#272: BNI – Part 1 – The Unexpected Origin
Dr. Ivan Misner was looking for more business so he set up a business networking meeting. What happened next he didn’t anticipate.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
[Kooler Garage Door Ad]
Stephen Semple:
Hey, it’s Steven Semple here for another episode of the Empire Builders Podcast. And Dave Young hasn’t joined us today, but I’m really excited by the guest that we have for today. We have Dr. Ivan Misner and boy, this is going to be an exciting story. So Dr. Misner started an organization called BNI. I’m sure many of you are familiar with it, but those of you who aren’t, let me give you an idea of how much of an empire this is. According to the information I have, over 350,000 members, close to 12,000 chapters, 78 countries, annual member-generated business, almost north of $25 billion. I used to be in a BNI chapter, and in fact, I used to run a BNI chapter many, many years ago. The average chapter size is 30 members. That is just massive, especially when you consider it was founded in 1985, and as we were talking about before hitting the recording, out of your garage.
Dr. Ivan Misner:
Yeah, my garage and just a room above my garage.
Stephen Semple:
Oh, well, there you go. You started in the lap of luxury, room above your garage. But when you think about that, that’s like 12,000 weekly meetings happening around the world.
Dr. Ivan Misner:
That’s exactly it. Every week. And you mentioned 25 billion, in the last 12 months, it’s 27 billion in what we call thank you for closed business. And what I think is important to say is that’s not how much money the company has generated, that’s how much money the members reported that they generated in referrals.
Now, what I love about that number is, Stephen, if you take a look at the United Nations estimates of GDP, UN estimates of GDP, there are actually a hundred countries in the world, a hundred countries in the world with a lower GDP than what BNI generated for its members last year.
Stephen Semple:
That is just a remarkable number, just absolutely remarkable number. So tell me a little bit, because there is an interesting story here in terms of how you got started. So what started this? Oh, and the last thing I want to say is when we think about this in terms of institutions, in terms of whether it’s business referrals or business groups, this makes it one of the largest in the world. I think I’d be hard-pressed to find something that rivals the size.
Dr. Ivan Misner:
In person, you’re correct. We are the largest referral marketing platform in the world. Online, you can get a lot of people online, but we, as you said, have over 350,000 members who meet every week in person. Some of them are Zoom meetings now, and some are hybrid, but most of our groups still meet in person.
Stephen Semple:
And I think the thing that I’d like to stress just for listeners to understand is there’s lots of places that will have lots of members and the 80/20 rule. Some members are active, some members are not active. But in BNI, for you to be a member, you have to be active. You have to show up, you have to participate. So when somebody like BNI says, “We’ve got over 350,000 members,” that’s a real number.
Dr. Ivan Misner:
It’s a real number.
Stephen Semple:
It’s a real number.
Dr. Ivan Misner:
And we do expect participation in the chapters. And so some people don’t like that, because there are rules. We have rules and systems and processes, but I have found that the most successful businesses have systems and processes. The thing is that you have to apply the rules more like Mandela than Attila. And if you do that, and you do it in a caring way, it works. But I mean, look, hockey without rules would be boxing on ice. You got to have rules.
Stephen Semple:
True. It’s true. I love that analogy. So tell me a little bit about the early days. What led to the start of this amazing organization that you’ve managed to build?
Dr. Ivan Misner:
I would like to tell you that I had this vision of an international organization with groups all around the world. I am absolutely humbled by what BNI has become. When I started BNI in 1985, my doctoral work was in organizational behavior. I was a management consultant. I was looking for referrals for my consulting practice, and I put together … I went to networking groups that were all mercenary. Everybody was trying to sell to me. I felt like I was being slimed. I had to go home and take a shower. And then I went to these other groups that were like happy hour and hor d’oeuvres. Nobody’s wearing badges, nobody had cards. I mean, it’s like, that was too social. I didn’t like either.
I wanted something that was focused on business but wasn’t transactional. I wanted something that was relational, but not totally social. And the glue that would hold it together in my mind was this philosophy of Givers Gain, this idea that if I help you, you’ll help me, we do better. I just wanted one group. I needed referrals for my consulting practice. I got all my business through speaking engagements and referrals. Someone came to the first group, because as you know, we only allow one person per professional classification. She said, “Wow, this is amazing. I could get a ton of business out of this, but I can’t join. My profession’s represented. Would you help me open up a second group?” And Stephen, I actually told her no. I said, “No, this isn’t what I do. I’m a business consultant. I don’t run a network.” And she said, “Well, come on. This is kind of consulting. You’re helping me build my business.” I’m like, “That’s a stretch. Okay, sure. I’ll do it.” She was cute. What the heck? I’ll do it.
Stephen Semple:
Now the truth comes out.
Dr. Ivan Misner:
Yeah. I think that’s the first time I ever said that on air, by the way. So I opened up a second chapter, and two people came to that second chapter who couldn’t join because of a conflict with other professions that were in the room. And both of them said, “This is amazing and I could get a ton of business out of it. Would you help us open up our own groups?” And I said, “No, this isn’t what I do. I’m a business consultant.”
And they talked me into it, and it was just off to the races. At the end of one year, we started January of 1985. By the last week of December, I always take a week and reflect. Where do I want to be a year from now? How was last year compared to my goals? And that year was like, what the heck just happened? Because I had 20 BNI groups, and I wasn’t trying. That’s when I had my Brody moment. You remember Shark Brody in Jaws?
Stephen Semple:
Oh, right. Yes.
Dr. Ivan Misner:
Right. He sees the shark for the very first time, and he turns to the captain and he says, “You’re going to need a bigger boat.” And that really was my Brody moment, was the end of December 1985, where I realized I’m going to need a bigger boat. I’m being pulled through the marketplace. Consulting is like pushing a rock uphill, but I’m being pulled through the marketplace, and I needed to pay attention to it. And that’s when I sat down and started to write my plan to scale the business and to take it global.
Stephen Semple:
So let me ask you this. So I’m assuming all 20 of these are in Southern California, because-
Dr. Ivan Misner:
Yes, the first 20.
Stephen Semple:
… that’s where you started, right?
Dr. Ivan Misner:
Yeah.
Stephen Semple:
What city did you start in?
Dr. Ivan Misner:
First chapter was in Arcadia, which is right next to Pasadena, and Pasadena was the second. And then the San Fernando Valley and Diamond Bar were the next two.
Stephen Semple:
Okay. So they basically-
Dr. Ivan Misner:
And by the way, that first chapter, chapter number one, still exists today.
Stephen Semple:
Isn’t that awesome? Isn’t that awesome? That’s cool. But basically, how that initial 20 happened was just all people sort of going, “This is really cool. I can’t join, or geographically I want to do something different. Can you help me?” The first 20 were completely, “This is a cool idea, organic, let’s do it.”
Dr. Ivan Misner:
100%. They went through a chapter. I mean, think about it. There was no internet, and we didn’t advertise. We’re word of mouth organizations. It doesn’t make sense to advertise, although we did try it and found that if you’re a word of mouth organization, you should grow through word of mouth. It was all referrals and no internet. At that point, I didn’t even have brochures. All I had was an agenda typed up by me, Columbus style, seek out and discover. I typed up the agenda and if people wanted something in writing, it was like, “Here’s the agenda.” And they would say, “Well, this doesn’t really tell me a lot.” And I’d say, “I know, that’s why you got to go to a meeting and experience it. You have to experience it.” Then they’d go and they’d join.
Stephen Semple:
So it strikes me as this. The problem you were trying to solve was you saw opportunities for networking, and either networking was too take, take, take, or it was too social, social, social. There wasn’t sort of this thing where we can make this great for everybody. There was a gap in the middle. And what you did is you filled that gap, but you also filled that gap with this whole idea that it doesn’t start with getting, it starts with giving, and if you give, you will then gain. That was the philosophical-
Dr. Ivan Misner:
Yeah, Givers Gain. That was a game-changer for the organization, when I incorporated that into the organization, the whole idea that, look, first and foremost, I have to be willing to help you. And then if I help you, then we’re going to build a relationship and you’ll help me. That’s kind of what friendships are, to some extent.
Stephen Semple:
It is.
Dr. Ivan Misner:
You develop friendships because somebody does something for you, they help you, they’re there for you. They listen to you. They do something for you. And then you’re like, “Wow, this is a really nice person.” And then it goes back and forth. And that’s what we tried to at BNI. And here’s the thing, we don’t teach this in colleges and universities anywhere in the world. We still don’t, by the way. I’ve taught at three universities over a 19-year period, and I’m here to tell you, we don’t teach this in colleges and universities.
Stephen Semple:
We do not.
Dr. Ivan Misner:
A professor might talk about networking, but there are no courses on social capital, emotional intelligence, business networking.
Stephen Semple:
And it’s really interesting. I talk a lot, when we’re building marketing campaigns for our clients, we talk a lot about, and it’s similar to this, but different, talk a lot about gaining trust. You gain trust by giving trust. If you become vulnerable with somebody, you’re basically giving trust, because you’re trusting that they’re not going to judge you, and you get trust back. It’s a similar idea. To get, you give first. If I want you to trust me, first I need to trust you.
Dr. Ivan Misner:
Several layers to what you just said. When you give a referral, you give a little bit of your reputation away.
Stephen Semple:
Correct.
Dr. Ivan Misner:
And if somebody does a good job, it enhances your reputation. If somebody does a bad job, it hurts your reputation. Stephen M. R. Covey, in his book, The Speed of Trust, talks about the fact that trust is a currency. And you can use that currency just like you invest, you put your money in a bank, you put these relationships that you have in a relationship bank, so you can call on that relationship for help when you need it.
Stephen Semple:
Absolutely. It’s funny, we talk about that a lot in marketing. Yes, you build trust, build trust, build trust. And then when you ask somebody for something, you draw down that bank a little bit, but you’ve got to build that bank up first, so that you can spend it in the future. Anyway, that’s really cool. It’s end of the year, you’re sitting there going, “Okay, I’m doing this business consulting, but I’ve had this thing happen.” So no doubt you’re sort of going, “I can’t do both. Which am I going to do?” Tell me about that decision-making in that moment, because you’ve probably also not built, not only how can I scale it, but I don’t even know whether at 20 you would’ve even had the, “How do you monetize it?” thought in your head.
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Using Stories To Sell]
Dave Young:
Let’s pick up our story where we left off, and trust me, you haven’t missed a thing.
Stephen Semple:
Tell me about that decision-making in that moment, because you’ve probably also not built, not only how can I scale it, but I don’t even know whether at 20 you would’ve even had the, “How do you monetize it?” thought in your head.
Dr. Ivan Misner:
Well, we charge dues from the very beginning. I mean, you can’t operate … Chambers of commerce aren’t free.
Stephen Semple:
Correct.
Dr. Ivan Misner:
So you can’t operate any kind of organization for free. And so it was really under the umbrella of my consulting business. I did continue to do my consulting business for about, I think it was four years. I sold off my consulting business around 1989, and doing both, it just became impossible. I just couldn’t do it anymore. And by then we were in multiple states, and so the travel started to be problematic if I was also a consultant. So yeah, the thing is that from the very beginning, we really tried to write things down to teach people how to network, because like I said, we’re not teaching it in school. And so I’ve done quite a few books on how to network effectively, and it’s made a difference for a lot of people.
Stephen Semple:
So the revenue model was, the membership fees ends up becoming the revenue model, the scalability ends up becoming all these instruction manuals. And I remember being involved in BNI, literally there was a manual, and when you followed the manual, things worked actually pretty well.
Dr. Ivan Misner:
Amazing, isn’t it?
Stephen Semple:
Amazing.
Dr. Ivan Misner:
It’s amazing. And what happens is when people get off the system, when they get off the manual and they start making up their own stuff, it becomes problematic. And if I had to say one problem that has existed for … We’re working on our 42nd year, we’re in the midst of our 42nd year in business. There’s one problem that has happened in all 42 years, but I’ll tell you, before I tell you that, 42 years of consecutive growth, year, on year, on year, on year, we’ve had 42 years of consecutive growth, including COVID. The COVID years, we grew.
Stephen Semple:
Wow.
Dr. Ivan Misner:
And so very few organizations in the world, very few businesses in the world can say they’ve had 42 years of consecutive growth, not one year had lower growth than the previous year.
Stephen Semple:
That’s amazing.
Dr. Ivan Misner:
And so that, to me, is pretty amazing. The biggest challenge that we’ve had over time is feature creep, and feature creep is when people just start adding stuff to a system until it becomes untenable. In the book I was mentioning to you, I am literally tomorrow turning in the manuscript for a book called Garage to Global, and in there we call it the curse of complexity, and it’s a curse. Entrepreneurs just want to make up their own stuff. They want to make up their own bad word, bad word stuff. And when they do, they make it more complicated. I’ve had an opportunity to meet Richard Branson on a number of occasions, and I remember talking to him about feature creep, and he said to me, and this quote’s going to be in the book, is in the manuscript, “Any idiot can make things complicated. It takes a brilliant businessperson to keep things simple.” And he is right.
Stephen Semple:
It’s so interesting that you talk about this. So I have a book, and it’s called The Five Silver Bullets, and I’m kind of making fun of gurus running around saying they’ve got a silver bullet, because I basically say there’s five in a business. And most businesses, the challenge is there’s one or two that they’re lacking, and really what you need to do is figure that one out.
Dr. Ivan Misner:
Isn’t it interesting that people want that silver bullet? “What’s the one secret?” people ask me, on anything, business, networking, whatever it is. So you know what I tell them? And your five bullets, they’ll be great for this.
Stephen Semple:
It’s a bit tongue-in-cheek, right?
Dr. Ivan Misner:
But you’ll love this. Do you want the one thing? And people go, “Yeah, tell me the one thing.” There is no one thing. It’s a recipe. It’s always a recipe. It’s like a great meal. If I just serve pasta with no seasoning, no sauces, no meat, nothing, it’s just pasta. So it’s a recipe. And so I love your five silver bullets. I’m sure that’s a recipe.
Stephen Semple:
Well, it is, and it basically says there’s these five key things, but one of the ideas in it, and it speaks as complexity, and I’d love to hear your thoughts on this, one of the things in it is I talk about how, when you get things working, so of course, because I’m marketing, I talk about marketing, when you get it working, what’s the most successful thing you can do is more of what’s working. It’s funny, I was just having a meeting with a client on Monday where they, “What more things can we do?” And I said, “We should be doing more of what’s working.”
Dr. Ivan Misner:
No, double down on what you’re doing right.
Stephen Semple:
“We know this is working. We can do more of this. Let’s double down on this.”
Dr. Ivan Misner:
Yeah, I’ll give you-
Stephen Semple:
Let’s double down on the things that’s working.
Dr. Ivan Misner:
… let me give you a great example of this. In my-
Stephen Semple:
I’d love to hear-
Dr. Ivan Misner:
… own organization.
Stephen Semple:
I’d love to hear this.
Dr. Ivan Misner:
BNI is a franchise of people actually own territories. And so we had this one franchise that was number one in the world, the world, number one in the United States. And he came to me one day and he said, “I got this great idea. I want to add it on to what we’re doing. I live in a city that’s a real party city.” And that was true. His city is known for parties. And so he said, “What I want to do is I want to start throwing mixers.” I forget how often he said, I think it was monthly. It might’ve been weekly. I don’t know, but it was regular mixers to get people to come to the event and then we’ll get them to go to a BNI chapter. And I said, “Whatever you do, don’t do that.”
And he said, “Why?” And I said, “Because of a couple of reasons. First of all, it’s feature creep. You’re adding something … You’re the number one region in the world and you want to change something.” So that’s one thing. The second thing is it’s a double sale because you bring people to an evening mixer and they go, “Oh, this is kind of interesting. It’s kind of fun. This is BNI.” Well, no, this isn’t really BNI. You got to come to a meeting at 0 dark 30. That’s when the meetings actually are. And then they go, “Well, no, I came to this. I don’t want to go to a morning.”
So it just makes it more complicated. It’s the curse of complexity. Now, here’s the bad news for this person. He had the number one franchise in the world. We have a traffic light system is green, yellow, red, gray, number one and green. He went to being in the bottom 10 of the world within two years. He ended up selling his franchise at a fraction of what he could have sold it for two years earlier, because he wanted to mess with a system that he had already become number one in.
Stephen Semple:
That is incredible. But I want to dial the clock back a little bit. I want to go back, talk a little bit about in the beginning, but that is an astounding thing, and we could do a whole podcast on this whole idea of focusing, but we want to talk about the birth and the growth of BNI. When you first rolled out this idea, because BNI is founded on this whole idea of Givers Gain, and you guys don’t just speak it, you live it, I experienced it. But when you first rolled that philosophy out with business, what did people think of that idea? Did they find it interesting? Did they find it naive? Do people resist? What happened when you first started sharing that idea with folks?
Dr. Ivan Misner:
Well, the overwhelming majority of people really embrace the philosophy, the concept of Givers Gain, because you don’t hear that too often.
Stephen Semple:
No, you really don’t.
Dr. Ivan Misner:
In business. And the truly amazing thing, and I ask your viewers, your listeners, test me on this. Go to a BNI chapter, stand up when you have a chance to introduce yourself and just ask this. “In two words, what’s the philosophy of this organization? And if you don’t hear the entire room say back to you, “Givers Gain,” I’ll be shocked. Because it has been inculcated into the DNA of the organization.
Now, occasionally you get some people that are like, “Everybody is in this Givers Gain thing. It feels” … I had somebody in a group of about 500 people say, “I kind of like what you’re doing, but it kind of feels like a cult.” And I remember saying to the guy, there’s 500 people in the room, I’m like, “Okay. Yeah, that’s an interesting comment.” I said, “All right, if BNI were a cult, everyone would do what I tell them to do and they don’t. I try, and they don’t.” And of course the whole room just cracked up laughing.
And I said, “Look, cults lead by fear and intimidation. We lead by giving and support. And the truth is there should be more organizations out there that lead by giving, not by fear and intimidation.” And I got a rousing round of applause for that.
Stephen Semple:
The interesting thing is when organizations, I believe, that when organizations have a really strong North Star, and everything is reflective of that strong North Star, it tends to develop a little bit of that feeling. So affiliated with our organization, Wizard of Ads, we have a school. Well, it’s not affiliated with, but basically our founder built the school called the Wizard Academy.
Dr. Ivan Misner:
Yeah, I’ve been there.
Stephen Semple:
You’ve been to the Wizard Academy? Okay.
Dr. Ivan Misner:
Oh yeah, I’ve been there several times.
Stephen Semple:
Awesome. Awesome. So I’ve taught there, I’m a major donor there, big part of my life, but there’s a sign now, there’s a painting, “Totally not a cult.”
Dr. Ivan Misner:
Absolutely. I’ve been there multiple times. Alex Mandossian does training programs there.
Stephen Semple:
Oh yes, he does.
Dr. Ivan Misner:
And he’s invited me several times, and I’ve done some videos over at the Wizard Academy. Yeah. Right outside Austin.
Stephen Semple:
And it’s a great place to attend classes and things along that line.
Dr. Ivan Misner:
Yes, it is. By the way, that’s where I’m talking to you from, is Austin.
Stephen Semple:
Oh, is it really?
Dr. Ivan Misner:
Yeah, I’m in Austin, Texas. Yeah.
Stephen Semple:
All right. Awesome.
Dr. Ivan Misner:
Not that anybody else cares, but that’s where I’m at.
Stephen Semple:
Is that home base for you?
Dr. Ivan Misner:
Yeah. I moved-
Stephen Semple:
Oh, well then-
Dr. Ivan Misner:
I moved here about 12 years ago.
Stephen Semple:
Well, then next time I’m in Austin, which is in about three weeks, we should try to get together for a cocktail in Austin.
Dr. Ivan Misner:
That sounds great. I’ve got a pretty good wine cellar.
Stephen Semple:
Nice. Well, and then at the Wizard Academy, we’ve got the whiskey vault. And because I’m a sommelier, we can have a whiskey at the Academy as well. As much as I would love to talk about alcohol, BNI, was there a big roadblock that you had to overcome in the building of it? Was there certain challenges that you faced, or was it all just clear sailing and fun and-
Dr. Ivan Misner:
It’s so funny, because people look at someone who’s achieved some level of success and they think, “Oh, you’re so lucky.” As a matter of fact, I had a young man say to me once, he was in front of my house when I had in California and he was like, “Man, you’re really lucky.” And I said, “You could be as lucky as this.” And he said, “Huh?” I said, “Well, you would find your own path, but I got lucky by working 60 hours a week for 25, 30 years, by getting three graduate degrees, by mortgaging my house two or three times, by writing,” at that time, “by writing 15 books. You could become this lucky by doing those kinds of things.” And he laughed, and he didn’t get it. He didn’t get it. He somehow thought it was luck.
Stephen Semple:
So you’ll laugh at this one. It’ll be amazing. You reached that point where things have really exploded, and somebody’s interviewing you and talking about your overnight success. Meanwhile, in your mind, it’s your 10-year overnight success.
Dr. Ivan Misner:
Yeah, I was literally a 20-year overnight success, 19 and a half. And I’ll tell you that, because I lived in the same house that I started BNI in for almost 20 years. I couldn’t afford a new home, because I was putting all the money back into the business to grow the business. And at about 20 years in, all of a sudden I had more money than I needed that month. And it was like, wow, I can start really saving money, putting it aside. I can get a new home. Which was good-
Stephen Semple:
Well, [inaudible 00:25:52]-
Dr. Ivan Misner:
… because I had a wife that I’d been promising a new home to for 10 years.
Stephen Semple:
Well, there you go. That’s important. Was there a big moment? Was there a big challenge? Was there a setback? So what are some of the things that you face that you had to deal with in this journey?
Dr. Ivan Misner:
Feature creep is ongoing. I didn’t quite set up BNI to be as smooth a business as it could have been. Franchising in the early days was complex to figure out, but that’s not the single biggest thing. The thing that almost bankrupted me was …
Speaker 3:
Oh, no, no.
Speaker 6:
What?
Speaker 3:
I was enjoying this episode.
Speaker 6:
Don’t worry. Part two’s coming next week.
Speaker 3:
It better.
Dave Young:
Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat juicy five star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at empirebuildingprogram.com.
