4 April, 2022 1 Comment

Heroes & Villains

April 4, 2022 By 1 Comment

Dropout is the mesmerizing story of Elizabeth Holmes and Theranos.

We’ve been watching two fascinating series about wayward entrepreneurs on Showtime and Hulu.

“Super Pumped” is the story of Uber and its “tech bro” founder Travis Kalanick. “TK”, as he was known,  broke a lot of dishes while disrupting the taxi business before being dumped for creating a culture more toxic than sucking on the tailpipe of a Checker cab.

“Dropout” is the fascinating story of Theranos founder Elizabeth Holmes who modeled herself on Apple’s Steve Jobs— except for the fraud part. She will be sentenced this fall for essentially lying her way to the top before taking a fall. Her black turtleneck didn’t save her from the fact that her company was built on…well…nothing but hype.

Yes, it seems that Hollywood is taking a dim view of entrepreneurs lately. The trend goes back a decade or so to the “Social Network” which portrayed Mark Zuckerberg as an egomaniacal, socially awkward techie who climbed over a lot of people to build Facebook into a global behemoth. In other words, the movie was spot on.

Also, a fit for the evil entrepreneur narrative: “WeCrashed”, the story of WeWork founder Adam Neumann, who ran his $47 billion company off the rails before being given his walking papers.  We can also look forward to  “Billion Dollar Whale” a soon to be released movie about Jho Low who looted the Malaysian sovereign wealth fund before disappearing somewhere in China. He remains at large. But he did take down a government and ensnared Goldman Sachs during his memorable run. In a quirk of fate, I got to know one of the major players in that scheme, but I’m saving that story for my next book. It’s a good one.

Yep, there sure are some cautionary tales about gifted grifters whose magnetism, vision, and ability to tap into greed makes for great books and movies and in most cases bad businesses. The jury is still out on Facebook while Uber and WeWork seek to move past the dubious behavior of their founders.

But the evil entrepreneur narrative doesn’t tell the whole story.

Yes, there are villains in the world of entrepreneurship, but there are lots of heroes too. I wish Hollywood would publicize their work as well—in many ways they are more interesting if not as salacious.

Admittedly, I am biased, but I work alongside a very kind entrepreneur named Carl DeSantis. He built Rexall Sundown from scratch into a huge vitamin manufacturer right here in Boca Raton before selling it for $1.8 billion in 2000. Rexall Sundown employees shared in the wealth they created—which is Carl’s way. While most people would have retired after such a huge exit, Carl went back to work, creating a family office and investing in companies and people. His latest hit is Celsius, a wildly popular healthy energy drink that trades on NASDAQ. Celsius started in Delray Beach before moving to larger headquarters in Boca Raton. But when Celsius rang the bell on Wall Street, Carl was onto the next thing—Tabanero Hot Sauce, which we are working hard to make a hit. Make sure to try it at Caffe Luna Rosa and Christina’s among many other restaurants.

Another good guy entrepreneur is Delray’s very own Randy Smith, who runs Heritage Flooring. Randy is a serial entrepreneur with a curious mind that I deeply admire.  I’m lucky to call him a friend because having lunch with Randy is like going to business school with salad dressing (always on the side).

Randy and his wife Lennie, have a passion for sailing (and life itself) and I’ve been taken by their devotion to an organization called Warrior Sailing (www.warriorsailing.org) which provides maritime education and outreach for wounded, ill, and injured service members and veterans. Warrior Sailing reconnects veterans to the camaraderie and teamwork they previously found in military service.

While Randy and Lennie certainly know how to have fun, the Wolf of Wall Street has nothing to worry about from these two.  They run a much cleaner ship.

We understand it is fashionable around these parts to bash developers. But like we’ve been saying, there are good developers and there are bad ones. We need the good ones because their entrepreneurship creates the vibrancy we rely on to make our cities work.

Along the way, I’ve known a few good ones (and a few bad ones too) and my company has dabbled a little bit in this world— as investors anyway. I can say that the development business is not for the faint of heart. Yes, there are great rewards if you do a good job, your timing is right and there’s a market for your work. But there is great risk as well—and mistakes can wipe you out, so can interest rate hikes, pandemics, hurricanes, bad politics, changing tastes and construction costs.

You must be a great entrepreneur to swim—and not sink— in those waters. Still, I know several developers who are very philanthropic, community minded and work hard to serve their communities.

Meanwhile, some of the best entrepreneurs I’ve met are in the restaurant biz.

Talk about a tough road.

The competition is fierce, the margins are small, it’s hard to build and keep a staff but somehow, they figure it out.

Fran Marincola and his father started with a small gelato shop on A1A in Delray and built it into Caffe Luna Rosa, a Delray landmark. CLR— as some of us call it— offers health insurance to its employees and the restaurant has given back a lot to Delray Beach over the years.

Same goes for former Boston’s on the Beach proprietor Perry Don Francisco, co-founder of Delray Citizens for Delray Police. For 30 plus years, Perry has quietly been there for so many people while being a steadfast supporter of police, fire, and local schools. He’s one of a kind; a gifted, hardworking entrepreneur.

I can think of dozens of examples of talented entrepreneurs who are role models as well.

So, as much as we are enjoying the drama behind the creation of Uber and Theranos, we are heartened by the good guys. They are everywhere. You just have to look.

And when they cast the part of Randy Smith in the Netflix version of his story (the series should be called “Floor It”)  I hope they consider Brad Pitt for the role.

 

Facts about entrepreneurship:

America just witnessed the biggest business startup boom of our lifetimes.

  •    5.4 million people applied for small-business licenses last year — a 53% jump from 2019, pre-pandemic.
  •  Global investment in startups shattered records in 2021, hitting $643 billion — 10x what it was 10 years ago.

 

 

 

9 December, 2019 0 Comments

The Dangers of Ego & The Value of Good Stewards

December 9, 2019 By Leave a Comment

You can still move the big rocks without breaking everything.

I’m fascinated by the strange tale of WeWork.

The seemingly innovative co-working company with the brilliant branding and patina of cool has imploded before our very eyes.

First, the company abandoned its long anticipated IPO, then it fired its high-flying CEO Adam Neumann, then it cost its largest investor Softbank billions of dollars and now comes the human fall-out with one-third of its employees—about 4,000 people—being laid off just in time for the holidays.

Merry Christmas.

Bah humbug.

It was only a short time ago that those people were working for the most publicized start-up in the world, a company once valued in the tens of billions for a boss who flew around the world in a $60 million jet and summoned the heads of stock exchanges to his home so they could audition for his business.

Now he’s gone– albeit with a platinum $1.7 billion parachute— a huge reward for an egomaniac who hurt a whole lot of people on his team by serving his ego and ambition over the bottom line.

It’s quite a tale, but sadly not an unfamiliar one.

We all know examples of people who crash into our lives, businesses and organizations armed with bravado, ego, bold ideas and often a whole lot of charisma.

Some actually have the goods and deliver. But many crash and burn and sadly take a slew of people with them.

A few years back, I was asked to talk to a wonderful group called Creative Mornings. The topic I was assigned was genius, a challenging topic to distill.

Since giving that talk, my feelings have evolved somewhat on the topic of genius.

While I still admire those who are blessed with genius, I have become more acutely aware of its darker side.

Mr. Neumann of WeWork is clearly a genius— on some level at least. He took an idea—co-working—and made it so cool that cities that were able to attract a WeWork saw it as validation that they were an “it” place.

Softbank poured billions into Neumann’s vision which went beyond co-working to a fully fleshed out lifestyle brand. And then it crashed, under a tsunami of hubris.

A similar fate happened to the founder of Uber, whose ride-sharing idea, swept the world but whose arrogance and over the top “bro” culture ultimately forced his dismissal.

Another good example of a supreme talent who wore out his welcome is Antonio Brown, who recently gave a pep talk to the Atlantic High School football team. I’ve been told the talk was great, but Mr. Brown went from being a top wide receiver making millions to unemployed after a series of bizarre incidents which ultimately led him to being bounced from the NFL. The descent was really fast.

When egomaniacs fail, they fail fast.

There are other examples too.

Mark Zuckerberg is undoubtedly a genius, but his creation Facebook, has suffered from issues as a result of privacy lapses, data breaches and the spread of misinformation.

His formidable technical genius is often undermined by a personality that is often unwilling to own issues of his own creation. Or maybe it’s the realization that even he is not smart enough to fix what’s dangerous about his own platform.

Regardless, while I remain a fan of genuine genius and appreciate its presence in art, song, design, business etc., I’ve come to appreciate the concept of stewardship and the importance of good stewards.

Sure there is a place for the game changers and disruptive mavericks. There is also a time when the dishes need to be shattered, but there is also a real need for people who are responsible and talented stewards.

A good steward knows they are in their position for a set period of time. They know that many have come before them and that many will follow them. They have respect for the past, seek to understand it and do their best to shape a brighter future knowing someday they will hand off to another leader.

They may not get the attention of the maverick change agent or genius, but they understand their job is to protect, enhance and position their organization for future success.

Sometimes I wonder whether that concept is lost on politicians.

So when a Senator blocks a Supreme Court pick or a President ignores Congress or attacks institutions are they unaware that they have now normalized those behaviors and therefore those “favors” will be returned? When we act as if we are the last people who will steer the ship, we risk sliding into a cycle of bad behaviors and reprisals. What gets lost in the cycle of rewarding friends and punishing enemies is the actual job of governing—or any sense of stewardship. Yes, someday you will pass the baton so please don’t break it in pieces.

I’ve seen this dynamic play out locally when newly elected leaders question past decisions without the benefit hindsight and context. What might have made sense in 1991 may not make sense in 2001 or in 2019. Or it just may— if you take the time to understand and look at the big picture.

None of this is to say we shouldn’t try and do big things. We need to move the big rocks, as we used to say in Delray.

But just make sure that when you move them you don’t crush what’s underneath. And always strive to keep your humility. Because, even if you are a genius, you don’t have all the answers.

Adam Neumann built a great brand at WeWork. But it crashed and burned and cost thousands of families and investors dearly. It crashed because the genius whiz kid thought he could do no wrong.

That’s a sure recipe for disaster whether you are a CEO or run the corner store.

A better mindset is to wake up a little scared and try and anticipate what can go wrong. A better way to lead is to try and protect the future.

 

 

 

 

 

 

 

2 October, 2019 2 2 Comments

Bullies Make Lousy Leaders

October 2, 2019 By 2 Comments

People matter.

Leadership matters.

You can’t have sustained success if you don’t get the right people in the right seats on the bus.

It’s a simple concept, but oh so hard to make happen in the real world where personalities, egos, politics and styles so often clash. And these days it seems that compromise has become a dirty word and so we often end up in an endless cycle of gridlock.

At the heart of conflicts we can usually find a difficult personality—maybe an egomaniac or a narcissist or some other type of charmer.

Sometimes they are dolts and I’m guessing we can all think of a few. And sometimes they are brilliant visionaries or technicians who are wildly talented but fundamentally lacking in emotional intelligence—the most important kind.

What happens next is sadly predictable. Because of their talent or their ego, they are often able to ascend to great heights but they inevitably crash and burn because their deficiencies in dealing with other people eventually become a fatal flaw.

Unfortunately, they often leave a whole lot of damage in their wake.

I was thinking about this phenomena last week when I read a slew of stories about the rise and fall of We Work founder Adam Neumann who only days ago was riding high atop the world’s most valuable start-up only to see the value of his vision plummet and to have the very people who threw money at him take him out.

Why?
 Because Mr. Neumann– clearly a genius on so many levels–flew too close to the sun. He talked about being president of the world (not making that up), engaged in questionable self-dealing with his own company and smoked marijuana on planes which annoyed pilots and unnerved investors.

And then it ended, before his company could launch its long awaited IPO. Oh and they lost billions in value along the way.

A similar fate befell the egotistical founder of Uber, countless politicians at all levels of government and to some extent Steve Jobs, the legendary Apple founder who was bounced from his own company before becoming the rare (somewhat) humbled egomaniac to come back and have a successful second act.

The problem is these types of personality types leave a ton of damage in their wake.

The key is to try and recognize these types and prevent them from getting into positions where they blow up people, cultures and institutions.

The challenge in stopping them is significant because their swagger, sense of entitlement and boundless self-confidence often lands them coveted positions. In America, we have this myth of the white knight that will show up and solve all of our problems. Yes, talented leaders can help to solve a host of issues, but (and this is a big but) nobody can do it alone.

You can’t run Uber or We Work by yourself, you can’t lead a city by yourself and you can’t lead a nation by yourself either.

You need a team of empowered people who work well together, trust each other, root for one another and believe passionately in the mission. And you need a leader who shares credit and is willing to take responsibility when the going gets rough and it always gets rough. There’s no such thing as an overnight success, you need troops and troops won’t follow an egomaniac, a bully or a narcissist forever.

The egotist may get far, but he or she won’t last. The behavior gets old. At first, it happens slowly, then all at once.

We Work’s Neumann was the charming rogue before his indulgences sunk him. Uber’s Travis Kalanick was the maverick who delighted in putting a thumb in your eye before his over the top “bro” culture saw him bounced from his creation and we’ve all seen politicians whose hubris (fatal arrogance) cost them elections and in some cases their freedom.

It never ends with a parade and when these beauties leave they are never remembered fondly.

The truth about real leaders is that they make you feel safe when they are there, they inspire people to do more, be more and they plant seeds that blossom long after they leave. They develop others who carry the mission further.

This is not an argument against disruption, we need innovators who can show us a better way. But too often disruption means destroying institutions that matter. We risk a lot when we start to pull threads without stopping to think why those threads were sewn in the first place.

It’s not a choice between disruption and stewardship—you can do both. You can innovate and make sure to take care of the organization you’ve been tasked to lead.

You can be a disruptive bully or a servant leader. But you can’t be both.

One style works and leads to transformational and positive change, the other style leads to failure. History never remembers the bullies with affection.