Meet the man who transforms the brilliant business mind of successful entrepreneurs into pure audio gold on his massively successful NPR podcast in the USA, extracting insights from men and women who have conceived struggled and pivoted their way to create some of the world’s best known brands and companies.
Guy doesn’t think that being an entrepreneur is about birthing unicorns and scaling up. He sees entrepreneurialism as a mindset – a way of solving problems for other people so that you can support yourself and your family.
RK: Guy Raz welcome to Bookomi.
GR: Thank you for having me, Richard.
In the book, you stress how crucial moments of reflection are to any entrepreneur…thinking back, assessing things and so on.
Going back over your conversations and interviews (for the How I Built This Podcast), did it give you the chance to reflect? And did you gain any new insights from your guests along the way, by writing the book and weaving them into a new context?
So many, but I think that the key insight that I walked away from after writing this book was the realisation that being an entrepreneur is not about hanging out a shingle and starting a business and scaling it and you know, becoming a millionaire or a billionaire, that’s not what it’s about.
Being entrepreneurial is a mindset. And it really became clear to me as I began to find connections, and then connect the dots between the stories that I have told on the show and elsewhere, and begin to pull out those insights.
What occurred to me and was so crystal clear, in gathering these stories, and trying to create a sort of a how to guide for how to think about starting a business or putting an idea out into the world. Being an entrepreneur is a way of thinking – it’s solving problems, it’s overcoming obstacles, it’s being perseverant. It’s being creative, introducing creative ideas into the world, and it and it doesn’t mean you have to be on your own in a garage, it could mean that that that you work for a bigger organisation.
Johnny Ive created so many iconic products with Apple. Who wouldn’t call Johnny Ive, entrepreneurial? He was doing it as part of his job within Apple, but he was operating in a very entrepreneurial way. And I think that’s the key insight.
And the key idea that I really walked away from writing this book, and my hope in giving it to readers is that they will walk away with that insight as well – Being an entrepreneur, is a mindset. And to get to that mindset simply requires practice. It’s not something we’re born with, it’s not something that is handed to you, it’s not, you know, you’re not touched by God, it’s like any other practice, you do it, and you fail, you’re not good at it for a while. And eventually, you get the hang of it, and you become pretty good at it.
And you talk a lot about what motivates entrepreneurs, traditionally, we perceive that to be money or control, but what motivates you Guy, to seek out the company of people who start companies?
I am really attracted to people who want to create an idea, or put an idea out to the world, it could be a product, it could be a service, it could be a way of thinking, an idea, philosophy, you know, those are the people who push innovation, and those are the people who change our world. And, you know, usually for the better.
And I see my role as really creating a platform for people to put ideas out into the world, not only about their products or their services, but about their approach and their way of thinking about business and their way of thinking about management and their way of thinking about life. Because, you know, running a business or you know, or creating a product or offering a service is only one part of it.
Ultimately, we are all on this planet for a limited amount of time. And at the end of the day, what matters isn’t how much money you made, or how powerful you were, but really what kind of impact you had on other people and so that’s why I’m always searching out for people who have ambitions to put ideas out to the world. That doesn’t mean that every single idea they have is going to change the world dramatically.
But even if it’s an idea that changes one person, to me, that’s interesting enough. And that’s, to me that’s more meaningful than any other, you know, any other pursuits, you could, you know, you could consider when it comes architecting your life in your career.
RK : And we meet some female entrepreneurs and their stories on your podcast and in the book, which actually demonstrates the range and the effort you go to represent a cross-section of entrepreneurs.
Stacy Brown, the founder of Chicken Salad Chick, Whitney Wolfe, founder of dating app Bumble, Eileen Fisher…and your first How I Built This was with Sara Blakely, the founder of Spanx. I’m guessing that the number of female entrepreneurs has increased in the last decade in the UK and will continue to do so. Have, through your lens, have successful women made a difference to the culture of entrepreneurship and business culture in general?
No question. And they’re continuing to do that. And actually, I very consciously seek out a balance of men and women and people of color on the show. And I don’t do that because it’s, you know, politically correct or whatever. I hate that that term.
I actually to it for a very practical reason, which is if we aren’t, if I am not representing who is out there, in the entrepreneurial sphere, I’m not doing my job in making sure that the opportunities to become part of that world expand.
In other words, if I do a show and all of my guests are men, and white men are men of European descent, it’s very hard to see yourself in that person if you aren’t a white man of European descent.
Now, it’s not to say it’s impossible. When we have a guest on the show. A woman entrepreneur, a black entrepreneur, a black woman, entrepreneur, a Latino entrepreneur, and somebody listening to that show shares that person’s background, or reads about them in the book, I hear about it all the time.
And I hear about it from the person who says, I saw myself in that person. And I saw myself being able to do what that person has done. That is hugely important.
Because if we’re going to live in a world where entrepreneurship is dominated by men of European descent, it’s actually not good for consumers. It’s going to create, it has created and will continue to create limited options, limited products and limited services; limited by a limited perspective right?
But if we have products and services that are created by entrepreneurs from various backgrounds, from different genders, inevitably it’s going to create better, more interesting products and services for the rest of us because a diversity of opinion results in a diversity of results.
And so, that is, you know, that is a crucial part of what I do and why I do it. I think the fact of the matter is that – in the United States, and I think this this is similar in other Western countries – businesses, start-ups that are funded that go seek out outside funding are still heavily dominated by men.
You know, only a small percentage of venture funding in the US goes to women entrepreneurs, that is changing very fast and has changed relatively quickly over the last five years. But it’s still not fast enough. But what I’m encouraged by is that the women who are out there leading the charge, you know, the Sara Blakely’s of Spanx and the Jen Hyman of Rent the Runway and you know, the Stacy Madison’s of Stacy’s Pita Chips and the Kathleen King Kevin Kings of Tate’s bake shop huge brands, Jen Rubio have a way.
They are also inspiring thousands and thousands of women to become entrepreneurs. And if you look at business schools today, in many of the top business schools, you now have at least 50% of the students in some cases, more than half of the students MBA students at several of the top business schools are women.
RK: Today, we’re all richer because of it, aren’t we? Where business is richer, life is richer – the more diverse ideas we have floating around. It’s not just a recruitment issue, is it? It’s an issue of thought. It’s a way of thinking. It’s like what you said at the top of this conversation – entrepreneurial-ism is a mindset, diversity is a mindset and you’re representing that in your conversations and demonstrating how much richer conversations are when when they’re diverse in content.
I’ve met a few founders in my time interviewing them for Bookomi. And I found when I’ve met people like (Microsoft founder) Paul Allen, or (Pixar founder) Ed Catmull, or (Twitter founder) Biz Stone, (Paypal founder) Peter Thiel – it’s a bit like visiting the Wizard of Oz, and behind the curtain you find exceptionally intelligent, but quite normal people who’ve found themselves in abnormal situations.
You always ask your guests about luck. Do you think the people I just mentioned and the people you meet are born entrepreneurs, or are they born lucky?
I think more of the latter, but not entirely. And I don’t think it’s binary, I don’t think it’s one or the other, or I think there are bits of both, and more. So let me try and explain.
All of the entrepreneurs I’ve interviewed, the vast majority were not born to be entrepreneurs, there’s somebody named Mark Cuban, who your listeners might be familiar with it. They’re familiar with Shark Tank, he’s a multi billionaire. He’s the owner of the Dallas Mavericks basketball team.
As a kid, he read a book called How to retire by the age of 35. He was determined to become a billionaire. And that was his motivation. He went to college, he found the most efficient way to graduate quickly, he found the easiest way to get a business degree in 18 months, he moved to Dallas, because he saw it as an opportunity to enter the software space, you know, early on, when computer software was still, you know, a new shiny thing. And he indeed was a millionaire by the age of 35. I think by the age of 30. He is rare. He’s an exception, you know, he did all the things that a budding entrepreneur should do, he went into sales, sales is a great way to learn how to how to start your own business, because when you’re a sales rep, you encounter a lot of rejection, a lot of slammed doors in your face, a lot of nose, a lot of not interested, it’s hard to be a sales rep, but it it builds the kind of resilience that you need to have later on in life, if you want to start your own business.
Mark Cuban did all those things. He’s an exception, the vast majority of the entrepreneurs I’ve interviewed, including those who are profiled in the book, I like to say like the rest of us, they’re almost accidental entrepreneurs, you know, they didn’t have the charisma that you might think you need to have, which is a myth.
They didn’t have the leadership skills you might think you need to have. they didn’t have the capital, they didn’t have the connections. All of these things were developed over time, especially charisma,
Charisma is one of the things that people find, you know, people who are introverted, or who aremore filled with self doubt than maybe others, they find their strength, they find they find their ability to get liftoff.
But it takes time, you know, I really believe that most of the people who I’ve interviewed for the book and on the show are people who have learned how to become entrepreneurs.
So the question is, you know, are they born? Or are they lucky? I don’t believe they’re born. Obviously, there are some who are just out of the womb with a higher tolerance for risk, for example, but it’s a very small number.
I do you think luck is a factor. It’s a very complicated word. And certainly complicated in how we define it in the United States. Because luck is I look at luck as a sort of a catch all phrase for a number of ideas.
It’s fortune, its chance. It’s also privilege, you know, the luck of being born with two parents, who are able to raise you and give you love and support. That already puts you 20 meters ahead, right in the race, the luck of being born in a house without money problems, that puts you another 50 yards ahead. There’s privilege in the United States, certainly around race. I mean, there are unearned privileges that people have simply because of the colour of their skin.
They’re treated differently. The doors open up for them and other in ways that they may not open up for, you know, a an African American kid or Latino kid living in East St. Louis.
So there’s so many factors involved. And of course, there’s work there’s hard work and There’s and and there’s drive and there’s ambition and there and there are other. There are other factors involved in, in what determines whether somebody does, you know, become an entrepreneur. I mean, some people are, are born with incredibly charismatic personalities or they have the ability to connect with people very easily.
People like them right away. They, they project confidence, they inspire people around them, they have natural leadership qualities, a kind of an energy, and some people have those qualities but I think by and large, the vast majority of people I’ve interviewed whether whether it is Sara Blakely, or, or even Richard Branson, who who’s been on the show, or Herb Kelleher, the founder of Southwest Airlines, or Pat Brown, the founder of impossible foods, the the vegan meat alternative benefit, and Jerry who found a Ben and Jerry’s it to a person,I don’t believe that they, they, they were delivered in the hospital as entrepreneurs, I think they all learned how to do it over time by by trying it out and making mistakes, and then getting better.
RK: You humanise the entrepreneurs in a way which makes them mentally accessible. One of the big case studies in the book is The Tylenol recall crisis in 1982. How the Johnson and Johnson CEO James Burke dealt with a hundred million dollar safety recall of their painkiller after someone contaminated it with cyanide.
And it reminded me of the parallel with a recent podcast of yours with Airbnb CEO Brian Chesky. It’s a great interview, and he’s had to deal with an 80% drop in income. Like everyone in the travel business, he has been hit hard by COVID. What can we learn from the from the way he’s surviving and growin in the pandemic, Airbnb?
You know, it’s such an interesting case, because Airbnb was actually started during the last financial crisis in 2008. And in 2008, I talked about this in the book a little bit in 2008, the three founders of Airbnb, went to 20 VCs venture capital firms in Silicon Valley, and cold pitch them the idea of Airbnb, which they had already stood up, they already had a mock up and a model and they’ve actually already put it to the test. And out of the 20 VCs that they contacted 10 replied, five agreed to meet for coffee, and not a single one invested.
And by the way, $150,000 in 2008 would have purchased would have put about you 10% of Airbnb, a $40 billion company today. Okay, you would have owned 10, you would you would have been worth $4 billion on that $150,000 investment.
Now, what does that tell you? it tells you a lot after these guys couldn’t find any investors, they continue to bootstrap this business by spending credit cards by basically maxing out credit cards and working jobs on the side and using that money to to build up their company.
They almost went under during that time. Because they constantly ran out of money. And it was in the midst of the financial crisis, they could not attract investors. But it forced them to operate in a very lean, focused, targeted way. And it essentially built resilience within from the beginning it baked resilience into their business without them even knowing it. So that today in the midst of another economic crisis, it’s part of their it’s part of resilience is part of their DNA. It’s part of their culture.
They have been through really difficult times, it doesn’t mean that it makes it fun or enjoyable. It makes it just slightly easier to navigate. And so today, you know, in March, when Airbnb saw its revenue drop, you know, 80%, there were Wall Street analysts saying they’re toast. There were people all over cable news channels saying this is the death knell for Airbnb. But the founders of Airbnb never cared about that. They knew that that was nonsense, because they had been through a crisis in the past. And so they had a playbook. And they raised money very quickly. They basically bulked up their cash, and made sure to shore up their balance sheet and made some really important strategic decisions very quickly. Knowing that they were going to recover. And now here we are, you know, six, seven months later. And in fact, they have more or less recovered.
The bookings are close to where they were last year. In some markets higher, people are tending to stay outside of cities. Now they’re looking for kind of rural and more space. But it really suggests that going through difficulty and going through challenges is really the best way to learn how to survive it, because any experience you have, you know, like they did, essentially, it’s like, it’s like a small inoculation.
You know, every setback is like another shot in the arm that so that when it comes to a huge crisis are a huge challenge. You are better prepared for it, you know, you had that series of inoculations, that, in a sense, doesn’t make you immune, but it makes you stronger and better able to fight the disease.
RK: And they showed great leadership as well, didn’t they, they were transparent. They looked after their stakeholders, their hosts. I’m an Airbnb customer and was amazed how quickly they dealt with, hundreds of thousands, if not millions of inquiries from people who were worried about getting their money back.
But we’ll get through this. And we’ll remember, afterwards, all the brands that did behave well that did show leadership, that did show decisiveness, and they’ll be there in the long term.
100%. I mean, it’s you know, the way businesses behave in crisis, and how they treat their employees, how they treat their customers, has a huge impact on how people will remember them.
There’s a case study in the book about a very well-known and beloved American ice cream brand called Jenny’s ice cream. And it’s a premium ice cream brand. It’s available all over the United States. It’s actually Joe Biden’s favorite ice cream. He just tweeted about it recently. And back in 2015, they had a listeria outbreak and one of at one of their plants. They actually have one plant where they make the ice cream and there was a listeria outbreak. And they recalled all of their ice cream all over the country. It cost them $200,000 a day in lost revenue, and which was a big deal at a time because they were much smaller than they are today.
They traced the listeria to a micro hairline crack in a wall in the factory. They batch tested all of their ice cream, and they didn’t find any additional listeria – it was only in one pint of ice cream.
But as a result, they destroyed millions and millions of dollars worth of ice cream and had to stop operations, close all their shops.
But the founder of that business, Jenny Britton Bauer, who’s a wonderful entrepreneur, just an incredible entrepreneur, and amazing ice cream maker. She has basically brought us into ice cream 4.0, let’s say you know, Ben and Jerry’s was 3.0 and Haagen dazs was 2.0, she’s she’s brought us to a different level of ice cream.
She was very transparent with her customers from the get-go, she started a blog from day one. And she outlined everything that was going on. I mean, she was giving her customers a blow by blow account of what was happening, what they were doing to mitigate what their protocols would be going forward, how they would not be making any ice cream until she was absolutely 1000% sure that it was safe.
And she asked her customers to just bear with her. And when they were ready to to start the factory up again and make the estimate again, her customers were so grateful for her transparency. And were so loyal, that their business was back within a matter of, you know, a few months. And today they’re much bigger company. So it really is a lesson in how you how you behave in terms of credit in times of crisis is a test for any leader.
RK: Customers and employees remember how you behave as an individual. I like the way in the book, you show how big business of any business of any size is operated by the same human leavers as we all are.
We can all learn from the successes and failures of large corporations. I’m thinking of the AOL Time Warner merger that you write about. I was actually working there for Turner Broadcasting just as that culture clash was coming to an end. And you describe that perceptively as an example of two companies not being true to who they are. The same thing that can happen to us as individuals, if we go into business for the wrong reasons.
What are the right reasons for starting a business? And how have you applied that to your own career.
I think the right reasons for starting a business are very simple, which is, what is the problem that you identify in the world that needs to be solved?
Is there a product or service that needs to be improved on? Is there an opportunity gap? And can you fill it with something that the world needs?
I think that people go into business for all kinds of reasons. But at its core, it is about solving a problem. And it doesn’t mean that that you need to build the next Airbnb or the next Virgin Atlantic, but it means that you might build a plumbing business, because in your community, the plumbing services aren’t good, or they’re too expensive, or they’re not transparent.
Or maybe it’s an automotive repair shop for the same reasons. Or maybe you start an e-commerce business, where you are offering counselling services that that, you know, are better, cheaper, or more personalized, whatever it might be.
I think that’s why people start businesses. It’s like you’re looking out at problems, and then opportunities to solve those problems.
And to me the goal isn’t to create the next billion dollar, unicorn, that’s not what my book is about.
My book really, to me, is about creating a business that is sustainable, that can sustain your life, that is meaningful to a few people, or maybe even more than a few people that maybe could employ other people and give them a secure and stable life. That is an incredibly successful enterprise.
A two person business that’s profitable, and that sustains two lives, arguably is better is a better business than Uber, which has never been profitable, even though it’s, you know, valued at 10s and 10s of billions of dollars. So, I think that everybody has different reasons for starting a business but ultimately, at its core, it is about identify identifying a problem that you believe needs to be solved in some way and then offering a product or service to solve that problem.
RK: Well, Guy, your passion and your purpose comes across so clearly in your podcasts and your book. You obviously love what you do and it shows thanks for sharing your OMI with me today.
Thank you so much for having me.
RK: Guy Raz’s book, How I Built This: The Unexpected Paths to Success from the World’s Most Inspiring Entrepreneurs, is available to buy now in the Bookomi Shop.
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I’m Rich Kilgarriff stay safe, and remember that brilliant idea inside your head is a brilliant business waiting to happen. Bye for now.