The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 2 years ago

33. The Soul of an Entrepreneur with David Sax

ABOUT THIS EPISODE

The word ‘entrepreneur’ conjures a very specific image. Picture a white male from Stanford, or Harvard, who is bold, brash, and ready to change the world – and you're halfway there.

From the icons of the 1980s like Larry Ellison, Bill Gates and Steve Jobs, to today’s Elon Musk, Mark Zuckerberg and Jeff Bezos, to name a few, the legend of the entrepreneur has outgrown its former confines.

But are they reflective of the true face of entrepreneurship? Do they capture the wide variety of lifestyles and philosophies that lead people to start their own businesses?

Canadian journalist David Sax doesn’t think so.

In this episode, Sax shares the thesis of his latest book, The Soul of an Entrepreneur, which dissects the myth of the modern entrepreneur, and its impact on the accessibility of entrepreneurship.

Sax is the author of the best-seller, The Revenge of Analog, which was on Michiko Kakutani's Best Books of 2016 in the New York Times. His work has also appeared in New York Magazine, Vanity Fair, Bloomberg Business Week, The New York Times, Saveur, NPR, GQ and Toronto Life.

...thats new Siris of the Ivy entrepreneur podcast. You're invited to listen in on the guest visits, my hustle and grit glass taking place virtually at the Ivey Business School. Hustling great is, of course, that we created to teach you everything that you didn't learn in business school in business school. In it, we invite world class innovators and entrepreneurs to talk about topics like motivation, how toe learn, what to prioritize and even how to be happier. In these episodes, you'll hear live audio from my classes because, honestly, there's just something different about the energy, excitement and honesty taking place in a live classroom environment. So get comfortable, grab a seat and don't worry. Unlike my real class, I won't call value. Enjoy. David is a Canadian journalist. He was born in Toronto. He's written for publications like New York Magazine, Vanity Fair, Bloomberg, The New York Times Geek in Toronto Life. He's authored several books, including The Revenge of Analog Taste Makers and Save the Deli, which won a James Beard Award. His new book was the one that really caught my attention, however, the soul of the entrepreneur and typically when you think about startups do you think of, You know, people dropping out of college, raising venture capital. But really, entrepreneurs come in all shapes, colors, backgrounds on sizes. And so, in David's new book he spoke about he spoke with entrepreneurs all over the country, big and small, these side hustles and full time gigs. And he dug into how entrepreneurship really changes lives. So, please, if you don't mind, give a nice warm welcome to Mr David Sacks. David is still with us. There we go. I thought you were gonna maybe Hi. Nice to meet you guys. Eric, good to see you. I didn't know I had to wear a suit, but this is the most of a dressed up in, like, four months. So you don't. I appreciate that. You've got a shirt on today. You're welcome. And high there. Westerns. Westerners Hope you're not the ones who are going back to the bars and parties. Sure. Yeah. You're the good one. To the business students s. Oh, yeah. It's a pleasure is a pleasure to talk to you. I'm glad you started off where you started off, Eric, and it's interesting to hear what everybody thinks. So I'm interested to sort of get into it. Yeah, so I want to start with. I know your family has an interesting entrepreneurial backstory, So if you don't mind, maybe we'll start there before we jump into your book and what you learned. So where did your family's experience with entrepreneurship start? I mean, I think it's it comes down from every sort of generation of my family. You know, the oldest generation of my family. I know that's in Canada, like came in the teen fifties, and they were tobacco merchants and then in the clothing business, like many Jewish immigrants, toe Montreal andan the tool business. And you know, there's very few members of my family that I can point to that have jobs and careers in employment working for other people. Um, my father, since he graduated law school, basically just went and worked for himself and has always done that. My mother had a clothing wholesale business. My mother in law, same thing. She sold wholesale clothes like from card tables, even though she's one of the first females in Canada to get an MBA. And, you know, I've always worked for myself, I think, since the day I graduated from McGill, I went out and decided I wanted to be a journalist. I didn't tried to apply for some places. I couldn't find a job. So I was like, Well, I guess I was just freelance and right and write articles and write, write, write books And and so I think that's typical of a lot of people who can look at their families and see this sort of through line of entrepreneurship. And yet, even though there are people who have had great success within the family or within friends of mine, and have done very well for themselves in building businesses or careers where they are entrepreneurs around their own, there's no there's no grand Titan that there's no names that you would know about. There's no Elon Musk in my family or or anyone sort of that equivalent. Nobody's nobody's named a business school after them, and I think that's true for most entrepreneurs. You may know people who are successful. You sure all know or related to someone who has their own business. It works themselves. But when you go and learn...

...about entrepreneurship at a business school, or you read a book about it. It doesn't tend to focus on the 99% of entre runners out there who are people like myself or my wife or my father. Or maybe some of you know, your family, relatives and friends who go on work themselves and may have a business may not even have a formal business, but might just be self employed like I am and do it for all sorts of different reasons that are probably not something that you discuss in a class like this. So when we opened the class, we had a chance to get to know everybody and wanted to learn, like what People wanna learn about entrepreneurship and why they took the class. And a handful of people mentioned sort of the sensationalized version of entrepreneurship that I think your book sort of tackles and that with that article tackles, you know, you you drop out of college, you start a mobile app and you raise a bunch of venture capital money. Where did that start like? When did that? Actually, no, it wasn't that way forever. Where did that get started? You know, I think it's it's always been there. I mean, the popular vision of entrepreneurship is kind of something that comes out of the industrial Revolution, right? You know, prior to that you had wealthy people who are merchants or, you know, wealthy individuals. But, you know, you were in a system in Europe or it all dependent on whether you're working or not. And so the the industrial Revolution happens in the middle of the 19th century, and suddenly you have these technological innovations that open up all sorts of businesses. And you have these business people who become these global names Rockefeller, Carnegie, J. P. Morgan Thompson here in Canada whenever I know who was the king of Canadian first. And, of course, that that grows with different eras. But it becomes like that that individual becomes sort of a hero in their own story. They write books there. They themselves become these sort of popular celebrities. You really see it growing in in the culture, starting with the computer age. And so, you know, in the 19 eighties you have Bill Gates. You have Steve jobs. You have others like Larry Ellison, who, because of the nature of the technology and the thes sort of exponential growth that it affords are able to build these tremendously successful, powerful and influential businesses seemingly overnight. And they're not the sort of business heroes that you would read about that were sort of known people like Lee Iacocca. You know, the great auto magnate from Chrysler, let's say, or Warren Buffett or something like that. It is, You know, there is this, that there's almost like a pop culture element to them. I mean, Steve Jobs has had Mawr movies made about his life than Martin Luther King. I was at a retreat like a corporate retreat center outside Toronto a couple summers ago, and, you know, it's like a really like conference center, very whatever. They have a lot of conferences and then a wall of heroes, and it was literally like, Ah, picture of Mahatma Gandhi and a quote Mother Teresa to quote Martin Luther King Jr in a quote, you know, Barack Obama. And then it was like Steve Jobs, Mark Zuckerberg, Peter Thiel like it. Suddenly, the idea of an entrepreneur was more than just. This person is successful in built a business. They were a moral force, a force of leadership, a character that was worthy of, ah, cultural interest. That was far more than just the business in the invention they made. And that over the past 20 something years has really accelerated tremendously with the Internet revolution, the mobile revolution and the Revolution. And, you know, various other digital technologies that we've seen so much so that has become this sort of package thing. So now when you talk about that myth of the startup entrepreneur, we have an idea in our...

...head of what that means. Oh, it's a young individual. They're probably probably male. They're probably white. And they probably went to Stanford or Harvard, right? One of those two schools. Sorry. I mean, nobody's you don't have your hero yet, Andi. They They're really bold in their brash and they say cool things and they probably dropped out and they say the health authority and they're gonna change the world, right? We've all watch Silicon Valley on HBO. I mean it z this trope, but it's become that narrative that we've come to expect. We've been fed it, and so often what you see is people playing into it. The best example of that is Elizabeth Holmes. Everyone know who Elizabeth Holmes is now. Elizabeth Holmes was a 19 year old Stanford University student about guess a decade ago who decided she wanted to reinvent the way blood testing was done. And you would do it by pricking your finger and putting a drop instead of taking needle out of your arm. And she managed to build a company called Theranos by dropping out of Stanford and raising, uh, it was like, I don't know, UH, $70 million with the venture capital money, maybe more. Maybe it was a couple $100 million for the venture. Happened of money, massive investors, you know, huge people on her board. It was like basically, every former chief of staff of various presidents were on our board, and the whole thing was a sham. There was never any machine. The technology never work. Now she's being tried in court, and actually, I think just claimed insanity the other day, part of her defense. But what she sold the world was herself is a vision of an entrepreneur. Her dream was to become the next Steve Jobs. Someone said that she dressed in black turtlenecks that she ate the same diet is jobs that she treated people like crap in the same way that Steve Jobs said, like you could read the Steve Jobs biography by Walter Isaacson and you could follow her career and it was this parallel thing and the staff said they did the same thing. But she was so successful in raising all this money because she knew that was what people expected of an entrepreneur. They didn't expect a middle aged African American woman, for example, that wouldn't have flown, but she fit into that into that type. And so So what you've seen is that entrepreneurship has become well, it's still this broad thing of way, said Microphone, over anyone who goes out and works for themselves in the culture. It became so lionized and yet in that very narrow way that it excluded the vast majority of entrepreneurs by who they are by what their background is by the industry. And most importantly, I think, by their motivation for being an entrepreneur, because no two entrepreneurs want to do the same thing, even if they're doing the same business. So we'll go back to that original metaphor. You talked about Eric, the pizza business, right? There are 100 places to get a pizza. I'm sure in London. Uh, definitely here in Toronto, A place like New York. Whatever. Right? And yet each one of them has their own thing. This one's gonna be the high end Neopolitan place with the 500 degree of in this place is the chain that's gonna be the next pizza pizza, the next Domino's. This is the just greasy 3 a.m. late night slice place that you're going to go after the bars let out and every owner behind them. They're not all trying to become that next Domino's or pizza pizza. They want to do something. Someone's might just be happy making the perfect pizza. Someone might just do it because it's a way for them to have a business that they work five days a week and it'll put their kids through college. Maybe there a recently arrived Canadian and they wanted something that they could get into in order to make sure their kid could go thio ivy and get a business screen, go on and get a good job and banking or consulting whatever. All of those motivations air genuine. They're all entrepreneurs, but we only really talk about and teach that one example, which is like, Oh, you want to start a pizza business? What's the most disruptive pizza business you could do? Here's how you can get all sorts of venture or private equity financing in order to leverage that the most and...

...then innovate so you can be the biggest pizza chain in the shortest amount of time. But that model of pizzeria to use the original Italian term might not be the one that you actually want might not be the one that speaks to you. Maybe you just want to sling the perfect pie, and that's okay. And I used to be a food writer back in the early part of this career, and I interviewed tons of people who owned Cupcake bakery, sandwich shops, restaurants, pizza, places that used to be management consultants, lawyers. They had MBAs, and it was like I was doing that and I got fed up with it, and I really just wanted to make the perfect pizza or open this type of pizzeria or whatever. And I did this because this is what appealed to me, and that's the thing that I think we tend to forget about entrepreneurship. When we talk about it in an academic context, we see it as an economic activity. But fundamentally it is an emotional, personal active right. If you're going to go and leave the certainty of a job and the salary and benefits that come with it and the check that comes every two weeks, it's not a rational economic decision. Most businesses failed. We know that most people who go to be entrepreneurs are not successful in the way that they imagine. And yet they're driven to do it by something that is inherently true to that, which is this personal emotional motivation. And that differs for each entrepreneur. And so it is as diverse is, you know, the faces in this class and the colors of the rainbow, so to speak. It was a very, very, very roundabout answer. You covered a lot of ground, and I like I like it on it, right? No, But if you were, you get a good grade. Um, so it sounds like you could take it to mean that it's sensationalizing it as a bad thing, but I'd say when I was in the shoes of the students in this class. I took this class when it first started at Ivy. I had those same ambitions. I think I was drawn in by the sensationalized version of entrepreneurship, and I think part of that is what drew me to it. And maybe I would not have been drawn to it if I wasn't thinking that I could be the next Maybe not Steve Jobs. But you know, whomever, the Canadian version and the life that all of that affords. So is it a Is it a bad thing? Net net for entrepreneurship? Or even if people don't ultimately achieve it? Or is it a positive thing? And that is getting more people interested in entrepreneurship to begin with? It's a good question. I think it's a little bit of both. So the positive is entrepreneurship is cool. Entrepreneurship is interesting. As maybe Kyle said, You know, Gen Z is the most interested in entrepreneurship of any generation. Kyle, I don't know if that was You are one of the heads to your right. We'll get incredible. It was you had a boy. And so yeah, if if you know the lionization of Elon Musk or the wonderful puff pieces about the brilliance of Tobias Luke, Um, or whatever. The latest genius to sort of create something and be super successful gets more people motivated in business and interested in starting their own thing and leads them to instead of opting for graduating and going to work in McKinsey and being miserable, you're gonna be miserable if you go into consulting guys. Hot tip, but rich but miserable. You know, if they're like No, I'm going to start that pizza place where I'm going to start that car parts business or I'm going to start that flower delivery app. Whatever the hell is calling you, then that's a positive thing. The downside of it and the danger is that when we reduce entrepreneurship down to that one model or that one archetype and we teach it in that way, and we finance in that way through what I assume is the Ivy Business School incubator, which has probably a number of venture capitalists on its board and has a pitch demo day in a startup, they and show me your hockey stick and everybody...

...does their five minute pitch with the same stupid you know, Power point presentation you're asking people to paint by numbers in a very small box, and you're you're actually limiting the possibilities of what people concede as a potential opportunity in business. You're getting people toe to feed what they think that model wants, which is like Okay, well, it's gotta be a fast scaling business. I got to show them what they want, because that's what these funders like. It's like Dragon's den, Um, or let's dragon's den, right Shark tank in the U S Like it. You know, you got to go up and you got to show the type of business that Kevin O. Leary wants. To hell with Kevin O. Leary. I mean, the reality is most people that you go and talked about in the community, in the London community, in the Toronto community, auto, wherever you guys air from our from parts further away, like they didn't build their business by writing up a pitch deck and standing a bunch of in front of a bunch of wealthy investors and saying, Here's how my idea is going to change the world. They just went out and built that business and did it for their own reasons and they succeeded or failed based upon what happened in the cycle of that business. And the other main problem with that is that that model of entrepreneurship which will call the, you know, I call the Silicon Valley startup model, which is very much based upon that. Right. What's your idea? How you gonna present it? Give me your pitch deck. Where is the hockey stick? We're gonna inject in venture capital yada, yada, yada. It's exclusionary by its nature. 90. I want come someone guess what? Percentage of venture capital funding in the United States went to companies led by women? Uh, in 2000 and 18, which is the last year was available. Anybody wanna hazard a guess what percentage VC funding in the U. S. Went to companies led by women. We'll take looking for answers. Maybe in the chat. Let's see. Throw some answers in their 10%. 1% percent. 7%? Yeah, it was like to point 8% which was an all time high, So Congratulations, ladies. The glass ceiling has been shattered. You know, similar numbers for for minority founders, black Latino founders. This was in the U. S. You know, you see a similar thing here in Canada. Most of the venture capital funding goes to people who graduated from Harvard or Stanford. It's like 40%. The vast majority of venture capital funding goes to companies that air in the San Francisco Bay area and then New York City. Even Seattle, home to Microsoft and Amazon gets like, I don't know, 3% of VC funding. So it is a system that excludes the vast majority of people who are entrepreneurs. And you could say, Well, you know, the people who go to Stanford or geniuses and they deserve it. But that excludes a lot of you. I'm looking at here, and so the issue isn't that we've glorified entrepreneurship. It's a glorified, only one flavor of it. To use the Ben and Jerry's, we've we've glorified the that I was gonna make up some stupid Ben and Jerry's name that would involve keep going with us or something. But if anybody could think about Ben and Jerry's name that involves Elon Musk or Zuckerberg or Steve Jobs, um, please tweeted in here, we'll take. We'll take votes in the chat or in this channel? Yeah, exactly exactly. Crushing it flakes or whatever. Anyway, I digress. Um, you know, if you're only promoting that one type of thing, it is turtleneck toffee. Bless you, Dalton. God bless you. That's jeans if you're only promoting one type of entrepreneurship. One. You're doing a disservice to all the people who might be excited about entrepreneurship but may only see it in a narrow framework and may not see themselves in that because they don't have the expertise or the knowledge, or it's again doesn't speak to them. And so we'll go and take that boring job at Deloitte and have their souls knocked out of them. And then, only later in life realized that this was the thing that they want to...

...dio but mawr importantly than that. What we're talking about are some of these fundamental issues that we're talking about today, which is economic inequality and the inequality of opportunity, right? One of the fastest growing groups of entrepreneurs are women of color in Canada, in the United States. Elsewhere in the western world, right black women, Latina women, brand women, indigenous women, they're starting businesses at a faster rate and growing every year. And yet, of course, they get a percentage of funding and percentage of, of course, is taught about them. The stuff doesn't reflect them because it's not that big thing. And so, yeah, maybe they're starting a nail salon. Maybe they're starting a small home catering business or a daycare business or something that's going to appeal to that knowledge or skill set. But if you're not promoting that, if that seems excluded, and those people are not only seeing themselves less like to be able to start something, but when they started less likely to get funding and support and education, then you're already growing the gap of inequality that exists in the economy and in this society. And so we know that, you know, for immigrants, for new Canadians, for people of color, for example, group indigenous people, Canadians, these we're talking about groups that are are dealing with a systemic disadvantage. One of the things that has been shown thio over the long term shift. That disadvantage is entrepreneurship, right? For many, I mean, who here is is comes from a family of immigrants, second generation or her third generation, right? Who here in that of those families of immigrants, have have family members who are entrepreneurs. Many pretty much one of those hands goes up. Why? Because they're like, Oh, Mr Boyle, what did you do in India? Oh, I was an engineer. Okay, Well, sorry. You don't qualify for that anymore. But here you go. Here's, you know, good luck doing something. And so I imagine that I'm just writing the narrative here that that family member decided to open up their own business out of either unidentified A or a lack of other option. They became an entrepreneur. And that allowed for that intergenerational transfer wealth that you don't get when you work a Timmy's. And so if we don't focus and make it more accessible, that version of entrepreneurship, which is the entrepreneurship that 99% of people are gonna be Maurin touch with than the founder of Cem Genius company, which is always gonna happen. You're always gonna have your huge success is out there in the world of business, wherever you are. Whatever the circumstances, we're doing a disservice to entrepreneurship. We're actually lessening it. And as much as you may wanna be one, it becomes less accessible. So can you paint a picture then? Yeah, No, this is This is good, because you're covering a lot of the questions that I had in one so we could go past 4. 30. Don't worry. So still, a handful of people are thinking this is all well and good for everybody else. But, like, I'm different, you know, I'm gonna I'm still gonna go for it, which they hope they are. I hope they are the one. But could you paint a little picture? You did your homework here. You traveled around? Uh, not just Canada, but the U. S. And maybe further than that. And you talk to a bunch of entrepreneurs who, despite the fact that they aren't the next Steve Jobs, have pretty darn good lives and some of them to find that by making decent money, some of them to find that by having a good lifestyle, the thinking about the Rockaway Beach story. So could you maybe share some of the stories of entrepreneurs who, assuming that these people are gonna learn everything they need to know in this class in order to be successful? Of course. But what are some of the nice stories that don't end up like Steve Jobs? but still end up pretty happy. Yeah, Yeah, You mentioned Tracy. Tracy Belski is, you know, grew up outside New York City in New Jersey. Um decided to become a pastry chef, I guess in early twenties, after working in a bar, graduating from like, graphic design school, realizing she didn't want to do art and got to become a really well known pastry chef in some...

...high end New York restaurants where you know, if you are a chef or a cook to be like, written up in The New York Times and one of the top pastry chefs in New York City is, you know, you're in the you're in the you're in the N B. A leagues of cooking. But, you know, the job was a grind. She would work in basement kitchens without windows from early morning to late in the night, you know, working for male chefs who would treat her like crap for very little pay. And, of course, you know the male chefs, we get promoted ahead of her and and you know, she was burning out like many people do. And many businesses, especially that one. And she also moved out to a place of New York City called Rockaway Beach, which is actually like you could take the subway to it. And it's a beach community on the edge of New York Queens Kind of work. JFK Airport is. And you could go surfing there. I used to go surfing there, and she got into surfing. She was doing it with another friend of hers who was also a chef, the restaurant and moved out there and was like, You know what? To hell with this. Like, I'm gonna I just wanna live out here. I want to serve. I want to enjoy my life, Wanna work? But I'm done working with these restaurants, you know, I'm done with that. This is not the dream that I thought it was gonna be. And she started by baking croissants and pastries in like a broken down shack and a fishing marina. And, you know, she was dealing with toxic waste and all these fumes and the oven wasn't working. But like every morning, she would, you know, sit there and roll Quest, Santo, looking at the sunrise over the bay and smoke a joint, and she's like, This is great, you know, borrowed a bunch of money, you know, took loans from the bank, opened up a little bakery coffee shop called the Rockaway Beach Bakery and basically opened up. And and that's what she does, like Every morning she wakes up, she takes a bomb hit. She actually is. I have not seen a bonk since I was in university, but this is a grown woman. Takes bomb, hits something to learn. There she goes out, puts on her wet suit, walks like 500 ft into the ocean, go surfing for an hour, you know, watches the sunrise, takes a shower, takes her bike or skateboard along the boardwalk. Looking at the dolphins, jumping opens up her bakery, works her ass off like rolling dough, making coffee, making pastries for eight straight hours where she barely has time to, like, take a break to go pee cells. All that stuff talks to people, is sort of the center of this community, you know, closes up, cleans up, preps the stuff the next day, takes the bike back, Another bomb hit surf dinner, hanging out with friends. Goes to bed early. Repeat that six days a week, you know, with like maybe a week off a year, right? So she works really hard. She makes money, but she doesn't make tons of money. She's not making exponential growth. She's not trying to franchise this thing. She wants it to be a lifestyle business. The business was designed to be a lifestyle business, and if you speak to a venture capitalist or anyone in sort of the world of private equity, something a lifestyle business is a four letter word that is the least desirable thing because you can't extract greater profit out of it. It exists in this sort of sustainable state for the owner. But if you're that owner, a lifestyle business is great because it affords you the thing that everybody wants and is very hard to buy. When you're working your butt off at a job at a law firm or or any sort of business. That's sort of seeking that exponential growth, which is that lifestyle. It's time with your family. It's time with your friends. It's time to do the things like surf that you want to dio, you know, read the biography villain Musk read a biography of Steve Jobs and Beyond the Greatness and the genius or the stories of two guys who turn through marriages, abandoned their Children, never took a vacation, never decided to sort of enjoy the things in life. And they're held geniuses, rightly so for their inventions and their ideas and whatever. But like, you know, you have to question at a certain point what life is, and I think a lot of people like, Oh, I'm gonna, you know, sleep when I'm dead or I'll enjoy my...

...life when I make that billion dollars. But that's not how the roller coaster ride works and not to plug plug your wife too much. But I felt like the when my wife and I were on that path. We got to know each other because your wife helps people with that transition. I think we were on a a path where we were not gonna say, growing apart. We had a pretty solid foundation in our relationship. But when you're both travel, you have two kids and you're both traveling a quarter million miles a year. You sort of high five on Friday night, you know, catch up on sleep and then you're on the air at the airport again. on Sunday. We hit that moment where it was like For what? You know, like what? What are we doing here? We're gonna be one of those statistics where you give up everything in order for what? A newer car that no one cares about. Like no one cares about. Legitimately So. And you're I mean, there's a whole industry now of people who help you through that transition of like that crisis of I thought I would wanted this thing, but I ended up not wanting this thing. So this class is about trying to teach people the skills that they need to be entrepreneurs or to think entrepreneurially. You had some anecdotes in the book about things that you learned from your father with respect, entrepreneurship. What are the things that we should be teaching or can be teaching? Young entrepreneurs are hopeful entrepreneurs. So I think we we get back to that definition, right, And I'm not sure what article you shared with with the class that I wrote, but all that happened, like the initial Covad fog. So it was just like stealing five minutes away from my Children toe write articles in the New York times wouldn't recommend doing that again. But here we are. We talked about that Schumpeter definition of an entrepreneur. Schumpeter. Joseph Schumpeter was not the man who coined the term entrepreneur. He wasn't the first one to write about it in that sense, either, right? He came around. He wrote that in 19 47 I think, like two years before he died. You know, the term is a French term, and it used to meet all sorts of things. Ah, military commander, Somebody lead in orchestra. I mean, it kind of goes back. But in about 17 30 there's this French Irish economist, Richard Continent in Paris, and he writes a book which actually gets published like 20 years after He dies. It's a series of essays on the economy. It's one of the sort of first books about modern economics, and in it there is a chapter on the entrepreneur and he says, You know the entrepreneur. There are two types of people in the world there, those who work for someone else for a fixed wage. You're gonna be paid $1000 a week or whatever, and there's those who work for themselves and all the rest are entrepreneurs from the beggar in the street and the farmer who takes their pumpkins to market to the wealthy merchant who send ships across oceans and hand sort of grows these empires. And I think that, you know that is still true today, I think. And what is the thing that links all of them together? What is the thing that links the person who might have a side business or side hustle in their dorm room with Western selling logo caps? Or, I don't know, used to be wheat, but I guess not whatever, like selling some service or some sort of thing. But does anyone here have a small business that they dio? I'm going to use you as the example. No masks. Anybody in the mask making business can't get to mute quick enough for put up their hand. But there are a handful for sure. Okay, yeah, so whatever your business is, right, whatever that thing is to your your tighten the business to the guys that Shopify or you know, whoever owns that, that sort of big thing, the poster child of entrepreneurship and the only thing that links them together. It's not money. It's not. Growth rates is not funding. It's not Children screaming the background. It is two things. It is freedom and risk. Every entrepreneur has an except that duality of forces into their life when they become an entrepreneur and they live with it throughout the course of their life is an entrepreneur. The freedom is the freedom to determine your work, what you wanna work in, how you wanna...

...build that work and and why it's important to you and how you structure your life and your work around each other, right? And so for someone like my wife, Lauren, who is a career coach. And that's how Erica and owner and I interviewed for a podcast and myself, you know who is a essentially a freelance writer and speaker and journalists like we have structure life around that idea of lifestyle we want to spend as much time with their kids is possible, and we probably least sacrifice money to do that. But this past summer, for example, you know, after dealing with fighting with the kids and juggling school, home school and and whatever in this pandemic, I was like, I'm not gonna work this summer I'm going to do nothing but, like, just be with the kids because there's no other option. And that was the freedom that I had. So that freedom on the others and this factory could be I'm gonna be the person that builds the billion dollar thing, and nothing is going to stand in my way. I'm gonna put 100% of my time to it, and I don't care what happens. I'm going to be the person that chooses my freedom to get back to my community. I'm going to do it in order to live up to a certain set of values, whether their environmental values of religious values or social values or whatever it is, it is the freedom to define your work in the way that Onley you can. And the only way to do that with complete control is by working for yourself because you can't go and work in the Kinsey and say, Oh, but by the way, I want to define my work in this way. And I like to see that thing. It's a door, Yeah, but along with that freedom, which is the intoxicating, wonderful part of entrepreneurship that everybody keeps everybody up at night thinking about these wonderful things that could happen. The great success that could have the difference that could have what their life could be like, if only they were to do. This comes risk, and they're inseparable. The risk, the risk. First of all, yes, financial risk. If I don't work and don't succeed, I will not have this roof over my head. I took the summer off of work. I made $0 because nobody was paying me anything because I decided not to work. There was no check coming in. I didn't take servant and take the Justin bucks probably should have. And so you know there's always that risk, the risk that the business could fail. And of course, now, during the pandemic, you go out in your community, whether it's London or you're in Toronto, and you look at all the stores and restaurants and gyms that have closed down and hopefully seeing the strip clubs. And you know that behind that boarded up window is a family and a life and hopes and dreams and investments and debt, and that leads to the other part of the risk, which is more than just money. It is that personal thing, right, because as an entrepreneur you tie your personal identity and your life in with your business. It's your idea. It's your capital. Tell you, identify yourself. I am David Sacks, the writer. Here's my name on books. This is all I kind of have. I am so intricately tied to that that when the inevitable ups and downs of the business cycle happened, I am tort along with that, personally, in a way that I can't blame on the bosses upstairs or the market or Susan. An accounting screwed up the thing or whatever. It's all on me. And that's the other thing that keeps you up at night. Is that worry not just about your financial performance, but about the very essence of your identity. And so while most courses and books and and articles about entrepreneurship will focus on the business strategy and sales and marketing and all this sort of technical aspects that you need in order to become and grow and succeed is an entrepreneur and all of those air extremely important. Whatever Eric's teaching here, listen to please, one of the things you actually really need to start thinking about. If this is something that you genuinely want to pursue, is that relationship between the freedom and risk and how you're...

...going to deal with that? What is the freedom that you actually want? What is your reason for being an entrepreneur besides just making money? Or maybe that's entirely it. And what is the risk that you're willing to entail to do that? And how are you going to deal with that? Because it is not going to be just this great. I wanna be a billionaire and I'm willing to take the risk if I lose the money or whatever, it's gonna be a much more complicated thing. And this is the thing that often separates the entrepreneurs who are successful in the long term from those who aren't is that they're able to deal with the emotional consequences of it. They're able to navigate the you know, they're able to endure the roller coaster ride, the ups and downs and the twists and turns and all the nauseating stuff in the middle, because that's what it is. Yeah, yeah, so I think there's a t least I thought I would be the exception. You know, like no Aiken. Balance it all. I'll have the perfect family life and I'll be in good shape and I'll eat well and I'll be a great dad and I'll keep cooking my own meals. Yeah, I'll volunteer. And all those things, uh, do the reality is a t least for me the after kid number two, it just all sort of. I was, like, somehow keeping it together, and then it all just sort of fell apart. You're not supposed to tell that to the 20 year olds, Eric. Well, I think reading it yet. Well, I think it ultimately kid screwed up. Here is the lesson from this or everything up? No, but it's a there. There are forcing function because it made me think about what we're actually was important. And I ended up coming back to teach full time. And I feel like, truly, this is where I'm This is where I wanna be in some capacity for the rest of my life. So cool. So the balance between freedom and risk. I like that we're a little bit over time, but I know you've got some flexibility. It sounds like which is awesome black hole. We won't spend too much time, but I've got a bunch of questions not in that chat, but privately to me and students had a chance to up vote them. So there's one that got up voted the most, and it's from Azman. Do you wanna? So the original question was your view that the vast majority of VCs are don't realize that all of these biases air baked into their investment philosophy like the question was like, Do they not realize that those biases air baked in? And why do they continue to focus on this sort of model? Given that the majority of companies and founders don't fit that narrative, that's a really good question. I think there's a realization that it is an issue, like other issues like systemic racism, you know, in various other parts of the society. But it works for them. So, you know, we've elevated the venture capitalist to this exalted place as this kind of gatekeeper of entrepreneurship, and that's happened through the success of companies like Facebook and the popularity of you know, well known VC investors like Peter Thiel, who is a truly evil individual, and you know Mark Andresen and others here in Canada, for example, you know who are constantly written about and profiled and and asked to sit on panels and whatnot on DWI baked it into these models of demo days and incubators and accelerators and whatnot. But we have to remember that venture capital is like a very small percentage of the world of investing, even in entrepreneurship, right? Most entrepreneurs, most people, starting businesses, even successful, huge businesses that you know about Canadian tire Lululemon. You know, pizza, pizza, whatever. Like they don't go to venture capital. They don't seek venture capital. They don't need venture capital. Venture capital doesn't fit. The venture capital is for a very particular type of business. And yet we've expanded it in our popular imagination to be part of something, something bigger and something grander. And I think you know, to your to your question like, Why do they not sort of seek that? It's like they're seeking the thing that fits into their model. They're seeking the peg that's going to fit into the hole that that they have, which is like we want a company that we...

...could invest X amount of dollars in. It's gonna do you know, 10 to 100 X in in under 10 years so we can deliver this return to our investors that, you know, you know, 10% minus are 2% and 20 carrier or whatever that fits into that model. But that doesn't suit most businesses. That doesn't suit most entrepreneurs. And when you focus so much on that, you're actually missing a ton of economic opportunity off all the businesses that don't necessarily fit into that. But could be huge, wildly successful businesses that, if you invest in in a different way, could actually provide a great return. And so there are, ah, growing cohort of alternative investors, alternative investment funds. Even in the world of kind of venture and technology, they're saying, Hey, this model of the way the venture capital has been structured and the incentives that it has in the and the problems that it generates by virtue of what it demands is broken. And they're trying to build new alternatives that that are gonna allow for, let's say, more sustainable growth or for a company and say, Look, we want you to grow this company, we want you to have profits. We want you to grow sustainably. We don't want you to just have it and exit in five years. That is actually against what we want, and we could see a greater value in that. But we become so obsessed with that one thing that we measure so much against that. Yeah, that's good. So another one here that's got up voted the most. So do you see a problem with the way business planning is taught at universities? So how best can you balance the importance of good analysis? So, for example, in our one of our projects, you know, write a business plan and how big is the market and who are the customers and all of those things? Eso How do you balance good analysis with just, you know, paralysis by analysis? It sounds like a lot of the entrepreneurs you interviewed didn't write business plans. They just said, I want to do this. Let's go Saudi balance those two. Yeah, I think it, you know, again, it's remembering this things inherently personal, and there's no right answer to it. I think that's the thing, right. Like coming up with a plan is good looking at. Okay. How much is this going to cost? Like, let me do a little bit of research into this to see if it's sort of a viable thing is a smart exercise and these air tools that you can use, but I think where it gets dangerous or almost anti productive is like Okay, So as long as I tick off these 10 boxes, then it's gonna be a good, successful business. And I think that's where that sort of business playing competitions or the pitch deck demo day thing twists a little bit of that around. It's like, Okay, you said hockey stick growth check. Okay, you have this cool graphic check like you promised to change the world check. You have ukulele music in behind your kickstart video check. All these things are good. Yours is gonna be the successful business. And oh, you say you're gonna start a company that you know cells, craft, cider. I don't know. Do we need more cider? It's like, Oh, well, that one ends up being successful. At the end of the day. It's a tool, but you know, when you ultimately take that jump into business, one is like your plan changes on that day one because it meets the reality of the market and two is like it's again, It's not, you know, becoming our career and starting a business is not an entirely economic thing. It is a personal thing you're putting yourself into that your desires, your taste, your history is your biases, all of that. None of that fits into business plan. But a lot of those things are going to be what makes that business what it is. And so I think you have to remember that, right? Like you're remembering that it is that risk. It's that personal freedom aspect of it that is gonna make that business yours. It's gonna make that business its own thing. And and some of that might be contradictory Toe What should go into business plan? Some of that might make...

...no economic sense On the face of it, it might actually be the thing that that does well, Ben and Jerry's you know, they didn't get investors. It was too random. Hippy stoner dudes in Vermont who are like, Oh, let's like, let's do you know, let's make like, the funky flavors and we're gonna drive around this, Calvin. You know, it's gonna be, you know, it's gonna be organic, and nobody even knew what that was back then. And, you know, we're gonna put these funny, like things on it. We'll let anybody come to our factory, and, you know, they went to investors. I'm sure people like guys. This is the stupidest idea, you know? What do you what do you to bang heads like thinking about? And yet, you know, that's what it was. That's what gave it the essence of what it is versus, you know, someone who is trying to copy hugging us or Baskin Robbins, for example. So, you know, the business plan is a tool and a very valuable one that you you need to pay attention to. But it is not. It is not the key. It is. It is a starting point, okay. And the last one here that I think still is one of the higher uploaded ones. So you mentioned about this sort of wall of heroes with these great entrepreneurs sitting next to the people who change the world in different ways. On the question was, Do you think that with that great power comes great responsibility where entrepreneurs are now going to be held to this sort of higher standard where they, you know, sort of new definition. It's not just innovation and disruption. It's actually gonna be measured against social justice and activism and all those sort of things. Sort of. The not just for profit businesses is that is our narrative of what makes the hero entrepreneur changing. Who is that? Uncle Owen that said that from Spiderman, Great power comes great responsibility. Um, Uncle Owen? Yeah, I think that possibly I mean, look, Peter Thiel, Mark Zuckerberg, you know, they might be your hero if those your values if you're a libertarian and you believe that the thing that an entrepreneur stands for is what you read in the Fountainhead. And you know, it's all about just innovating and creating growing the economy and like that is the thing. And there are others who, like Ben and Jerry, believe that it means something greater Or, you know, even Chouinard from Patagonia. Or you know, any other numbers of entrepreneurs that believe it's It's something great house. That's where that that personal aspect comes from, I think, and that's where that diversity of voices and faces and entrepreneurship is something that's important because we typically, you know, it's like there's this, like, tack on of values and ethics. It's like, Oh, we're a company And for every shirt we sell, you were gonna give another one to charity And you know, that's what we dio that's like the good thing that we dio and you're like, Okay, cool tick. You've ticked off the the corporate social responsibility box, and that's what gets your articles written about or whatever. But like, there's another aspect of it is the company that makes sure it's and they don't give them away. But they actually have created a more cooperative system of the way they treat and pay their employees, and they don't brag about it. But it's actually something that keeps more people in that community and keeps more jobs and gives them a better wage. And, you know, is sort of that quieter thing. Every entrepreneur brings their own personal values, toe what they dio, regardless of what those values are and that shapes that business. But I think there's definitely a corrective that we're seeing now, especially in the world of tech I mean, you know, if I asked you guys 10 years ago, I'd be class. Who would see Mark Zuckerberg is a hero? There's probably a lot of hands going up. I mean, does anyone see Mark Zuckerberg is a hero today? No, He's like a pitiable, despicable Osaka book. Uh, um uh, you know, a moral figure who? It's like, you know, he was asked questions the other day about something in our interview and like So, how did you feel about this genocide that happened specifically because of what you did? And he's like, Well, we just try Thio, keep every let everyone have conversations. Um, you...

...know, that does not seem like the type of person that belongs next to Martin Luther King on a wall in a conference center in King City, Ont. Area. Okay, well, David, we could go on for some time, and I got a bunch of questions here, but I've kept you 15 minutes past when I promised I'd have you out of here. So I really appreciate you coming in and sharing a little bit about what you learned in class and your expertise. It's been good to reconnect. You're welcome. to stick around, but I know you've got other obligations. So please, uh, get out of here. But we really appreciate it. Thank you. You've been listening to the Ivy Entrepreneur podcast to ensure that you never miss an episode, subscribe to the show in your favorite podcast player or visit ivy dot c a forward slash entrepreneurship. Thank you so much for listening until next time.

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