Guy Raz of How I Built This on start-ups in a downturn : The Indicator from Planet Money Since the pandemic started, nearly 100,000 businesses have closed permanently. Opening a business now might seem crazy. But downturn start-ups have some advantages.
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Downturn Start-Ups: A Conversation With Guy Raz

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Downturn Start-Ups: A Conversation With Guy Raz

Downturn Start-Ups: A Conversation With Guy Raz

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This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.

The last six months have been incredibly hard on businesses. Nearly 100,000 businesses in the U.S. have closed their doors since March. Actually starting a business right now seems kind of crazy, but some people say this could actually be a good time to start a business.

Today on the show, we talk with Guy Raz. He's host of the podcast How I Built This, and he has a new book out called "How I Built This." After the break, we talk with Guy about entrepreneurship, resilience and why now might actually be a good time to start something new.


VANEK SMITH: Guy Raz, welcome. Thank you for talking with me today.

GUY RAZ, BYLINE: Thank you.

VANEK SMITH: So this book is really interesting because in a lot of ways, it is like a how-to guide for people who are wanting to start businesses or to grow the business they have started.

RAZ: Exactly. You know, I have never been into business books, in part because they were impenetrable to me. You know, they were full of weighty...

VANEK SMITH: Oh, yeah, weird jargon.

RAZ: ...Theoretical ideas, which are really powerful but didn't always speak to me. And so I really wanted to create a business book that was told through stories. For example, how do you come up with an idea? Where do good ideas come from? It kind of starts with the story of Lisa Price and her product, which became Carol's Daughter, which went on to sell to a large cosmetics and beauty company for many millions of dollars years later.

Well, the idea came to her because she had a problem. And her problem was that, as a Black woman, she didn't feel like skin care products were made for her. She felt like they were made for whiter skin and lighter shades of skin. And she wanted products that really spoke to her and her community of women. And so that's how she started to mix shea butters and jojoba oils and essential oils in her kitchen and packaged them in baby food jars and start to hand them out to friends who would then say, this stuff is amazing. You should sell at the church flea market. And then eventually she became this huge brand.

Well, the way she got that idea was very simple. She had a problem, and she wanted to solve it. And that is the essence of a business. There's a problem. Can I solve it? And does this solve a problem for other people too? And if the answer is yes, you've got a business.

VANEK SMITH: You talk in the book about how you see personally the journey of an entrepreneur as something that is known as a hero's journey.

RAZ: Yeah. It really came out of my love for Joseph Campbell. I think a lot of people, especially in college, get into him because you take a humanities course and you really take a deep dive into, like, "The Iliad" or "The Odyssey."

VANEK SMITH: Or you just love "Star Wars."

RAZ: Or you love "Star Wars," right. And you learn about this guy Joseph Campbell who essentially showed how all epics follow similar - a similar narrative arc. You know, there's a hero. She has to leave the village to fulfill her dream. And, you know, she'll run into a dragon. And she'll find a mentor. And the mentor will die. And she will be lost. And then she will slay the dragon and fulfill her dream, and then return to the village and triumph. And that is, metaphorically speaking, what virtually every founder I have had on the show has gone through.

VANEK SMITH: It does seem really different from starting, like, an HVAC company, I have to say.

RAZ: Yeah. It does and it doesn't because look. Even starting an HVAC company is about taking a risk. You know, it's about putting yourself out there and having no real safety net. Maybe you're borrowing money from friends or family or the bank. You know, you've got sleepless nights. You've got to make payroll.

VANEK SMITH: Dragons to slay.

RAZ: Dragons to slay. And, you know, you think about a story - the story of Stacy Brown. Stacy Brown started a company called Chicken Salad Chick. It's one of the fastest growing fast casual food restaurants in the South. And not surprisingly, they sell chicken salad. Well, her husband left. She was a single mom with three children - a 6-year-old, a 4-year-old and a 2-year-old - with no money. And she had not worked after college because she was raising the children.

So to make extra money, she started to make chicken salad and sell it at her church and door to door until a friend said to her, hey, you should sell this at a restaurant. I'll give you a little seed money and get a brick-and-mortar place. And she found a place. They launched the business and were shut down. They got some more investors involved who tried to take the business away from them. There's triumph. There's incredible loss, incredible sorrow, but also incredible wins and victories all in that single story, the life story of Stacy Brown, who founded this incredible business that's now, you know, valued at over a hundred million dollars. Nobody who knows that story would doubt that that's not a hero's journey.

VANEK SMITH: Your book is coming out into the world at a time of incredible hardship. I mean, it seems like a really hard climate.

RAZ: It seems totally nuts, right? I mean, here's the sort of counterintuitive and very interesting idea. If you look at some of the most successful and now resilient companies - Slack, Betterment the investment company, Microsoft, FedEx - these are all businesses that were founded either in the middle of financial crises or depressions. Hewlett-Packard was founded in 1936. I mean, that's the business that invented Silicon Valley. Who would have thought that 1936 was a good time to start a business, right?

When you're starting a business in the midst of a pandemic, it forces you to be efficient with your money, really focused. It forces you to be radical in how you put your ideas out into the world because this is a moment of crisis. I actually believe that if you start a business, when we emerge from this moment - which we will - you will be in a much stronger position to build a resilient business for the future because if you can withstand this, you'll be able to withstand anything.

VANEK SMITH: Guy, you've talked to some of the most successful entrepreneurs in the world. I'm wondering, for people who might be starting businesses or trying to or have a new business that's maybe struggling right now, what advice would you offer people?

RAZ: I would say that the most - and this is so - I believe in us so firmly and it's so - it's going to sound like a New Age message, like I'm trying to channel Tony Robbins. But I really believe in this.

VANEK SMITH: Bring it. Let's walk over the hot coals together, Guy.

RAZ: Let's walk over the hot coals. The most valuable asset you have is you. It is you. Like, imagine if you actually had a bunch of assets, a bunch of passive income from properties. And one day you look up at the sky and there's a firestorm, and all of your assets are about to burn. Are you going to stay there with your assets? Are you going to run and protect the most important asset, which is you? You're going to run and protect yourself. And it's not easy to remember that.

I have many days where I feel like, what are you doing? What are you thinking? Like, you can't do this. And I work really hard to remind myself that I am my most important - the most important asset I have is me - obviously, my family too, my wife and my children - but in terms of being able to do what I want to do. And it takes a lot of work to remind myself of that.

Anybody who wants to start something, you have to begin by really believing in yourself. And it's not easy. It's not magic. It doesn't come from nowhere. It comes from hard work. You have to start to get comfortable with rejection. You have to start to get comfortable with fear and even some risk. It doesn't mean you jump out of an airplane with no parachute, but it means that maybe you can hear somebody say no or that's a dumb idea and you can keep going and keep pushing forward. It's hard work. It's really hard, but it's a choice you can make, and with practice, you can actually get pretty good at it.


VANEK SMITH: Guy Raz, thank you so much for talking with me. It's been such a pleasure.

RAZ: Stacey, thank you so much for having me. It's always a pleasure talking with you.

VANEK SMITH: Guy Raz is the author of the new book "How I Built This." This episode of THE INDICATOR was produced by Darian Woods and Jamila Huxtable. THE INDICATOR is edited by Paddy Hirsch and is a production of NPR.

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