INTERVIEW: Andreas Widmer - Business That is Both Virtuous & Profitable

Welcome to the 10 Minute Entrepreneur Podcast, intended to equip and encourage business owners and aspiring entrepreneurs, taught by active business owner, bestselling author, and teacher, Shawn Castrina.

I'm excited about today's podcast, but you know, I'm always excited. But I have an author and entrepreneur with me today. I have Andreas Widmer with me. He is the author of The Art of Principled Entrepreneurship. He's going to tell us How We Can Do Both Business in a Way That's Virtuous and Profitable. I'm a big fan of profitable, so I'm open to listen to the virtuous part. Andreas, great to have you on the podcast.

Thank you, Shawn. My pleasure. Thanks for having me.

All right. So what brought you into the entrepreneurship space? And then we'll get into your book.

Long story short, I was born in Switzerland and let's say I wasn't super excelling at at school, let's say. But I came to America and I did come to school here and found a few friends who had a software startup in the late '80s that happened to— I mean, at the time it didn't mean anything to me. They ported TCP/IP to the PC, which is like bringing the internet to the PC. It's one of the 3 companies who did that. And I joined them. And in a sense, the rest is history. I was able to join a team that really changed the landscape of computing because we were very involved in the early internet. And then we went public in '93, and I joined another team of friends who started a company called Dragon Systems, speech recognition. And that was a beautiful, beautiful experience, ups and downs. And we sold that in 2000. And then I did a couple of other things. I ended up running a consulting firm actually to do business strategy, and a couple of other startups, and eventually found myself meeting somebody who said, I want to start a business school. And I was famous to my wife always to complain about people coming out of business school and they just don't know, you know, what business is all about and how to go about it. And so I couldn't— it was an offer I couldn't refuse. And so I started— I helped start a business school in Washington, D.C. called the Busch School of Business, and I run the entrepreneurship program there.

Oh, that is so cool. So obviously you've had a very, very successful journey in entrepreneurship and a great set of space, but what specifically made you excited about the idea of writing a book that's— and I want to pivot on this— is that, you know, that's both virtuous and profitable? Because it sounds like you can make a, you know, a pact with the devil if you don't.

Yes, but then it's not the free market and it's not sustainable, isn't it?

Exactly.

I like to call this enduring value. You know, I think business got such a bad name, but 99% of business people, like, I watch what you're doing. You started, what, 20 companies in 20 years? People just misunderstand why entrepreneurs do business. And I teach my students, it's a very simple thing. I'm sitting here, I'm looking at you, Sean, and say— and the most quintessential thing I can do is to say, how may I help you?

Exactly.

It's the most quintessential sentence. It's not, how can I make a profit out of you? No, it's, how may I help you? And then I use me, I use my skills, my talents to add value for you. I'm not forcing you to buy it. I'm not cheating you to buy it. I'm creating value. And when you're willing to pay me more than it costs me to create this value, it's called a profit. But it is also called an other-directedness of me adding value for you. I like adding value more than profit because in a way, people look at profit in a negative way, which they shouldn't. Without profit, the economy would be a zero-sum game. But with profit, the economy is the gift that keeps on giving.

No. And my feeling about profit is that if there's that big of a margin, competition will step in and squeeze it out of you. It naturally— the playing field always gets evened.

You're so right. And that's the beauty of the free market. And I love, you know, with the— so, Mike, one frustration in today's world with the reputation and almost the stamp that business gets, it's this, that the economy is a zero-sum game and everything. No. The Soviet economy was a zero-sum game. Our economy is not a zero-sum game. It's actually a multiplier. And there's never in the story of the free market, there's never a fixed amount of money. There's always, as long as we add value, as long as we do voluntary transactions where you pay me more than it costs me to make it, this is not a pizza pie that we have to cut up. It's a pizza factory.

There's never-ending money. There's never-ending money and it goes to great ideas. But I do, and I do believe, you know, over the last few years, I think politicians have really, you know, beat up on businesses. And I think it's utterly ridiculous because it tends to be politicians who've never created anything in their lives.

I think it's a very—

And none of them are poor. And none of them are poor too. I find that they're in that sweet spot of being worth over $1 million, been in government a great deal of time. And, oh my gosh, Elon Musk, he's Satan, or anybody who's making a great deal. And I'm thinking, hey, listen, You put somebody on the moon, you ought to be worth $1 billion.

You know, and it's like, and then the business person has to, quote, give back. But let me— I did some research for my book in which if you as an entrepreneur, Sean, you've created 20 companies, and God bless you, I hope you made a lot of profit and a lot of personal wealth with it. But if we go in, in the value you produced in your life, Sean, and anybody else who's listening, in the value you produce as an entrepreneur, on average, your price is 2% of the value you create. And then we're saying, now you have to give back of the 2%. I mean, compare this, and I don't want to go too deep into this with the politicians. I don't know what the value is there exactly in terms of creating new value. But then the 2%, is that fair? Yeah. Elon Musk, I think he deserves 2% and probably more of the value he created Which, by the way, he makes something out of nothing. He creates something that wasn't there before.

It blows me away. And that's what I say. I don't care what side of the fence you are on this. I look at how many jobs did that person create? That's the biggest thing that I look at. The number one number that I look at in every one of these extraordinarily wealthy people, how many jobs did they create? Because they allowed this many people to, A, purchase homes, put kids through school, feed, whatever. I mean, in other words, that is the— these people that are making a fortune, it tends to correlate with job creation.

Yeah. Because in the free market, the market will be unforgiving that if you don't add— see, this is this whole thing. How may I help you? If you don't help in a free market, you will be pushed out of the market. And when you find a profitable way to help somebody, other people will have an entry into that market and compete with you for it so that your margin is actually, let's say, optimized for the market. If you have a great advantage, you won't have it for long if you have a free market.

Yeah, no, it always balances itself out. I know, I love it. So tell me, in your book, what are some key principles that you just, you had to write about? You want to talk to my entrepreneurial audience? This is where I kind of let you, you know, beat the tambourine a little bit on some Some of your pet subjects.

Sean, if you indulge me for a minute, I want to tell you how I wrote it. This was a COVID book in the beginning of the pandemic. I was actually in Italy. And I had a friend of mine who is in his 80s. He's the kind of CEO that, that you should know, but you don't know about him. And his name is Art Sioka. And he's the— he changed the industry, the wine industry in the United States and in the world. He's the guy who came up with the boxed wine and all— and wine coolers and spritzers and all that kind of stuff, except Nobody knows him because he built the company and he always felt like, you should know my winemaker. You should know the people who do this. I'm just behind. He's like the impresario and he thinks you should know his first violinist rather than himself.

Yeah.

Well, Art was getting very ill and he had cancer at the end of his life. And I called him and I said, I wanted to write a book about principled entrepreneurship, which is something that he and I shared a lot of thoughts about and a lot of discussions. And he told me he would have 2 months to live. And I said, well, if you're in, I'm in. And we agreed that we would record all of our conversations. And I started to write this book to tease out him looking back at his career and saying, what have I learned over 40 years? You know, he's 87 years old.

Yeah.

He was over 40 years of this. And what are the lessons and the essence I bring out of this? And it turned out that Art didn't die in 2 months. He died 2 years later. And so he died actually 3 days before this book went to print. And so I always want to do a shout out for him and sort of dedicate it to him. God rest his soul. He has given me a front row seat to hear what the essence is of an entrepreneur who went all the way. And in a way, the jury was in with him. He was done with his career. And I think this is gold. when you, when you get a front row seat to this. This was golden. I want to share this gold. The bottom line of what he taught me is that entrepreneurship is primarily a mental model.

It's—

and it's not— and this is why I came up with the title. He kept saying, this isn't, this isn't science, this is an art, because you're dealing with persons. He would say the economy was made for people, not people for the economy. Don't forget it. Put the customer in the center. This whole idea, I help you. How may I help you? There's 2 people in there, and that makes the economy very person-centered. I help you through my talents and skills, adding value to you, and that value is profitable, right? And so he says, start with those 2 people. How may I help you? And then you fulfill that need. To him, this was to produce and deliver superior wine at a great value, he would call it. And then he would start to find ways to deliver that. But he said, it all starts in your mind. And this is because you're dealing with these 2 people, in a sense, in the center of it. Humans are so varied and so diverse that any combination like this won't be the same as the other. And therefore it's the art of bringing it together. I called it earlier him being an impresario, you know.

Yeah, leading the orchestra or whatever, and you have all these—

And because it's humanity that you're dealing with, you constantly— it's an art form. You constantly are an artist to do this. So, Sean, you did 20 masterpieces with your companies. You know, it's like an art piece that you draw. And again, because of the humanity being at the center of it, is why there's no paint-by-numbers thing on this. Like, it's a— in German, we have a word that says Fingerspitzengefühl. It's the feeling on top, on the front of your fingers when you touch something, that you have to see this specific situation and how exactly you add value for it. And so because Art was talking about this being a mental model, we teased out 5 principles, very basic principles of how business is. It's like these mental models, these 5 pillars of principled entrepreneurship.

All right, run them down for me. Give them to me quick.

So the first one is business is for people, not people for business. And we talked about this already. The second thing is that to create is human. And to be human is to create. It's what he felt is that this is— for us to be entrepreneurs is one of the most uniquely human things you can do, right?

I love that.

We definitely create. You see, when we work, we don't just make more, we become more. The full humanity that you develop is through your work. People always think that we're— not always, but some people think that work is a downer. No, work is actually making us more human. It's that we flourish when we when we work, which we can't do before. I just ask somebody who's been unemployed for a long time, and you see what work does.

It's a very vital part of a person's self-esteem.

The third thing is that it's an old cliché, but I like it anyway. Culture eats strategy for breakfast. Many times we think when we create a company that we create a product, but what we're really doing is we create a team that is, that can create together. And so we often forget, I, this is one of my chief offenses in this system is that I focus too much just on the product and not on the team to create the product. So I, when I create a company, I often neglected to focus on the culture I'm creating. Whereas if you create the right culture, the products that come out of it are a natural result.

You're right. I always say culture is like the fertilizer.

Yeah, yeah, yeah.

You have really good fertilizer, anything is going to grow, and it's going to grow exponentially faster, exponentially more, you know, better.

I like the term the fertilizer because that's exactly what it is. It's the, it's the, it's, it's the ground of it all. And then the 4th pillar is Art would always say, always make sure it's a win-win.

Yeah, I like that.

You know, we, we— there's people in the '90s when I, you know, when I started some of the companies that, you know, we read The Art of War and everything, and Art would be allergic to this and say business is not war because you're not seeking the annihilation of other people. Business is more like the Olympics, and war implies a zero-sum game, but business is not a zero-sum game.

No, that's true. And Stephen Covey really mastered that point so well and kind of beat it into us, and it is— you have to think win-win. Everything has to be win-win.

And then we have the 5th principle, which he says is the most simple thing. He says, always think like an entrepreneur. And he told me, look, Andreas, there's 2 kinds of people that I met in my life. And it has to do with their mental model. There are creators and there's harvesters. And, you know, he's in the ag business, you know, with the wine.

Yeah.

If I would go to my vineyard and I would always think like a harvester, my vineyard would be dead in 2 years. I don't focus on the harvesting. I focus on the creating. This is like what you said earlier about the fertilizer. If you focus on the overall environment and the health of the vineyard, your harvest is not— you don't have to worry about the harvest. But he says there's too many people who just going for the harvest and one more and one more and one more, and they're not nurturing it. And so he feels that always think like an entrepreneur is the way to create enduring value. And this, of course, involves the economic principle. You know, I'm putting a lot of this on top of it afterwards, of creative destruction. That's the creator, like, who constantly comes up with the next and the next and the next thing.

And there always is a next.

There's always a next. And either it's you who does it next, or somebody else comes and does it.

Isn't it funny? Because we're old enough to know that everybody who looked amazing in the beginning, and then, like, example, like AOL looked like indominate forever, right? Gone, right?

Oh, isn't that true?

Yeah. I mean, you look at, you look at like in our lifetime, we look at like Sears, JCPenney, and all these retails gone.

Think of the PalmPilot.

Oh yeah.

When that baby came out, people thought this is the end of it. I mean, this is it, right?

BlackBerry.

Yeah. And then the BlackBerry comes out. And then, and so the same with Amazon and all these other things. Important thing we need to do is to preserve the free market. And progress and the good of humanity is secured.

I know. I love it. Listen, I am an evangelist for entrepreneurship. I always say, look at the name on any building at a college. Look at every stadium. 9 out of 10 times, it's an entrepreneur whose name's on it. We create something that, you know, entrepreneurs create jobs, they create extraordinary wealth, and they typically are the most generous. By chance, entrepreneurs are the most generous.

Absolutely. And remember the 2% that they keep and 98% goes. One of the things I asked Art at the end, so, so what should I say to people? You know, I mean, we knew that he was dying. It was so beautiful and meaningful for me to talk with him about this. And he knew he was going to pass. And I said, so when I go and do these book interviews like I do with you right now, What do you want me to say about your overall experience with entrepreneurship? And he looks at me and he says, Andreas, I was an entrepreneur long before I thought I was one. He says, I started off— he wanted me to stress this idea of the employee entrepreneur because he says, an entrepreneur who is taking on the problem personally, they seek the solution. And he says, you don't have to own the company to be an employee entrepreneur. He says, My favorite employees were the people who came to me with solutions. And he says, I can now, in retrospect, I see myself in this, that take ownership of things and your employer will love you. And it's training ground for your future to do this yourself.

It's so funny you say that because, you know, when you go speak on other podcasts, there's 5 points. I always give the 5 points. One of my points is everyone should think like an entrepreneur. I mean, I couldn't make it up. And my whole point was exactly what you're saying. I said, if you go to work every day and you look to solve a problem or monetize an opportunity or an idea, that's your— you go and you're looking at those 2 lanes. I'm like, Steve Ballmer, over $50 billion worth, was an employee for Bill Gates. Okay? Sharon Sandberg figured out how to monetize Facebook. She's worth $1.6 billion. Okay. Then you go with Tim Cook, employee at Apple, extraordinary employees. And I also want to say none of these companies hit the trillion-dollar— I mean, Apple and Microsoft never hit the trillion dollars under their founders. They hit the trillion under the employees that took over.

Yeah. So one of the parts in the book, and I I have a website called andreas-widmer.com, and I do a little— I have a little unscientific test on there. But if you're listening to this, you can go on there and take the test and see what kind of— where in the employees— where in the entrepreneurship stages you're at right now. I do it, and you can take the little test. It'll tell you something and give you these examples that you just went through. My point with it is this, that I believe you should always think like an entrepreneur, and then apply it in where you're at. And by me doing a test, is it almost like with my students to give them permission to be entrepreneurs where they're at, at the moment, and to look at their life like this, that Art felt he was an entrepreneur, right? You know, he's in the Navy, and he came out in his first job, and he felt like he was an entrepreneur already now in retrospect, you know?

Yeah, no, absolutely. And it's funny that when you said think like an entrepreneur. I'm like, I have felt that way for so long. And my most valuable employees think like that. They're always solving problems for me, helping me solve problems. And we're always looking at ways to monetize opportunities, new marketplaces, and things of that nature. Man, it's so great. I have Andreas with me here today. He is the author. I got to flip all my notes here because I've taken so many notes while you're talking here. He's the author of The Art of Principled Entrepreneurship. Andreas Widmer with me here today. Andreas, obviously, where can they get the book? We know Amazon, I hope. And how can they connect with you?

So I'm at andreas-widmer.com.

And that'll be in the show notes. Yes.

And I'm, I teach at the Catholic University of America, which is in Washington, DC. We have a school called the Busch School of Business. Easy to, easy to Google me there. And I run the entrepreneurship program and I do Right. I do a lot of outreach and writing and talking and so on, and I look forward to connecting.

Great. Again, Andreas, thank you so much for being on the podcast today, and I'm so thankful that you listened. This podcast is brought to you by Get Started Marketing. If you need more leads, you need more sales, you just don't understand marketing, reach out to somebody who does. getstartedmarketing.com. We will talk again soon.