The story of the hustling D-student who built a business from a dorm room never gets old, which is why I loved interviewing Kenny Dichter. That’s exactly how the serial entrepreneur, now the CEO and founder of Wheels Up, got his start. But what sets Dichter apart is his track record since then: building and selling one successful business after another.
In college, Dichter and a friend began creating and selling T-shirts with “Wisconsin flair” at the University of Wisconsin-Madison. The apparel line started to gain traction, so Dichter moved the operation from his dorm to a nearby storefront. That business grew to three locations before Dichter sold it upon graduation.
After his first success, the father of one of his friends, a clothing manufacturer, decided to back Dichter’s next apparel venture. His operation moved from Wisconsin to New York City, and he was soon fulfilling orders for the likes of Wal-Mart and Sears. As the company reached a tipping point, Dichter decided to sell it and start a new venture, a process he would repeat over and over again.
His next business took him into the world of sports marketing. His friend Jesse Itzler, a jingle writer, saw an opportunity to build a business around the music that played in arenas during sporting events. Dichter provided the strategy for Itzler’s idea, which was proven correct when the two sold that business to SFX entertainment for more than $4 million in 1998.
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At this point, Dichter was experiencing substantial success firsthand, and he noticed that no one in his social circles flew commercial anymore. On one of his first private flights, the idea for Marquis Jet was born. Marquis Jet was the first aviation option that allowed members to reduce travel costs by buying blocks of hours on a pre-paid card instead of purchasing their own aircraft. Again, Dichter grew his idea and made an exit, selling Marquis Jet to Warren Buffet’s NetJets in 2010. Before returning to aviation with Wheels Up in 2014, Dichter built and sold another business, Tequila Avion, an ultra-premium brand that sold for 100 million.
His latest success offers a the private aviation industry a membership model without spending requirements or hourly minimums. Wheels Up raised $115 million in funding in February 2016, and according to Ditcher, it now holds a valuation of $521.5 million with a projected worth of $1 to $1.5 billion by 2020.
Clearly, Dichter knows what he’s doing. Here are his top four pieces of advice for entrepreneurial success.
1. Embrace rejection.
Dichter explains that belief in one's self as an entrepreneur is paramount. One must be able to pivot -- and realize that hearing “no” is a good thing. Why? Because it means you are innovating.
“If everyone saw what you see, they’d all be doing it themselves,” Dichter says.
To embrace rejection does not mean to accept rejection, however. Dichter believes that “no” just means “not now.”
“Never take no for an answer," he says. "You have to have the belief in yourself that you can sit at the big table.”
2. Value relationships.
Dichter often says “my friend” or “my buddy” when referring to his partners. He also emphasizes that if you want your employees to treat customers like rockstars, you need to treat your employees like rockstars. Dichter clearly values relationships, and he cautions entrepreneurs never to burn a bridge. “As an entrepreneur you touch a lot of lives," Dichter says. "Just be fair, have integrity, do what you say you’re going to do.”
He encourages entrepreneurs to cherish existing customer relationships. Try to take someone who is “interested” and convert them into a “believer.” His advice for everyone trying to build the next Birchbox or Dollar Shave Club is simple: “The only thing that matters in a subscription business is can you keep [your customers]. Retention is the number-one value metric.”
3. Create a clear map.
Dichter is a huge believer in business plans. When Itzler approached him about a music business, all he had was an idea. It was Dichter’s job to make the plan turn from an idea into a business. This is a step many entrepreneurs aren’t executing well, Ditcher says.
“Ideas are fragile," he says. "Ideas are not enough. You need to have a concrete plan that can serve as a map."
4. Know your numbers.
An idea and a plan are also not enough, Ditcher says. You have to have the proof. Now that Wheels Up has 3,500 members, Ditcher can start to rest a little easier. Is there a certain number one needs to hit before a successful exit? Ditcher explains that the average life cycle of a great idea is five to seven years. If you want to maintain success, and you’ve taken outside investments, you need to prepare for your exit, Ditcher says. “If a restaurant is given five stars, sell the restaurant, because it doesn’t get any better than that.”
Ditcher, like many serial entrepreneurs, is in it for the climb, not the destination, and right now he’s on the way up.
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