The movement would be to have people’s proposals for projects and financing judged on the merits of the proposal rather than on the demographic identifiers of the person who is proposing it. The investors would look at the proposal rather than looking at who is proposing it. This philosophy would start a movement that would facilitate the crowdfunding of service businesses particularly in parts of the world such as Venezuela or Columbia where there is often little or no hope whatsoever for the entrepreneur with ambition to rise above his or her station. This is exactly where fin tech shatters fatalism. Fatalism defined, is the acceptance of all things and events as inevitable or a submission the fate. My argument is this. You don’t have to think of yourself as a piece of garbage particularly where you have been brought up to believe that this is what you really are. Where financing from the bank is impossible on account of whether your parents have any social rank, my movement would opt to support and reward great ideas with a series of micro loans. Micro loans are supremely helpful for those who can’t get a break from their traditional financial institutions and therein comes a leakage of entrepreneurship. The bottom 90% have no option available. In most countries the entrepreneurs come from the middle class or higher. In some cases the entrepreneur rises through the ranks from the poor social class, but in most cases, not. I would like to change that.
I had the pleasure of interviewing Dr. John Edmunds Professor of Entrepreneurship & Finance at Babson College. Dr. John Edmunds is an expert in financial reform, a professor at Babson College and a world economist frequently contacted by media outlets including CNN, BBC, Business Week, Tech Republic, Barrons, Bankrate and America Economia.
Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path of teaching entrepreneurship and finance?
It was an easy career choice and this was an especially natural progression for me. I taught many University courses and other subjects serving as a consultant all the while, going out on various jobs and the consistent theme was new business financing and new business creation. I found then and still find now, a lot of the things that I came to know about the subject. That people don’t know much about the process of new business creation in an academic framework seemed like a bit of an oversight and thought it might be substantial as well as possible to teach it.
Can you share your story of Grit and Success? First can you tell us a story about the hard times that you faced when you first started your journey?
I was involved in many businesses even when I was a young undergraduate and each time there was some moment of crisis where someone had either taken a sum of money out the back door, and other instances in which, someone didn’t actually show up to sell the merchandise or ended up delivering a set of shoddy goods to the customer and I took several hits on that process and had some periods of time when I got down on myself and even become aware that people were laughing at me behind my back and in some cases, in my face. I had to just find inside myself that I wasn’t going to stop trying to do things differently. I wouldn’t stop experimenting with new business ideas that could actually work.
I was going to continue to drive through that brick wall until it came crashing down.
People would often point out that I had a nice white collar job but a mundane, safe existence wasn’t very exciting for me. I wasn’t interested in that sort of life.
Where did you get the drive to continue even though things were so hard?
In a new business situation, you may find a moment when things really did not go the way you had hoped and in my particular situation, I had to decide whether it was because of me or because of the business. Is it that we were trying to sell the wrong thing to the wrong people or is it because we are selling the right stuff, but unsuccessfully. It got to the point where a routine triage included determining if the product was there or not, whether the team was there or not or whether I was the one incapable of performing at the level or in the role I was in. Often times I did start something new, sometimes even the next morning. I am just really glad that I am naturally optimistic, iconoclastic I would say, and there I go again, off working on another campaign or another opportunity to launch something new.
So how did Grit lead to your eventual success? How did Grit turn things around?
Nobody ever succeeds in some kind of rocket assisted takeoff unless you were someone like Mark Zuckerberg who had I think four thousand hits the first night he launched Facebook. Even a Harvard pedigree like mine does not ensure it. Most people had to scuffle about until they found their path and one entrepreneur that I know quite well, I saw in his kitchen when I went to visit him, that he had half a bag of rice — I’m talking like, one five pound bag — and had maybe one pound of potatoes that looked like they’d been there for a month and that’s all the food he had in the kitchen. And I was asking other people around what was this guy eating and they said “well, that’s what he’s eating”. So even he was far past the old adage “you have to eat beans” when hard times came to pass because the guy had actually run out of beans! Still, that didn’t stop him!
Everyone at some point or other was down and out working in the garage or their parents basement, halfway homeless, sleeping in the backseat of the car to save on gas. It’s brutal but it’s true and reminiscent of an old meme that went around about Coca Cola which had only reportedly sold 29 bottles that first year. Imagine what they would have given up has they not persisted!
So, how are things going today? :-)
I’m feeling really good because two of the businesses that I’ve been involved in for the past couple of years just had a really good day. Some news came through and and coincidentally both at the same time so I’m really having an up day. It’s quite thing when paperwork that you have been putting together for months is finally coming up for signature and you know what it says on it. When contracts go the way they are supposed to and all that is left is for the lawyers and accountants to sign off, its been a good day. You know where your income is coming from it’s a very stabilizing feeling.
Can you share a story about the funniest mistake you made when you first started teaching entrepreneurs? Can you tell us what lesson you learned from that?
I would identify two mistakes. One of them is that I’m a very poor judge of character. I got into business with a guy who several people told me not to get into business with but I liked him and found them quite confident. I knew that he was an alcoholic but I just didn’t know how much of an alcoholic he was until I got close to the guy. He just absolutely stank of rum and and ultimately became very ineffective. He was also doing several things that were distractions. That was maybe the key mistake I made in an early business venture that should’ve been successful and I end up having to wind it up. Another other mistake I made is having over invested in one thing and then not having been able to get out of it quickly enough. I learned to listen to people when they tell me something about someone especially if you’ve heard it several times. Do yourself a favor and don’t think you know better than some other person who knows that individual better in another context — listen. Also, don’t fall in love with one part of your portfolio or with one position. Keep diversifying and distinguish in your mind some form of blue-chip investment that is supposed to be safe as well as an option in the forefront of your mind things that is supposed to be your chance to hit it really big and when one of those really risky ones starts going down, take the hit and positively move on. Walk around the block and see if you can clear your head rather than to stew about your loss.
What do you think makes some companies stand out more than others? Can you share a story?
There are styles of management that could be classified as hierarchical, or dictatorial, top down where only the person at the top knows everything and the people at the bottom know nothing at all. Those people by definition are overlooked and undervalued and that doesn’t work. Less and less now, in a society with massive parallelism where many of people are co-equal people capable of doing the same role, but only in a different country, talent is bountiful. The possibility of putting something together involving people that are in different time zones is more an more feasible with apps and communications tools like Zoom.
The most recent business that I’ve been involved in starting up includes a person from Singapore, who’s living in California, three people living in Boston and they’re about to add another one in Argentina and the possibility of having a conference is extremely good because you could do it on the Internet instead of having all those people in the same room. Companies who are thriving can understand that there is no longer a need for people to be in the same room. It would be way too expensive and way too inconvenient. The idea that you have a business where there is one person at the top telling everybody else what to do and most people say yes sir is inane. Don’t ever set yourself up that way. If you find yourself in a situation that resembles it, change it. People come in and out in the gig economy and no one is necessarily loyal. People aren’t just sitting around waiting to get called upon, rather, they are seeking real opportunities to produce now.
Which tips would you recommend to your colleagues in the industry of entrepreneurship to help them to thrive and not “burn out”?
Don’t set any rigid timetables about when you should’ve accomplished something. Do what you can do when you can do it and when there is a little bit of down time, go away from it, because it is important to attack things with enthusiasm. You need freshness and creativity. One of the nice things about my life is that I love to come to work. Even if I’m not going to do anything with distinguished activity, I have found ways to break things up and keep the original passion alive.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I was extremely lucky and had a couple of bosses in my life that were really good about being bosses and helping to steer me in the right direction. Many were capable of giving me critical advice, most notably a CEO of a management consulting company who kept an open door policy. He had come from being a solopreneur to having a twenty-five person team. By the time I had left him five years later, he had 650 employees.
How have you used your success to bring goodness to the world?
I define my career as economic development. And there are periods in time when I begin to wonder whether I have done anything at all to alleviate the stress of poverty, which defined in metrics in the percentage of people around the world who live on $1.00 or $2.00 dollars a day. Recently, I have been looking around to see whether lately I have done anything to make the situation better. I feel that I have not drastically altered the direction of a given country’s economy but I have been a thought leader in this arena for the country of Chile at least and that was a very exciting time, especially because the impetus was there. I would go into a place where I saw someone doing well and used it as huge source of pride and inspiration for any positive change I could affect elsewhere. It would be great to continue this work for the countries of Venezuela or Argentina.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The movement would be to have people’s proposals for projects and financing judged on the merits of the proposal rather than on the demographic identifiers of the person who is proposing it. The investors would look at the proposal rather than looking at who is proposing it. This philosophy would start a movement that would facilitate the crowdfunding of service businesses particularly in parts of the world such as Venezuela or Columbia where there is often little or no hope whatsoever for the entrepreneur with ambition to rise above his or her station. This is exactly where fin tech shatters fatalism. Fatalism defined, is the acceptance of all things and events as inevitable or a submission the fate. My argument is this. You don’t have to think of yourself as a piece of garbage particularly where you have been brought up to believe that this is what you really are.
Where financing from the bank is impossible on account of whether your parents have any social rank, my movement would opt to support and reward great ideas with a series of micro loans. Micro loans are supremely helpful for those who can’t get a break from their traditional financial institutions and therein comes a leakage of entrepreneurship. The bottom 90% have no option available.
In most countries the entrepreneurs come from the middle class or higher. In some cases the entrepreneur rises through the ranks from the poor social class, but in most cases, not. I would like to change that.
This was very inspiring. Thank you so much for joining us!