Shattering the Silicon Valley Entrepreneurial Myth and Uncovering the Soul of an Entrepreneur

And so, I came to this place of saying, well, an entrepreneur to me, is anyone who works for themselves, right? Anyone who is their own boss, who either starts their own business or like me, doesn’t have a formal business but is self employed, makes their own hours, bears the risk and has the reward.

And that really goes back to that fundamental definition of what the term is, which came out of the early 18th century, this French Irish economist Richard Cantillion who said, “Anyone who works for themselves, who was on unfixed wages and trades the risks of that, for some future reward is an entrepreneur. Whether they’re the landowner or the beggar, whether they’re the merchant, or the stableboy.” That experience links them together.

But what you saw and what you’ve seen, really over the past century to especially the past couple decades, is an increasingly narrow version of that saying, “Well, no, no, no any small business, any schmo that works themselves they’re not an entrepreneur. An entrepreneur is an innovator, a man of action, someone who engages in creative destruction, they have to create tremendous value. An entrepreneur is only someone who’s successful as that, and only a certain degree of success.” Till it gets to the point where only people in one certain type of industry are the ones that have been culturally accepted to be the entrepreneurs.

Oh, an entrepreneur, some looks like Mark Zuckerberg or Steve Jobs or Elon Musk. But it’s not the person who owns their own restaurant or their own marketing company, or is a coach and has their own business that’s just a small business or a lifestyle business, so it’s not worthy of that term.

And so for me that difference in the way you define it is the kernel that led me to explore what the meaning of being an entrepreneur is in this bigger picture of how we got to this place.

Steve Sanduski: So a lot of threads for me to pull on there. So let me just start with how I think about being an entrepreneur, and the way I think about it, and the perception that I have of what it means to be an entrepreneur has really changed over time.

So I think back in the 1970s, when I was growing up, what was modeled to me was my dad, and my dad had a job with a big company. He actually carpooled to work every day. He got picked up at the same time every morning, got dropped off at the same time every evening. We ate dinner pretty much at the same time. So it was a very consistent structure.

And so my idea was, I go to school, I go to college, I get a job with a good company, probably stay there a long time. So that was kind of the model that I had. And I thought back then, that if someone was an entrepreneur, what that basically meant was, they couldn’t get a job, they couldn’t hold a job so they had to go do something on their own. You know, we might laugh about that today, because some people that are entrepreneurs would probably say, “Yeah, nobody would ever hire me. And so that’s why I start my own business.” But that’s really evolved over time.

Yet for a long time, I did work for other people. And I think in your book, you touched on this idea that there is this myth out there that a lot of the entrepreneurs today are the younger folks, when in reality, the data shows something different. And I think I’m actually part of the data that you’re going to show and I’d love for you here in just a second to share some of that. But I didn’t become “an entrepreneur” until age 50. I was working with other people up until that point, at age 50, went out on my own, at age 55 started a FinTech software business. So I’d love to hear your, you know, some of the data that you have uncovered about, what is the age of people who become entrepreneurs? What are some of that data show?

David Sax: Right. Well, it happens at every age. But when you look at what the average age is, let’s say in the tech world it’s 45 years old. Which makes sense, because that is the middle age of someone’s working life and career, when you factor in life expectancy and when they enter the workforce. And there are entrepreneurs who start businesses, yes, when they’re 18, or they’re out of high school or in their college dorms, but there’s a lot who start at every different point along the way, and might go into it and then come out of it for a job and go back into it at different points for different reasons.

My father’s friend’s father who just passed away this year, I think he started a business like two years ago in his 90s. And this is someone who had tremendous success and all the wealth and no financial reason to do that. So I think the mythology of the Silicon Valley, startup fairy tale is that entrepreneurship is a thing that young men do, who go to elite universities and are absolutely brilliant misfits that can’t be contained, and they come up with some brilliant new invention. And that’s what entrepreneurship is, and that’s what they look like.

And we lionize these individuals and we look for individuals like that, and we dismiss people who are entrepreneurs, but don’t fit into that. So that’s people who are older than that demographic, women, people of color, who actually represent a far greater proportion of entrepreneurs then hooded sweatshirt wearing dropouts from Stanford and Harvard in their 20s and teens.

Steve Sanduski: Now, earlier, you also mentioned this idea of a lifestyle business. And as I think about the financial services industry, there’s a bit of a bifurcation here in that there’s some firms that are very large, they acquire other advisory firms and they’re really trying to build, “an enterprise.” And then at the other end of the extreme, you’ve got what some people call a lifestyle practice. And some people dismissively call it, “Oh, that’s just a lifestyle business.”

Now, I’m not dismissive of that. I don’t think you are either, because it’s really the backbone of the entrepreneurship ecosystem out there. So you’ve also talked about this idea of identity. And I would love to explore that as it relates to these folks who are more of the lone entrepreneur, the small, the bakery, the nail salon, the restaurant, and how is this idea of identity wrapped up into the idea of entrepreneurship?

David Sax: Well, I think they’re intricately tied together and you can’t separate them. An entrepreneur is someone who goes out on their own and creates a business or operates a business or owns a business of various different sizes. And the difference between them and everybody who works for them is that they’re the ones who personally bear that risk. And that really changes their identity.

It’s not, “Oh, I work here. I have this job.” It’s like, this is my thing. I am a coach. I am the owner of this hair salon, this mechanic company, this factory, this huge firm that employs thousands of people, whatever it is, they’re the ones who at night, go to bed thinking about that. And the weight of that is a substantial thing. And it really, really ties them to the fate of that business. And so they see themselves very directly impacted by every dip and peak of the roller coaster that that business has. In a way that is very different from anyone who just happens to work there, regardless of what role they’re in.

Steve Sanduski: And as we read about these, the Elon Musk’s, the Steve Jobs, the Mark Zuckerberg, and we have this fantasy vision of what it means to start something from scratch and become a billionaire. How does that hurt the idea of someone wanting to start a business but knowing that it’s highly unlikely that they’re going to end up of the scale that some of these Silicon Valley companies get to? Is the lionization of the Silicon Valley entrepreneurship idea, does that detract from people’s ability to start or is there any negative to how much we lionize what’s happening in Silicon Valley?

David Sax: Well, I think there’s certain negative consequence to it. One is the inordinate amount of attention that gets put on that type of model because of the handful of high profile, hyper successes and instant billionaires that come out of it has led a lot of institutions and investors to focus on that model of entrepreneurship almost exclusively.

So for example, over the past 20, 30 years universities went from having one or two courses in entrepreneurship to minting schools and institutes of entrepreneurship and innovation, and in house venture capital funds, and almost all of that is exclusively focused on teaching and promoting and financing a Silicon Valley style startup ecosystem to use their term of venture funded startups. Which represents a tiny fraction of the actual businesses that are out there. I mean, every year in America you have two to three million business being created. There’s 25 to 30 million businesses out there. So that’s really that 10% of the population that are entrepreneurs.

I think this year, last year was predicted in the United States is like six, 7000, venture capital deals done. Most of those are follow on rounds. So it is a tiny, tiny microcosm of the world of entrepreneurship. And yet, in that way, in the academic field, in the world of finance, in the world of the media and the culture, it has received this enormous amount of attention.

And so what happens is you have people who want to go into entrepreneurship, but they don’t see themselves in that. The business that they want to start doesn’t fit into that very niche, very specific model which demands certain kinds of returns in certain ways. And so you have two things happening, one is people don’t do it or they don’t feel like they can do it because they’ll never receive that Angel funding or venture capital funding for the start up capital which most businesses don’t receive that and don’t need to receive that, but people feel they have to go that route.

And the other thing is you then have people who pursue that route, and they end up building a business along those lines, that ends up being less sustainable because it’s so reliant on outside capital, so reliant on growing in a very specific, very hyper funded way, that is a lot less sustainable and a lot less healthy than building a business that they financed on their own or through a loan or something that is akin to the other 99% of entrepreneurs out there.

And finally, there’s the psychological expectations. I was talking to a neighbor of mine starting a company. He said, “I’m going to launch this product on Kickstarter.” I said, “Well, what’s your goal?” And he’s like, “The biggest Kickstarter ever.” Because when what is discussed and what sort of our framework for entrepreneurship is, is unicorn status being a billionaire, that’s a marker of success and anything below that is seen as lesser than, is seen as a failure.

That sets such an unrealistic expectation for people where you have to achieve this one in a billion financial goal. And you lose sight of all the other markers of success that entrepreneurship give you like independence, freedom, the ability to relate to your community in a different way, the ability to build a business that expresses your own personal values and brings them out into the world, the ability to build a business that fits into your lifestyle and actually accentuates that lifestyle. That allows you to have a more time with a young family, or to pursue something that you want to do that’s outside of work.

All those things are aspects of the entrepreneurial experience that are central to it and things that entrepreneurs have the unique ability to pursue and control and grow. And none of that fits into the Silicon Valley startup model.

Steve Sanduski: Well, so earlier, I mentioned that I had this idea, this concept of what an entrepreneur was, as someone who couldn’t get a job, no one would hire them. And then over time, as I went to college, got my first job out of college, working for a big company. And then did that for a few years, went to grad school, got an MBA, and then coming out of grad school, this is late 1980s now, I decided I want to go to Silicon Valley, and I ended up getting interviewed by Hewlett Packard. At first they wanted to interview me for a job in Vancouver, Washington at their inkjet printer factory. And I said to the recruiter, I said, “You know, I’m really interested in Hewlett Packard, but I’d really like to be in Palo Alto.” And they said, “Okay, well, we’ll put your name back in the hopper and see if somebody from Palo Alto reaches out to you.”

So sure enough, somebody did, long story short, I ended up getting hired, moving out to Silicon Valley with my wife, live in Menlo Park, I’m working for Hewlett Packard at their corporate headquarters in Palo Alto and I’m thinking to myself, this is it man. This is cool. I’m in Silicon Valley. This is where things are happening. I’m going to be rich. I mean, I was, in hindsight, I was just super naive. I just thought that by being there something magical was going to happen. And of course it didn’t.

And then, I ended up moving back to the Midwest, but that was my little foray into a Silicon Valley idea. But I was an employee, I was not an entrepreneur by any stretch. And it wasn’t until many years later that I became one. And so like you, as I think about the Silicon Valley model, absolutely that’s one big model, but like you say, that is such a tiny, tiny fraction. And today, I’m pretty much at the opposite end of the spectrum, and many of the folks listening to this are independent financial advisors who have advisory businesses that are one, two, three, four, five team members, maybe one or two advisors and they do well, they do a great job with their clients and they have a certain type of lifestyle and an income that works well for them.

In many respects, it’s the backbone of our industry. And one of the other things that you’ve talked about in your book I’d love for you to expand a little bit upon is this idea of, you mentioned the word ecosystem that goes along with it or the community for these entrepreneurs, not the Silicon Valley folks, but the smaller firms, the people starting the restaurants and the bakeries and the connections to other people in their area that help them get those things started.

Because I see that happening a lot in my industry, where these folks who are the independent advisors, they want to be part of a community even though they’re their own boss, and they have their own business, they still want to be part of some type of community. So how important are you finding that?

David Sax: It’s so essential, right? So let’s take your industry for example. Yeah, you could go move to Wall Street, get a bank at Goldman Sachs or JP Morgan, crush derivatives, make billions of dollars, get massive bonuses, get a house in Grenich and another one in the Hamptons and make your impact that way. But the community of the people you’re investing on behalf of that you’re advising, you don’t see that impact, you don’t feel the difference you’re making in the lives of the holders of the sovereign wealth fund that are giving you a couple million dollars, a billion dollars to put around into the markets.

But if you’re a financial advisor who is dealing, let’s say, in a family office, or in a community or even out of a local bank branch, wherever you live, you know that you’re dealing with people’s futures, their savings, the futures of their families and their children, their insurance plans, their hopes and dreams, their lives. You’re dealing with them when loved one die, you’re dealing with them when you have marriages and graduations. You are an intricate part of their life. And so the value you have as an entrepreneur to that community, is more than just what you’re able to put into the local tax coffers by the income and profits that you generate from the business.

It’s all those other things that make a community a place to be. I mean, when you think of the impact of entrepreneurs on your life. So we’ll say, “Well look at the iPhone.” We’re talking on Steve Jobs who is a great entrepreneur, okay, sure. But day to day in your life, who actually has a greater impact on you? It’s the barber that owns a barber shop where you go to get your haircut once a month or twice a week.

It’s the coffee shop around the corner where you go to get your coffee and your croissant every single morning. It’s the fruit store, and the bookstore, and the accountant that does your taxes and helps you out. It’s the coach. My wife is a career coach and just like you’re a coach, and these people are the ones that form part of your community in the way that’s tangible, that they deal with you on a human level.

I think that’s an aspect of entrepreneurship and a benefit of it for both the community and entrepreneurs themselves, that we don’t readily acknowledge. Because it’s not quantified in dollars or economic impact. But the reality is that the economic impact stays within the community. It filters out to the community by supporting others within that community and other businesses. And it has these other tremendous, let’s say psychological or emotional impacts, right?

If I wanted to start up my own financial advising firm, I’m more likely to go to someone who’s an advisor in my community and get a coffee with them, than I am to knock on the door of JP Morgan, Chase, Citibank, or Goldman Sachs and say, “Hey, how do I do this?” And I’m more likely to get that advice, and get mentoring, and get the things that entrepreneurs can and need to give each other, which is that sense of support and sense of community.

Steve Sanduski: Yeah, and since my wife and I moved to a small town here up in northern Wisconsin, I’ve really gotten a much deeper appreciation for the local community and for the small town and just how important it is like to support local businesses. So you mentioned the coffee shop.

So this morning before you and I jumped on the phone here, as I was prepping for this, I was at the coffee shop, of course, and they know me by name now, because I’ve been there fairly often. And so I’m always thinking about if I need to buy something, I’m thinking, “Okay, can I get it here?” Can I get it here in town or up in the local area, as opposed to just immediately jumping onto Amazon and having it the next day type thing.

So yeah, I think this whole idea of community is so critical as an entrepreneur. Now, in your book, you profiled a lot of different people. And is there one or two people that maybe stick out in your mind that you talked to, you profiled, that maybe you learned something from or was there any insight or aha that you gleaned from one of the entrepreneurs that you talked to as you were writing your book?

David Sax: The book really looks at reasons beyond that startup method, why people become entrepreneurs and stay entrepreneurs.

And so one of the chapters, the early chapters focused on immigrants, and I looked at immigrants here to Toronto, which is a city where at least 50% of the population was born elsewhere, and specifically Syrian immigrants and refugees who arrived the past couple years since the Civil War there who set up food businesses.

And some of them were coming at it from a place of really desperation, right? They were accountants, or pharmacists, or doctors, or marketing professionals in Syria and they arrived here with nothing and they had to do something to make a living and figure a way out and so they started baking balaclavas, making meals that they would cater through Facebook pages and building up a business that way or opening a small restaurant. And others had food businesses back in Aleppo or Damascus that they had to leave or were destroyed even some of them were actually the business had been bombed during the war. Came here and restarted those businesses.

And for them, entrepreneurship wasn’t just a means to a financial future. What was interesting, getting back to what we were talking about earlier, it was a way of securing a sense of identity, and a strengthened sense of purpose in lives that had been completely unmoored by civil war, by dislocation, by the uncertainty of being refugees for years. I mean, many of these people crossed borders, walked through war zones, lived in refugee camps, had not known where they were going to end up until they were granted refugee status and residency in Canada.

And, I remember talking to one guy. He actually didn’t flee the Civil War. He was living in Dubai for years, he worked for a global marketing company. He was living in Toronto for a global marketing company and a Canadian resident, and was doing really well. And he decided to give it up and start a company that made Arak, which is anise flavored liquor that you find throughout the Middle East. He really missed it. He couldn’t find any kind.

And I said, “Why did you do this?” And he was talking about how he missed that. But he said, “For me, it’s so important for me to build a business here, because I want to root my identity in this community. I want to root myself in Canada and a business is the way to do that. Now, my identity is tied to this place.” He’s like, “I don’t want my kids to ever think that they can go back to Syria. I want them to be routed here because of this business.”

And that was the really interesting thing I found about it. Was that when I talked to these people, it was never, “Well, I decided this was the great way to make money. I’m going to get super rich off this.” It was always this question of like, this is part of my identity. This food’s part of my identity. We need to build a business to share it with Canada. That’s our new home that we’re in, or I want to express my identity through this business.

And it was that importance of identity to the entrepreneur, especially when there’s someone who’s starting over. So whether it’s someone who’s an immigrant or a refugee, or maybe someone who loses their job or moves to a new town or a new city within the same country, or has some sort of event happened in their life, where they have to start fresh. Maybe it’s a mother after she goes back to work after raising your kids for a couple of years, or somebody who retires, right?

The ability of the entrepreneurial experience and entrepreneurship to anchor yourself in that new sense of purpose, in that new identity is such a powerful driver for all entrepreneurs. And I really learned that here through these various Syrian entrepreneurs that were starting fresh and starting lives completely over.

Steve Sanduski: One of the quotes that I had pulled out from the book here really right along the lines of what you’re talking about, and this was from I’m probably going to mispronounce the name, I’m just going to call him Emir and his wife. He came from the… I guess he and his wife came from Syria, said he was determined to be a self-made man. And he, as he was talking about, as you write in the book here about their new life in Canada, he said, “We are not here to work for anyone else. We are here to develop ourselves. That’s what I teach my children to have their ideas and their business, because when you win, you win from your bucket, and if you lose, you lose from your bucket.”

So it sounds like that is this kind of this, we were talking about rooting yourself in the new country. So it sounds like that’s playing into what you were just talking about here.

David Sax: And exactly, I thought about Emir as we were talking with that. There was another Syrian family who has a business very close to mine, the Al-Sufi family, they have a restaurant.

And I remember I said, “Well, what happens if it’s not gonna work out?” They’re like, “Oh, well, we’ll just tour around in an RV.” I said, “Well, you could all probably get good jobs. You’re all well-educated.” And they laughed at me with the idea of a job. Are you kidding? Like, we look at what we have, and I think that, that also gets to the inherent truth of entrepreneurship, and the thing that links all entrepreneurs together. Which is like someone who lives in a democracy, right?

Once you’ve attained freedom, you are loathed to give it up. And I think the freedom that entrepreneurship gives you, regardless of what type of entrepreneur you are, regardless of how successful you are, financially, regardless of the size of your business, is this liberating, intoxicating and beautiful thing that all entrepreneurs experience, right?

You have shaken off the yoke of employment, you are no longer subservient to anyone by yourself, for better or worse. But that freedom is, I think, probably the greatest benefit of entrepreneurship that we don’t necessarily acknowledge and isn’t quantified in any way. But what price can you put on that, right?

If you ask someone who’s an entrepreneur, okay, how much more money can I pay you to give this up and take a regular job? I mean, I think it has to, you can’t say, “Okay, I’m going to give you $10,000 more a year to work in a job. Okay, no. Well, okay, 20, 30.” Like, at what amount would you be willing to trade that freedom for here’s where you work, and here are the hours, and here’s the company policies. And by the way, here’s the dress code. Oh, God, no, it just sounds terrible, right? It’s trading that essential freedom of your mind, of your ideas, of your ability to do things for the security of the certainty of a paycheck.

Steve Sanduski: Well, and I think for many people, that can be scary. I know for me, it was. So when I was 50. When I left the previous job, the previous partner I was working with, I had a period of time where I really couldn’t do anything with a non compete agreement. And so during that time, I had one leg in trying to find another job and another leg in trying to become an entrepreneur. My heart was in becoming an entrepreneur. But my financial situation was like, I got three daughters, they’re in college, they’re going to get married someday probably. So I’m thinking, “Man, I got all these bills I gotta be paying for, so maybe I should get a job.”

Well, long story short, there was a day that came and I just, I had this realization. I said, I don’t want to work for someone else again, I really don’t want to be employed by someone else again. And it wasn’t until I made that commitment that things turned around, and I put all the focus on becoming an entrepreneur, starting my own business, that things turned around.

So it was making that commitment that was the hurdle for me to… And I haven’t looked back. That’s been a number of years ago now. So yeah, so I think part of it is a mindset as well, this identity that you talked about having the identity of I am an entrepreneur, I think is also important.

David Sax: Yeah. And I think that is when we talk about what is the thing that the definition of entrepreneurs and what links them all together? I think it was my agent was telling me this. He’s like, “Well, yeah, an entrepreneur is someone who doesn’t want to work for someone else.” I mean, that’s getting back to that idea that you had in the 70s.

And I think that’s the truth, right? Not everybody is able to make that decision. Only about 10% of people in the United States are self employed, are entrepreneurs. Which is down, half of what it was when I was born 40 years ago, when it was two out of 10, 20%.

But for those people, they’re the ones who at a certain point, they reach that decision, it just becomes no longer feasible to sacrifice that freedom that they desire, feel the need for the security of a job. And that transformation often defies logic, right? If you look at the statistics, if you look at the studies, on average, forget about the overnight billionaires and the Instagram founders and so on. Most entrepreneurs make less money on average than people in a similarly employed profession, across industries. You’re more secure and you’re more steady financially if you’re going to work for someone else than if you’re going to work on your own, especially in the United States with health benefits and so forth.

But I like to say that it is a rationally logical decision to become an entrepreneur. You know the costs of it, you know, yes, I’m probably going to not do as well as I think, I’m probably going to have failure, I may lose my money, I may lose my house, I may sacrifice all these things and work harder than I’ve ever worked and experience the emotional turmoil of that. But Gosh, darn it, I really just have to do this. Like I have no other choice. It’s kind of like marriage, I guess in that way, right? It’s like this makes no sense on paper, but my heart says it has to.

Steve Sanduski: That’s right.

David Sax: And I think that is a truth. And that’s a thing that we don’t acknowledge. And we need to get back to is saying like, it is not a logical economic choice. And it’s not something that we can look at by studying it at business schools and with the economist and saying, “Well, entrepreneurs are the people who study a market realize there’s a need and do the numbers and it makes sense.”

It’s like up to a certain point, but then there’s that other 50, 70% of it, which is you just saying, “Ah, screw it, I’m gonna do it anyways.” That’s the difference between the people who think about the idea and stay in their jobs and the people who become entrepreneurs. It’s that 10% that say, “Ah, screw it. Let’s do it.”

Steve Sanduski: Let’s do it. That’s right. So speaking of that, how did it happen for you? Did you grow up knowing that, I want to have my own business? Were you starting businesses when you were a kid, or was this modeled as you were growing up? What made you decide that you’re going to be responsible for earning your own income?

David Sax: It was certainly modeled from day one. My parents are both entrepreneurs. We come from a family of entrepreneurs. My grandfather in Montreal had a tool business that’s still operating today. And the other grandfather had a series of Jewish businesses in the garment district of Montreal that continually failed. And my father when he graduated from law school looked for a job, and he was told, “You’re too entrepreneurial Sax.” So he started this firm on his own.

Had a partner, the partner moved to Florida, he started some other businesses. And he’s always worked by himself for himself and continues to right up until today as first a lawyer, and then investor and he just calls himself an entrepreneur. He does all sorts of different things. And so it was always modeled in that way.

And my mother, she worked as travel agent for a number of years. But then my brother was born, she took care of us. And then she started a business with her best friend, Paula, selling women’s clothes wholesale out of our house for two clothing sales a year. And this was a side thing that she did, and it gave her a sense of challenge and something fun and she said, this was the money we would use to send you to summer camp. So it was always seen as like, you could always just go and do this.

And you know, when I was in university, I graduated. I knew I wanted to be a journalist, and I remember going after graduating and applying to newspapers and television stations and radio stations here in Toronto, and everyone’s like, “Well, you didn’t go to journalism school or there’s an internship program.” And I was saying, “No, no, I want to go and be a sport correspondent.” Again, I was young and cocky. I want to go live abroad. And you know what? Once you send me to your foreign Bureau, and they’re like, “What, no, who are you? You’re just an idiot kid.”

And I remember talking to my father, and he’s like, “Well, if you want to do it, just go and do it. Why are you asking permission of someone?” I was like, “Oh, what do you mean?” He’s like, “Yeah, just go, just start writing, freelance.” And that’s what I did. And from day one, really, since I graduated and left the world of school with the exception of a few short term, part time jobs during university and high school, I have always worked for myself. It was kind of this default and once I started doing it, that was it. I mean, there was no, it never even occurred to me after that to go and apply for some salary position somewhere else.

And so it’s always been this thing. And amazingly, not surprisingly, I’m surrounded by people in my family who do the same thing. My brother has his own business, my wife started her own business, my cousin’s all work for themselves. I have one relative that’s gainfully employed in a corporate job. And it’s just sort of woven into our DNA, I think, because that behavior is modeled like, “No, this is a way of life, you can do this, this is possible. You’re not all gonna get rich.

And you know, here’s all the stresses that come with it, but like, this is a perfectly good thing to do.” And when you see that as normal, it’s not this mystified exalted thing. It’s just like, “Oh yeah, you can just start your own thing, you can work for yourself.” That’s totally kosher.

Steve Sanduski: So you mentioned the stresses that come along with it. So what have you found, yeah? What have you found are the biggest stresses that you’ve experienced? And then how do you deal with those?

David Sax: I think it is, again, the assumption of the risk is always there. And it’s always the fear of not having enough work and the terror of having too much of it.

And it never evens out in this perfect way. And it’s all on you, right? There’s no backup. So I think there’s the financial stress of it as well. But again, because so much of it is tied to your identity, you feel it in ways that aren’t just reflected in your bank balance. It’s reflected in your sense of worth, your sense of who you are as a man, as a woman, as an individual, as a creative person, right?

You can’t just shrug it off and say, “Well, the boss is a jerk and my managers an idiot. Whatever I put in a good day at the office and here’s my check.” You feel every high and low, and life is full of highs and lows, that’s a given in any type of business, regardless of its size, regardless of the industry. Nothing’s just perfectly consistent, you feel everything.

I go through this all the time with I have an idea, I don’t know if it’s a good one, I wrestle with that. I then might sell the idea to a publisher and then I wonder if the idea is good when I actually have to start researching and writing it and every little thing that’s, I got this interview, this person didn’t call me back at all, it’s terrible, this idea is going to fall apart. And then you have a great one, and you get this wonderful high from that conversation and all of that goes on until you have to go and write the book.

And then the other part of it is I do a lot of speaking. And did the audience like it? I don’t know. Did they clap loud enough? What did I connect with them? Was that good? Am I going to get another speaking thing? And often it’s out of your control. Right now, we’re dealing with this Coronavirus outbreak that’s spreading to various cities. And one of the real consequences of that is all these conferences getting canceled, which, if you’re a keynote speaker like me, it’s really impacting the bottom line.

And so how do you say, okay, that has nothing to do with me. Like I will feel its impact, but it’s not my fault. I’ve done what I can, I can’t control how this affects things. But of course you feel it in this personal way. You can’t just shrug it off. There’s no insurance policy that covers it. So you surrender yourself to the uncertainty, and the uncertainty exacts a toll. That’s the price of the freedom for the entrepreneur.

Steve Sanduski: And do you have any practices that you engage in to deal with that kind of stress? I know some people might have a mindfulness practice or do yoga or exercise or have someone that they can talk to you about that? Is there anything that you do along those lines that helps you deal with the stresses and the things that are outside of your control like a virus that’s spreading?

David Sax: Constant worry, no. I mean, I think it is surrounding yourself with the people you love and the people you can talk to. So first and foremost that’s my wife who thank God is a career coach so actually knows how to talk to people like this. Because she’s just trained in it and does it all day for other people, and knowing that these things aren’t always as important. And knowing that as an entrepreneur, ultimately, you’re the one who’s responsible for changing your situation. That stuff might be out of your hands, but you’re also the one who’s capable of changing it.

And so I remember a while ago when, let’s say, the speaking had slowed down for a few months as it does every year or so. And I was in this panic of, “Oh, what was me, no one loves me. This is the end of my career. I’m a fool. I’m an idiot. What have I done? I don’t know what I’m doing.”

Which if any entrepreneur doesn’t experience that they’re not an entrepreneur. And just said, “Well, it’s up to you to generate this stuff. So what are you going to do?” And that got me thinking, “Okay, what’s the next idea? What are things that I can do? How can I push this? How can I be aggressive in this way? What are the opportunities that I can create?” I think it’s when the entrepreneur gets that feeling of being stuck, they stop doing the thing that makes them an entrepreneur which is coming up with new ideas and actually taking action, right?

And then you’re just so ensconced in that, but it gives you that hope, it gives you that momentum, and you keep moving forward, keep moving forward. Keep going with other ideas. That’s it. That’s all we’ve got.

Steve Sanduski: Yeah. Well, I know, the doubts can creep in for sure. I think that happens to every entrepreneur, like you say, and we just have to keep marching forward. Well, I do want to segue way here to a second topic that’s a little bit different than what we’ve been talking about here. But before we go to that topic, is there anything else that you want to share about the book that we haven’t talked about yet?

David Sax: Ultimately, when you think about entrepreneurship, and why it matters and what it means to be an entrepreneur, that answer is really up to each individual entrepreneur. And for some, it’s going to be driven by success and money and being the biggest and the best. And for others, it’s going to be driven by something like lifestyle or community, or their values, or maybe just the ability to have the freedom to pursue their ideas.

All of those are legitimate and good things and all of those should be encouraged. And when we think about entrepreneurship, whether we’re a company that’s looking to encourage people to think more entrepreneurially, or we’re investing in entrepreneurs, we need to take a deeper look at that and legitimize that and see what the value is, in all those different things beyond chasing some rare billion dollar payout.

Steve Sanduski: I think that’s such an important point. And it reminds me of a conversation that I had with a coaching client. And early on in the conversation as I often start my coaching engagements we talk about what are their objectives? What are they trying to accomplish over a three, five, let’s say 10 year period? And for this particular person, they had set a financial goal. They had a certain financial objective that they wanted to reach three years down the road, and then I asked him, I said, “Well, on a scale of one to 10, let’s assume it’s three years from now. You’ve achieved everything that you describe here in this three year vision. On a scale of one to 10 with 10 being oh my gosh, I’m over the moon, this is unbelievable that I’ve achieved this, and one being the opposite how would you rate it? And he said, “About a five or six.”

I’m scratching my head, I’m thinking, “Okay, well, then why did you put this down if it’s only like a five or six in terms of how excited it would get you to achieve that.” What he said was, it was more about this is what the expectation is in our industry, that you have to keep growing, that you have to reach a certain size, and that if you’re not at that level, or you’re not continuing to grow, then you know, maybe it’s not as valid.” And so what we ultimately discovered was, what he discovered was, he was really pretty happy where he was, and he wants to bring on a handful of new clients, likes the lifestyle that he has, and so that ended the coaching engagement.

Now, some people might think, well, maybe that was a failure from a coaching engagement because it didn’t last very long. I actually look at it as a success, because I think it helped that person come to the realization about what was most important to them as an entrepreneur, what kind of business did they want to have? And maybe it gets back to this myth out there that you’ve got to grow, grow, grow. And for some people, yes, that’s what they want to do. That’s what drives them. But for other people, it’s about, I’ve got a certain group of people that I work with, I really love working with them, I think I can impact their lives. And I’m going to do the best job I can working with them, while at the same time, have a kind of lifestyle that works for my family in a place where I want to live.

And so it’s really a win, win for everybody. So I think it’s so important that people just get clear on what it is they’re trying to accomplish, and not be swayed by what the outside environment might suggest success means.

David Sax: Well, that’s it. Because the one thing that every entrepreneur has, as a given, is that freedom to decide and the freedom to think about that, right?

Steve Sanduski: Yeah.

David Sax: You’re not guaranteed success, you’re not guaranteed growth, you’re not guaranteed scale, you’re not guaranteed investor capital, you’re not guaranteed any of these things, you can pursue them, but there’s no guarantee you’ll get them. But you’re always guaranteed that you have the ability to determine what you want to pursue in your future, right? And if you’re not true to that, if you’re pursuing someone else’s ideal of success, then regardless of how successful you are, financially, you’ve failed.

I remember speaking to an entrepreneur, a software entrepreneur named Bart Loring in Colorado. And he was referred to me actually by someone who mentored and coached him. And he’d said, I said, “What’s the hardest time? What’s the most difficult time of being an entrepreneur?” He said, “Right now. I’m trying to get my company from 30 million to 100 million in six months in order to meet investor targets in next round of venture capital funding. And we’re scaling from 25 to 100 employees or something and I’m miserable in life. I’m coming up with shingles, my marriage is stressed, my kids never see me, I’m hitting.” I said, “Well, that’s terrible.” I was like, “So when is it going to end?” He’s like, “Well, when we hit a billion dollar valuation. As soon as we hit that unicorn status, I’m good, we’ll sell the company. I’ll take time off, and I’ll live the life I want.”

And I said to him, “That’s a bullshit answer. That is the easiest, most outright lie I’ve ever heard anyone tell me.” Because, of course, you’re not going to just do that and then that’s it, you’re good, you’re set as soon as you do that you walk into the sunset. No one actually does that, right? It’s a narrative you’re telling yourself. What if you build your business and oriented it in a way that actually reflected the values that you have and the things that you want instead of someone else’s?

Steve Sanduski: Yeah, I mean, it’s just you got to be true to yourself is what it ultimately comes down to.

David Sax: Yeah. So if you’re a financial advisor and you have a small family office, and you know enough clients and it does well and you make money, right? I’m not saying do this and lose money. The laws of economics still apply, but you have a nice lifestyle, you get to go skiing, you’re golfing on the weekends, and hey maybe you get to take Friday off because you run your own business, and you get to be there for your kids hockey games or take them to school each morning. And you get to be a part of the community, and you get to do the things that you really enjoy and the work that you find fascinating. What could be better success than that, right? How much money is that worth? I think it’s priceless.

Steve Sanduski: Great. Well, let’s segue way here. So I want to talk about writing. So you’ve written several books. And just in the time that you and I have known each other, you wrote a book, the revenge of analog back in 2016 and now here we are in 2020. You got a second book out. I’d love for you-

David Sax: This is the fourth book actually.

Steve Sanduski: Fourth book, yes. Well, we’ll link to all four of them in the show notes here. And I would-

David Sax: Just to show the level of entrepreneurial insanity.

Steve Sanduski: That’s right. Well, I’ve written two and I keep telling myself I’ve got to write another one. And in fact, one of my objectives for this year is by the end of the year to have the next book scoped out, to have a tentative title, to put an outline together and just have the idea of the book so that in 2021, I can actually write the book, so-

David Sax: You and me both, Steve, you and me both.

Steve Sanduski: So I’d love to hear a little bit about your writing process. Well, how does that work? How do you get a book written? So let me just stop there. I’d love to hear some of your thoughts on that.

David Sax: For me, the writing is, I wouldn’t say the easy part, but it’s a component of it. The hardest part, I think, is taking an idea and wrestling it down to the point where you can write it. And unlike other colleagues of mine who write nonfiction books, and it’s like, “I’m going to write the story about this one event that happened or this one personality.” Unfortunately, my stuff just tends to be these large vague ideas that start with some observation. Like, “Hey, isn’t it interesting that we’re talking about entrepreneurship all the time? There’s something going on with that.” That and wrestling that down into some sort of big question or thesis, and then figuring out how to tell that through people.

So that process is a pretty long and torturous one for me. If I’m going to be brutally honest, and if you’re asking about the points of stress as an entrepreneur, this certainly is it.

Steve Sanduski: Let me just stop you there if I could for just a sec, because I’d love for you in the very beginning of the book, you tell a little story about Heidi Klum. I’d love for you to share that. Because I think that maybe that ties in with what you’re talking about here in terms of how that may have sparked an idea for the book and maybe how that led to some of the research and ultimately, the writing. Does that tie in?

David Sax: Sure, yes. So I was thinking about this idea of entrepreneurs in some way, shape, or form. I had an idea for a podcast about them. I’d written some stories 10 years ago about people who work in a coffee shop in New York and what were they all doing on their laptops. And, I was always writing about entrepreneurs, and I just felt there was something going on. And I was kind of poking around, but I wasn’t sure what it was. I had this vague idea about a book about what it meant to be freelance or work for yourself.

And I was in an airport in Montreal, two years ago or so, or more when I was starting to think about all this stuff and do kind of some initial research, and I saw in the magazine rack, there was a cover of Maxim magazine. And there was Heidi Klum, topless, and essentially the text that was covering her bosom said, ” Heidi Klum, interminable entrepreneur.”

It was just this clarification of sex sells, here is a topless supermodel. And it’s not about her being this beautiful super model, it’s like entrepreneurship, this is what it is. And it just sort of clicked to me, it was like the celebrity aspect of entrepreneurship, the romanticization of it. The culture had never been more fascinated by it. And I wanted to understand what was up? It was seen as this we’re the greatest period of entrepreneurs ever but then when I started looking into it, and I started asking questions, which is what I do as a journalist, that’s how I tackle these things. I started asking questions to people and they’re like, “Well, actually entrepreneurship, if you counted as the number of people who start businesses and are self employed, is at an all time low for 40 years.”

And when you look outside the small world that’s been romanticized, with topless cover models, it’s really been troubled and declining. That really shifted my thinking. And that was kind of my aha moment that set me on the path. But that path is not a straight one, it’s a fairly circuitous torturous route that got me to where I am. And that was through all the way of figuring out who to interview, and what to ask, and where to go and who to tell the different stories, to the writing part, which is wrestling all this information and ideas down into some coherent thing.

Yeah, it’s not a pretty process. But at the end of the day, it’s the process that’s necessary to, wrestling those ideas is the only way you come to terms with them.

Steve Sanduski: And then as a journalist, so you’ve kind of got this idea now and you’re going out, you’re interviewing people, you’re talking to people. Do you have a recording device where you’re recording these conversations? Do you have a notebook? You’re just writing down notes. So I know you’re a bit of an analog guy.

David Sax: Yeah.

Steve Sanduski: So you maybe have a notepad. So how does your note taking process work?

David Sax: Yeah, I’m a notepad guy. If I’m interviewing someone over the phone, I’ll type it out on the computer, but I’m a notepad guy. Yeah, I’m pretty old school that way. I hope I won’t be sued for libel for not recording something but I don’t tend to do too much national security or political stuff.

Steve Sanduski: Sure. So you had all these notes, so you take your notes, you’re sitting down.

David Sax: Yeah, I have my 10 notebooks of notes, right? So I’ll sit, I’ll interview, so for example, one of the characters in the books, so one of the chapters, a guy named Seth who’s a cowboy, a rancher essentially in California, in the San Joaquin Valley. So I spent three days with Seth rounding up cattle and fixing fences, and driving around in a pickup and interviewing him over hours and hours about his life being an entrepreneur, the stresses, the ups, the downs, all of it.

I mean, I’ve literally had cow manure sprayed on my notebook as I was holding onto the back of an ATV with this kid trying to run out enough cattle. And then months later, I’m going through those notes and highlighting the parts and the things that he said, and winnowing down what the best way is to tell this bigger story that I’m trying to tell, and all its different components.

It’s like assembling a jigsaw puzzle, but you don’t know what the puzzle looks like at the end. And you actually have to make not only the pieces, but you actually have to make the cardboard yourself in the end to come up with something that’s a reasonably coherent X answer to a question that you had two years before. This is terrible advice.

Steve Sanduski: There’s a famous writer, I forgot his name, but he said something like, “I only write when the muse strikes me, but it just so happens that it strikes at 9:00 AM every morning.”

David Sax: I am the same. As close as I get to a regular salaried employee is when I am in the process of actually writing. So I’ve gone and done the research and that can take a year, more than a year in the case of this book of calls and papers and studies and trips and interviews with people. The sitting down when I’ve organized all that and actually writing is a very defined and intensive time.

David Sax: So it’s like all right, I have nine chapters. So over the next 10 weeks plus the introduction, I’m going to do one chapter a week, the first day is going to be going through all the research and notes and plotting out in a big thing of paper and sticky notes. And the next four days from 10:00 in the morning till 12:00 and then from 1:00 till 3:30 or 4:00 until I’ll go pick up the kids is going to be sitting down and writing. And like that’s it, boom, ended the week comes Friday, chapter’s done. If I finish the chapter earlier than Friday, I’m not going to start the next one. I take that day off as like reward or that afternoon, take the weekend off completely clear my mind, boom back to it on Monday.

It’s like there is no, I’m not crafting some precious novel. It’s like this is it, you have to get this done. Here’s the deadline, go, go, go, get to the end, x weeks of editing, boom, send it off. Like, it is the most intensive time, but that structure is something that I find absolutely necessary. And it just keeps it moving. Just go, just keep writing, just keep writing. Don’t go back over your thoughts, like, write it down, fix it all later in editing. And I find that’s the most helpful.

Steve Sanduski: And having a good editor too, I suppose.

David Sax: I have an excellent editor, Benjamin Adams, who is my editor of Public Affairs. This is the third book we’ve done together. And I just, you know, I trust him, he trusts me. We understand where we’re going. We have conversations along the way, but I know that I’m not going to be left hanging with whatever I send him.

Steve Sanduski: Excellent. All right, great. Well, let’s wrap up here. Just a couple of rapid fire questions. Since you’re a writer, I can’t let you go here without asking you about books. So what are one or two of your favorite books that you’ve read?

David Sax: Well, I was thinking about this along an entrepreneurial thing. So one of my favorite novelists is a man named Mordecai Richler, who is a Canadian, Montreal, Jewish, comedic, satirical author, who wrote about that world in Montreal. And that was the world that my dad really came from.

And so when I was young, my dad gave me the book The Apprenticeship by Duddy Kravitz, which is a very classic Canadian novel about this young son of an immigrant striver from the same neighborhood in Montreal that my father grew up in. And he does everything he can to make himself wealthy and become this big entrepreneur, sort of an antihero, but that was like my dad was like, if you want to understand where I came from read this. And I think that rough drive and entrepreneurial spirit from that book, which I’ve read many times over my life stuck with me. I absolutely love that book. That I think is one that’s just excellent and has really, really stuck with me.

And then, other books. I mean, I read a lot. I have a book club with some friends, which is one of the best things I’ve ever done. If there’s ever an entrepreneurial venture that I’m proud of, it’s starting a book club.

Steve Sanduski: Yep.

David Sax: The last one we read. I don’t know if you ever read a Confederacy of Dunces, the pure surprise winning novel about a wild character named Ignatius J. Riley in New Orleans. Written in the late 1960s by an author who committed suicide and his mother finally got the manuscript published, I think 12 or 20 years after his death, and it won the Pulitzer Price and just a hilarious wild book.

Those are the two best. I wish I could give you some more management finance titles, but even though I technically write business books, I generally hate reading them.

Steve Sanduski: Yeah.

David Sax: That’s a terrible thing to say. Because they don’t apply to someone like me. It’s like how is the six ways you could manage more effectively? It’s like, I don’t know.

Steve Sanduski: You know, as well as I do if you want to be a better writer, you need to be a better reader, and read a lot.

David Sax: And just at whatever, right? Read all sorts of things, whatever you can get your hands on.

Steve Sanduski: Yeah. I mean, if you’re a business writer, don’t just read business books because you’re going to hear the same thing. So like you do, you can read literature. I mean, read Hemingway or whatever, but just get different ideas.

David Sax: Yeah. One of the coolest moments of this book was I was interviewing this guy who owns this company, I’m forgetting his last name, I’m blanking out. But his name is Bob, in the suburbs of Philadelphia.

They make tubing for pharmaceutical and it’s a hundred million dollar sales company. And I was interviewing because he was selling his company to his employees, to an employee ownership plan, and that’s what that part of the book was about. And for him, being an entrepreneur was really about expressing his values through that and everything he did.

And when I met him at his company, this industrial facility, he handed me a copy of a book about a vegetarian diet and Victor Frankel’s book of philosophy Man’s Search for Meaning which he’d written after he survived the Holocaust. And it was just this… It’s like this guy was a businessman, right? He was a, he made industrial tubing and this book was his expression of like, “Here are my values, read these two books.” And it’s interesting because the Frankel book I actually did read.

And then my wife, the coach, Lauren, took it and read it and now has integrated it into her coaching. So often the best business books are books that are not business at all.

Steve Sanduski: Yeah, for sure. All right, so one last question here, in seven words or less, what would you say your motto for life is?

David Sax: Never eat lunch at your desk.

Steve Sanduski: Yeah, that’s wise words for an entrepreneur, right?

David Sax: For anyone.

Steve Sanduski: For anyone.

David Sax: I mean, never eat lunch at your desk. I think that’s it. There’s something, when Lauren left her job after our second kid and started working from home, I would come downstairs at 11:30 and she’d be like sitting there with a can of sardines at her computer. And I was like, “You don’t have to do this anymore. You’re not at an office. No one’s giving you the clock in. You can go in the kitchen, you can take the lunch, you can sit down at a table. You can go out.” It’s like, “Nope, I’m too busy. I have to work, work, work.”I was like, “Don’t, please don’t eat lunch at your desk. You’re beyond this. You’re an entrepreneur now.”

Steve Sanduski: I love it. All right. Well, we will wrap it there. Well, David, appreciate you being back on the show here. Congratulations on the new book. Where can folks find you if they want to follow you on Twitter, or what’s the best place for people to learn more about you?”

David Sax: You can find me on Twitter or I’m trying to be more active on LinkedIn, because it’s just so wonderfully boring and civilize their, business like I guess. So you can find me at both those places.

Steve Sanduski: Yeah. And your Twitter handle is?

David Sax: Sax David, very boring.

Steve Sanduski: Very boring. Excellent. All right, great. Well, we will link all that in the show notes. So again, thanks for being on the show. Big congrats on the new book.

David Sax: Thank you so much, Steve.