In the 1990s, Jordan Belfort built one of the most dynamic and successful sales organisations in Wall Street history. He soared to the highest financial heights, earning over $50 million a year as the notorious “Wolf of Wall Street,” and then sunk to the lowest societal lows, succumbing to a massive drug addiction and spending twenty-two months in a federal prison camp.
Yet along the way, he managed to provide over $1 billion of financing for various public companies, and held controlling stakes in more than thirty of them. In this Q&A interview with Alex Pirouz, he talks about the elements necessary to be successful in business, growing a company, and how to motivate sales staff to perform at their optimum level.
Q: Jordan, you seem to have this tremendous ability to build businesses from scratch into multi-million dollar corporations; what is the methodology behind this?
“The methodology behind this approach is a process I call ‘failing elegantly,’ which basically means how do you get into business and be wrong. It is not usually the first generation or evolution of the idea that ends up working; it takes three or four tries, you need to make adjustments, change your approach when necessary and tweak certain steps.
“The idea behind failing elegantly is that there are certain actions and strategies that you can employ that will allow you to be wrong and not lose massive sums of money, time and heartache. Essentially it allows you to test, be wrong and maximise on the lessons whilst minimising the financial loss.
“Failing elegantly and succeeding wildly, that is the basis of entrepreneurship.”
Q: What is the hardest thing about starting a business from scratch?
“I believe the hardest thing would have to be the challenge of feeling overwhelmed. Entrepreneurs look at things they need to know, things they have to do and because of this entrepreneurs go into a state of being overwhelmed.”
Q: What do investors look for when looking at a business? Is it the entrepreneur himself or the business model, or something else?
“One of the things entrepreneurs need to understand is that investors are not looking for base hits, they are looking for home runs. Playing the game of venture capital, they know that they will be wrong a couple of times. They invest in 10 deals but they will be flat out wrong in six of them. What they are looking for is the explosive idea that has massive scalability and one which has the ability to break out quick into the marketplace.
“They then look at the person running the company and his/her experience. If the entrepreneur has very little experience, they then look at the team within the business, and of course a combination of this works best.”
Q: Jordan, what would you say are some of the quickest and most effective strategies to grow a company?
“The ability to systemise and train a sales force is the most powerful strategy. The problem with most entrepreneurs is that they are great salespeople, they know how to market and sell their product and close deals. Then, as the company grows, they hire two, three, four and more salespeople and in doing so they hit a roadblock because it is now more about duplication than it is about sales. As a manager they need to pass down the knowledge, skill and expertise to staff in order to help them produce results and this is quite often a challenge.”
Q: How have you seen sales shift in the past five to six years with the introduction of social media, the Internet and the information age?
“I think that clearly people are smarter and wiser than they used to be, which I believe is a great thing for the sales industry. The landscape has changed but the fundamentals and the core of sales haven’t. People nowadays come into the sales process with either good or negative anchors from what they have heard about your product or service through social media and the Internet.
“Given that customers nowadays have more knowledge, the first part of the sale should be gathering intelligence, listening, finding the person’s core needs and the pain they are looking to solve. This is what the salesperson needs to find out before they do anything in trying to convince someone to move from uncertainty to certainty.”
Q: In one of your businesses you managed a group of a thousand sales professionals. How did you keep them motivated?
“It is actually easier to motivate a thousand than it is to motivate five because there are certain dynamics that come into play when you run a team so big. At the core of it, every human being in the world has the same core human needs. Within those needs there are certain values people look to fulfil, so my job was to scan and observe how to best help team members meet those needs at a broad scope, whether it was moving away from motivation or towards.”
Q: In your experience, how do salespeople like to be managed?
“Salespeople like to be given the tools they need to be able to succeed, great leads, great training, and excellent motivation, and once they have this they want to be left alone so they can go and do their job. They don’t like to be micromanaged or for someone to breathe down their necks.”
Q: When hiring salespeople, do you hire on attitude or skill?
“I am not a big believer in hiring top producers; for me it’s all about desire because I can teach anyone the skills necessary to sell but desire and having a big enough reason why isn’t something that can be learnt.
“If you know the reason why a salesperson wants to succeed you can teach them the skills and drive them forward by relating everything back to their reasons why, to sustain consistent motivation. The person who has the biggest reason why will overcome barriers and challenges along the way a lot easier.”
Q: What is one lesson you have learnt in business that you would consider crucial in order to succeed?
“In business you should always offer value first and then get the money afterwards. The mistake I made was that I focused so much on the creation of money without going out there and giving value first. Monetising value is easy; it’s a matter of building that value first.”
Q: Jordan, what would you consider to be the most important trait to have as an entrepreneur?
“The ability to close the deal: the single most important skill as an entrepreneur is the ability to be able to sell a concept, not just your product or service.”
Alex Pirouz is the founder of RIDC Advisory Pty Ltd., a Business and Sales Advisory firm partnering with Australia’s largest and fastest growing companies to further increase their revenue. Visit www.ridcadvisory.com.au for more details.