01 Jun 2014
3-Minute Briefing: Reza Satchu (MBA 1996)
Entrepreneur; managing partner, Alignvest Capital; and founding chairman, The Next 36, a selective entrepreneurial education programRe: Asif Satchu (MBA 1999); William Sahlman; Ramana Nandaby Julia HannaTopics:
"The HBS case method and the cold call are a terrific way to push people. It's a cornerstone of how The Next 36 has been built." (Photo by Naomi Harris)
We moved to Toronto from Mombasa, Kenya, when I was eight and my brother [Asif Satchu, MBA 1999] was six. For my parents to decide to come here and start a new life was, in many ways, THe ultimate risk. The immigrant experience is uncomfortable and sometimes difficult, but it teaches you how to deal with adversity and overcome challenges.
I try to create sources of discomfort for my three children. They've been learning Mandarin intensively since the age of two and going to competitions. It's not a situation where everyone gets a ribbon or a trophy. In fact, last year was the first time in 10 years that they won anything at all.
When I was at McGill, I sent out over 100 résumés to Wall Street firms and was rejected everywhere. Then I found out there was a Canadian working in HR at Merrill Lynch. I called her, and after we chatted a while she suggested we meet in an hour. I said, "How about tomorrow morning?" and drove all night from Montreal to get there.
I learned that kids from Harvard, Stanford, and Yale weren't necessarily smarter, but they did have two incredible advantages: exposure to leaders and an expanded sense of what's possible. They didn't just want to be vice president of the bank. They wanted to run the bank. They didn't just want to write a book. They wanted to win the Pulitzer Prize.
When Asif and I were working on our first business, SupplierMarket, we were funded by Sequoia, KKR, all these folks. My brother was a public markets guy. I was a private equity guy. Later, everyone said, "You guys knew nothing about technology. Why did all these smart people give you money?" And I said, "You know what? I think they saw two Indian kids sitting across the table and assumed we knew what we were talking about."
Bill Sahlman said something that I have used in both my business and my teaching. Entrepreneurs are often solely focused on trying to sell as little of their company as possible to an investor. If you take that logic to the extreme, it means you're probably going to end up selling to the person who expects the lowest return. In fact, you're better off going with really smart investors, even if it costs you more, because they're going to increase the probability of success. It's better to own less of a business that has a higher likelihood of success than more of one that is going to be worth zero, frankly.
One day, I knocked on the dean's door at the University of Toronto and told him I wanted to teach a class on entrepreneurship. He asked if I had ever taught before, or if I had a PhD. When I told him no, he asked why he should let me teach. I said, "Because it's going to be really good."
HBS professor Bill Sahlman had a huge influence on the way I teach, although he's a bit nicer than I am in the classroom. I have very high expectations of my students. I don't think anyone got an A in the six years I taught, and yet it was the most popular class at the university. I brought in leaders of all kinds as guest speakers and taught HBS cases. That created the kernel of The Next 36.
Our current cohort for The Next 36 was chosen from over 1,000 applicants across Canada. They each get $50,000 to start a business. We fly in the very best entrepreneurship academics, including HBS's Ramana Nanda. They get capital, academic instruction, and mentorship from many of Canada's leading CEOs. The goal is that these extraordinarily talented young people will build something of significance and do it faster and better because of what they receive through The Next 36.
Class of MBA 1996, Section I