Becker Private Equity & Business Podcast
Building Businesses: Lessons from a Career of Wins & Losses 6-2-25
Mon, 02 Jun 2025
In this episode, Scott Becker shares hard-earned lessons from building multiple businesses.
Chapter 1: What are the key lessons from building businesses?
This is Scott Becker with the Becker Private Equity and Business Podcast. Again, before I get started, I am so thankful to our listeners, our sponsors, our guests, just having a tremendous run with the podcast, past 7 million downloads, and ranked really highly in the Apple list. Thank you so much. Today's discussion is building businesses lessons from a career of wins and losses.
So lots of wins, lots of losses. And I'm just going to go through about 10 points on this building businesses, wins and losses. The first background I'll give, I'll start with this. I've been involved in building two successful businesses. First, a healthcare media company known as Becker's Healthcare that became really successful with a great team and great leadership in several niches.
Second healthcare legal practice originally built in a specific niche and then grew into several other niche practices and areas as we got bigger and more successful. I've also served on the board of a company that sold for nearly a billion dollars. I've served on a couple other boards. Some of those were successful. Some of those were not.
I've had the chance by background to invest in venture capital and private equity funds, including with Andreessen Horowitz, one of the best known venture capital funds, incredibly successful people. I've also invested in several startup companies throughout my career. Some of those went well. Some of those went to zero. Zero is always a bad thing. I've started several businesses.
A couple of them have been very successful. A couple of them have completely failed or petered out. We've seen both of that. I've made lots of investments. Some have been successful. Some have been total disasters. In fact, some of the ones I thought were real wins ended up being real losers.
We'll talk a lot this afternoon about building teams, niches, and a lot more, and try and also give some of my most miscellaneous points that I love to talk about. So I hope you enjoy this. What we're going to try and do again is discuss common lessons from wins and losses. So the core concept I'll start with next is teams. Every success I've had has been built around building teams.
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Chapter 2: How does team building contribute to business success?
And every failure I had was really where I didn't make the effort to want to put in the time to seriously build teams. where I've served on companies' boards, and I'll just go through this real quick. One of the boards I served on early, a company called Ambulatory Surgical Centers of America, they had droves of brilliant people, a ton of A-plus leaders,
they ended up having huge success for a long period of time.
Similar example, Physicians Endoscopy ran by a gentleman, Barry Tanner, significant success over a very long period of time and really succeeded with that team and that growth, ultimately sold to, went through several different private equity funds over the course of 25, 30 years, and then finally sold to Optum United for some crazy amount of money.
The flip side is I've been involved in a board where they had one supernova leader, but ultimately that was the be-all and end-all. They ultimately sold the company for a number that was not very exciting, and largely because you can't go very far with just one supernova leader. It just doesn't work. This leads me to the next point.
There's this constant discussion today about the myth of the solopreneur, what I call the myth of the solopreneur. Peter Diamantes, brilliant business person says, we're going to see a unicorn built around a solopreneur soon. And he may be right. I have a very hard time buying into this concept of a solopreneur. I'm a believer. You've got to build teams if you want to be successful.
I am a believer that, yes, you have to outsource stuff. And I still believe very strongly you need a core team, but outsource everything beyond your core team. In building the media company, we decided we needed editorial staff. We needed a conference team. We needed a sales team. In a sense, we outsourced everything else for a very, very long time. We still don't have a receptionist.
We have an 800 number that people call into, leave a message, stuff like that. People might hate that, but we've built a half a billion dollar business with that mindset of outsourcing everything that we don't have to. So the next thing I'll talk about with teams is I'm the biggest fan of Jim Collins.
And for those of you old enough to remember, Jim Collins, one of the great business writers of our time, at least of my time, he has this concept, good to great, and essentially says that when you – It's all about getting the right people on the bus. If you get the right people on the bus, you could do almost anything that you want.
And if you don't get the right team on the bus, it doesn't matter how good your strategy is, no matter what you're doing, you can't go very far. With teams, I'll give one more comment or two more comments, is that there's this concept of what I think was the evolution of a founder. The founder early on is what I think of as a solopreneur. That's stage one of founding a business.
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Chapter 3: What is the importance of focusing on niches in business?
Chapter 4: How can businesses effectively outsource tasks?
I would say that, in addition, the very most successful companies I've worked with have been really niche-focused and really know what they're trying to do. Originally built a law practice, an initial media company, founded on a specific niche areas.
And one of the lessons I have about niche areas is if you get really great at your niche, you also tend to see things in other niches and adjacent areas to grow into other areas and adjacent areas. But if you don't make the effort to get really great at your niche, then it's hard to understand where to grow into adjacencies and to grow from there. In building a niches,
I'm a big believer that you have to get yourself so engaged in things to really see the field, to see the opportunities, to see what's out there. It's very hard to hardcore whiteboard every niche you're going to go into. But the flip side is when I've been so close to businesses, I'm able to really dig into them. And you see things so clearly when you're so close to them and you see opportunities.
And those opportunities, when you really are close to your business, you almost realize you're not going to fail. It's easy.
find succeed or succeed greatly and that's we want to be so close to your business that you could see niches like that a couple of the thoughts on niches we we often think about niches is can you win in the niche and then in addition is it worth winning in so can you win goes to how deep or incredible is the competition in it like for example i'm building a software company
I don't want to compete with Judy Faulkner, but I just don't want to do it. But I want to pick a niche point area to start with and then grow from there. And then is it a big enough area that's worth winning in? Some of the areas we've grown into, we could win in them, but they're not worth winning in. Other areas, hyper-competitive, we can win in them, but it takes a lot of effort to win in them.
One of the examples of a niche that I've seen recently, a company called Shoulder 360 or Conference Shoulder 360. The beauty of that is you know exactly what your targeted customers are, exactly what your targeted audience is, exactly what you're trying to do. I love that. It's not a company we're involved with. I just love the concept, Shoulder 360. Jack Welch hit it well on niches.
He often said, you want to be first or second in the niche, maybe third, because in great times you clean up, in bad times you survive. And I think he's right on there. We'll also talk about sort of niches versus the total addressable market. Whenever a founder comes to someone and talks about the
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Chapter 5: What are the stages of a founder's evolution?
The total addressable market being China, and that's the example we always talk about, or everybody always talks about, or all of the United States or every consumer, they almost get laughed out of the room. Whereas if they come to a very specific niche you're going after, it's much easier to grab somebody's attention as an investor, what you could do.
Then the investor's issue is, can you grow big enough to make something out of that niche? I got a real good lesson in niches and watching the USA Today. USA Today years ago doesn't have a specific niche, a real niche. trying to be a newspaper for everybody, its value several years ago was very close to the value of a niche media company we had built.
And I just found that fascinatingly interesting that this broadly known publication wasn't that much more valuable than something we had built in a niche. The last thing I'll talk about with niches is the paradox of point solutions. You're almost always going to start with point solutions because that's the way you can do something better and more concentrated than anybody else. The flip side is,
In the long run, you probably can't be a point solution unless you're so big. You got to be a little bit bigger than that because nobody wants to deal with thousands of different point solutions. Again, to go back to Judy Faulkner and her eating the lunch of people is at some point, Epic develops a module that competes with your point solution. In many, many houses, this will be Epic first.
Even if the point solution is better, they don't want to work with it unless they have to because you're so much better. So there's the paradox of point solutions. Most people are going to start with paradox of point solutions. Most are going to start with niches. But at some point, you have to get bigger and find bigger niches and go beyond point solutions. I find it's a brilliant paradox.
The fifth thing I'll talk about is product-market fit for companies. One of the things, again, you see countless times with entrepreneurs and founders and engineers is they build something at such length, but don't spend enough time commercializing early. And many of us do this. I mean, we can't help ourselves.
We don't commercialize early enough, and thus we build something that people don't really want. So it's a lot easier to be in your room coming up with a product and so forth and so on for a lot of us than actually trying to sell. But if you don't commercialize early and sell early, you're in a lot of trouble.
CEO of Becker's Healthcare, again, says, ready, aim, fire, not ready, aim, aim, aim, fire. The constant need to get out there and commercialize and test early and then see how it goes. Jim Collins says, fire bullets, not cannons, so you can test early. I think he's right on. And you have to spend a lot of time early on figuring out who is your ideal customer.
And we often call it a persona at the media company. Who is the ideal customer we're trying to reach and trying to understand it? But this concept, whenever you're looking at businesses, thinking about businesses is, commercializing and testing early. It's no fun. You have to have a thick skin, but you got to do it.
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Chapter 6: How do you assess competition within a niche?
Chapter 7: What strategies can lead to successful investment decisions?
And we often call it a persona at the media company. Who is the ideal customer we're trying to reach and trying to understand it? But this concept, whenever you're looking at businesses, thinking about businesses is, commercializing and testing early. It's no fun. You have to have a thick skin, but you got to do it.
I've also seen, you know, people come to us a couple years into funding the business and saying they are now making a big pivot. If you're an investor, When somebody says you're making a big pivot, this is when you mark down internally in your head the investment to zero often. So that's one thought on the big pivot.
But you have to test early to know whether your market really wants what you're trying to do. You want to have great clarity of who you're trying to be the go-to for and what you're trying to be great at. We often talk about product fit and market fit and ideas as the funnel in five stages. I'll go with this very quickly. Somebody has an idea. That's one top of the funnel.
Then they have a product, then revenues, then profit, then scale. And by the time you go from one to five, you've narrowed out a huge amount of the competition of potential players. Sixth concept, I'll go through a couple overstated myths. A favorite overstated myth that we have is culture eats strategy for breakfast. And I just think this has become part of the populist view.
But no, it's really culture, talent, strategy, drive. It's a lot of things to make things really successful. I must say this culture strategy is similar to the concept of this concept of the solopreneur myth. I just don't think it's fair to do things alone. I think it's very hard to call it just culture. A lot of places have great cultures that aren't very successful.
You have to have culture plus talent and strategy. Seventh concept, startups, growth, driving things forward. And this is something I wish it wasn't true. And it may not only get unique to me. Any time I've had real success, I've become so taken by the effort that I've become obsessed and compelled by the effort. The flip side is when I've not had that drive, and growth, I've had a very hard time
having great success in getting things where they need to be. There's no way around it early on that you have to have this burning desire to succeed. Dave Thomas of Wendy's, the founders of Wendy's, and I used to love Wendy's, used to say that ultimately you need a burning desire to succeed. I think this is largely true.
Every success I've had has had a founder or a fire starter that really has had that drive and nervous energy or whatever it is. We call them fire starters, but I can actually start fires Most entrepreneurs realize that sometimes you have it, sometimes you don't. But greatness and getting something really going requires sustained drive over a serious period of time.
And a couple of things I'll tell you is when you see that coming in yourself, you need to cultivate that passion. So it doesn't come throughout one's life all the time. Many serial entrepreneurs believe that they've become greatly successful in one thing. They're going to be gifted success in another thing.
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