Q&A Part 1 | Doug Mellinger

What questions or what stories? I'll say anything. So what would you like me to answer? What do you want me to talk about? Did you go to school with Tim Draper? No, I met Tim just through the entrepreneurial world and the venture world. We were talking this summer and we just started talking about my old entrepreneurship days and talking about a lot of these lessons. He's like, you're coming back to tell the class. I said, tell me when. So I have huge respect for Tim. He's just world-class.

It seems like you've got entrepreneurship to a very good definition. How would you— what's the difference for you between an entrepreneur and a hustler? Not the hustle like everybody.

Yeah, listen, entrepreneurs, most of the best entrepreneurs are Pied Pipers. You got to convince people to do things, both employees and suppliers and customers that oftentimes has not existed before. And the kind of— the hustler, the somebody that can actually sell ice to an Eskimo, that's what a lot of times they say entrepreneurs are, that—

That's right.

that person can sell ice to an Eskimo. I mean, you could say it's a hustler, you could say it's an entrepreneur. It's almost interchangeable, but in a positive way. When we had our ACE 100 back in 1986, I got a great picture of Steve Jobs and I when we were literally kids, just about. We were talking, and I watched something with him that I had not seen We were going up an escalator and somebody was coming down, and back then you could still smoke indoors. And some guy was coming down the escalator with a cigarette, and Steve just said to him, you know, you really shouldn't smoke, it's just not good for you. And I swear to God, that guy stopped smoking that day. I know him, and we've talked about it since. He's like, if Steve could tell me that and take his time to do that, I just had to stop. He had a way of doing things that just nobody else could ever do. Somebody asked him over dinner that time, what would you do differently, because this was 1986, back in the '70s when you started? His answer was so fascinating. His answer was, I wouldn't have started the company because it wasn't possible. That's a great answer. It's the naivete sometimes of when we all start these businesses just to believe that we can do it, to believe that somebody's actually gonna spend the money for you. It's kind of crazy in some respects. But that's what the magic of the entrepreneur is, is being able to create that magic and then bring it forth to people.

Way back when you were getting those contracts and then needed to find somebody, you had a problem and you needed to find somebody to make solutions. What kind of approach did you take and then had to change perhaps that ultimately led to success there?

Well, in the beginning I was just trying to find revenue. I was listening to people and taking some risks because they would define a problem and I would say, I can solve that, and I'd convince them I could solve it. Then frankly, I was running out trying to figure out how to solve it. What enabled the company to grow though was when I started to do a lot more what I'll call solution selling. Where I started to find some of the common characteristics, bring people together, actually create a solution that I could then sell that same problem to lots of people. A lot of people, when they start their companies, they end up doing lots of things for lots of people, and they don't have the discipline. They become kind of a mile wide and an inch deep.

Deep.

What you need to do is just the opposite. You need to be hyper-focused when you're getting started. What type of ventures are you interested in now? What are you investing in now? I'm no longer doing just pure venture. We're doing more private equity, so companies that have achieved some level of profitability already. But it's still the same in this. It's just amazing what's out there. There's still a— the internet is still young. There's gonna be a lot of new things, especially in mobile. We love everything about data analytics because most people still make decisions blind. If you can be doing business decision management oriented activities. I think in the bio— the biocoding industry is just going to be massive as we go forward. But really, anywhere you turn, there's still a lot of opportunity because there's a lot of industries that have not been modernized. What's your life purpose? So for me, life purpose, you know, when I did my first fundraiser, it was for Jerry Lewis's telethon. So it was for muscular dystrophy way back when, when we only had like 4 or 5 channels on Labor Day weekend every year. Literally everyone would watch this fundraiser that was a telethon. And I did a fundraiser when I was 10, and they found out and asked me to go on TV to give the—

Speech.

the check. And it was a life-altering experience for me because the feeling of helping, of giving, was incredibly powerful. And so, you know, I've always been very active in philanthropy. And, you know, I believe very strongly that if companies do good, they can also make a lot more money. And, you know, I don't think people I've been very involved with impact investing over time. I don't think impact investing is about taking less return because you're getting a social return. I think it's about getting a risk-adjusted return and then getting an extra bonus through the return from the social side. A lot of what I'm after is that we're living in a world that's got a lot of problems. And I think that the nonprofit sector right now is one of the last sectors that has not been consolidated and modernized. And I think that philanthropic capital from foundations and donors is the impetus to bring about change in the nonprofit sector. The nonprofit sector has, in the United States alone, 1.5 million plus entities. And I think we're trying to solve big world problems with corner grocery stores. And ultimately, I think that we're going to see a massive consolidation of the nonprofit sector. And I think there's going to be a much greater overlap between the for-profit sector and not-for-profit sector, because the only difference between a for-profit corporation and a nonprofit corporation is that one pays taxes when they have an excess in money over their expenses. In the not-for-profit, they build endowments. In for-profits, it's called profit, but it's exactly the same thing. One doesn't have a lock on making a difference in the world, but if you look at almost every problem from poverty to the environment to health-related issues, and you look at it over the last 30, 40 years, we're not only not better, in many cases we're even or worse than we were even though trillions of dollars have been spent. But I think they've been spent very poorly and very inefficiently because of the way the not-for-profit sector is organized. So a lot of my life throughout the rest of my life is on one side I still want to make a lot more money. And I want to use a lot of my experience and my capital. By the way, my definition of capital that's deployed against solving social problems is cash plus product and services plus human capital. Most people think, well, I don't have a lot of money right now to give. But that's only one small element because even in the gifts that you make, the cash portion, cash is made up of donations, along with equity investments, debt investments, and credit enhancement investments. Human capital is your time, your experience, your resources, your contacts. When you do a full inventory, everybody in this room has so much more capital to give. I just think that we, if we're going to have a world that's going to be sustainable 50 to 100 years from now, and we can We can solve the food issue, we can solve the water issue, we can solve so many things. It's gonna take people who are entrepreneurs thinking about and executing on this, and I'm playing a role in that. Thank you.