Born in Long Island, New York to a firefighting father and a journalist mother, Richard Lorenzen’s interest in entrepreneurship and his drive to achieve led him to an online business venture at the age of 15. Ten short years later and Lorenzen is now one of the Top 50 Digital Marketing Influencers of 2016 according to Entrepreneur Magazine, a top Millennial influencer according to LinkedIn and Inc Magazine named him one of the Top 8 Entrepreneurs on Twitter.
Today, he’s the CEO of Fifth Avenue Brands, a public relations and digital media firm he founded.
Lorenzen is the latest to contribute to our Ask A Young Entrepreneur series and talked to us about his experience in business as a teen, his failures and successes, the most important college connections to make, and his advice to others just starting out.
When did you first realize “this business idea is going to work”?
The great thing about starting a service business is that it’s relatively low-cost to begin offering a service and acquire your first client. With that said, it takes time to build a reputation that allows you to charge increasingly larger fees. So although I started acquiring some clients within the first month or two of starting my agency, which proved that there were clients who wanted what I sold, it probably took about a year to get to a point where we had decent cashflow.
How many times did you fail before finding something that worked?
Fifth Avenue Brands isn’t the only company I’ve started. In fact, I’ve been involved with many other startups over the years– some failed and some worked. When I started my agency as a teenager, the internet was just starting to really take off a platform for businesses (especially small businesses) to sell serious amounts of product. So I was learning things like coding, SEO and digital marketing very early on the in the game. I would test out my new skills by launching all different types of websites and seeing what worked and what didn’t. This also helped me to figure out successful marketing models that we were later able to implement for clients.
The most important point I would make about this question though is that it isn’t about how many companies you need to start before you find one that works. That’s the wrong approach. Many new entrepreneurs mistakenly think that when their new venture fails, it’s simply because they didn’t find the right venture yet. But 90% of the time, the venture failed because of the founder, not the business model. Entrepreneurs suffer from shiny object syndrome. They start a venture, give it 2-3 months (or less!) to see how it works out and if they aren’t making money, they fold up and move onto the next shiny objective or trendy business opportunity. What I’ve found in my own personal experience is that it’s not about finding the right venture. It’s about choosing one venture and sticking to it for as long as it takes to be successful. You need to give it time and constantly improve your business model and systems. Do that long enough and good things start happening.
Name one mistake you made in college that you learned from in business
I left college after a year to continue growing my company that I started in high school. That isn’t the right decision for everyone, but it proved to be right for me and I haven’t looked back.
With that said, don’t underestimate the value of your professors. They are highly connected, accomplished veterans in their industry. Focus on building relationships with them that will go on long after you graduate. You never know where your most valuable advisor, partner, investor or client is going to come from.
Also, I now speak to countless audiences of high school and college students and what I see time and again is most of them don’t realize how many opportunities are out there and available to them. The world is a lot bigger than you think, so think bigger and aim higher.
If you could tell a person new to investing one piece of advice about investing or money management, what would it be?
Many of the best deals you’ll ever make will be the ones you didn’t make. Before you start investing any amount of money, get super clear about what you are investing in (stocks, real estate, VC, etc) and learn your industry inside and out. When it comes to investing, almost nothing ever goes as planned, you will lose money and things will go wrong. By learning an industry inside and out, you minimize your risk greatly by being able to handle problems when they come up. For example, two industries I know very well are digital media and real estate. Therefore, a startup that I’m investing in right now is a content site called AchieveIconic.com. We’re about a year in now and starting to see some success. I have no inclination to invest in something such as manufacturing or automobiles because no matter how great the opportunity may be, I don’t know enough about those industries.
Name one mistake you made with your money.
Like most entrepreneurs, I’ve made two common mistakes that are two sides of the same coin: spending too much money and not spending enough money. Early on when I first started making money, I spent too much on the wrong things. But I also made the mistake of not spending too much in the areas that could grow my company. I find that when entrepreneurs start to make a lot of money, they are too timid to risk a lot of money on a new marketing or business development initiative, yet they have no problem spending $10K taking their crew out for the night. When you first start making money, worry less about spending on your lifestyle and focus more on where you can spend to move the meter for your business.
What’s the one assumption strangers usually make about you?
That I somehow inherited my company from family (due to my age). Not true.
Is there a book, movie, quote who changed your life?
Darren Hardy’s book The Compound Effect was a gamechanger for me. It completely changed how I thought about productivity and performance. Every entrepreneur needs to read that book. Robin Sharma’s books are all must reads as well.
How important is a mentor?
It’s not absolutely critical to have a mentor, but having one could easily cut the amount of time it takes you to reach your goal by half or more. I’ve had many mentors over the years. There was one in particular who completely changed my success trajectory at a young age and if I hadn’t of met him, I don’t know if I would be where I am right now. I’d get there eventually, but it probably would have taken a lot longer. I highly recommend seeking out a mentor in any way you can. At the very least, find mentors through reading books.
Did you set out to become a millionaire or did you have another goal?
I set out to build a great company because I wanted to build something bigger than myself that would make a significant impact. We’ve now had a lot of success, but there is also still a long way to go ahead of us.
What does it feel like to see a million dollars on a bank statement?
Achieving a major goal is one of the most satisfying feelings you can experience. You need to reward yourself in some way whether it’s something you’ve wanted to buy, an experience such as a trip that you’ve been waiting to take or anything that is meaningful to you. Rewarding yourself when reaching a major milestone is one of the best ways to keep yourself motivated to keep achieving more and to not crumble under the stress of being an entrepreneur. With that said, if you’re like most entrepreneurs, once you reach such a goal, you will probably spend more time thinking about your next goal than reveling in your current achievement. You’ve got to stay hungry.
How long did it take you to make your first million and what is the biggest piece of advice you can give to a new investor on how to get there as fast as possible?
First, you can’t look at it in terms of what is the fastest route possible. If you do that, you’ll almost certainly never get there. You should absolutely set a specific concrete goal and give yourself a clear timeline for reaching it. But setting out to find the best way to make $1M in the next 30 days or the next 3 months will likely not happen. Spend more time thinking about 1) how to build the systems needed to grow and scale your idea 2) delivering a great product or service to the right group of people and 3) figure out the daily habits and tasks you need to be doing consistently every single day to eventually reach success. Success (and wealth) compounds. It’s very hard to hit a homerun immediately. But if you focus on getting consistent base hits everyday, you will be surprised at how quickly those wins add up. So focus on what you need to be doing every day, do it consistently, and build momentum.
I first started my agency when I was 15-16 years old. I am 24 now. So you could say it’s taken me almost 10 years to become an “overnight success”. The same is true for many young entrepreneurs who seem to have achieved success quickly at a young age.
Do you think in the future it will be easier or harder to become independently wealthy?
In my opinion, it’s getting easier thanks to the internet and technology. With that said, there’s also never been more competition than there is now. You are competing on a global scale. But even with that, technology has greatly leveled the playing field and allowed entrepreneurs to start and scale businesses for cheaper than ever before and to have more information and resources at their fingertips. In the future my prediction is it will continue to get easier for those who work hard and look for opportunities.
Name a specific characteristic a person needs to have to become successful?
To me the most important characteristic is discipline. It’s the characteristic that develops all the others that you need. If you’re going to be successful at this, you need the discipline to sacrifice short term pleasure for long term gain, persist for a very long time against seemingly insurmountable obstacles and shoulder a whole lot of criticism and pressure along the way. The rewards though are great.
If you could start with nothing and do it all over again, would you?
If I had to, I could, but I would prefer not to!
If there was no little to no money involved with what you do, would you still do it?
What I love doing is building great organizations that make a difference. I love the satisfaction of creating something from nothing, putting together the right systems and people to make it scale and seeing what your creation becomes over time and how far it can go. I would do that whether I was getting paid or not.
Chris Illuminati is a senior editor with BroBible. If you’ve got a story that deserves to be told, reach out to him here.