every week with guidance and support.

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This article is sourced from the Evolve Podcast, a top startup podcast. Listen or subscribe below.

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Scroll to the end of the article for selected links to important resources mentioned in this episode.

Into The Depths Of Entrepreneurship

Brandon Stover: [00:02:34]  I'd like to start with that first major business that you had in 2008 and kind of the rise and fall as an entrepreneur that you had. Can you share the story of that first business?

James McKinney: [00:02:46] Oh, yeah, man. So, to go back a little bit, I have not been a, career entrepreneur. I mean, in fact, I avoided entrepreneurship for most of my life. My dad, ran a print shop. The CFO and lead sales person, stole clients and embezzled money. And so I saw the hardship of that business shutting down as a team.

And I didn't want anything to do with it. I was like, man, I just want a steady nine to five like that. Like I saw, I saw the heartbreak that my dad went through and then, some of the challenges the family went through because of it. so with that said, you know, as a punk kid, my only. My only opportunity outside of high school was, the Marine Corps.

So I joined the Marine Corps, paid for college. I had ambitions of being a teacher. in the pursuit of trying to be a teacher, I had to take like an accounting course for some general ed saw how easy it was. And so I started selling bookkeeping services on the side with, again, not knowing that the entrepreneurial gene was embedded in me.

I'm just like, Oh, I can make some money off of this one class I took. And then as I had a book of catalog, a catalog of it, customers. I thought, man, if I'm going to do this for like, for a service, I should probably know more than accounting one Oh one. And so I started taking more business classes and had this catalog of, clients.

And I S I changed majors. I went to business instead of liberal studies to be a teacher. And it wasn't until the last semester where I looked back at that man, like, I wish I was going to be a teacher, instead of this. And, but I'd built this business. This was a side gig just to help make ends meet.

And, I had, you know, 20 to 30 customers at any given rotation. so I kind of built something small, but I still didn't want to go that route. Full-time because again, I remember my history as a kid, seeing what my dad went through. And so. Yeah, it's a say numerous careers, numerous job opportunities.

And I was working for a real estate investment firm, had our first kid at the time. And. We're pregnant with our second. And I was like, man, I just want to do something creative. Like I know in the online space, like I can just create something. And so I launched what was the very beginning called all business calendars.

It was a URL or businesses can go get promotional product calendars. And that's the only product I sold was that singular product. And, you know, being online, it started to grow slowly. And it got to a point where I was like, man, like, this is the only product I'm selling. You know, I'm already strapped from a bandwidth perspective, because I hadn't streamlined some of the processes or anything.

And I thought, man, what if I did this full time? You know, like what could this be? And at this point I'd kind of forgotten a little bit about my childhood and the church challenges my dad went through. And so I had, kind of got that itch to do something again, not knowing it was really just a part of who I am.

And so I, I left that real estate investment firm went all in on my, what I call what I consider my first startup, you know? Yes. I, I do consider somebody early grade school hustles with the bubble gum and the Gulf war posters, which would totally not fly from a political correctness these days. I'm just gonna put that

Brandon Stover: [00:05:57] right.

James McKinney: [00:05:57] but, So I started all business, which was a PR printing and promotional product brokerage. So brands would come to me needing product catalogs, stationary, wherever the case may be. And I would find a source for it. I had this vision for being almost like this, this aggregate buying resource where, you know, multiple brands would commit to some annual spend with me and I would then leverage and manage it for, greater resources for them because I was getting them prime dollar at a book level.

So I was going, let's say, for example, you know, for those that are on the West side of the United States, you know, in and out burger, right. I, I pitched it out burger, like, Hey, We, I know what you spend in printing in these categories. If I combine this with what, you know, Kaiser Permanente and HMO was spending, if I combine the buying power of both of you, I could get you a savings of about 20%.

but I was a one person show. So they were like, okay, who's this kid, like, what does this, what is this, you know, 29 year old thinking that they can accomplish? Or I guess at that point I was probably 32, maybe. you know, and so that, that idea didn't fly. But I continued to have a growing business and, got into the government space. Government space for anyone out there listening.

Who's in sales. Or has a product they think the government might be interested in, man, I'm telling you, government procurement is fantastic on so many levels. That's a whole nother conversation. Feel free to hit me up on LinkedIn. And I'll happy to kind of give you my insight into the government procurement process.

but like your intro said, I had secured, a $110 million contract. I was one of 11 people permitted to participate. I was the only solo preneur in that whole list. The rest were facilities and manufacturing plants, but I had put the package together and was able to participate in it. Well, I thought it was pretty hot stuff.

I thought I was like, man, like, dude, I am killing it right now. And I began to, to really kind of shut off mentally from hearing what other people had to say in my life, because I was like, I nailed this. I just got, I just got participation $110 million contract. Like what input do you have to say into my life?

I'm I'm firing on all cylinders. Well, that will, That will destroy you period. Like that mindset will never bode well for you. And so what had happened was I got, under that contract, I got a purchase order with the LA County Sheriff's department for, USB drives and it was a sizeable contract. I was getting USB drives made overseas.

And being young and again, not wanting to listen from guidance from anybody. I went down my own route on how to source out of China. And so I had purchased product. That required me to put 50% up front prior to order and 50% upon when the boat left the dock. And so, so I did that, and I was out, you know, 300,000 plus dollars leveraged all the credit cards, the house, 401k, like all the things the wife didn't know, because this was going to come right back to me.

They, you know, I was going to get paid as soon as they hit, as soon as they hit land, I was going to ship and I was going to have that thing paid. And I was going to have the cash in bank in 30 days from shift from when he left China, that was, that was, it was all planned out and pictured perfectly. And I was going to make, you know, I was going to double my money basically.

I mean, it was a $700,000 PO and I was only, it only costs me 300 grand. And so. It was all great, but, like many entrepreneurs, no, you cannot, you cannot, forecast the economy. You cannot forecast political, bills that are signed into place. And at that time we were entering the worst recession in us history.

so to put a date stamp on it, we're looking at Oh eight Oh nine. when things were really starting to unravel and inside of that, in fact, The, federal stimulus package has just gotten signed. Well, part of what that did was that package canceled funding and some categories and reallocated to other categories.

Well, one of those categories that I canceled was the funding that the LA County sheriff was using to pay for. And again, I was a small piece of all the things that got canceled, but it was a big piece to me. It was everything to me. And so I got so as the three or four days after, I sent the final payment and the, the USBs were on a boat to the U S I get a cancellation letter from LA County sheriff.

And I have never been more sick in my entire life. Like as I, I didn't see, I didn't see the letters on the page. I saw. My house. I saw my 401k. I saw all the credit cards and even more. So I saw my wife who didn't know what I had done and how I had leveraged us. And so, I mean, it was a, it was a long, long, I mean, man, it was a tough, tough space.

And so as a, as it got to land. I hear, I have these USB drives that I can't do anything with. they were branded on them. you know, I ended up selling them on eBay for pennies. I mean, absolute pennies, to, to someone else who was able to do something with them. a lot of third world countries is where they went with all these things.

But at this point I knew the business was not recoverable. Like I had, I had to tell my wife, and, I go into great detail in my own personal story when I share it on my podcast, I started the story. But, you know, for those, I think it's pertinent for you for those listening. because I want to talk about a little bit about how dark the failure got, because I think it's important to understand that, to understand how I got out of it.

in my mind it plays out like it was a dark and rainy night. I don't know exactly if that's how it was, but I remember coming home and knowing that there was no recovery from this, like w that we were going to lose it all and sitting, as my wife to sit down and, kids are put to bed.

And I just told her everything, told her how I had leveraged the house without her knowing, drain the 401k is maxed out the credit cards. She had no awareness of it, how he lost everything. she was a stay-at-home mom from the moment we had our first kid. And so there was a lot of things that, I didn't know, she would process through.

I just knew all the bad that I had done. As I'm telling her this my mind tells me, there's no way she's staying with me. Like now my God, I'm going to lose everything else. Like now I'm gonna lose my wife and my kids. And she doesn't remember it this way, but I will never forget it because of what it meant to me, the, her first words after I had unloaded everything, her first words were okay. I trust you now. What?

And like, in that moment, The amount of courage that I had internally. Was as if I was an entirely different person and you know, we use the word encourage, like it's a hallmark card, right? Like, Oh, wow. You're so you're so encouraging. Like the re the word itself means to place courage inside of some, like it is.

So if I'm encouraging you, I'm giving you courage to do something. I'm not making you feel good. Like that's a compliment, right. People, people say encouraging when they really say, wow, so complimentary, like. Like in that moment, she had actually placed courage inside of me to just kind of raise up and I didn't have answers.

And I told her I'm like, I don't know him. I don't know. I, I said, I, I'm pretty sure we lose the house. I'm pretty sure we're going to go bankrupt. and I'm pretty sure I had to get a job to figure all this out, but I just didn't have answers. and at that point, you know, I had really. Reached a place that I had to acknowledge that I didn't have the answers, which was 180 degrees different than the place I had gone to.

When I thought I was hot stuff with all those contracts that I won. And so it really was this roller coaster of pride and humility. To understand where to navigate. There were so much grace when I was humble, so much isolation and arrogance. When I was prideful, I was just like, it's, it's so crazy. The polarities in which they operate.

but in that moment, I was just, I was a new man. And from that point on, it was a slow rise again. so that does answer your question about the early days.

Gaining Courage After Failure

Brandon Stover: [00:14:25]  I'm curious, once you had that courage, what gave you the confidence, you know, after you worked for Disney and whatnot, to start thinking about doing it again, I mean, that's a huge undertaking. You went through quite a bit and be like, you know what, it's time to get back on the horse.

James McKinney: [00:14:42] So, you know, to get people perspective, it was five years. So, you know how I got a job at Disney still amazes me organizations that big, like, you really need to know somebody. I knew nobody and which is rare because  one of my strength is strength as being a connector. And so the fact that I knew no one kind of surprised me.

I went to look and I saw a job on the board. I'm like, Oh, I got to know somebody in that. And I didn't, but lo and behold, I got the job. So I was so blessed for that, but it was five years of just, you know, licking my wounds through the process, healing the family a bit, you know, getting us stable financially and from a home perspective.

And then what happened was, one day as I was getting ready to go to work. everyone, you know, I'm sure your listeners as well will resonate with it. Like everyone has a place where they just think more clearly than others. Like it's, there's no distractions. It's just, it's you in that space, in that quiet environment, whatever it may be.

for me, it's the shower. And

Brandon Stover: [00:15:42] Yeah,

James McKinney: [00:15:44] And so as you know, and again too, and maybe part of it is because, you know, I have kids that are at the time were older and now they're even more. Yeah. But you know, it's like, it's the water just drowns up noise. And it's just like, I'm thinking about my day. And in the process of thinking about my day, I started thinking about just what could be in future ideas or whatever.

So in that moment, this idea for. A mobile app came to be. And so I come downstairs, I'm like, Hey, I had an idea in the shower and I wish your listeners could like picture this moment, but she's, you know, I'm at, I'm at this bar. That's on the one end of the, of our kitchen. You know, ready to eat breakfast and she's at this sink and it's, you know, I'm, I'm directly to her left by about, you know, 30 feet, but I'm at, I am, I am not in her peripheral vision.

So without even moving her in her body at all, she just turns her head on a swivel and looks at me. Cause she knows what that means. She's like really a shower thought. Huh? So, and so that really started to spark the conversation, but, but my posture. In how I pursued was so differently than anything else before, because now I knew I had learned what all the, not all the mistakes, but I learned from many mistakes from my past one.

So I went slower. I went smarter. I planned, I planned better and I had more communication with my spouse, with my wife. then at any point in time before, because now. I had, I knew what I kept from her before. Again, it wasn't, I wasn't trying to keep anything from her. In fact, I remember telling myself when I was refinancing everything to pay for that PO, like I was trying to, protect her from the stress of it all, because I knew it was a for sure thing, but the reality was, and she told me this later, she was like, the best way you can provide that to me is to communicate to me.

Like you just tell me everything like, and that way I'm never in the dark. And I was like, wow, I would've never guessed that to be true. And so I just navigated this mobile app differently. And so, in that process, the mobile app was an interesting concept. I still believe it to this day that it has, a place in the market.

at the time everything was going to AR cameras, right? So you hold your camera up to a location and you could see information about the location, but from a use case, like, I don't want to hold my phone camera up to see a location, but we all use television remotes. And with location data, I had this vision, like, why can't I just use my phone?

Like, yeah. Television, remote, where I just pointed out. They're like at like, I want a TV remote and push a button. And I see all the information about that place. And the idea was, starting with restaurants, but my, my hope was to have built it to be like everything. Like if you're in Paris example, tower, you push a button and you all send us like information about the Eiffel tower.

Maybe you see something video is about it's it's, you know, a time lapse video of it being built. Like just content around the location. at the push of a button, not the use of a camera, I'm not, I personally, not a fan of that. Google says otherwise, so they keep putting money into AR and that's where it's going.

I raised money, to build it. I, you know, I did it so much in my mind, so much more intelligently. and slowly I did it while working at Disney, I didn't jump the gun right away. I went from Disney to another job, while still doing this.

And then even when I was getting ready to come to market, my developers. needed a sales person and because most developers aren't salespeople. And so, you know, I said, Hey, I'll sell it for you. Keep building my app. And so I, I tried to be more intentional in that process, but it just couldn't get it anywhere.

you know, the. The loss of not being able to grow that and build that it wasn't a personal loss from a financial perspective. I did lose my friends and family. I lost their money. you know, so that weighs on me still to this day. I hope to, at some point, have the liquidity where I can just pay them back for their trust they put me obviously, you know, they'll still have lost the time value of money, but. The principal, I would still love to just pay them back because they've placed trust in me and I couldn't, I couldn't deliver at the time. but that, but inside of that, I learned a ton about, you know, not being a technical person, trying to build a technology company.

I want to just make it clear, like it took time to get there. Right. And during that five-year period, there was never this, this weight of, No, I failed as an entrepreneur. The, the weight I felt in those five years was, you know, I let my family down, you know, I embarrassed my wife, you know, cause this was a home that she was entertaining in.

And now she's got to explain to friends and family that we're moving. Why? Oh, because James lost the business. you know, she was, she was kind in the way she described it, but the reality was I dropped the ball.

Once, Twice, Third Startup Is The Charm

Brandon Stover: [00:20:23] So now you've cycled twice as an entrepreneur, with, you know, a few different ideas and you're coming up on the third one with the startup story. what gave you the passion to jump into this one? Why such a fire for it?

James McKinney: [00:20:37] So when I, when I realized I wasn't going to be able to do what I wanted with simple deal, which was the name of the mobile app, I had such a hard time. Believing that it was me, like in my mind. And it wasn't from a position of, of arrogance. Like my first one, the, the idea that I had a hard time believing it was me came from this idea that I don't necessarily believe that successful entrepreneurs are that different than you or I or your listeners.

But I didn't have any, it was just an assumption. I didn't have any data to back any of that up, you know, there are the anomalies, there are the Steve jobs and the Elon Musk's right. the Mark Cubans, but they are the anomaly. It's not the norm, but when you're building, when you're building a technology startup, you know, you're reading and Crunchbase, all the fundings, you're reading on tech crunch, all the stories.

And you're, so you're, you're, you're building this framework of what a successful entrepreneur looks like. And you begin to believe it, but I didn't believe it. I was like, I don't, I don't see it that way. And so I started reaching out to people that were more successful than I, and just having conversations with them, like coffee, just, I would say, Hey, I'm coming off of my second failure.

I just want to learn what I might've done wrong. Can I take you to coffee? And I kid you not, I mean, I maybe had in all of my outreach, I maybe had like two or three that said, no, you know, I'm, the entrepreneurial community will, will always show up if the intentions are right. I truly believe it. Like, I mean, people say it all the time, you know, how do you get these people?

Like my intentions are right. Like I truly want to learn, you know, it's not, I'm not coming in like, Oh, can you teach me? Oh, Hey, by the way you want to, can you buy this? Like, I'm not like I'm not a snake oil salesman. Like I truly want to learn. And so, And then as I was having these coffees with these incredible entrepreneurs, I started sharing the stories and the learnings with other people.

And all of them were like, man, like, like, can, can you like. You know, do something and you record this China's is a pre podcast. Well, pre podcast, my awareness, I should say, can you like to record this? And I'm like, well, maybe I just do like a live events. Right. And so got hooked up with startup grind, which is a great, like global community entrepreneurs.

They have like local events, at a small scale and. And I started doing this and I, we quickly became one of the larger chapters in the U S where we'd have a hundred to 200 people come to hear these stories of entrepreneurs, as I'm talking with them again, same thing I was doing at the coffee talks, but now just an ticketed event where people would pay, you know, 20 bucks to come here themselves.

And it was amazing again, from a value perspective now is like now not only was I getting to learn, but I was helping. Everyone else in there learn. Right. And so. you know, I, there is a bit of a salesman in me when it comes to like, I'm not going to lie. There's a lot of salesmen and me when it comes. So, so like, as I was, you know, I was always trying to reach for that, like that next level of founder, just to kind of create a bigger draw in a bigger community.

but I also wanted to hear their stories, right? So like, you know, in the live event I had Larry namer, the founder of entertainment television, you know, came to this again, you know, Santa Clarita, which is where, where these events were held. Was, miles wise, it was like, you know, 20 minutes North of LA time-wise is about a day and a half because traffic is so bad.

But like, so it took a lot to get people there. But the entrepreneurs I reached out to were so gracious with their time, like, yeah, I'll come in, I'll help out. I'll give you give some time. But in that moment, in those moments and those events I'd have people come up to me. And this one in particular, after Larry namer, the co the co-founder of entertainment television, I had three people come up to me.

And said, you know, James, do you have a podcast? Cause if you had a podcast I'd listened to it. These three people didn't know each other, they were independent occurrences. And I thought that's really weird for something like that to happen in one night. And so I started giving it and I was listening to podcasts at that time.

And so I started to give it a little bit of credence because it just how unique the situation was. And I was like, at the time I'm running sales for a software development company, I'm back into government procurement. you know, things are going really well. We're getting ready to move to Texas at the time, out of Southern California.

So like all things were firing and you know, at this point I'm a year outside of simple deal. and I thought, huh, a podcast. Well, I guess I could sell some ads and sponsors and make a little side money. Like it really was. More. So to keep my, desire of connecting with entrepreneurs, to, provide way for people to hear the same guidance that I'm hearing and if I can make some money on the side. Great.

And so that's kinda how it, how it happened. And so I remember talking with my first sponsor Mobo cash and I said, Hey, I want to do this. They were one of my live event founders. I said, Hey, I want to do this. Would you help fund it? You know, sponsor number one, he said, yeah, absolutely. And so, that really January 15th of 2019 is when we launched our first three episodes.

And, it's been rolling ever since. And so, yeah, it's been an amazing journey.

The Power Of Hearing Another Entrepreneur's Story

Brandon Stover: [00:25:53] Can you speak to a little bit to why storytelling is so important? You know what the value of hearing another person's story is?

James McKinney: [00:26:00] That's a great question. you know, and I, I want to answer this, not from my own personal desire. I think the value of story has to be that I believe it can, reveal a person's true intention. It can make them more transparent, more authentic. And the reason, let me back up a bit, the reason I say that is. For my podcast. People ask me all the time and you didn't, you didn't give me any questions. So for all the listeners, like Brandon doesn't provide questions. It's a conversation. But I think had you provided questions just, which is why I don't provide questions. We begin to frame up pitches in our mind.

We may say, it's not a pitch. We may say we're just having a general conversation, but I begin to frame up something in my mind that shines me really well. Like, is it, we are. You know, we are people that want inherently help ourselves protect ourselves. if you will protect our brand, our, our public persona.

And so whether it's intentional or not, I, for that reason, I don't provide questions ahead of time. That's the power of story, right? In general conversation, when it's truly. An organic conversation and storytelling comes into play. I believe you will actually see the true heart of the individual. Like you will begin to see authenticity and transparency and I don't care how successful the individual they are, how successful the individual is.

Within the context of just storytelling about their life and their journey, you will be, you will see moments of joy that they, that they probably haven't spoken of publicly before, because it was just organic and they'll see moments of, of processing as they grieve a moment again. Right? Like it's, it's, it's been unbelievable.

The conversations that I've been able to have, by just hitting, you know, again, exploring a person's story, but I believe storytelling, we inherently, as people, we. We view our lives subconsciously as a story, I truly believe it. Like, you know, we want to be the hero. Like again, fundamentally our internal ego wants us to be a hero.

That's a story element, right? So if you need a hero, who's the bad guy. Well, we make up who our villains are and our enemies are right. They may not be, you know, who's the, who's the damsel or the, you know, the night in distress, whatever it may be like, you know, we, we, we place ourselves into this. Story narrative.

It just is a little subconscious a lot of times.

Brandon Stover: [00:28:27] Yeah. And I think, entrepreneurs do this quite a bit. I mean, you know, most of my listeners, basically, you're trying to build businesses. To, you know, solve something in the world. They're trying to be a hero in some way to, you know, whoever they're serving.

James McKinney: [00:28:40] Yeah. I mean, there is, entrepreneurship is very much a, I, A great story. I said it so many times. Like there are so many stories I hear that I wish I can make into a movie, you know, like, and then, you know, everyone knows the social network when they did it of, Mark Zuckerberg's story.

And that was an amazing movie, but I've heard stories of, of cookie manufacturers. That I know would make a great movie. I've heard stories of an Instagram influencer that I know would make a great movie, a florist. I mean, I've heard so many stories like Christina stumble, a farm girl, flowers, her story would make an amazing movie, but.

whether or not Hollywood sees it that way, but we as entrepreneurs, we know for sure the entrepreneurial journey, what makes for a great story and all your listeners have decided to place themselves into the role of the hero. And they're trying to conquer whatever challenges ahead of them. That challenge, maybe right now, it could be COVID.

You know, the economy in general, that challenge may be, you know, technical challenge. They may be a, an obstacle with hiring ed. There's so many, there's so many things that we have to battle through the muck and the, to get to our end goal. Like it is very much a story that we have placed ourselves in the middle of sure.

Brandon Stover: [00:29:54] Absolutely. What skills, or you as a storyteller, how do you pull that story out to provide that value to your listeners to get that out of your guests?

James McKinney: [00:30:05] I, at some point I'm going to take that question and have a better answer for it. Cause I've been asked that numerous times and maybe I will, after this, maybe I'll just make a note to, to jump in the shower and think through a better answer. Cause since that's what I think clearly, but like this past week, let me, Give a framework. So, on September 29th, we released an episode, with Jennifer Beck communications, their PR firm, on both coasts LA New York. And. After the episode aired. I never give my, my guests the ability to listen ahead of time. Like they hear it when the general public hears it. I'm the same thing.

When I released video content on entrepreneur.com, my guests don't get to see the final product. Like it is what it is. if you want to be a part of the show, you're just going to trust me that I'm, I'm doing this to serve. And so the content is going to shine a light. She's going to shine a light well on the lots of people.

And so. As they were hearing the episode and the firm was hearing the episode for the first time. someone reaches out to me from the office that helps schedule it all and said, James, our Slack channels are going crazy right now with how proud everyone is of the episode. and she just starts, you know, giving me this, these incredible grand compliments and she makes this statement.

so it is so apparent that you do so much research on your guests. And as a, as she's giving a compliment, I, I said, you know, can I, can I be honest with you just said, yeah. And I said, I won, I receive all the compliments I receive. I thank you so much for it, but I'm gonna be telling me to tell you the truth.

I don't do research on my guests. And she's like, what? And this is, you know, a publicist, right? A public, you know, publicity for them. They do lots of research, you know, to try and craft stories and things. And, and, I said, I'll tell you why I don't do research. I said, because I want to hear their story from them.

I don't want the media to take me. I don't want my own research to have this idea of what their journey looks like and why they made decisions. They made. I want to hear it from them. And from that conversation is where the rest of my questions come. And, and here's why I think to answer your question, how, like the skillset she responds with again, the first time I've heard it, my wife has never said it to me.

She, she said, wow, you must be an amazing listener then. And I was like, Oh, that must be it. And I will it's from a skillset. I will say, I, I guess I am a good listener, you know, but I'll even peel that back. Additionally, from a tactical perspective, you know, if someone wants to know, like, where do you learn this?

Where do the skills come from? I'm a good listener, but I'm a good listener because I truly care about people. I care about the person I'm talking to. Like I do not glance on my phones when I'm with someone at, for coffee, you know, I, when I'm scheduling or recording a podcast, I may glance at the clock for times.

I want to keep things on a certain pace, but I am in that moment with that person. and I care about their story. I care about how that story is presented to the world. I care about them looking like the expert that, that they are, regardless of the stumbles they've had. And I care about the listener.

And delivering true value, connecting somehow with my guests, a story with the listener in their car, running, working out, whatever the case may be, whether they're listening to the startup story. I care about trying to figure out how do I connect this mazing moment I'm having with this founder to that person.

Who's listening. Like, those are the things that run through my mind. And yet I'm still actively listening in the moment. So from a skillset perspective, I guess it would be a great listener and I care so much about the person I'm talking with and the person who will hear it later.

Brandon Stover: [00:33:53] Absolutely. I think that's a really good skill set. And I think what comes out of it too, is, you know, not looking beforehand a sense of curiosity, really wanting to hear their story. I'm somebody that researches quite a bit beforehand. We'll look things over and you know, pre-write questions.

James McKinney: [00:34:09] And there's nothing wrong with that. Like, I want it, you know, like, I love that you do that. And I love that many people do that. I mean, I've heard some amazing interviews because of that. Like, there's probably things I miss by not doing that. and I think I'm okay with that miss for right now.

How To Monetize A Brand In The Attention Economy

Brandon Stover: [00:34:23] Let's talk a little bit about the nuts and bolts of startup story, because I think every business going forward in the attention economy is going to have to be a media brand or some sort of media to their, their company. what strategies have you done for monetization since you launched?

James McKinney: [00:34:45] Yeah. So, so January 15, 2019, we launched, sponsorships and in episode ads have been my monetization. I'm not a huge fan of affiliate revenue. I know I'm leaving money on the table by not doing that, but the reason I'm not a fan of it is. If in all of my email communication, which is really where affiliate revenue actually takes place.

I mean, you can do affiliate in the episode, but there's too much leakage. Like, you know, you may, you may hear a brand like you may hear me say like, Oh, make sure you visit express VPN and use code startup story for it. Like you'll remember express VPN chances of you possibly murmuring the code are slim to none.

So like in episode affiliate, I'm just not going to do, but email. If I'm going to do it, that's why I'm gonna do it. But I just don't want my email communication to constantly come across as though I'm selling through affiliates. Now there are things that I will sell and, but it's very clear that this is a sale, not just a, Hey, check out this, you know, this kit list of everything that I use to create a podcast in my email communication, because that's obviously an affiliate link I want to just constantly, you know, deliver value.

So the, my main monetization sources were sponsorships and in episode ads, Then at the end of 2019, I thought, man, like this all kind of started with live events. I want to get back to live events. And so I started brainstorming this idea for startup story live. And when I say brainstorming this idea, like it was a pretty grand idea.

Like we were going to be at the Dallas Cowboys global headquarters here in, Dallas metroplex in Texas. you know, the facility would hold 12,000 people. I wasn't going to have more than 1500 people. Like I was, I, you know, I, I didn't think I knew I couldn't sell that thing out. And so I was only to have like, you know, 1500 people or so, and, and so big plans for it though.

I mean, it was, it was going to be. You know, and, from a financial perspective with tickets and sponsors and advertisers and everything, it was going to be a half a million dollar deal for me. And as we announce it in late February, I had my guests as me Baron Davis, NBA, all-star early stage investor in vitamin water with 50 cent, like a big deal, dude.

Right. I had Jamie Schmidt was Schmidt natural. She's going to be one of Luke Fox of white Fox defense technologies, which is a drone security company, unbelievable technology, Jamie Smith. Story's amazing from kitchen acquisition and seven years for over a hundred million dollars, like an unbelievable story.

So it was going to be an amazing event. And, we announce it mid to late February, early March. COVID becomes a real deal. And at the time, I truly didn't think this was going to be anything, you know, cause I'm talking to sponsors who are wanting to spend significant money. I was talking to one brand who wanted to be the title sponsor for that event and my buy event that was going to take place in the fall in Austin.

Like we were talking a big deal for those two events and lost some other opportunities. And they're like, well, what are you going to do? You know, if we have to cancel because of COVID, I'm like COVID is going to come and go. I've seen this thing before, like this is, you know, end of March, we're not talking about this anymore.

And they're like, okay. you know, I'm glad you feel confident about that. And so just as we were getting ready to sign the final contract, President Trump comes in and shuts everything down for the month of April. And I was like, Oh, this isn't going away. And my sponsors are like, this isn't going away.

And so all the conversations, not just the title sponsors, all the conversations I've had that were about sponsoring this event were gone. Now my ticket sale question becomes, do I sell tickets? Because my event was going to be, I think it was going to be early or mid may, I think was the initial date. And now the month of April is canceled.

Like, no one's going to buy tickets to a live event. If they, if they're being told live events are dangerous, you know, of course, South by Southwest it canceled, like all these other things that canceled take place. So that was gone. My show sponsors and advertisers started pulling out because they're keeping cash close to the vest.

As most businesses work is they had no idea what was going to come up all of this. So I had no, I mean, starting in April, there was no revenue coming in and all I kept thinking to myself was, Oh man, please don't let this be a replay of 2008. I just, don't let this be a replay of 2008. and so it just, it forced me to just kind of rethink and re-engineer like, how, how do we monetize?

How do we monetize? And so I pivoted that live event to be a virtual event. you can't really charge upfront for a virtual event. it's a tough sell. And so we did it for free. but I did have an upsell that if they paid. before the advent of they pay $29, they'd have access to all the video content from the things that they could watch it whenever they wanted.

they have an increased price of that, but that event launched what is what I call startup story inner circle, which is a, subscription membership that allows you access to view all my video content from live events, private, podcast recordings and allows you to attend live recordings of my podcasts.

You can, then when we're done recording, you can ask my, the founder guests like questions directly to get their questions answered. I mean, I had Ben Chestnut of MailChimp for crying out loud. And my inner circle members got to ask this guy who bootstrap meant for those who don't know, MailChimp is an email service provider. They, he bootstrapped it all completely didn't take any investment capital in fact said no to investment capital. They're valued over $5 billion and he did it with zero investment money. It's an unbelievable story. And so like those in my inner circle got to ask him questions directly. There was a, a lady in the inner circle makes, You know, upscale pajamas, and she's asking Ben Chestnut questions about distribution. It's like, this is unbelievable. And for me it was, it's awesome to see someone have access to someone. They probably wouldn't have access to otherwise.

And so that, so COVID screwed a lot of things up. It did force me to rethink and kind of bring this inner circle to the table a lot sooner. So it's been an interesting journey and I mean, not only to do that, As the audience kept growing.

and I started seeking counsel and guidance from more founders on like, how are you navigating COVID? and I was sharing kind of our own personal journey. So many people said to me like, James, if your audience keeps growing, you need to find a way to monetize that audience regardless of sponsors or ads.

Like you've got to have something. You know, you know, that you can sell, I'm like, Oh, the inner circle, like, yeah, that's a digital membership. That's great. You need to have a physical product. I'm like what a physical product. So I started brainstorming, just trying to think through like what, what would be organic, authentic, what would continue the mission of serving through stories and providing resources to entrepreneurs?

And what came to me. This is, you know, again, one of those shower moments, I got it again for all your listeners. Think about your place. Like you have a place, you have it, you have your quiet place where ideas go. Think about where you came up with the idea for the venture you're working on right now. Like everyone's got a place.

So, so one of those shower moments, I'm like every entrepreneur, like this really truly started with me having coffee with founders. Like, this is how it started. I'd reach out and have coffee. Like every, every founder, every entrepreneur loves coffee. I'm like, Oh, coffee, subscription service, Mike. Yeah.

But how does that serve my audience? Like how does that really deliver the tools and resources? Is that just a money play? And I'm like, Hmm, let me think about that. And so. What it became was this quarterly box that would have, you know, really well-made crafted coffees and entrepreneur. We don't like crappy coffee.

Like we drink it cause we, we need to sustain life, but we want good coffee. So it's not always as good coffee, but. It's going to have a cool mug as well, but the resources from brand partners are going to be in this. Like, so as an entrepreneur, what are the things you would have productivity, hacks and life hacks that you need?

What are resources you need to build your business from an infrastructure, a hiring perspective. and so all these resources come into play, but again, from all my various learnings, I started talking about this idea with other founders and all of them were like, James is a great idea. I haven't seen anything like this before.

but. You know, and I want to, I want to thank, you know, my good friend, Chris George at the subscription trade association, he said, James, so you need to think through the use case of your founders. Like, what do you mean? It's like your founders listening, you know, they, at the middle of the day, they'll have answered thousands of questions, answered thousands of questions.

They're probably stressing over payroll trying to figure out cashflow. Like they have challenges in their life and here comes this beautiful black box. So the brand is called . That's the name of the brand we're launching. He get this beautiful black grindology box. They know what's inside. They're excited for it.

They open it up and there's a bunch of stuff from brand partners. It's no longer a joy. Like you've got to figure out a way to present all this better. Yeah. I'm like, Oh, that's interesting. He's like now what if that same founder gets this beautiful black box, they open it up and inside is a grindology magazine that has all the resources, tools, productivity hacks from your, from your founders, that, you know, all the stories and all the resources.

It's all within the, almost like a, how to manual for a specific topic for that quarter. And then inside, they see their coffee in their mug and they have their magazine. It's like, that's the experiment. That's it. So grindology now, it's, it's available. I mean, pre-launch is available. You can go on and sign up to be notified when it does launch.

but  is a coffee subscription service specific for entrepreneurs, makers, creators, and those who have, trying to create something into this, into this universe. But there's going to be a magazine that is all about educating, providing tactics for the individual. They can live it, my hope for this magazine, because it takes a lot of work to pull off a magazine is so different than a podcast.

You know, my hope for this magazine is that it truly is. For the, for a three month tactical strategy for a founder on a specific topic, each quarter we'll change the topic, but you know, to have someone like Ben Chestnut chime in on user acquisition, like it's going to be in there to have Larry namer chime in on what it means to have immediate and content strategy.

Like he's going to chime in, like it's all centered to provide the founder with actual tactics for the next quarter. I'm super excited about it.

How To Have Resiliency As An Entrepreneur

Brandon Stover: [00:45:02] Amazing. Well, something that I want to pull from that story. And your first story. both in 2008 and then now in 2020, like we have some very turbulent times going on, you've gone through a few failures of a startup. How have you built your resiliency in, you know, being creative during those times? Being able to think through it, keep going forward.

James McKinney: [00:45:24] It's all about perspective. you know, and I say it, so, you know, blahzay, I mean, it sounds so simple, but it's simple because it's true. Like, I have been in my mind to the darkest of places, you know, because of what had happened in Oh eight and Oh nine. And even in. That dark situation where we lost everything.

I didn't lose my wife and kids. Like I have nothing to fear at this point. Like I'm never going to fail more than that moment. Now, startup story may fold. Grand Knology may not take off, like I'm not saying that I will be successful, but what I'm saying is the manner in which I failed in Oh eight Oh nine is the worst manner in which I'll fail ever, because I'm not communicating better.

I'm serving more people in mine. My wife is well informed of everything going on with the business. And so, so if it does fail, she's not surprised because I'll have been talking with her for quite some time about it. So, because I've gone through what I went through in Oh eight and Oh nine, and I didn't lose my wife and kids.

Like there is nothing. That I am a afraid of now, you know, do I, do I want my ventures to succeed? Of course I do. Like I don't want to go through financial ruin again. I'm not, I'm not chasing financial ruin again. I'm not, I'm not being, reckless in my investments and cash management and decision-making, But I also know it and it's worst case scenario.

I still have my wife and kids. Like it perspective is everything like for your listeners, like, think about this thing that is causing you, fear and an anxiousness about your venture and play that scenario out to whatever degree that you want to go. Like, however, dark you want to take this thing, just play it out.

One, it's never going to get to that point, unless you just don't have a really good imagination then at some point, I mean, if your worst case scenario is you lose your car then. Yeah. I mean, there's a chance it goes there, but, but nine out of 10 times, like our imagination is pretty dark. One. It's never going to get there.

And two, what are the most important things in your life and will these decisions you have now? Impact those things? My decisions had an impact on my family in Oh eight Oh 9 100% they did. But you know, the, the worst thing that I thought going into that conversation didn't happen. And so now I know there is nothing.

And My, my wife has told me numerous times, it's like, it's like, babe, I'm in this forever. Like, period. again, another courage moment, you know, so I truly, it is, it is, my resiliency is solely based on the perspective that I've been given through my journey. and God's good grace, because I'm telling you, like, there are some things that just don't make sense about my life as to where I am now with the opportunities I've been given now, that I would be foolish not to acknowledge.

God's kindness on my life. but perspective is everything for me. That is, that is truly what keeps me going forward.

How James Believes We Can Push The World To Evolve

The world will only evolve to the benefit of all those in it if the parts are thinking of the whole while they're growing. I'm all for personal growth. I'm all for development and learning. But if it is solely to your benefit and not, how can you serve? Not how can you be a better wife or husband? How can you be a better employee?  How can you be a better entrepreneur? If the heartbeat of why you're trying to grow and learn is self seeking, then the benefit of that growth dies with you. But if your growth and your personal development and evolution is so that you can serve those around you better, then that has the legacy impact.

Selected Links & Resources From This Episode

Connect With James Mckinney:

The Startup Story | LinkedIn | Instagram | Twitter | Youtube

Want to hear another entrepreneur who failed multiple times before success? — Listen to my conversation with Ketan Anjaria, founder of HireClub, an immigrant, designer, developer, & serial founder who has paved the way to success through facing his own hardship and focusing on the power of community.

FULL EPISODE TRANSCRIPT

James McKinney Interview

James McKinney: [00:00:00] It's all about perspective.  I mean, it sounds so simple, but it's simple because it's true. Like, I have been in my mind to the darkest of places, you know, because of what had happened in Oh eight and Oh nine. And even in. That dark situation where we lost everything.

I didn't lose my wife and kids. Like I have nothing to fear at this point. Like I'm never going to fail more than that moment.  

Brandon Stover: [00:00:54] hey everyone. Welcome to evolve.

Imagine you were launching a business in the middle of a recession. You score the biggest government contract of your career, leverage $300,000 worth of your own assets and then lose it all.

Would you get back up again and start another business? Well, today's guest has not done this once, but numerous times. From Disney's corporate world to the launch of his simple deal mobile app, this entrepreneur has ventured, stumbled, ventured succeeded, and then ventured again, which is why he is so focused on bringing authenticity and transparency to the entrepreneurial journey.

After being director of a startup grind chapter, he discovered the power of sharing stories about the daily grind, the grit and the business trials of others. So he hasn't embarked on launching the startup story, which had over 500,000 downloads, been a top 10 entrepreneurial podcast and all vine tunes in the USA, UK and Australia, and shared the stories of founders, such as Ben Chestnut, MailChimp, Jamie Schmidt of Schmitz, naturals, and Michael Lee the co-founder of sucker Berg Institute.

Whether from his time in the Marines, selling accounting services, having over 280 million career sales, raising 140,000 for an app or increasing Disney's revenue by 271% within the first two years, this wealth of knowledge continues to impact hundreds of thousands of entrepreneurs every week with the guidance and support they need.

I'm honored to welcome founder and host of the startup story and an entrepreneur who started out selling bubblegum and Gulf war posters in school, james McKinney.

James McKinney: [00:02:25] That was awesome. I'm not going to lie. I did get a little bit of goosebumps as you were reading through. Some of that was like, Oh man, it's weird hearing someone else say it. Versus when you say it.

Into The Depths Of Entrepreneurship

Brandon Stover: [00:02:34] Yeah. Had quite the journey, lots of ups and downs. And I'd like to start with that first major business that you had in 2008 and kind of the rise and fall as an entrepreneur that you had. Can you share the story of that first business?

James McKinney: [00:02:46] Oh, yeah, man. So, to go back a little bit, I have not been a, career entrepreneur. I mean, in fact, I avoided entrepreneurship for most of my life. My dad, ran a print shop. The CFO and lead sales person, stole clients and embezzled money. And so I saw the hardship of that business shutting down as a team.

And I didn't want anything to do with it. I was like, man, I just want a steady nine to five like that. Like I saw, I saw the heartbreak that my dad went through and then, some of the challenges the family went through because of it. so with that said, you know, as a punk kid, my only. My only opportunity outside of high school was, the Marine Corps.

So I joined the Marine Corps, paid for college. I had ambitions of being a teacher. in the pursuit of trying to be a teacher, I had to take like an accounting course for some general ed saw how easy it was. And so I started selling bookkeeping services on the side with, again, not knowing that the entrepreneurial gene was embedded in me.

I'm just like, Oh, I can make some money off of this one class I took. And then as I had a book of catalog, a catalog of it, customers. I thought, man, if I'm going to do this for like, for a service, I should probably know more than accounting one Oh one. And so I started taking more business classes and had this catalog of, clients.

And I S I changed majors. I went to business instead of liberal studies to be a teacher. And it wasn't until the last semester where I looked back at that man, like, I wish I was going to be a teacher, instead of this. And, but I'd built this business. This was a side gig just to help make ends meet.

And, I had, you know, 20 to 30 customers at any given rotation. so I kind of built something small, but I still didn't want to go that route. Full-time because again, I remember my history as a kid, seeing what my dad went through. And so. Yeah, it's a say numerous careers, numerous job opportunities.

And I was working for a real estate investment firm, had our first kid at the time. And. We're pregnant with our second. And I was like, man, I just want to do something creative. Like I know in the online space, like I can just create something. And so I launched what was the very beginning called all business calendars.

It was a URL or businesses can go get promotional product calendars. And that's the only product I sold was that singular product. And, you know, being online, it started to grow slowly. And it got to a point where I was like, man, like, this is the only product I'm selling. You know, I'm already strapped from a bandwidth perspective, because I hadn't streamlined some of the processes or anything.

And I thought, man, what if I did this full time? You know, like what could this be? And at this point I'd kind of forgotten a little bit about my childhood and the church challenges my dad went through. And so I had, kind of got that itch to do something again, not knowing it was really just a part of who I am.

And so I, I left that real estate investment firm went all in on my, what I call what I consider my first startup, you know? Yes. I, I do consider somebody early grade school hustles with the bubble gum and the Gulf war posters, which would totally not fly from a political correctness these days. I'm just gonna put that

Brandon Stover: [00:05:57] right.

James McKinney: [00:05:57] but, So I started all business, which was a PR printing and promotional product brokerage. So brands would come to me needing product catalogs, stationary, wherever the case may be. And I would find a source for it. I had this vision for being almost like this, this aggregate buying resource where, you know, multiple brands would commit to some annual spend with me and I would then leverage and manage it for, greater resources for them because I was getting them prime dollar at a book level.

So I was going, let's say, for example, you know, for those that are on the West side of the United States, you know, in and out burger, right. I, I pitched it out burger, like, Hey, We, I know what you spend in printing in these categories. If I combine this with what, you know, Kaiser Permanente and HMO was spending, if I combine the buying power of both of you, I could get you a savings of about 20%.

but I was a one person show. So they were like, okay, who's this kid, like, what does this, what is this, you know, 29 year old thinking that they can accomplish? Or I guess at that point I was probably 32, maybe. you know, and so that, that idea didn't fly. But I continued to have a growing business and, got into the government space. Government space for anyone out there listening.

Who's in sales. Or has a product they think the government might be interested in, man, I'm telling you, government procurement is fantastic on so many levels. That's a whole nother conversation. Feel free to hit me up on LinkedIn. And I'll happy to kind of give you my insight into the government procurement process.

but like your intro said, I had secured, a $110 million contract. I was one of 11 people permitted to participate. I was the only solo preneur in that whole list. The rest were facilities and manufacturing plants, but I had put the package together and was able to participate in it. Well, I thought it was pretty hot stuff.

I thought I was like, man, like, dude, I am killing it right now. And I began to, to really kind of shut off mentally from hearing what other people had to say in my life, because I was like, I nailed this. I just got, I just got participation $110 million contract. Like what input do you have to say into my life?

I'm I'm firing on all cylinders. Well, that will, That will destroy you period. Like that mindset will never bode well for you. And so what had happened was I got, under that contract, I got a purchase order with the LA County Sheriff's department for, USB drives and it was a sizeable contract. I was getting USB drives made overseas.

And being young and again, not wanting to listen from guidance from anybody. I went down my own route on how to source out of China. And so I had purchased product. That required me to put 50% up front prior to order and 50% upon when the boat left the dock. And so, so I did that, and I was out, you know, 300,000 plus dollars leveraged all the credit cards, the house, 401k, like all the things the wife didn't know, because this was going to come right back to me.

They, you know, I was going to get paid as soon as they hit, as soon as they hit land, I was going to ship and I was going to have that thing paid. And I was going to have the cash in bank in 30 days from shift from when he left China, that was, that was, it was all planned out and pictured perfectly. And I was going to make, you know, I was going to double my money basically.

I mean, it was a $700,000 PO and I was only, it only costs me 300 grand. And so. It was all great, but, like many entrepreneurs, no, you cannot, you cannot, forecast the economy. You cannot forecast political, bills that are signed into place. And at that time we were entering the worst recession in us history.

so to put a date stamp on it, we're looking at Oh eight Oh nine. when things were really starting to unravel and inside of that, in fact, The, federal stimulus package has just gotten signed. Well, part of what that did was that package canceled funding and some categories and reallocated to other categories.

Well, one of those categories that I canceled was the funding that the LA County sheriff was using to pay for. And again, I was a small piece of all the things that got canceled, but it was a big piece to me. It was everything to me. And so I got so as the three or four days after, I sent the final payment and the, the USBs were on a boat to the U S I get a cancellation letter from LA County sheriff.

And I have never been more sick in my entire life. Like as I, I didn't see, I didn't see the letters on the page. I saw. My house. I saw my 401k. I saw all the credit cards and even more. So I saw my wife who didn't know what I had done and how I had leveraged us. And so, I mean, it was a, it was a long, long, I mean, man, it was a tough, tough space.

And so as a, as it got to land. I hear, I have these USB drives that I can't do anything with. they were branded on them. you know, I ended up selling them on eBay for pennies. I mean, absolute pennies, to, to someone else who was able to do something with them. a lot of third world countries is where they went with all these things.

But at this point I knew the business was not recoverable. Like I had, I had to tell my wife, and, I go into great detail in my own personal story when I share it on my podcast, I started the story. But, you know, for those, I think it's pertinent for you for those listening. because I want to talk about a little bit about how dark the failure got, because I think it's important to understand that, to understand how I got out of it.

in my mind it plays out like it was a dark and rainy night. I don't know exactly if that's how it was, but I remember coming home and knowing that there was no recovery from this, like w that we were going to lose it all and sitting, as my wife to sit down and, kids are put to bed.

And I just told her everything, told her how I had leveraged the house without her knowing, drain the 401k is maxed out the credit cards. She had no awareness of it, how he lost everything. she was a stay-at-home mom from the moment we had our first kid. And so there was a lot of things that, I didn't know, she would process through.

I just knew all the bad that I had done. As I'm telling her this my mind tells me, there's no way she's staying with me. Like now my God, I'm going to lose everything else. Like now I'm gonna lose my wife and my kids. And she doesn't remember it this way, but I will never forget it because of what it meant to me, the, her first words after I had unloaded everything, her first words were okay. I trust you now. What?

And like, in that moment, The amount of courage that I had internally. Was as if I was an entirely different person and you know, we use the word encourage, like it's a hallmark card, right? Like, Oh, wow. You're so you're so encouraging. Like the re the word itself means to place courage inside of some, like it is.

So if I'm encouraging you, I'm giving you courage to do something. I'm not making you feel good. Like that's a compliment, right. People, people say encouraging when they really say, wow, so complimentary, like. Like in that moment, she had actually placed courage inside of me to just kind of raise up and I didn't have answers.

And I told her I'm like, I don't know him. I don't know. I, I said, I, I'm pretty sure we lose the house. I'm pretty sure we're going to go bankrupt. and I'm pretty sure I had to get a job to figure all this out, but I just didn't have answers. and at that point, you know, I had really. Reached a place that I had to acknowledge that I didn't have the answers, which was 180 degrees different than the place I had gone to.

When I thought I was hot stuff with all those contracts that I won. And so it really was this roller coaster of pride and humility. To understand where to navigate. There were so much grace when I was humble, so much isolation and arrogance. When I was prideful, I was just like, it's, it's so crazy. The polarities in which they operate.

but in that moment, I was just, I was a new man. And from that point on, it was a slow rise again. so that does answer your question about the early days.

Gaining Courage After Failure

Brandon Stover: [00:14:25] Absolutely. and I'm curious, once you had that courage, what gave you the confidence, you know, after you worked for Disney and whatnot, to start thinking about doing it again, I mean, that's a huge undertaking. You went through quite a bit and be like, you know what, it's time to get back on the horse.

James McKinney: [00:14:42] So, you know, to get people perspective, it was five years. So, you know how I got a job at Disney still amazes me organizations that big, like, you really need to know somebody. I knew nobody and which is rare because  one of my strength is strength as being a connector. And so the fact that I knew no one kind of surprised me.

I went to look and I saw a job on the board. I'm like, Oh, I got to know somebody in that. And I didn't, but lo and behold, I got the job. So I was so blessed for that, but it was five years of just, you know, licking my wounds through the process, healing the family a bit, you know, getting us stable financially and from a home perspective.

And then what happened was, one day as I was getting ready to go to work. everyone, you know, I'm sure your listeners as well will resonate with it. Like everyone has a place where they just think more clearly than others. Like it's, there's no distractions. It's just, it's you in that space, in that quiet environment, whatever it may be.

for me, it's the shower. And

Brandon Stover: [00:15:42] Yeah,

James McKinney: [00:15:44] And so as you know, and again too, and maybe part of it is because, you know, I have kids that are at the time were older and now they're even more. Yeah. But you know, it's like, it's the water just drowns up noise. And it's just like, I'm thinking about my day. And in the process of thinking about my day, I started thinking about just what could be in future ideas or whatever.

So in that moment, this idea for. A mobile app came to be. And so I come downstairs, I'm like, Hey, I had an idea in the shower and I wish your listeners could like picture this moment, but she's, you know, I'm at, I'm at this bar. That's on the one end of the, of our kitchen. You know, ready to eat breakfast and she's at this sink and it's, you know, I'm, I'm directly to her left by about, you know, 30 feet, but I'm at, I am, I am not in her peripheral vision.

So without even moving her in her body at all, she just turns her head on a swivel and looks at me. Cause she knows what that means. She's like really a shower thought. Huh? So, and so that really started to spark the conversation, but, but my posture. In how I pursued was so differently than anything else before, because now I knew I had learned what all the, not all the mistakes, but I learned from many mistakes from my past one.

So I went slower. I went smarter. I planned, I planned better and I had more communication with my spouse, with my wife. then at any point in time before, because now. I had, I knew what I kept from her before. Again, it wasn't, I wasn't trying to keep anything from her. In fact, I remember telling myself when I was refinancing everything to pay for that PO, like I was trying to, protect her from the stress of it all, because I knew it was a for sure thing, but the reality was, and she told me this later, she was like, the best way you can provide that to me is to communicate to me.

Like you just tell me everything like, and that way I'm never in the dark. And I was like, wow, I would've never guessed that to be true. And so I just navigated this mobile app differently. And so, in that process, the mobile app was an interesting concept. I still believe it to this day that it has, a place in the market.

at the time everything was going to AR cameras, right? So you hold your camera up to a location and you could see information about the location, but from a use case, like, I don't want to hold my phone camera up to see a location, but we all use television remotes. And with location data, I had this vision, like, why can't I just use my phone?

Like, yeah. Television, remote, where I just pointed out. They're like at like, I want a TV remote and push a button. And I see all the information about that place. And the idea was, starting with restaurants, but my, my hope was to have built it to be like everything. Like if you're in Paris example, tower, you push a button and you all send us like information about the Eiffel tower.

Maybe you see something video is about it's it's, you know, a time lapse video of it being built. Like just content around the location. at the push of a button, not the use of a camera, I'm not, I personally, not a fan of that. Google says otherwise, so they keep putting money into AR and that's where it's going.

I raised money, to build it. I, you know, I did it so much in my mind, so much more intelligently. and slowly I did it while working at Disney, I didn't jump the gun right away. I went from Disney to another job, while still doing this.

And then even when I was getting ready to come to market, my developers. needed a sales person and because most developers aren't salespeople. And so, you know, I said, Hey, I'll sell it for you. Keep building my app. And so I, I tried to be more intentional in that process, but it just couldn't get it anywhere.

you know, the. The loss of not being able to grow that and build that it wasn't a personal loss from a financial perspective. I did lose my friends and family. I lost their money. you know, so that weighs on me still to this day. I hope to, at some point, have the liquidity where I can just pay them back for their trust they put me obviously, you know, they'll still have lost the time value of money, but. The principal, I would still love to just pay them back because they've placed trust in me and I couldn't, I couldn't deliver at the time. but that, but inside of that, I learned a ton about, you know, not being a technical person, trying to build a technology company.

I want to just make it clear, like it took time to get there. Right. And during that five-year period, there was never this, this weight of, No, I failed as an entrepreneur. The, the weight I felt in those five years was, you know, I let my family down, you know, I embarrassed my wife, you know, cause this was a home that she was entertaining in.

And now she's got to explain to friends and family that we're moving. Why? Oh, because James lost the business. you know, she was, she was kind in the way she described it, but the reality was I dropped the ball.

Once, Twice, Third Startup Is The Charm

Brandon Stover: [00:20:23] Yeah. So now you've cycled twice as an entrepreneur, with, you know, a few different ideas and you're coming up on the third one with the startup story. what gave you the passion to jump into this one? Why, why such a fire for it?

James McKinney: [00:20:37] So when I, when I realized I wasn't going to be able to do what I wanted with simple deal, which was the name of the mobile app, I had such a hard time. Believing that it was me, like in my mind. And it wasn't from a position of, of arrogance. Like my first one, the, the idea that I had a hard time believing it was me came from this idea that I don't necessarily believe that successful entrepreneurs are that different than you or I or your listeners.

But I didn't have any, it was just an assumption. I didn't have any data to back any of that up, you know, there are the anomalies, there are the Steve jobs and the Elon Musk's right. the Mark Cubans, but they are the anomaly. It's not the norm, but when you're building, when you're building a technology startup, you know, you're reading and Crunchbase, all the fundings, you're reading on tech crunch, all the stories.

And you're, so you're, you're, you're building this framework of what a successful entrepreneur looks like. And you begin to believe it, but I didn't believe it. I was like, I don't, I don't see it that way. And so I started reaching out to people that were more successful than I, and just having conversations with them, like coffee, just, I would say, Hey, I'm coming off of my second failure.

I just want to learn what I might've done wrong. Can I take you to coffee? And I kid you not, I mean, I maybe had in all of my outreach, I maybe had like two or three that said, no, you know, I'm, the entrepreneurial community will, will always show up if the intentions are right. I truly believe it. Like, I mean, people say it all the time, you know, how do you get these people?

Like my intentions are right. Like I truly want to learn, you know, it's not, I'm not coming in like, Oh, can you teach me? Oh, Hey, by the way you want to, can you buy this? Like, I'm not like I'm not a snake oil salesman. Like I truly want to learn. And so, And then as I was having these coffees with these incredible entrepreneurs, I started sharing the stories and the learnings with other people.

And all of them were like, man, like, like, can, can you like. You know, do something and you record this China's is a pre podcast. Well, pre podcast, my awareness, I should say, can you like to record this? And I'm like, well, maybe I just do like a live events. Right. And so got hooked up with startup grind, which is a great, like global community entrepreneurs.

They have like local events, at a small scale and. And I started doing this and I, we quickly became one of the larger chapters in the U S where we'd have a hundred to 200 people come to hear these stories of entrepreneurs, as I'm talking with them again, same thing I was doing at the coffee talks, but now just an ticketed event where people would pay, you know, 20 bucks to come here themselves.

And it was amazing again, from a value perspective now is like now not only was I getting to learn, but I was helping. Everyone else in there learn. Right. And so. you know, I, there is a bit of a salesman in me when it comes to like, I'm not going to lie. There's a lot of salesmen and me when it comes. So, so like, as I was, you know, I was always trying to reach for that, like that next level of founder, just to kind of create a bigger draw in a bigger community.

but I also wanted to hear their stories, right? So like, you know, in the live event I had Larry namer, the founder of entertainment television, you know, came to this again, you know, Santa Clarita, which is where, where these events were held. Was, miles wise, it was like, you know, 20 minutes North of LA time-wise is about a day and a half because traffic is so bad.

But like, so it took a lot to get people there. But the entrepreneurs I reached out to were so gracious with their time, like, yeah, I'll come in, I'll help out. I'll give you give some time. But in that moment, in those moments and those events I'd have people come up to me. And this one in particular, after Larry namer, the co the co-founder of entertainment television, I had three people come up to me.

And said, you know, James, do you have a podcast? Cause if you had a podcast I'd listened to it. These three people didn't know each other, they were independent occurrences. And I thought that's really weird for something like that to happen in one night. And so I started giving it and I was listening to podcasts at that time.

And so I started to give it a little bit of credence because it just how unique the situation was. And I was like, at the time I'm running sales for a software development company, I'm back into government procurement. you know, things are going really well. We're getting ready to move to Texas at the time, out of Southern California.

So like all things were firing and you know, at this point I'm a year outside of simple deal. and I thought, huh, a podcast. Well, I guess I could sell some ads and sponsors and make a little side money. Like it really was. More. So to keep my, desire of connecting with entrepreneurs, to, provide way for people to hear the same guidance that I'm hearing and if I can make some money on the side. Great.

And so that's kinda how it, how it happened. And so I remember talking with my first sponsor Mobo cash and I said, Hey, I want to do this. They were one of my live event founders. I said, Hey, I want to do this. Would you help fund it? You know, sponsor number one, he said, yeah, absolutely. And so, that really January 15th of 2019 is when we launched our first three episodes.

And, it's been rolling ever since. And so, yeah, it's been an amazing journey.

The Power Of Hearing Another Entrepreneur's Story

Brandon Stover: [00:25:53] Can you speak to a little bit to why storytelling is so important? You know what the value of hearing another person's story is?

James McKinney: [00:26:00] That's a great question. you know, and I, I want to answer this, not from my own personal desire. I think the value of story has to be that I believe it can, reveal a person's true intention. It can make them more transparent, more authentic. And the reason, let me back up a bit, the reason I say that is. For my podcast. People ask me all the time and you didn't, you didn't give me any questions. So for all the listeners, like Brandon doesn't provide questions. It's a conversation. But I think had you provided questions just, which is why I don't provide questions. We begin to frame up pitches in our mind.

We may say, it's not a pitch. We may say we're just having a general conversation, but I begin to frame up something in my mind that shines me really well. Like, is it, we are. You know, we are people that want inherently help ourselves protect ourselves. if you will protect our brand, our, our public persona.

And so whether it's intentional or not, I, for that reason, I don't provide questions ahead of time. That's the power of story, right? In general conversation, when it's truly. An organic conversation and storytelling comes into play. I believe you will actually see the true heart of the individual. Like you will begin to see authenticity and transparency and I don't care how successful the individual they are, how successful the individual is.

Within the context of just storytelling about their life and their journey, you will be, you will see moments of joy that they, that they probably haven't spoken of publicly before, because it was just organic and they'll see moments of, of processing as they grieve a moment again. Right? Like it's, it's, it's been unbelievable.

The conversations that I've been able to have, by just hitting, you know, again, exploring a person's story, but I believe storytelling, we inherently, as people, we. We view our lives subconsciously as a story, I truly believe it. Like, you know, we want to be the hero. Like again, fundamentally our internal ego wants us to be a hero.

That's a story element, right? So if you need a hero, who's the bad guy. Well, we make up who our villains are and our enemies are right. They may not be, you know, who's the, who's the damsel or the, you know, the night in distress, whatever it may be like, you know, we, we, we place ourselves into this. Story narrative.

It just is a little subconscious a lot of times.

Brandon Stover: [00:28:27] Yeah. And I think, entrepreneurs do this quite a bit. I mean, you know, most of my listeners, basically, you're trying to build businesses. To, you know, solve something in the world. They're trying to be a hero in some way to, you know, whoever they're serving.

James McKinney: [00:28:40] Yeah. I mean, there is, entrepreneurship is very much a, I, A great story. I said it so many times. Like there are so many stories I hear that I wish I can make into a movie, you know, like, and then, you know, everyone knows the social network when they did it of, Mark Zuckerberg's story.

And that was an amazing movie, but I've heard stories of, of cookie manufacturers. That I know would make a great movie. I've heard stories of an Instagram influencer that I know would make a great movie, a florist. I mean, I've heard so many stories like Christina stumble, a farm girl, flowers, her story would make an amazing movie, but.

whether or not Hollywood sees it that way, but we as entrepreneurs, we know for sure the entrepreneurial journey, what makes for a great story and all your listeners have decided to place themselves into the role of the hero. And they're trying to conquer whatever challenges ahead of them. That challenge, maybe right now, it could be COVID.

You know, the economy in general, that challenge may be, you know, technical challenge. They may be a, an obstacle with hiring ed. There's so many, there's so many things that we have to battle through the muck and the, to get to our end goal. Like it is very much a story that we have placed ourselves in the middle of sure.

Brandon Stover: [00:29:54] Absolutely. Now, what skills or You as a storyteller, how do you pull that story out to provide that value to your listeners to get that out of your guests?

James McKinney: [00:30:05] I, at some point I'm going to take that question and have a better answer for it. Cause I've been asked that numerous times and maybe I will, after this, maybe I'll just make a note to, to jump in the shower and think through a better answer. Cause since that's what I think clearly, but like this past week, let me, Give a framework. So, on September 29th, we released an episode, with Jennifer Beck communications, their PR firm, on both coasts LA New York. And. After the episode aired. I never give my, my guests the ability to listen ahead of time. Like they hear it when the general public hears it. I'm the same thing.

When I released video content on entrepreneur.com, my guests don't get to see the final product. Like it is what it is. if you want to be a part of the show, you're just going to trust me that I'm, I'm doing this to serve. And so the content is going to shine a light. She's going to shine a light well on the lots of people.

And so. As they were hearing the episode and the firm was hearing the episode for the first time. someone reaches out to me from the office that helps schedule it all and said, James, our Slack channels are going crazy right now with how proud everyone is of the episode. and she just starts, you know, giving me this, these incredible grand compliments and she makes this statement.

so it is so apparent that you do so much research on your guests. And as a, as she's giving a compliment, I, I said, you know, can I, can I be honest with you just said, yeah. And I said, I won, I receive all the compliments I receive. I thank you so much for it, but I'm gonna be telling me to tell you the truth.

I don't do research on my guests. And she's like, what? And this is, you know, a publicist, right? A public, you know, publicity for them. They do lots of research, you know, to try and craft stories and things. And, and, I said, I'll tell you why I don't do research. I said, because I want to hear their story from them.

I don't want the media to take me. I don't want my own research to have this idea of what their journey looks like and why they made decisions. They made. I want to hear it from them. And from that conversation is where the rest of my questions come. And, and here's why I think to answer your question, how, like the skillset she responds with again, the first time I've heard it, my wife has never said it to me.

She, she said, wow, you must be an amazing listener then. And I was like, Oh, that must be it. And I will it's from a skillset. I will say, I, I guess I am a good listener, you know, but I'll even peel that back. Additionally, from a tactical perspective, you know, if someone wants to know, like, where do you learn this?

Where do the skills come from? I'm a good listener, but I'm a good listener because I truly care about people. I care about the person I'm talking to. Like I do not glance on my phones when I'm with someone at, for coffee, you know, I, when I'm scheduling or recording a podcast, I may glance at the clock for times.

I want to keep things on a certain pace, but I am in that moment with that person. and I care about their story. I care about how that story is presented to the world. I care about them looking like the expert that, that they are, regardless of the stumbles they've had. And I care about the listener.

And delivering true value, connecting somehow with my guests, a story with the listener in their car, running, working out, whatever the case may be, whether they're listening to the startup story. I care about trying to figure out how do I connect this mazing moment I'm having with this founder to that person.

Who's listening. Like, those are the things that run through my mind. And yet I'm still actively listening in the moment. So from a skillset perspective, I guess it would be a great listener and I care so much about the person I'm talking with and the person who will hear it later.

Brandon Stover: [00:33:53] Absolutely. I think that's a really good skill set. And I think what comes out of it too, is, you know, not looking beforehand a sense of curiosity, really wanting to hear their story. I'm somebody that researches quite a bit beforehand. We'll look things over and you know, pre-write questions

James McKinney: [00:34:09] And there's nothing wrong with that. Like, I want it, you know, like, I love that you do that. And I love that many people do that. I mean, I've heard some amazing interviews because of that. Like, there's probably things I miss by not doing that. and I think I'm okay with that miss for right now.

How To Monetize A Brand In The Attention Economy

Brandon Stover: [00:34:23] Yeah, I think, everybody has to find their secret sauce for, for sure. well, let's talk a little bit about the nuts and bolts of startup story, because I think every business going forward in the attention economy is going to have to be a media brand or some sort of media to their, their company. what strategies have you done for monetization since you launched?

James McKinney: [00:34:45] Yeah. So, so January 15, 2019, we launched, sponsorships and in episode ads have been my monetization. I'm not a huge fan of affiliate revenue. I know I'm leaving money on the table by not doing that, but the reason I'm not a fan of it is. If in all of my email communication, which is really where affiliate revenue actually takes place.

I mean, you can do affiliate in the episode, but there's too much leakage. Like, you know, you may, you may hear a brand like you may hear me say like, Oh, make sure you visit express VPN and use code startup story for it. Like you'll remember express VPN chances of you possibly murmuring the code are slim to none.

So like in episode affiliate, I'm just not going to do, but email. If I'm going to do it, that's why I'm gonna do it. But I just don't want my email communication to constantly come across as though I'm selling through affiliates. Now there are things that I will sell and, but it's very clear that this is a sale, not just a, Hey, check out this, you know, this kit list of everything that I use to create a podcast in my email communication, because that's obviously an affiliate link I want to just constantly, you know, deliver value.

So the, my main month Istation sources were sponsorships and in episode ads, Then at the end of 2019, I thought, man, like this all kind of started with live events. I want to get back to live events. And so I started brainstorming this idea for startup story live. And when I say brainstorming this idea, like it was a pretty grand idea.

Like we were going to be at the Dallas Cowboys global headquarters here in, Dallas metroplex in Texas. you know, the facility would hold 12,000 people. I wasn't going to have more than 1500 people. Like I was, I, you know, I, I didn't think I knew I couldn't sell that thing out. And so I was only to have like, you know, 1500 people or so, and, and so big plans for it though.

I mean, it was, it was going to be. You know, and, from a financial perspective with tickets and sponsors and advertisers and everything, it was going to be a half a million dollar deal for me. And as we announce it in late February, I had my guests as me Baron Davis, NBA, all-star early stage investor in vitamin water with 50 cent, like a big deal, dude.

Right. I had Jamie Schmidt was Schmidt natural. She's going to be one of Luke Fox of white Fox defense technologies, which is a drone security company, unbelievable technology, Jamie Smith. Story's amazing from kitchen acquisition and seven years for over a hundred million dollars, like an unbelievable story.

So it was going to be an amazing event. And, we announce it mid to late February, early March. COVID becomes a real deal. And at the time, I truly didn't think this was going to be anything, you know, cause I'm talking to sponsors who are wanting to spend significant money. I was talking to one brand who wanted to be the title sponsor for that event and my buy event that was going to take place in the fall in Austin.

Like we were talking a big deal for those two events and lost some other opportunities. And they're like, well, what are you going to do? You know, if we have to cancel because of COVID, I'm like Koba is going to come and go. I've seen this thing before, like this is, you know, end of March, we're not talking about this anymore.

And they're like, okay. you know, I'm glad you feel confident about that. And so just as we were getting ready to sign the final contract, President Trump comes in and shuts everything down for the month of April. And I was like, Oh, this isn't going away. And my sponsors are like, this isn't going away.

And so all the conversations, not just the title sponsors, all the conversations I've had that were about sponsoring this event were gone. Now my ticket sale question becomes, do I sell tickets? Because my event was going to be, I think it was going to be early or mid may, I think was the initial date. And now the month of April is canceled.

Like, no one's going to buy tickets to a live event. If they, if they're being told live events are dangerous, you know, of course, South by Southwest it canceled, like all these other things that canceled take place. So that was gone. My show sponsors and advertisers started pulling out because they're keeping cash close to the vest.

As most businesses work is they had no idea what was going to come up all of this. So I had no, I mean, starting in April, there was no revenue coming in and all I kept thinking to myself was, Oh man, please don't let this be a replay of 2008. I just, don't let this be a replay of 2008. and so it just, it forced me to just kind of rethink and re-engineer like, how, how do we monetize?

How do we monetize? And so I pivoted that live event to be a virtual event. you can't really charge upfront for a virtual event. it's a tough sell. And so we did it for free. but I did have an upsell that if they paid. before the advent of they pay $29, they'd have access to all the video content from the things that they could watch it whenever they wanted.

they have an increased price of that, but that event launched what is what I call startup story inner circle, which is a, subscription membership that allows you access to view all my video content from live events, private, podcast recordings and allows you to attend live recordings of my podcasts.

You can, then when we're done recording, you can ask my, the founder guests like questions directly to get their questions answered. I mean, I had Ben Chestnut of MailChimp for crying out loud. And my inner circle members got to ask this guy who bootstrap meant for those who don't know, MailChimp is an email service provider. They, he bootstrapped it all completely didn't take any investment capital in fact said no to investment capital. They're valued over $5 billion and he did it with zero investment money. It's an unbelievable story. And so like those in my inner circle got to ask him questions directly. There was a, a lady in the inner circle makes, You know, upscale pajamas, and she's asking Ben Chestnut questions about distribution. It's like, this is unbelievable. And for me it was, it's awesome to see someone have access to someone. They probably wouldn't have access to otherwise.

And so that, so COVID screwed a lot of things up. It did force me to rethink and kind of bring this inner circle to the table a lot sooner. So it's been an interesting journey and I mean, not only to do that, As the audience kept growing.

and I started seeking counsel and guidance from more founders on like, how are you navigating COVID? and I was sharing kind of our own personal journey. So many people said to me like, James, if your audience keeps growing, you need to find a way to monetize that audience regardless of sponsors or ads.

Like you've got to have something. You know, you know, that you can sell, I'm like, Oh, the inner circle, like, yeah, that's a digital membership. That's great. You need to have a physical product. I'm like what a physical product. So I started brainstorming, just trying to think through like what, what would be organic, authentic, what would continue the mission of serving through stories and providing resources to entrepreneurs?

And what came to me. This is, you know, again, one of those shower moments, I got it again for all your listeners. Think about your place. Like you have a place, you have it, you have your quiet place where ideas go. Think about where you came up with the idea for the venture you're working on right now. Like everyone's got a place.

So, so one of those shower moments, I'm like every entrepreneur, like this really truly started with me having coffee with founders. Like, this is how it started. I'd reach out and have coffee. Like every, every founder, every entrepreneur loves coffee. I'm like, Oh, coffee, subscription service, Mike. Yeah.

But how does that serve my audience? Like how does that really deliver the tools and resources? Is that just a money play? And I'm like, Hmm, let me think about that. And so. What it became was this quarterly box that would have, you know, really well-made crafted coffees and entrepreneur. We don't like crappy coffee.

Like we drink it cause we, we need to sustain life, but we want good coffee. So it's not always as good coffee, but. It's going to have a cool mug as well, but the resources from brand partners are going to be in this. Like, so as an entrepreneur, what are the things you would have productivity, hacks and life hacks that you need?

What are resources you need to build your business from an infrastructure, a hiring perspective. and so all these resources come into play, but again, from all my various learnings, I started talking about this idea with other founders and all of them were like, James is a great idea. I haven't seen anything like this before.

but. You know, and I want to, I want to thank, you know, my good friend, Chris George at the subscription trade association, he said, James, so you need to think through the use case of your founders. Like, what do you mean? It's like your founders listening, you know, they, at the middle of the day, they'll have answered thousands of questions, answered thousands of questions.

They're probably stressing over payroll trying to figure out cashflow. Like they have challenges in their life and here comes this beautiful black box. So the brand is called . That's the name of the brand we're launching. He get this beautiful black grind Knology box. They know what's inside. They're excited for it.

They open it up and there's a bunch of stuff from brand partners. It's no longer a joy. Like you've got to figure out a way to present all this better. Yeah. I'm like, Oh, that's interesting. He's like now what if that same founder gets this beautiful black box, they open it up and inside is a grand Knology magazine that has all the resources, tools, productivity hacks from your, from your founders, that, you know, all the stories and all the resources.

It's all within the, almost like a, how to manual for a specific topic for that quarter. And then inside, they see their coffee in their mug and they have their magazine. It's like, that's the experiment. That's it. So grand Knology now, it's, it's available. I mean, pre-launch is available. You can go on and sign up to be notified when it does launch.

but  is a coffee subscription service specific for entrepreneurs, makers, creators, and those who have, trying to create something into this, into this universe. But there's going to be a magazine that is all about educating, providing tactics for the individual. They can live it, my hope for this magazine, because it takes a lot of work to pull off a magazine is so different than a podcast.

You know, my hope for this magazine is that it truly is. For the, for a three month tactical strategy for a founder on a specific topic, each quarter we'll change the topic, but you know, to have someone like Ben Chestnut chime in on user acquisition, like it's going to be in there to have Larry namer chime in on what it means to have immediate and content strategy.

Like he's going to chime in, like it's all centered to provide the founder with actual tactics for the next quarter. I'm super excited about it.

How To Have Resiliency As An Entrepreneur

Brandon Stover: [00:45:02] Amazing. Well, something that I want to pull from. Yeah. That story. And your first story. both in 2008 and then now in 2020, like we have some very turbulent times going on, you've gone through a few failures of a startup. How have you built your resiliency in, you know, being creative during those times? Being able to think through it, keep going forward.

James McKinney: [00:45:24] It's all about perspective. you know, and I say it, so, you know, blahzay, I mean, it sounds so simple, but it's simple because it's true. Like, I have been in my mind to the darkest of places, you know, because of what had happened in Oh eight and Oh nine. And even in. That dark situation where we lost everything.

I didn't lose my wife and kids. Like I have nothing to fear at this point. Like I'm never going to fail more than that moment. Now, startup story may fold. Grand Knology may not take off, like I'm not saying that I will be successful, but what I'm saying is the manner in which I failed in Oh eight Oh nine is the worst manner in which I'll fail ever, because I'm not communicating better.

I'm serving more people in mine. My wife is well informed of everything going on with the business. And so, so if it does fail, she's not surprised because I'll have been talking with her for quite some time about it. So, because I've gone through what I went through in Oh eight and Oh nine, and I didn't lose my wife and kids.

Like there is nothing. That I am a afraid of now, you know, do I, do I want my ventures to succeed? Of course I do. Like I don't want to go through financial ruin again. I'm not, I'm not chasing financial ruin again. I'm not, I'm not being, reckless in my investments and cash management and decision-making, But I also know it and it's worst case scenario.

I still have my wife and kids. Like it perspective is everything like for your listeners, like, think about this thing that is causing you, fear and an anxiousness about your venture and play that scenario out to whatever degree that you want to go. Like, however, dark you want to take this thing, just play it out.

One, it's never going to get to that point, unless you just don't have a really good imagination then at some point, I mean, if your worst case scenario is you lose your car then. Yeah. I mean, there's a chance it goes there, but, but nine out of 10 times, like our imagination is pretty dark. One. It's never going to get there.

And two, what are the most important things in your life and will these decisions you have now? Impact those things? My decisions had an impact on my family in Oh eight Oh 9 100% they did. But you know, the, the worst thing that I thought going into that conversation didn't happen. And so now I know there is nothing.

And My, my wife has told me numerous times, it's like, it's like, babe, I'm in this forever. Like, period. again, another courage moment, you know, so I truly, it is, it is, my resiliency is solely based on the perspective that I've been given through my journey. and God's good grace, because I'm telling you, like, there are some things that just don't make sense about my life as to where I am now with the opportunities I've been given now, that I would be foolish not to acknowledge.

God's kindness on my life. but perspective is everything for me. That is, that is truly what keeps me going forward.

Brandon Stover: [00:48:58] Well, before I get to my last question, where can everybody find you, James, and everything that you're doing?

James McKinney: [00:49:03] the startup story.co is the podcast website. That's everything. you'll see the inner circle there. You'll see most recent episode. You'll see quick links to all the podcast platforms where everywhere. you know, and then grind knology.com is our new product launching submit your email to be notified when we get, when we launch, but also to buy by going to grand ology.com.

Yeah. 30 days for free in the inner circle. So you can attend these private podcast recordings. You're going to ask access all the video content. so I guess I've, you know, the best call to action would be go to  dot com. You know, be notified for pre-launch of the product, get access to the inner circle, see all the things we have going on there, and then do not ever hesitate to reach out to me on LinkedIn, just search for James McKinney. You'll see me. and just reached out to my LinkedIn. Let me know that you hit me up on Brandon's podcast.

How James Believes We Can Push The World To Evolve

Brandon Stover: [00:49:51] Awesome. Well, put all of that in the show notes for everybody. So my last question is. How can we push the world to evolve?

James McKinney: [00:49:57] Yeah, that's a great question. and I think there's two starting points that someone has to get to, to answer that question. if the question of how do we get the world to evolve is rooted in, how do I make my life better? That is going to have a very different answer than if the purpose of getting the world to evolve is to make everyone's life better. That's going to have a different set of answers. So my question, my answer comes from the ladder. the world will only evolve to the benefit of all those in it. If the parts are thinking of the whole. While they're growing,

I'm all for personal growth. I'm all for development and learning. But if it is solely to your benefit and not, how can you serve not how can you be a better wife or husband? How can you be a better employee if you're not even an entrepreneur? How can you be a better employee? If, if the heartbeat of why you're trying to grow and learn isself seeking, then the benefit of that growth dies with you. But if your growth and your personal development and evolution is so that you can serve those around you better, then that has the legacy impact.

That is how change is made. So to answer your question, how can we get the world to evolve? The individual has to desire the growth for the benefit of the greater whole.

Brandon Stover: [00:51:28] James. That is excellent advice. I really. Appreciate you coming on today and sharing your story. It's very impactful and I hope it helps our listeners a lot. So thank you so much.

James McKinney: [00:51:38] Oh, it's been an absolute pleasure, Brandon. I applaud you for what you're doing, what you're bringing out into the world and for all your listeners that, that spend time with you each week, they are blessed for it.

Brandon Stover: [00:51:47] Thank you so much.

About The Host

Brandon Stover

Brandon is an entrepreneur, certified professional coach, and podcast host. His aim is to evolve the individual through education, entertainment, and philosophy so together we can ask the world's biggest questions, build businesses to solve them, & live fulfilling lives in the process.

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