As an entrepreneur, I mourn the end of the era of US investment banks. I am sorry that these venerable institutions were first taken over and then blown up by their own traders. Traders should have built their hedge funds and not gamble with the whole investment bank. Entrepreneurs are now left with commercial banks to deal with. These banks have less understanding of our businesses. Here´s a debate by my buddy Brent Hoberman on this issue in the FT.
This is not an offering. It´s an enquiry. The companies that I invest in is public information. I am an entrepreneur and the full time CEO of Fon, but I am also the head of Jazzya, my VC company, out of which I both start my own companies (Jazzya comes from Jazztel and Ya.com) and invest in other companies, like Technorati, Netvibes, Joost and others that you can see listed on the right side of this blog. People have asked me to open up Jazzya for other people to invest with me, and so far I have taken only one investor.
If you would be interested in investing with me please send me an e mail. I don´t have time to go on a road show to see if there´s interest, so this blog can maybe achieve a similar objective. If I actually do a fund I would only take high net worth individuals or institutions, not because I want to discriminate in any way, but because what I do is very risky and I would need investors who understand this risk.
This post will not take public comments.
Today Expansion, Spain´s equivalent of the Financial Times, has a poll among university students whose results I found surprising. In general, I believe that somehow I can understand and predict how people in Spain think. Here, had I been confronted with the questions beforehand, I would have failed miserably. Students are asked to rank ocupations from the most trusted to the least trusted.
I have been in business for 20 years. Lately I frequently run into former employees who have have become successful entrepreneurs. Indeed this morning I was cycling with a few of them and wondering why is it that I seem to be the last stop to entrepreneurship for so many corporate types. My answer is that, when I recruit, I look for candidates who will run with projects and get them done with little supervision. In many cases, I look for candidates who are better than me at their tasks and I am not afraid to delegate. Corporate executives come to me because they want to do what I do. They see companies that go from idea to global leaders, (Fon has now the largest wifi network in the world) in 6 months and they want to “learn the trick”.
Now my “trick”, I guess, is that they not only learn…they make it happen. And they make enough money through equity in my companies, that the next time they do it on their own, in some cases as much as $50 million. Some examples of very successful former employees now entrepreneurs: Alan Levy, Miguel Salis, Antonio Carro, Christoph Schmidt, Jon Berrojalbiz, Alvy Ibañez, Moises Israel, ex employees of Viatel, Jazztel, Ya.com. And this “learn and start my own” model, is not only true in the case of profit ventures. Rafael Rivera, a social entrepreneur, was one of the first employees of Educ.ar, a very large educational project started by my foundation, and then he went on to being one of the co founders of Red.es, a huge educational internet project in Spain. I once read in Forbes magazine that great leaders are the ones whose followers do well. I would slightly change that. I would say that great leaders are the ones whose followers do so well that they become leaders!
This morning I was walking around my farm in Uruguay and saw a small owl standing on a post. As I approached the owl stood still until it seems I crossed a threshold that the owl considered potentially dangerous and it flew away. I watched the owl fly away on to another post from which to look for small animals to hunt and thought of the decision making that had just taken place. While the owl was on the lookout for prey, when I came close I became a potential predator myself. This situation is not too dissimilar to many I face in the telecoms business when I judge a market ripe for taking yet are concerned about the larger predators and their responses. Is entrepreneurship based on risk analysis techniques that are shared with many in the animal world? Probably.
I’m beefing up FON’s board and decided to ask former Jazztel and Ya.com colleagues to jump on the FON bandwagon. And I’m thrilled they’ve accepted. On the Ya.com side, we have Alvaro Ibanez (a.k.a Alvy), who’s very well known here in Spain with Microsiervos and Internality, and Jon Berrojalbiz, who started the very successful TradingMotion . On the Jazztel side, I’m joined by former managing director Antonio Fuentes, who has partnered with me on Sybilla and who is its CEO.
Sometimes, we have parties and get-togethers with all those who worked at Jazztel and Ya.com in the early days. For me, they’re like Christmas parties in the office, with a strong feelings of déjà-vu mixed with memories of intense work.
How many entered these companies as employees and left as entrepreneurs? What about Miguel Salis, ex CFO of Jazztel, who is now building wind farms across Spain valued at over 200 million euros.
And Axel Serena, other one who really made it and who, I’ve heard, is about to lift off pretty soon.
What do I want from people who work for me? Well, basically I’d like to see my employees enjoy their last stint as an “employee” with me!
Jon, for example, had the the entrepreneurial spirit in his early 20s. I met him in 1999 when he was still a student but had already registered the domain favoritos.com, which I liked very much. When I saw that he owned it, I asked him if he wanted to sell it to me. Jon simply answered : “I know who you are and if you interview me,I will give it to you”. From there, we started working together, him, first as an employee, then as a partner and now as business buddies. Ya.com and Jazztel were, more than anything, made up of people who dreamed of creating something. For those who are nostaligic, here is an old powerpoint that tells the Ya.com story from the very beginning.
I was thinking about people who have made significant amounts of money and their success strategies. I was then comparing those strategies to animals and their offspring and their success strategies. And this is what I found.
If you go through the list of the richest people in the world and take out the heirs focusing on self made (mostly) men, you would see that you can divide wealthy individuals into two main strategies of money making. One is the entrepreneur who has built one or very few businesses, as for example, Michael Dell or Bill Gates. The other one is the trader, who has not managed large organizations and has made thousands of investments in which good ones exceed bad ones, example: George Soros. These individuals have very different strategies and yet when measured by money achieved they have similar results: they are all among the richest people in the world.
Now let´s shift to the animal kingdom. In the animal kingdom the same two strategies appear. Mammals have very few offspring in their lifetime, even the most prolific mammals cannot be compared to any insect, for example, in the amounts of offspring that they have during a lifetime. In my analogy, the entrepreneurs are the mammals and the traders are the insects. Mammals as we know, care for their newborn, feed them, protect them and stay with them for a significant part of their life. Mammals cannot afford many mistakes (dead offspring) as their genes would not prevail in future generations if they did. Insects however frequently accept failure, they play a game of chance, lay thousands of eggs and leave hoping that at least more than a few survive. Interestingly both strategies work and yet in terms of personality they make very different type of animals…traders and entrepreneurs I mean.
When I look around at the people I know I see this division. There´s the traders, and there´s the entrepreneurs. Both can be as successful, but their lifestyles and personalities are completely different. Traders tolerate failure as part of their daily routine. Traders base their success in the frequency of transactions. Very successful traders make an incredible amount of trading decisions. Entrepreneurs on the other side make very few decisions, but they spend much more time thinking, studying, comparing, contrasting, analyzing. Entrepreneurs can´t be as frequently wrong. They don´t have too many chances to pass on their genes.
OpenBC is a super succesful web site that links business people around the world. It is relatively new and growing fast. I joined a month ago, encouraged by my friend Ola Ahlvarsson from Sweden, and did not think much of it. Surprisingly, two days after joining, an executive from a large multinational contacted me with a project that they wanted to do teaming up with an entrepreneur. Even more suprisingly, I found the project so interesting that we now have a letter of intent signed and hopefully I will soon be able to announce that we are launching it.
George Soros, Amancio Ortega, Stephan Schmidheiny…