Linda Rottenberg: Crazy is a Compliment [Entire Talk]

TL;DR

Back yourself before expecting anyone else to support your venture, then choose action over excessive planning. Linda Rottenberg argues that founders pursuing contrarian ideas should expect misunderstanding and criticism, regard being called crazy as evidence that they may be thinking boldly, and seek networks that provide talent, capital, mentorship, and credible role models.

Transcript

Take it away Linda. Thank you. In the spring of 1998, I walked into an unassuming room and an unnamed neighborhood of Buenos Aires. I was there to meet Wences Casares, a 24-year-old charismatic son of a sheep farmer from Patagonia, who now had the improbable idea of creating the e-trade of Latin America. When I walked out of that office I was carry... Read More

Key Insights

• Self-belief is the first essential source of backing for a new venture. Wences Casares faced dwindling cash, rejection from 32 local investors, and responsibility for two sisters who had left college, yet he continued building the financial services portal patagon.com.
• Being misunderstood is often the first consequence of challenging the status quo. Rottenberg’s proposal to identify and support emerging-market entrepreneurs received little encouragement from friends, economic development contacts, Wall Street connections, or foundations because the model did not fit familiar expectations.
• Hope can guide founders through the conflict between security and uncertainty. Rottenberg rejected the safe professional path preferred by her risk-averse family because she believed building Endeavor reflected who she was and what she was supposed to do.
• Bold requests can convert skepticism into commitment. When Eduardo Elsztain called Rottenberg crazy after she requested his time, passion, and $200,000, she defended the request by recalling his own ambitious pitch to George Soros, and Elsztain wrote the check and became Endeavor Argentina’s chairman.
• Being called crazy can indicate that an idea is sufficiently ambitious. Rottenberg treats the label as a compliment because unconventional founders must give themselves permission to think differently and prepare for criticism from people who do not share their vision.
• Action can matter more than extensive preliminary planning. Endeavor’s founders wrote their plan on a napkin, and two-thirds of the Endeavor entrepreneurs discussed by Rottenberg did not create a business plan, supporting her advice to stop planning and start doing.
• High-impact entrepreneurs combine ambitious ideas with growth and influence. Endeavor screens thousands of candidates for businesses that can scale, create impact, and inspire others, then puts candidates through a year-long process before providing access to resources such as talent and capital.
• Successful entrepreneurs can strengthen an entire ecosystem by becoming mentors and role models. After patagon.com sold to Banco Santander for $750 million, Wences joined Endeavor’s board and mentored entrepreneurs, giving young people across Latin America an example that made entrepreneurial success feel possible.

Questions & Answers

Q: How can entrepreneurs build confidence when nobody supports their idea?

Entrepreneurs can begin by recognizing that their own commitment is the first backing a venture needs. Wences Casares kept building patagon.com after 32 local investors rejected him, his cash was running low, and his sisters were sleeping on a couch in their shared apartment. Rottenberg’s lesson is that founders must first persuade themselves to continue through uncertainty before expecting parents, spouses, bosses, bankers, or friends to believe.

Q: Why are unconventional business ideas often misunderstood at first?

Unconventional ideas are often misunderstood because they challenge assumptions held by people who follow the existing system. Rottenberg found little support when she proposed an organization for emerging-market entrepreneurs, receiving rejection letters from foundations and confusion from contacts in economic development and Wall Street. She concluded that people aligned with the status quo will not necessarily understand or welcome a vision designed to change it.

Q: What does “crazy is a compliment” mean for entrepreneurs?

The phrase means that being called crazy can signal that a founder is thinking beyond accepted limits. Eduardo Elsztain used that description after Rottenberg requested his time, passion, and $200,000. She responded confidently, noting that he had once asked George Soros to support his own ambitious idea. Elsztain then wrote the check and became chairman of Endeavor Argentina, turning his initial skepticism into commitment.

Q: How did Linda Rottenberg decide to create Endeavor?

Rottenberg developed the idea after moving to Latin America and becoming interested in entrepreneurship. A conversation with a taxi driver who had an engineering degree but could find only driving work showed her that local barriers extended beyond scarce startup capital. The driver did not recognize a distinct word for an innovative person starting something independently. She envisioned an organization that would find dreamers, help their businesses scale, and build a global innovation network.

Q: What support does Endeavor provide to selected entrepreneurs?

Endeavor screens entrepreneurs for ambitious ideas, the potential to build growing companies, meaningful impact, and the ability to inspire others. Candidates go through a year-long screening process. Those selected receive services that include access to talent and capital. For Wences Casares, Endeavor found a chief operating officer, introduced venture capitalists, and arranged help from a Stanford Business School student who worked on an expansion plan.

Q: Why does Linda Rottenberg advise founders to stop planning and start doing?

Rottenberg argues that extensive planning is not a prerequisite for entrepreneurial action. Endeavor’s initial business plan was drafted on a napkin at her parents’ kitchen table, while Intel’s plan contained 161 words and spelling mistakes. She also states that two-thirds of Endeavor entrepreneurs did not create a business plan and that Wences Casares built without one. These examples support beginning with action instead of waiting for a lengthy document.

Q: How should entrepreneurs handle pressure to choose a safer career?

Entrepreneurs should identify whether the safer path reflects their own goals or the expectations of others. Rottenberg attended law school and passed the bar exam, but she realized that she did not want to become a lawyer. Her parents preferred stability and urged her toward a conventional career and family life. At the decisive kitchen-table moment, she chose hope over fear and committed to the work she believed expressed who she was.

Q: How do successful founders inspire future entrepreneurs?

Successful founders can become visible proof that ambitious ventures are possible, then multiply their impact through mentoring. After Wences Casares sold patagon.com to Banco Santander for $750 million, Endeavor helped position him as a role model and mentor. He later joined Rottenberg’s board and supported entrepreneurs in Latin America and elsewhere. His example allowed young people from Patagonia to Mexico to imagine that they could succeed too.

Summary

In this video, Linda Rottenberg, the co-founder of Endeavor, shares her experiences supporting entrepreneurs around the world. She talks about the importance of self-belief and the challenges faced by entrepreneurs, especially in emerging markets. Rottenberg also discusses the key lessons she has learned through her work and offers insights into the mindset and characteristics of successful entrepreneurs.

Questions & Answers

Q: What was the most important lesson Linda Rottenberg learned from her meeting with Wences Casares?

The most important backer anyone needs to start a venture is themselves. Rottenberg learned this lesson from Casares, who convinced his two sisters to drop out of college with him and faced many struggles before selling his company for $750 million.

Q: How does Endeavor support entrepreneurs?

Endeavor is an organization that focuses on the scale up phase of entrepreneurship. They screen thousands of entrepreneurs every year, looking for high impact individuals with big ideas and potential for growth. Once selected as Endeavor entrepreneurs, they receive a suite of services including access to talent and capital.

Q: Can you give an example of a successful Endeavor entrepreneur?

One example is Leila Velez, who started a business to provide products for the curly haired Afro-Brazilian population. With support from Endeavor, her business, Beleza Natural, now generates over $80 million in revenue and employs over 2,300 women.

Q: How does Linda Rottenberg view entrepreneurship in different cultures?

Rottenberg believes that entrepreneurship is a global phenomenon and that entrepreneurs everywhere have a desire to make a positive impact and create jobs. While there are cultural differences, she sees more commonalities than differences among entrepreneurs.

Q: How does Endeavor deal with the issue of equity for employees in different parts of the world?

Endeavor educates the investor and business community in each country about the importance of giving equity to employees. While there may be initial resistance, many entrepreneurs in Endeavor's network have become role models for giving equity to their employees.

Q: How has Endeavor's business model changed over time?

Initially, Endeavor focused on being a neutral provider of support and did not invest directly in companies. However, they have now created Endeavor Catalyst, a co-investment fund that allows them to passively invest in their entrepreneurs alongside other qualified institutional investors.

Q: How does Endeavor find the right entrepreneurs for their program?

Endeavor has offices in 20 countries and spends a lot of time locally, working with top business leaders in each country. They rely on these leaders to identify and recommend high-impact entrepreneurs for the program.

Q: What are some of the challenges faced by entrepreneurs in emerging markets?

In addition to the lack of access to capital and resources, entrepreneurs in emerging markets often face cultural barriers and a lack of trust in entrepreneurship as a viable career path. Rottenberg emphasizes the importance of role models and mentorship in overcoming these challenges.

Q: What are some important characteristics of successful entrepreneurs?

Successful entrepreneurs come in different types and have different strengths. Some may be focused on branding, metrics, innovation, or impact. The key is to know your strengths and surround yourself with a team that can complement those strengths.

Q: What are some areas of research that Linda Rottenberg believes should be explored?

Rottenberg believes that there should be more research on the scale up phase of entrepreneurship, as well as on the intangible factors such as role models, mentorship, and the psychology of entrepreneurship. She also suggests studying the impact of giving equity to employees on motivation and success.

Takeaways

Entrepreneurship requires self-belief and the willingness to take risks. Successful entrepreneurs focus on pain points, not just PowerPoint presentations. They stop planning and start doing. They minimize risks and build strong teams. Trust, mentorship, and access to talent are crucial for success. Entrepreneurship is a global phenomenon and has the potential to solve social problems and transform economies.

Summary & Key Takeaways

• Linda Rottenberg’s entrepreneurial journey began when she questioned the safe legal career expected of her and moved to Latin America. Conversations there revealed that aspiring innovators lacked capital, support, and even a commonly understood word for entrepreneur, inspiring her vision for an organization focused on emerging-market founders.

• Rottenberg and Peter Kellner developed Endeavor’s initial plan on a napkin despite doubts from family, friends, foundations, and economic development contacts. She concluded that doing something different often begins with being misunderstood because people invested in the status quo are unlikely to embrace an unfamiliar vision immediately.

• Endeavor identifies high-impact entrepreneurs with ambitious ideas, growth potential, and the capacity to inspire others. After a year-long screening process, selected founders receive help accessing talent and capital. Rottenberg’s broader message is to back yourself, tolerate criticism, think boldly, and replace excessive planning with purposeful action.