Keep Things Simple So You Can Multiply Their Impact

Steven Krein: Welcome back to the Free Zone Frontier Podcast. This is Steven Krein with my good friend Dan Sullivan. Hi, Dan.
 
Dan Sullivan: Steve, one of my great pleasures.
 
Steven Krein: I'm excited about this episode of the Free Zone Frontier Podcast. But before we jump in, for those who might either be joining on this episode, not having heard the context on previous ones, can you describe what a Free Zone Frontiering entrepreneur is and then we'll use that to kick off a conversation about how to do it?
 
Dan Sullivan: Free Zone Frontier is actually an activity where entrepreneurs with experience, and they have cash flow confidence, can enter into collaborative activities, collaborative creativity and payoffs and results, and do that completely, amazingly free of competition. In other words, entrepreneurs would enter into a competition-free zone and could continually expand that for the rest of their careers. But the big thing is, collaborative and competition-free are the two key indicators of whether you're actually in a Free Zone Frontier.
Steven Krein: If you were to pick one of the greatest Free Zone Frontiering entrepreneurs and companies of the last 20 years, what would be some of the companies and names you'd think of first?
 
Dan Sullivan: Well, a lot of them start off as Free Zone Frontiers. Uber started off as a Free Zone Frontier. Airbnb started as a Free Zone Frontier. Then they got really, really complicated because they got a lot of headwind from who they were disrupting. But I would say the purest Free Zone Frontier that has maintained the quality of being a Free Zone Frontier has been Apple. I would say Apple has been the best. And I think it had to do with the basic mindset of Steve Jobs, who was all for the customer. His whole thing was about the customer experience. It wasn't about the engineers who were geeking in the back rooms. His whole thing is, what's the customer experience about?
 
And one aspect of his care about the customers is that their private information using Apple Networks was their information, and he wasn't going to sell it. So my feeling is that's becoming a big thing, and he had it right from the beginning. And for the most part, Apple, I think, has been a really great citizen, where some of the other tech companies have been bad boys on this particular issue. They're going to be appearing in front of Congress, some of the other bad boys, but Apple will not be appearing in front of Congress over this issue.
 
Steven Krein: Yeah, it's interesting. There's another company that I think needs to be brought into the conversation, which is Amazon.
 
Dan Sullivan: Amazon.
 
Steven Krein: And Jeff Bezos. And I think that not just because it's a company that obviously has not existed as long as Apple has and hasn't gone through the different iterations as an organization, but Jeff Bezos has been, I think, Free Zone Frontiering since 1994 in so many different new expansions or extensions of the original business. But it's really interesting when you look at how well Jeff has been both a simplifier and a multiplier.
 
And I want to use the Amazon framework because the part Amazon that consumers experience, which is buying products, and you could buy any kind of product anywhere in the world and we've all become accustomed to buying on Amazon, and the other is the enterprise experience, which is at the company level, where you're just buying what is called Amazon Web Services and access to web services where they've democratized the technologies and the servers and the even artificial intelligence and machine learning technologies to make it available to entrepreneurs. So what's your take on Jeff Bezos as a Free Zone Frontiering entrepreneur?
 
Dan Sullivan: I'm more aware of Apple because I've really tracked it from the beginning. And I'm not an online shopper, so I don't have the actual experience. Other people shop for me online, but I actually don't do the online. But I have had the experience of something that was needed today and it was delivered tomorrow morning, and I found that really, really quite extraordinary. The other thing is that he's created more new kinds of businesses as a result of his platform. He's gotten rid of a lot of mediocre businesses, and that's where the pain is. But he's actually created some really quite extraordinarily new businesses that just see Amazon as their platform for doing business. And we know some of them personally. We've had people who've just mastered Amazon as a capability. They don't see it as a competitor. They see it as a capability.
 
Steven Krein: I'll dig in, I have a little bit more exposure to both sides of Amazon, both whether it's Kindle or Amazon fresh shopping for groceries or even on the Amazon Web Services side where our company and companies in our portfolio leverage their technology, but what's really fascinating is how Jeff runs the business off of a very simple simplifying tool. It's a version of The Impact Filter, and it's been written about by past employees of the company. It's never been articulated from Jeff per se, but it's definitely been articulated as a format to innovate within Amazon or collaborate with Amazon. And their version of The Impact Filter is called a PRFAQ. PR for Press Release and FAQ for Frequently Asked Questions. What's fascinating about the PRFAQ, and I think in our world, at Strategic Coach, it's the Impact Filter equivalent, it is distilling down whether you're presenting to Jeff a new idea for an expansion of the product, or he is presenting a new idea or an expansion of the business, you need to put it into a six-page document. No matter how big you're thinking, no matter how crazy it is, it needs to be distilled down to a six-page document.
 
And from what I understand, and again, I'm talking from the perspective of an outsider, from what I understand, this six-page document includes press release put out sometime in the future about the impact that this product or service is going to make on the world, on their customers. So it's a futuristic press release, followed by two types of frequently asked questions, one for how the business inside might be affected and what are the top questions you might have, and from the outside, what are the top questions?
 
And again, think of the exact same kinds of things that an Impact Filter requires you to do, which is explain the success criteria, explain the purpose, the importance, the best case scenario, the worst case scenario. But what I think is really interesting is that Jeff, as big as the company is, as wealthy as he is, as big as that organization is, not just with employees but revenues and profits, et cetera, that they continue to distill everything down to a six-page document to force a developer, to force a product lead, to force an entrepreneur, a division head, and even Jeff himself into this framework to simplify everything down so that those who you need to collaborate with can understand it.
 
And so, I want to use that as a framework because I think this idea of simplifying and multiplying, even in the biggest organization or one of the biggest organizations in the world, can come down to a format that then becomes the framework for the meeting to discuss the idea. And everybody in the first 20 or 30 minutes of every meeting needs to do nothing but read the PRFAQ before even opening up their mouth.
 
Dan Sullivan: Well, I think the big thing is, a document like that and a simplifier and just think of how massive the organization is in its worldwide impact, but probably Jeff Bezos, when he first started Amazon, they picked books as the first one because books was an easy medium. But I bet he already had that document when they started Kindle. My feeling is, he started the organization with that tool. Now, Amazon is just a material extension of a way of organizing your thinking and communication and decision making right from the start. Probably the beauty of it is they've remained faithful to that.
 
Steven Krein: Yeah, the interesting thing is apparently when they acquired Whole Foods, it went back to, again, a PRFAQ. When they launch a new product line, when they acquire a company, when they do anything within the organization, it always starts with a PRFAQ. And apparently, just like you won't do a meeting without an Impact Filter, he won't do a meeting without a PRFAQ. And it's an interesting thing because I think a lot of people, especially entrepreneurs, will think about how they might simplify and multiply something, and again, go back to the Free Zone Frontier, and overthink it.
 
And yet, if they just sit down and can start with an Impact Filter, one of the great tools in Strategic Coach, and add a couple of dimensions to it, I think this idea of a front-facing press release that is a point in the future describing that impact, and then there's good frequently asked questions ... again, going back to some of the things that I think are [inaudible 00:09:31], you have a real practical way of starting a collaboration because what you're doing is being able to stand in front of somebody or sit in front of somebody with something that represents your thinking and use it as a collaborating document.
 
So my guess is, whether it was the book deal you were talking about, or any other collaboration you're doing in Strategic Coach, it probably already starts with an Impact Filter, but it becomes a way to communicate with the other collaborators that you're actually working with that gives you a much more practical starting point.
 
Dan Sullivan: Well, it's common language. Basically, probably everybody who wants to go anywhere in Amazon has to become an expert at the PRFAQ. There's no question. You know nothing unless you know that basic way of thinking, that basic way of thinking things through, presenting things. Probably any execution plans they have, they go right back to that basic document. There's actually a bigger example of that, and that's the U.S. Constitution. This was put together in 1787. The country that it formed was 1789. And if you do typewritten pages, you take the Constitution, right now it's 27 typewritten pages, which isn't very long.
 
But in 1787, it was 23 typewritten pages. They've just made four extra pages in 230 years. But what it calls for is that every state in the country is a duplicate of the federal government. If you look at a state government, it's a fractal of the federal government. And how do you multiply across an entire continent? Well, it's got to look the same as the big model. The governor is the president. With exception of one state, they have a Congress, they have a Senate, and everything else is duplicate. So it's a very simple model. It's an operating ... if you want a state.
 
And then they had a population number you had to get to, it had equal Rhode Island, which was the smallest state. So as they go west, there were territories and they said, "Let's get the population up. We have to instill this structure." And here you are 230 years later. Actually, in terms of population and everything, it seems complicated, but it's actually quite simple, the whole country.
 
And the other thing, probably the simplest idea that was really, really simple is the universal cargo box that's on trucks, it's on buses, it's on planes. And that was instituted by the U.S. Department of Defense because the harbor at Da Nang Harbor in Vietnam was too shallow to bring in the freighters. So they had to have everything packed into uniform containers. And that revolutionized world trade. And you can't think of any product today unless it packs in one of those containers. You've got to design your products for that one container.
 
Steven Krein: They standardized their collaborations.
 
Dan Sullivan: Standardized collaborations, yeah. It gets worked out. You never see all the pain and effort, trial and error before you get a solution like that. And I'm sure that- You know, Jeff Bezos started off in the investment market in New York City and he got all sorts of proposals and he says, "Geez, these are just incredibly complicated." And probably just as somebody who is receiving proposals as an investment advisor and as someone who is in private banking and everything else, he said, "You can't really start a company unless you're really clear about these six pages, what goes on these six pages."
 
Steven Krein: From what I've read and heard from internal and also external people who've interacted, he stays true to this.
 
Dan Sullivan: Oh, yeah.
 
Steven Krein: And so does the team. There are people who trained every new employee on this. If you show up with anything but that, you're stopped in your tracks. And I think there's something very powerful, as we talk about Free Zone Frontiers, about not overcomplicating. And I think that there's something that you can't unsee or unhear when you think about the notion of Free Zone Frontiering as a way to collaborate on your terms with people that have complementary Unique Abilities, an entrepreneurial transformational mindset. But really this idea that everybody understands from the beginning what success is.
 
I've found that if you don't, up front, clear everything up about what success looks like, not only is it destined for failure or frustration, but it's almost dead on arrival. And so, when you think about unlocking the Free Zone Frontier, what do you think the biggest obstacle is to somebody who says, "All right, I'm in. I love it. I want to go there." What is step one to either historically reframing what you've already done, because a lot of people have them inherent in their organization already, they don't realize it, but also what they can do to leapfrog forward and accelerate and multiply them?
 
Dan Sullivan: The big rule for me, are you a successful enough entrepreneur that you can actually do this, on the one hand? We call it "total cash confidence." Are you in a position where you can play the collaborative game, because quite frankly, most people are too close to cash flow urgency that they can't even think about actually collaborating? The other thing is that there has to be a big, big, what I call "100x value creation proposition."
 
You're doing something that simply doesn't exist now. In StartUp Health, these problems are not being solved entrepreneurially in the world, quite frankly. Everybody's doing their little thing, and they want to be more competitive, but nobody's doing it to actually be more collaborative. And you just tapped into the fact that there was another approach to solving virtually every healthcare issue in the world with a different model that was a simple model, and it had to be global, and it had to be simply tapping into the passion that individual entrepreneurs would have, and then giving them enormous guidance and giving them enormous support to grow as companies so that their solution could actually get into the world.
 
So we'll provide the funding, we'll provide the coaching. We want a part of your action just as our payment along the way for what you're doing, but really what we're all about is actually solving 10 major healthcare issues in the world that are not solvable in any of the existing ways of going about them. I think that's basically what I'm seeing there. And my sense is, it made sense the first 10 minutes in which you explained it, and I haven't seen any variance in your approach since you've started it.
 
Steven Krein: Well, I do keep trying to simplify and remove the friction.
 
Dan Sullivan: Well, you got more numbers. You're adding numbers in terms of people, you're adding numbers in terms of funders and everything else, but the model is utterly simple. If you were a hundred times bigger, I can't see why the model would change.
 
Steven Krein: No, actually the network effect gets more powerful because of the connections, but so does the technology. And I actually am fascinated by how technology oftentimes catches up with ideas and makes them possible. I go back to things like social networking where you can now connect to everybody everywhere in the world. Whether it's Facebook or otherwise, there's good parts of, I think, connecting people all over the world together and allowing them to not only benefit from being connected, but learn from each other.
 
And if you go back five or 10 years before the creation of Google and Facebook, which happened in I guess '99 to 2003, there was no cell phones in mass adoption. There were no cameras on the cell phones. There was no operating system for the cell phones. And so, it took I think until 2007 when the iPhone came out for the technology to catch up to some of the things that had been invented in 2003 and 1999.
 
And so, all of a sudden now, you leapfrog forward and the technologies that are available accelerate the adoption, accelerate the possibilities. I think the same thing is happening with collaborations where the things that are going to be available over the next decade or two are probably either underestimated in many ways right now or not even known, that will become capabilities that entrepreneurs have access to.
 
And so, if you look out 20 or 25 years, I think there is no doubt we can dream big about the possibilities. The technologies will appear, but over the next 90 days, which is all we can really control, we can work towards those long-term goals and achievements. But doing it with collaborators who have that same alignment really does multiply the possibilities. How do you see that playing out in the Free Zone Frontier, where technology catches up to what's possible?
 
Dan Sullivan: Well, I think basically, I talked to Peter Diamandis about this, that people are trying to catch up with technology. I said, "What if it was the reverse, that technology is trying to catch up with humanity, that it's actually humanity wants to do all sorts of things and has all sorts of aspirations, but the technology isn't there for them to actually achieve their aspirations?" I think it's just the opposite, that the technology companies are really hard-pressed to keep up with what people actually want to do.
 
It's just an idea that I'm developing that the most disruptive thing in the world are unpredictable individuals who have access to a new capability like that. I'm sure that Zuckerberg has learned that. He thought it was going to be global kumbaya, and then he put out a capability. Well, there's a lot of unpredictable individuals who got ahold of the technology and they do all sorts of things with it. But if you have a desire to really, really transform the world ... and I prefer the word transform to disrupt because disrupt sounds like you're like you're trying to hurt somebody. It's kind of a revenge.
 
Steven Krein: There's always somebody losing in a disruption.
 
Dan Sullivan: Yeah. But the whole point is you're not responsible for that. But I would like to raise the value creation proposition for everyone. But you can't stop and demand that the rest of the world stop. You're where you want to be and they can't interfere with you because none of us gets that guarantee. But my feeling is that what you and I are doing right now on a podcast is simply technology catching up with the fact that when Steve and Dan get together, we like talking about all sorts of things and we'd like as many other people to join in on the conversation.
 
Well, we couldn't do that when we first met. Our conversations were interesting from day one when I first met you 22 years ago, but we couldn't do what we're doing now and we couldn't share it with the rest of the world. So my feeling is that it's a chicken-and-egg thing. Aspirations increase, technology actually has created to support those aspirations, and then it goes the other way. The aspirations double, and then the technology has to develop to catch up with it. I don't think there's any starting point. It's always a back-and-forth thing, and then there's unpredictable new things that actually come into existence as a result of this.
 
Steven Krein: Yeah, I think trying to get rid of any limited thinking you have about the technology not being available is an interesting concept. I think many episodes ago, I talked about the Steven Spielberg documentary on HBO and how even going back to his first movie, "Jaws," all the way through to his most recent movies, he has no idea how he's going to get the effects to happen that he's looking for, whether it was a mechanical shark to come out of the water and appear realistic or any of the other movies. He has pushed the boundaries of ideas and let the technology arrive as a result of what he's pushing for.
 
And so, a lot of the breakthroughs in "Star Wars" and other movies have done the same thing. They've upped the capabilities of the technologies by aspiring to do more. And as entrepreneurs, I think every day in the same way, because even in connecting a global army of entrepreneurs together, there was no artificial intelligence and machine learning to harvest the relationships among an entrepreneurial community. And yet, today there is.
 
And when I look at the network effect of an entrepreneur connecting into StartUp Health today with 500 entrepreneurs, 300 companies in 24 countries, their ability to connect in and get access to a multiplier network today versus three years ago, or five years ago, or seven years ago, is so much greater. And it's only getting better by the day as we plug in more people to it with the technology overlay to harvest these relationships. And so, it's always amazing to me to think about the five or 10 or 15 or 20 years out, not even knowing how it's all going to get done, but knowing we are going to go after that. Finding collaborators to think the same way I think is one of the most important activities that an entrepreneur can undertake.
 
Dan Sullivan: Yeah, there's no question about it. My feeling is that entrepreneurs, by their very nature, are more open to this than the general population simply because the aspirations are bigger and they're willing to think longer in terms of what the payoff is. And what I'm noticing, you have to understand that I can do Free Zone Frontier in 30 years simply because I've got 30-year veterans. I've got 20-year veterans in Coach who have really acquired a vast array of other thinking tools that have simplified their life. So there was no possibility that I could have even come up with this idea 10 years ago.
 
And the other thing is that I only consider myself 50% of the partnership in here. Until I've checked out my ideas with the entrepreneurs in the workshop, I don't have the other 50%, and the ideas continually get formed. I've got good conceptual skills, I've got good packaging skills, I've got good coaching skills, but I can only get to the 50% line with the most exciting idea. Then I have to put it out there and see what happens to the idea when actual users and testers and also very innovative people actually do with it.
 
And I'm very, very open that I don't fall in love with a new idea that I come up with until the users fall in love with it. That's my take on it. So the whole thing is that you have to get your life really simple as an entrepreneur, both professionally and personally, to do this. You can't have a lot of complexity in other areas of your life and play a simple game as an entrepreneur because the complications will catch up with you. We really push for people having great personal lives, that they have a lot of personal time, that they're taking great care of themselves physically, they're surrounded by positive, enthusiastic people in their life, because otherwise you're going to get held back.
 
Steven Krein: And energy drained. What's your biggest insight from today's episode, Dan, as we wrap up?
 
Dan Sullivan: Well, the thing is that you've really, really asked me a lot of questions. I just introduced this concept of simplifier and multiplier, and my feeling is that you need both to constantly grow. And the whole question is that you personally, today, are you a simplifier or today are you a multiplier? My sense is that entrepreneurs by definition have to develop both skills as they go along, but there's a point where you've simplified it to the point where some big multiplier can simply take your simplified idea and really run with it.
 
And my sense is it's a judgment call, and there's no guarantee what you're going to be doing 90 days from now because there's a lot of progress to be made and a new scenario gets created. And I'm just looking at the next 25 years. First of all, it's a lot more simplified Dan than when you met me, and we're a much more multiplied Strategic Coach now than when you joined the Program for the first year. And I don't expect the future to be any different from those two experiences.
 
Steven Krein: Yeah, it's interesting. My biggest insight is that in order to multiply, you need to simplify, and in particular the framework. I hadn't thought about the PRFAQ as a simplifier and a multiplier until you said it. I think of how much we use The Impact Filter, how every quarter when we come to Strategic Coach, we're leaving with a Moving Future book full of five Impact Filters. And when you layer on the notion that whether you're an entrepreneurial, nimble company or you're one of the biggest companies in the world, it's still the same formula.
 
And it's probably one of the reasons why Amazon continues to succeed. At the size that they are, they still think ... they call it day one or day zero, where they're still a startup. And this idea that you need to keep it simple in order to keep multiplying is a radically simple statement in a very significant way, the key I think to Free Zone Frontiering without getting overwhelmed by the potential complexity. And so, giving everybody a first step at an Impact Filter to get on the same page with your collaborators, I think is just a very practical first step. But I just love the idea of that simplify and multiply framework.
 
Dan Sullivan: Yeah. And I think it's a daily conversation because anywhere you've run into complexity, it means that you've expanded your previous simplification as far as you can go. And you said probably we've hit the ceiling with this. So the next stage is not to figure out new ways to multiply what we've already achieved. Let's go back and simplify again, and that'll introduce a new dimension of multiplying that we don't have right now.
 
Steven Krein: Yep. Excellent. Dan, always enjoy the conversation and look forward to the next episode.
 
Dan Sullivan: Thank you very much, Steve.