Meet Linda Rottenberg | Leaders in Action Society

Meet Linda Rottenberg | Leaders in Action Society


Ok.
Chica loca still. I think that entrepreneurs see pain points
and then have to solve them. I always tell people:
“Don’t focus on the power points, “focus on the pain points.”
And for me… The pain point, even before
I stepped into that taxi in Buenos Aires, that you mentioned, with the driver
with an engineering degree, I had been living in Buenos Aires
and got very frustrated and confused by the fact that all the
young people wanted government jobs. He was a guy with
an engineering degree driving a taxi. I had to ask what I thought
was the obvious question: “Excuse me, sir, you know,
why aren’t you starting a business?” And he kept using the word
“empresário”. (businessman) And I knew that people felt
big business leaders had an in with the government,
had a swiss bank account were really not about job creation, were really about just,
sort of, taking for themselves. And I kept saying “no, no, no”
“businessman is another word”, “you know, it’s another word,
what’s the word?” And we went back and forth
and the driver says to me: “I don’t think there is a word
for what you’re talking about.” I was talking about innovation
and entrepreneurship and start-up. And I was like, “no wonder no one’s
become an entrepreneur, they don’t even have a word.” So, that really was the impetus. And, no one, at the time…
Now, it was 1997 when my co-founder
and I funded Endeavor. Everyone thought
this was a terrible idea. We would never find entrepreneurs
in emerging market we wanted the high impact ones,
that would really grow and create the jobs
and the innovation, be the role models. People said “absolutely not”. And I was known as “La chica loca”,
the crazy girl for going around believing this. But, my favourite moment in Endeavor
came six or seven years later, when the editor
of the brazilian portuguese dictionary called up our team in Brazil
and said, in part, because of Endeavor’s work, they were
going to add the words “empreendedor” and “empreendedorismo”
into the dictionary. So that’s pretty good. But, to just end this,
it’s very funny how things change. Now it’s almost 20 years later and, when I tell this story, people say: “The gringa, she doesn’t
even know there’s a word “’empreendedor’ in spanish”,
and I think: “How nice that things can change.” I grew up in a traditional family
outside of Boston, my parents met
as high school sweethearts, my dad is a lawyer, my mom stayed
home to raise three kids. And I was expected
to take the traditional path. And I went to Harvard for college
and Yale for Law school. Get there and realise
I have no interest in practicing Law. So I ended up getting
and opportunity to go to Latin America, as we described,
when the taxi happened. And I came back
and my parents assumed I was now going to get a real job
after my, you know, “time off”. And when my co-founder,
Peter and I were writing Endeavor’s business plans, literally, on a napkin, how cliché can you get, but we were in
my parents kitchen writing in a napkin. My parents got very nervous
and they said: “Well, wait a minute, “maybe it’s not the Law, but aren’t
you gonna get a job in consulting?” It was really scary for me,
to tell them I was gonna do something
that was unknown, unproven, may likely fail. And, what I’ve come to believe, working with entrepreneurs
in 25 different countries, is that the biggest barrier to
entrepreneurship, to getting going, they’re not structural, they’re
not financial, they’re not even cultural. They’re psychological.
And so, I think that that moment of,
I call it my “kitchen table” moment, I had to tell my parents “No.
I’m doing something “that’s not safe,
but I have to do it”, I think that I’ve spent the last decades
helping others in that scary moment realise that they can move forward and even if people call them crazy,
then that’s ok. I say “take it as a compliment”.
Entrepreneurship is hard. Entrepreneurship
is supposed to be hard. Because if you’re a pioneer,
then it’s going to be harder, means other people
would’ve done your idea before you. So I always tell people On the one hand,
you have to give yourself permission to move forward with something
you’re really passionate about. But on the other hand,
you have to be prepared that it’s going to be difficult. And if you’re not,
you think this is just easy, then maybe this isn’t
the right thing for you. Endeavor defines high impact as the entrepreneurs
with the biggest dreams, but like you said,
they have to be doers as well. And we’re not looking at start-ups,
we’re looking at scale-ups. So we’re looking
at entrepreneurs in every industry, so, many are in technology,
but many are also in consumer goods, manufacturing or health or education. But they have to have ideas
that have gotten off the ground, but basically have anywhere from half a
million revenues to 20 million revenues but that could, with a push, really scale, really go big. Many of them go international. And then these entrepreneurs
become the role models, so that young people can say: “If he
can do it, if she can do it, I can too.” And now we’ve actually mapped out
in each ecosystem we’re in, a multiplier effect that happens. Where if you have
a few entrepreneurs that make it big, and then give it back
into the ecosystem, but not on the being
the role models, but actively mentoring,
actively angel investing, that that’s actually how entrepreneurial
ecosystems are built. So we want people to actually
have their bubbles on this map. We show the influence by bubbles.
We’re the only ones who likes bubbles. We want people’s bubbles to go bigger
and give back into the system. So, we’re betting on people who are not only gonna do well
by their own companies and their own employees, but who’s success will then feed to make
sure others can dream big as well. When we started,
very few people, as I said, were looking at
entrepreneurship at all and that’s changed, but I found that entrepreneurship has
only become associated with star-ups. And, only become associated
with Silicon Valley or mainly. And so, I’m always telling people “You
don’t need to be a boy in a hoodie “living in Silicon Valley
to be an entrepreneur.” And I think that one of the things
Endeavor has done is that, you can be
an entrepreneur in any industry. You can be an entrepreneur
at any age, male, female, any background,
doesn’t matter what your last name is, doesn’t matter
what university you went to. If you’re someone who is able to follow
through and execute on that idea, and convince others, then there’s
a group of people that will support you to dream even bigger. And that scale-up moment is, I find the critical one, where
companies either go out of business. Most companies start up and then
go out of business within 24 months. But, if you can find a way
to unlock the growth potential, that’s where the sustainable job
and wealth creation comes. That’s the moment
that Endeavor focuses on, and I think gives people hope. I have changed my mind. I used to, very confidently say: “You can’t teach entrepreneurship,
you have to be born.” Look, I do think to be a high impact
entrepreneur, what we’re calling, I mean, people who grow businesses
to a very big level, and have to hire and often fire people… That takes a certain stomach and a certain tolerance
for chaos and risk that I’m not sure everyone has. But I wrote a book,
“Crazy is a Compliment”, because I’ve come to believe that we all need to think
and act like entrepreneurs today. And, whether it’s people
that are worried about losing their jobs, or worried about getting ahead
in a big corporation, or people that are starting something in their basement or in their kitchen, or people who are starting a non-profit, or people who want
to think of something big… I think, today, if we don’t take some risk we risk being left behind. If we don’t think like entrepreneurs, then, we’re assuming
that these big institutions are gonna solve our problems. I think we have to write our own stories
and be masters of our own destinies. And that’s what entrepreneurs do, that. Everyone can learn to think
and act like an entrepreneur. Well, we have a number
of stories of tech companies that have gone from,
you know, start-ups, if not in the garage, then in cafes, and got on to become
public companies. One of my favourite stories,
because it’s less expected, is the story of Leila Velez,
in Brazil. We met when
she and her sister-in-law, Zica, were starting a hair care
products company for the afro-brazilian population
and people generally with curly hair. I can relate. And it started because Leila had grown
up in the slums of Rio, in the favelas, her mother was a maid,
her father was a janitor and she got a job at 15
working at McDonald’s, as a cashier. And she said “oh, this franchise
thing is pretty good, “but I want to use it to help poor
people feel beautiful”. And they don’t, because they don’t have
products that work for them. And so, she convinced her sister-in-law,
Zica, to start something, they started like,
a mad scientist lab in their kitchen, they created their first product,
tested it on their husbands, the husbands’ hair fell out.
They went back to the sink and we met them
when they had one salon in Rio. But that salon had six hour waits. And they were really thinking big
and we decided to take a bet on them. So Endeavor helped
bring professional management, Leila became officially CEO,
Zica was the face of the brand. We sent Leila to Harvard,
business school for training. When they…
When Leila divorced her husband, we had to write a shareholder
agreement with her now, ex-sister-in-law. I often say Endeavor 101
is how to fire your mother-in-law and, still, show up to family dinner. We then, actually,
helped Leila find her second husband, Endeavor is a full service organization. But, when I tell this story, people assume I’m talking
about women and microfinance. “What a nice story.
Oh, now do they have two salons?” I said “No, no, no, my friends.” There’s nothing “micro”
about Leila and Beleza Natural. So it’s stories like that
that inspire me. People always ask me how I, initially, got anyone to support us. And I always say by “stalking”. I always say stalking
is an underrated start-up strategy. So, at first, my co-founder,
Peter and I were kind of… … all alone,
when no one thought we were on to anything.
And… I ended up getting a meeting, early on, in 1998, with a guy named Eduardo Elsztain
who had become famous in Argentina for, at that point, making George Soros
the largest land owner in the country. And I got a ten minute meeting.
Five minutes in the meeting, Eduardo looks at his watch and says: “Ok, Linda, I know you want a meeting
with George Soros, “I’ll see what I can do”. And I said: “No, Eduardo, I’m
an entrepreneur, you’re an entrepreneur “this is an organization
about entrepreneurs, “I want your time,
your passion and 200 thousand dollars”. So he turns to his right hand guy
and says: “This girl is crazy!”. And I looked at him and then said: “Eduardo, estoy decepcionada,
I’m disappointed. “this from the man who walked into
Soros’ office and famously came out “with a 10 million dollar check. “You’re lucky I only asked you
for 200 thousand.” He turned away, I thought he was gonna
kick me out of the room, turned away, turned down, took out his check book,
and wrote me a check, on the spot, for 200 thousand dollars and became the
first chairman of Endeavor, Argentina. And, what I learned from
that was a couple of things: First of all, I got my mantra:
“crazy” is a compliment. I embraced being “chica loca”. But I also realised the importance
of having local business leaders pull Endeavor in. So, while I’ve had many
supporters here, in the United States, from people like Edgar Bronfman Jr.,
my chairman, Pierre Omidyar
and his group, from eBay, Reid Hoffman of LinkedIn
is on my board. So many. I think what’s really made Endeavor
special is that we won’t go into a country unless we’re pulled in
by the local business leaders. Who take ownership,
who become partners. So, in Endeavor now, has a team
of 400 full time people, most are based outside
the United States. We have boards in every country. And I think that
that’s been super important because, if you don’t
have the local network that’s mentoring the next group
of people coming up, it’s very hard. When I go back and take out
that napkin that Peter and I created, two things strike me: Number one, how many things
have stayed the same. We believed that you would select
the right entrepreneurs, you would give them mentorship,
which was lacking. You would help them access capital, you would tell their success stories, you would encourage them to give back,
and then the circle would continue. No one thought any of this would
happen, they never thought we’d
find the entrepreneurs, they never thought we would
then get capital, they never thought
they’d grow and exit, and they, certainly,
never thought they’d give back. And so, all of that has stayed true. But here’s a couple things
that have changed. I was outvoted, I thought we would
never go outside the emerging markets, and then, first,
we got phone calls from Greece, saying, after the crisis:
“We need your help”. And I started joking that, ok, well we
can go to these “submerging” markets. But… No, but I kept saying:
“Look, when economies turn down, “that’s when entrepreneurs turn up. And
that’s when Endeavor should be there.” And, after Greece came on
board, and it has been a great success, Spain came on board… Endeavor was known as venture capital,
without the capital. And we said we never wanted to create a misalignment
with our entrepreneurs. But the world has changed
and so many people started investing we said: let’s give out entrepreneurs
an extra hug, let’s anytime any investor comes in,
we’ll take 10% of the round, but we won’t get
involved in negotiations, we won’t take a board seat. And, instead of creating a barrier
between our entrepreneurs, it has actually drawn them closer. And, in fact, we’ve been able
to encourage investors to do bigger rounds. So, this growth capital
that didn’t really exist, of five to ten million dollar rounds, Endeavor has been able to encourage. Those were two ideas
I never saw coming. And so, what I’ve learned is that
you have to, on the one hand, if you’re an entrepreneur,
stay true to your original ideals, but then be open to the world changing and not be so stubborn,
as I was initially, to not evolve. It’s funny, I don’t mind the ones
that fail quickly. “Ok, that was a big, that’s ok.” And I don’t even mind the ones
when we made a mistake. There’s some people
who didn’t wanna grow, they should’ve been a lifestyle business and we pushed them to grow. And they wanted to be a lifestyle
business, that was our fault. What disappoints me is that the people
who… We all cause our own problems,
most of the time, it’s not the market,
but you don’t learn from that, and repeat the mistakes,
and get so tunnel visioned, and so blind sighted
and don’t look at our own failings and don’t let go. Don’t build a team around them,
that’s complementary to who they are, try to just be Steve Jobs
when they’re not Steve Jobs. That’s why I’ve created a test,
an entrepreneur personality test that people can go take because I feel like everyone
doesn’t model themselves after one or two entrepreneurs,
they have to find “what’s my personality “and then how to I build a team
around me that complements it.” So I get most disappointed
by the people who don’t grow, because they couldn’t
get out of their own head. I think that, sometimes,
the “we’re saving the world” mentality can be just as arrogant and blind sighted
as the “I wanna get rich” mentality. I think that the best entrepreneurs solve problems. And so, it’s not so much that
they see themselves as God’s gift to saving the world,
it’s that they’re doers. One of the mistakes we make, in terms of envisioning entrepreneurs, is that we see them
as these huge risk takers. Right?
Who are tilting at windmills and, you know, changing the world. And the best entrepreneurs
I’ve seen are risk minimizers. They’re not risk maximizers. They’re people who just see the world
differently and act on what they see, but they do it in a very tactical,
pragmatic way. So, I think that the best entrepreneurs
actually aren’t necessarily missionaries. They’re much more pragmatic than that, they just see a problem
that they can’t stop, unless they solve it. Here’s the interesting thing: So
Endeavor has helped our entrepreneurs raise a couple billion dollars, in capital. Not a small amount. Every time we do a survey
asking our entrepreneurs what was most important, capital comes towards
the bottom of the list. Having a network that believes in me,
number one. Gaining access to mentors
who’ve done it before and can help me avoid pitfalls
and mistakes, number two. The only thing lower than capital is,
you know, changing regulatory issues. Because I get annoyed
when the world banks says the biggest problem is how
many days it takes to start a business. That is gonna deter an entrepreneur?
No, my friends. But if you don’t,
if you’re the crazy person, and you’re gonna get divorced
from your family and community if you fail… The lack of appreciation for failure being part
of the entrepreneurial journey is, I think, what people need to change. And having a support network that says: “We’re gonna help you think big,
but then, if it doesn’t work out, “we’re gonna support your next venture”.
Give them the courage to move forward. And I think that that’s underrated, I do. Some of our best companies
are people who come through… We start our selection process,
takes almost a year. You go through
a local selection process, and then have to go to a global panel. And it’s very challenging,
but you get these wonderful debates. And one of our best companies
were these for techies, from Argentina. They’d started a company to outsource, not like what you do in India,
the backend, but high technology. Great, great company. Rejected from our first selection panel.
Why? They were too arrogant. Back to what we said. People said they’ll
never take advice, they’ll never listen. They spent a year determined to come
back and be Endeavor entrepreneurs. Instead of saying we’re not gonna select
you. They failed, very publicly. They came back, they both now sit
on the board of Endeavor Argentina. And I love that they now,
publicly, go to Morocco, and Indonesia, tell it in South Africa,
telling their story of failure within the Endeavor network,
to encourage people that, even if they don’t make
it the first time, to come back. So, we’ve actually created,
within our own process, this notion of “it’s ok”. Move on to the next thing. Well, wait a minute,
we have all these investors coming, why doesn’t Endeavor
have any skin in the game? It would be an extra seal of approval. And we spent three years debating
how we could do it on rules-based way. We didn’t wanna pick and choose
among our “children”. So, we created… Members of my board
who are venture capitalists joined a committee to help us
create a series of rules. So now, anytime any Endeavor
entrepreneur raises a round of capital at five million dollars or above, Endeavor comes in at up to
one million dollars of the investment. And then I wanna be one
of the few non-profits that is completely self-sustained based on the success
of the very people we support. I think that would be a great,
great statement. One of the things that allowed me
to be a little bit crazy is that I did,
I had a very stable home life. So that’s what I’m trying
to provide for my children. So, I literally travel to Dubai for a day so I can come back
and pick them up at school. That’s what benefited me. Maybe other people, it’s the
instability that makes them think bigger, but, for me… I sort of said,
“Ok, I had my suburban upbringing…” and I just wanted to see the world, that’s why I left for Latin America, now I travel all over.
It’s exciting, but yet have roots to come back to. I live in Brooklyn and, anytime when I’m not doing these
one day trips around the world, I’m back in Brooklyn.
So that’s what works for me. I had the impression that
to be a female CEO, I had to be…
not necessarily tough, I’m not,
I smile too much to be tough, but really independent,
not bring in any personal life and kinda create that wall,
because you had to be strong. And that’s how I lead. And then, I was put on bedrest when I was pregnant
with these identical twins and then I… My husband is a journalist he was diagnosed
with a rare form of bone cancer. I decided… This was right when we had
been given this expansion mandate 25 countries
by 2015, we were in 10. And I called up our board and I said: “I don’t know if I can do this.
I’m not getting on the plane. “I am going to every
chemotherapy session.” And when I’m not doing that,
my girls were then three I said: “I’ve got to bring them stability,
that’s what’s important.” And, didn’t surprise me is that
we expanded more that year than we had before
and that the team and the board, and the network stepped up. But here’s what changed after: I started talking much more openly
about my personal life, which I’d never done. And I always thought
that would distance people from me. And instead it drew them closer.
And, two young employees
came up and they said: “Linda, we always admired you, “but you seemed super-human”. And I realised, not in a good way.
In a unapproachable way. And they said:
“Now that we see your vulnerabilities, “now we’ll follow you anywhere.” And so I said… I’ve been spending
all this time trying to be super-human when really I had to be
less “super” and more “human”. And I tell people, “I hope you don’t
have to go through the experience I did “to get to that same conclusion.” So that’s what I’ve learned. My goal’s that every young person,
or every old person too… In fact, the biggest number of people starting businesses in this country,
in the US are baby boomers over 65. Who knew?
We don’t tell their stories. I want that everyone
who has a dream but is scared can give themselves permission to try because I’ve looked at someone and said: “If he can do it,
if she can do it, I can too.” So, I think that, if we can help people
overcome their own fears, and get out of their own heads, and take chances with their own dreams, I do think things will be better. Call me crazy. Translation and Subtitling
Ana Luísa Aguiar/ PSB Studios

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