Episode 31 | Part Two: The Next Generation

Gregory Shepard, an entrepreneur who's built and sold 12 businesses, a recipient of 4 private equity awards, TEDx speaker, and Forbes author. This is The Boss Podcast with Gregory Shepard. Thanks once again for joining me for my conversation with Umrah Beba and Koran Beba from the Beba Innovation and Entrepreneurship Foundation. We've been discussing how they're helping aspiring entrepreneurs to turn their ideas into applications, commercial products, or services for the global markets. Omron, you've been very active at an academic level. You've been involved with Purchase College and Columbia. Now, speaking in broad strokes, how do you think entrepreneurship education is being handled at the university level? This is something I'm greatly fascinated by because I run into these folks who graduated from these programs, but they don't even understand how entrepreneurship works.

I mean, there is definitely a long history of some sort of entrepreneurship education in the US. I mean, they are even referring to Harvard University in 1947 and then several other universities. And today in 150 institutions you find such programs. I think like any other course, the whole idea of, you know, getting an education or a course versus real-life experience. I think more and more the education system should move into this collaboration between the business world and the academic world. And the entrepreneurship students should have early on opportunities to test their ideas. For example, this competition thing is an incredible help. In Mercy College, we do the same, for example. So they have chance to bring their ideas, they have chance to present it, get ready, coached, mentored, or present and then maybe get some seed money. So these opportunities are very good because if you just get the training, the education, I think perfect, it's a good base. But in any area without, for example, the— if you are getting education, let's say in engineering, I'm an engineer, industrial engineer, the internships are very valuable. You have to go and do something about it. You have to see what it means. Do you like it or not? So working with the real machines in factories, you have to see it. It's the same with entrepreneurship. So how can we change our education systems or academic world more into the co-op programs where you have the opportunity to test these ideas in real life, in real settings? I think that's still missing in my opinion, and it can be better. I mean, there is some, but not fully, you know, Therefore, programs like our programs or similar, you know, programs from different foundations, I think, are very helpful. They bring a practical perspective to test their ideas, to see in real life, you know, if it can work or not.

Yeah, you make a really good point because when you think about this, you know, a doctor doesn't get out of school and start treating patients right away. They go through an internship period. And lawyers and pretty much every industry. And when you look at these entrepreneurs, the thing that breaks my heart is that they have this idea, they come out, they don't know what they're doing, and they use all their savings, their family's money, you know, and then it doesn't work. And it's all because they didn't have any experience to start out with. So, I embrace what you said deeply.

Yeah.

I think it's very wise.

Thank you. Thank you.

Corann, if you were to list the most frequent success stories And if there's a pattern that you could point out, what would that be?

Well, I think when you, you know, look at some of the most successful stories out there, firstly, there is the common characteristics of successful entrepreneurs, right? I mean, you know, there's a question, are you born an entrepreneur or can you be taught? Obviously, it's probably a mix, but you do have to have certain characteristics such as, you know, you need to be determined, you need to be a curious person to be able to look out there and identify problems, you know, that you can bring unique solutions to that people actually will pay for. You need to be an optimist, really, you know, because as you were saying, you know, people have an idea, they start out, their entrepreneurship journey is not like a linear line, right? There's so many ups and downs and loops and all that kind of thing. So, you know, you have to have a certain mindset, first of all, as an entrepreneur. I think the other is having a great team. Yes, there's solopreneurship, and that's getting even, you know, more and more widely available nowadays, I guess. But you really need to have a good team of people that kind of complement each other, you know, because you cannot just get to everything yourself. You need, obviously you need to be disciplined, you need to be on top of things, but, you know, subject matter expert is I think an important thing to have in an entrepreneurial setup, in entrepreneurial teams. So, you know, team is very important and obviously, I mean, one of the key other things is, you know, having a product service, product or service and market fit. You know, a lot of people come up with these great ideas, quote unquote, that they think is going to solve an incredible problem, but in many cases those problems are not really other people's problems. Or maybe there are already solutions out there that are much more practical, so people don't really want to pay for this person's idea. So having a good understanding of that is also, I think, vital. And when you look at entrepreneurs that have been successful so far, I think those are some of the things that I can point out in terms of What do you think about this?

One of the things that for me anyway, and maybe this is just because I came up the hard way, but I always tell entrepreneurs, I'm like, you need to be prepared to take a beating, to get the crap beat out of you because it is not— I mean, I think people think it's this glamorous thing, but if you've actually— whenever you've actually been an entrepreneur, you realize that you take a beating. Right, for— it's like a 5-year constant beating. And I'm wondering, Imran, if you could tell me a little bit about your thoughts about that side of it.

Yeah, I think in general, the perseverance and resilience, we call it good leadership skills, are definitely needed in this case of entrepreneurship. Because if you have an idea, if you found that, you know, right positioning for your service or product or solution, then things may not happen in the first year or 6 months, right? So you have to keep iterating, keep finding different ways of succeeding. And during that journey, you will get the beating. And therefore, I think the whole idea of perseverance, resilience, and having your support system just beyond the regular team. I mean, who are your, let's say, mentors, coaches? Sometimes they even call it your board of, like, board of directors, but in a more personal and informal way, right? So who are those people giving you the, I think, the encouragement? Sometimes it might be also maybe in terms of funding, but most of the time it's about guidance, encouragement, advice. So I think that's critical. I mean, everything starts with, of course, the passion and determination. But there is a lot of good work you have to do. I mean, some research, some understanding, some data. And sometimes we see that faster the better. I think entrepreneurs, you know, would like to just go ahead without checking some of those things and understanding the market.

Great mistake, right?

Yeah, competition and let's go and do it. Of course, I mean, that kind of needs then the adjustment, the iteration, and you have to get some beatings and learn. So trial and error, we call it in old terminology, I think becomes part of the game. But I would say perseverance, resilience. I mean, that's, that's what I have seen also in business world. But in entrepreneurship, I think you need at least 2 times of that style.

I agree. I feel like, you know, for a lot of entrepreneurs, you know, if you think about the average, because, you know, they'll sometimes I'm on these Podcasts where I'm on the other side of the mic and they'll ask a question like, um, what's a day in the life of? And I tell them, well, let's see, you go through depression, stress, fear, elated happiness, you know what I mean?

Yeah.

You know, it's a roller coaster ride up and down all day. Every phone call, some are happy and some are like, oh no, you know, you know, uh, investor says something good, the next one says your idea is horrible, and you're going through this, this roller coaster ride. And I always tell them, I say, you know, you have to Constantly maintain homeostasis, you know, and stay at one level the whole time and try to keep yourself together. I'm wondering, Omron, if you look at the other side of the question that I asked Koran, if you think about why the entrepreneurs fail, right? So, I have done this really big study on why entrepreneurs fail at this 90% rate for like the last 20 years. It's incredible. And it hasn't changed. What sort of patterns are you seeing in terms of why they're failing? The opposite question as I gave Koran with regards to why they're succeeding, right?

Yeah, I think that identification of the problem or the pain point and really understanding what are the solutions in the marketplace, are you going to be unique or not? And how are you charging in terms of pricing? That becomes like sometimes, you know, it's driven too much by passion. but not enough, let's say, data and analytics. So I think that balance is very important. You have to really do some due diligence or preparation work before jumping in and, you know, bringing your passion to life. Maybe it is not somebody's need. It might be your passion, but it might not be the need of some other people. So how do you bring that together? The personal passion, I think, and the need of consumers or need of organizations, let's say, whatever is the target group. So that's, I think, one aspect. So pricing is another very critical aspect and the cost structure, you know, sometimes underestimating the costs and focusing too much on optimistic revenue numbers might lead you to some mis— I mean, like misforecast, let's say.

Mm-hmm.

So which will then, you will be out of cash. And if you don't find investors at that point, this unplanned out of cash situation, you know, will be the end of that, I think, passionate start. And as mentioned, you know, the team, but also the support system. And also we talked about the women and multicultural people, you know, different ethnicities. how can they get more funding? You know, finding the money and having equal chance in this environment, I think, is the critical one. I mean, failures, you know, as I said in the beginning, you might have some seed money, but then if you don't get in the second round, third round, the support the others are getting, then you will fail. You will be in trouble.

And to that point, Koran, when you think about this, Do you feel like there are certain areas, you know, they have that term, the valley of death. Do you think in terms of the lifecycle that there are certain areas in the journey that these failure points have the most impact?

Yeah, absolutely. So, you know, according to a lot of studies, and obviously, you know, you've done a major study yourself, like you were mentioning, I've been seeing that within basically the first 3 years. Most of the startups fail. And that's really due to those things that Imran was talking about, you know, because that's at the beginning of the journey, really. That doesn't mean that, you know, after year 3, you're like, everything is— the grass is green, you know, and everything. Obviously, you're going to have, you know, pain points all along the journey, but it really is at the beginning where, you know, this thing is either going to look like it's going to have a life or not, is where you run into these problems more frequently. After you cross that threshold, I would say, you know, of course, you know, there are, like you were saying, I mean, you take a beating regardless as an entrepreneur, you know, all along the journey, but the beating, the level of the beating or the frequency obviously changes, you know, as you go forward.

Yeah. And the impact it takes on you, right?

Exactly. And then, yeah, you grow a thicker skin and then you know what's coming. So you're more prepared, I guess, you know, you know how to defend yourself, if you will. But yeah, I mean, you know, as you go forward along the journey, you still have to always be able to, You know, make adjustments, iterate, you know, whenever you need to. You know, and obviously when you get to that product lifecycle, you know, when it plateaus, you need to come up with other ways to, you know, start it again. But that's true for pretty much anything, not just for entrepreneurship but for major corporations as well. So I would say it's really, you know, to answer your question, it's really happening more at the beginning than in the end.

So let me ask you a question. I'm coming off script a little bit because I really want to ask you guys this question because I'm actually Just having a good time on this podcast. So, when I was doing the study, right, I found out that the far majority, over 50%, closing in on 60%, drop out or fail after the first year right after leaving an accelerator. And so, I started to study this and I was like, okay, well, what is going on here? And is there any connection to what the accelerator is teaching them Or is it just that they sort of get dropped after an accelerator and then fall off a cliff and lose everything maybe because of the support that they don't have or the mentorship or whatever happens? And I'm still trying to figure this problem out. Why is it happening right there? So, what you learn is that it's like 58.7% drop out right after— within a year of leaving an accelerator, usually within months, 6 to 8 months of leaving the accelerator. And the reasons why they fail in the following 3 years over the 5-year study that I did had to do with the things that also happened during the first year. So, it seems like this first year is critical, critical, critical to understand. And I'm wondering for the listeners if you can shed some advice for them on how they make it through this first battle because there's all these little battles and the war is over when you exit.

Yeah.

You know, and this first battle seems like a lot of people just can't make it past that. I'm wondering if you guys can provide some advice for the listeners on how to get through this critical period.

Like Imran was mentioning earlier, one of the key things that any entrepreneur has to keep in mind before they start this whole journey is spending enough time for preparation. The more prepared you are before you turn the key or you push the button, the better you will be, you know, expecting all these things that will come up, especially like you were saying in the first year. What usually happens is people come up with this idea. They don't really spend a lot of time in terms of analyzing, you know, if there's a need out there, how they're going to tackle some problems, like, for instance, if they run out of cash, that kind of thing. And then they jump in. And then within the first year, typically, or, you know, after the accelerator period, they do see all these problems and they get hit, you know, by, by these things very quickly and very frequently. And all of a sudden, you know, Either their drive falls or they really cannot solve the problems anymore. There may be team dynamics that go south. I mean, for instance, an example, one of the teams that have entered the competition, the Greater Good Challenge competition, they were shortlisted and they did get the second place. But within about 8 months after they got the seed money and, you know, the recognition and the mentoring and all the other support, they just dissolved because they realized that actually, you know what, there really wasn't that big of a market for their product. There were a lot of challenges in terms of supply chain that they have not figured out prior to entering. And then, you know, the team basically said, you know what, there's the opportunity cost of doing things. I'd rather be doing something else than spending more time and more effort and being stressed out. So what I would personally recommend is do spend enough time to do your due diligence to make sure of— obviously you're not going to be able to you know, anticipate all the problems, all the, you know, all the questions. But the more prepared you are, I think the more easier the journey will be, especially in the first, you know, year and the couple of years.

Yeah, I agree. I tell them, I usually tell entrepreneurs, I'm like, let's say you're crossing a street, you look both ways before you cross the street and you're looking both ways as you cross the street. And I said, starting a business is like crossing a freeway.

Absolutely.

Yeah.

You have to pay a lot of attention.

You're absolutely right.

It's more like a German freeway where there's no speed limit.

Like the Autobahn, you're trying to cross the Autobahn.

Exactly.

Cars are coming at 100 miles an hour.

Yeah. I think the whole idea of what is the first year, I think we have to define the first year, right? So after pushing the button and launching the service or product, because there is always, I mean, ideally a year or maybe year and a half preparation time, right? So you can't just go ahead and push the button. We are not talking about like 5 years of prep time, maybe the product deserves that. But I mean, you need some preparation time. And during that period, even iterations or small-scale trials, you know, has to happen, if possible.

I agree. I think you guys are so great. I want to come back to you, Amran, because there's something that I read about that I just was really moved by. Back in May, you gave a commencement speech where you received an honorary degree from Mercy College, right? And you told the students that mountaintops and summits shouldn't be enjoyed alone and that we can all shine together. And I just was like so moved by this.

Thank you.

I actually put it on my machine as a screensaver and I was just like, this is just so moving, especially when this struggle to become an entrepreneur is so difficult. You know, I do these things like run marathons and stuff, and I do those things to keep myself, you know, sharp on struggle, you know, just kind of get through it. And I'm wondering, what, what did you feel like? How did— how was it to talk to these future entrepreneurs and future people that are going to be creating the world that we're going to live in? I mean, it must have been just incredible.

Yeah, that group is very special also because Mercy College students' profile, you will see a lot of students working while they are actually studying. So they might be having one job or two jobs to get things going. So it is not an easy at all period for most of them. So when they sit in that, you know, seat after 4 years, it's an incredible achievement. I mean, Yeah. because they achieved it despite everything. Uh, their family support. I mean, some of them are married with kids and they came back and did this study, you know, while after many years of work and now they wanna be an entrepreneur maybe. So a lot of emotions in that, uh, specific event. So my, my speech was basically about, you know, how do you, how do you take care of yourself also within all the things you have been through and expecting you out there? So that care element starts with yourself, but also caring for others. And then I was talking about the community aspect, right?

Mm-hmm.

So they succeeded because of some other people. I mean, it was not always just them alone. It was their family, friends, community managers, whatever. So I think that's very critical. You know, we, we don't succeed alone. If you look at any entrepreneur or any individual, I don't think It's a story of one person. There are always others and we need to appreciate that, but also we need to get support, ask for support, ask for help.

Yeah.

That's my philosophy.

Yeah, it's beautiful. I mean, I always say namaste because, you know, I like the idea of us all being one and we all come from the same place and we each see each other. And if we do see each other, we realize that When the tide comes in, all ships rise, you know?

Yeah.

And I think I was really moved by that, you know, when I was young and I was coming up as an entrepreneur, I was working 4 jobs literally 7 days a week, 24 hours a day. I was sleeping on the nighttime job, to be honest. But, but so when I read that, I was just like, this is just so— you guys are just really beautiful, kind, giving people. And what you're doing for this environment is incredible. Like, you know, the future of our world comes from these entrepreneurs. Large companies don't even innovate anymore. They just buy innovation. You know, 75%, 80% of them outsource their innovation to accelerators now.

So true.

Um, yeah, I just can't say enough about how great you guys are and what you're doing. And, um, yeah, it's just really— I'm grateful that I was able to talk to you, and I'm grateful for what you're doing every day. Thank you so much.

Thank you. Thank you for the opportunity.

And Greg, thank you. And by the way, I did watch your TEDx talk, and my, my hat off to you too. I mean, I think You know, you're a brilliant person. The challenges that you tackled throughout your lifetime, what you're doing right now is very adorable. And really, I'm personally very grateful to be on this podcast with you, and I hope it helps, you know, some of your listeners. But it's been great meeting you and talking to you. Thank you, sir.

Thanks so much. That means a lot. To find out more about Imran and Koran's work, go to bebbafoundation.org. And that wraps up this episode of the Boss Podcast. If you enjoyed the show, make sure you take a second to subscribe so you automatically get notifications of when new shows drop. Also, if you have a minute, I'd love it if you could leave us just a little review so more folks like you can discover the show. Until next time, namaste, my friends. Learn more about the Boss Business Operating Support system at bossstartupsience.com, or you can reach Gregory Shepard at gregoryshepard.com. This has been a production of Forbes Books.