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For today’s episode, Steve McGarry had a chat with Melissa Kaufman, the Founding Executive Director of The Garage at Northwestern. They talked about how The Garage is molding students to become entrepreneurs. Melissa also shared some initial findings on their research on accomplished entrepreneurs’ personalities and traits.
A Brief Backstory
Melissa considered The Garage as the “happiest accident” of her career. But before that, she spent her first two years out of school in New York City, operating at IBM as a strategy consultant. Melissa realized that she was positioned in the wrong place. And after years of research and soul-searching, she worked on Google for five years, managing business development partnerships.
Following product managers, building other people’s companies no longer urged her to continue. It has induced her to start her own company, which became one of the first influential marketing agencies specializing in Pinterest and Instagram. It grew for years until she shut down the corporation.
While she was at Chicago considering having consulted or taken some time off, the Northwestern recruited her for The Garage. At that point, Melissa didn’t know what that was, but she knew she loved working with students.
Entrepreneurial Experience
Since Melissa has always been interested in entrepreneurship, she strived this is an opportunity to build something new from the ground while approaching it like a startup. Melissa thought she would rather be a mentor or intent for a position with a similar nature. But they recruited her to be the founding executive director and build a program for them.
The Garage aimed to understand the Northwestern students, including what resources they need to contemplate in order to offer a truly entrepreneurial experience. This included doing various research on entrepreneurs while working with the young and talented, enabling them to visualize from a unique perspective.
Teaching the fundamentals of entrepreneurship and not running a business comes with controversies. Leaving a job and starting a company would let you come across high risks and emotional journeys. That is why Melissa thought it is essential to manage financial attributions and business management first before encouraging others.
Characteristics Of A Good Entrepreneur
There are specific characteristics that make an entrepreneur excellent. But as for Melissa, entrepreneurship is an activity and not an identity considering there’s a lot of pressure in the media to be an entrepreneur. This idea from Australian entrepreneur Sam Prince has been her guiding principle in the last five years as she built the Garage entrepreneurship program.
Gaining an entrepreneurial mindset and skill set allows the students to be successful in various yet versatile roles. And according to Melissa, if an individual is a creative problem solver who can deal with the ambiguity, it makes the person a better doctor, lawyer, accountant, or any other profession that the students might.
Melissa shared that most of the students they worked with at The Garage did not become entrepreneurs after graduation. Some students work for a more traditional job, then leave that job to start a company. Usually, 90% of the students will take a job after graduation, and it takes at least five years before they start their own company. The entrepreneurship mindset and skills that they learned at the Garage allow them to succeed in many roles.
So much information is available on the Web nowadays; hence, The Garage allows students to work on an idea they are passionate about. Melissa explained that they let their students figure out whether their idea is good or bad because it is part of the journey. Learning that their vision is terrible is as valuable as knowing that is a great idea. Both realizations offer them insights.
Embracing Failure
The Garage is unconventional because it does not look like a classroom or an academic institution. Melissa explained that they aimed to give students an entrepreneurship experience while they are in school. The atmosphere is more like work. And one of the components of being an entrepreneur is dealing with failures.
Most of the participants at The Garage are risk-takers who hate to fail. They feel uncomfortable with the idea of failure. If they could not do something, they would easily give up on it. At The Garage, students are deprogrammed to realize that entrepreneurship is dealing with ambiguity and that failure is part of learning and starting a new venture.
They have established an environment different from the traditional setup to make the students feel comfortable and creative. Weekly dinners and quarantine periods are being held to share the students’ entrepreneurial journey. Melissa mentioned that most things they often discuss are successful programs until some are brave enough to share a failure story. They will talk about what they crashed at and then what they learned from it.
It was more like a community of their own ingrained, having cultural touch points that would encourage individuals to achieve the character they wanted to be. If no one is failing, it concludes that nobody has been doing anything. Finally, narratives about struggles have become reserved over time, leading to students embrace unsuccessful attempts.
Understanding Entrepreneurs’ Personality And Traits
Melissa and a clinical psychology professor are trying to understand accomplished entrepreneurs’ personalities and traits. They are using the tool called Hogan Leadership Forecast Series on their students and accomplished entrepreneurs. They hope to discover the similarities between accomplished entrepreneurs and the general population.
Initial findings showed that, on average, accomplished entrepreneurs have a low score on prudence. Prudence is usually associated with following the rules and orders. But accomplished entrepreneurs score low on this personality, which speaks about their willingness to break the rules and take a significant risk. Some are serial entrepreneurs, some of taking companies public or have a significant exit to an acquiring company.
Melissa encouraged everyone to seek a mentor to help them out, especially if the listeners are entrepreneur investors. As for her, it’s incredibly fulfilling to pass on some of your wisdom and hard-earned lessons from living a well-lived life.
PODCAST TRANSCRIPT
Steve McGarry:
Hello, and welcome to The Exit presented by Flippa. I’m your co-host Steve McGarry. This is a 30 minute podcast where we sit down with expert entrepreneurs that have been there and done it. They have gone through and bought businesses, they’ve sold businesses, and they have operated incredible businesses on a day-to-day basis. We get some awesome tricks and tips from them on a regular basis. On this episode, I sit down with Melissa Kaufman, the co-founder of The Garage. But before we dive into this episode, definitely be sure to check the previous episode out with my interview with Shakil Prasla, the founder of SZ Ventures. If you haven’t had a chance to check that out, definitely check the show notes as well as any links around where you’re listening to this on Spotify, SoundCloud, YouTube, or iTunes. Definitely check out the links in the descriptions.
So for today’s episode, I sit down with Melissa Kaufman, the co-founder of The Garage at Northwestern. One thing that you’re going to want to stick around for in this interview is she talks a lot about their study. They’ve been doing this incredible research on entrepreneurs and some of the specific characteristics that they have early on in college. There are some doozies in here that you were definitely going to want to stick around for. So without further ado, let’s dive into my interview with Melissa. What is up everyone? I am here with Melissa Kaufman, the founding executive director of The Garage at Northwestern. How are you doing today, Melissa?
Melissa Kaufman:
I’m great. How are you, Steve?
Steve McGarry:
I’m doing great. Thanks so much for coming on.
Melissa Kaufman:
My pleasure. Thanks for having me.
Steve McGarry:
So let’s dive into the nitty-gritty here. Let’s figure out your story. Let’s hear your background as to what led you into starting The Garage at Northwestern.
Melissa Kaufman:
Yeah, so The Garage has been probably the happiest accident of my career. So I spent the first two years out of school in New York city, working at IBM as a strategy consultant. I loved in New York, I hated being a consultant and quickly realized I was in the wrong place. So after a lot of soul searching and research, I was lucky enough to get a job at Google as an associate product marketing manager, a PMM. I was the second year of that program ever.
I spent five years at Google, half of it in mountain view at the headquarters and half of it at YouTube after we acquired them, working on business development partnerships. I then being in San Francisco and Silicon Valley kind of was drawn to working at startups. Because you hear about these startups and how great they are. The first company I worked for is called Luvocracy, so I started following… Sorry it was Polyvore. I started following product managers. So first I worked for Polyvore then I worked for a company called Luvocracy. One was in fashion, one was in social shopping. At that point, I was sick of building other people’s companies. I started my own company, which was one of the first influencer marketing agencies that specialized in Pinterest and Instagram. So I’d seen teenagers in their bedrooms at YouTube a massive huge followings, and the same thing was happening again on Pinterest and Instagram.
Steve McGarry:
Nice, nice.
Melissa Kaufman:
That’s the first part of the story. Then, so that was all out in the Bay Area. Then I met my now husband who was going to Chicago for one year for a fellowship program. So I came to Chicago thinking that I would just do a little consulting or take some time off because I was just shutting down my company at that point. Instead I was recruited by Northwestern for something called The Garage. I didn’t know what that was, but I knew that I loved working with students. At first I thought maybe I would just be a mentor or something, but instead they recruited me to be the founding executive director and really build a program for them.
Steve McGarry:
Nice.
Melissa Kaufman:
Yeah.
Steve McGarry:
You just kind of walked in one day and fell in love with the program.
Melissa Kaufman:
Yeah, it was just one of the most serendipitous things. I went to undergrad, but I don’t even have a graduate degree. So I thought like what would I ever be doing or teaching back in academia. But it’s really been an opportunity for me to build what I wish I had had as a college student. I’ve always been interested in entrepreneurship. So this is an opportunity to build something new from the ground up. Also, to come in and, and treat it like a startup. So to understand who our Northwestern students are, undergrads and grads and PhD students, and what resources do they need and really pull everything together in one place. So we could give them a true kind of entrepreneurial experience while they’re students.
Steve McGarry:
Nice. Yeah. I love the fact that you had run a business.
Melissa Kaufman:
Yes.
Steve McGarry:
I think that there are a lot of controversial things around teaching entrepreneurship and, and, and having not run a business. So that’s valuable, that’s extremely valuable just then on its own. Just you having run a business, teaching it to people, that to students is extremely valuable to pick up on that.
Melissa Kaufman:
Yeah. I mean, it’s very scary to leave a job and start a company. Kind of the risks and the emotional journey that you have to go on in order to do that. I think it’s important to have done that before encouraging others.
Steve McGarry:
Yeah. Taking that leap is definitely a big differentiator for sure. One of the really cool things. part of the reason that we wanted to do this episode together is you’ve been doing a lot of research on entrepreneurs and working with the young and up and coming talent. I think that you have a really unique perspective on this and this has been well talked about for many years. What makes a good entrepreneur? If you could give us any sort of knowledge nuggets around what your kind of… I won’t say definition, because there can’t just be one, but what would you say characteristics underlie a really amazing entrepreneur?
Melissa Kaufman:
So I’ll reframe it for you slightly because obviously I’ve spent the last five years, I’ve been building this program thinking about this. I’m going to borrow something from an entrepreneur, an Australian entrepreneur, very successful entrepreneur named Sam Prince. Who he and I over a taco lunch once described, he explained to me that he believed that entrepreneurship is not an identity, it’s an activity. I really liked that. It stuck with me because I think there’s a lot of pressure in the media to like be an entrepreneur, to take that on as an identity. I think that you can be an entrepreneur if you think of it as more of an activity and something that you can do, you can be doing an entrepreneurial activity, but you don’t have to be an entrepreneur. There may be times of your life where you are doing that activity versus other times where you aren’t.
Steve McGarry:
Mm-hmm (affirmative).
Melissa Kaufman:
So that’s kind of the way that I think about it. So if it’s an activity it’s much like a sport like basketball. You could teach anybody the rules of the game and how to play, and that’s kind of the foundation of what we do with The Garage, it’s really about teaching students what is an entrepreneurial skillset. But more importantly, if I’ll continue with my basketball analogy, if you’re going to be an elite athlete in something there’s a, there’s a huge mindset component to that as well. So we really like to talk about… for our students, we’re teaching them not only the skill set of how do you come up with an idea, and validate it, and build an MVP and all of these things, but also the mindset. So how do entrepreneurs think and act differently than other people when they are being an entrepreneur in that entrepreneurial activity?
The vast majority of the students that we work with at The Garage, don’t become entrepreneurs right after graduation. It’s just that’s a huge undertaking. Some of them we found we’ll go to a more traditional job and then leave that job and we’ll start companies. So we’re five years out. We’re starting to see that with some of our young alums, but about 90% of them are going to go take a job right after graduation. I think that having gone through some of our programming, and picking up that entrepreneurial mindset and skillset, it allows them to be successful in lots of different roles. Because I think that fundamentally that if you are a creative problem solver who is gritty and can deal with the ambiguity, that makes you a better doctor, or lawyer, or accountant, or any other profession that our students might pursue.
Steve McGarry:
Got it well said, well said-
Melissa Kaufman:
Thanks.
Steve McGarry:
… [crosstalk 00:08:16]the activity. It’s like the ultimate sport going 24/, 365 days a year.
Melissa Kaufman:
I really had to think there’s so much information on the web these days and podcasts like this one where you can consume a lot of information on how to be an entrepreneur, and how to come up with your pitch deck, and the process and fundraising all of this stuff but if you take it a level… there’s so much more to it that I think you don’t really understand until you’re in it and you’re doing it yourself. So The Garage gives our students the opportunity to work on an idea that they’re really passionate about. My job and my staff’s job is not to help students understand if their ideas are good or bad, that’s kind of, part of the journey. Is like, we want them to figure it out for themselves, are they the only person in the whole world who wants this? Or have they able to find a group of users or customers that want this as, as much as they do?
Steve McGarry:
Mm-hmm (affirmative).
Melissa Kaufman:
I think that learning that your ideas is terrible is almost as valuable as realizing that it’s great.
Steve McGarry:
Yeah.
Melissa Kaufman:
Yeah. For about 10% of our students, Northwestern students are pretty smart and capable. So about 10% of them actually do find product market fit and launch a company immediately following graduation, which I think is crazy, but good for them.
Steve McGarry:
Yeah, yeah. Good for them. So can you walk me through that a little bit? What kind of companies? I guess there’s probably all different walks, of course that are coming out of a good think tank kind of concept like The Garage. But what types of companies are you seeing come out? Any ones that are kind of notable to mention ones that have exited things like that?
Melissa Kaufman:
Yeah. So the first acquisition out of The Garage was a company called Zcruit founded by Ben Weiss. It was a football analytics recruiting software is where it started, like every entrepreneurial journey, not where the product ended. But he worked on it after graduate. He worked out while he was a student at The Garage for about two years. He did all of our programs, including our summer pre-accelerator program, and some of our incubation programs. After graduation, he worked on it full-time for about six months and then it was acquired by a larger company. He’s still there running Zcruit now inside of a larger corporation today.
Steve McGarry:
Nice.
Melissa Kaufman:
There’s some other examples. They’re all over the place. We have one student working on drones with computer vision on them. That was for Inventory Warehouse management.
Steve McGarry:
Oh!
Melissa Kaufman:
I think his project has also pivoted. He’s doing some other things now. He’s raised money. We have had some ed tech companies, some social impact projects. Lots of different things that are out there in the world. No unicorns yet, but with enough time.
Steve McGarry:
Yeah. Yeah. You touched on something, you mentioned gritty. I hear the word grit quite a lot with, in tandem with the activity of entrepreneurship where people are very much able to persevere through whatever may be thrown at them. I think that, that’s one of those unique these unique things that come to the surface through failure. They’re constantly kind of driving through all of these failures, and you’re learning and you’re iterating on yourself as you’re going through it. So from where you sit as someone that’s really guiding these young, these young individuals through this program, how do you see, how do you see that kind of working out? How do people deal with failure while they’re in your program and how do you kind of help them with that?
Melissa Kaufman:
Yeah. So I would say coming into The Garage we have a lot of undergraduate students, a lot of [inaudible 00:12:02] MBA students that participate as well. We have students from all the schools at Northwestern, but particularly those two groups. They come in and they’re super risk averse. So they hate failure. You have to think about it coming to an elite school, you’ve done really well at everything, academics, extracurriculars your whole life. They don’t like the idea of failure and they’re really uncomfortable with it. They’re quick to give up on something. So if they fail then they don’t want to work on that anymore. So there’s kind of some deprogramming that we have to do with them and teach them that if they want to do something that deals with more ambiguity, like entrepreneurship, that failure is part of the learning of starting a new venture.
So we’ve done little things to try to build it into our culture and to… The Garage is it’s a really different place. Your listeners can go online and do a virtual tour, but it doesn’t feel like you’re in a classroom or an academic institution that feels like… I’ve had employees of Facebook and Google stop by and say, “Oh, it kind of feels like work.” That’s what I’m going for. We want an environment that feels different. We have raw cement floors, we’ve really leaned into the whole theme of The Garage. The name, The Garage, I had a really big problem with when I started. Because I was like, “Oh, it’s so cliche”, coming from the Bay Area, but we’re actually in a parking garage or on the second story of the North campus parking garage. So we’ve really kind of leaned into that garage theme, so the raw floors and all of that.
I wanted to create an environment where students feel comfortable failing. We have a weekly dinner that we do. We call it family dinner. At least we did pre-quarantine times. Where we’d have dinner and usually have a founder come in and tell a story kind of their own entrepreneurial journey. Before we start that meeting students will get up and share successes, things that happened that week. If they launched their app in the app store, or they got a new customer, like successes. Students are more than happy to tell you about all the things that are going well.
Steve McGarry:
Yeah.
Melissa Kaufman:
But before we serve dinner at least one student has to get up and share a failure. They really don’t like doing this. So there’s some days where we’ll stand there for like three minutes, which is a really long time, and wait until sheepishly one student will come up and volunteer and we memorialize it with like a confetti popper to make it more fun. It’s kind of become like part of what we do. I’ve had students tell me that that is such a cathartic experience is to get up in front of their peers and talk about… Even if it’s a minor failure, right?
“We like when we launched our website and nobody came.” Or like, “We rolled out this new feature everyone said they wanted, and everyone hates it.” I think that, that’s like great for them to do that and just get really comfortable with it. It passes onto the newer members of our community, that this is a different kind of place and that failure… They’ll talk about what they failed at and then what they learned from it.
Steve McGarry:
Yeah. in front of the peers means exponentially more than a one-on-one style meeting. Because in front of your peers the people that you hang out with on a regular basis, the people that you respect, people that your kind of in the trenches with in a way, I can see how that would be really valuable to a young entrepreneur getting their footing. If anything, I would be curious to see if people start sharing a little bit more over time, their failures. Is that the case? Or are people becoming a little bit more reserved over time? How do you see that happening?
Melissa Kaufman:
They’ve definitely come to embrace it more. They know that it’s an expectation. It’s also, nice to hold back the food until somebody shares a failure, because everyone’s pretty hungry usually.
Steve McGarry:
Yeah.
Melissa Kaufman:
But again, if you want to help a community over some of their own ingrainedness you have to kind of have these cultural touchpoints that will encourage the kind of behavior you want. So in this case I’ll often say like, “Hey guys, if nobody’s failing then I guess nobody’s doing anything.”, Which is probably true.
Steve McGarry:
Mm-hmm (affirmative). Yeah. Well said. Well said. So you are doing some research right now, which-
Melissa Kaufman:
We are.
Steve McGarry:
… I’d love to highlight and have you kind of talk a little bit about what are you guys currently researching?
Melissa Kaufman:
Yeah. So this is a fun one. So I partnered with a professor in our clinical psychology department to understand a little bit more about the personality traits of entrepreneurs. So we are using a tool called the Hogan Assessment, the Hogan Leadership Forecast Series. So Hogan’s a company that traditionally works with C-suite executives to both select and develop their talent. So we are using it as a tool to understand kind of the personality traits of our student population. We are also looking at some of the personality traits of what I will call accomplished entrepreneurs. These are individuals who have had a co-founder title, have often scaled something from zero to tens of millions of dollars in revenue. For some of these individuals some are serial entrepreneurs, some have taken companies public, or have a significant exit to an acquiring company.
What we’re doing is this group has also taken the Hogan Assessment and we have no ties to Hogan except for a research relationship. My co-founder of this research project really believes that it’s one of the best scientific tools for personality assessment out there. We’ve been giving this assessment to these accomplished entrepreneurs and looking for any similarities in personality, and compared to kind of the general population. There’s been some really interesting initial findings.
So for example, there’s one element on this personality assessment it’s called prudence. High prudence is usually associated with following rules, and process, and the order. We’re finding that on average personality, most entrepreneurs have a very, very low prudent score. So that kind of speaks to their willingness to break all of the rules, take really big risks. I personally have taken the assessment, I think I scored maybe like an 18 or a 22 on prudence, which seems pretty low. But some of our accomplished entrepreneurs are scoring like one or five. [crosstalk 00:18:40] So it may be that some of these really, really successful entrepreneurs just have very low prudence at the end of the day.
Steve McGarry:
Pretty cool.
Melissa Kaufman:
So those are some of the things that we’re starting to find. We are looking for more participants in our study. So I’ll put it out there to all of your listeners, is that if you fit some of that criteria, I talked about and you’d be willing to take a 45 minute personality assessment. We would love to have you participate in our study and we’ll be putting out some, some findings pretty soon. So look for those as well.
Steve McGarry:
Awesome. Awesome. So the grand finale question that I ask everyone is knowing what you know now, what would you tell Melissa, 10 years ago?
Melissa Kaufman:
There is so much joy to helping others experience entrepreneurship. I think it was something like I said, that I had been interested in since college and when I was in school, there just wasn’t a community or a place like The Garage to go to. It is so wonderfully rewarding and fulfilling to help other people experience that. So, I think I was hesitant into going back into academia and working with students, but it’s just been an absolute joy and a pleasure to do so. So I would encourage all of your listeners if you live near a university that has any kind of program like this and you are an entrepreneur investor, maybe see if you could mentor help out. It’s incredibly fulfilling to pass on some of your wisdom and your hard earned lessons from living a well live life.
Steve McGarry:
Perfect. Perfect. Well, that concludes the questions that I have for you. I want to roll out the red carpet. I know you mentioned the survey, but where do you want people to go and learn more about what you’re working on?
Melissa Kaufman:
Yeah, the best place if you’re interested in the survey, you can email us at [email protected]. You can just mention that you heard this podcast, you’re interested in participating in this study. If you just want to learn more about The Garage, our programs, and all of the things that we do with students, you can check us out at [email protected].
Steve McGarry:
Amazing. All right. Well, if you guys are listening on Spotify or iTunes, definitely check the show notes, all the links to what Melissa was talking about will be in there so you can check them out. But once again, thank you so much for coming on the show, Melissa.
Melissa Kaufman:
Thank you. It was awesome.
Steve McGarry:
Thank you so much for listening through this entire episode here on The Exit presented by Flippa. This has been a really fun episode, specifically because with Melissa’s study researching all of these amazing young entrepreneurs and just the Northwestern college student population in general, and comparing them together is a really fascinating piece of research. So I’m going to be leaving the links to their study and all the research that they’re working on on the show notes. So you guys get a chance to check out all of the links.
You’ll have an opportunity to actually go through the research study, if you are a successful entrepreneur that have exited businesses, started businesses and things like that. It is a fantastic study. I went through it myself and they are collecting some really powerful information. So it would help to have you contribute to the research for them. So definitely check that out with all the links in the description, as well as the show notes. So you guys can go and put in your 2 cents in terms of how you built your businesses, or if you bought businesses or sold them in the past, just to help out their research and really further what we look for in early stage entrepreneurs and how we can help. So that is it for this episode of The Exit. Definitely hit the subscribe button because we have an amazing episode coming up shortly after this. So definitely hit the subscribe and I will see you guys on the next episode.
