An interview with Laura Franklin of Sovenco
This interview with Laura Franklin (LF) covers her advice from personal experiance in starting up a Social Enterprise Management Consultantcy business. It was recorded March 2017 (the abridged text below is slightly edited to make it easier to read).
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[0:00] Music
[0:33 Host / LF] Introduction
[01:00 LF] Hi everyone my name is Laura Franklin. I am one of the founders and the Chief Business Development Officer of Sovenco, I founded it with my female soul mate, Danielle Norris, she's an amazing woman. I can get into the story of our inspiration for founding Sovenco but I'll just let you know who we are right now and what we do.
[01:21 LF] We're a management consulting firm and we're dedicated to converting for profit businesses, standard for profit businesses, over to a social enterprise model. One that has sustainability initiatives, built or developed in to it. If we were dealing with larger companies that would be something more on the line of GRI [Global Reporting Initiative] but since we work with a lot of start-ups, it’s more like measuring the triple bottom line. They aren't producing much greenhouse gas emissions, so for them it's much more about dealing with things like; are they paying employees a living wage?
[01:51 LF] The thing that we do which I feel is different than what a lot of standard sustainability initiatives is that we’re very much about every business having a direct impact. If we're going in from the triple bottom-line perspective, we want every business to be environmentally sustainable, we want them to be financially sustainable. (We don't work with non-profits, we’re aware they can be social enterprises but it's just too complicated to work with them right now. We like businesses that are profitable that are making money, so you don't actually have to add a revenue model.) Then from the people perspective, we want businesses to be taking care of their employees.
That's where the movement B Corp, (that's a certification that basically says that a business isn’t a piece of shit) - that they pay their employees a living wage, that they give them insurance, that they're basically doing the bare minimum of what they should be doing, but it nowadays it's a certification because you can't trust a company!
[03:01 LF] It's also legal a status but I won’t go into that, the legal status right now is useless, as very few people use it. Adding in the direct impact for us means that a business has a mission that is equally important to making a profit. So that would be if you go on to a business’s website and they say; “we sell widgets and we’re dedicated to saving animals” - it's a mission that is equally important to their profit generation mission.
[03:29 LF] That is essentially what we do. We've been having a ton of businesses and if I can thank Donald Trump for one thing .. [inaudible]
[03:40 Host] Sorry can I back track for a second …
[LF] Yeah, go in to how we met!
[Host] We met in China around the end of 2013, I think, and we were there to train Shaolin Kung Fu with genuine Shaolin Warrior Monks from The Shaolin Temple, which is something that everybody has not done apparently! I don’t know why! It seemed perfectly normal at the time to go and spend a year training full-time martial arts in China with Shaolin Warrior Monks, on reflection it seems a bit weird.
[LF] The thing is we normalize it because we just know so many people now who have done it, that it seems completely normal to go to China to train with Shaolin Monks, but it’s not normal! In fact when I was telling US immigration, they're asking; “ how did you and John meet?” … “Oh god, you’re not going to believe me”!
So yeah we were training Shaolin Kungfu in Qu’Fu, Shandong Province, hometown of Confucius. It was funny because we didn't talk a ton at the school but I always liked you, I always thought you had this really dry British wit, I thought you were really funny and the biggest level of respect there was how hard you trained. I like that you trained hard, you're always running around, training for marathons which I thought it was impressive.
[05:20 LF] I just wanted to lie in bed every day after training. So that's how we met and since then we've both gotten married and done some pretty cool things.
[Host] Not to each other!
[LF] Not to each other! No, we did not marry each other. Let's put that on the record! I'll go back, I remember where I was, I was thanking Donald Trump, which isn't something I do every day, I was thanking him because…
[5:46 LF] because of him being elected here in the US, especially among Millennials, especially among entrepreneurs, we no longer have this feeling that the government is representing us. We no longer have this feeling that the government is going to keep businesses in check, like they should. I'm definitely a pessimist, I do not believe in the overall goodness of people. I believe that we’re innately selfish. Especially those who head up corporations, they are not going to employ environmental sustainability initiatives unless they are absolutely forced to by the Government.
[06:27 LF] Everything that's happening with Trump is very scary for the environment, for people, for women, for minorities. So because of that, businesses and especially founders and entrepreneurs are taking it upon themselves and saying; “okay I don't just want to make a profit, I want to do something more. I want to add a mission and I want to make sure I’m sustainable”. So Trump has been the driver for this, as terrible as it sounds!
[LF] A conversation started that I don't know would have been started if Clinton had become president. And I'm not saying that I don't wish she’d become president, I wish it every day, I sometimes dream about it, but that's not the reality. We’re just kind of dealing with it over here, but in terms of business, it has gotten a lot more people interested in what they can do.
[07:10 Host] I notice on your website that you describe yourself as a “Start-up”. I am not an American, I think it may be a little bit of an American term, what is the difference between a startup and just a new business, it's the same thing isn't it?
[7:28 LF] It’s a hip, trendy way of saying a new business. There is actually a culture with it now, usually with a start-up it's the mentality that like, “okay I have this start-up, I want to scale very quickly”, usually start-ups are constantly pitching to Angel Investors or Venture Capital firms, you're constantly raising money as you want to scale very quickly. It’s also is associated with technology, but I know a lot of people who call themselves start-ups that aren’t technology firms, such as us.
There’s a whole culture around start-ups, you see it in shows like Silicon Valley. Whereas starting a new business, that's like when my mum started a craft business, she wasn't saying “I’m this innovative new company who is making crafts”, she’s just making shit! She just started a new business! There wasn't any culture or even pretence there was. Sometimes actually it's better to have the new business mentality, then you don't run out of cash as much. Sometimes you're much more financially sustainable if you have that mentality compared to a start-up mentality. We call ourselves a start-up because that's the trendy lingo right now and it makes us look cool!
[08:53 Host] OK fair enough! That's a nice segue into the next question, as you mentioned culture, I know you’re early days there at Sovenco but it sounds like you already have your own culture, so what kind of person would succeed at Sovenco?
[LF] You definitely would Steve! And you would come here and we would pay you complete shit!
[09:30 LF] But I do like to say that Danielle and I always pay our employees more than we pay ourselves.
[09:37 Host] Stick by your own principles!
[09:40 LF] Exactly. We have our nine core values written on our website which I can't even remember what the hell they are right now! In terms of actual culture, we need individuals who are, really witty and can put up with a lot of harassment from Danielle! We joke about that, I don't know I think it's just being in the start-up culture, you realize that you don't have to have a filter anymore, you aren't working for anyone anymore so you really can just say whatever you want! I mean it's dangerous! We could be sued for sexual harassment … but we haven't!
We were thinking about it because our first hire was a guy, and he just has amazing hair! I don't know what it is, I don't know what he does, so we're constantly telling him; ‘you have the best hair we’ve seen’! But then we're realizing, wait, if this was reversed that would probably be considered harassment, constantly objectifying someone like that. Luckily he didn't mind, he thought it was great that we thought he had fantastic hair!
[11:01 LF] I've been trying to catch myself for little things like that because we’re so used to it just being the two of us. In terms of culture it's becoming a bit cult like, a little bit intense. The type of people who would succeed are people who are hard workers, have a lot of mental fortitude and who are willing to put the long hours in and have a sense of humour.
In terms of actual skills, it's kind of interesting because we need people who obviously have a lot of experience in sustainability management and things with the environment, but because we actually act as full service management consulting, the goal is also to help any business we work with scale. So they also do need to have a financial background or any sort of background in a start-up, any background in marketing... I guess it's very holistic. You need a lot of different skills to do what we do, I'll go into more what our plans are later, but it does make sense in terms of what our 20-year strategic plan is, it does make it difficult to find the right person, I know there are a lot of people there who’ve got the skills that we need.
[12:08 Host] If you need all those skills wrapped into one, what was it that inspired you to co- found Sovenco, rather than focusing on one skill and maybe joining an existing organisation?
[12:23 LF] Yeah why we didn't just go and do a major in Sustainability Management or something like that, well I'm going to tell you the whole story. So back in 2010 or 2009, that's when I met Danielle. We met at a Chinese culture and communication course, I remember that. We were both doing presentations but I remember she did a presentation on Yin and Yang, and a lot of the feminist undertones, just because our Professor was so funny, I remember it, he was saying “Yin means light, bravery, courage, man. Yang; darkness, despair, woman.”!
[13:12 LF] So Danielle did her whole presentation on it and we immediately just connected and became really good friends. We tried to do all of our projects together and all of our business classes, we realized that we worked really well together. Back in 2010 social enterprise and even sustainability management wasn't such a thing then. I mean of course the sustainability management was, but there were no classes on it at our University, now they've got all these programs associated with it, back then we had no social enterprise courses, so we kind of came across social enterprises through our own research, and just through our frustration with a lot of our courses.
[13:51 LF] I’m going to skip to when you're asking about what our plan was for the next 5 years and just explain why we started the company the way we did. Our original idea, which is still our goal, is to make Sovenco a holding company.
So we would buy a business and then convert it over to a social enterprise model. My first job out of college was in Private Equity, so I was able to see that the firms purchase a business, they basically perform the equivalent of slash-and-burn agriculture within the business, which means laying off a ton of employees, doing absolutely anything they can to make it short term profitable, then sell it off (or maybe hold it for a while and cash in on the profits and then sell it off) - so we were thinking, okay, we do want to be a holding company but our whole goal would be to purchase a business, convert it over to a social enterprise model, change the culture within it, make it more profitable without laying off people, then hold it for a very very long time and only sell it off if it would be to the right person.
The whole goal was if we had more than one business in our portfolio as a holding company, we could accomplish so many more missions. One business could be devoted to helping animals, another one could be devoted to helping disadvantaged youths, the possibilities would be endless. So it's almost like a Grand Vision to take over the world at that point, we were like holy shit if we could pull this off would be fantastic!
[15:21 LF] So we got our entire pitch together, we presented to a potential board of directors back when I was 20. We created a framework for converting businesses over, because working in private equity I saw they didn't even have a framework for trying to make business more profitable.
[15:51 LF] We very quickly realized that it was going to be virtually impossible for us to even get the investment money to buy that first business that we wanted on our portfolio. So we thought about it strategically, we couldn’t manifest that form of the company right now, that's just not going to happen. So we thought, let's start with management consulting, because that way we can test our framework to see if it works, we didn’t even know if it worked at this point, maybe that's why we didn't get the investments!
[16:17 LF] We were pretty naïve!
[16:21 LF] We were feeling pretty overconfident about ourselves, so that's when we decided to go into management consulting with our framework. For our first client we did everything for free. For 8 to 12 months, we wanted to do that so that we could perfect our model. When we realized it works and it works really well, we started gaining more clients in the hopes that, if investors could see us as a profitable business, and I'm really proud that we’re profitable, (a lot of start-ups don’t have the revenue generating model of a children's lemonade stand, you wouldn't believe it! I don't know how they get money from these but they’re Tech so…) The goal is to still become a holding company, so in the next one to two years we’re going to purchase our first business.
[17:22 Host] It was a strategic decision that you were almost forced in to.
[17:25 LF] Yeah it was, I know it sounds terrible we never wanted to be a Management Consultant for our clients. They should know that! It’s not that we didn't want to do it, it's just that we really needed to do it to test our model to prove that we’re profitable.
Also we get clients across all Industries so with every client we get, we are basically learning everything about that industry. And how we could start businesses in that industry, how we could run a businesses in that industry. So Danielle and I always talk about it, if this just crashes and burns we could start another business pretty easily. It would be okay.
[17:57 Host] When you realized it was going to have to be a management consultancy from scratch, founding your own company rather than buying one, what were the practical steps you had to take in terms of getting registered, finding office space and all the rest of that exciting stuff?
[18:18 LF] The first thing you want to do is register your company in your State. Delaware is the best State to register, but only big companies are able to do that because you have to have an actual physical location there. There are all these tax implications which they can get away with. The small guys can't.
So we're registered in the State of Colorado, the taxes aren't terrible. Then you need to create your Articles of Incorporation. You need to create your corporate bylaws and you need to create your product. That seems obvious, but it's not completely obvious to a lot of businesses, it wasn't really obvious to us either. We just had this grand idea and then we realized that in the meantime the management consulting was the product. We worked for years to create that framework, so it's kind of funny when on your question lists, “after the Kung Fu School did you know you would be doing this?” - we actually started it before that, we both wanted to have a life and I wanted to go back to China, I’d lived there a year before already. Danielle wanted to get an MBA, so we thought okay let's do the research and put operations on hold until we're both in the same country, then get things together, so actually I could imagine it! I'm just happy that we’re profitable at this point which is really fantastic.
[19:52 LF] If you have employees then there's payroll, then there's non-disclosure agreements, and there’s confidentiality agreements... in terms of space that was kind of the easiest thing. We were working from our houses at first, but then for meeting with clients, we've always used co-working spaces because they're the cheapest. Before we had an office, we just paid $80 a month so that we could go in and use their conference room anytime we wanted. So that way we looked professional to clients and had that space to do that. So that was actually surprisingly easy. If we expand we’ll have to get more space, but that's never really been a challenge.
[20:58 LF] Also getting the technology you need to support the system, we've dealt with Pandadoc which is what we used to make proposals, we use Zero, and we do a lot of our own finances, some people use Quicken, we know how to use Quicken as well if we need to. We make intense forecasting models for our clients well, we have some programs for that, we could always use Excel. God I hate using Excel.
One of the hardest parts is those first few initial sales. Making sure that you're well known, to get out there is difficult when you're young and you don't have a lot of connections. You can just Google how to start a company that will help you with registering with creation of Articles of Incorporation and bylaws, but getting those first few initial sales that’s the real rub of it.
[21:52 Host] Did you think that would be easy or did you know what you were getting into in setting off on your own?
[21:02 LF] We were kind of realistic, it was funny we were at this event recently, talking about women in business and it wasn't just female entrepreneurs, the whole thing it was talking about negotiating. A lot of people argue that the wage disparity between men and women is because of that initial meeting where you negotiate your salary and a lot of times a woman will devalue themselves, and Danielle and I turned to each other and said we actually overvalue ourselves we think! We don’t have that problem! So that goes in to own personalities and that we were very overconfident going in. We were not realistic at all I would say, we were slapped in the face pretty quickly with that. We priced our consulting way too low, at the same time looking back, we had to starting out because we needed those first few initial clients to prove ourselves.
[23:00 LF] Our workload was way too high, we realized that even some of the highest paid consulting firms weren’t doing what we were doing, and it was just the two of us at that point. It was pretty intense, no we are not realistic at all, but that’s ok! I don't think anyone really is in starting a business, and as it goes along everything kind of manifests itself in a different way. I joke with Danielle that we have these grand plans, we could be making candles in a year, who the hell knows what's going to happen. We also surrounded ourselves with a community of entrepreneurs which really helps.
[23:41 LF] Because it’s tough. I didn't mention earlier when I said what you could do to work at Sovenco, will you have to deal with a lot of emotional breakdowns. We’ll cry in the office, hug with each other, but the thing is where we work, I’ve seen grown men cry in the office next to me because they’re Founders too, They have their own businesses, it's a tough thing. Danielle and I both developed uncontrollable eye twitches which was great when we're pitching to investors, our eyes are twitching like some kind of mad women. A twitch during a pitch, that's not good! So surrounding yourself with a community is good but yeah we were not realistic at all going into it I don't think. I think Danielle was more realistic than me.
[24:35 Host] You said that you've spent a good couple of years planning everything out, I imagine that a lot of people who leave jobs to set up on their own don't have the opportunity to spend that amount of time planning. How did you go about marketing yourself at the beginning? You said you had to work for free for a long time and then you were under-priced and overworked. But how did you find those clients in the first instance?
[25:14 LF] First we used the traditional online marketing such as Facebook ads and social media. Also I'm very personal in many ways, we know way too much about our clients because of that personal connection, it's been all about networking. Getting in with investors, it is all about networking, it's about being at events where you know potential clients are. That was the most exhausting part, during the day we'd be working on client work and at night we have to go to an event because potential clients might be there, talk and smooze and hand out our business cards. That is how we got our initial clients.
[26:09 LF] It was interesting, I went to France for a bit, that's when John and I got back together and all that. Then I came back to the States, I was thinking of staying in China, but I came back to the States and got a job in corporate finance. Danielle at the time was doing real estate brokerage, so she had a lot more time to go to events and build up connections, I give her a lot of credit, she spent a solid six to eight months just going to every event she could until we got that initial client.
I would say if someone really wants to start their own sustainability consultancy, which would probably be better because of our plans for private equity we are in a niche, if they're in a specific niche it will be easier. If that's their plan, don't quit your job right away. Don't do it. Just build up those connections while you have a job, build up your framework or however you see yourself doing the consultancy and then there will be a Tipping Point, when you can quit, if you're working for a firm in a similar industry they will may have non-competes, so you will have to quit if you want to start your own consultancy. But my advice if it isn't something that is competing with the current company you're with, try not to quit for the longest time, because the moment you run out of money, that's when the business dies.
[27:32 Host] I think that question maybe it's a bit more apt because you’re quite young and a lot of people who go into consultancy in our field, are people who have worked for organizations and spent 20 sometimes 30 years building up experience in one sector. They have the client base already. So they can easily jump ship and all of the sudden they have a very large and existing client base to draw on, but if you're starting from scratch, that’s tough.
[28:02 LF] It's definitely tough, we're going to make sure our next hire has their own book of clients. You would have no idea how many emails we get on a daily basis from people at places like Morgan Stanley and Merrill Lynch, people who want to come work for us just because our Company actually has a mission people can believe in, and they won’t feel like they’re just twiddling their thumbs, or being a pencil pusher who at the end of the day thinks “what good am I really doing?”. Just having that is so powerful in a business. We've had a lot of potential clients that piss us off because it’s clear they are just using us because they want “cause marketing”, have you heard of that term?
[29:01 LF] It's funny we're talking because you're so clearly from the environmental sustainability side, where's I'm really from the financial side of environmental sustainability and sustainability Investments, if you were talking with my business partner she's much more environmental, that’s why we make a good team, she has more knowledge than I do. I'm trying to train myself so I'm going to be the one who runs all the investment side of our business as well as the valuation of all these businesses
[29:27 LF] Cause marketing is when a business will purposely try to make themselves look like they have some sort of purpose or some sort of environmental initiative, but in reality they don't, and that’s why we refer to direct impact a lot. You have a lot of companies that do donate money to good causes and we think that's actually fantastic. We don't want companies to stop doing that. But if you're going to work with us we're talking about very specific direct impacts, and that can manifest itself differently.
For a lot of companies that manifests itself as an employee model, they want to employ people from a certain disadvantaged group. A lot of people may want to work directly with an animal shelter. When you get a company email you're getting weekly updates of how the stock is doing how things are going. If it's a social Enterprise you also get a weekly update of here’s how many animals we helped this week, here’s how many people we employed this week, here’s how much money tax payers saved because we employ these people from a disadvantaged population. That's where the key differences are, you're seeing that a social Enterprise has those two elements and they are directly linked, cause marketing is when companies are trying to fake that.
[30:55 LF] I think that our generation really can see through the bullshit, when Walmart got their Fair Trade Certification we were like “that's great maybe you can pay your employees a living wage now?!”
[31:11 LF] It's really easy to see through the bullshit. We don't accept any clients like that. They have to actually want to become a social enterprise and make some really significant changes in their business. Lucky for us we had only the most fantastic people as clients. Obviously, anyone who's going to come to us will have to have a specific mind-set already.
[31:31 Host] Let’s talk about your first client, how did it compare to your last?
[31:36 LF] Our first client was a woman who runs her own social media marketing firm. She does social media for tons of businesses in marketing and social media management. Danielle met her at an event and asked if we could test our management consulting program on their company and test our model. And she's said “why the hell not!” - which was great of her because it included a lot of work on her part, she was willing to do this with us and become a social enterprise.
[31:37 LF] The biggest difference is obviously we did that client for free, which sucks, you know we were both working at the time.
[32:15 LF] My mantra for that time was pretty much “I have no idea what the hell I'm doing”. Which I think is anyone's Mantra when you start a business, you just kind of fake it until you make it. It was a fantastic time to perfect our model and just get things really systematized. With our most recent client, it was so much easier, we have all of our systems down at every step, we know what we're doing, we know what we have to do, we have to-do lists for every single stage of the consultancy.
[32:20 LF] It’s no longer a complete clusterfuck, it’s really well-organized, our knowledge base for both of us is just so much higher than when we started out, and that's the thing about being a consultant or being your own entrepreneur or anything like that.
Your knowledge base expands so quickly compared to a traditional job because it has to, because you have no choice than be constantly learning.
[33:15 Host] So now you have more of a structured process in place?
[33:21 LF] So much more structured and anyone who's doing consulting, you have to make a structure to it or else you will just go mad. Of course there are moments when you don't have structure. Oh well I didn't mention the best part we're getting paid thousands of dollars to do this!
[33:39 Host] Okay Laura so what's the most important thing you're working on now, and how are you making it happen?
[
33:57 LF] Well other than our whole strategy which I outlined for you, the most important thing I'd say we're working on right now is two-fold, One, finding investors which is a ton of fun when your service company. Two, getting our online platform together because we just come to realize that, when you're having a business and its Consulting, it is so difficult to scale. Hence why we have the private equity, but the private equity is going to take years before we can get this holding company together.
[34:18 LF] So in the meantime we want to get our online platform together, we’ll sell courses on various topics, create a passive income. Courses we can create once and then not do anything again. Getting that online platform together is also a really good way to get investors because any time they hear anything sort of “artificial intelligence” or “tech” or “SQL’ - they just shit themselves.
[34:45 LF] If you go on to the website of any Venture Capital firm, they usually have a little tab that says portfolio, look at every single company they've invested in, it will 100% be tech companies, they don't invest in anything other than tech at this point.
[35:19 LF] But at the same time we aren't necessarily looking for Venture Capital firms because we know it would be very difficult to get in with them, we’re looking a lot more for angel investors. Just being able to put ourselves in those circles is a challenge. That's what we're working on right now. In Denver the climate is so much different than it would be in Silicon Valley, or New York, in Denver all the investors, especially angel investors …
[35:47 LF] are going to be in Boulder, they’re going to be in Aspen, so starting to get ourselves a bit more acquainted with those types of circles. Most Angel Investors invest in people they like. Of course they want to make a profit, but they want to know, it’s a very almost Chinese way of doing business. When you do business in China they want to know everything about you, they want to know about your family, they want to know you before they will ever even consider doing business with you.
With Angel Investing it's the same. So I guess I would say that's our strategy is on the investment side but also with that we're getting our pitch completely together. Danielle this week is doing a lot of pitches so that's fantastic. And then on the other side it's getting our online platform together which is something that's much more realistically going to be happening in the near future.
[36:25 Host] I can imagine with the online platform is a good way to get exposure to all sizes of company as well.
[36:34 LF] Exactly, it's a really good way.
[36:37 LF] I want to ask more about you and the podcast, I know it's about me, I want to ask you what’s up?!
[37:06 Host] Before I went to China and I was working for French company in the UK called Bouygues.
They’re a big Construction Company. So I was brought on to do their Environmental Management System stuff like 14001 and do site support, covering Waste Management noise and pollution and permits and all that side of things, as well training and all that. Then I went off to China, after China I went to Qatar, doing project Environmental Management stuff and now I'm in Jordan doing corporate level EMS and 14001 stuff, which is great because they have projects all over. I'll be going to Kuwait tomorrow for a week and then India after that and then Saudi after that. God knows wherever else after that so it's going to be pretty busy.
[38:21 Host] Okay so Laura you mentioned that you had to change your strategy to reach your overall Grand Vision. Has there been anything else along the way that has been a massive obstacle that if you couldn't break it through, it was going to be game over for you guys?
[38:40 LF] Well it's funny because we formed the company back in 2010-2011 I can’t remember exactly right now. But we dissolved it in 2014 just because the original board of directors we had, a lot of the people, it was nothing against them they just moved on, they had different lives and we're like oh my God to do this share redistribution is going to be such a pain in the ass - lets just dissolve it. We weren’t making a profit then we’d just started operations. So we already dissolved the company once, we could just do it again!
[39:35 LF] Investors is a huge thing, we have to get that Capital to buy that first business or else the private-equity initiative just won't happen. We have to get the capital. I mean the make-or-break in any business is always money. I've said many times her and I worked different jobs while doing this that's why I always tell people if you're starting a business make sure you already have a job because you might be putting all that businesses money into reserves, or into operations, or into growing the business. Especially the very beginning it's probably not going to be going to your salary!
Money is the make-or-break but then I should say on the other side that burn out and exhaustion is also the other break. You see it all the time for entrepreneurs in this culture. When you're working 12-hour days, more than that honestly a lot of time, it becomes a part of you, when I was working my other job in corporate finance I really didn't give a shit. I can see the company's stock with tumbling, I didn't have any stock in the company, they didn't give me stock options, that was just the high up guys and they weren't that nice I wasn't too sad on it honestly.
[40:56 LF] Companies need to make their culture in such a way so that the employees care about it. When you're an entrepreneur it's just so connected to your soul. I don't want to say it’s a child because that’s a little bit too intense. It is like something you’ve birthed, it’s something that’s come out of you, it's our child that we created together, we always joke about that.
[40:48 LF] Our Business Partnership is like a marriage in its own way. When you have a business partner that you see more often than you see your own spouse, it becomes a sort of marriage, the company is the child that you created together, and you're trying to deal with this whole horrific screaming bastard child.
[42:06 LF] Having burnout and exhaustion that comes along with it is difficult. Not everyone is meant to be an entrepreneur, even me, Danielle has more of an entrepreneur personality then I do. I'm going to give her the highest compliment you can give an entrepreneur, which is that she's a hustler. I don't mean that she steals things, she grew up a really poor, she had a difficult childhood, she just has that personality, that grit, so she’ll get it done and sometimes with being an entrepreneur you can have as many certifications, as much education as you need, but if you're not that person with the grit to just go out and do it and get those sales, that’s the make or break it with being an entrepreneur - 100%. You see a lot of people who have all these accomplishments in Academia, and they know so much, but they would not make it as an entrepreneur.
[43:05 LF] I have more of the burnout I think than Danielle does, she just does not give up. That's why when we were picking out roles for ourselves I gave her the role of CEO. She kept this freaking thing alive, I'll be the chief development officer. What do the roles mean? It means that we both get a lot of shit done.
The make or break it for so many entrepreneurs is burnout and exhaustion, one of our clients was a business called Impact Founder, which was started literally as a way of creating a community of entrepreneurs. A lot of entrepreneurs or founders are committing suicide because they feel that is their only way out of their obligation. It sounds intense but it's actually very true, you see lot of very suicidal high up founders.
That’s just the burnout, that's just the exhaustion, that’s seeing something you love so much dying in front of you. Having a community is really important. For us, it’s money and it's burn out. Those are the two hurdles that could really mean game over.
[44:15 Host] You mentioned that you already dissolved once, you’re a bit further along now, so what would happen if Sovenco started to fail now?
[44:26 LF] We would obviously finish up with the clients we have, we wouldn't leave them in the lurch.
We would burn it all! Just burn it, have a bonfire dance around it while playing the Irish flute.
[44:47 LF] We’d start a cult, not Jonestown, but something like that. If it did fail, we would move on. The Grand Vision would be gone, I said earlier we have come to a point where we know we could start another business. We could maybe start one that's easier than this one! We talked with so many other entrepreneurs, there's this idea that success comes over night. So many successful entrepreneurs have started five businesses before they get to the one that's really successful, or the one that takes off. We talked about what we would do if we needed to dissolve Sovenco, because it does take so much time and personal effort, perhaps we need to be investing our efforts in something that takes less time.
[45:50 LF] If Sovenco failed it really wouldn't break us, Danielle has always wanted a career in politics so maybe she’d pursue that more but Danielle has always felt like she's wants to help disadvantaged youth. When I talk about Sovenco being a social Enterprise, I would not consider us to be a Social Enterprise because of course our job, our vision is to promote social entrepreneurship in businesses and sustainability.
[46:25 LF] In our own business we have sustainable practices, but we don't have that direct impact right now. We want to have a program to take on young people who have come right out of high school, who maybe aren't on the path for college, teach them management consulting, some of the business basics, accounting and stuff, so they can get some business skills.
So they aren't stuck in a service level job. Danielle knows what it's like to be abandoned by the system, and have people think that she's not going to go anywhere. What I want to do is start an animal shelter associated with Sovenco. So we both have countering visions of what we would want the social enterprise mission of Sovenco to be.
Perhaps we could accomplish both, but if Sovenco does fail I think both of us would probably be working a lot more towards those visions. To answer your question it would not break us. I was not even joking about the Cult, we have talked about buying land and setting up like a little Happy Village. It sounds bad because then you think of the Jonestown family which sounds disturbing, but ours would not be disturbing…
[47:38 Host] I think if you call it a Sustainable Community it's okay. It's when you start calling it a commune, I think that's when a line has been crossed!
[47:45 LF] It's a sliding slope and I could see it going down, because you know at first we're creating our values, then we’re creating rules people have to follow, then we're creating an ideology, and then people aren't allowed to leave!
[48:15 Host] Is there’s any key advice that you would give to anyone who is looking to Startup what would it be?
[48:14 LF] I've said this so much throughout when we've been talking, my biggest piece of advice is to have a job while you're starting. Unless you have a non-compete with the current company. It just makes it a million times easier if you can keep on investing money back into the business, and not worry about how you're going to pay the rent. So many entrepreneurs live with their parents, for me that's not an option, that’s not going to happen!
[48:46 LF] Far more Baby Boomers start businesses actually than young people in their twenties. It's probably kind of what we talked about the difference between start-up culture and new businesses. They’re probably starting more new businesses but you don't hear about them a lot, they're starting it because they have retirement at that point, they’re set, they know they can afford it. Whereas the number of young entrepreneurs is actually going down, and that's because of student debt, that’s because young people can't afford to be entrepreneurs anymore.
[49:33 LF] That's why I say having a job while you start this is a really huge part of your success. If you can do it! In terms of other advice, be passionate about what you do. Have fun and realize that sometimes what you're doing isn't going to manifest itself the way you imagined.
A lot of times female entrepreneurs; if they fail once that's it, they're done and they don’t try again. Whereas male entrepreneurs they’ll fail once and move on to the next thing. So I would say, if you feel like it’s your destiny to start up a business, don't give up. Definitely do it strategically because there have been plenty of stories were people have been financially eviscerated by starting a business, and I use that word eviscerated.
[50:33 Host] That's serious.
[LF] If you think about your financial future and you're pouring money in to the business, and it fails, that’s not to say don’t have courage, and try something, that's just to say that I know have a job, be strategic about it take care of yourself.
I'm getting really into the world of sustainability investing. I'm hugely into IRA’s. In the United States our generation is not going to be taken care of by the government. So you have to save up before retirement, even starting in your 20s!
[51:11 LF] So I don't want to see a young person be completely destroyed and maybe mess up their future because they tried to start a business. That's why I say have a job and do it strategically. There will come a Tipping Point where you can quit your job, or do something else. Have courage and have grit, and realize that it's not going to happen right away. Danielle and I first had this idea back in 2010, it’s been seven years. In the meantime she's got her MBA, I've lived in China for 2 years, life just happens, it's not going to be a normal path.
[51:48 Host] Is it is there anything else you want to add that you think we might have missed? I think you’ve given a lot of good advice.
[52:03] You’re an environmental professional and there's so much to talk about sustainability, sustainability metrics, corporate social responsibility and all that sort of stuff. The thing is, no amount of sustainability metrics or reporting or any of that can really compare to these businesses that I'm working with.
They have a passion for helping certain people, of course they'll do all the sustainability stuff but it’s where you really see the passion. For example there's a business that I know, Spring Back Colorado, and they hire former prisoners to work with them. The owners’ idea is that the best gift you can give anyone is a job. He says that over and over. I really like that because I feel like we just live in this world of Facebook activism, you press the ‘like’, you sign a petition, and I'm just as guilty about it as anyone else, and I'm also someone who …
[53:04 LF] is always bringing myself up to date on all the issues of the world. Oh God global warming happening! Oh God female genital mutilation is happening! Oh God there's an animal in need somewhere! All these things are happening but it just becomes so unbelievably overwhelming.
I get into that sort of mindset, it's important to spread that activism, but to me it's nowhere as powerful as actually doing something directly about it. Whether it's hiring from a specific population, or building up a strategic connection with an animal shelter, whatever your businesses is. I think that's what really inspired Danielle and I to start the business. Because we're so tired of all the bullshit.
As much as I love celebrities, they'll go on TV and say “oh god the refugees and it’s awful”. It's good they're spreading the word, but I want to ask them: “Have you opened your house up to refugees? What are you doing directly about it?”
[54:04 Host] I'm raising awareness.
[54:18 LF] It's annoying after a while. It's good to raise awareness, but that's what I love about business, and the power of business. Profitable companies as opposed to non-profits, just the power they have to make a direct difference because of the money they have and that’s why I like
[54:48 LF] our original idea to become this behemoth holding company. Simply because when you are bigger you have more power to affect direct change. I think we need a lot of companies to be doing that. To an extent we have seen it, Ikea is starting to create shelters for refugees in Patagonia. I think I would say to young people who are
[55:16 LF] in sustainability and social enterprise, even in your own life, focus on doing something very direct and very local. For me it’s helping with animals. I can talk as much as I want about the Yulin Dog Festival and it breaks my heart.
I can also go and volunteer at the Rocky Mountain feline rescue center here in Denver and actually do something directly for them, rather than going on and on about activism. That to me is the biggest thing a business can do, having a direct impact rather than just constantly raising awareness. I'm tired of it honestly, I want more people to make a direct impact.
We're completely aware of a lot of the issues in the world, you know the situation with refugees, we really encourage a lot of our businesses, especially the smaller ones to be more vocal just because it is more direct.
We go on and on in Denver about what's happening with refugees when we have a massive homeless population who we see freezing on street corners. Maybe we should take care of that directly, right now. We encourage that a lot in our business and it's not to say that you can't do stuff internationally, but a lot of time you get a lot more satisfaction and help the community when you are doing something directly.
[56:50 LF] I feel like that sounds kind of cruel, saying it like that “stop giving a shit about what's going on abroad, just care about what's going on around you” - it's not that - it's just about doing something very direct.
[56:56 Host] Think global act local!
[56:58] I know a lot of time people say “take care of your own house first”. That sounds kind of cruel but there is some truth to it. If you are having problems locally, you need to open your eyes to that.
I did want to say in terms of advice to starting a business; having a great business partner has made all the difference so if you can if you find someone from University or from your own environment, your work, someone who you think would be a great business partner, that definitely takes a lot of stress and the load off, having someone to bounce ideas off. When I'm having a down day my partner can pick up the slack and vice versa. Danielle’s been helping me a lot because I've been doing so much stuff with US immigration, she's had to pick up the slack.
[58:00 Host / LF] Closing remarks and thanks
[1:03:27] Music.
[1:03:43 LF] I’ve never been called whore so many times in my life just walking down the street
[1:03:52 Host] Cancer is so not in my vibrational Spectrum right now! I was thinking, what the Fuck does that mean?! Nice! You're safe, you’re not going to get cancer because it's not in your vibrational Spectrum. Good luck with that!
Tags
#startup #socialenterprise #Environmental #sustainability #entrepreneur
2017, Steven Spencer
Environmental Professionals Postulating
http://www.epppodcast.com/
