Russ: This is the BusinessMakers Show heard on the radio and seen online at thebusinessmakers.com. It's guest time on the show and I have with me a repeat guest, a repeat guest from not so long ago, Ashok Rao, serial entrepreneur, chairman of the world's largest entrepreneur organization, TIE, The Indus Entrepreneur, and also now the founder and CEO of Whodini. Ashok, welcome back to the BusinessMaker Show.
Ashok: Oh, thank you, Russ. It's great to be had again.
Russ: All right. You bet. Well, I have you back because we you're your advice to entrepreneurs and turned it into one of our BusinessMakers classics that's broadcast from our Facebook page, and man, that thing went wild. People were commenting very aggressively, all positive, and it was your advice about the entrepreneur must be confident, yet humble.
Ashok: Yes. The entrepreneur's paradox.
Russ: The on entrepreneur's paradox.
Ashok: And there are several of them.
Russ: Well, I'm sure there are. In fact, that's one reason I have you back ‘cause we're gonna delve into those, but before we move off of that paradox I wanted to tell you - I've never told you this - that that one so much reminded me of some advice I got when I was out fundraising. I'm sure you know this and many of our listeners do too. Fundraising for start-ups is not necessarily that much fun and takes a lot of work, and I was getting ready for one of my first presentations, first of about 100 that I did before I raised money. And my near dear sister gave me some advice that I think is real good.
So I'm gonna share this with you. She looked at me, she said, "Russ, when you go in there you just gotta be ready and you gotta have a kick ass attitude, but you gotta be ready to convert to kiss ass attitude just like that." And I think we did a lot more kissing than kicking in my fundraising.
Ashok: Oh, believe me. I used to talk about getting my elbow and knee pads ready every time I went to a VC. In fact, it reminds me of a little story. I wonder if I can tell it on the radio and the television.
Russ: Absolutely. I hope. We'll see.
Ashok: We'll see. Well, it's like some of the young entrepreneurs who are watching. There's this young entrepreneur, first time entrepreneur, and he's worked very hard on his business plan and he's got it perfect and he has sented out a bunch of VC's and finally gets an appointment with a top notch VC. And the next day he has to go present, but now he's stressed because he doesn't know what to wear. So he figures, "I'll go get an opinion from my attorney," and the attorney says to him, "Look kid, when you go up in front of a VC you gotta look like a million bucks. So hawk everything you got. Max out your credit cards. Armani suit, Ferragamo tie, Gucci shoes. Look like a million bucks. They'll give you the money."
Doesn't have a million bucks, so he says, "Let me get a second opinion." So he goes to his accountant and his accountant says, "Look kid, this is the sympathy game. Look like a bum. Torn T-shirt, worn jeans, gym shoes, and they'll feel sorry for you and they'll give you the money." Now the kid is really conflicted. So he says, "I'll get a tie breaking third opinion," and he goes to his priest. And he says, "Father, I have this real important meeting with a VC tomorrow and my attorney tells me to look like a million bucks. An accountant tells me to look like a bum."
And the priest interrupts him and says, "Son, let me tell you a story. Just the other night this young lady came to me on the eve of her wedding and says, ‘I'm conflicted, Father. My mom tells me to wear a flannel nightgown from neck to toe and my sister tells me to wear the sexist negligee possible.'" And the young kid says, "Hey, Father, Father, here I am so stressed about what to wear tomorrow and here you are telling me this story about this girl." He said, "Son, let me tell you what I told her. It doesn't matter what you wear. You're gonna get screwed."
Russ: [Laughs] great. All right. And hopefully we still have some venture capital friends after my story and after your story too.
Ashok: And my story.
Russ: But the great -
Ashok: They're not all like that, but it's a fun story to tell.
Russ: No. Absolutely. Right on. It kind of segues to one of the things I wanted to talk to you about too, ‘cause just for our audience we're gonna have Ashok share a lot of his pieces of wisdom and advice to entrepreneurs. This man's a walking encyclopedia when it comes to that kind of advice. For those of you under 35, encyclopedias were a set of books we used to use back before the Internet was invented.
Ashok: I still have them in my library, all 28 volumes of the Encyclopedia Britannica.
Russ: Great, but another interesting thing. I know that one of your pieces of advice that you share often has to do if it feels wrong, it probably is wrong. And man, oh, man, do you have some experience with those that probably felt it was wrong, but didn't acknowledge it and are actually famous and in jail now too. So -
Ashok: Yeah. I know a lot of jail birds.
Russ: Well, share a few of those names with us that you've actually worked with and knew and they knew you.
Ashok: Well, the first most famous would probably be Bernie Ebbers and Scott Sullivan from -
Ashok: WorldCom. Yes.
Russ: You knew those - how did you know them?
Ashok: Well, I was in the telecom business, and of course they were the model for all of us who were smaller because they were growing at an incredible pace and they had unbelievable gross margins. And so every quarter I'd sit down with my CFO and say, "Hey, if they can do 40 percent gross margins how come we're only doing 28 or 29?" And then my CFO, bless his heart, would say, "Well, Ashok, they're probably better than us. This is the best we can do." They were for a while. They were.
Russ: Wow, and were they talking to you about maybe acquiring your company?
Ashok: Yes. Exactly. They had talked to us about acquiring our company, both the CEO and the CFO and -
Russ: Well, Congratulations on that, but that's not the only guys you know that are in trouble. Right?
Ashok: Well, yes. Yes. Yes. And on that one I'm a little more conflicted on because I worked very closely with them and I'm not sure that they had their hands in the tail like the press likes to make them out to be, which would be Ken Lay and Jeff Skilling.
Russ: Wow, ‘cause you spent time an Enron. Right?
Ashok: Yes. I spent time at Enron. I was president of the North American operations. I have a feeling that they were a little removed from the real numbers and when they were presented to them and they were almost too good to be true as long as the accountants and the attorneys blessed them.
Russ: They would go with them.
Ashok: So I don't know the details because I had been gone five years.
Russ: But you probably learned a lesson by watching this. So you're probably involved in the details.
Ashok: Yes. Absolutely, and even when I was a public company CEO it was quite clear that don't do anything that would allow you not to sleep well at night.
Russ: There you go. All right. Well, is that your first advice piece that you're gonna share here or when -
Ashok: Well, that's the final piece. That's my final piece. In fact, these are not encyclopedic wisdoms and yet, these were just stupid things I'd say, and my employee - one of them - particularly very sharp young man is a co-founder with me at Whodini would just write them down and then he sort of published a pamphlet on it.
Russ: Right, and so this one that we're talking about is what?
Ashok: Is if it feels wrong, it is, and it will get you in trouble.
Russ: Well, all right, but we're gonna have a lot of these in the coming weeks. So stay tuned in for more advice to entrepreneurs from a serial entrepreneur, also known as Ashokisms.
Ashok: That's right. That's what young Todd called.
Russ: All right. Well, Ashok, I really appreciate you coming back in and spending some time with us and sharing with us your vision for the future for entrepreneurs.
Ashok: Well, thank you, Russ. It's always a pleasure to be here with you.
Russ: You bet. Well, that's Ashok Rao, serial entrepreneur, now founder and CEO of Whodini, also chairman of The Indus Entrepreneur. This is the BusinessMaker Show heard on the radio and seen online at thebusinessmakers.com.