Bonus: Cultivate an entrepreneurial mindset, w/Reid, Bob & Sir Richard Branson

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Will be there with us October 20th through 22nd in San Francisco. If you're building something great, or you want to build something great, We want you there with us too. Join us at masters of scale dot com slash apply twenty six. That's mastersofscot com slash apply. Twenty six.

Hi listeners, it's Bob. We're between seasons right now at Masters of Scale, but we couldn't resist sharing this special bonus episode. Today we're talking about something we're very passionate about here at Masters of Scale, the entrepreneurial mindset. The featured guest for the episode Is Reed. With me serving as host.

This episode will feel a bit different. It's not an interview, and it's not Reed proving a theory on how to scale your organization. Today, you're gonna get a little peek behind the curtain of how we create episodes of Masters of Scale. We almost always start by asking for in-depth analysis from Reed. On an interview he's done, the topics of conversation and a theory of scaling that we're exploring. Our producers will send Reed a list of questions and observations for him to respond to. It's a little like a brainstorming session, and also helps read and all of us unpack key thoughts and ideas. In today's episode, you'll hear Reed's analysis on the entrepreneurial mindset.

What it means to cultivate that mindset, and much more. Reed talks about why we focused on the concept of the entrepreneurial mindset in creating the Masters of Scale Courses app. And I encourage you to stay tuned all the way to the end because we'll be sharing with you a lesson from the Courses app. Which includes a special appearance from Sir Richard Branson that really brings it all together, and a wrap up lesson from Reed that you won't want to miss. Now on to this special episode of Masters of Scale. You gotta have incredible talent at every position. Huge push. There are fires burning when you're going out. Can you believe it? Such an idiot. And then you go back to this is totally gonna be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right.

Nutball, ten years later and be like, well that's just how you do it. We haven't made it. Just how you do it. This Is masters of scale. I'm Bob Safian, former editor of Fast Company, founder of the Flux Group, and host for this special bonus episode of Masters of Scale. We believe the single greatest success factor for any scale leader isn't knowledge, experience, or network. It's your mindset.

Optimism, resilience, curiosity, and also things that are less obvious, counterintuitive mindsets like letting fires burn and occasionally doing things that don't scale. And no one, not even Reed, is born with all the entrepreneurial mindsets. You may be comfortable in chaos, but Less confident making quick decisions in quieter moments. You may be more creative than you are disciplined, or the other way around. The good news is these mindsets can be cultivated. That's why we produce Masters of Scale and Masters of Scale Rapid Response, and it's why we made the Masters of Scale Courses app. The Courses app offers curated courses around Themes all entrepreneurs need to know about leading through crisis, learning how to pivot, and more. But it all starts with how to build and cultivate your entrepreneurial mindset.

Today we'll hear from Reed about what it means to be a lifelong learner, how he continues to develop his own entrepreneurial mindset, and the impact of democratizing entrepreneurship. So Here we go. The first question starts at the beginning. How do you think about cultivating an entrepreneurial mindset as an investor and as a startup founder? Is it something you should seek out?

the entrepreneuri is throughout everything that I do. It doesn't mean that everybody I hire is an entrepreneur. or interact with But like it's how you create the new. How you shape

the possible into the real. And I think that's pretty fundamental the entrepreneurial mindset is not just entrepreneurs because it's not just the blank sleeve of paper, it's not just V zero to V one. One of the things that I look at that I learned from Socialnet

is I actually think there's three kind of games. There's V0 to V one, V one to V one one, and V one to V two. All of these are forms of entrepreneurial mindset. Now probably goes in like, oh my God, jump into the unknown. It goes V zero to V one, V one to V two, V one to V one one in those iteration because the V one to V one one is most naturally thinking, and that's the thing that people tend to most do because it has the most certainty of outcome and so forth. But the other ones are fundamentally important because at some point you get to a local maxima, it just doesn't work on the V one to V one one, doesn't just really work. Now

What I would say is in terms of working learning is you should always be learning, right? This is a little bit like the Glen Gary, Glenn Ross. Always be closing. But it's always be learning. And you should be approaching every circumstance with

Is there something serious I can learn here? So What happens if you drop the ball and stop moving forward? Are there key moments or milestones when you think an entrepreneur should reset, should double down on going back to learning. So one question is

If you think oh I'm actually in fact way off here. Right, like I don't really have the right map I'm not learning at the right rate by being an action and by doing the thing. those kinds of things, then you go, oh shit, I should go back to learning. Now, entrepreneurs almost always tend to be learn by doing, learn by getting into it. And it's actually that bias to action is actually in fact a very good thing for entrepreneurs. One of the things that people tend to overly bias on is learn, learn, learn, learn, learn, learn, learn, learn, learn, learn, learn, learn, learn, learn before you do. And actually it's

you know, learn do, learn do, learn do, learn do, learn do, learn do is useful. Now sometimes you say, Well Hey, I'm gonna learn that like there's something deep coding. You know, modern coding like artificial intelligence. Some aspects of business strategy or something else. She's like, Well, I actually need to learn a stack. Before I can get into the learn to

Moment. And sometimes that's something in the field. Like for example, I'd say one of the things that you know was a very good piece of advice that I was given. Was learn how to ship commercial software, even though The way that large companies ship commercial software is different than small companies.

learn the components of that. First. Before trying to go create a software company because then I'm not figuring out like, okay, what is a PRD? What is a minimum viable product? What is QA look like? What is, you know, the people doing these jobs together look like? What is the way they coordinate? Like I've got at least baseline to that. I may be improving it a lot. I may be changing it a lot.

But I understand both what's baseline and also understand what everyone coming to the picture with some experience will also experience as a common language, a common method of play, a common theory of the game. As a way of doing that. Now as you think about learning Are there great examples of learners out there models of how people take in information?

I think there are Different kinds of learners. Not everyone learns the same way. Now, obviously the classic way that people say this is some people are reading learners, some people are audio learners, some people are video learners, and so but it's not just that. Some people are learners by first principles and what they're doing, some people are learners by talking to other people, some people are learn by studying what other folks are doing. And so You should have that theory of you as an individual, but you should also, by the way, have that theory of you as a group, you as a company.

Because just not thinking about individuals as learning, but as companies as learning and as kind of increasing capabilities and fitness functions is very important. By the way, that's not necessarily a big surprise because one of the things that happens is people get more systemized groups is postmortems and wiki knowledge bases and other kinds of things that are in there in order to facilitate that. A strong example of how Facebook operates is that Facebook says we built a huge testing framework. So that everybody can Literally individual engineers can run tests.

on features and things that they Now Part of the process is You have to document that you've searched the knowledge base to see if anyone else has run the test before you do it. So you're not just blindly running the same test again. So that you can position your test.

Against what has happen before, or say, Oh, I see it's already been done. And that's an example of how not just individual learnings, but group learning kind of playing together. How do you work networks into learning? What are the key things you look for in learning environments? working networks in a learning

Is a function of kinda like, okay, who are the smart people out there that can talk about what questions Can I ask them? What things can I learn from

in what they're doing. What's the context in which I can talk to them and which I'm getting the most useful Things. In this

And so kinda network and by the way, not all learnings like everyone tends to learn is like how to, like how do I build an AI machine or how do I hire a sales force? And those are important. But also a lot of key learnings are what not to do. Because they're part of What defines someone who has learned stuff is they go well actually in fact

These are the landmines. These are the things that look like good ideas, but are bad ideas and ultimately don't work out. Or kind of the classic thing that amateurs or smart amateurs are caught in. Or these are the things that could look like an interesting bold risky idea. But it's much harder than you think. A lot of learnings are That seems like a good idea, but the ROI is very bad on it.

That's a great point. Learning is not only uh about learning what to do, but what not to do. So how do you take this cautionary idea and translate it into scaling? Sometimes when people think about scaling they think they have to do everything. When I went into business, my theory was Look, I have this big brain, I can manage a whole bunch of complexity in my head, and so I'm gonna have a competitive differentiation from all the other people around me because.

I'm capable of having this very big complicated picture in my head. And actually in fact That's not how business and business strategy nor by the way military works. It's the simplest план. That wins it's the simplest plan that creates a lot of value.

And so a lot of what you're trying to do is not say, Well, look, all five of those are great ideas, we should do them. The answer is well, could we get away with doing one of them very well? And this is part of why people talk about focus is in doing that one thing very well. And making that work. Is that the thing that we should really do from here? And

Is that the way we should play out? Now, by the way, the you get this classic once companies get big. is say, like for example, you know, there are people who say, Well, all that Microsoft should do is Windows An office. Like say, Wow, why are you doing Bing? Because Bing is Only a lost leader to put pressure on Google and

That's not how you're gonna make that much money. Well the answer is if Microsoft hadn't done Bing Then they wouldn't have had a jure. And Azure is the next computing platform in the cloud. Which puts Microsoft in the running and the edge for that. And so that's part of the reason why you have, once you get big, a number of things. And why the whole thing of doing all this only one thing isn't actually in fact, once you're there, isn't actually in fact the right strategy. Now

When you're a small company. And you say we have five ideas, doing one is much better than doing five. And even though you might do one and experiment a little bit with one. The discipline is to play that one out. And then correct.

If it's not the right one. When you've built substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious. Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years.

Building. Creative planning where wealth works together. Learn more at creative plating dot com slash masters of scale. Humans will never be more intelligent than AI. Those were great at AI and those that went out of business because they weren't. How do we build a future?

That is human centered. I'm Rana El Calyubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives.

Find pioneers of AI wherever you tune in. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely. From Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Alright, a final question for you, Reed.

Why do you choose to host Masters of Scale? The entrepreneurship is how the future is created. It's how the future is created for products and services that improve society and life. It's how the future is created for jobs and for people to do things. And it doesn't say that big companies are mincemeat. But like there's an increasing what John Seeley Brown and John Hagel call the topple rate, which is

The last decade of companies that were in the S B five hundred. dropping out of the S B five hundred because yes. Some large scale companies really go the distance. But also companies fail. For example, would you have anticipated

That Yahoo You know, went from the giant of the internet to who are they now? As a way of doing it. And that can happen with any of these tech companies. It's help with all of that. That's part of that creating that content. That people across All industries, all

Geographies startups and existing business people, even small business people, even a restaurant entrepreneur,'cause you go, Well that's you know may not actually ultimately go to scale So the blitz scaling lessons, for example, don't apply, but the entrepreneurship does.

And then of course. On the courses app. The whole thing is that's the reason why these set of mindsets Because these sets of mindsets

Allow you to approach. the challenges that you're solving With like a learning mindset with a What's the way that I can win this game? What's the way I can get more upside, avoid downside?

And what's the way that I am better? Day by day, month by month, year by year, in doing this. And sometimes that requires like asking the right question, approaching it the right way in order to learn it. obviously the specific like, oh, this is how you do a restaurant or this is how you do a massive scale company. The specific rule may not be in the courses app because it's the mindset the way which you bring to it. That

Allows you to learn. Thanks, Reed, and thanks too to our listeners because we believe in learning. We've tacked something special onto this episode for you, a free listen of day one in the Masters of Scale courses app on the mindset of scale. This one features Sir Richard Branson. The centerpiece of each day in the course is a 10 minute daily practice anchored by a key first person story from an iconic leader like Branson, and concluding with a prompt or practice from Reed that you can take into your day to drive a new behavior. Each day also includes optional content for you to dig deeper. There's a three to five minute concept that unpacks the day's key idea and a full length interview with one of the terrific guests we've had on the podcast. This is the first time we're releasing the catalog of the entire sixty to ninety minute interviews with Reed. They're available only to Masters of Scale members. So here's day one of the mindset of scale. The theme of the day is ask what if

Why not with Sir Richard Branson? Let's listen. Welcome to day one for the mindset of scale. Our first course in the Masters of Scale app. I know how each minute matters for an entrepreneur.

And I know you probably have a tendency To multitask. But take a moment, right now. To turn off Slack. Close your email.

And arrive. For these ten minutes. It will be worth your time. Whether you're an entrepreneur Starting something from scratch, on your own.

An entrepreneur. Who build something daring. Inside established organization. Or an executive. Leading at scale.

Your single greatest success factor isn't knowledge, expertise. or network. It's your mindset. So you have to think in ways that are often the exact opposite. of what you learn in school.

No one. is born with all of the entrepreneurial mindsets. You may be comfortable in chaos. But less confident. And making quick decisions.

You may have a natural instinct for escaping competition. But less certainty. About building company culture. The good news is that all of these mindsets can be cultivated.

And that's what this course is about. Each day will tackle a different essential mindset. And the most fundamental mindset you need is a bias for action. It's not enough to have good ideas. You have to be ready to act on them.

To show you what I mean. I want to share a story. From Sir Richard Branson. Richard is known for his death defying entrepreneurial leaps in the new markets and industries. Virgin Records, Virgin Airlines, and Virgin Galactic.

Or just a few. He embodies the entrepreneurial Biased action. We'll start the story in the mid nineteen sixties. Richard was in high school and about to act on his very first venture.

The Vietnamese war was going on. Like a lot of young people, we thought it was a travesty of justice, a horrendous, horrendous, horrendous mistake. And so I decided actually to start a magazine to campaign against it. Richard was only fourteen when he launched what he called Studazine.

Like most school boys. He lacked an office. And because this was the late sixties, he didn't have his own phone, which he needed to sell advertising and conduct interviews. He found his solution in a classic British icon. A red telephone booth.

Or As they say. Telephone box. But the amount of time he spent in his three by three foot office was became a problem.

I started on the magazine from the school phone box. And at fifteen the had to stay at school and do my schoolwork or leave school and do the magazine. And so I said goodbye to him. And the magazine became quite successful. I mean we sold about a hundred thousand copies an issue

Not every fifteen year old would have the Bravado. To start a business. Much less abandon school to do so. And I really wouldn't recommend it. But what I want you to notice.

is the underlying mindset. The unstoppable bias to action. Have an idea. Act and idea. Never look back.

And he didn't. The magazine was the launch pad for Sir Richard's next And more famous. First venture. Virgin Records.

The spark came, as it so often does with Richard, but From an offhand comment. One day somebody said to me, Look, music is horrendously expensive and why don't you consider starting a music company? And so we started Virgin Records. It should probably go without saying, but I'll say it anyway. That this was in the days before digital music.

The Walkman was almost a decade away. CDs. or a futuristi gleam on the horizon. Vinyl. Was king.

There was only one problem for Sir Richard's fledgling record store. But it was a pretty big one. We didn't have any records, but once the orders came in we then went and bought them from record shops and tried to get a discan. And then Handed leaflets outside concerts, and because we didn't buy the records up front, we got the cash flow to fund it in that way. And Virgin Records was born.

That's right. Richard took the orders and the money. Before he had the stock. Or even knew if he'd be able to get it at the price he was offering his customers. There are a few things I love about the story.

Without any records is one of them. But I also love it

led directly to their advantage. Richard and his team had no choice but to negotiate those steep discounts. Because they had already made the sales. Richard's fast growing reputation as someone who did things differently. And a quick

Cavalier manner. Was attractive to lots of people. Not least of all. Musicians. A young artist came to me.

with a tape and he was only fifteen years old himself. Um I found the tape hauntingly Beautiful. We didn't have a record company, so we went to the eight record companies to try to get somebody to put it out. None of them would put it out. Here it comes another moment when Richard decides to go all in on a daring notion. So we decided to start a record company and Shubla Bells was the name of the album and Mike Oldfield was the artist and it sold millions of copies.

Even if the name doesn't ring any bells, tubular or otherwise, you would very likely recognize the music because The album's opening track was used as a theme for the movie. The exorcist. And on the back of that, we were able to build the largest independent record company in the world and ultimately to sign people like the Rolling Stones and Janet Jackson and Genesis and Peter Gabriel and the Sex Pistols and and so on and so on. So it was a lot of fun.

By the mid eighties, Sir Richard's bias to action had seen him launch a film distribution company, a video game publisher, and most famously, An airline. Thirty five years ago when we started it, the Big carriers were dreadful. You were lucky if you had a a lump of chicken damped in your lap and there was no entertainment and very, very surly. Surly crew generally.

And on one of those flights coming to the Virgin Islands, I got bumped, which is a sort of typical thing that airlines did in those days. And so I hired a plane and filled it up with all the people who'd been bumped and called it Virgin Airlines as a joke. However The joke very quickly had Richard ask himself seriously the question. What if

Why not? And we arrived in the BBI and during that flight I just thought, airlines do bump people. Maybe I should ring up Boeing the next day, which I did, and asked if they had any second hand seven four sevens for sale. Turns out they did. And the real Virgin Airlines was born. Sir Richard uttered the five words he'd repeat for the rest of his career.

Words that became the title of one of his three autobiographies. Words worth emulating. Even if You don't quite want to repeat them. Screw it. Let's do it.

Screw it. Let's do it. It's the mantra that let Richard shake up the state airline industry. And it's not the only industry Virgin set out to disrupt. Soft drinks, trains.

Even space travel. Not every venture worked. But Richard went all in on each. If he could succeed. He did.

And you can't help but marvel at his bias to action. His willingness to ask What if And then follow those fanciful thoughts with bold and decisive steps forward. But you don't have to be born with Sir Richard's Bravado to cultivate a biased action.

If you're taking this course, you clearly already have the seeds. But there are a few common things that might be tripping you up. You might be so busy fighting fires that you become all reaction. And no action. Or

You might just find yourself stuck. Kicking the count on idea. Because you don't know how to move it forward. So what you need to do is cut through the loops of analysis, overthinking. Or overwhelm.

That get in your way. You have to find a way to act. And I have a specific tool. You can use starting today. Next time you have an idea that just might scale.

Act on it immediately. Using a word. Act. As an acronym. A

C T. A Ask the question. What if, why not?

Do it any time you're inspired. Delighted. or frustrated in a way that sparks an idea. Do this right away. Not later.

It's a starting point. Of all great products. C. Call your network. Because taking action

Doesn't mean acting alone. In fact, The very first thing you should do when contemplating a big move is is go to your network. Talk to people.

You respect. And finally T. Take a step. Any concrete step.

To move it forward. Sir Richard called Boeing to see if they had an extra plane. And they did. What can you do? Right now.

This minute. So that's your ACT tool for taking action. But this next part is the most important. Once you land on a step you can take Don't delay.

Don't add it. Don't Write a draft. And save it to edit.

Take the step. Do it right now. Act. That was Sir Richard Branson in the Masters of Scale Courses app with Reed's terrific advice capping it off. If you want to learn more, use promo code MINSET at join.masters of scale dot com slash mindset.

For a twenty five percent discount on annual membership. I'm Bob Safian. Thanks for listening. Masters of Scale is a whitewater. The show is recorded remotely with Sanitized Audio Gear. Our executive producers are June Cohen and Darren Treff.

Our supervising producer is Jay Punjabi. Our producers are Jordan McLeod, Adam Skuse, Katherine Clark Ray, Hallie Bondi, Marie McCoy Thompson. Christina Gonzalez and Chris McLeod. Our editor at large is Bob Sapian. Our music director is Ryan Holliday.

Original music and sound design by The Holiday Brothers and Eduardo Rivera. Audio editing by Keith J. Nelson. Steven Davies and Andrew Knott Mixing and Mastering by Aaron Bastanelli. Special thanks to Chris Yay, Elisa Schreiber.

David Sanford. Sayre Sapiava, Adam Heiner. Emily McManus. Kelsey Capitano Tim Cronin, Sarah Sandman.

Harry Goldstein. Anna Pizzano. Mina Corsawa. Charlie Menetes and Colin Howarth.

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