Dashboard: Victor Hwang on Entrepreneurship in America

[Music] welcome to another 21 hats dashboard I'm Lauren felin and today my guest is Victor Wong who is founder and CEO of right to start which is dedicated to expanding entrepreneurial opportunity especially by working with policy makers to kind of level the playing field uh Victor was also vice president of Entrepreneurship at the Kaufman Foundation which has a $2 billion endowment and is the world's leading philanthropy supporting entrepreneurship his resume is way too long and impressive to list here but suffice to say he's also been an entrepreneur himself and a an adventure Capital investor as well welcome Victor thank you Lauren thanks for having me a it's great to have you here thank you so much for taking the time why don't first tell us about right to start you you left Kaufman to start this organization what exactly does it do right to start is a advocacy organization to lift up the voices of entrepreneurs in public life uh we want to make it a Civic priority it's an issue that we think is uh not talked about often enough so we're fighting to expand entrepreneur opportunity for everybody if you think about every issue that matters in American Life uh there's some kind of advocacy infrastructure in place if you believe in guns rights you've got the NRA if you believe in civil liberties you've got the ACLU but if you believe in the rights of entrepreneurs and even more specifically the rights of every human being to be able to start and grow a business uh who fights for you what is your voice and so that's what right to start is we're trying to build that infrastructure to get that voice heard and to to make our our society and our government care about this that's so interesting I hadn't thought of it from the perspective of um every other uh group having its own advocacy group um what can you give us an example are you focusing on particular areas is there any one or two aspects that you're uh you're trying to advocate for at the moment yeah we have uh three uh pillars to the work uh we call it change Minds change policies and change communities with change Minds that's storytelling and media uh getting this issue into the public sphere so people are talking about it at all levels changing policies is actually working with policy makers to change the laws at the city level state level and the federal level and then changing communities is uh organizing and mobilizing at the Grassroots with ordinary citizens entrepreneurs and those who care about entrepreneurs to come together and get this issue heard so working in all those different ways is really how lift this these voices up so we're we're in now we're in over 20 communities across the country we've got a network of 23 ambassadors uh by the end of the year we'll have 13 Advocates who are our Grassroots field organizers and this year we had five State legislatures introduced right to start act bills which are seeking to create pro- entrepreneur policy environments and uh looking forward to next year now we have we're targeting uh 10 states at least to introduce right to start act we've got verbal commitments from at least 10 of them so we're really excited for the growing momentum in this organization correct me if I'm wrong but I you're based in Kansas City Missouri and I believe Missouri may have been the first state to uh adopt the uh right to start platform you're you just referred to I am in well I'm in Kansas City just on just over the Border I'm I'm literally a few minutes walk away from the Missouri border so I'm on the Kansas side I see so it's often uh often deceiving but we think of ourselves as by state here in the KC area and the you're right the Missouri legislatur was the first one to pass the right to start act in both the Missouri house and the Missouri Senate we actually got to the one yard line and it wasn't signed by the governor yet but we're we're planning on taking it up again for the next session and getting it all the way into the end zone next time that's disappointing uh can you give us just a quick overview what's what's in that platform well every State's a bit different if you look on the right to start website we have a field guide for policy makers and we've got uh at least 10 ideas depending on what you want tackle it's sort of like a buffet of different ideas that people can choose from about what fits their particular state or city environment because we found that every uh environment's got its politics it's got its issues it's got its current context and economic environment and so in Missouri the issues were around creating an office of Entrepreneurship uh expanding Government Contracting to make it easier for young businesses to get government contracts and tax relief uh actually lowering taxes for businesses in their early years which is the equivalent of like a seed investment for everyone that's starting a business but in other states like in Florida for instance uh we had 12 different ideas that were introduced in there so was the ideas I mentioned before but then also issues around Economic Development and making that more pro- entrepreneurial shifting resources from recruiting large corporations to helping build homegrown businesses to Workforce training to online lending and making that more fair and transparent uh to uh uh reducing non-compete restrictions so people can leave former employers and create businesses in the area of expertise they're in and a number of other ideas as well so we've actually got a diff a number of different ideas and different uh legislators and different states and cities take on different aspects of that it's a little hard to see why someone would oppose much of that do do you know why the governor didn't sign it that was not our it was not our fault it was red it's a redistricting year as it is in so much of the rest of the country and so redistricting actually caused the uh legislature to shut down a day early uh because angry at each and so because they shut down a day early they couldn't reconcile the bills in time to get our bill fully reconciled and signed so we just missed out on this unfortunately this is this is America in 2022 you know where there's so painful to hear what's happening is the real work that needs to get done doesn't always get done but you know we're only a two-year-old organization so to have gotten five states introduced this to get this as far as we've gotten uh We've we we've talked to a lot of folks who are in policymaking and say this is unheard of this is this is is the kind of issue that it's the kind of thing that you don't see this kind of momentum on almost any other issue it's we've gotten such traction so quickly uh I was just uh a couple weeks ago with the Council of state governments at their leadership forecast we had about 30 heads of state legislators there Senate presidents House Majority leaders Etc and the enthusiasm and interest in what we're doing was so strong I I think this country is at a point now where we're tired of paralysis we're tired of ideas and policies that don't fit where we are today as a country and we're coming in with a set of fresh ideas with a set of fresh data with a set of uh new ways of looking at Old problems that has just gotten policy makers and citizens really excited and I think that's what's happening right now we're catching we're presenting a set something that people are really hungry for right now you know one of the things I like about what I do is I I feel it brings together people from all sides of every issue and they find something in common about you know entrepreneurship building businesses it's it's hard to be opposed to that and I I I think what you're doing takes that even to another level well that's what we found in uh like the bill in Missouri for instance it brought the sponsor was a rural uh a republican uh state representative uh but he was joined in the bill by Urban black progressives and uh bipartisan Urban rural all across the board and we found this in other states as well this is getting traction from Democrats Republicans Independents uh across races across genders uh this across geographies this is something that really hits home for a lot of people and in many ways there are almost um there's a sense of almost of relief and excitement that there's a set of issues that people can work on together I heard this a lot over the last couple years is you know it's all like policy makers are human beings too and they they want to do stuff and the paralysis frustrates them as well so this is this is very exciting exciting for them too that's a great thing to hear you also did a survey recently which I highlighted in the morning report a bipartisan survey um that is kind of different from anything I've ever seen along those lines tell us about that survey yeah this is a survey it's the first one we think has ever been done where we pulled the American electorate about entrepreneurship issues and messaging and saw how this resonated across party lines and demographics and uh I really wanted to get a sense of just how does this hit home when it comes to voting and what when people actually punch their voting buttons and and we actually got uh two pollsters that are bipartisan so we had Wht SS who's a very well-known respected Republican pollster and Jeff Garen a very well-known respected Democratic pollster and they they did this jointly for us a thousand voters who voted in the 2020 election and uh we found the the main headline is that America is deeply deeply entrepreneurial 94% of Americans This cuts across party lines agree that this issue of uh entrepreneur opportunity people having a fair chance to start and grow their own business they said it's important to America's future 94% our pollsters said this is almost unheard of in their polling that kind of enthusiastic response which means at its very core Americans are still deeply entrepreneurial they still Harbor entrepreneur dreams they believe this is something everyone should be able to do to do it was also interesting that it found an extremely high favorable rating for people engaged in entrepreneurship correct yeah Americans love their small business owners and entrepreneurs so for small business owners the when we tested out that those three words as a phrase 90% favorable rating and with the word entrepreneur 73% favorable rating we were testing out in our minds you know every small business owner was an entrepreneur and is many of them are still in the entrepreneurial phase for us the entrepreneur is someone in the early years of becoming a a successful business um but overall these are extremely strong numb and when they look at large businesses uh it's more divided people don't think of them in quite the same favorable terms as they think of small business owners and entrepreneurs those kind of numbers 90% plus did you compare that to any other profession do you know of anybody else who hits that level oh no I don't think so there I mean there are other polls done around you know the most respected segments of society and I don't think anyone comes close to 90% at this point did that surprise you would surprise me a little bit well I think in many ways uh we have mythologized the small business owner in America uh in a way that's both great and um somewhat uh uh harmful too in that people have this great image of the small business owner what they don't know is that these small business owners are their neighbors and their friends and their extended families and because so much of entrepreneur activity now is quiet it's like once your neighbor start your your neighbors are probably starting businesses in their basements and their kitchen tables and their garages that you don't even know about uh and so I think what happens is people mythologize it because it seems so far away um what we really would like to have is a case where everybody knows how entrepreneurial how how entrepreneurship is something that's close to them that's relatable uh and so uh I think in many ways what's happened is you hear politicians all the time to say well small businesses are the Bedrock of our economy but then they don't they pay lip service but they don't they don't do anything about it and I think what we want to say is actually this is a group of people that want you to do something they need help they need support and there's things you can actually do to make it easier for them it's funny you say that I kind of had the same experience in working for big media companies where I worked with a lot of really smart business journalists who understood that small business was significant in the aggregate but just couldn't imagine why anybody would be interested as I was in specific individual small businesses to them all they heard was the word small uh and they had no idea what it took or it takes to get a business off the ground you know the idea that you know they think people in Wall Street and in Silicon Valley take risks uh they have no idea that the typical small business owner is likely to have to use their own home as collateral at some point that you know just hasn't registered at all I'm sure it's true for the population at large as well absolutely it this is the thing I think that has been lost in America because entrepreneurship has been in general decline over the last uh five decades or so uh we don't hear about this stories of heroism that happen every day when people are starting businesses uh it is a heroic Journey for almost every entrepreneur a few people maybe get it lucky and they can punch a button and they have wealth or they have connections where things move quickly but for the vast vast 90 9% of Americans when they start a business it's a heroic Journey where they put a lot on the line and they there's a lot of uncertainty and there's a lot of stress and tears and anxiety that comes with it people kind of cover it up I think they're embarrassed about it they're shy about it or Americans just take it for granted and I think what we need to do more is to get those stories out so people realize just what a heroic effort it is to start and grow something you recently took a road trip uh I followed you a little bit on Twitter what was the purpose of the road trip the road trip uh well I will say the original idea of the road trip was to launch right to start 2 and a half years ago so when I originally thought about launching the organization I thought you know what let's do this with a road trip and we'll go and meet entrepreneurs and spread the word and the story and get and do organizing and of course we know what happened to the world two and a half years ago uh with the pandemic and so this was a delayed road trip and so but now the road trip was different instead of a celebratory launch it was uh really asking the question what's going on out there and is America what is the state of America now out of what we've been through the last few years and what is the role of Entrepreneurship in in whether it's a rebirth or is America fundamentally broken Beyond repair uh and so for me it was really get a chance to get out there and hear what's happening on the ground again not just filtered through a zoom box or through through other media but firsthand to see it and to to get a sense on what was happening did you get your answer is it a rebirth or is it broken it's it's a rebirth Beyond what I could have expected um really yeah this country and this is the thing I think you know you if you if you spend enough time talking to Ordinary People and you get enough sampling across different places and different types of people and segments of society you get a better sense than uh when you have to get it interpreted through other people and so I think our political leaders and our larger mainstream media haven't yet picked up on the mood of the country and the mood of the country I I mean I'll tell you where I was in community unities I was in urban neighborhoods that had been left behind I was in wealthy suburbs I was in rural areas uh I was in large towns small towns I met with every possible kind of entrepreneur you can imagine and this the mood of the country is let's get back to business let's fix this thing let's fix our problems but we're starting where we are we're working with the resources we have in our communities in our neighborhoods in our networks amongst our friends and the is palpable it is this is a country that is renewing itself as we speak yet when you when you tune into you know the major Media or you look you you look at what the our political leaders are doing it's essentially you know combat and paralysis and negativity I heard one one universal theme I heard throughout the trip was people are tuning out the noise now I I've I can't I lost count of the number of people who said they'd stopped using social media or they'd stopped even stopped reading the national news they were just busy doing the work of you know getting things to happen again where they are um and one one gentleman uh will aov in Nashville said to me he said he calls it a you know a blame shame and complain he said people are tired of it they don't want to do any more of it they're they're just they're tuning it out and they're getting back to work and I heard he had that great phrasing but I heard that similar theme echoed across this country you mentioned the decline in entrepreneurship of late that obviously turned during the pandemic and the rate of startups has increased dramatically and I I'm guessing that's part of what you're picking up and what you're referring to as the rebirth do you think that's here for real or was that a phenomenon of the pandemic that may pass as things gradually return more normal well there's research that shows this that it's a com it's it was a mixture of things there were people starting businesses out of desperation uh and there were people starting it because they saw New Horizons open up and new opportunities happen and and that mixture of things is real and the the data shows it is that that that combination but I would say really what's happened I think is you know this country at at its core has a resiliency to it it's a bottomup country it's always been that way it's a every major movement in the history of this country has come from the Grassroots and the bottom up and we're seeing it happen you know cities and uh States and communities are getting rebuilt as people are doing this work and um and we saw that I mean the the poll that uh we were talking about earlier we actually asked um uh Americans whether they're more likely to vote for candidates that make entrepreneurship and expanding entrepreneur opportunity a significant part of the platform and the vast majority of Americans said yes uh cutting cutting across party lines um 64% of independent 62% of Democrats and 59% of Republicans said they're more likely to support candidates that talk about making it easier for citizens to start and grow new businesses uh and so people want that opportunity they want the chance to take Take Back Control of their lives and to be able to make things happen again and they want their leaders to give them that chance we got to make sure more people find that out um that's really interesting what did you do on the road trip H how did you figure out who you which entrepreneurs and business owners you're going to meet with in a particular area and and what kind of questions did you ask them it was uh you know we've got this network we built through right to start and so our network of ambassadors and Advocates at the local level and so we tapped into it and we really let them lead because every Community is different and every Community has different pockets and little currents and sub tiddes Within These larger pools of human activity and so we let them lead and find conversations for us and so the it ranged from uh you know neighborhood meetings where we had uh 10 people around a campfire to uh uh uh meetings in a co-working space that had 30 people uh to uh a little uh organization mentoring entrepreneurs in the corner of a strip mall with five people uh and so it was and then we visited uh entrepreneurs in their environments in their real stores and retail shops and uh and in their you know kitchens and such and it was really a mix I I've it was really neat to uh get that kind of broad sampling of what was happening so there was not just one kind of conversation I made a a point of really trying to get out there and see people in different places and meet them where they were that sounds great did anything really surprise you did the any of the owners or entrepreneurs tell you things that you really didn't expect to hear oh God I mean yes I mean there's so many moments of Revelation they almost too many to count um I'll give you two instances of um I guess one just how hard it was for um uh people who've been in communities that have had obstacles placed in their way so in in uh the black community of entrepreneurs in Baltimore for instance our our ambassador Paulo Gregory has been a real leader in building the entrepreneurial ecosystem there and getting to meet the entrepreneurs there and realizing how much energy there was to get things done but how much issues like one simple issue just stuck with me which is there a number of entrepreneurs were Reinventing an entire street because you know they they wanted to create better retail services for people which can have a a big um magnetic effect for the community but across the street was a giant um block that was not being redeveloped and I asked what's going on over there and they said well the land owner has been sitting on it for decades and they're they don't want to do anything with it because it's too much hassle for them to lease it out to individual entrepreneurs they're waiting to sell off the whole thing for a giant payday uh and so this really hit home because you have people trying to change the community and and the thing that was getting in their way was essentially because they were too small to be to be relevant to a large landholder that was really waiting for these entrepreneurs to restore the neighborhood and rejuvenate it and then sell it out at a higher price it cost them uh less to just sit on it than it would to actually have the hassle of being part of the development and I think there's a lot of that Legacy baggage that so many communities carry and I I I felt that that sense of frustration and pain uh in in the community there and I thought that's just something that is just too bad and it really it shouldn't be that way at all it needs to be fixed and it can be fixed and it's just one of these things that uh if if we were able to get the right people in the room uh together I'm confident there's a deal to be worked out but so much of it is sense of inertia or just people just don't care and but that can be broken through and I certainly felt that energy and optimism from the black community there in Baltimore that this they were going to find a way you know come hell or high water to do this um but you could certainly feel that there were obstacles that were unnecessarily being placed there but on the up on the plus side I'll give you another example and this was when I was in the Town of Huntington West Virginia which is a uh Town that's been in Decline since the manufacturing job started getting uh lost in the 1970s and this is a town where this story has not been well well told yet but Brad Smith who was the former CEO of Intel he's a Native Son of West Virginia he uh left Intel just a few years ago and has now just nine months ago moved back to Victor is it Intel or is it in it I'm sorry you're right into it thank you Lauren uh into it and then he just moved back to West Virginia and uh he's taken on the presidency of Marshall University and uh it's it was it's electric uh the influence he's had he's brought design thinking to the town to the college uh to the entire state of West Virginia uh he has I've met people who said you know people in West Virginia are so used to being you know at the bottom of every you know 50 State ranking they they feel they've been told for so long now that they're not capable of anything that they're backwards and behind and to have someone who has made it and been to the very top of Silicon Valley and one of the most successful companies in the world and to uh come back uh to West Virginia West Virginia and say I did it and you can do it too and to bring back all of the skills and knowledge he's had he's learned through that work has just I I to have an entire State on fire because of his return was amazing to see and it's it was very real and one thing that Brad has done already is he's requiring every freshman at Marshall University to learn design thinking wow and I asked him why design thinking for every freshman as a requirement and he said because I want them to be Scrappy the world is so uncertain and it's changing so fast that you have to have tools to be able to deal with the change and find Solutions and I met people in West Virginia who said exactly that like I never felt like I knew what to do when I was dealing with these big problems but now I've learned these design Thinking Tools that allow me to have a road map for any problem I deal with um and that that is the result of what's happening and you're seeing this kind of energy I think there's probably more optimism and um momentum coursing through uh West Virginia now um than there has been in many years Brad's part of it there's a much bigger movement of foot but there is a moment in time right now where you see uh states and cities finding new Pathways and I think the remote economy has had a lot to do with it I think the the dis dysfunction we've seen politically has had a lot to do with it I think the pandemic has had a lot to do with it as people are just tired of of of uh Decline and so you've seen this convergence of activity where people are saying let's get back to business let's fix things despite all the obstacles we're going to make this work that's an amazing story about Brad Smith I love that I'm curious having had this uh amazing experience getting out there are meeting with people traveling the country hearing it straight from the people who are living this did did it change your thinking at all about what needs to be done I I guess what I'm asking you is if if you had a w a magic wand right now and you could wave it and change a couple of things uh about the way uh this country deals with entrepreneurship and business ownership what would you change well I think out of the trip what what became really really clear is that we the Citizens need to lead the leaders uh you know we often think our political leaders are the ones that are going to you know save us from you know where wherever we are and lead us to a better place and we're getting over that yeah what's very clear is the system ain't working and people know it and the real actions happening on the ground in the cities in the states um and and people know it and they're and so like we tested this this number out with our with our uh poll and I thought it was really interesting we actually asked um people about a range of um issues we actually tested the sentence out every child in school should be taught the skills to potentially build their own business someday and we just wanted to see how that resonated with voters and voters like that a lot they found very 46% of Voters found it very persuasive but that message especially hit home with small town voters 52% rural voters 58% and Black and Hispanic voters 64% and 63% of them said this was a very persuasive issue which is their kid needs to graduate from school with the ability to start and build their own business that what that means is that uh people on the ground especially in these these places that have perhaps been left behind or not served well or you know have been ignored in much of the economy they see that entrepreneurship is a key to a better life and they see it's a key to wealth creation they see it's a path towards Prosperity renewing their Comm communities and they're not finding their leaders pushing on this issue hard enough um and and so that's what we wanted to find out is you know are are our leaders actually leading the way and we're finding that people at the Grassroots are the ones that are actually doing this and and uh and that's that's I think probably the biggest takeaway is this is the time for the citizens to actually take charge of this issue because we know the economy is way different than it was yet our leaders are talking about their policies and their C their campaign platforms are ideas from 50 years ago these are industrial era debates and we have a new economy that's got a lot of new problems and we've got to change the way we we do things from and we saw that same kind of uh that was education but we saw the same kind of voting uh polling pattern across Health Care Capital Access red tape taxes and Government Contracting this people in these groups that have been left behind are saying we could these are issues we care about and we can do better Victor I'm going to let you go in a second but I I can't help but notice that in in talking about what we could do to help the entrepreneurial Community you you haven't mentioned finance and I'm curious about that because so much of the discussion about what business owners and entrepreneurs need tends to focus on that one aspect of it and I'm wondering if you think that's overplayed and that there are other issues that are more important or did you just did we just not get to that in this conversation we didn't just yeah we just didn't just get to it there's there I mean it's clearly an issue and one of the reasons money comes up is because when you talk about all these problems people are dealing with from healthare to bureaucracy to taxes and getting in the door and you know and the the basic uh blocking and tackling of business from sales and marketing to operations more money helps all those things so sure often money becomes the very quick response is well if we only had Morey more money we could fix all those things the issue with capital is a it's a profound one because the capital uh uh products on the market today for actually don't fit the businesses of today um so venture capital is which gets all the attention it actually finances less than 1% of the businesses out there uh so when out of you know 100 businesses that get started less than one of them 1% of them actually fits the Venture Capital High growth High scale exit model 16% of businesses roughly fit the banking model which is they have collateral physical assets to be collateralized and they have several years of financial statements that a bank can project on uh 83 plus% of businesses don't fit the banking or the Venture Capital model which means that we have a financial market system that's actually not serving the businesses of today uh there's a lot of new things coming online from fintech tools to revenue based investment models those are actually starting to fill the Gap now that's actually a big part of the problem is because of so much of what we think of as capital isn't hasn't adjusted quickly and there's a lot of reasons we can get into that there are a lot of folks that are tackling that there's new federal government spending to try to boost new forms of capital there's a lot of new funds getting built up there's new fintech platforms getting built up but that that is at the core of a lot of the issues we see and we've seen banking consolidation um a lot of what people think as capital capital for entrepreneur activity half a century ago was in community banking that is the financial tools of the industrial era for a small town economy that's changed so much now yet we have a system that's still uh rigidly locked into that model that is moving to the new model but there's so much further to go we've got a lot of businesses that are still underfinanced because of that we're going to need to have another conversation Victor absolutely Victor Wong is founder and CEO of right to start thank you so much for taking this time I wish we could keep talking I could talk to you all day I'm going to beg you to come back uh before too long let's do it Lauren I love talking with you you your publication is such a great service and everything you do has been so so important to entrepreneurs thank you for doing this oh I appreciate that all right thank you and have a great week everyone