The Power of Zigging When Everyone Else Zags

Linda Rottenberg: Well, I think there is this misconception that being an entrepreneur is reserved for young boys in hoodies living in Silicon Valley and I've come to realize first of all, as you explained, Endeavor, my organization, now supports over 1,300 top entrepreneurs in 25 countries, so we know that, first of all, it's a global phenomenon, not something localized to the US and London and a few other hotspots.

But, more importantly, I think that people are intimidated by the word entrepreneur and it seems like you have to have a huge idea, a huge network, and a huge bank account. And I think what I've tried to do in "Crazy is a Compliment" is, first of all, break down the process of entrepreneurship and show that, if you take it step by step, it's actually not so scary but, more importantly, everyone today has to take some risk or risk being left behind. And the only thing that we know is constant in this world today is change and chaos, for lack of a better word.

And so I think that people who sit there thinking, "No, I'm going to keep my stable job and my stable company and my stable economy," all of those are out of the window. There are no stable companies, there are no stable economies, and there are certainly no stable jobs. So I think that, even you mentioned the intrapreneurs, I call them skunks, but everybody today has to shake themselves up, shake up their business or their company, if they're going to get ahead.

Rachel Salaman: Tell us now about the four different groups of entrepreneurs that you've identified that you talk about in your book. You've mentioned skunks already - tell us a bit more about them and the other three groups.

Linda Rottenberg: I ended up creating this kind of zoology of entrepreneurs because the word entrepreneur itself is so clunky. It's obviously from the French, although George Bush famously said there was no French word for entrepreneur, but the word intrapreneur, social entrepreneur, mompreneur, it just gets mind-boggling, so I said we have to throw that out.

There was already a term, gazelle, that was coined in the early eighties by economists and this was for the high-jumping, fast-growing companies that we think of and I think now people are aiming for. There is one more sub-set of gazelles which are the unicorns, which are the companies that achieve a billion dollars.

So people are familiar with that type of entrepreneur and really, at Endeavor, that's the type of company and entrepreneur we're looking for around the world. But I sort of think that's not the only type of entrepreneur and so I said, "What other animals could describe these other people?", and the skunks actually, which are the word intrapreneur (and I hate that word), initially came from the Lockheed Martin Skunkworks Projects, which in the 1950s was a secret division within Lockheed Martin of people that went around building fighter jets.

So a lot of companies started out creating these kind of secret divisions. Google has Google X and different parts of the company are off in different buildings. And then I started thinking, "No, skunks have to be everywhere because every company needs people to stink up the joint because, today, we have to have some disruption in our companies or they're going to topple anyway, because they're going to be disrupted from the outside if they don't have people within it." So my favorite part of writing "Crazy is a Compliment" is the number of people who come running up to me saying, "I'm a skunk, I'm a skunk," which I love.

The other two types of animal entrepreneurs in my kingdom are, one, the dolphins. And the dolphins are really the social entrepreneurs. These are people working inside either government or in the social sector, and who have shown themselves to be enterprising and problem solving. And what I love about dolphins is you think of them as these nice, sweet animals and they are very protective of their family and their communities and their environment, but, if you start harming their pod, watch out. And that's important because social entrepreneurs are not these namby pamby people. These are people who are as committed, if you look at someone like Wendy Kopp, who started Teach for America, or Muhammad Yunus of Grameen Bank. These are people who are not stopping at anything.

So those are the dolphins, and then the last group are the butterflies. And the butterflies are really what used to be mom-and-pop people. But, today, to be a mom-and-pop means you have to have your own website. You have an online presence, or you're trying out for Shark Tank or Dragons' Den, or you're at the farmers' market. You have your square reader. This is now a highly competitive and highly dynamic part of society. And the reason I chose butterflies is, first of all, they aim for independence. These are people who are not trying to become billion dollar businesses with thousands of people. They want to have one to maybe 10 employees or they're just self-employed. And they're yoga instructors and carpenters and bakers etc, but they aim for freedom. They want to be their own boss and, as there are thousands of types of butterflies, there are thousands of types of these entrepreneurs. But what is important is that four in ten Americans already, and just as many if not more around the world, will spend some time working for themselves as independent contractors.

And I think that this group, as I said, have to have all the skills of being an entrepreneur. My husband, for example, is a writer and, when he started out, the idea that he was going to be an entrepreneur was the farthest thing from his mind. But for him to go after book contracts or magazine freelance articles or do his own publicity, he's had to realize that he's an entrepreneur too. So I find that, what I was saying before is that, in this new world we all have to think and act like an entrepreneur and, no matter which type of entrepreneurial animal we aspire to be, it's the mindset and the toolset that we can all take advantage of to get ahead.

Rachel Salaman: Now, a lot of the language around this topic is negative, words like disruptive and destructive and even skunk, as we've talked about. Why do you think negative terms are used so often in this context?

Linda Rottenberg: It's so interesting you say that because I don't find them negative. I think that's so interesting and that's why the title of my book, "Crazy is a Compliment," is the whole point. It's being called crazy is supposed to be something that's an insult and I was known as La Chica Loca for about 10 years in Latin America when I was starting up Endeavor. And when we moved to the Middle East I was still called Chica Loca. And I embraced that. I said, "No, if you're not being called crazy then you're not thinking big enough."

And, similarly, I think what holds us back, particularly in the U.S. and Europe - we now have offices in Miami and Detroit and Louisville and Spain and Greece and Italy, and now we just started in Japan too. So Endeavor used to be in these emerging markets and now we're moving to the so-called developed world, and what I realized is the emerging markets have an advantage in this new world because they're used to disruption, they're used to chaos and here we prize stability and I think it hurts us. So I think that, because we prize stability here, words like chaos and disruption sound really negative and really scary. In fact, it's the opposite.

So the status quo is what benefits stability. So unless you're part of the 1 percent already or the 0.1 percent, you actually want some disruption because it's the only time when you have a chance of shaking things up, if you're a small company, capturing good talent, capturing market share, and if you look at the Fortune 500 companies in the United States, half of them were founded during periods of recession and downturn and outright chaos. And, at the very end of this podcast, I can tell my most favorite story of one of my most favorite companies that proves this theory, but what I would say to entrepreneurs is, "Look, chaos is your friend."

And so I think that chaos, disruption, craziness, it's this opportunity to take things that people think of as negative and use those to your benefit because, by definition, being an entrepreneur is a little scary and hard because no one has done your idea before.

Rachel Salaman: So, in the early stages of a new idea, how easy is it to determine whether or not it will fly? It's all very well to press on with zigging when everyone else zags, but perhaps the zaggers are sometimes right. Is there any way of knowing?

Linda Rottenberg: Well yes, I do think there are some ideas that are just either ahead of their time or just bad ideas. So I think that sometimes there's a rationale to being crazy. But today, more than ever, it's actually easier to focus test your idea, your product, because of the rise of social media and the internet. So I think if you look, for example, at Kickstarter campaigns or a lot of whether it's Kickstarter or Indiegogo or the hundreds of sites that people are doing to crowdsource and crowdfund ideas, that is one easy way to test it. If you put your idea up on Kickstarter and no one is funding it then maybe that tells you something. Whereas I know people who have started something and then they're not only getting funding, but people are crowdsourcing or adding to their ideas.

If you're inside a company, one thing I learned while researching "Crazy is a Compliment" is many of the best ideas are tested. Really, people don't go to the boss first, they save that for last. They quietly test ideas within a company.

There are these two women who started Clorox Green Works, and what happened was they were job sharing and they were the first vice presidents to job share and each of them only worked half a week. And so, the other half of the week they were moms in the playground and they saw that people were concerned about using toxic qualities in their detergents. So the moms got together but there hadn't been a new product line launched in decades at Clorox, so they knew that, if they went to their boss, there was no way they were getting money, there was no way they were getting time. And so, on the off hours, they teamed up with a group of engineers and just product tested in their homes. And by the time they showed their bosses, they had a full line of products that they had tested, and Clorox Green Works instantly garnered $60 million and became a hit.

So, time after time I saw this. At Pfizer Works, which is a program within Pfizer which started because a middle manager was seeing fathers and mothers on their teams staying late to do spreadsheets. And he created this outsourcing program that didn't work at first and he slowly tested it, and then only later brought it to their boss.

So I think that, to me, the lesson is, going to your closest friends, your closest family, your closest colleagues, your bosses, maybe not the best place to start. Those are the people who are going to be probably most conservative and most likely to shut down your idea. Sara Blakely, the founder of Spanx, which is now a billion dollar company, famously said the last people she told were her parents because they were going to shoot it down. But I do think that the internet, social media, the people who are "friends," the people on this crowdsourcing or crowdfunding platforms, people at the farmers' market, people in other departments of our companies; there is a lot of ways now to market test ideas with very little money and not that much time.

Rachel Salaman: Now, risk is obviously integral to this discussion and, in the book, you mentioned that some of the most intrepid entrepreneurs are not big risk takers, and you say that Virgin's Richard Branson said the art is to protect the downside. So what advice do you have about risk taking in this context?

Linda Rottenberg: Look, one of the things I tried to do in this book is to try to debunk a lot of the myths. We'd already talked about these "negative" terms like disruption and failure and crazy that we need to grab hold of. But it's an opposite way of risk taking.

I think people think of entrepreneurs as these swashbuckling mavericks who are just aiming to beat down the status quo. Anyone who has read Ayn Rand, it's Howard Roark, it's people marching, full blazing. And I find it's really, really the rare person who operates that way and most people I know who are the best entrepreneurs, as you said, are people who hate risk and, in fact, their whole attempt is to de-risk risk or take what they consider very calculated risks, where they know that the likely downside is not that great and the potential upside is huge.

So I think what I've realized is that the riskiest part of being an entrepreneur is letting yourself start in the first place. That is the scary leap of faith and that is a psychological risk that everyone has to take. But once you do that - we talked about ways with crowdfunding and crowdsourcing or going within your company to other departments - you can break things down step by step. You can really make sure that you're not going to mortgage your family, you're not going to max out all your credit cards, you're not going to bankrupt your department in your business. You're taking these calculated risks and slowly experimenting so that you can build up traction and then, ultimately, take the next step forward.

And I think that that's what entrepreneurship is about - every day it's like two steps forward and one step back. But it's not 40 steps forward at once and then 52 steps back.

Rachel Salaman: Now, there's an interesting section in your book on what you call stalking, which is approaching people who might be able to help your project or enterprise. How important do you think this is as a skill?

Linda Rottenberg: The point here is that you don't need a fancy Rolodex, you don't need wealthy families, to start up a business. I think this notion of friends and family also leads people to believe, "Well, if I don't have friends and family that have hundreds of thousands of dollars, I can't start anything and I didn't go to the right school, I can't start something new."

And, really, a lot of times people closest to you, even if they did have the resources, they are the first people to shut down your ideas, number one. Number two, again back to the Inc. 500, the fastest growing companies in the U.S., half of them were started with under $10,000. So you don't need that much funding to start. But, more importantly, you don't need that network necessarily in place. And what I mean by stalking is obviously a joke - I don't mean literally to stalk - but, when I was starting Endeavor, I identified some people who could be most helpful. One was Peter Brooke, the founding father of International Venture Capital. One was Bill Sahlman, who is a professor of entrepreneurial finance at Harvard Business School. And I literally got myself an opportunity to meet them face-to-face. One I waited for outside the men's room when he was speaking and I quickly explained my idea.

And I think now, in a nice way, with things like LinkedIn and Facebook and social media, you've got to be careful. You can't be too aggressive. But I think there are ways to find friends of friends of friends and make connections. And I think if you're passionate about your idea and if you target people you think are going to be equally passionate, then I find there's a way to get to them and you shouldn't assume that they don't want to talk to you. Like when we go do a new country at Endeavor, I sort of pre-identify with the team who is most likely to resonate with this idea. So we don't go to everyone and blanket people. We have a targeted strategy and then we find every possible way to get in front of them.

So that's what I mean by stalking, but I do believe it's underrated.

Rachel Salaman: This links to the idea of mentors and mentoring, which runs throughout your book. What tips do you have for people who would like to find a mentor to help with their innovation?

Linda Rottenberg: We've been called the mentor capitalists at Endeavor and I feel really strongly that our idea of mentoring is outmoded. And when I was in my twenties I thought back to my mother, who wanted me to get a husband, I thought, "Oh my God, I have to find a husband and I have to find this mentor soulmate who is going to guide me through my whole career. This is so stressful." And I think that that whole notion of some gray-haired person who is going to gently guide us through our career and be with us as a single mentor is really something that belongs back in the 1950s. I think that, today, we need a circle of mentors, not just one. I think that we need people who are in our field of expertise and out, who are older, who are younger, who are peers; some of the best mentors can be peers.

I actually think your frenemies can be your best mentors: Larry Page and Sergey Brin famously went to Steve Jobs when Apple and Google were feuding (this was right before Steve Jobs had passed away), to get his advice because they wanted to design things more elegantly and they knew that who better to know their strategy. And also Larry Page was going back to become CEO after giving up the title, just as Jobs had done. So I think that people who might be competition, whether inside your company or in your field, can sometimes actually know what you're going through.

But beyond that, I have mentors that are younger than me, that are older than me. I think that getting different perspectives is important. And, also, very few of us walk through the ladder at a company like Proctor and Gamble for over a 40-year period. And so I think that, as we are all changing and sometimes becoming independent contractors and sometimes working for other people and sometimes maybe going in the private sector or the social sector, our needs change, our experiences change, and I think that we have to be willing to cut the cord with mentors when they're not being helpful because it's stressful on both parties. And sometimes we keep mentoring relationships too long.

And so I think having a circle of people, but being very clear about what that person can help you with, is sometimes really helpful because people don't feel the stress of meeting up once a month. You can have quarterly check-ins or twice-a-year check-ins with people that can be incredibly valuable, and then that's not that much time.

But the last thing I'll say is you have to be very careful too. Just as you don't ask someone to marry you or get engaged on the first date, you can't walk up to someone and say, "Will you be my mentor?" That's a little off-putting. But I think what you can do is have targeted, can I take you for coffee, I'd love to pick your brain on this one specific area of expertise, and then organically the relationships build.

Rachel Salaman: There's an interesting quote in your book which is "open the door and the mentors will walk through," and I think some people might be surprised to hear that. They might worry they wouldn't get a yes to a mentoring request, but I guess you're saying it has to be a bit more subtle than just saying, "Will you be my mentor?"

Linda Rottenberg: It has to be subtle and that's also whether people think it's Buddhist or Taoist, which is when the student is ready, the master will appear. One of the things we do at Endeavor a lot is set up mentoring sessions. We have these selection panels where experts come and spend two and a half days with entrepreneurs. And it's really interesting. There are a number of people who are just open to advice, so part of it is when you're around people and you're passionate and you're open to learning, that is contagious.

What do people want to be as a mentor? Useful. And you don't have to take all their advice but, if you show appreciation and willingness to listen to their ideas, then they're more likely to want to keep helping you. And it sounds so obvious and yet having spent time around thousands and thousands of entrepreneurs, and thousands of experts, and so many times the entrepreneurs feel like they know it all or they're too shy and therefore they give off this vibe of, "I don't really want your advice or I'm intimidated or I'm not interested." And the ones that openly express passion for what they're doing and knowledge, so, "I'm not going to take all your ideas because that's scary too." You don't want to feel like you have to build the organization for somebody. If people have confidence in what they're doing but are also open-minded to other people adding to it, that is what's attractive on the mentor side of the equation.

Rachel Salaman: In your book you offer some tips for creating an environment that brings out the entrepreneurial instincts in a workforce. So what is psychic equity and how can leaders encourage it in their teams?

Linda Rottenberg: I think this is one area where the non-profit world can teach the for-profit world. And as a non-profit, you don't have stock options to give away. You don't have as much of the financial equity and, yet, what you do have is the ability to make people feel part of a mission, part of something bigger than themselves, feel ownership over their job, feel like what they're doing connects to the success of the whole. And I really think people take that for granted. We at Endeavor hire the top talent from the top schools of anybody and people just feel like they get that psychic equity. They get to do things that are meaningful, they get to have responsibility.

And so that's what I think we have to encourage because, when you're a startup, even if you're a for-profit startup, you don't know if your equity is going to be worth anything, you can't pay big salaries. What do you have? You have this dream that you can get everybody excited about. And I think that making sure people feel like they're building it and it's not just one person's idea, that is what it's about and, if you can get everyone to feel like they're co-owners, then you're going to build something much bigger.

Rachel Salaman: And in your book you outline something called Leadership 3.0, which talks about the four As of entrepreneurial leaders: agile, accessible, aware, and authentic. Could you talk a bit more about that in this context?

Linda Rottenberg: I had this outmoded view of leaders as people. Whether it was General Patton or Jack Welch, they were all-knowing and all-seeing and tough and confident and assured. And what I realized is that a lot of that is outmoded. People do want leaders that are more human, for lack of a better term. And for that there is a term that I heard from a woman who was the former CMO of Coca Cola, and she had this term called flawsome, which is a term between flawed and awesome, which I just love. So I think all leaders need to try to be flawsome.

Just as brands today on social media, people see through any attempt to be anything but authentic and, if you try to over-promote, the millennials will just not accept the brand. And it's the same with leaders too. They expect people to be open-office and not on-high. They expect leaders to use social media. And, in my own life, I talk about being a female CEO and expecting to have to be more self-sufficient and independent and strong. And yet, going through this period eight years ago where I had young identical twin girls - I still do but they are now in middle school - so they were very young and I had a husband who was going through an aggressive cancer treatment for a year and I spent a lot of the year out of the office, either at chemotherapy treatments with my husband or taking care of my young daughters.

And when I came back to work full time, I was really nervous and I didn't know how people were going to relate to me. It was going to be awkward. I never really talked about my personal life and now here I had this big event and would they not be able to relate to me. But they started asking questions so all I could do was answer honestly, and two of my younger team members came up to me and they said, "Look, Linda, we always admired you but we thought you were superhuman." And they did not mean this in a good way. They meant I was unrelatable, and they said, "Now that we see your vulnerable side, your real side, now we will follow you anywhere."

So I realized that, after all these years of trying to be superhuman, I really had to be less super and more human. Again, it sounds so obvious and yet I think we all go to work and we put on these work clothes and we try to project power. There are all these TED talks about powerful poses and really, at the end of the day, I think the more authentic we can be, it attracts the people we're going to need and, I think, today people's brands also reflect that style of leadership as well.

Rachel Salaman: Now, as we near the end of this podcast, Linda, didn't you say you were going to tell us your favorite story about an entrepreneur?

Linda Rottenberg: I did. So this has to do with harnessing chaos and what you were saying about we see these words like chaos and disruption as really negative and how do we deal with that. And this is about how to harness it in our favor.

The story takes place in the 1800s in the Reims region of France, and a young widow became the head of a family wine company that her late husband had left her. And she really didn't know the business, but there was this wine and then there was a fermented sparkling wine. And she decided to do something original, and she turned the bottles upside down in these special racks and created a bubbly, sharper taste than sparkling wine had ever had before. In fact her 1811 vintage was said to be the first truly modern champagne.

But just as this woman, whose name was Barbe-Nicole Ponsardin, perfected this, the Russians invaded France as part of the Napoleonic Wars. And all of the experienced wine and champagne makers went to protect the vineyards and didn't want the barbarians at the gate. And Barbe-Nicole took the opposite tack. She said, "This is a marketing opportunity. These Russians drink." And so she resolved to get them wasted and she said, "Today they drink, tomorrow they'll pay."

So this was a great marketing opportunity and it worked, and then years later, when the peace treaty had been in discussion but not formally signed, she took one calculated risk, which was to run the blockade. There was a blockade against products from France going to Russia. But she knew that the peace treaty was only weeks or months away, so she took that 1811 vintage that she had been holding back and she shipped it right outside of St Petersburg and Moscow, meaning the second the peace treaty is signed her bottles arrive, the Russians are drinking like fish, and even Tsar Alexander announces that he will only drink "the widow."

Well, as you probably know, the word in French for widow is veuve and Barbe-Nicole Ponsardin's late husband was called Cliquot. And it is the story of Veuve Cliquot and the story of how one woman can, even in an industry that she's not familiar with, take calculated risks, and seize these marketing opportunities that no one else identifies, and become the first woman to run a multinational business.

And so I think that, if there is one last thing I can leave with your listeners, it is that the only people that can give us permission to move forward with our crazy idea are ourselves and that we are the people that are most likely to hold ourselves back. And that's why most ideas don't die in the marketplace or in the laboratory or online. Most of the best ideas die in the shower, because we don't even get out and give ourselves permission to pursue them.

So I think that's the lesson. We can do it. We can zig when everyone else zags. We can embrace our crazy and move forward.

Rachel Salaman: Linda Rottenberg, thanks very much for joining us today.

Linda Rottenberg: Thank you, it was a pleasure.

Rachel Salaman: The name of Linda's book again is, "Crazy is a Compliment: The Power of Zigging When Everyone Else Zags."

I'll be back in a few weeks with another Expert Interview. Until then, goodbye.