Last Monday, I had the honor of keynoting the Texas MBA Class of 2015 Orientation. This is the McCombs School of Business at the University of Texas at Austin's largest class to date - I believe around 270 students. Around 80 spouses were also present. Tina Mabley, Assistant Dean of the Full-time MBA Program, introduced me. She introduced me as the Vice Chairman and Co-founder of Bazaarvoice and also as the incoming Entrepreneur-in-Residence at McCombs, a position I'm glad to begin in September. My grandfather, James Mann Hurt, taught at U.T. Austin for his entire career and I'm proud to follow in his footsteps. I promised the students I would post my speech, complete with links, and that is what follows here:
Photo credit: @jhoodashcraft
Thank you very much, Tina, and to all of you. It is a sincere honor to be here.
I remember like it was yesterday what it was like to be in your shoes. I was 25-years old when I entered Wharton's MBA class in 1997. I had just a few years of work experience post my undergrad here at U.T. Austin, where I was a Management Information Systems major. I had studied hard for the GMAT. My wife, Debra, helped me practice it over and over again. Deloitte Consulting would pay for my MBA if I returned to work for them. But all of my essays were about entrepreneurship. I worked hard on those essays. It didn't come natural to write about myself, and Debra was tough. She would read my essays, rip them up, and tell me to start over - that I wasn't explaining who I really was. I started to get more comfortable showing them to everyone - even strangers on planes. I would say, "You don't know me, but please read this and give me your feedback - I really want to get into my top pick for MBA school and a complete stranger will be reading this to assess whether or not I get in". People were more than happy to help. I know that you worked very hard on your essays as well to get into McCombs and you should feel very proud to get into this program. I remember when I find out that I was accepted at Wharton and what an amazing feeling that was. It was a big deal to get in, but I now had so much to prove. I was both going back to school and also full of anticipation to become an entrepreneur. Debra and I were moving to a new town - Philadelphia - and there would be so many new people and such diversity - a more diverse, intelligent, and Type-A population than I had ever been around. Hopefully I would thrive in this environment. I grew up as a nerd, having programmed since I was 7-years old. The irony is that my background of being a nerd - the very thing that unfortunately was the source of people picking on me as a child - and the innovations I created as a child and young adult was what got me into one of the top-ranked MBA programs in the world.
And it clicked. Wharton was a transformational experience for me. I put a lot into it and leveraged the network heavily. I started businesses the whole time I was there, including Coremetrics. I made a point to see almost every entrepreneur that came to speak. It was very cool that they would take the time to do that, and I soaked it all in. I remember when Farhad Mohit, co-founder and CEO of BizRate, came to speak to us. It was around 7pm at night. Only 20 students showed up. No real fanfare. No one really knew who he was. He had graduated from Wharton the year before I got in. He was most famous for the "Dear Farhad" column in the Wharton Journal. And it was magical. Here was Farhad talking about how he had been eating ramen noodle for the past year and now he had finally gotten the business funded. I remember the raw humility of it all. And much later - in 2005 - BizRate (also known later as ShopZilla) was acquired by Scripps for $525 million.
I loved the case study method. My professors had practical work experience - they were constantly consulting for Fortune 500 businesses. They would bring this real-world learning back into the classroom, and the case studies would describe real situations and outcomes. This was very different than my undergrad, where my classes were very large and a lot of our grade was based on memorization and regurgitation. My favorite classes in undergrad were my MIS classes because they gave me real-world experience. And I fell in love with business at Wharton. I looked at it as the start - not the end - of my education. I read hundreds of books on leadership and management after Wharton. I remember driving with Debra when we moved back to Austin after graduation and passing a hotel that I had seen thousands of times as a child. But this time I thought, "How many people do they employ? How much do they charge their guests? What are their costs and margins? What is their revenue?". That really struck me. I told Debra that I knew then that Wharton had changed me forever. I would never think the same way about business again.
At Wharton, Debra really invested in me. She provided me with stability. For those of you with spouses here, let's hear it for them (applause). This was a huge advantage for me, and if you are married here at McCombs it will be a huge advantage for you. No posturing to find dates, just the focus that a supportive spouse gives you. Her support allowed me to work many nights until 3 or 4 in the morning. She allowed me to prove to myself that I could become an entrepreneur, and I started four businesses while at school. I set big goals at Wharton. When I was 26-years old, I told Debra and just a few close friends that one day I would found a business and take that public. Well, my dream came true on my fifth business - Bazaarvoice. I turned 40-years old on our IPO roadshow. It is hard to believe.
So I thought a lot about this speech and what advice I would give you. I wondered, "What would I have liked to know when I was in your shoes starting my MBA?". So I came up with a top-ten list because I guess that is just what you do:
- You'll get what you put in. Your MBA can be a transformational experience if you allow it be. I heavily leveraged my classmates, my professors, the alumni, and the Philadelphia community. I suggest you do the same here at McCombs and in Austin. My classmates were the smartest people I had ever been around. Several of my professors are good friends and mentors today and some of them are wealthier because of that friendship - they were initial investors in Bazaarvoice at a price of around 16 cents per share. One example of this while I was still at Wharton is Coremetrics. I sought out some Wharton alumni working at CDnow and Amazon to show them the Web analytics solution I had built for my own online retail site. I went in expecting them to teach me how much better their Web analytics were. To my surprise, they told me that I should go for it. At CDnow, I asked them what analytics they used. They said Accrue and pointed to a shrink-wrapped box sitting on the shelf. They simply had no time to install it as they were too busy keeping up with their website traffic. So I decided to found Coremetrics to address this problem and it became one of the first Software as a Service companies. [Note: I wrote extensively about my time at Wharton in this Lucky7 post.]
- Set big goals, don't play it too safe, and take calculated risks. I set my goal to found and take a company public while I was at Wharton. It was gut-wrenching to leave Coremetrics, which had barely weathered the dot-com bust. I remember us going from around 80 dot-com clients to around two after the fallout occurred. I didn't know if Coremetrics would make it but we pushed through and it later got acquired by IBM for around $300 million. It was hard to leave the company I founded to start Bazaarvoice. But it was the best career decision of my life - it was a lifechanging. MBAs tend to be a risk adverse bunch. Don't be too risk adverse because risk is everywhere. This leads to my next lesson. [Note: Lori Hawkins at the Austin American-Statesman did a great job summarizing my experience and lessons learned at Coremetrics in this article.]
- Think hard about your career ROI. You have nothing to lose at your age. You should swing for the fences. And look at where the world if going when you make your selection - nanotech, biotech, solar, there are huge industries being transformed. My pick for entrepreneur of the decade right now is Elon Musk. He is simultaneously transforming the auto, solar, and space industry. [Note: he recently announced his $10 billion plan for his hyperloop transportation system too!] He didn't come from these industries, and many of the great entrepreneurs of our past also didn't come from the industries they chose to passionately transform. Nothing is safe any more, and everything is subject to disruption. Your "safe" decision to go work at a big firm like Monitor Group - founded by the famous Harvard Business School professor and author of the five forces, Michael Porter, and who used to be one of the most prestigious recruiters at Wharton, could later surprise you when they go out of business, as Monitor Group did last year. "Strategic consulting" turned out to not be viewed all that valuable after all during the Great Recession. [Note: this Forbes articleabout the demise of Monitor Group is very insightful.] By the way, this is harder than it sounds. I made very little in terms of salary when I graduated as compared to my classmates. For many years, it looked like I was an idiot financially if you compared me to them. It was only later in life, when the financial hockeystick when far up and to the right that I was viewed as making the right career bet from an ROI perspective. And when you think about impact and you look around McCombs or Wharton, you'll realize that these schools were named by entrepreneurs. Red McCombs is a very successful entrepreneur, and so is Herb Kelleher. Benjamin Franklin, who founded the University of Pennsylvania, was one of our most historic entrepreneurs. So wasJoseph Wharton. And more recently Jon Huntsman, who is the namesake of Wharton's main building now.
- Leverage your MBA to change the way you approach people forever. This lesson will greatly help you in your job search. Take the time to approach people with an informed perspective - the type of perspective that studying all of those company case studies will give you. Don't be afraid to be bold and share your ideas. Less than 1% of the emails I received as CEO of Bazaarvoice from someone asking for my help or trying to sell me something had what I would consider valuable content. It doesn't take all that long - spend a few hours doing research on the industry they are in. Approach them with a unique perspective. On my blog at Lucky7.io, which is named as a tribute to my mom, I write about the similarity between the DNA of our forefathers in 1776, Israel, and Steve Jobs. I encourage you to watch the video interview of the recently discovered Steve Jobs footage about how he asked Bill Hewlett for help. Steve Jobs was 12-years old, and who wouldn't have responded to such a bright 12-year old? Our forefathers literally pulled themselves up by their bootstraps to defeat the empire and claim their freedom - except they couldn't even afford boots. Most wealth in America was self-created, not given to us, and we remember our roots. We stand on the shoulders of those that helped us. [Note: here is the Lucky7 post on 1776, Israel, and Steve Jobs.]
- Lose the hubris. The MBA is the beginning of your business learning, not the end of it. You are here in Austin, and the Austin way is to always be humble and always be learning. Look no further than the damage MBAs did to cause the financial collapse just a few years ago. If there wasn't so much hubris, it would have been easy to see the problems in the debt-to-capital ratios of the banks. I was lucky enough to be in a group of 12 CEOs at dinner with the CEO of Morgan Stanley and get the inside story on the financial collapse. It was so close, and Morgan Stanley was fortune to get a last-minute loan from the Japanese. Without that, they would have liked gone out of business and followed Lehman Brothers. MBAs get a bad wrap because of their hubris. There is simply no place for it. [Note: my Lucky7 post on my 7 lessons learned on the path from founder to CEO addresses this point too.]
- Love what you do or don't do it at all - life is too short. When I first started at Wharton, I attended a career day presentation on investment banking. I was set on being an entrepreneur but I was curious what that career was like. Several Partners of large investment banks were there to tell us about their career and life. Well, let's just say that I knew it wouldn't be for me after listening to them for 15 minutes. There were things said that really shocked me, and it wouldn't be appropriate to share them here. Now please don't misunderstand me. Not all investment bankers are bad, and one of my Wharton classmates, Ed Liu, loves his job at Morgan Stanley and has worked there ever since graduation. Ed and I teamed up for the Bazaarvoice IPO, and it was a great example of Wharton bringing two people together to do business later in life. But there were many others at Wharton that knew there were going to be miserable in this career and decided to do it "for the money". I was sad for my classmates when they would say, "I know I'm not going to like it, but I'll make a lot of money over the next two years or so and then I'll quit and start a business or do something that I really want to do". Life is too short. I lost both of my parents at age 64 and 65 respectively. My father taught me the value of living his passion. He loved fishing and invented the first halogen fishing light. He was Tim Ferriss as described in The Four-Hour Work Week, not the Tim Ferriss that constantly travels and speaks around the world today - but the idealized version in his book. My father seriously lived that lifestyle. And I'm proud to say that I have lived my passion since I was a child. I always thought computers would change the world, but I never knew how profound it would be. We changed the world at Bazaarvoice. How many of you read reviews when you shop online? [Note: almost all hands went up.] I'm proud to say that much of that content - the voice of the marketplace - is served by Bazaarvoice, all over the world. It has changed the way we shop forever. This lesson leads directly to my next. [Note: I wrote about the lessons learned from my father in this Lucky7 post.]
- Create the financial space to choose to do what you love. Don't compromise your life for material things. Don't overcomplicate it. Money is a utility that can also provide security and freedom to choose. At a conference I attended recently, a famous angel investor that has made over 80 investments was talking about how he had sold everything - his fancy sportscars, his homes, and other material items - and how free he now feels without the weight of it all. This may sound extremist - and to some extent it is - but there is wisdom in his learning. Debra and I didn't buy our first house until 2003 at the age of 31. We bought a very modest home for our income. This created the optionality to allow me to leave Coremetrics and start Bazaarvoice because I didn't burn through my savings. We lived more frugally to keep our options open. [Note: I wrote about money as a utility and what Benjamin Franklin may have really meant when he said "time is money" in this Lucky7 post.]
- Take the time to reflect and recharge. Life is a marathon, not a sprint. Growing with your family is incredibly important. Unfortunately, many marriages fail because of not living the simple practice of growing together. This is especially true of highly driven people - the type of people that pursue MBAs. Don't let this happen with your family, or your business. You will build a better business and set the tone for the marathon if you practice this. If your nose is always too close to the grindstone, you will lose perspective. I'm proud to say that I took 5 to 6 weeks of vacation every year - including the year we went public - from the inception of Bazaarvoice. I'm proof that you can have it all - that it is your choice on whether or not you want to live a manic life without time for yourself or your family. [Note: my Lucky7 post on my 7 lessons learned on the path from founder to CEO addresses this point too.]
- If you decide to start a business, nourish it. This lesson also applies to leading a team. A business is like a person and is treated as such. I recommend you watch the documentary The Corporation to learn more about the origin of the corporate form. It is a collective of people, and it should be nourished as such. Corporations are even legally treated as individuals as we've seen recently with laws governing campaign financing. It has a brain, it has a heart, it has a soul. The brain is often nourished in a corporation. The heart less so. And the soul far less so. Want to know if a company has a strong soul? Walk around the halls. Does it give you energy or take it away? If you lead a team or lead a company as a CEO, you need to nourish it. I'm proud to say that Bazaarvoice was often recognized as one of the top workplaces in Austin - even winning the #1 place to work several times. [Note: I've written extensively about Bazaarvoice culture, including my Lucky7 posts on the t-shirts we produced over the years, how we created a sales-driven culture, how we hired, and how important it is for the CEO to be the Chief Culture Officer.]
- Give back to your community. The more successful you become, the more you owe to the community that supported you in that success. A lot of people forget that entrepreneurs are the primary job creators. Speaking from experience, there is great pride in this. I love that we have created about 800 jobs at Bazaarvoice plus hundreds more work-from-home positions of mostly stay-at-home mothers. Not to mention the companies that have been founded by people that used to work at Bazaarvoice - now a total of 13 or 14 companies. I have heard that former HomeAway employees have started 12 or more themselves. This ripple effect of job creation cannot be underestimated. It drives the economy. I love that we started theBazaarvoice Foundation at the beginning of our company and were cited as one of the most philanthropic companies in Austin when we were just one-year old. When you lead a company, philanthrophy should be grass roots, and not tops down. I love that the Bazaarvoice Foundation today primarily focuses on helping students in STEM and entrepreneurship. That all happened because of the people of Bazaarvoice, not because of me. I just needed to be the initial spark, the catalyst, and then let them lead and support them in their efforts. This is part of what I mean by nourishing the heart and soul of the individual - the corporation. [Note: recently I received a report from the Bazaarvoice foundation on their work with charity: water and you can see the BazaarWell in Malawi - how cool is that?!]
Ok, that's the top-ten list. Now let's get started with some homework. I talked about the importance of books, and I'm going to recommend several out of the hundreds I've read. Reading these now will make your experience at McCombs more meaningful:
- Abundance - I wrote the longest book report of my life about this book, and there are at least a hundred thousand great business ideas in here. It addresses the world's biggest problems, such as lack of water, food, energy, or education, and what is being done to solve them - to make them abundant. It starts out with the story of aluminum and how it used to be more prized than gold but then the breakthrough occurred and now it is almost a throwaway but infinitely useful metal. Our biggest challenge is mindset - ambition, innovation, and optimism. It is impossible to read this book and not be inspired. [Note: you can read my Lucky7 book report on Abundance here.]
- The Innovator's Dilemma - a classic with lots of company case studies. This will help you understand how industries are constantly being disrupted. It will help you read where a company is going and whether or not you should join them. Or give you the inspiration to start your own.
- Influence: Science & Practice - this is an important book to tune you into human nature. You can use this book for great good although it will initially frustrate you in how much you've been manipulated all of your life. A classic story from the book - a woman has a turquoise jewerly business in New Mexico. She isn't selling any product and leaves in frustration on vacation, leaving the store to the manager and writing a note to them. She comes back and everything is sold. She says to the manager, "Wow - that worked! I guess everything was too expensive" (the note she had left was to mark everything half off). The manager says, "no, I doubled the price of everything - I thought that is what you meant!" The lesson: customers were on vacation and were valuing the turquoise jewelry based on price and they thought it must not be good because of how cheap it was before. Sound familiar? I've fallen prey to this on many vacations myself.
- All of the Patrick Lencioni books. These are fast and easy reads in the form of fables but with powerful lessons and frameworks. One of my favorites is The Five Temptations of a CEO - a book that led to me changing some of my practices, including an annual assessment of my performance against the five temptations.
- Man's Search for Meaning. This is one of the most important books a human being should read. It is about a Holocaust survivor, Viktor Frankl, who was a psychologist by training and survives four contentration camps, including Auschwitz. He loses everyone close to him but perseveres through it all and creates an entire field called logotherapy. Mr. Frankl writes many books on the subject but this was his most popular book - by far. I leveraged this book a lot at Bazaarvoice. To have a real calling - a mission worth fighting for - will get you through the tough times, and Bazaarvoice persevered - and actually thrived - during the Great Recession. [Note: I quoted from this book in my Lucky7 post "Middle-aged entrepreneurs - this is your five-step program to freedom".]
- How Will You Measure Your Life? or The Start-up of You. The first book was recommended to me by Jeff Harbach, the head of the Central Texas Angel Network, and is written by Clayton Christensen, the author of The Innovator's Dilemma. There is a great chapter on emergent vs. deliberate strategies that most relates to my lessons to love what you do and create the financial space to allow you to choose to do it. The second book is written by one of the greatest entrepreneurs and investors of our time, Reid Hoffman. Either or both will greatly help you in your career and they are very recent books too.
- My Lucky7.io blog is also a source for you. I'm dedicated to fostering entrepreneurship here in Austin to the best of my ability. One way I do that is through my blog. I encourage you to get started with my posts on 1776, Israel, and Steve Jobs; Time is money; My return to Wharton as an Entrepreneur-in-Residence; My book review on Abundance; and if you are into tech my post popular post to date has been the State of tech entrepreneurship in Austin. [Note: outside of the last post in this list, I already linked to the former posts in context above.]
As the hour is now getting long, I'll end this talk with of my favorite quotes - one that I live by and I encourage you to think about during your time here at McCombs. This is from the great Theodore Roosevelt and is from a speech given in 1910 in Paris. It is called "The Man in the Arena":
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.
Enjoy your time here at McCombs - make the most of it, and thank you again for the honor of speaking here today.