8 Unconventional Truths I Learned in 8 Years of Entrepreneurship

Yong-Soo Chung [00:00:00]

In 2015, I moved from New York to San Francisco on a one-way ticket. All my belongings were packed into a single black suitcase, and one dream - to become a successful entrepreneur. e

I started an ecommerce business selling pocket knives and flashlights. My first year, I made sixteen thousand in revenue. Last year, in 2022, I made $5.6 million from THREE businesses.

It's been an incredible journey. Certainly hasn't been easy. I've learned some pretty tough lessons over these eight years. I've figured out some unconventional truths along the way.

Truths that I think every entrepreneur needs to be aware of BEFORE starting a business. Truths I wish *I* knew before starting MY first business...

Not that I regret any part of my journey. Nope. I would still do it all over again if I could.

Because... no matter which way you look at it... I still succeeded in building 3 businesses over these eight years-

You know what, I'm not gonna repeat it. You've heard me say it plenty of times before. Heck, I say it in every episode.

And if you haven't heard it yet, well, listen to this show intro, very carefully.

And, oh yes, buckle up your seat-belts, put your phones on airplane mode, and get ready for take-off!

Yong-Soo Chung [00:01:16]

I'm your host Yong-Soo Chung! Let's get down to business!

Yong-Soo Chung [00:01:19]

The next generation of successful founders in this digital age of entrepreneurship will leverage their audience to launch, build, and scale their brands. First Class Founders explores this golden intersection of audience-building & company-building with proven strategies to grow both your audience, which is your distribution, and your brand, which is your product.

Because those who can master both will create a category of one.

Hi, my name is Yong-Soo Chung and I'm a serial entrepreneur who bootstrapped 3 successful businesses from $0 to $20 million over 8 years.

On this podcast, you'll learn timeless lessons from world-class content creators, startup founders, and CEOs. You'll also hear tactical tips & strategies from ME, Yong-Soo Chung!

Are you ready? Then, let’s begin!

Yong-Soo Chung [00:02:12]

Before we start today, a quick reminder that First Class Founders is not just an audio experience. We teamed up with the team over at HyperPods to bring to you a quick 3-min hyper-visual summary of this episode on the 8 unconventional truths I learned over the last 8 years of running 3 businesses.

You can grab the hyper-visual summary for this week’s episode absolutely free at firstclassfounders.com/hypervisuals.

There are eight truths, in total.

Yeah, I know, eight years, eight truths. Seems like I kinda-sorta forced that match, but, no. Believe me, that's just a coincidence.

Each of these eight truths was learnt the hard way, often painfully. Some are shareable stories - and I WILL share them. But others, you will just have to take my word for it. Don't worry, though. If I can't share my OWN story, there are always examples from the real world of business and entrepreneurship that we can learn from!

So, without further ado, let's begin.

Yong-Soo Chung [00:03:19]

TRUTH NUMBER 1: Know when to switch from Growth mode to Preservation mode

This is a dilemma that creeps up on you. A couple of years into selling pocket knives and flashlights on Urban EDC, I remember thinking, 'Hey, we are doing pretty good! I should look to expand my operations.'

And just like that, I went into growth mode.

I started scaling up operations, hired more people, spent a ton of money advertising and promoting my website and products. I did this for three straight years.

Then, when growth started to stall a bit, we decided to scale back and go into ... you guessed it, preservation mode.

I decided to hunker down and focus on preserving my business. If you can recognize when you should shift between these two modes, it gives you a superpower to both grow and outlast your competition.

What you DON’T want to do is try to be in both modes at the same time. Why? Because you optimize for two very different things within these two modes.

When you are in GROWTH mode, you optimize for SPEED. And when you are in PRESERVATION mode, you optimize for CASH. And you CANNOT optimize for BOTH speed and cash. It's impossible. Trust me on this one.

You can't be in BOTH modes at the same time. You can switch from one to the other, sure. But, ideally, you don’t switch modes too often either because you’re optimizing for such different factors.

Growth mode is speed. Preservation mode is cash. Switching between the two modes too quickly will put you and your team in no man’s land of unfocused prioritization.

Oh, here's a pro-tip: whichever mode you choose, make sure your ENTIRE team is aligned on it, okay? You don't want your sales team in growth mode and your production team in preservation mode, if you know what I mean...

Yong-Soo Chung [00:05:05]

TRUTH NUMBER 2: Hire the right people for the right seats at the right time.

Jim Collins -someone who I refer to often on this podcast because his concepts are amazing- he says, "People are not your most important asset. The right people are."

And I learned this the hard way.

Back in episode 67, when I was sharing my learnings on how to hire the perfect operator for your business, I said this:

EPISODE 67: How to Hire the Best Operators for Your Personal HoldCo
"Finding the right operator is like getting a nitro boost for your business. And the wrong operator will not only ruin your business but maybe even STEAL it.

Yeah, that 'steal' part is a wild story - do listen to that episode after you finish this one.

But, digressions aside, if you have ever hired for your business, I suspect you are nodding your head in agreement right now. If you haven't hired anyone yet, I can tell you this... As you grow your business, you will find yourself constantly wishing you could clone yourself so you can be in two places at once. And that's when you will hire your first employee.

As exciting as this period is, it is also one of the most nerve-wracking as a business-owner. Your head is swarming with questions. YOu are filled with doubt. You want - no, you NEED - this employee to be PERFECT.

So, you go around hunting, interviewing, meeting, evaluating, agonizing... What if... What if you choose the wrong person? What if they interview well but turn out to be lazy? What if they ask for a salary or a raise that you can't afford?

Well, here's the secret. All of your hiring eventually boils down to ONE question:

Is this the right PERSON for the right ROLE at the right TIME?

Yong-Soo Chung [00:06:42]

Hire a person only if you get THREE yes-es.

And yes, it is TOTALLY a subjective call.

A person may be right for the position advertised but may still be WRONG for your business. A person may have the right qualifications but the ROLE you  advertised might be wrong for them. Or your mutual ambitions might be mismatched and it might not be the right TIME for them to join your business.

But if you find the right PERSON for the right ROLE at the right TIME? The stars are aligned and you’re putting you, the person, and the company in the best possible position to succeed.

I always think about how I can position someone I hire in the best possible situation so that they can excel at their job.

And guess what? Even if you have to pay more for an A-caliber employee, I’ve always found that to be the right decision. Of course, just as long as the amount is NOT way out of range. From personal experience, salary is secondary to hiring the right person. Because an all-star employee is easily worth 10x the salary you give them. And it’s not just about their own individual output either. An all-star employee will keep others on your team accountable so they have a way to uplift the productivity of others around them.

I’ve seen this at my own company and trust me, it’s magical when an A-player comes in and impacts the rest of your team around them.

Here's a pro-tip: Don't hire a smart person and tell them what to do. Hire a smart person so THEY can tell YOU what to do.

Let me repeat that again.

Hire someone smarter than you. Then, instead of telling them what to do, have them tell you what to do. It’s counterintuitive, but it works.

I always joke that if I hire right, I should be the dumbest person in the room.

Yong-Soo Chung [00:08:24]

I still have six more truths to share. One of them is about how you can create a situation where everyone in your business can win. And another will help you resolve an age-old debate about when to rely on data and when to trust your gut.

But before I share those truths with you, I want to take a few moments to thank my wonderful sponsor Riverside!

Yong-Soo Chung [00:08:56]

All right, listen up creators. You know that I'm super picky about which sponsors I work with. Well, I'm super happy to have Riverside as our sponsor for this episode. Why? Because I love using Riverside to record all my guest interviews on this show. Yup, that's right. My producer and I use Riverside as part of our podcast production process.

My favorite part about Riverside is how seamless the recording process is whenever I record an episode with a guest. Riverside records everything locally so the audio quality is the best that it can be. Plus, it even records backup audio just in case something happens, which has come in pretty handy in the past.

But hold on. We don't just use Riverside for recording. We use it to analyze transcripts within the video recordings to pull out the best parts of my conversations with guests. They even added AI to make it even easier for you to create even more high quality content.

Riverside is completely free to sign-up and get started for your first 2 hours. Then, use code "FIRSTCLASS" to get 20% off any paid plan. Trust me, you'll love using Riverside as much as I do. Just look for the link in the show notes and don't forget to use code "FIRSTCLASS" to save some extra cash.

Huge thanks to Riverside for sponsoring this episode!

Yong-Soo Chung [00:10:19]

And now, let's get back to the remaining SIX unconventional truths!

Before the break, I shared two unconventional truths I learned. The first one was about growth mode and preservation mode. And the second was the ultimate secret to hiring.

Here's the third unconventional truth.

Yong-Soo Chung [00:10:42]

TRUTH NUMBER 3: Uncertainty ALWAYS leads to Opportunity

Or, as Winston Churchill once said, "Never let a perfectly good crisis go to waste!"

Take my 3PL business GrowthJet, for example.

Back in the day, I had a different 3PL provider I used to ship out orders. But, one day, they botched a $1000 package and left me holding the bag. I could have simply wrote it off as the cost of doing business.

But, what if this was not an aberration but the start of a pattern? That would amount to a crisis in the long-term. So I decided to convert this potential crisis into an opportunity and start my own 3PL instead.

Now, I not only had complete control over my packages but I also could offer 3PL services to other e-commerce brands. In fact, I ended up making money instead of paying it out!

By the way, if you’re looking for an amazing 3PL partner, please DM me on X or LinkedIn at YongSooChung. I’ll hook you up!

All right, as we all know, entrepreneurship is inherently unpredictable. That's the whole point. It is your job as an entrepreneur to find undervalued opportunities where you have an unfair advantage. Or, in simple words, it is your job to find opportunities to buy low and sell high. And, even though this might sound a bit callous, you can definitely find something to buy low and sell high in any crisis.

The entire history of business is filled with stories of people finding incredible opportunities when faced with uncertainties. When traditional video rental stores were declining, Netflix transitioned from DVD-by-mail to a streaming platform. When COVID hit and remote work became the new norm, Zoom capitalized on the increased demand for video-conferencing tools.

For my 3PL, we were able to lock down a crazy deal on a new warehouse space during the lockdown and our business boomed during the pandemic because everyone was forced to stay home and shop online.

And I was able to do that because of one simple rule: I quickly identified the new normal and figured out new opportunities for my business.

In other words, I zigged when everyone was still zagging. And when everyone began to zag, I was already prepared to zig.

Here's a pro-tip: Look for the second- and third-order effects of a crisis. That is, look for what is impacted by the crisis second-hand. That will give you a good idea of where new opportunities exist.

Yong-Soo Chung [00:13:03]

TRUTH NUMBER 4. Build and nurture a healthy ecosystem around your business.

Okay, this one sounds like a platitude but, to be perfectly honest, it is THE MOST IMPORTANT aspect of running a business.

Your business exists to serve THREE different stakeholders - Vendors, Employees, and Customers. These three are the critical components of your business ecosystem.

And, the most ideal scenario is when ALL three of them "win".

Traditional business and entrepreneurship knowledge says that your customers come first. That, you should always keep your customers happy. That, they should always come away feeling that THEY got the best result from the entire bargain.

But, and this is important, if that bargain comes at the expense of someone else in your ecosystem? Believe me when I say, it's NOT worth it. You never want to do business at the expense of someone else in your ecosystem.

That means if you have an unreasonable customer or client or vendor who is causing issues for your employees, don't hesitate to fire them. Just as you would fire an unreasonable employee for causing unreasonable issues for a client or vendor, you know?

Business should NOT be a zero-sum game. You do not win by making your employees lose. Or your vendors lose. You win when ALL THREE stakeholders in your business win.

And if you want this win-win-win situation for your business, then there is only one truth you need to learn quickly: Protect your ecosystem and you'll go places you never thought possible.

Here's my pro-tip: Treat your business like a garden. Make sure the soil is great, there’s plenty of sunlight, and make sure it gets plenty of water when it needs it. By creating a beautiful ecosystem, your business will thrive on its own.

Yong-Soo Chung [00:14:41]

TRUTH NUMBER 5. Understand the difference between incremental and exponential growth mindsets.

You can think of business growth as either incremental or exponential. This concept can be a little hard to grasp so let’s dive into each one carefully.

When your mind is thinking incremental growth, you might be optimizing for conversions on your website, or slowly increasing your subscribers for your newsletter, or perhaps A/B testing your welcome flow on your newsletter. Sure, you might improve your sales 10-15% year over year, and that’d be great.

But if you only focus on incremental growth activities like these, you won’t drive your business forward meaningfully.

What you need to work on are exponential growth initiatives. Because exponential growth takes a whole different approach than incremental growth.

What are exponential growth initiatives? They could be new product, new sales verticals, or new partnerships. You know, things that will move the needle quite significantly for your business.

The best companies that I’ve seen have both incremental and exponential initiatives. Think Amazon, for example. They’re always A/B testing their website: button colors, location of text, website layout, everything. This is their main revenue engine and they are maniacal about getting everything optimized.

But, Amazon doesn’t just stop there. They also take on zero-to-one projects. Like Amazon Web Services. Or Amazon Music. Or Kindle. Sure, not all projects will be successful. Do you remember when Amazon launched a smartphone and it completely flopped?

Yeah, failures will come. But you know what I always say… failures are just stepping stones to success. Because without experimenting on these types of larger scale projects, you will never know what will take off. Right?

Yong-Soo Chung [00:16:23]

There’s a wonderful quote from my favorite business mentor Jim Collins that sums this up perfectly:

Fire bullets first, then cannonballs.

Start experiments small, then scale up as you see more success.

Ultimately, to be successful, you need to balance a bit of both incremental and exponential. But too many entrepreneurs are comfortable with just incremental growth.

My pro-tip? As soon as you feel a business has matured and entered incremental mode, take an exponential bet. Introduce a new vertical. Try a new partnership. Shake things up.

And I say that through experience because one of my BEST exponential bets has undoubtedly been my dog-boutique business, Spotted by Humphrey.

See, when the pandemic hit, people spent a lot of time indoors. And they got themselves pets because they felt alone during the lockdowns. Now, all pet-parents know that you just HAVE to pamper your pets, right?

And where can you go to find things to pamper them with?

Yup, SpottedByHumphrey.com - which also is the sponsor for this show!

Yong-Soo Chung [00:17:31]

Humphrey is an adorable French bulldog. And guess what? He has quite a following on social media. Over a 150,000 followers if you're counting across Instagram and TikTok @spotted byhumphrey.

Every time we post Humphrey in a new harness or with a new dog toy, people keep asking us.

Hey! Where can I buy that? So what did my wife and I do? We decided to launch a dog boutique named after him called Spotted By Humphrey.

Spotted by Humphrey is a destination for all your furbabies needs. Treats, Leashes, dog toys, and even an award winning dog poop bag holder called Poopsie Daisy, which my wife designed all on her own.

Oh. So Check out Humphrey's shop at spottedbyhumphrey.com and use code FIRSTCLASS15 for 15% off your next order. That's spottedbyhumphrey.com. I'll leave a link in the show notes.

Yong-Soo Chung [00:18:34]

Alright, let's get back to last THREE unconventional truths.

Before the break, I explained the importance of making the most out of a crisis, building a healthy ecosystem, and finally making the occasional exponential bet.

The next unconventional truth is something that even seasoned, veteran entrepreneurs sometimes struggle with.

Yong-Soo Chung [00:18:59]

TRUTH NUMBER 6. Sometimes, intuition is more important than data.

The truth is, business *logic* is rarely, erm, logical. Your metrics might show that consumer sentiment about your products is spectacularly high but your sales charts might be showing the exact opposite. Where's the logic in that, huh?

But, here's the thing, just by looking at that sales chart, you are usually able to quickly come up with theories about why it looks the way it does. These theories often yield an instinctive correction or suggestion. You know this correction isn't supported by the data but you just KNOW it will work.

Don't get me wrong, metrics are important. As a business-owner, unbiased data will frequently give you important insights into your business processes and practices. And I strongly recommend decision-making based on unbiased data.

But, sometimes... just sometimes... Using your intuition might be even more important.

Because, your metrics are just proxies for what you've already chosen to measure. What you don't choose to measure doesn't show up in these metrics. And sometimes, a bunch of things you DIDN'T choose to measure can still end up having a pretty visible effect on your metrics.

So, yeah don't hesitate to follow your gut at times.

Pro-tip: You know how you can instinctively figure out which phone calls are spam and which aren't in the first few seconds itself? Yeah, it's kinda like that...

And now we come to the penultimate truth.

Yong-Soo Chung [00:20:26]

TRUTH NUMBER 7. The most successful people have the highest Return-On-Investment on their "luck".

The biggest myth in entrepreneurship is the concept of luck.

No, I am not saying luck doesn't exist. It definitely does. Some of the biggest advancements in science and technology have been purely lucky.

But, I disagree that luck is purely and entirely coincidental.

I believe there are FOUR types of luck. I did an entire episode on how to make your own luck - episode 10. Line it up next if you want to hear the details but the basic premise is this: When people use the word "luck" or "lucky" they are referring to a specific TYPE of luck I like to call Blind Luck.

The three other types of luck that I have mentioned in the episode are very much... controllable, in a manner of speaking. For example, if you are working on LLMs, would you classify a breakthrough in AGI as “luck”? Or as “a result of smart planning”? I'd argue it’s the latter!

But, here's something you will definitely agree with. Suppose, you happen to be in such a situation. Whether or not you can control the situation, what is the one thing you probably WILL look to do?

I'll tell you. You will look to capitalize on this 'luck'.

We had no idea our French bulldog, Humphrey, would gain such a large social media following. But once we saw his steady growth, his growing fanbase, we knew we had something, we went all-in. And the result is a dog boutique business headed by my lovely wife Sandy.

Pro-tip? If you want to get lucky, you will first need to create conditions favorable for luck.

And that brings us to the final truth.

Yong-Soo Chung [00:21:59]

TRUTH NUMBER 8. Everything Will Be OK.

This, honestly, is the most difficult truth to digest.

Because it feels so much like an affirmation... like you're hyping yourself up... It feels so... unreal. Especially when you are going through a tough time. When it feels like things are about to collapse. When it feels like YOU are about to collapse from the weight of it all.

I want you to tell yourself this: "Everything will be okay"

I'm not gonna lie, the last 8 years have been the most challenging years of my life. It's been a non-stop rollercoaster ride of ups and downs. When I thought everything was going well, bam! A crisis would hit. I would barely find my feet and steady the ship and then, bam! Another crisis!

Over time, having faced crisis after crisis, I came to realize the ultimate truth:

It's just how the game is played.

Owning my own business... being my own boss... finding new sources of revenue... finding a community to serve... No matter how you define being an entrepreneur, it has stretched me in ways I never knew existed. And it will stretch you too, if it hasn't already. You will find yourself questioning your decision to quit your cushy, well-paid 9-5 job at various points in time.

Is there a chance it won't work out? Sure, but the same applies to a salaried job too. And if you are willing to bounce back and find a new job, what's stopping you from bouncing back and starting a new business?

My final pro-tip? Zoom out. And tell yourself, “Everything will work out in the end.” Because if it doesn’t work out, it’s not the end.

Yong-Soo Chung [00:23:35]

And that brings us to the end of the episode. Here's a quick recap of all 8 unconventional truths I learned over the past 8 years:

TRUTH NUMBER 1: Know when to switch from Growth mode to Preservation mode

TRUTH NUMBER 2: Hire the right people for the right seats at the right time.

TRUTH NUMBER 3: Uncertainty ALWAYS leads to Opportunity.

TRUTH NUMBER 4. Build and nurture a healthy ecosystem around your business.

TRUTH NUMBER 5. Understand the difference between incremental and exponential growth mindsets.

TRUTH NUMBER 6. Sometimes, intuition is more important than data.

TRUTH NUMBER 7. The most successful people have the highest Return-On-Investment on their "luck".

TRUTH NUMBER 8. Everything Will Be OK.

These eight truths took me eight years to learn. I hope sharing them here will help you achieve the same enlightenment much quicker.

And if there is a truth that I should have learned by now, please don't hesitate to tell me about it - I'm @yongsoochung on X. And my DMs are always open!

Yong-Soo Chung [00:24:47]

If you liked this episode on the 8 unconventional truths about entrepreneurship, then I believe you will enjoy episode 65 titled, "I – We – They Framework: How I Scale My Personal HoldCo." The 'I – We – They' framework is how I have accelerated my business growth and how you could do the same for yours.

And that's all I have for this episode. I'll see you next week, same time, with another episode of First Class Founders!