Podcast: Alan Donegan — Journey to FI and Starting Companies
Episode 45 of the NewRetirement podcast is an interview with Alan Donegan — founder of PopUp Business School and host of the Rebel Entrepreneur with ChooseFi — and discusses Donegan’s own journey to financial independence and the people that he’s met along the way. They also go in-depth on how to start a business. Spoiler: you don’t need debt to do so.
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- Popup Business School
- Rebel Entrepreneur Podcast
- The Simple Path to Wealth: Your road map to financial independence and a rich, free life
- Notes from a Friend: A Quick and Simple Guide to Taking Charge of Your Life
- Mr. Money Moustache
- Mad Fientist
Full Transcript of Steve Chen’s Interview with Alan Donegan
Steve: Welcome to The NewRetirement Podcast. Today, we’re going to be talking with Alan Donegan, founder of PopUp Business School and host of the Rebel Entrepreneur with ChooseFi. We’re going to be diving into two topics, his own journey to financial independence and the people that he’s met along the way, and also how to start a business, which is a topic near and dear to my heart as a founder and entrepreneur and I think that many people in our audience will be starting their own companies.
Steve: Some quick data on this, a 50-year-old entrepreneur is almost twice as likely to start an extremely successful company compared to a 30-year-old. Alan is joining us from Basingstoke Hampshire, United Kingdom. Alan, welcome to our show. It’s great to have you join us.
Alan: Thanks so much for having me on, Steve. I’ve been really looking forward to this. And I have to say, I love your notes. I feel like this is the most prepared I’ve ever been for a podcast. I’m really looking forward to it.
Steve: Yeah, hopefully it’s helpful. You’re a self-described self-development junkie. Can you give our audience a quick summary in a few minutes of what you do and how you got here?
Alan: Yeah, of course. How I got here is someone thrust a book into my hand at one of my darkest moments in life and said, “You must read this.” And I was actually on my way to Brazil at the time and I sat on my own on Copacabana beach in Rio de Janeiro, and I read this self development book called Notes from a Friend. And for anyone reading it, who’s done a bit of self development, it’d be very basic. But at the time, as a 21-year-old, those concepts were mind blowing and it completely altered the course of my life. And I thought, “This is incredible. This is exactly what I’ve been looking for.”
Alan: And that book led to all these other books and in those books they said, “We got some of the ideas from these books,” and it led to more books. And every book I read I got a little bit more confident. I achieved a little bit more. I earned a little bit more. I was able to deal with my relationships a little bit better. And then it becomes like a drug. You’re like, “Life is improving. Give me more.” It becomes like a drug eventually, Steve. And then you go, “What next?”
Steve: Do you follow Tim Ferriss at all?
Alan: Yeah. I love Tim Ferriss. His books have had an incredible impact on me all the way from “The 4-Hour Workweek” way back in the day that changed the way I look at business.
Steve: Yeah. A friend of mine actually told me about that several years ago and I started following it. And this guy, Philippe Violette, he was actually on our podcast early on and he’s applied it to his own life. And he has done a lot of these things where he is super optimized about how much time he spends working out, how much time he spends working, which he has a huge payback on his time. And he’s done things like he moved remotely for a few years, left off and moved off shore and, I guess, opened his mind to what was possible. And I think he’s the first person who told me about ‘lifestyle design’. But I know that some of these folks talk about that.
Alan: And I think what you said there is he applied it. I have met so many people who read those books but have never done anything about it. And it’s not the fact that you’ve got an idea, it’s are you applying it in your life. And there’s a bunch of crazy people out there who go read the books and actually do it and live that lifestyle and do those things. And that’s where the magic comes true. It’s not just about reading. It’s about doing.
Steve: Yeah. Well, we’re definitely going to talk about how you inspire people to take action in the latter half of this podcast, but I was reading your story and there are definitely some things about your story that resonate from other folks I’ve talked to that have gotten into financial independence. You talked about how your dad had a lot of success but also dealt with bankruptcy, and how that inspired you to start a business. And some of that have led to your discovery of FI. But I’d love to hear a little bit more about how some of the earlier experiences informed your life.
Alan: Well, I keep repeating to people nowadays that in your toughest moments are when your character, identity and beliefs are formed. And it’s almost like when they’re put under pressure there’s a forge that forms who you are, and you’ll either break or you’ll become stronger through those difficult times. And when my dad went bankrupt he went bankrupt for $5 million, about £3.6 million; and the only thing it was secured against was the family home which me, my brother and my mum lived in at the time. And I spent 10 to 15 years of my life fighting to keep the family home, just to have somewhere to live for my mum, and those experiences of going into court and arguing.
Alan: I’m an early 20-year-old, and I’m stood up in court in front of a district judge, arguing against the bank’s solicitor and against the bank’s lawyers and it did make me smile. The bank’s lawyer was called Mr. Bond. They would all say, “Mr. Bond from the bank, do you have anything to say?” And I was arguing against Mr. Bond. And the pressure of having your family home on the line based on your performance in an hour and a half to three hour argument in a court is unbelievable. And if that doesn’t change you in some way, I don’t know what is.
Alan: And I think it was Jim Rohn who said, “Don’t wish for life to be easier, wish for yourself to have more skills.” And those tough times do actually forge you. And it’s not nice when you go through it but the skills I developed I had to develop. There was no choice. I either developed the skills or we went homeless. The skills I developed then have made me who I am today and created the life I have today. Those early things, if you can use them as learning tools, they’re unbelievable.
Steve: Yeah. Well, that’s an amazing story to hear. I mean, so I guess it worked out okay that you were able to save the house, save your home.
Alan: Well, we settled. We settled and we got enough money for mum to be able to buy somewhere to live. Yeah, I did pretty well. We settled. Yeah, we got enough money for mum to live. We managed to get on with life. But the interesting in thing that bankruptcy still plagues us today, like if you get your finances wrong it’s unbelievable the ramifications through the decades that can happen. And sorting out a bankruptcy, I mean I’m sure you know this, sorting out a bankruptcy, that stuff can haunt you for a long time afterwards.
Steve: Yeah. I mean, there’s been some challenges in our family, but we haven’t dealt with bankruptcy. But I do remember as a young person after my parents got divorced we were renting a house and then we had some issues with the landlord and we had to then go to like small claims court and duke it out. I remember going in there and having to talk about what the situation was and why we were being treated unfairly. But it was a good lesson, right? Like standing up for yourself and like, hey, don’t let people push you around.
Steve: That happened again later before we bought our primary house here. We had a landlord that was just screwing us. And they had a history of screwing tenants and we had to push back and then take them to small claims court. And this is a side story but just going into that process of like, okay, now we’re going to try to serve this guy to drag him into court and then he was dodging us. He wasn’t really super well liked in the neighborhood, so I rounded up our neighbors and we had three people trying to serve him.
Steve: And you have to actually give someone a piece of paper like, “Hey, you got to show up in small claims court.” And if you can’t give it to him, he doesn’t have to show up. We had people watching and then he showed up once and then someone came over and said, “Hey, how are you doing? And, by the way, you’re served.”
Alan: I thought that only happened in the movies.
Steve: No, it’s ridiculous. And there’s all a process for it. But, yeah, and then same thing once you hold people accountable and if you’re in the right you can get what you want. I think a lot of people they do get pushed around and then they’re just like, “Okay, this is how it works. This person has power and I don’t have power. It’s tough luck for me.”
Alan: I think that’s a really important point, Steve, a really important point. I think a lot of people just accept what institutions, people in power, say without really standing up against it. And I think it’s so important for you to read the law, know your rights, know your own stuff. And just a little bit more on the dad debt story, originally we went to the small courts and we were arguing a particular point in law, which is you only have so many years after a debt. Like if you don’t chase the debt for X number of years, you can’t go after the debt. And I stood there and said to the judge, “Here’s the point of law. Here’s where it’s said.”
Alan: And he looked straight at me and said “that particular point of law doesn’t apply to mortgages”, which I knew it did. But then what do you do? He’s just staring at you going, “That’s not true.” And then he has the gavel, he bangs down the gavel on the desk and says, “That’s it. Your house has gone.” My mum is in tears, like she’s literally crying and screaming in the room. I’ve just had the house ripped from me by someone who doesn’t know the law who’s a judge, and we were just in a mess. And you go home and I look up the law and I find out I’m right and then I work out what to do.
Alan: And I actually had to take them to appeal to get that overturned. And I won the right to appeal because he made a wrong judgment. He didn’t actually know the law. But I really genuinely believe don’t just listen to senior people, doctors, solicitors. They don’t always know. Learn for yourself. And what you’ve just said is such a critical point.
Steve: Yeah, that’s a powerful story. It’s cool that you were studying up on it and then willing to go to appeal; and yeah, you have someone who’s like, “Hey, this is written.” Bang, you’re done. And you’re like, “Ugh.” You know? Yeah, I think there’s a lot to also not giving up. I think that a lot of things get rewarded for persevering and pushing through difficult situations. That’s cool.
Alan: Absolutely. Absolutely, perseverance and pushing through the hardest of times. And I was never giving up. If I was in the wrong, I would have given up and said, “So, what he said.” I literally went and read the law. There’s not many people that do this, you go in, you look it up and you read the law. And I knew he was wrong, so I was standing up to the nth degree; and I didn’t care how far I had to go because I knew what I’d read.
Steve: Yeah. All right, I’ll share another quick story and then we’ll move on, just because you’re inspiring me as well. Yeah, there was a situation. I was running a small business, a consulting business, and one of our clients who I had done a bunch of work with ended up getting in their own bankruptcy situation. In trouble, right? And so then they tried to come back to all the vendors and say, “Hey, listen, we paid you for this stuff and we want to claw it back.” And they were trying to claw back $400,000. And for us that was like a huge amount of money.
Steve: And I’ve already paid our team, we’ve already done all the work, da, da, da. In retrospect, I think they just threw it in there to see what they could get. I bet they sent these letters to everybody and just saw what happened.
Alan: Mm-hmm (affirmative). They’re chancing it.
Steve: Yeah, but on my side I was freaking out. But thankfully I got smart friends who are in the law business and I’m like, “All right, I need to talk to someone who actually knows this.” And I got hooked up with a lawyer, and I was young guy. And he knew all about bankruptcy and said, “Based on how you’ve done the work and what you’ve done, essentially they have no cause for this. You can push back.” And I was able to write one letter and just say, “Hey, look, you’re completely in the wrong and you have no right to come back to this. And if you try to do this again, we’re going to come after you.”
Steve: And they’re like, “Okay, fine.” They totally backed off. But for like two months you’re flipping up because you’re like, “Hey, if this goes against us I got to come up with…” It’s not like I’m going to go back to our team and say, “Hey, give me all the money back.” Right? I think sometimes people are just like, “Hey, let’s just try it. Right? Anyway, along the same lines. All right, let’s keep going. I want to talk a little bit about your journey to FI and who you met along the way. Right? Because it’s pretty interesting how you got involved, and it really feels like you’ve met some of the luminaries in the space. I’d love to hear how you discovered FI and then how you got involved in the community.
Alan: Yeah. I didn’t really know about the community, but I always wanted to sort out my own finances based on my dad. And I was like, “I am going to fix this for myself.” And there was a book that came out by Tony Robbins, MONEY Master the Game. Do not read it. It is long and difficult to read, and there are much better books. But I was reading that and talking to friends and an incredible friend called Matt Reeve, thank you for changing my world Matt, said, “Have you read Mr. Money Mustache’s blog?”
Alan: And I think that’s how it starts for a lot of people. It’s, “Here’s a link to Mr. Money Mustache’s blog.” And he sends us a link to a blog in the UK called “The Escape Artist” as well. We read them. My wife at the time she was like, “Why is it okay for me to retire early?” She had some weirdness around going for this goal and retiring early when everyone else still had to work. And actually it was Pete’s blog that changed that, and she read the whole thing. And then one day she rung up and said, “Oh, MMM is going to be an event in Ecuador.” Or she texted me, sorry. She said, “MMM is going to be an event in Ecuador.”
Alan: And I thought it was an auto type correct and she’s saying my mum was going to be an event in Ecuador. And I sent a reply saying, “Why would they want to go to Ecuador to see my mum?” But it was this Chautauqua thing and I love learning, and so does Katie. And we have learnt that we do courses together because if you’re a pair of you, and I don’t care what couple you’re in, but if there’s just a pair of you and one of you goes on the course and gets truly excited and then comes back and tries to explain an entire week-long course in an hour to the other person you can’t do it. You get a weird reaction.
Alan: They don’t get it. It kills your energy. It just doesn’t work. We’ve learned to go on courses together. And we just said, “Right, let’s go.” We traveled to Ecuador, which is a long way from England, and we met Mr. Money Mustache and Brandon the mad scientist and JL Collins and Carl Mr. 1500. And we had the most incredible week hanging out, talking about happiness, finance, how to get FI; and I think we just dived in so deeply so quickly.
Steve: Yeah. It sounds like a great experience. And I think JL Collins originally kicked these off. Is that right? He started this Chautauqua-
Alan: Yeah. JL Collins came up with the idea for Chautauqua and he’s been running them, I think, since 2012 or something. He’s done a lot of them. They were mainly in Ecuador until I arrived and he’d been looking for someone to run them around the world. And as we were leaving our one he said, “Alan, do you think you could put one of these on in England?” And I was like, “Yeah, sure.” And then nine months later we’re running a Chautauqua in England. My wife and I organized it for him and we made friends and now we’ve been running all around the world with him as well. And I think, yeah, it’s just that desire to get involved and make things happen and meet people which really changed things.
Steve: Yeah. I think there’s a ton of power in the face-to-face in-depth engagement around that. And I remember talking to JL Collins about this several years ago. I was talking with him like this and reading his book and I actually now want to get him back on this podcast, or get him on the podcast. Well, he’s always been pretty famous but he’s not assuming he’s getting more and more famous. I’m sure his time is getting consumed. But yeah, it does sound like some pretty engaging and diverse people get together and dive into these topics. How many people are showing up to these things?
Alan: It’s capped at 30, so they are very small scale events. And the reason they, or we, do that is so that you get to have a one-to-one with the speakers. And we all have breakfast together, we all sit together; and you get to sit down with JL Collins, the author of the Simple Path of Wealth and say, “Here’s my financial situation. What would you do if you were me?” Or you get to be with Pete and he face punches you for having too much cash. Or you get to sit with Brandon and create a spreadsheet, which was an amazing experience. But yeah, the small scale events where you can actually talk to the real people and go through your details are incredibly powerful.
Alan: But everything… like Chautauqua is inexpensive event. There are lots of less expensive event. There are ChooseFI meet up groups around the country where you can go and talk to people. And everything that’s actually discussed at these event is free on the blogs of these writers, so there’s no like you’re going to learn secrets and all that scamming crap. You’re going along to an incredible location to meet incredible people. All the information is free on the blogs, so if any of your audience want to they can just read the blogs and get everything for free.
Steve: Yeah. Well, I think that there’s a huge difference, and we talk about this a little further, there’s usually a difference between reading stuff and then taking action. Because like JL Collins, and by the way we definitely should point to his talk, you mentioned it before in the prep for this, that Google-, the most popular talk or something, or one of the second most popular talk at Google about-
Alan: Is the most popular non-celebrity talk. Celebrities obviously get a lot of views, but he is the most watched non-celebrity talk on the Google Talks, and it’s a phenomenal talk and like his investment philosophy. And I’d be interested to know if you follow his investment philosophy, or if you have your own, but he has completely changed our lives with that investment philosophy and we follow it to the T.
Steve: Right. Well, we’ll see if I got it right. Here’s my takeaway from talking with him. He was like, okay. When I talked to him several years ago I was like, “Okay, well, I think I have too much cash,” and I was asking my own situation. And he was like, “Okay, one, just invest it as much as you can now, all at once. And don’t try to do anything fancy with dollar cause, just put it in the market.” And he was like, two, buy the whole market.” PTSA accent basically that says go two. I finally started doing this and in the last downturn I was like, “Okay.”
Steve: I did throw it in as the market tanked and I threw it in to this huge broad indexes and that has worked. I mean, I was invested before but not completely. But it’s like this guy is telling you what to do and it’s still hard to do it even though you know better. Anyway, that’s my personal side on this, but I think that he’s right. The math is on his side. Another interesting thing about him and Mr. Money Mustache Pete it’s like I think what helps them is that they’re fully committed to their ideas and that they’re 100% behind it. And I think that people like to see that.
Steve: There’s no gray. It’s black and white. Here’s the Mr. Money mustache way, the mustache-ian way, and here’s the JL Collins way. And if you’re into it and you’re like, “Okay, this math is right. This works. Let’s just do it,” it makes your life easier.
Alan: It makes life so simpler. And you’re exactly right. We broadly follow the same principles, but we’re not American so we don’t just invest in VTSAX, which is the broad-based American one. Katie and I still invest in Vanguard, but in a global fund because there’s more outside America. I hate to tell you. This is called a home country bias. A home country bias is where we would invest only in the UK and Americans would invest only in America. It’s slightly different for Americans because your businesses are so global, Facebook, Amazon, Apple, Starbucks. They all operate around the world, so it’s slightly different. But home country bias if you’re in a small country, that’s a daft thing to do.
Steve: No. Yeah, it’s a real thing. I read about that a little bit on Forbes. They’d looked in the U.S. and it’s like 70% of the investments in the U.S. are inside the U.S.; and yeah, your point is well taken. Let’s move on to the PopUp Business School, and it does feel like the FI community has helped get the word out or change your thinking a little bit about what you’re doing there. But I’d love to learn more about what you do there and what your mission is and how you decided to get into that.
Alan: Yeah, of course. The mission of PopUp Business School is very simply to help anyone to build a business doing something they enjoy without debt. I don’t care who you are, you should be able to make your own money doing something you like and you shouldn’t have to go into debt to do it. That’s the mission. And we do that by changing the way entrepreneurship is taught. Instead of business plans start up loans, we help people to start with sales and we help them create their own money without going into debt. And that’s the whole purpose, the whole mission. Everything we do is free for the end user. We give away all the courses and we travel around the world trying to inspire people.
Steve: Nice. Why did you get into this particular idea and start running around the world? Because I’ve seen that you’ve done many of these and educated thousands of people. I’ve watched some of the videos, that does look really cool. But it’s like, yeah, it’s an interesting model. I’m just curious what led you to it.
Alan: Well, I wanted to start a business, and it was actually in ‘08 that I tried to start a business, and I went to the British government for help. And they sent me on three workshops, how to write a business plan, exciting, funding and finance which is basically where to get the money to start and how to go into debt, and then marketing. And they did more to put me off starting, Steve, than they did to actually help me. They left me in a mess. And I didn’t want to go into debt. The dad debt story should tell you I don’t want to go into debt.
Alan: And I was left in a mess and I spent the next two years trying to figure it out for myself there must be a better way of starting a business. There must be a better way of making money. There has to be. And over the next two years I started to figure out how to sell, how to market, how to sell before you create, all these different ideas. And then I started to teach people these ideas. And then eventually I started going to the housing authorities, housing associations in the UK, so lower income neighborhoods and saying, “You don’t need debt. We can help you start without debt.”
Alan: And that’s when it really started taking off. And you could see the light bulbs go off when people realized that it doesn’t take money to make money. It takes ideas and application and sales, not money.
Steve: Yeah. Right. That’s awesome. Well, that’s good. You have the best founding story, which is you had a problem that you faced yourself and you went out and solved it and got into the whole market yourself. You’re traveling around doing this in the UK, the EU, Africa, U.S. Any other places that you’ve taught?
Alan: I haven’t been to New Zealand yet, but we’ve got a franchise in New Zealand run by Tony, and I’m dying to go there and run a course with him. But I know he’s been doing the methodology and running it out there. It’s going on in Morocco at the moment, which is interesting. There’s an organization that’s rolling out the PopUp methodology across Morocco. And yeah, it’s really interesting how it’s spreading around the world.
Steve: That’s awesome. And do you see any huge changes or differences? I mean, these cultures are so different and the attitudes about starting companies are… I mean, like in the U.S., it’s a very entrepreneurial country, right? I feel like this place is full of entrepreneurs. How do you see it differently across the world, or do you notice some huge differences?
Alan: Well, I think the first time I was going to run a course in Southern Africa. I was going to Namibia to run a course, and I was nervous. Because I’ve done this in the UK, the U.S., I know it works there, but Africa is a different culture, different world. And we got to the capital city, Windhoek, we went out for coffee in the morning and we’re walking through the capital city and I noticed this wall of posters. And across the wall there are plastered signs saying, “If you need help writing your business plan you can pay us and we’ll write your business plan for you. If you need help getting a startup loan, pay us and we’ll help you get the money to get going.”
Alan: And in that moment I realized that the problems that face someone in Africa, they have the same theories about you have to have money first, you have to write a business plan, you have to do this, you have to do that, it’s exactly the same in America, the UK, the U.S. There’s obviously cultural differences and differences in resource levels, but people are trapped by this same belief that it takes money to make money and I need to write a business plan and get a loan to get going. All of a sudden I was thinking, “Well, actually, this is a universal problem and actually we need to tackle this across the globe and help people get going without debt.”
Steve: Yeah. Yeah, and that’s awesome. I think the most successful entrepreneurs there aren’t the most innovative. I mean they’re obviously innovative, but they can deal with scarcity in a big way. Right? They can find ways to solve problems or test ideas with very little resources. And so I totally get the idea behind what you’re doing here, that you can take this on with almost nothing or start with almost nothing and then see if your ideas work. Who’s attending these things, and what are they getting out of it?
Alan: At the moment the actual physical courses are around about 70% female, and it tends to be 40 years old plus. That tends to be the age. But you get the whole spectrum everywhere from a 16-year-old to an 80-year-old who wants to top up their pension, and you get everything in between. But it seems to actually be women who maybe they finished looking after the family and they’re looking for the next challenge or ways to make extra money or earn income around the family. And entrepreneurship offers something that traditional employment doesn’t, which is a whole host of different freedoms and flexibilities. It brings its own challenges, but it comes with some benefits too.
Steve: Do you have any top success stories of people that have built really successful companies?
Alan: Just before we dive into the examples, let’s just define what success is. The traditional method of success is have you made a bucket load of money and run an IPO and you’re worth 100 million. That’s the traditional view of success. And actually my view of success is can you earn enough money to look after yourself doing something you enjoy and live a nice life, and actually depending on who you are and what your situation is earning $2,000, $3,000, $4,000 a month extra will change everything. Our aim is not to start the next Google. Our aim is actually to help lots of people make their own money doing something they enjoy, so just redefining what success is.
Alan: To give you an example, we have a young couple called Katie and Andrew who came along to our event in Redding. Katie was into games and they decided to set up an escape room. And they actually managed to borrow a building so they were able to launch an escape room with no debt whatsoever. And they did a six week PopUp version and in the first six weeks they had enough money to be able to get their permanent venue. They got the permanent venue and now three years later they’ve got 10 staff, there’s large amounts of games, they’re doing really well. They’re super happy. And there’s loads of stories like that, but it’s helping people make money doing something they enjoy.
Steve: Yeah. I think that one thing that a lot of people don’t realize or realize at the end of this is that it is all about the journey and doing the stuff. I was thinking about this the other day. It’s like, hey, when things are going well, right? Right now for our business things are actually going knock on wood pretty well. Actually, I have an executive coach and he was like, “Hey, don’t just be thinking about the bad stuff. Think about the good stuff, and enjoy the good stuff when it’s happening.” You’re right. A lot of folks, they’re very focused on the exit and like, “Oh, I made a bunch of money,” and then I’m done.
Steve: And I saw that you interviewed, or I actually listened to your podcast with Sean Jenkins, and he was involved in ChooseFI, and he’s has had a huge amount of success and then, boom, he’s right back at it doing other stuff. Right? Building his blog and podcasts and so forth. But yeah, I think for a lot of people the running of a business, helping other people making money along the way, having control over it, not having it be so big because with more money, more problems, right? As things get bigger it gets more complicated. I read an interview with the CEO of SUN, which was a big company and then went away.
Steve: But at one point he was like, “Half of my time is dealing with lawsuits at this point. People are just suing us left, right and center for whatever bogus reason because we have money.” And that sounded like it would suck, like you’re not spending your time innovating and helping people; you’re spending your time defending yourself. But, yeah, I think that’s interesting that you frame up success that way. And I think you’re right, that for pretty much 99% of the people that’s what they should be thinking about.
Alan: Well, I’d just add one little piece to what you said because I think you’re right. And the little piece I would add is you can start a business doing anything. Why would you ever pick something you don’t enjoy? That just seems the most perverse. People say following your passion doesn’t work. It’s like, well, the opposite advice is do something you don’t enjoy. That just seems crazy. And I think there’s an area of what you enjoy and what the world needs; and if you can find that space in the middle of what you enjoy and what adds value to the world, what the world needs, what people need, there is absolute magic in there. I think, yeah, you can build a business doing anything. Pick something you enjoy, it’ll get you out of bed on a Monday morning.
Steve: Right. It won’t feel like work. It’s just like your vocation or whatever your hobby that you’re doing. And it spits off cash, which is good. It was interesting hearing you talk about the data about who’s attending, kind of 40 plus year old and also women. I was pulling some data on who starts companies and, for our audience, it’s like 54% of… U.S. small companies are founded by people who are over 50. There’s definitely a huge population of, I think, older folks that either because they need to or because they have extra human capital are starting companies.
Steve: And I feel like that’s going to continue to increase. And it’s combined with the fact that they tend to be more successful than younger people. I think it blows up the myth of the younger entrepreneurial person.
Alan: Yeah, absolutely. And let’s not call people over 50 old, because I’m closing in. Let’s not go there. They’re still very young, very healthy. But, you’re right. There does come some experience with age, and if you’ve gone through your life learning, developing, and growing… I’m actually 41 at the moment and I feel like I’m barely hitting stride, Steve. I’m just getting going . I’m just getting good. I’m starting to learn some stuff. I’m starting be able to apply what I learn. I feel like I’m just getting going. If you’re 45, if you’re 50, if you’re 55, you’ve done some learning, start applying. And it’s phenomenal what you can do when you start to really apply those skills and that learning.
Steve: Yeah, I totally agree. What are some of the big objections that you see from people about why they can’t do this, and how do you help them get over those hurdles?
Alan: We’ve done a little bit of studying around this and there’s primarily three main objections. Number one is money. I don’t have enough money to be able to start a business. I need money first. I need a loan. I need investment. That’s a huge excuse. And then actually you don’t need money to launch a business if you start with sales. And there’s actually many techniques to start for free, but money is a huge excuse. The second one, it’s not an excuse it’s a real one, it’s confidence or the lack there of. I’m nervous. I’m scared. What if it goes wrong? What if it doesn’t work? All of those elements, they stop people from starting up.
Alan: And I think that confidence is actually quite closely tied to finance. And the reason I say that is if you believe you need to borrow 50 grand, 100 grand plus, or even put your own savings and investments into it, well, you better be really confident that it’s going to work. But actually if you can free that up and go, “I’m going to do a mini experiment and have a go and launch a business without debt,” if it goes wrong the only thing I stand to lose is a bit of time and a bit of energy. Or suddenly you can feel a bit more confident about having a go because it’s just an experiment, whereas the old way of doing it was a lot of debt. Well, people think entrepreneurship is risky. And it is if you go into debt to do it. It’s not if you do it on a low cost scale and a very minimal startup.
Steve: Right. Yeah. No, I think that’s a great way to frame it up. For our business we do start with money because we do financial planning and retirement planning, but it is so that people can see that they have levers. And I think for a lot of folks that is reframing their situation. If you actually step back and think about your resources and include everything like your human capital, you can make money. I talked a lot to about five people and they were like, “Hey, you know I wasn’t sure if I should retire or not. And then I was like, eh. I did it. Because worst case I’ll go back and make some more money and I’ll go back and get a job. Right? Let’s just try it.”
Steve: And that’s true if you think about it that way, your home equity, all your savings and ideally any passive income sources or small businesses that you spent up. And there’s a lot of things, a lot of levers that you have to pull, if you’re smart about that stuff. And then I think the biggest thing is expenses, right? If you’re willing to say, “Hey, I don’t necessarily need all this stuff. I can live with less stuff or less fancy stuff,” it gives you a lot of power. I’m sure you see that as well and I’m sure you frame that up for folks as you talk to them.
Alan: Yeah, absolutely. If your expenses are lower you have a lot less risk and you can get going and get started and get out there. That’s basically what we do. It’s help people start and test because running a business is not for everyone, Steve. Some people try it and then go, “Wow, that was a lot of work. I’d rather go and get a job.” And that’s a great decision to make, but it’s a painful decision if you’ve gone into debt to do it. If you can test out your business idea without debt, give it a go, see if you like it or not. And actually I have three measures for did your experiment go well.
Alan: Number one is did you enjoy it? Did you have fun? Number two is did your customers like it? Did they buy it? Would they come back? And number three is did you make any profit? If those three things went well for your mini experiment, then, go further and build the business. If they didn’t go well, close it down and try something else. Pretend it didn’t happen, have another go. And if you do it that way you can have unlimited tests.
Steve: Yeah, right. I think that’s another great point. It’s like don’t be afraid of failure and fail fast and think. I mean, so many companies don’t make it. Right? I was actually pulling this data too. The startup business failure rate in the U.S., over half of companies don’t make it five years and 70% don’t make it 10 years. You have to assume like, hey, most ideas aren’t that great and are not going to work so this probably isn’t going to work. Right? But if I try five things or 10 things probably one of them will work, so it’s a much better way to think about it.
Alan: Absolutely. And the expression we’d say at PopUp is fail fast and fail cheap. If it’s going to go wrong, let’s get it go wrong quickly and without going into debt and very cheap, and then we’ll try the next idea. And you’re absolutely right. I’ve had loads of businesses that have failed. And I always think it’s a good idea until I try and sell it and then I realize, “Ah, maybe it’s not a good idea.” And we all think our ideas are the best ideas in the world, but they’re not always. You’ve got to actually go out there and test it. And if you can do that… I’m sure this will be useful for your audience, what’s the only way to test a business idea?
Steve: Try to go sell it?
Alan: Yeah, it’s sell it. But what does everyone else do? They do market research. They talk to people. They do Google research. They do loads of research, but they never actually go ask someone to buy. Or what a lot of people do is they go. And tell their friends about the business idea and they go see their friends and they say to their friends, “I’ve got this is an idea. What do you think?” Just for a second, Steve, you’re one of my really good friends. You like me, you support me, you can reject me again afterwards. It’s okay. You like me and you support me. And I come to you and you go, “Okay, I’ve got a new mobile phone case design. I think it’s really sexy. It’s going to protect phones. It’ll help with sound. It’s really good. What do you think?”
Steve: Yeah, looks awesome.
Alan: Looks awesome, the positive feedback. And that’s what most people say, but is that actually useful feedback, Steve?
Steve: Yeah. No, you have to see it like would you give me whatever, some money-
Alan: Well, yeah, that’s the bit. It’s when they say it’s awesome look at them and say, “Fantastic. I have a sample here. It’s 20 bucks. Would you like to buy it?”
Alan: And that’s the full answer. And people will be nice to you until you ask them to take their wallet or their purse out of their pocket and give you money. They will be nice to you, and nice does not help you grow.
Steve: Right. This is a good lesson for a lot of folks even in big companies too. I think there’s so much of like, “Yeah, let’s do research.” I mean even our company there are people who are like, “Oh, let’s do research. Let’s do surveys.” I’m like, “All right, let’s do some surveys. But why don’t we just run some ads and see if people click on this stuff and come through and buy our stuff.” You know? Yes or no. And is that happening at a high enough rate? And I’d rather just spend the money out in the market seeing what happens versus doing… I mean, surveys will give you some qualitative data but, yeah, it can be a giant time suck as well.
Alan: Yeah. Or just call your top five clients and say, “I’ve got this idea. Would you buy it?” And you’ll know very quickly from that feedback. And if they say no you can ask why. That’s where the learning is. Every no is a learning opportunity, and that’s where you’re going to really improve the ideas.
Steve: Right. This is making me think of one. I think it was Annie Duke. She’s this poker player and she writes about decisions. And she was like, “One of the things that you have to have is strong beliefs but loosely held.” It’s like to be an entrepreneur you have to go out and be like, “Hey.” You know, you’re super enthusiastic. You got to be enthusiastic. “Here’s my idea. It’s going to be so great.” And then, “Do you like it and will you pay for it?” And then you have to be like, “I’m willing to take the answer and be objective about it.”
Steve: Like, “Okay, the answer is no,” and then you have to be able to get away from your idea and then crank up enough enthusiasm to do the next thing. I think that combination of enthusiasm, trying to sell, and being objective, and being able to pivot is not simple, or people need to appreciate that. That’s what it takes, so anyway. All right, as we go to wrap up, I just would love to hear any big takeaways you’ve had on your self-development journey, like any huge lessons that jump out to you. Because you’ve met some pretty interesting people and you have traveled all over the world, you’re starting companies, meeting all these entrepreneurs.
Alan: Oh, that’s a very broad question.
Steve: Yeah. Sorry.
Alan: Where to start with that one? I think the first thing that came to mind was a quote that says you can have anything you want in life, astrics, if you help enough other people get what they want in life. And that has driven my philosophy of all of my businesses. Everything I do is if I can help other people I can then ask for money and be rewarded for that. And the focus of all my businesses, my training businesses, PopUp Business School, has been, how can I add value, how can I help other people, and how can I give?
Alan: And if you have that at the heart of your business, and even at the heart of you being an employee, if you can help the person that employees you get what they want they will look after you in most cases, Some don’t, but we can’t deal with them. But you can have anything you want in life if you help enough other people get what they want in life. And that’s been one of the foundational things. And you see this attitude of service amongst the most successful and kind and happy people I have met around the world.
Steve: Yeah, it’s interesting as I heard Bill Gates once say. He was like, “When I look back I feel like we’ve helped to create a lot of value for other businesses and people with the tools and we were able to capture some of that value for ourselves.” But it was about the value he’s creating for other people and then some of that aggregated to himself and Microsoft. Any other big things around lessons around FI or things that resonate with you?
Alan: Well, the FI lessons, you could pick each one of these people that we have read or spoken about and go, “I got an incredible lesson from them.” With JL Collins’ The Simple Path to Wealth, it’s about index investing, focusing on one strategy. He has changed my life. With Mr. Money Mustache, there’s like be a hassle huff, take the hassle, do it yourself, work hard, get involved. And like if you’re thinking of buying an expensive car, punch yourself in the face and then save more, like his no-nonsense attitude.
Alan: And then the mad scientist, his analytical way of looking at the data, optimizing the taxes, planning for what you’re doing. And you can look at all these incredible people. And I’d recommend to everyone from your audience to study some of this stuff because every time I go on a course, read a book, I get something that helps improve my life, improve my financial situation and move me towards my goals. And it’s the constantly being at the feet of the people who’ve been successful and going, “Teach me. Help me understand because you’ve achieved it.” And that’s absolutely what I’ve done through all of these.
Steve: Yeah, that’s awesome. Now I appreciate that. We’ll point to these resources in the notes for this. And as we wrap up, one thing you shared was how you had taken the lesson for yourself that you’ve been running around delivering these courses face-to-face and now you’re based on someone’s feedback. I think it was Mr. Money Mustache’s lesson. Can you teach this course to a 100,000 people face-to-face or a million people face-to-face? Is that going to happen? And you’re like, “Probably not,” so you’re leveraging and working with ChooseFI, you’ve got your podcast going and clicking on your blog. How’s that stuff going, because you’re now trying to go bigger and worldwide?
Alan: It’s been an interesting journey trying to get the message out there, but you get the podcast seems to be really flying. It’s called The Rebel Entrepreneur, and it’s all about starting businesses with no debt. And we’ve made it into the top 6% of podcasts within our first couple of months, which is phenomenal, and it’s growing really well and the next big thing for me is actually a TV show. We are working on a TV show to help people build businesses with no debt and I want it to be the first ever global entrepreneurship show.
Alan: Because there’s plenty of entrepreneurship shows that are just in the U.S., just in the UK, but there’s very few that go, “Here’s the principles that apply whether you live in the U.S., the UK, Australia, France. It doesn’t really matter.” That’s the plan, to get the message out there, change the way entrepreneurship is taught, and really help people build great financial futures.
Steve: That’s awesome. Yeah, I like the idea of a TV and video, YouTube and showing some stuff here where people are able to get in and share these stories about either instructional or ideally share stories how other people are doing it and what they’re doing, how they do it. It’s powerful and it’s amazing. These mediums open it up for anybody to get out like, “Look, we’re here. If you hit it right, yeah, you can get millions of people hearing your message in a super scalable way.” Well, good luck with that. Hopefully it goes well. Alan thanks for being on our show. Thanks Davorin Robison for being our sound engineer.
Steve: Anyone listening, thanks for your time, hopefully you found it useful. Our goal at NewRetirement is to help anyone plan and manage their retirement so they can make the most of their money in time. And if you’ve made it this far I encourage you to, one, checkout The Rebel Entrepreneur, Alan Donegan’s site, and the PopUp Business School. We’ll point to all that stuff. We also run a private Facebook group or you can follow us on Twitter, so just search for NewRetirement and hopefully, check out our tool as well. And then finally, both of us are looking for reviews and feedback on our respective podcasts, so if you have the time and inner inclination, we’d love to get your feedback. With that, thank you Alan, and everyone else, thanks for listening.