Editor’s note: James Altucher is an investor, programmer, author, and entrepreneur. He is Managing Director of Formula Capital and has written 6 books on investing. His latest books are I Was Blind But Now I See and FAQ ME. You can follow him @jaltucher.
I’m a complete sexist. I want women to look as good as possible. And I’m not the only one. Women want to look as sexy as possible. That’s why they buy hundreds of millions worth of form-fitting Spanx every year. And now Sara Blakely, the founder of Spanx is worth a billion according to Forbes. She took Justin Timberlake’s advice. A million is not cool. A billion is cool.
So what happened next? In the past 24 hours I’ve heard three different guys say something to the affect of, “She? She is worth a billion? Huh. I guess anyone can be worth a billion.” As soon as someone says that they are scratched off my list of people I want to spend time with. I only like to be around positive people who celebrate success.
I hold a Twitter Q&A session every Thursday EST from 3:30-4:30. I answer every question asked. Then I expand further into a blog post. Then I’ve taken all the blog posts, expanded further with original material plus added material from questions asked me via email and I compiled the results into a book I just self-published called “FAQ ME”.
One of the questions asked this Thursday was, “What are my key takeaways from the Spanx woman being worth a billion and how can one replicate her success?”
Here they are:
First off, I’m amazed by her and I have been ever since I saw on the Donnie Deutsch show on CNBC about 5 years ago. I spoke to the producer of that show shortly after it aired and he told me it was the most popular show they ever had. I never heard of her before then.
I had no idea she is now considered a billionaire. It’s not as if she has a billion in cash, but the theory is that if she were to sell her company today it would sell for one billion.
– Stay motivated. She was reading self-help books (specifically Wayne Dyer’s earlier books) and motivational books since she was sixteen years old. What’s a self-help book do? It tells you that part of the world around you exists because you “think” it to exist. Extreme example: if you are lying on the floor depressed all the time you won’t seize opportunities. If ever day you wake up and say, “what adventure will happen to me today?” then adventures will happen to you. So from an early age she trained herself to look for the opportunities in life. She trained herself for 10 years thinking that way before the idea of Spanx hit her.
– She was amazingly good at sales. She had to sell fax machines for Danka as one of her first jobs. Within a few years, by the time she was 25, she was the national sales trainer. People shy away from the word “salesman”. They think the process of selling is “dirty” in some way. But the only way to get anywhere is to come up with ideas and then have a strong ability to sell them. She had that ability. Here’s my own suggestions on how to be a better salesperson: The 10 Keys to Selling Anything:
– She solved a huge problem for women. If you want to create $1 billion in value you need to find a problem that nobody solved. Right now, this second, there are about one million problems where if you solve it, someone else will say, “holy shit! That’s so easy. Why didn’t I think about that?” And yet, these problems right now remain unsolved.
So what was the problem she “solved”? Pantyhose that didn’t have feet that also smoothed out a woman’s body underneath the dress. What does that mean? “Smoothed out”. 99% of woman complain about the “muffin top” that forms after the pantyhose ends and their stomach takes over. No problem said Sara. Here’s pantyhose that solves it. And she did it. Now woman look sexier. Not only was this a huge problem for women, it solved a pretty big issue for men as well! We like looking at sexy women.
– Prepare. How did she do it? She had never done anything in fashion before. So she spent every day at the library and the hosiery stores. She had a full time job but at night she researched every patent. She bought every type of pantyhose. She knew the entire industry. To succeed at something:
- Know every product in the industry
- Know every patent
- Try out all the products
- Understand how the products are made
- Make a product that YOU would use every single day. You can’t sell it if you, personlly, don’t LOVE it.
– Cold Call. Someone asked me yesterday if I had any connections at a major children’s company so she would be able to sell an excellent set of children’s travel books to them. I think it’s a great idea. Why? Because I see my kids buy every book from this children’s company. It’s a doll company but they put out books like, “How to be a child of divorce” as an example (which both my kids, being children of divorce, have read thoroughly). So why not travel books? And this woman has already made a dozen travel books for kids ages 8-12, the exact age group for this children’s doll company. I know this woman is a good writer because my kid even did a book report on one of her books and loved it. So I know kids would love her travel books.
She wanted a connection in because she was afraid to cold call. But almost all sales are done through cold calling. If there’s a need, people will love to meet you. Cold call right now!
When I was trying to get people to use Stockpickr.com, a site I built in 2006-2007, I cold-called AOL, Yahoo, Google, Reuters, Forbes. Guess what? Everyone responded because I knew it was something they all needed and I had at least 2-5 meetings with each group and did deals of some sort or other with all of them. If you have something that’s worthwhile then you can’t be afraid to cold-call. They need you more than you need them.
What does this have to do with the Spanx woman? She cold-called the number one place to sell her stuff – Neiman Marcus, and they loved her product and took it right away.
– It doesn’t cost much to make a billion. She started with $5,000. That’s it. She never took investors. She never borrowed money. Now her revenues are hundreds of millions a year. Facebook spent a few thousand to get to the point where they had a million users a day. Google hardly spent any money at first. Not that I’m in the billion dollar league but I can tell you that Stockpickr.com cost me less than $5,000 to build and was sold for $10mm a few months later. And the first company I sold cost less than $0 to build. We had profitable clients from day one.
If you have an idea: don’t focus on the money. Don’t focus on how you will make a living. Do this:
- Build your product
- Sell it to a customer
- Start shipping
- Then quit your job.
Sara, the founder of Spanx, didn’t quit her job until she was already well on her way to selling her first million in orders. Most entrepreneurs write me before they have a product even built. They have “an idea” and they want to quit their job to pursue it so they need to raise money right now. Are you crazy? Anyone who would give you money might as well get really good with a plunger because they are going to need it after the money gets flushed down the toilet.
– Never ask Permission, Ask for Forgiveness Later. Sara didn’t like how Spanx were being displayed at Neiman Marcus. So she bought samples at Target and displayed them right next to the cash register at Neiman Marcus. She knew, innately, that nobody would question her. Nobody questions anything if you have confidence, intelligence, and you are proud of your product. So she just did it. To hell with the ramifications. What else did she do? She sent Spanx to Oprah Winfrey’s stylist. Who was more perfect to wear Spanx than Oprah Winfrey.
– Take advantage of all publicity. I’m bad at this. I say “no” to almost everything. CNBC used to call me all the time and I wouldn’t even return their calls. Finally Jim Cramer said to me, “Why are you embarrassing me like this. Return their calls.” At this very moment I’m turning down an offer to speak at a TED conference. I just don’t feel like preparing for it. I’d rather blog to you guys. But Cramer made the very good point to me, “if you don’t promote yourself, nobody else will.”
I first heard about Spanx when she was on that Donnie Deutsch show. But also millions heard about it through Oprah, an opportunity that Sara created for herself. And she also spent a season on Richard Branson’s reality show, defying every fear she ever had. She promoted herself down every avenue. That’s what you have to do to succeed. You can’t have any shame. I see in myself that I have a lot of shame in promoting myself that I have to get over. She had no shame.
– Looks. I’m not saying good looks or bad looks. But YOU are the best promoter of your product. So if your product is something in the fashion industry, you should make sure you are the best model for it. A good friend of mine is about to launch a skin cream for Latina women. The cream smooths out wrinkles and also smooths out the different shades of color on the face that many Latinas have. She’s about 40 years old. I can tell you this: she doesn’t have a single wrinkle and her skin glows. She will be the best model for her product.
Again, you don’t have to be great looking. I’m a weird, geekish looking guy. Who better to sell a website? Or website services in the 90s like I used to. If I looked like a J. Crew model I might’ve failed. Instead I had the look of a dirty computer genius (even though I was thrown out of computer science grad school) and I can tell you – that look worked for me.
– Good for her. Don’t be a hater! 99% of people are haters.
If you want to be successful, you need to study success, not hate it or be envious of it. If you are envious, then you will distance yourself from success and make it that much harder to get there. Never be jealous. Never think someone is “lucky”. Luck is created by the prepared. Never think that someone is undeserving of the money they have. That only puts you one more step removed from the freedom you aspire to. I can tell right away when someone is so envious and jealous that they will never get the freedom they want and will spend the rest of their life trying.
– It’s not about the money. In the article I just read about her it tells a story of how she had to tell her fiancé a few weeks before their wedding that Spanx wasn’t just selling a few million dollars worth a year but hundreds of millions of dollars worth a year.
That’s a big difference, right? And it was only a few weeks before their wedding. Why didn’t he already know? She probably never spoke about it. You know why? Because she probably didn’t care about the money.
In the past fifteen years the only time I didn’t look at my bank account every day was when I was doing something I was passionate about. She was clearly passionate about Spanx. The money quickly became an afterthought.
This doesn’t mean you shouldn’t think about money. But it does mean if YOU ARE thinking too much about money while building your business then either you are not very passionate about the business or you aren’t helping people with your business. Those two thoughts alone will crowd at the thoughts of your own personal bank account.
What a pleasure that is when you experience it and it doesn’t matter if you are rich or poor. It doesn’t matter because you are not even thinking about the money. You KNOW you are creating value. The money is just a side effect of passion.
My final takeaway. God bless her. She’s worth a billion.