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MDH 59 | Learning From Mistakes

How Hard Can It Be – Why Learning From Mistakes Is Important To Success With Arnaud Henneville-Wedholm

MDH 59 | Learning From Mistakes

 

You won’t gain much listening to massive success stories like Elon Musk. What you need to do to mature is learning from mistakes of others. Victoria Wieck sits with Arnaud Henneville-Wedholm, entrepreneur, optimist, and the author of How Hard Can It Be. Arnaud shares how he opens his book with a quote by Eleanor Roosevelt. It says, “Learn from the mistakes of others. You can’t live long enough to make them all yourself.” Don’t be afraid to fail your way to success. You need to trust what you can do and have that resilience and drive to change the world. If you want more tips on developing perseverance, listen to this episode.

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How Hard Can It Be – Why Learning From Mistakes Is Important To Success With Arnaud Henneville-Wedholm

Every week I try to bring you some relevant content to your life as an entrepreneur or aspiring entrepreneur. No matter what stage of entrepreneurship you’re at, this show is going to be inspiring but in a way that’s very realistic. A lot of times, people who are into inspiring and encouraging are eternal optimists. They don’t see the realistic side of things. When you get hit with reality, you’re wondering what happened to me.

It’s a known fact that the failure rate of small businesses is somewhere north of 75% to 90% in the first five years. Even if you make it beyond the five years, there is still a 50% failure rate between 5 to 10 years. Why is it? There are two known facts that we know. The first one is the lack of customers. The second one is the lack of funding. The third one is lack of visibility and the fourth one is the one that we’re going to talk about now.

It has a lot to do with your entrepreneurship mindset. It’s also a known fact that most entrepreneurs suffer from a lack of resilience and persistence because they give up the first time if something major happens to their business. They give up on their life dream and all of the dreams you had about helping other people, amplifying your mission, improving other people’s lives come to a halt. I have somebody who can talk about this from not a theoretical view but he’s experienced this in his own life. I’m going to tell you that you’re going to be fascinated with this. His name is Arnaud Henneville-Wedholm. I know it’s a mouthful. We’re going to call him Arnaud. Welcome to the show.

Thank you, Victoria. Thanks a lot for welcoming me to your show.

Tell my readers a little bit about your entrepreneurship journey and some of the times when you didn’t succeed. A little bit about that and we’ll dive into why you wrote the book called How Hard Can It Be.

I’ve always been in an entrepreneurial setting. I’ve done things and tried to achieve things on my own. I’ve always had, from a young age, this ambition of creating something for myself. I created some small businesses, even I was younger but what I had over everything else is this grit and mindset of consistently, systematically going into the household. I’m fighting my way through and making it happen.

I’ve set up a few businesses even before doing a real job. Eventually, I graduated with an MBA from the UK and started working as a Management Consultant in a large consultancy firm doing change management. We are doing behavioral change. We’re helping large organizations to cascade strategic initiatives within the organization.

We’re changing, helping leaders to develop the capacity and skills to execute on important corporate strategies for large operations, Coca-Cola, AT&T, big monsters that are complex to maneuver. After several years or so of doing that, a colleague and I decided to go on our own and try our luck into challenging Facebook.

You always had the entrepreneurial spirit in you and you wanted to find your own path to success. Most of them didn’t succeed at that point. You decided to go to a corporate world where you did the corporate management and learned how the large corporations lay out their strategies, execution, scale and optimize their total resources. What were the lessons that you learned comparing the small businesses that you failed at versus the large-scale corporations that were doing something right?

In those big systems, it’s hard to feel that you make a difference yourself. It’s the sum of all the people that make it happen. It’s all about the team and everything that comes through to support the team to execute. It’s easier than doing it on your own and trusting yourself in having all that resilience and drive to change the world. That’s what small entrepreneurs, everyday entrepreneurs, have to have to make something of substance and try to bend the universe.

Trust yourself and have that resilience and drive to change the world.

I’ve seen it right off when I tried my different ventures prior to working in large corp and afterward when we decided to challenge Facebook. I was working there in 2010. Facebook is starting to pick up speed and traction. It’s six years of business to have 800,000 users. Everyone is talking about what’s going on with Facebook. What is the relation with social networks and depression?

You start having a lot of research around the effect of playing with the Like button on teens. A lot of that is happening. At the same time, we, as management consultants, cannot understand why would so many people be excited by pressing a Like button, doing it from their sofas and not engaging in the real world.

From a behavioral perspective, it was a bit odd to us. We thought that we could create a social network that would bring back people into the real world, taking them out of their couch and pushing them into doing things for real. The mechanism was a challenge. Our network was based on a very simple thing, which is that forever people have been driven by self-actualization. It’s all about what you have to do to reach the higher level of the Maslow pyramid.

Since the beginning of ages, we’ve been trying to get out of the cave and slowly but surely, move away from the fire camp and become greater versions of ourselves. We’re discovering new lands, we’ve come up with technologies and that’s what we do as a human. We thought that this idea of bringing back people into the world by doing things that they wanted to do as per this idea of self-actualizing made a lot of sense, hence the challenge idea.

It’s like a real story of David and Goliath. You’ve got to take on something as big as that and you don’t have funds. You don’t really have the system’s built-in. At that point, Facebook was rapidly getting investors and was pretty much putting on almost impossible barriers to entry for most people. Most of our entrepreneurs here are not at that point. Let’s get back on point, which is how hard could it be?

Your title of the book is very appropriate. We are now living in the era of the Great Resignation. A significant percentage of the people who are quitting their jobs is 3 to 4 million every single month. They are younger. There are the Millennials too. They’re at the height of what they should be doing in terms of building their careers and financial resources for the future. 3 to 4 million people per month are alarming.

All the research and we’re talking real extensive research by UPS, VistaPrint, Forbes, Census Bureau, these are very big research. They have shown that 63% of Americans want to do their own thing. Of the people that quit their jobs, about 30% of them have already started a side hustle. The other 70% of those people want to start something but they don’t know how to get started. Tell us in point by point, maybe three points about How Hard Can It Be. Why is it so hard?

It’s rough and that’s the starting point. We went through the statistics. The reason for the title of the book is that, “How hard can it be?” is the question we ask as an entrepreneur when we go into something. “How hard can it be to displace Facebook,” which is what we went after. In truth, it is harder than you think it will be.

In what way? Is it funding or getting customers? Is it in promising time?

Everything is hard on that journey unless you have the brilliant idea that you are going to go after. First, it’s about coming up with an idea. The cytosol is something else because you can try to do something on the side but I believe in going all-in because otherwise if you are half-committed, what you get is half of the results.

MDH 59 | Learning From Mistakes

How Hard Can It Be: Startup Lessons From Trying (And Failing) To Take Down Facebook

I’m into committing yourself to something that you are passionate about or at least you believe that you are passionate about. That’s a big one because people tend to think, “I’ll find my passion first and then I’ll go after it.” I think that’s backward. Everyone is passionate about something whether it’s a hobby or something that you can feel inside you that this is for you. For you, it was jewelry. For other people is other things, sports, diet or whatnot.

That passion somehow will change as you move along and go forward. It’s okay for me to start with something that you believe in and put all into that venture, all your sweat, commitment, ideas, vision, dedication and see how far you can go. If you don’t, you will turn around and most likely, you will regret not having pushed and you won’t push the second time once you’ve given up. The first thing is to go into the one thing that you believe.

That’s the journey of entrepreneurship. It’s up and down. It’s the valleys and the deeps. It’s hard because getting customers and lending finance are very hard. You don’t lend a couple of millions overnight. Getting traction is super hard. Throughout that journey, you will experience hardship. It will be complicated but nevertheless, you have to keep going, which is why passion helps initially.

It’s interesting because in my own journey I did what you said, which was to go all-in. At the time I started my jewelry company, I had a colleague and a very good friend. I didn’t have any money and anybody who was a jeweler in my family. I didn’t have anybody who was a business person in my family.

My father was a Professor. When he came to America, he couldn’t teach because he didn’t speak English. I had a colleague who had a well-paying job and didn’t want to go all-in because he thought he could do his as a side hustle. He was already in the related business, had family connections and had some money.

There were quite a few people that started their companies right around the same time. I was the only one that quit the job. I didn’t have family backing and money. Yet, I was the only one that succeeded after a few years. After several years, there was a huge divide. I believe the reason why those people didn’t succeed is that when they were going to work during the day, they were making $100,000, $150,000, $200,000. They’re giving their best hours from about 7:00 AM to 6:00 PM to that company. You’re coming home exhausted. You’re dealing with your family, got a kid and you want to be a great parent and spouse.

Your business always takes a second priority. Unless you have a strong business idea, there is very little chance that will succeed. The other thing you can do is you can start it as a side hustle only as a testing ground and then you’re going to have to eventually transition into a business that could sustain, grow and scale.

Those of you who are reading now, you can sign up for a lot of my freebie classes. I talked about, without passion, you don’t have a business. When things get rough and you hit a month or you got no revenue, You hit a month where you find out that the stuff that shipped out had a defect and you have to be called. There are all kinds of crazy things that could happen. When a small business would be called, it could be 50 pieces but it’s everything you have.

When that happens, if you are passionate and this is what you breathe and live for, it’s easier to stomach those hours and lumps and say, “I’m passionate about it. I don’t know what happened but I’m going to fix this.” Rather than if you were in there for the money, you’re like, “This isn’t making me any money now. I’m going to quit.” Doing what you’re passionate about in those times helps you stay consistent and be a little bit more resilient.

For me, even those times when I thought my business was going to be done with it, over with, as your business grows, the stakes are higher. One mistake can get you down. I was able to sit back and say, “Even though I may lose everything tomorrow, the sun will rise. I enjoyed all that time that I’ve had with this business. If I had to do it over again, I’d do it again.” In those times when stakes were high, I could go under and compromise. I doubled down and then I grew. What you’re preaching is something that I’ve experienced myself.

All those facets are hard. What are the tips that you could offer? In your book, How Hard Can It Be, you talk about all the things that could go wrong and how hard it is. What you’re trying to do is you’re trying to let people know that entrepreneurship. When you look at all the people who made millions of dollars like Jeff Bezos, Richard Branson and Elon Musk, all those people are entrepreneurship unicorns.

Start with what you believe in today, put your sweat and commitment into that venture, and see how far you can go.

They’re rare and most people don’t know if they’re real. When you look at their stories, they are latent with failure. Look at Bezos, it was at several years. We all listened to his earnings call on CNBC, talking about why he didn’t make his numbers. Why his losses were bigger than the last month but he continued on. Everybody thought he was crazy.

It’s the same thing with Elon Musk. If you read his book, it was 5 to 10 years. People thought he was a joke in Silicon Valley. They thought, “This guy is for real.” Are there any tips that you have in your book that you can share that help them? This is reality but what are the things you could do to succeed in that environment? It’s a jungle out there when it comes to entrepreneurship now.

You raised quite important points. First of all, most we’d fail, as you say 90%. When you look around for tips, advice and content that could support you, the stories that are relayed aren’t relatable. If there are stories about failure and stories that you can learn from because you won’t learn anything from the massive successes of Elon Musk, are stories of failure because you learn from the mistakes of others.

I opened my book with a quote from Eleanor Roosevelt, which is, “You should leverage, use the learnings from the failure of others because you can’t possibly long enough to make them all yourself and you can’t. The purpose of the book is to show some tips that you can learn from and help you achieve the success you’re after.

What are the tips that you can offer to small entrepreneurs to succeed in the environment where you’re going to be faced with failure after failure? To expand upon your point that you learn more from your failures than you do from success stories, for example, my kids played competitive tennis. They were both nationally ranked. They played college tennis.

As a tennis mom, I watch my kids play. Sometimes they get lucky with the draw and they’ll get somebody who is ranked 185 or something in the nation but sometimes they’ll get the number one draw opening round. They’ll be like, “He’s got to be the next Roger Federer. I’m sitting here hitting poles over here. What’s my luck?”

When they excelled and their tennis game was not when they won one of those easy draws but when they lost those close games, where it came down to the last six points and they keep thinking about, “I should have come in earlier. I should’ve hit a volley. I shouldn’t have hit a back end.” They think about their strategy and that’s when you grow.

What I like to say is that with every challenge and obstacle in your entrepreneurship journey, there is a gift that’s wrapped in there. I always teach people how to not only embrace failure but plan your failure. When you’re launching a business, I always ask people to launch you’re a good, better, best. When you launch three-tiered of the same product something is not going to work because people are not going to buy the good, better and best. They’re going to buy 1 of those 3 things. The other two, by nature, will fail. Understanding failure is a key ingredient to success

We’ll fail our way to success.

Get up and fall forward.

MDH 59 | Learning From Mistakes

Learning From Mistakes: Fail your way to success.

 

Go beyond and embrace failure. The strategy is to get uncomfortable on purpose like by design. That touches a bit upon the point you made earlier. When you are working full-time, you come home and you decide that you don’t have the time and energy because you’ve been tied up with all the things, you are too comfortable in a way because the moment you are completely committed to the thing you are going after.

When you do the journey yourself, you are going through those deeps, difficulties and the struggle of landing a customer, not having enough inventory or whatever business you may be in, on design, putting yourself into difficult situations will help you be comfortable with potential failure along the way and you will.

You can put that into the context of a sport like you did. I personally do that every time I go running or go to the gym. You don’t grow muscles by lifting the same weight over and over. You grow muscle because you break the muscle fiber and then you build on top. You have to lift heavier and heavier to get growth. It’s the same mechanism. It’s the same for running. I don’t know if you run but I run quite a lot. It’s always the same pain. Regardless of how many times you go running at 10, 15, 20 kilometers, you will find the exact same struggle. It won’t get easier. Everything is the same.

You raised a good point here, which is when you’re starting your business and trying to make the first $50,000. I’ve been there. Trust me, it’s very painful and it’s a lot of work. You wonder every single day, “Am I ever going to get a break? or this was a stupid idea. Why did I think I was going to succeed in this? There are a lot of people that are smarter and have more money than me. They didn’t succeed. What the heck was I thinking?”

I lived in LA at the time. I had an LA Times-like employment board next to me the whole time. It’s circled in red thinking like, “I should start to get a backup job.” I still pushed on. The first $50,000 is pretty painful. You get a little bit of money, things are nice. I did the first $300,000 and I’m like, “This is great. It’s wonderful. I’m going to go buy some furniture because I finally have some money to buy.” I was living in a two-bedroom apartment. I thought to myself, “I could get myself a desk.”

At that point, I realized every order I shipped because your margin isn’t that huge, if anything goes wrong with any of those things, that could wipe my total profit. The stresses are different and then you have to invest money. You have to have somebody to help you. I hired help and all that. At that point, I now have an office and a couple of employees. I have to do $300,000 a month to sustain myself. How am I going to do that? It’s the same pain now but it’s much bigger.

The good news is you went through that pain. You understood you have some skills to get a response rate. You know what’s working. You know why direct mail doesn’t work. Phone calls worked better for me. When I went from $300,000 to the first $1 million and that was within the first eighteen months, by the time I was doing $1 million, my conversion rate was about 40%. You learned how to tweak up to that point.

I’m going to tell you ladies and gentlemen who are reading because a lot of my readers are female entrepreneurs. I’m very honest and upfront. I always tell people when I coach and do free webinars, in fact, I did one and it was like a mastermind class, “Don’t sign up for any of my classes if you think all you have to do is sign up for this class and listen to me for a weekly Zoom because it’s not rosy and not easy. You are going to have to do a lot of work. It’s the only way you’re going to get there.”

I find it a lot of fun. I wake up every morning after many years in business, $500 million to $750 million in sales. I’ve got plenty of money. I’m not saying I’m Oprah or anything like that. Remember, I started my company wanting to make $2,000 a month. As an entrepreneur, you never know when a rainy day, year or decade will come. I never learned to be extravagant in any way. I never learned to be braggadocious. I stayed humble. I always try to pay back and pay forward.

I drive a Yukon. I don’t drive any fancy cars. I got plenty of money for the lifestyle that I live. I was on a live radio show at 6:00 in the morning because it was 9:00 East Coast time. I was so excited to share my vision because one of my favorite lines from Whitney Houston’s song, Destiny, that said, “My finest day is yet unknown.” I’m an eternal optimist and I look for my finest day, which could be tomorrow. It’s in the future. It’s not in the past.

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.” – Eleanor Roosevelt

For all of you who are reading, if you’re 1 of the 3 to 4 million Americans who quit their jobs in the last several months, it’s probably about 20 million or so by now. I’m hearing that trend is only going to continue more. I still encourage you to start short businesses to find your passion and purpose in life. Live your life with gratitude and intention.

When you do, you can directly impact your family, your community, your world to make it better, healthier, happier and you can heal the planet this way rather than working for some horrible boss who’s going to tell you what you’re worth. That’s in the best-case scenario. In the worst-case scenario, they tell you, you’re not worth anything or that you’re only worth something if you do it my way. A lot of these corporations are just into profits. They’re not into helping people.

The other thing I would say too and this is from my heart is if you get down to this, everything you need to succeed in life and be happy, you had it the day you were born. Don’t let any expert or anybody to tell you that you can’t do this or you can’t do that. Tune it all out. If you believe in something, it’s a matter of, “How am I going to get there? How am I going to get my message out?” I know it’s hard. Getting visibility and traction is hard. You can come to my website. I do a whole webinar on that one thing.

Getting visibility and traction in the first two years. That’s not going to be easy either. I give you a lot of things you can do to get there but you got to do them. I have a home gym here. We bought a whole new SoulCycle Bike. I don’t know how much it was. We already had an elliptical, treadmill, a noted track. I have all the weights here plus we’ve got a boxing thing. He says to me, “We already have an entire gym here. The problem with that is you don’t lose weight. You don’t get in shape by looking at those. Those machines have to be used. You just use the ones you already have.”

We have the bike and all this stuff. We already had like a gym model, bike, Life Cycle and all that. We got the SoulCycle and I said, “You got to get on it and start using it.” Any one of them will be fine. I’m going to start with one of them. He’s not super heavy or anything but he’s getting a little annoyed because his birthday is coming up. This is the same thing. When you go to these mastermind classes or you attend free webinars and they give you tips, you got to use those tips. They’re simple tips.

I love the book you wrote, How Hard Can It Be because nobody is talking about how hard, realistically speaking, from an entrepreneurship point of view. What I want to say to everyone is it is normal to be hard. You don’t learn how to ski, cook or do anything great by doing things that are super easy. I can ski but I’m not a professional skier or anything like that. When I see my kids ski or even professionals, they fall all the time. Watch the Olympics. How many people break their leg and fall but they get right back on and they are better. Apparently, with pins and stuff in their knees, they’re still better because they fell.

We have that when we are born. We start to walk, stumble, fall and we don’t stop. Otherwise, we would all be crawling and we don’t. We all walk. It’s around the teenage ages where everything becomes about conformism. You have to conform to that very box in which you’re going to exist for the rest of your life. You’re going to have grades and be graded on those. If you do below the average, you will fail and then we start to stigmatize failure. The less we fail and try, the more we supposedly fail in the eyes of society.

Slowly but surely, we become very rigid in our ways of looking at the world where in fact, we are meant to try stuff, to experience things and the only way to move forward is to try so much stuff out there, fail at them and recognize which one worked for you. We all feel it. You made that very interesting point. We have it from day one, from our birth. The very fact that you are on this Earth, the probabilities are crazy. It’s 1 to 400 trillion.

If you are on this Earth, it’s probably for a good reason. We are being falsely directed to do things that we don’t fully engage in because it doesn’t resonate with us and it makes us miserable. At the same time, we look at others who are supposedly successful. We put them on a pedestal and look at them as those great people that are different than us. They have something that we don’t have but it turns out we all have it. We are all the next great thing. It’s a matter of tuning to it.

Think about this, Arnaud, when you look at the companies that are now controlling our lives or those people who let them control. You’re looking at Google, Apple, Amazon, all these companies, except for Bezos, everybody else started their companies as a college dropout with less than $5,000 in total revenue. If you watch the Steve Jobs movie or you know anything about Amazon, they failed for the first ten years. Steve Jobs was even voted out of his own board. He was fired, came back and created the iPod.

MDH 59 | Learning From Mistakes

Learning From Mistakes: The only way to move forward is to try and fail at many things to know which one worked for you.

 

The resilience factor is a very big thing, believing in yourself. I’m not here to tell everybody, “As long as you’ve got a passion, you’re going to succeed.” You have to work hard and work hard consistently. I come from Korea. It’s true here, much more so here in America. When you go to school, your teachers, the society, your community leaders, everybody tells you they have their own definition of success. If you’re a lawyer, doctor, this or that, you’re successful.

I went to MBA school, I got a great grade in my MBA school and this is a true story. I didn’t want to go to MBA school. I wanted to be an artist. I want it to be van Gogh and I’m a pretty good painter. That’s all I wanted to do. My parents said, “I’m talking to so and so.” They’re immigrants here, “you got to be a doctor, lawyer, this and that.” I didn’t want to be that. In my family, I have four doctors and a lawyer but they made me go to MBA school and I did it.

I went to MBA school and I thought, “Maybe my parents were right because I can do this marketing thing.” That’s a creative thing. In advertising, I can create ads and slogans. I can deal with that. My professor at USC pulled me aside. He liked me, cared about me, gave me extra work and everything. He told me, “You’re never going to be good at marketing. You need to switch your major because you don’t understand the nuances of language and marketing. You have to understand psychology. The American people think differently,” all this stuff.

I might not have got my degree in Finance, which I had no interest in it. Creative people don’t think about money. I went out and got that, $500 million later, primarily marketing, which I was pretty good at. Had I listened to him in that, given up my hope then and became a banker? I would have been fired from the first job because I can’t deal with numbers at all. The numbers bore me to death.

I have a degree but when you are in the most impressionable years in your life, about the seventh grade on, you’re being told what you’re good at. You’re going to be told pretty much what you’re going to succeed in. These are teachers that never gone out and lived the real-life out there, that entrepreneur life.

We were all given what we needed from the minute we were born. The word success, if you look at the personal lives of some of these people like Steve Jobs. He was an adopted kid, abandoned his own child, on and on. When we talk about success, I talk about the quality of your life more than the digits you have in your bank. If you’re going to go after that, I would highly recommend that you pick up this book, How Hard Can It Be.

Many of you know I’m an avid reader. I read about 30 to 40 books every year. I’m a very curious person. I lived on a small island in Korea, that’s how I saw the world and that’s how I learned. I still have this love for books. I don’t normally recommend a lot of books for my people to read because books take a lot of time. You’re asking people to invest time in you. I think this book is one that every entrepreneur should read because you are going to face times when you’re going to give up and say, “It’s not worth it.” At that time, you’re going to be given some tools to cope with that. Thank you so much for coming in and sharing your time with me and my audience.

If you want to pick up the book or know more about the book or about Arnaud and his journey, which is fascinating. You could go to HowHardCanItBeTheBook.com. Thank you so much for coming and if you have not subscribed, please go ahead, share, subscribe and more than anything, go ahead and give me a review. I’m not asking anybody to give me a great with you. I’m asking you to give me some honest feedback on every episode because that’s how I grow. It’s okay not to give me a five-star review. I’m okay with that. Being in a creative world, I get a lot of real honest feedback and that’s what we thrive on. Until next time, please stay healthy and happy. We’ll see you soon.

Thank you, Victoria. Thanks for having me.

Thank you.

 

Important Links

 

About Arnaud Henneville-Wedholm

MDH 59 | Learning From MistakesArnaud Henneville-Wedholm is an entrepreneur, author and optimist. Today, he leads sales and business development at GLOBHE, a platform for drone data on demand. He also mentors startups at the Nordic Startup School. Arnaud is the founder of multiple startups, including internalDesk, a SaaS platform for enterprise collaboration, where he served as COO. internalDesk was recognized as one of the ‘Top10 Tech Rising Stars’ in the Nordics in 2014 and was acquired in 2019. He has worked many years in Change management. He holds an MBA from the University of Leicester, UK. Arnaud’s interest areas include entrepreneurship and everything related to mindset and wellbeing. He lives in Stockholm, Sweden with his wife and three children.

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MDH 43 | Small Business Intellectual Property

Patents, Trademarks And Copyrights: How To Protect Your Small Business’ Intellectual Property With Richard & Elizabeth Gearhart

MDH 43 | Small Business Intellectual Property

Patents, trademarks, and copyrights serve to protect intellectual property for your small business. Intellectual property is the ownership of ideas in the legal world. In this episode, Victoria Wieck’s guests are Richard Gearhart, a respected patent attorney and provider of great intellectual property strategies, and Elizabeth Gearhart, the Chief Marketing Officer at Gearhart Law. Richard and Elizabeth talk with Victoria about how the first step to determining when to use patents, trademarks, and copyrights is to consult with an intellectual property professional. Make sure to get confidentiality agreements while you’re at it. Want to learn more? Tune in!

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Watch the episode here

Listen to the podcast here

Patents, Trademarks And Copyrights: How To Protect Your Small Business’ Intellectual Property With Richard & Elizabeth Gearhart

I’m so delighted because some of the questions I’ve always had and struggled with in my entrepreneurship journey have to do with protecting my ideas, my business, and what we call intellectual property. I know that sounds like a scary term, but it’s not. I have the perfect guests who can unravel all of that and unlock the secrets to making sure that your hard work is protected.

I have Richard and Elizabeth. They’re a married couple. They have been married for many years and that already tells you something why these people are saints other than being super smart people. Richard is a very respected Patent Attorney. His wife Elizabeth is the Chief Marketing Officer. She does a lot of things behind the scenes to help Richard’s clients as well. Without further ado, I want to introduce Richard and Elizabeth. Welcome to the show.

Thank you.

Thank you, Victoria.

You founded your law firm several years ago. Did you work for other people or you get out of school and founded it? How did it happen?

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: The goal now is to help others escape from jobs they don’t like and start their own businesses.

 

I worked in big corporations. I was the Head of Intellectual Property for Novartis. I didn’t like the corporate lifestyle. I got some great training. I worked with some good people, but I didn’t want to spend my entire career working for somebody else. A break in the action happened at Novartis. Elizabeth said, “Why don’t you go out and start your own law firm?” I thought she was nuts. It turned out that it was the best decision I ever made in my life. I’ve been having a blast ever since then. That’s my story. My goal is to help other people escape from jobs that they don’t like and start their businesses.

I stupidly said, “I’ll do whatever you need me to do to make your firm successful.”

First of all, I know all of you probably heard a lot of different things in that very short intro that Richard escaped. What I got out of it is that behind every successful man, there is a woman kicking his ass. You worked in corporate and you didn’t love the lifestyle. You felt that you could impact more people more directly by going on on your own. It took Elizabeth to convince you to do that.

I had never thought of being an entrepreneur. When I was growing up, the way somebody became successful was to claw their way to the top of a corporation, which I did. By the same token, that came with a lot of stress and a lot of personal ethical compromises that made my life less fulfilling. Elizabeth thought that if I started my law firm, I could be more my person. It would be easier to be around because, let’s face it, you carry that stress with you wherever you go.

If you work at a corporation by the time you’re in your mid-fifties, you’re at a huge risk of losing your job.

She didn’t want to move the kids again if I took another corporate job and I ended up in some other part of the country. We didn’t want to move the family. That’s what was behind it. She always said she knew I would never fail because she knew that I was driven and determined. Having a family to support is a lot of responsibility.

It felt like a huge risk. We were in our 40s. If you work at a corporation by the time you’re in your mid-50s, you are at a huge risk of losing your job. Starting your own thing in your 40s, so that you have something when you’re in your 50s, I think it was important for us. I feel like it was almost less of a risk to start his own thing than to try to stay in corporate.

Those of you who might wonder about this. I completely agree with you on everything you said so far about the risk. Sometimes we think it’s safer to stay in a corporation. In my experience, not ever taking a risk and taking the safe route could be the most dangerous thing. You did more than practice law. Since you opened your law firm, you have been helping people deal with intellectual property.

It’s important for people to understand all the different parts of intellectual property, which I don’t understand very well, so I have you here. Also, I deal with a lot of attorneys because I have a lot of intellectual property to protect. You’re one of the few law firms that helps your clients succeed. You have a radio show called Passage to Profit, which I’ve been on as a guest. You also have another show called Fireside, where your clients can come on the show, promote their products and you highlight what they do to help their clients, which makes the world a beautiful place.

You might want to check out Passage to Profit, which is on iHeartRadio and GearhartLaw.com. If you’re entrepreneurial, you definitely want to check them out because even if you don’t think you have anything worth protecting, there are so many things that they’re doing to help everybody that I think is worth checking out. Let’s dive into the intellectual property itself. This question is directed you, the attorney, Richard. How would you define intellectual property? It’s a very vague and scary term.

Intellectual property is the law of ideas. Just like you would have a deed to your house that defines the ownership of the land and the house, intellectual property is the ownership of ideas. In the legal world, they refer to ownership of property as real property. In the legal world, we refer to the ownership of ideas as intellectual property. There are four different basic types of intellectual property. There are patents, trademarks, copyrights, and trade secrets.

Patents protect ideas related to technology. They protect the inventions. If it’s a new mousetrap, car tire, or a tangible thing, that technology is protected with a patent. Trademarks protect business names. They call them source identifiers, which may sound a little confusing. The point is that they exist, so that when you go to buy a bottle of Coca-Cola, for example, you know that bottle of Cola was made by the Coca-Cola Bottling Company. Trademark serves to identify the source of the goods, so you know that it has a certain quality or characteristic.

The third category is copyrights. Copyrights protect original works of expression. Music, art, sculpture, architectural drawings, literature, all of those movies, all of those things are protected by copyrights. The fourth category is trade secrets. Trade secrets are secrets that a company has that give them a competitive advantage. It’s information that’s kept secret within the company. Lots of times, you may see things like documents marked confidential or whatever. You can protect the confidential information of the company through trade secrets. Those are the four types of intellectual property.

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: If you’re looking for larger sales volumes, then investing in a patent makes more sense.

 

For a small business entrepreneur, this is a lot of information you unpacked. Thank you so much for doing that. We know now. A lot of times, I’ll go have lunch with somebody or I’ll give a speech, people would come up to me afterward and they’ll ask me things like, “I want to apply for a new patent on my new whatever. Do I need an attorney?”

With the limited knowledge I have about patent law, I knew right away there are a lot of the things that they’re talking about are more copyrights and not patents type things. It’s interesting that patents had to do with primarily new inventions or a new way of doing something or making something. When you said copyrights protect original works of art, such as sculptures and music, I copyrighted both of my books and a lot of my design work for jewelry designs.

Copyrights are not that expensive. It’s something that can be done easily. I would assume that trademarks and patents can go up to quite a bit of money. Do you have any idea? I also understand that it has to do with the complexity of the project and whether or not you get into some pushback by other competitors.

Intellectual property is the ownership of ideas in the legal world.

There’s a lot of considerations. For example, at Gearhart Law, we charge flat fees for everything and it’s a pay-as-you-go service. A utility patent is a patent that protects a concept. For example, if you were to want to patent a desk, you would patent the concept of a desk. You would have different sides, tabletop, you would have drawers, no drawers, different materials, plastic glass, wood, L-shape top, oval top. The idea is to protect as many variations on the concept as you can.

There’s another type of patent that’s called a design patent, where you only protect exactly what is shown in the drawing. It’s a very specific embodiment and specific view. It’s almost like taking a photograph and sending it into the patent office. Those two different types of patents have different levels of protection. They have different costs associated with them.

The utility patent, for example, might cost $15,000 to $20,000 from start to finish, spread out over 3 or 4 years. The design patent might cost between $2,000 and $3,000 from start to finish, including all costs. There are advantages and disadvantages to both. That’s why you need to contact the professional who can discuss it with you and recommend the best protection for your project.

If you’re starting out on an entrepreneurship journey and you had a new business idea, at what point do you think that they should be looking for intellectual property protection of any kind? I have a way you can decorate an Apple iWatch case. You find a lot of phone cases, but you don’t find a lot of iWatch cases because every time you put a metal around the piece where you can put jewelry pieces, it will negate your Bluetooth and all the functions. You have to get around the metal piece of it and all that. I designed it.

In that case, I have a design patent. I have a patent pending. I have trademarks for that particular brand and copyright for the design. I believe in the product. I went after all of that. I assume that in some things, you can get all of them, like copyrights design. For an entrepreneur, who doesn’t have a lot of money, they don’t know if it’s going to be marketable or not what would you suggest that they start with?

The first thing they should start with is a discussion with an intellectual property professional. After that, usually what we do as a search. We want to find out if there are other things out there that are similar to your invention. That’s very important both from a patent and a trademark perspective because somebody else might have a patent that could block you. You want to find that out as soon as possible, then your options are to change your design to avoid the other person’s patent or get a license from that person which may be attainable or it may not.

You need to do a search and you need to see what other intellectual property is owned by others. For us, about a third of the projects that we researched, we have to tell the client, “If there’s something out there that’s too close, we can’t move forward with this because you’re going to get in trouble from some other company.” Assuming that you get past the search phase, then you have to decide when the project is mature enough that it makes sense to invest in the intellectual property? That’s an art. It’s not necessarily a science.

Once you understand what your budget is, you understand what all your costs are for moving the project forward, then having at least a little sense of what the total sales potential is you can then make decisions about the intellectual property. For example, if you’re selling a niche product and you think that the value of the sales is going to only be $250,000 to $300,000 a year, then maybe spending the money on the patent is more questionable. If you’re looking for larger sales volumes, then investing in a patent may make more sense.

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: It’s important for legal reasons to get confidentiality agreements with the people you talk with.

 

You have to remember that the value of the patent is not only running out and suing somebody. If they copy your idea, that’s what people think. The value of the patent also puts other people on notice. Other people who are having searches done find your patent and that discourages them from entering the market.

Even if it’s only for six months, if you have $100,000 a month in sales and you invest $20,000 a month in your patent, in those six months, that will keep you dominant in the market. You might earn $500,000 worth of sales based on a $20,000 investment. It’s not that you would necessarily even sue them, but you keep the competition at bay. That’s one of the values of intellectual property that people don’t often realize.

I have my startup called Fireside.Directory and I have a logo. The first thing I did was have one of our attorneys at Gearhart Law do a trademark search on Fireside.Directory. They didn’t look for the exact words. They looked at things that would be close to the category I’m using it in. It was clear. I started using it. With trademarks, you get some protection from when you start using them, but we have filed for trademark protection.

I’ve learned that a very famous person is going to use Fireside for something kind of similar, that’s going to be pretty interesting. I’ve been working on this and having Richard help me. The two of us have brainstormed a lot of ideas that are patentable. I haven’t told anybody what they are. I’m on a patent age, and I’m almost done drafting that patent. I’ll have one of our experts at Gearhart Law finish it for me because I haven’t done a patent for a long time. I think that if your service business, especially a trademark, can be important. We have a client that’s in litigation for millions of dollars over a trademark.

A utility patent is a patent that protects a concept.

I think that intellectual property is something that if we could afford it, in an ideal world, you want to all have that. As Richard explained, a lot of times, it’s an ROI. It’s a return on your investment in some cases. Beginning entrepreneurs don’t know in the beginning what’s possible and all that. That leads me to my next question, which is to be directed to you, Elizabeth.

I know that you are more of a driving force behind Passage to Profit. I find that to be fascinating because you’re not doing law. You’re helping your clients get more traction, get more clarity which might even help the intellectual property part of that too, because you’re using it more out there. It’s more of a deterrent. How did you conceive that show and what’s your goal there? What’s your home run situation with that show?

There was somebody we networked with in New York named Kenya Gipson with iHeart. She broached the show to me over champagne in New York. I brought the idea home to Richard. I’ve been on radio before, and he liked it. We got a lot of pushbacks from a lot of people we knew who said it was not the best way to spend money, not a good idea. We wanted to do it anyway. We felt like it was a real place for us to showcase our clients, and we have a whole social media effort around it.

We felt like it was a way to push positive and negative experiences because we do ask people their challenges about entrepreneurism out into the world. The normal person listening could understand what they might have to go through if they decided to start a business. Our goal is to help as many people succeed using whatever they can from Gearhart Law, but also using the promotion and the advice I get from people like you on our radio show.

I was a guest on the show and the first thing I noticed was how authentic you two are as people. You take all the attorney, the law firm, the chief marketing officer hat off. It’s a lot of fun, but you’re also providing some serious content around that. I also love what you said, which is not only success stories, but I’m a firm believer that we learn so much more from failures. Especially, the ones like you almost make it. My kids played competitive tennis, USTA National level tennis. In a lot of those close matches, you lose over like 5 or 6 points. It comes down to how those kids play those critical moments and points.

When you win over somebody 6-0, 6-0, you don’t learn much. You hardly get an exercise. When you have a deuce forever and then you finally lose it, those are the things that shape you. I feel like bringing guests on where they’re talking about there are challenges in the past and current because you will always have challenges when you’re in business, as you might know, I think that’s doing a lot of services. I commend you for doing that. Being married to a top-notch attorney, you could stay at home and keep on drinking champagne all day long.

I think that’s great. I want to be a part of that. I was glad that you invited me to your show. I work with a lot of entrepreneurs. In fact, I am the co-director of the Global Society of Female Entrepreneurs. That’s why I invited you to my show because the one thing I do get a lot is surrounding the patent and intellectual property law. I wish I had found you many years ago because almost every one of my designs is an original design. There are like 70,000 people out there in the world making money off of my designs. They’re knocking you off here and there.

As Richard said earlier, it’s not only about suing people, but it will deter some of the bigger companies from knocking you off. If you are a little mom-and-pop in China and you don’t understand the law yourself and you can knock my designs off, they’re not going to have that much of an impact. Whereas if a major company did that, they’ll do a search like we’re doing a search and it deters them.

Your practice and Elizabeth, you are a force behind marketing your services and also helping your entrepreneurial clients to market their services. That’s an exceptional above and beyond. I want to thank you for doing that. Anything that I didn’t cover about intellectual property? That’s a thing you can probably talk about for the next year. I don’t have the year.

I would say one other thing is that make sure you get confidentiality agreements with the people that you talk with. There are legal reasons for doing that. There are also other reasons, the business relationship reasons. Before you spill the beans about your project, you need to make sure that you have a non-disclosure agreement or confidentiality agreement, something in place to make sure that they don’t run off with it. It happens. I can’t tell you how many times I’ve had clients say to me that they went and they talked to somebody and I said, “Did you file a patent?” “No.” “Did you have a confidentiality agreement?” “No.” “There’s not much I can do to protect your interests if you don’t have that agreement.”

The other thing too is that you lose your rights in Europe if you tell somebody your whole idea without a confidentiality agreement.

I’m so glad you both mentioned this because the one thing I do is I get approached a lot because I’ve been on TV for many years and have done quite a bit of business myself. I have incredible contacts. Every single CEO that went through HSN since 1998, I’ve been personal friends with. Many people want to tell me their idea.

They’ll say, “I have a great idea. I haven’t told anyone.” I tell them, “Stop. Don’t tell me anything, because I don’t want to know. I don’t want to be at the receiving of a lawsuit if you tell me something and you tell six other people and somehow that product gets on the market.” That has happened to me many times where I would tell somebody, “Go get your intellectual property secured before you talk to me because I don’t want to know anything about it.”

Especially if they’re jewelers, I don’t want to know because I may be working on the same thing and we’re all on the same journey. Sometimes as a receiver of information, you also have to protect your rights. My children’s SAT coach, whenever it was like a holiday or something she would give us boxes of cookies. The woman didn’t know how to bake, but she knew how to decorate them. It’s really cool the way she does this. It’s sugar and water and she has a way of doing it. She wanted me to help her get on QVC or whatever.

I said, “I don’t want to know how you do it.” She told me it was sugar and water. That’s all that was. I told her, “I don’t want to know anything about it. Get your intellectual property secured. I don’t want to sign an NDA because I don’t know what I’m signing off. Until you get that signed, I don’t want to talk about it. I don’t want to hear it.”

MDH 43 | Small Business Intellectual Property

Small Business Intellectual Property: We’re always open to helping any group that would like to receive information on intellectual law.

 

That product was on HSN three months later. I can tell you, by the time HSN gets something like that on, it’s usually a year. It takes you like six months to get a vendor number. Whoever was doing it at the other end probably had it already. Meaning that there are multiple people that are doing it. It’s a machine. These other people invented the machine. There was all this other stuff.

Non-disclosure agreements are the first step. Lastly, I want to ask you a question. I’m going to challenge you guys. I’ve never done this before to anybody, but you guys seem so down to earth, I’m going to do it anyway. Have you ever thought about giving like a free webinar or a seminar? This is what I do on my show. What I do is I take six different key factors that I felt like I needed that every entrepreneur needs to master before they can build a business empire.

I went from 0 to $500 million with no advertising. Basically, storytelling is one of them. There are six key pillars that you do have to master to be able to do this as an entrepreneur with no money. What I do is I pick one topic once a month, because we’re all busy. We don’t have time to do endless free webinars. I’ll do like a storytelling mastery. I’ll limit it to like 50 people, where I’ll do a free webinar for 45 minutes.

Next month, I might be doing how to build a proper website because a lot of people, their websites are there but a proper website will generate money for you no matter what you’re doing 24/7. I’m repeating storytelling like once every six months. Obviously, if you’re doing intellectual law, you’re not going to be able to help them with everything you do. There’s a lot of information there that they’re going to get for free. Have you thought about doing something like that or would you consider something like that?

No. A lot of our team members give many presentations to a wide variety of sources. We’re always open to helping any group that would like to receive that information. We’ve presented in Inventors Associations. We don’t necessarily set up the webinars, but we have, for example, meetup groups with probably close to 5,000 meetup people and members. We give seminars monthly. We get good attendance. I love speaking about intellectual property. I’m happy to do it anytime and I’ve never charged for my time to do it.

If people wanted to connect with you for those, they still go to GearhartLaw.com.

We have the links there. You’d have to join one of the meetups. We’re rebranding the meetups because it used to be a global intellectual property business meetup, but we’re gearing it more towards general innovation and having different topics. We’ll have the name of the new branded meetup on our website. That’s a great idea.

Thank you so much for coming and it’s been so delightful having the two of you there. You guys are trailblazers because I don’t normally interview two people at the same time. In fact, you are the first one, because it’s hard to interview more than one person at a time. Especially topics like yours, which is a very focused topic. You broke new ground there.

You get protection when you start doing trademarks.

Thank you, Victoria. We look forward to having you on Passage to Profit, again too.

Everybody, go to Gearhart Law. You’ll be literally absolutely amazed at the type of clients they’ve had so far. They are passionate about helping entrepreneurs and small entrepreneurs. A lot of them are the household brands that you will recognize. They’re very humble people here. You’ll find an incredible amazing diversity of the types of clients you’ve helped. You’ve got food, pharmaceuticals to small service businesses, you name it. Whatever your challenges are, connect with them.

You’ll get free information. Quite a bit of it will be free before you spend the money. That’s a great thing. Secondly, they are probably the most down to earth like real, approachable lawyers. When I think about lawyers and doctors, they’re very scary. I always think twice about whenever I have to go to a doctor.

I know so many people in my age group that don’t go for a routine checkup. They’ll go, “You have prostate cancer or whatever. Don’t worry, it’s the beginning stages,” or something like that. Whenever I get a call from one of my lawyers, it’s the same thing. It’s like, “Are we getting sued or something?” We haven’t been sued, by the way, ever. Go to GearhartLaw.com. You can always check out Passage to Profit podcast on iHeart radio. Thank you so much for reading. Don’t forget to subscribe, rate and review the show. Thank you, Richard and Elizabeth, for making time. I’ll talk to you soon. Until next time.

Thank you.
 

Important Links

 

About Richard Gearhart

MDH 43 | Small Business Intellectual Property

Richard is the founder of Gearhart Law and the host of a weekly radio show for entrepreneurs called “Passage to Profit”.  He has built a firm with an international presence that helps entrepreneurs from around the world with their patent, trademark and copyright needs.

Richard commands a breadth of experience that comes from nearly 30 years of practice in the writing and prosecution of hundreds of patents, and in all aspects of Intellectual Property law.

Gearhart Law emerged from Richard’s passion for entrepreneurship and startups and his belief that entrepreneurship grows the economy and creates jobs. When we started Gearhart Law, our goal was to help and support the new business ventures of 500 entrepreneurs and inventors. After 12 years, the firm has far surpassed this goal; today, we look forward to helping even more inventors and entrepreneurs get off to a great start and reach their own goals.

Richard formerly headed the U.S. Patent and Trademark group for Novartis Pharmaceuticals Corporation. While at Novartis, Richard oversaw over 40 patent and trademark attorneys and managed global litigation and patent prosecution. He managed numerous product development activities and participated in extensive transactional and opinion work globally.

Richard previously served as General Patent Counsel at CIBA Vision Corporation, where he oversaw the activities of 9 patent attorneys, and actively managed U.S. and global patent litigation, as well as patent prosecution and opinions. Richard successfully initiated and managed the case of Wesley Jessen Corp v. Bausch & Lomb, Inc. which led to an injunction against one of CIBA Vision’s major competitors, and the removal of an infringing product from the market.

Before taking the helm at CIBA Vision, Richard worked at Dow Corning Corporation as Senior Managing Counsel, and prior to that worked in private practice at the Geneva, Switzerland office of the international law firm of Jones, Day.

Richard graduated from Knox College with a BA in Chemistry. He received his J.D. from Case Western Reserve University, and subsequently obtained a DES in International Law from the Graduate Institute of International Studies, in Geneva, Switzerland. He is registered to practice at the U.S. Patent and Trademark Office, and admitted to practice in the states of New Jersey, Michigan and Massachusetts.

About Elizabeth Gearhart

I’ve recently launched Fireside, a video directory of businesses. I’m inviting any business owners who would like to shoot a short Zoom interview video with me for inclusion on the site to message me. The video and listing are free for 2020 due to the current economic conditions. You can schedule an interview with me through calendly at: https://fireside.directory/contact-us/

I’m also a patent agent and Chief Marketing Officer at Gearhart Law, and co-host of Passage to Profit, a radio show that premiered on iHeart Radio at 8pm on Sunday July 29, 2018. It’s also a podcast which can be found on iHeart and the other major podcast platforms. The show is for entrepreneurs and each week we feature an interview with an accomplished business person followed by presentations by three entrepreneurs. We normally tape the show in the iHeart studios in Manhattan, but are on hiatus for now. As soon as we can get back into the studio we’ll be taping new shows every other Wednesday. You can message me if you’re interested in being on the show, it’s sponsored by Gearhart Law and so is free for the presenters.

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