The Outsized Optimism Of The Entrepreneur
It is part of the American dream, the notion that if you have a good idea and a fire in your belly, you can turn an idea into a successful business. It's that entrepreneurial spirit that drives the global economy.
That message is everywhere in our culture. President Obama echoed it last week, at a summit on entrepreneurship at the White House.
"We have a lot of brainpower here," he said. "We've got innovators and investors, business leaders, entrepreneurs. We've even got a few Sharks."
He was referring to the hit show Shark Tank — because Americans love the idea of making it big so much that we watch the drama unfold on TV night after night.
Even if an entrepreneur can secure some investment to get up and running, the odds of it working out are low. The Small Business Administration says that 50 percent of all new businesses fail within the first five years.
This week on For the Record: two entrepreneurs who risk it all to make it big. One's business succeeds; the other's does not.
Jane Chen, San Francisco
Chen started a company called Embrace, that sets out to save premature babies in developing countries with a product that keeps them at exactly the right temperature.
"It looks like a little sleeping bag for a baby," she explains. "You can heat it either through a hot water heater or through an electric heater that only requires 30 minutes of power."
She and three friends came up with this idea when they were students at Stanford's business school. They researched the market and in the end, "We thought to ourselves, 'Hey, if we don't do this, no one else is going to.' "
Jeff Martens, Portland, Ore.
Martens's "aha" moment came in 2001. He was obsessed with the idea of harnessing the power of millions of home computers for large, single tasks.
"We could split it up into many pieces, send those pieces to many computers and do it faster than if the client submitted that workload to just one single server," he says.
It was an idea he couldn't shake. Then in 2009, Martens got his big break.
"I was laid off," he says "It turns out that was probably one of the best things that happened to me."
He got a severance package so he could afford to take a few months off to turn his idea into a business.
Most entrepreneurs hit a low point in any new enterprise, and Martens and Chen both had theirs. Chen's came last year, when national elections in India created instability in the country where she and her partners were selling a lot of their products in India.
For Martens, the low point came when a member of his team quit.
Here, the two stories start to diverge. To climb out of her low point, Chen found an investor, someone she randomly met in a meditation class who happened to be really interested in neonatal health. That investor kept her going.
That didn't happen for Martens.
"We kept saying, 'Oh, there's just this new investor around the corner, or this new customer that'll sign up and it's going to happen,' " he says. "I think after telling ourselves that a number of times, we just couldn't believe it ourselves anymore. And to my surprise, the day that my co-founder and I decided to shut down our company, it was one of the easiest decisions we'd ever made."
Martens is on solid footing now. He got a job with a tech company as a product manager. He likes the steady paycheck and even likes the work. He figures his start-up cost him friends, his bank account and his marriage — but he is absolutely convinced that he'll strike out on his own again at some point.
Chen is still making baby warmers. She admits to being perhaps irrationally optimistic — believing, despite the odds, that everything will just work out. That's the thing that entrepreneurs all have in common.
"Once we finish one thing I'm always thinking, well, what's next?" she says. "And thinking, well, it's 150,000 babies now. How do we get to a million babies?"
Three takeaways
First, entrepreneurs don't talk about failure like the rest of us. In this world, it's considered almost a badge of honor to have started a few companies that tanked. Of course, that only holds as long as the next company you start is a huge success. But they see failure as an almost necessary step to making it big.
Second, entrepreneurs have to believe in their idea and in themselves. They simply don't allow self-doubt to creep in. They are eternal optimists, which is helpful, because the risk they have to tolerate is enough to turn the stomach of the rest of us mere mortals.
Last, entrepreneurs have little room for work-life balance. The work is all-encompassing; they put their personal lives on hold. But until when? Based on our conversations, entrepreneurs are also super ambitious, so how do they know when to stop and say, "This is good. This is enough." There's always another good idea, another big investor around the corner.
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Transcript
RACHEL MARTIN, HOST:
This is For The Record. It's part of the American dream - the notion that if you have a good idea and fire in your belly, you can turn that idea into a successful business. That message is everywhere in our culture. Here's President Obama this past week at a summit on entrepreneurship at the White House.
(SOUNDBITE OF WHITE HOUSE SUMMIT)
PRESIDENT BARACK OBAMA: We have a lot of brainpower here. We've got innovators and investors, business leaders, entrepreneurs. We've even got a few sharks.
MARTIN: That was a reference to the hit TV show "Shark Tank" because Americans love the idea of making it big so much, we watch the drama unfold on TV night after night.
(SOUNDBITE OF TV SHOW, "SHARK TANK")
UNIDENTIFIED MAN: All right, Curt (ph) I'm not going to invest in your schminkles (ph). I'm out.
MARTIN: Even if an entrepreneur can line up some investment to get up and running, the odds of it all working out aren't great. The Small Business Administration says half of all new businesses fail within the first five years. For The Record today - risking it all to make it big. This morning, a tale of two entrepreneurs - one's business succeeds, the other's does not.
JANE CHEN: My name is Jane Chen. I live in San Francisco.
MARTIN: She started a company called Embrace that set out to save premature babies in developing countries with a product that keeps them at exactly the right temperature.
CHEN: It looks like a little sleeping bag for a baby. You can heat it either through a hot water heater or through an electric heater that only requires 30 minutes of power.
MARTIN: She and three friends came up with the idea when they were students at Stanford. They researched the market and in the end...
CHEN: We thought to ourselves, hey, if we don't do this, no one else is going to.
MARTIN: That's James Chen. Now our second entrepreneur...
JEFF MARTENS: My name is Jeff Martens. I live in Portland, Oregon, and I'm a technologist and entrepreneur.
MARTIN: Jeff's aha moment came in 2001. He was obsessed with the idea that there were all these personal computers out there in millions of homes, and couldn't all that computing power be harnessed to complete a job faster?
MARTENS: We could split it up into many pieces, send those pieces to many computers and do it faster than if the client submitted...
MARTIN: Suffice it to say, it's really technical. But the point is that he had an idea that he could not shake.
MARTENS: And I just, literally, for years, could not stop thinking about it. It kept me up at night. I would wake up in the morning and think about it.
MARTIN: Then in 2009, his big break.
MARTENS: I was laid off. And it turns out that was probably one of the best things that happened to me.
MARTIN: He got a severance package so he can afford to take a few months off and see if he could turn his idea into a business. There they are, Jane and Jeff, each moving along, trying to build their respective businesses, which is code for trying to find cash. And they found it - enough to keep each of them moving forward. Now this is a point in the story where you know something is going to change because that's what happens to entrepreneurs. There's almost always a low point, the moment when it seems like the whole enterprise might crumble. For Jane Chen, that came last year. She and her partners were selling a lot of their products in India, but national elections in that country created instability.
CHEN: As a result of that, we were put into just a very, very precarious financial situation. And I thought to myself, you know, are we going to be able to make it out of this?
MARTIN: For Jeff, the low point came when a member of his team quit.
MARTENS: One of our employees was really pushing back on some software design that we were planning. And he said this just will not work. And it was really hard to hear.
MARTIN: This is where these stories start to diverge. To climb out of her low point, Jane Chen reached out to an investor who gave her the funding she needed to keep going, an investor she randomly met in a meditation class months before, an investor who happened to be really interested in neonatal health. She does not necessarily think it's a coincidence.
CHEN: I love this quote from Paulo Coelho in "The Alchemist." He says "when you truly believe in something, the universe will conspire in helping you to achieve it."
MARTIN: And if you haven't already guessed it, the universe did conspire to help Jane Chen, and her business is still going strong today. That did not happen for Jeff Martens.
MARTENS: We kept saying, oh, there's just this new investor around the corner or this new customer that will sign-up. And it's going to happen. And I think after telling ourselves that a number of times, we just couldn't believe it ourselves anymore. And to my surprise, the day that my cofounder and I decided to shut down our company, it was one of the easiest decisions we'd ever made. We looked at each other, and we said it's over.
MARTIN: Jeff knew the risks when he was starting out. He remembers one meeting with a family friend.
MARTENS: He said, you know, here's the deal, you better love what you're doing because you're going to lose a lot. And specifically, you're going to lose three things. You're going to lose your financial security. Think about your bank account now, and kiss all that money goodbye. It's gone. And then, he said, the second thing is, you know, think about your friends. And you might as well say goodbye to them because you won't have time for them anymore, and they won't understand what you're going through. And the third thing was you will probably lose your marriage. And I just thought to myself, no way, not me.
MARTIN: So what happened for you and those three things?
MARTENS: Unfortunately, they all came true for me. I became broke. I lost my house. I had to short sell it. I had to cash in my 401(k). And, you know, I miss my friends. I don't see them as much as I once did. That hit me once when I was on the phone with one of my friends, and I asked him what he did that weekend. And he said, oh, well, we all went and rented beach house at the Oregon coast. And we had a great time. And I said are you kidding me? How come I didn't know this? You didn't invite me. And he stopped, and he said, well, I guess we didn't think about it because every time we've asked you to do something in the past you've always said no. And the third thing is, unfortunately, my marriage has ended. And we were married for about 10 years and yeah.
MARTIN: That's a lot.
MARTENS: Yeah.
MARTIN: Jeff is on solid footing now. He got a job with a tech company as a product manager. He likes the steady paycheck. He even likes the work. But he is absolutely convinced he will strike out on his own again at some point. However, he says he'll do things differently. Next time he'll try to be more open because he says in the startup world when someone asks you how things are going, there's only one right answer...
MARTENS: Oh, man, we're killing it. Things are great. When they ask how sales are, you're killing it. Hiring is good. You're killing it. And on one hand, you have to say that because you don't want to put out the message that there's something wrong with your company. But the truth of the matter is you're lying most of the time.
MARTIN: Jane Chen understands that pressure to succeed. In a lot of ways she puts it on herself.
CHEN: Once we finish one thing, I'm always thinking, well, what's next? And how do we - you know, it's 150,000 babies now. How do we get to a million babies?
MARTIN: She admits to being, perhaps, irrationally optimistic, believing, despite the odds, that everything will just work out. And that's the thing that entrepreneurs all have in common. It's not just optimism, it's ambition coupled with an uncanny ability to tolerate risk, even thrive on it. It was something Jane Chen had to explain to her family.
CHEN: My parents are immigrants, and they moved to the U.S. to give us the chance for a better education and a better life. And so the path that I took, they were very, very opposed to it. But for me, it's, you know, I think that when you have a calling like that, like, I just felt it so deep in my heart. People would say to me, you know, you're crazy. Why are you doing this? And for me, it was always, I would be crazy not to do this.
MARTIN: Entrepreneurs Jane Chen of San Francisco, California and Jeff Martens of Portland, Oregon. Transcript provided by NPR, Copyright NPR.
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