Here’s Why Marcus Lemonis is One of Today’s Most Inspirational Entrepreneurs

Recently a cable-TV station launched a new reality series which follows a group of first-time entrepreneurs as they launch their startups. Naturally, it caught my attention. However, I only managed to endure about fifteen minutes as it quickly became evident that all of the entrepreneurial wannabes were recent grads building apps.

This experience set me to thinking about the current state of entrepreneurship in the USA. That’s when I realized what a breath of fresh air Marcus Lemonis truly is these days. Let’s take a look at two types of businesses to understand why he should be a role model for more entrepreneurs.

1. Building Fugazi Businesses

How many more vanity startups, such as dating and photo-sharing apps, does the world really need? My hunch is that we are already over-stocked for the remainder of the century with these things. However, I can understand their popularity for recent grads due to the allure of the “Vanity App Myth” which goes like this:

1. One day as you’re lounging in a bean bag chair at the Stanford Student Union building, you have one of those coveted Eureka Moments. “I just figured out a great business idea! You know all those snooty dating apps? Well, I am going to make an even snootier one!”
2. You then raise some money from family and friends to hire a team of Ukrainians to build it for you and return to your favorite bean bag chair to bask in your genius.
3. Six months later Dimitry informs you that it’s finished and you brace yourself for the eruption of the money volcano which is about to bury you.

Sounds great doesn’t it? No employees to complicate life. No payroll to fret over. No monthly overhead. Why you can run your entire business from Starbucks with a smartphone while becoming a billionaire.

Sadly there are downsides to this path which include:

• The low barriers-to-entry mean that there are thousands of others building basically the same app.
• The one app that does go viral often has the lifespan of a fruit fly.
• Most app companies provide no real value to customers. For example, snooty dating apps provide a brief ego boost to desperate attention-seekers willing to pay for the illusion that they are part of an elite class.
• Going into apps seems like such an obscene waste of money considering the cost of a Stanford MBA. It’s akin to a Harvard trained doctor downgrading to a career as a manicurist.

Meanwhile there are thousands of real businesses providing real value to their markets which have difficulty in attracting management talent because they are not considered “sexy” by today’s grads.

Now let’s move onto real businesses and Marcus Lemonis.

2. Building Real Businesses

After almost a decade of the Internet-based business media seemingly only paying attention to the sites and apps that cater to shiny happy people’s vanity, Marcus’s show, The Profit, comes along and jolts us into recognition that there are still real businesses out there serving real needs. In each episode we follow Marcus as he attempts to fix a troubled bricks and mortar business. Each hour comes packed with valuable entrepreneurial lessons and insights into what it really takes to build a business. Here are just a few of them:

• Develop Core Business Skills

Before you can attempt something truly great, you will need the courage.
Before you can have the courage, you will need the knowledge. – Anon

This is basically Marcus’s Super Secret for Success. He’s mastered the basics of small business value creation. Whenever he explores a new business he does so through his 3P framework: People, Products, and Process. The framework allows him to quickly spot the problem areas and determine if he can fix them.

When it comes time to implement the solutions he relies heavily on teams of specialists to do the detail work. To use a sports analogy, Marcus is like an old school quarterback who looks for the openings and calls the plays.

• Avoid Fads and Mobs

During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents and blue-jeans made a nice profit. – Peter Lynch

Just like Warren Buffet, and many other famous investors, Marcus avoids fads and anything that’s undergoing a feeding frenzy by the mobs. Instead he’s trained his mind to analyze low key opportunities with the goal of finding ways to add value to them with his 3P framework. If he doesn’t see a way in which he can add value, he walks.

Of course one needs a bit more business acumen to pursue this path than it does to hire Dimitry and the boys to build a custom app. Watching The Profit will greatly accelerate your climb up the learning curve.

• Small Scale Capitalism is Alive and Well

We used to make sh*t in this country. Build sh*t. Now we just put our hand in the next’s guy’s pocket. – HBO’s The Wire

Marcus reminds us of a time-tested way to build wealth that today’s business media, staffed almost exclusively by apps-obsessed 20-somethings, no longer even knows about. I refer to the classic wealth-building strategy of starting with a cashflow (usually a small business) and leveraging it to acquire additional cashflows. I especially enjoy seeing how he creates synergies among his portfolio companies by having them trade back and forth.

Moreover, like any good venture capitalist or private equiteer, Marcus is simultaneously reducing his risk and maximizing his potential return by building a portfolio of companies some of which will fail while others succeed.

• Be the Deal-maker, Not the Shopkeeper

Eureka! Here’s the goose that lays the golden eggs. – Andrew Carnegie

Marcus Lemonis growth guru.

These were the words uttered by Andrew Carnegie upon receiving his very first dividend check and realizing first-hand that you truly can make money in your sleep. After this he pivoted and set out to acquire control over or interest in as many businesses as possible. He did so by focusing on honing his deal-making and investing skills.

More often than not the entrepreneur running a single company begins to feel like Bill Murray’s character in the movie Groundhog Day since most small businesses plateau quickly after which every day begins to feel exactly like the ones that preceded it.

By being the deal-maker Marcus never gets bored. There is always a new deal to explore, new people to work with, and new challenges to overcome.

To sum up, recall the tale of the tortoise and the hare. Marcus is the tortoise steadily building long term value through diversification. In contrast, the app crowd consists of hares betting everything on a single fugazi deal.

Life is about the journey not the destination.

All stories about how great fortunes are built are interesting, but the very best ones have a guy who starts out with a small grubstake and through serial wheeling and dealing parlays it into an empire. – Peter Ireland

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