The Virtues of Free Enterprise and the Heroic Spirit of Entrepreneurs | Villanova University | 2024

Good afternoon everyone. Welcome to Villanova's law school and the John F. Scarpa center for Entrepreneurship and Law. Conversation with Professor Andreas Widmer from Catholic University Sioka center for Principled Entrepreneurship. I just wanted to say a few things about the Scarpa center because some people are not sure about what we do. So I am the Scarpa professor of Entrepreneurship and Law and the center director. And what we do is kind of unique among law schools in the country. We attempt to promote the entrepreneurial mindset in our law students, but we're very cross disciplinary. We work across the university with undergraduate students. For example, we have a law student in residence in the Engineering entrepreneurial program to mentor those students. We work closely with the Institute for Innovation and Entrepreneurship over on main campus in doing workshops. A number of my SCARPA fellows are here. They can raise their hand. They lead and organize events which promote not only the study of entrepreneurship and the entrepreneurial mindset, but we host attorneys who either own their own firms or who are startup attorneys. We have provided legal externship opportunities in various entrepreneurial organizations. And we have an entrepreneurship law blog. I teach a course every fall called Law and Strategy for Entrepreneurs and Attorneys. And in fact we use Andreas book as one of the required readings. And we also have three student organizations, the Entrepreneurship Law Society, the Scarpa Corporate Negotiation Team and the Fashion Law Society. And last but not least, last year we started a new thing that Mr. Scarpa really wanted us to have, which was we initiated the Entrepreneur in Residence. So I'm happy that this semester's Entrepreneur in residence, Mr. Terrence Lowe, he's right back there, co founder and CEO of Michael Lavelle Wines, is our Entrepreneur in Residence this semester. And Terrence comes about once a week. He comes down from New York and he not only talks to and counsels students in the law school about the entrepreneurial mindset, but he also is a great resource to students across the university. I also just want to give a thank you to Mr. Scarpa who was unable to be with us this afternoon. He is down in Florida, but already called and texted me. He's very excited and he will see this video. He sent a nice letter to Andreas. A number of our board members are here. The SCARPA Advisory Board, the namesake of the law school, Mr. Chuck Widger and Barbara Widger are here. Joe Delrasso is here. And in a few minutes a very distinguished looking gentleman, Eustace Wolfington, who is on our SCARPA Advisory Board. He's also one of the producers of the fabulous new Film Cabrini will be joining us. Sorry, that. That's my commercial. We are delighted to have Andreas Widmer here today. As I said, he is the center director and founder of the SIOKA center for Principled Entrepreneurship at the Catholic University of America. And his book here today. Everybody will get a signed copy before you leave. If you can't join us for the reception, please make sure you get your signed copy. But he also. The first book you wrote was the Pope and the CEO, which I loved and read last summer in Ocean City, New Jersey. And if you're interested in that, you can get that on Amazon. We have the QR code. And now Mrs. Shelley Widmer has written a book about. For little people, about this tall guy which did you see? How tall? What are you, six? Nine? Six, nine. You were the tallest among the Swiss Guards. So that's going to be for the Christmas gift for my grandkids. Anyway, enough about the Scarpa center and enough about. Well, not about me, the SIOKA Center. I apologize. SIOKA Center. Andreas, will you share with us your career path from a Swiss Guard to your current role at the Catholic University of America?

How long of an answer is this supposed to be? I'll try to be sure, because it took a lot of turns. I see it now as a thrust forward, but it took many turns. I was actually not a very good student. I kind of came out of Switzerland without. Or the reason why I went into the Swiss Guards is because I actually kind of failed at school. I have the classic entrepreneurship profile of having very strong ADHD and dyslexia. And so the way that the school is being taught, it's just not how I learn. And that was handicapping me a lot during my younger years. But it also gave me grit, and not a tolerance for failure, but grit to overcome it. Right. And then to that, you add my military service, which Switzerland is a militia. I was in the militia and I went on in the military for a bit. And then I found out that I could be a bodyguard. And I thought that was about the coolest thing you could do with your life. I still do. And I then learned that I was going to protect the Pope. And I'm, you know, culturally Catholic. I grew up kind of as a Catholic or so, but I had no faith or anything. I just thought being a bodyguard was the coolest thing you could do. And so I joined the Swiss Guards and found out pretty quickly that this was way stronger, way tougher than I wanted it to be. But the Swiss Guards is actually a Foreign Legion. Once you're in, you can't leave, right? And so I couldn't leave anymore. I was totally demotivated. Like I didn't want to be there. And that's when I started to meet John Paul ii. And he kind of changed my life in terms. Starting in terms of my work, you know, that he started to work with me and kind of saw that I was a frustrated young man who tried to figure out his role in life. I just couldn't. I couldn't find who I was. Right. And so I. In sort of a memetic desire, I went into every direction and tried out everything, but never found myself. And he cued in on that and through. And we can go into detail another time, but through many different interactions, he helped me find the meaning of my life, my faith, but also importantly, my future in work and my understanding of work. While there, I made another great discovery, and that is I met the love of my life sitting right here. Shelly was studying in Rome, and we met. And I have to say, I didn't speak a word of English and she didn't speak a word of German. And so we spoke French and Italian in the beginning with each other. And. But that gave me the desire to come to America to pursue her. Right. She was going to go back and I would come back, but it's difficult if you don't speak the language. You can't just walk in here. And that's where the Augustinians come in. I knew the Augustinians in Rome well, and especially a few of the Americans. And they said, look, if you really want to come to America and try this out and pursue this young woman, then why don't you come to one of our schools up in North Andover, Massachusetts? And they let me into Merrimack College without speaking a lick of English. I don't know how they did it, but they did it. And they let me live with them. Can you believe it? They're very, very good. Good priests, good men. And so I lived with them and they taught me English and they coached me through my classes in the beginning. And then we got married. And very early on, I found a college student who was working, who was studying there as well and who said, look, we have this little startup company that is doing some technology, and you speak all these languages. I speak like four or five languages. And they're like, you should join us, but we can't pay because we're a startup. But in 1989, 90, I didn't know what that was. And they Said, we do computer software. And I said, well, I never used a computer in my life. And I did it because Shelly told me that if you work with somebody, you're not going to regret it later. And I didn't. I worked for free in the beginning. And that company, I didn't know anything about it was called FTP Software and we ported tcnet to the PC. That was a revolution in technology. And I ended up being there and running all things outside the United States. And so while I still was at Merrimack College, I became the vice president of international at FTP software. And in 93, the year we graduated that I graduated, I started college at 23, by the way. So in 93 we go, I graduate and we go public as a company. This was an amazing year. And then we moved to Europe to open the offices over there. And then something happened. We called FTP. I told one of your students, not it's for file transfer protocol, but we actually called it fun that pace because we had so much fun doing this. And this was so I so flourished in that company that we called it fun that pace. But suddenly the fun was gone. We go public and people showed up who didn't dress like us and things culture changed and we said, we got to get out of here. And we left, moved back to the United States and I met a couple at mit. I didn't go to mit, right, I went to Merrimack. But I started to know all these people and I met Jim and Janet Baker and they told me that they are at the cusp of innovation with speech recognition. They own the company called Dragon Systems. And they hired me to do what we did at FTP. And basically a startup bringing a product like naturally speech, continuous speech recognition, which is what you have now on Siri and Alexa and all that. And so I helped that help that grow and go, you know, skyrocket a bit. And we sold the company at the end in 2000 for $600 million. And three months later it turned out that the people we sold it to were fraudulent and the whole thing just blew up, right? And that gave me pause to think it was right at the time. People go, you know, capitalism is evil and this is a selfish bastards and stuff like this and so on. And I started to really go. And I mean the people say, when you lose that much money, I didn't lose $600 million. Like I was a piece of this, right? What do you do when you lose that much money? And I always say, well, the first thing is you go into the fetal position, but then after that, when you come back out, you basically. First you blame yourself and then you blame other people. It's like the stages of grief, right? But you stand back up and you say, okay, what is going on here? I'm not going to just keep doing the same thing over. Should I even go back into that system? And so I started to do two things. I'm not going to do an mba. I'm too old for an MBA at this point. I feel like I honestly, like, I know how to do the MBA thing. I've now helped lead two of these large companies. But what I did is I joined a business strategy firm in the Monitor Group. The Harvard Business School strategy firm was called Monitor Group. And I led. I took over as the lead for one of their subsidiaries called OTF Group, that did business strategy in uncertain environments, which is I feel my background. And because I felt maybe I did miss something, you know, some strategy in business school or so. And because Michael Porter is in there and all these guys. And then I. And we worked on more and more on emerging markets. So I got in touch with all poverty issues and stuff like that. And at the same time, I actually went back to say, to ask myself, is that faith I found through John Paul II and to capitalism I practice compatible? Can I have faith in capitalism? And so I went to study. I wanted to study theology, but this priest that was advising me was saying, no, you should study ministry, because that's applied theology and it's much more useful to somebody like you. And so my master's degree is actually in ministry. And I did the two things and the culmination of the two things together. What I learned is this first book. And then that led me to. I did a few other companies in between. I'm trying to not go too long. That led me to be called when the Catholic University of America, which is the Pope's. It's the pontifical university here in the United States. And they wanted to start a business school. And they read this book and said, this is the kind of business school we'd like to do. And they called 10 years ago. And so now for the last 10 years, I have helped build this business school and teach. And so the second book I now published has to do with what I learned through this teaching how to teach. And sort of my answer to this was sort of me thinking about myself and saying, this is my testimony of how I make sense out of what happened in my life. This here, the other book has to do with actually being out in the world and working with students of all ages and looking at the situation we are economically now and say, okay, what does the market economy have to offer here and how does that jive with ethics and morality and all that? Sorry, that was a very long answer.

It's wonderful. In your book you state that there are five pillars of principled entrepreneurship. But I would like you to expound on my two favorites, number one and two. Number one is the economy exists for people, not people for the economy. And number two is to work is to create. To create is to be human.

Yeah. So principled entrepreneurship has to do with these principles. I didn't want to go the first principle of principle entrepreneurship, so I call them pillars. Right. And the important thing is that we start to understand now. We talk about market based economy, capitalism and everything and everybody starts to assume themselves what this means. But we need to go back to the basics and say, where is this coming from and how does this actually work? And the first thing that we understand is that you wouldn't have a business if somebody wouldn't work and if somebody would want to buy what it is that you're creating. So we should. I know it's cliche, but we shouldn't lose the forest for the trees of when you do something, you should always start by asking, why am I doing this? Like, what's the end result here? The actual purpose of doing this and the actual purpose of an economy is the human person. If there wouldn't be a human person, we wouldn't have an economy. So it's not a chicken and egg question where you say, well, they need each other. No, actually you can have human persons without economy, but you can't have the economy without the human person. And so that's something we should never forget. I tell my students, there's no such things as companies. At the end of the day, there's only people because you end up knowing people here. The biggest thing you get out of this environment right here isn't what you learn because you can read that in a book. It is knowing each other. It's actually not the people you're looking at right now. The most important thing you're getting out of this school is the people who sit next to you. This network, and that is about the people here is the most important thing you're bringing out of an education, out of an environment like a school. And it pays to never forget that. Focus on the people at all levels, on the customer and on the people around you. So never Forget that first principle. The economy actually exists to serve us, not the other way around.

And then the second pillar, this is my favorite. To work is to create. To create is to be human. Because this is somebody who loves working. And that's. I always say to my students, that's my wish for all of you, is to find a job you love because you'll never work a day in your life. But I still like to get a paycheck from Villanova. But anyway.

And it's actually not a good thing never to work a day in your life, because humans are the only animal that can work. Did you ever think about that? No other animal can work in the sense of creative work. I had this, you know, at otf, we worked with emerging markets, and one country that we worked with a lot was Rwanda. And we helped as a business strategy firm to define ecotourism there. And we did the gorilla safari. I mean, the safari, it's like a hike. You walk up and you go see these gorillas in the wild and everything. And of course, they said, like, I'm the CEO, and they, oh, you have to go. But look, I'm 6 foot 9. I'm not made for this in a Jeep for two hours, banging my head on the thing. But I went. And so up the mountain we go, we see these gorillas in the wild, right? And right as we get there, and with all the, you know, the head of the company and the security and the local office manager and everything, as we get up there, we get in between the main gorilla and one of the females. He did not like that. He gets up and he screams. This is like on a hill in the rainforest, like a really steep hill. You have to hold on. And he charges. He just one look at me with my favorite Rwandan friends, and this guy looks at me and says, you're the problem. The gorilla just charges at me, and they're tearing me to the ground and tell me to not look at him. This is really what, by the way, people think this is a joke. That's actually what they tell you to do, not to look at him. And so they brought me down, and this gorilla came this close. Like, I could smell his breath. And then they made some sound or something, and the gorilla lost interest in me. I was no threat to the gorilla. So he walks away. And the second the guy walks, the gorilla walks away. The wildlife warden there pats my back and says, so, Whitmer, how do you like meeting your cousin? And I said, this gorilla has many things, but he's not my cousin. And so the whole time back we had this argument with each other about the gorilla being my cousin. Because the truth is this gorilla is 99% my DNA. If you take him apart and me apart, we're basically the same. There's no other material here. And we're pretty much the same animal. Eventually I sort of said, look, I came here on an airplane, we drove with the Jeep, as painful as that was, I stayed in a lodge that was actually air conditioned and I am vaccinated to come here. So I don't get some of the mosquito borne illnesses. All are things that my grandpa never had. Actually my grandpa wrote this story for us of how he saw the first car and the first airplane. And so this is always in my mind that my grandpa didn't have this. And I said, and here I am and I'm flying, I'm driving, I have this medicine and everything. This guy, guess what his grandpa was doing? Sitting on the same mountain, defending the same females and eating wild celery just like him. As a matter of fact, he never worked a day in his life. He never created anything that led me to understand why not. You can say, okay, he makes some, he uses his stick to get some ants out of something. That's not what I'm talking about. I'm talking about the invention of penicillin, the Internet, speech recognition. It goes back to the beautiful thing about the ancient texts about God and religion and our origin. Talk about the creation story. And if you look at why this animal can't create, and me, I'm an animal too, can create. The reason for that is one thing and one thing only. And that is I am made in the image and likeness of the Creator, the creator of everything. But if you look at the story, it's a beautiful metaphor, it's a beautiful story of how that we should go back and don't put it away, but go back to this story. Everything on earth, if you read Genesis, everything on earth is built out of the same stuff. There's only that material. So when God metaphorically created the being, God goes down, grabs like wet clay and forms an animal, every shape, every sort and goes poof, there you go. And he runs away. And so then God creates humanity. What does God do? What's the material, goes down, takes clay. Now comes the difference. Says, you need to be in my image and likeness. What am I like? I never die. I have free will. I'm a subject, not an object, right? And I can create because I just created all this. And in order for you to make you like me, I just made you like the animal. What did God do? What does this beautiful story say? Breathe the creator spirit into us. And that made us creators like God. So when you think about it, that's why biologically, there's no difference between me and this gorilla. But the gorilla can't innovate, can't create something out of nothing. Think about this. We created speech recognition, tcpip. People do come up with electric cars, with penicillin and everything out of nothing. God calls that work. Because the first thing we know about God, that God is identified in Genesis is he works. Do you know that God is defined by being a worker? And we're like God by us being able to work. Now, the way that this is drawn out spiritually. And we'll talk a bit more about this in here. But that's where the creativeness is uniquely human. It's actually our charge to take care of this planet. Not just to keep it as it is, but to develop it further. We get to continue creation. We can take two juices together and come up with something that takes away headaches. You know, we actually get this. And on top of it all, we get this freedom along with it, that we can actually do this and abuse it. This is how we're also like God, that we actually get to say if we create goods that are truly good, if we provide services that truly serve or not. In that sense, each one of you is like a God who gets to decide if you do good or evil. That is the great responsibility we have through work. The gorilla doesn't have that because the gorilla is forced to sit there and eat his salary and protect his tribe. It's no free will. It has to do. We have the free will. And one of the key ways this comes out is our ability to create, to participate in God's creativity. And we call that work. And so I think that goes back to this idea of that the economy exists for humans. And I want you to think of something. It doesn't matter what your faith is or. But I want you to understand that humanity depends. Your humanity depends upon the degree with which you realize your innate talent in your creativity. In the Catholic language, that means that your work is a part of your holiness. Think of. If you're not Catholic, think of us saying holiness, like in being whole, you know, all of it, being fully who you can be. Right. And work is our ability to bring forth perfection and excellence. That is Godlike because it imitates God and our language Then within Christianity is that because you imitate God in this perfection, in this, because you're able. And this is not just paid work. I can clean this room and make order here. Just like God made order out of chaos. Right. Then you imitate God. When you imitate somebody a lot, how do you become? You become more like them. Work is a path to holiness. And here we are in a society that struggles with the very core of work, of saying that work is somehow evil. Yeah, eventually we fall. You know, work predates the fall. And in this beautiful creation story of Genesis, God first made us work. And then we started to learn to abuse our freedom and not just create goods that are truly good, but start to do bad. And that's called the Fall. Now we have this wound in a sense that we're tempted to create and do things that are actually evil. Right. Because we can. Once we did, it's like once I take one peanut, the bag is gone. That's sort of our temptation now. And so now we need even stronger discipline and desire for good to actually exercise our free will in a free market economy, to create goods that are truly good and to provide services that truly serve.

Beautifully said. Whether we look at FTX and the infamous Sam Bankman Fried or Theranos Elizabeth Holmes, capitalism has been under attack and for many good reasons. Yet you provide living, breathing cases of businesses and human beings who put humans, who put their fellow brothers and sisters at the center. So would you share a few of those case studies that you describe in your book that you teach about that are truly doing well and doing good?

Yes. I want to add one thing about this, because when we talk about capitalism, what are we really talking about here? You know what's at issue? Profit. Profit is at issue. Underlying that issue is a total misunderstanding of what profit is all about. Profit, you know, it starts in small things, in how we talk about, for example, things like poverty, right. We say, well, how much money do you live on versus how much money do you live on? And in that is baked in. The point that if you live on less money than her, what should I do? Take some of her money and give it to you? Right. So in that definition is baked in a zero sum game that there's only a certain amount of money in the world. That's not true. As a matter of fact, the only unlimited resource we have is money. But you have to make money correctly. And that's where capitalism comes in. Money is a transfer value. When I'm saying making something out of nothing, I'm Saying that we put these, our minds together to create TCPIP on the PC, or easier example is to create a way that Siri can understand me and actually execute a command or take my dictation. So that's what we did at Dragon Systems. We took something and we put it together and we made it so that other people felt that this was worth, you know, at the time. We sold it probably for 500 bucks apiece. And they cost us in the software world, it cost us probably a hundred dollars to produce. And they paid $500 with it. What do you think those $400 came from? Suddenly it cost me only $100. I sell it for 400. $500. Where did the $400 come from? I tell you where we call it profit. I like to call it new money. It's value add. Value add is new money. That's value that we created that didn't exist before. And we use money to indicate value, right? So therefore, if you talk about issues like poverty or equality and economic development and everything, the question is a very simple one. Allow people to create value and you will eradicate poverty. The biggest lie we have is that capitalism is a zero sum game. As a matter of fact, that's the only game that is not a zero sum game, because it is the free market where if I don't add value, you're not going to buy. Right? As long as nobody is forced here to buy from anybody else, Value add is baked into the solution and therefore more and more money, which means it makes money and value creation the unlimited resource that we have access to. So profit is not a bad thing. As a matter of fact, going back to the great metaphor of the creation, do you realize that God has never created anything that isn't profitable? Everything. The universe is expanding, okay? Everything is growing. We live in an environment, in a universe of abundance. And here you tell me you want us to run a nonprofit company. I think there's. Personally, I think there's something wrong with that. You can. We should not. I'm happy to debate with you what you should do with your profit, but I'm not happy to debate with you to do work which leaves no added value. Do you see where I'm going with that? So to me, I sort of turn all the way and say, we need to create value. Now, does this happen at the price of human dignity? No, of course not. Because again, I can chew gum and walk at the same time. And I can create goods that are truly good, that serve humanity. A story is of Edouard Michelin. Michelin is the famous tire company. They come out of France. And Eduard, this was now told by his grandson, Francois Michelin. So I heard this story through Alex Chaffman, who interviewed him and talked about Edward Michelin's story about. His name was.

Oh, Marius.

Marius Mignol. Marius Mignol. So they. Michelin, in the 20s or 30s, rather, started to do tires and everything. And they sold these tires. And there was an economic depression there during the 20s, 30s, and menial was fired because he worked. He worked in a print shop, printing company somewhere, and he was fired. But he has children and he's looking for a job. And he goes basically from place to place to say, hire me, hire me. And this Marius just wouldn't find a job until he got to the factory of Mish. And he walks in and he sees the head, you know, the shop floor manager, and says, hey, I need a job. And. And the guy says, well, what can you do? And he says, well, I worked at a print shop before, and I, you know, I have five kids and, you know, please hire me. He said, well, we don't have a print shop, but we have a mail shop, a mail room, you know, why don't we put you in the mail room? And he says, I'll do anything you say. I'll start right now. And Mario starts to work in the mailroom. And before you know it, Michelin would walk the floor, you know, what do they call it? Manage, by walking around. He did that. And he walks around and he sees Marius as a new guy and says, who is he? He meets him and then he goes to the. To the factory manager and says, hey, where did you get this guy? And he says, well, he's, you know, he worked in a print shop before, but he's, you know, he needs work. And so I thought he doesn't know anything else. So I just put him in the mail room and he says, don't do that. And Michelin goes in. Edward goes in and takes the guy and says, no, you come here, you go in the finance department. He's like, why would you do that? And he says, look, humans are like gems. We will never find out what this guy's talent is unless we expose him to different environments. It's like breaking open a gem to see what's inside. Let's put the guy into a totally unknown environment that he hasn't tried and see what he does. And before you know it, this guy goes in and he was on the exchange, you know, in Europe all the different exchanges in the different currencies. And the guy started to figure out a way to find transfer value, transfer cost of the. From one currency to the other. And so all transactions would always go to him because he got an idea and he saw a pattern and he did it. And so he could do it 10 times faster than the next guy. And so everybody's going, okay, that's our finance guy. We're going to keep him there. Guess what? Michelin comes back and says, now we're going to put him into engineering. And they're like, no, no, don't do this. He's brilliant at finance. Why would you. And he says, jem, take this guy, put him in the next place, see what he can do. And by the way, it's not that he didn't observe, right? He observed because he does management by walk around. He put him into the engineering. And of course, in engineering, he was totally ignored because he's not an engineer. He doesn't even. Probably he doesn't have a finished high school degree, but he was a smart guy. And Michelin saw that. And that guy comes in and says, what's the challenge? At the time, just as a. It's a good trivia question. We had cars that could only go 30 miles an hour, even though the engine could go 100 miles an hour. Why, why could cars not go faster?

Do you know the tires, right?

The tires would explode. Can you imagine driving around if you go too fast? And so they couldn't go faster because they couldn't figure out how to make the tire with the heat and the air inside hold. And here comes Marius and he says, okay, tell me what's. And he figured something out, and they did tests and it worked. Marius came up with the radial tire. If you drove here today, you drove on Marius technology, it made Michelin overnight the number one tire company in the world. And Michelin basically went back to say it is you have to break the gem to stone to find the gem inside. And what he means by this, there's two way of management, two ways of management. One way of management sees the person, the human being, as a problem. That's why you have to manage them. The other one sees the human person as the solution, as the potential, as people with potential. And you manage them into their potential, and it makes all the difference. And both, in a sense, are trying to be profitable. But the kind of profit you create, where the profit and the result is more than the sum of its part, is when you manage people as gems, as the stones that have gems inside of them.

It's a beautiful story. Earlier today you were telling. I was telling you a little bit about our work in the Scarpa center and how we're trying to. We don't assume that law students who are interested in the entrepreneurial mindset will become entrepreneurs. They might. But how can they be better partners with entrepreneurs? That's Mr. Scarpa's vision. So just tell us the story. When you, you know, as a business person, as an entrepreneur who were your kind of go to partners.

I'm glad you're asking that. So I told you already, I'm not the smartest. I'm not the brightest bulb on the Christmas tree. I have learned. I had learning disabilities all my life. So I, I'm very proud with dyslexia to have written two books, eh. And I have adhd. I'm like a cat with a laser pointer. Right? I'm all over the place. But I have vision and I can communicate. That's my talents. I always talk to the students, find your talents. God gave you talents. I guarantee you I start a business with every student. I have 250 students in the fall. Everybody starts a business. All you need to do business is simple. It says how may I help you? That's it. That's my favorite thing. How may I help you? And if I can use my God given talents to create value for you that is more valuable for you then it cost me to create what we call that business. Everybody has talent. Don't try to learn what is not your talent. So don't teach me accounting. I learned what I need to know, but it's like the return on investment on me. Teaching me something which I'm not good at, which I'm not talented at versus teaching me something I'm talented at is night and day. A good investment is to teach me vision, Talking communication, startup and being in an environment where everything changes every two minutes. Because that's my talent, right? Versus making me look at crossing the dots and dotting the I's. Except the way you put teams together is you. I want everybody to start to talk about their talents and non talents. By the way, for all the students or students and scholars here, go ask around. Ask your parents, your best friends. What do you think my talents are? Because what makes me sad about our education system is that I knew that I sucked at numbers when I came out of school and that I have a learning disability, but I didn't know what my gifts were. And shouldn't school at the end be the Thing we do of finding your talent and then excelling at it, isn't that what we want out of school? So go back and ask your folks, what do you think my talents are? Ask the people around you and write it down because first of all, it'll be joy in your heart. And this is a way, in a sense of praising God for true humility, which is to recognize what is true and then lead with your talents and, and mitigates your non talents and start to use this language, talents. And as you build your company, find people with the talents. And if my talents cover somebody's so I have talents, I hire somebody to cover my non talents. And then if we circle the wagon in a sense like this, with everybody's talents covering everybody's non talents, we become invincible. This is when humanity like lights up, right? A team can reach extreme heights doing that. And for me, the two key hires on this is a lawyer and a finance guy. So I brought my lawyer, Paul Cohen, God bless him, to every company at the same lawyer, Paul Cohen. Even if I'm doing something now, I'm involved on a board or something like that, I tell him to call Paul Cohen, because Paul is the kind of lawyer who is as excited about new ideas and new things as I am. And he has this way of communicating with me in which he sees my vision and he shows me the path to the vision rather than the reason why I can't do it, even though he gives me perfectly legal advice. But he and I communicate and we connect and we communicate in a way. And that's what I ask you to do, is to find, if you go into practice, if you go into a company, listen first find the person's vision and then show them the possibility rather than the prevention. Right? And that's why I would go through fire for Paul. And he's involved in every company I do, even though he's as strong and stringent as anybody else on what I can and cannot do. The second thing that I do is I have to find a cfo. I need somebody to say, okay, now we're getting to the point where we're going to stop investing in this and to just make sure that the spending and everything is, I have the overall idea and I can do the budget, everything. But then to go into the nitty gritty to make sure at this moment this is correct, I don't trust myself to do that. And I know that's not my strength. So these are my two best friends who come with me and it has and Then from then on you hire more people to cover other parts of your non talents. And so my interviewing and my hiring process always has to do with talking about talents and non talents and my reviews of employees always has to do with how can I give you more rocket fuel and what you're really good at and mitigate with help for you from other people on the stuff where you struggle.

Wonderful. You know I talk about false dichotomies a lot in my class, right. I don't like either or. I mean there is some either or in life. That's why my students know I have the ampersand in my office and I bring it to class. But we talk a lot about false choices, even in the economy. And Milton Friedman, you know, his stance was that the only responsibility of any enterprise was creating stakeholder value, profits only. And I take it you disagree.

Yes and no. Friedman is the classic theorist. Friedman's never run a company, has he? He's not an entrepreneur. I come from a different angle. I'm not saying Friedman is the person who comes who sees a beautiful Swiss watch like a Tissot or an Omega or something and is starting to say from the outside how this works. Right. And therefore, based on his observation, he's not wrong. Because I tell you what I told you before, Profitability is a non negotiable about a company because if you don't add value, what are you doing? Then you're destroying. You either don't add value or destroy value. It's one or the other things. But as a person starting companies, I've tried it a few times. When I took over a company and we had three months of cash left, this was like a company in free fall. And I was brought in to turn like, it's like getting into the cockpit and you have to pull the thing up to get it back up. With three months left, a burn rate of 100, $200,000 a month, and you're in free fall and you have to turn this around. My first instinct is of course to say I need to turn a profit. Right? You go in, but how much? What should I do? Sit in there and say profit, profit, profit, profit. Can you see how nonsensical that is?

No.

What you need to say is I need to create value. What are we doing here and why are we doing it and how can we do it better? Let me find somebody who wants our product. Let me find out what is our strength. It's what I do with my students. To say, what's your talent? The first Thing I do with our freshmen is to find out what the talents are. And I go through the whole thing of all kinds of things to do with them to find your talents and then turn around and say, how may I help you? And then how do I create? And then the rest of your school should be to learn skills, to create value with your talents. That's what school should be, right? And so the profit part is a result of that. And Friedman, of course, saw this around the other way because he doesn't have that experience. But what Friedman does is a little bit like this. Do you have any white blood cells by chance? Are you sure? Have you checked today? When is the last time you checked? Sorry everybody, but do you know how important white blood cells are? What happens if you don't have them? You die. And you have not checked if you have white blood cells today. How do you explain that? Have you? Is this vital? It's a non negotiable. Right, but when have you checked last? Why don't you check? Why don't you check? Do you have confidence you have them or you just wait until you find out? Why don't you check? Tell me. Checking wouldn't necessarily bring them back if they were gone. So how do you know you have them? And how do you continue to have them? Eat well, drink sleep well, move, do some exercise, right? Live a good life. Profit is to accompany what white blood cells are to the human body. You're not walking around going, profit, profit, profit, profit. No, that's silly. That's like you're not checking white blood cells. White blood cells are a result of healthy living. Profit are a result of adding value in your work. So let's all go back and say, let me add value today. What's the value you added today? And for that we have to go back and say to the very basic formula. And that is what is my talent? How can I help you? And then how do I learn the skills to create more and more, more value for others?

Right, before we open it up for questions, we have a few more minutes. I think you mention it in both books, but it started in the Pope and the CEO Tivolio, beneath that, he learned it.

I learned it from you.

And I say it to you and I say it to all my students. I don't say it in Latin. Tell everybody who are not Latin scholars what that means.

So I heard John Paul and I have to pinch myself that I actually knew John Paul ii. And it's not like that I was his best friend or I was his bodyguard, which means you walk around with him and everything, but I wouldn't go to coffee or dinners or something like that. But nonetheless, you know, we know each other. And he. I of course, hear everything he says because you're there all the time. And I heard him say to somebody, you know, love. The word concept of love is a funny thing. It's said in different languages differently. But his favorite was the Italian one. It's actually Italian. His favorite way was Italian because he said, you know, take English. I love, you know, I love peanuts. I love my dog, I love Michelle. That's a different scale. Right. But it's all the same word. I love my employees. That's what he actually was talking about. You love your employees. Yeah. So what's the difference here? And what are you looking for? And what he said is he likes the Italian way the best. That they don't just say, I wouldn't say so to her. I would say, ti amo. I love you, amor tiamo. You know, and then to you, who is a student here and we would be colleagues, I wouldn't say tiamo. That would be inappropriate. I would say, tivoglio bene. Tivoglio bene. I want your good. Remember what that reminds me of? I think some of you may have stopped for a second. When I defined what the objective of a business is in terms of. Of the free will you have received from God to do you have received the power to create goods that are truly good and the power to create services, to provide services that truly serve. And you know, who's the judge of that? Of the truly good and the truly serve you are, because you get to say tivoglio bene. You know, I want your good. What good is you want from me? If it's truly good for my customer, for my employee, for my investors, I say tivoglio bene. Rather, I love you, Tivolio bene. Well, what good would you want from me? Define that. And of course, what John Paul said. What's the greatest good you could wish on somebody? Like, think big. You could wish for them to be forever in heaven with God. And then he turns to you and says, then why would you sell them a product or a service or make them do work that interferes with their path to the thing you wish for them, Right? So I need you to say tivoglio beneath for your co students, for your employees, for your investors, for your business partners. And then define the good you wish for them. And I encourage you to think big.

So we have a few Minutes for questions and then of course everybody's going to get a book. And those who don't have to run off, join us for delicious food and some alcohol and non alcohol. Who has a question? Got some? Oh, Ray, Terrence, our entrepreneur in residence.

I've actually got two questions.

Go easy on me, Terrence.

Terrence here, you're a low talker. So I've gotten to know you well and you have a very soft voice.

All right, how did you, how did your non talents present themselves and how did you identify them? As non talents?

Yeah.

And then my second question is, you know, as entrepreneurs we tend to either be risk adverse or risk taking.

Right.

Somewhere in the. Or somewhere in the middle. When is the last time you took a risk and what did you learn?

Oh, good. Well, let me go with the easy first. How you find your non talents, of course, through failure. Right. And I think we know our non talents quicker because school is designed, designed in a way to actually drive home your non talents rather than your talents. And the other side is, and this is a joke, getting married also helps. And what I mean in that in a positive way, true love is to tell the truth. And Shelley and I have a partnership. We actually do the business together now and we are such a match that we actually complement each other that she is detail oriented and she doesn't book AM flights in the PM like me. And so that honesty, you know, it's like you can have charity and truth. Right. Love and truth that she can actually tell me and I believe her that I suck at something. But so I think that's the less you will find very quickly what your non talents are in the world. But the more you rank in a company, the more difficult that it becomes the best thing you can do. And this is again, I talk you your best, your highest value you get out of the school is the people sitting next to you right now. Because this is what they can do for you. They can be the people who you know will always tell you the truth because the more you become successful, the more people lie to you. I always thought there was, you know, somebody else who, who is they in the company until I run the company and I still talked about day. Don't you feel like that in your company? And I'm like, I want to know what the gossip is. Suddenly the gossip is about. I'm the gossip. People end up. It's weird, but you yourself start to miss the point and believe your own PR just because you're the top dog and everybody says whatever you Say is funny, right? The best you can have. And I have that as a great Blessing. I have four guys I meet with every week. We've met for 30 years. These are my brothers. I pray with them, I sit with them, we drink, we go to vacation, we hung out. They tell me the truth. Start this now. You need this now. Not once you're successful. Somebody shows up and then you don't know, literally. And I empathize with that. You can't know who you trust because everybody has a dog in the race. But if you start these relationships early, it's the greatest joy and the greatest friendships you can have in people who tell you the truth. And that includes, of course, telling you what you're not good at and risk taking. I'm a high risk taker, right. Wouldn't you say, Shelly? We're a good match with this. She's very careful. And I am a high risk taker. So I take it depends what kind of risk you like. But driving, I'm a glass half full person. I've never seen a bad idea that I'm not getting excited about. And so that's actually one of the things I mitigate because I know that my talent, of course, can also be a risk. My propensity to go the risky way. And I'll give you just a quick thing on that. You know, we actually had a chance to bail out of the company and actually make all the money because I, you know, there's a window for senior management to actually. It was a public company and there was a window for us to sell. And of course Shelley said to sell and I didn't. And that's how we lost that chunk of money. Key way. And I'll give you just a quick thing on that. You know, we actually had a chance to bail out of the company and actually make all the money because I, you know, there's a window for, for senior management to actually it was a public company and there was a window for us to sell. And of course Shelley said to sell and I didn't. And that's how we lost that chunk of money. And you know, sometimes you take a risk and sometimes you don't. But it also helped us to. It took a while, you know, we had to go through this. But yeah, I know that it can also be a non talent, you know, if you do something a lot and it's uncontrolled, it becomes a non talent too.

Any students have questions? Zen and then Victoria. And then we can just take it outside.

Yeah.

I thank you for coming to speak with us tonight. So I had a question for you. What you were talking about before with value and you said that value was creation. So that's your profit margin and that kind of stays somewhat constant. You know, you can have a higher margin on some products, but overall you have a constant value, you create. And so then money must be something else, perhaps energy or like a share of knowledge. And if you print more money, you have to use more money to compensate for the energy loss, the inflation. So my question would be, do you think that in the free market economy we naturally gravitate towards the best money?

So, so now, so there's a couple of things I don't, I may be miscommunicated. We should never just print money. To print money. There's only one legitimate way to, to increase the money supply in the economy and that is when there's more value being created. So we measure the GDP and we print more money when the GDP goes up. GDP is a roughly a measurement of new value being created, right? So the effect of business in a free market is to create value. Value is never constant because it's a perception by humanity is the product I'm creating, how valuable is it? And you know, ice cream at the beach is much more valuable than it is in the North Pole. And so there's no constancy of value. Value is always subjective. And that's the beauty. You know, this is so to me, business is, is on the spiritual level because it's so beautiful, because it's individual, human. And so therefore, no, I don't say value and there's a fixed margin and this and that. No, it's a dance. We're in a universe of abundance and we need to interact with each other on an individual basis to figure out how to do this. But the only valid way to create new money is to create value for others that's measured. We have hundred different ways to measure it. The simplest way to say it is to measure the gdp. If the GDP goes up, you print more money. So just fiat money to just print or saying the government wants to spend more money and therefore you print it. That's deflationary. If you only print money when value is being created, you do not have inflation by definition, not the free market, if it's a free market, would not allow the government to print money just like that. There's a reason why the Fed is separate from the political system and it shouldn't be abused to start to print. Look, one of the things I found and let's just be frank about this. Every criticism of this thing that we call capitalism is always somebody abusing the rules. And then capitalism somehow has to pay for that. It's like saying in basketball, if somebody cheats in basketball, we don't say basketball is a bad game. We say this person cheated. Do you see what I mean? But we say, when, you know, in an economy, which is maybe a good term for this is crony capitalism, where very large companies, very large business start to collaborate with each other and suppress small businesses, competitiveness start to increase. And you know, when you print money, the first round of people who gets that money from the government, they have the purchasing power for it. And the second and third round, which is what's happening right now, now the milk costs five bucks or ten bucks or whatever. You see, I get emotional about this because at the end we're blaming the market economy. But that's some. What is the term for this gaslighting that we're blaming the very thing that is the solution. The only way to recognize the dignity of the human person and the freedom of the human person to become, to grow in excellence is a competitive market economy.

And then, Mr. Gall, we'll talk outside. Our wonderful Spartan fellow.

So I took Professor McDonald's entrepreneurship class. So I'm familiar with your book. So your third pillar, Culture, Eat strategy for breakfast. I was wondering, if you were to talk to a founder on day one of their venture, what would your advice be to creating a corporate or a business culture that does actually eat strategy for breakfast and is overall positive.

Thanks for this question. You know, I ran a strategy consulting firm. Right. And I know it's tried to add strategies, Culture for breakfast. But I wanted to use that because I ran a strategy consulting firm and not just anyone. It was out of Monitor, Harvard University. Right. And Porter and all that. And I think Porter is absolutely brilliant. And business strategy is, of course, a very important thing. And I just want to say that. Culture for breakfast, because at the end of the day, it's not. I'm thinking, yeah, there it is. At the end of the day, what matters is not what you say, it's what you do. All the strategy in the world, as soon as the lights go out and everybody does what they want to do, the strategy goes out the door. The strategy is what we say, it's not what we do. What we do is culture. Culture is what you do when nobody's looking. It's your habit. Right. And so my challenge for you as a startup, as a founder, is I will show up. So I coach, right? I coach CEOs. I will show up and do 360s and talk. And you and I, I want you to declare your values and say, this is what I stand for. So that could happen in your company with integrity, quality. Actually, for you, with a wine company, you should read what Art says because he is a wine company with integrity, quality, value, things like that. And then I don't allow you don't publish it, but I go walk around every month and see if your employer and ask the employees what that value is that you stand for. And without you saying it, we go see if they hear it, because it's. If your employees recognize the values that you stand for by what you do versus what you say, then you have a culture and so fewer, better. But it's like a parent, right? It doesn't matter what you say. What matters is what you do. And when push comes to shove, what you do. And so that's sort of my trick in a sense for startups to say, even if you have 2, 3, 5 partners in the beginning, let's see what they say. After you, the founder, how you live and how your life speaks of your values.

Well, thank you all for joining us. Thank you. Andreas, please get your.