Linda Rottenberg: Enabling High Impact Entrepreneurs to Transform Economies
The NextWomen Social Entrepreneurship Theme.
one of “America’s Best Leaders” by U.S. News & World Report, Linda
Rottenberg is considered one of the world’s most dynamic and respected experts
on entrepreneurship, business opportunities in emerging markets, and innovative
leadership for the new economy. For years, she has motivated audiences of
Fortune 500 managers to think like entrepreneurs and develop their global
As CEO and co-founder of Endeavor, Linda pioneered the field of “High-Impact Entrepreneurship,” the global phenomenon of using high-growth business to transform economies. Headquartered in New York and Silicon Valley with 15 affiliate offices throughout Latin America, Africa, Middle East, Europe and Southeast Asia, Endeavor identifies, mentors, and co-invests in the most promising emerging-market entrepreneurs. The 700 Endeavor Entrepreneurs selected to date, screened from more than 30,000 candidates, have created more than 200,000 high-wage jobs and generate annual revenues of $5 billion.
Linda has been the subject of three case studies published by the Harvard Business School and the Stanford Graduate School of Business. She was named one of 100 “Innovators for the 21st century” by TIME magazine. Dell, Inc. featured her as a Hero in its “Take Your Own Path” global advertising campaign, Veuve Cliquot named her Business Woman of the Year in 2008, and Tom Friedman named her the world’s “Mentor Capitalist” in his bestseller,The World Is Flat 2.0.
In 2011 she was named to the Forbes "Impact 30." Dubbed “Ms. Davos” by Business Insider, Linda served as co-chair of the World Economic Forum on the Middle East and currently serves on the Forum’s global steering committee on entrepreneurship. A graduate of Harvard College and Yale Law School, Linda is also a member of Young Presidents Organization (YPO), the Council on Foreign Relations and an expert judge for the McKinsey-Harvard Business Review awards.
TNW: Tell us about the early days of Endeavor. Why did you choose to launch in Latin America?
LR: After graduating from Yale Law School and realizing that I had no interest in practicing law, I fled to Argentina where the only person I knew was a pen pal I had kept for years.
And it was actually in the back seat of taxi in Buenos Aires where I had my epiphany to start Endeavor.
I was talking to the taxi driver and I learned that he had a Ph.D in Engineering. So I asked him, "Why are you driving a cab? Why don't you become an entrepreneur?" He said, "become a what?" It turns out that people barely understood what "entrepreneur" meant in Spanish. More importantly, there was no network, there were no mentors and no access to capital there - all of which are critical to starting a business. So I partnered with a friend, Peter Kellner, and started organizing groups of successful entrepreneurs and business people who could help mentor promising entrepreneurs in Latin America.
TNW: Who were the first Endeavor entrepreneurs? How did you help them? And where are they now?
LR: Some of Endeavor's earliest entrepreneurs have turned out be among its most successful. The very first Endeavor entrepreneurs were Andy Freire and his partner, Santiago, who founded OfficeNet, the Staples of Latin America. In the early days of OfficeNet, Endeavor introduced Andy to investors and senior business people. In 2005, OfficeNet was acquired by Staples, and now Andy manages Axialent, a global business he founded that employs 130 people. And Andy certainly gives back to the Endeavor community. He is the Chairman of the Board of Endeavor Argentina.
Another early entrepreneur was Wences Casares, who grew up on a sheep farm in Patagonia, Argentina. He was the first in his family to attend college, and soon after, the first to drop out. He dropped out college after building Argentina's first Internet service provider and selling it to a telephone company which then shut him out of it. His next project: to create the E-trade of Latin America, called Patagon. At the time, Wences asked me, "Do you think I'm crazy?" And I said, "Yes. And that's why you're going to succeed."
I often say that being called "crazy" is a compliment. In fact, if you haven't been called crazy, you're probably not thinking big enough.
Soon after Wences started work on Patagon, Endeavor got involved. We helped Wences by introducing him to business mentors and venture capitalists, and less than a year after our involvement, Patagon became the premier financial destination in the Americas and Spain. In 2000, Wences sold a majority stake to Banco Santander for a valuation of $750 million. Wences now sits on the board of Lemon Bank, a Brazilian retail bank he founded for the poor, and he serves on Endeavor's Global Board of Directors. He has given back in big way. And that's something we look for when selecting Endeavor entrepreneurs: how likely they are to give back to the Endeavor community to help future entrepreneurs.
Another set of early Endeavor entrepreneurs was Marcos Galperin and Hernan Kazah. After securing funding in 1999, they founded MercadoLibre, an eBay-like site for Latin American users. Soon after, they became Endeavor entrepreneurs, and Endeavor helped with important introductions, including a meeting with eBay that lead them to buy a stake in Mercado Libre. In 2007, the company went public on the NASDAQ with a $400 million IPO. Today, MercadoLibre’s market cap is close to $3 billion. That's the kind of growth I was dreaming of when I started Endeavor! And both of the founder's give back generously. Marcos has been a member of Endeavor’s Global Advisory Board, and both have served as panelists and speakers.
TNW: Roughly what proportion of the 30,000 entrepreneurs screened by Endeavor have been women?
LR: We don’t gather information for this number.
TNW: What percentage of the successful Endeavor entrepreneurs are female?
LR: About 20%. And we’re proud of that number - because out of all the entrepreneurs who receive VC funding in the U.S., only 8% are women.
We’re helping a lot of women in places like Latin America, South Africa and the Middle East, which surprises many.
TNW: Tell us a little about the most successful female Endeavor entrepreneur and her business.
LR: We've had many successful female Endeavor entrepreneurs, but one that always sticks out for me is Leila Velez. Leila grew up in the slums of Rio de Janeiro, Brazil, the daughter of a janitor and a maid. While working at McDonald’s, she realized that there were few hair products for Afro-Brazilian women like her. So she recruited her cousin and they started experimenting – first on their husband’s hair, which promptly fell out! But soon enough, they came up with some effective products and opened up a beauty salon. The demand was enormous and now Leila has 26 salons in Brazil. She has $70 million in revenue, employs 1,400 people and will be expanding to the U.S. with a store in Harlem, New York City. That’s a big business.
So when people only think of micro-finance when they think of women entrepreneurs in a developing country, I say, no. Women can create very large businesses. Look at Leila.
TNW: How do you decide whether a business has the potential to be "high-impact"?
LR: I don't actually make the decisions about which businesses get accepted and which ones do not. Endeavor assembles panels of highly respected business people and venture capitalists that make those decisions. But we ask our judges to seriously consider the following three factors in making their decisions: 1) The Entrepreneur. Does the entrepreneur possess the vision, persistence and track record to advance the business successfully. 2) The Business. Is the idea innovative and the business model strong enough? And does the business have high growth potential and the capacity to add substantial economic value through job creation? 3) Fit with Endeavor. Are the entrepreneurs receptive to taking advice from mentors and will they likely give back to the Endeavor community in the future?
TNW: When screening businesses, do you give preferences to different sectors?
LR: No, we don't. But we have found over the years that, in the selection process, it is less helpful to divide businesses by sector and more helpful to divide them by the kind of entrepreneur who is leading that business. So we've actually developed four distinct "profile types" based on our extensive experience with entrepreneurs. Here they are:
- The Diamond, the bold founder of a high-tech company who creates a new way of solving a problem. Think Mark Zuckerberg of Facebook.
- The Rocketship, the ambitious dreamer who tries to take down existing companies. Think Jeff Bezos of Amazon.
- The Locomotive, the innovator in traditional industries with rock solid business models. Think Sam Walton of WalMart.
- The Rockstar, the charismatic entrepreneur whose strong personality is woven into his or her brand. Think Martha Stewart or Ralph Lauren.
I'm personally very excited about "Diamonds" and "Locomotives" right now.
TNW: Do the Endeavor entrepreneurs themselves tend to have certain key traits in common? Is there a personality type for the high-impact entrepreneur, regardless of nationality?
LR: As far as personality, they differ.Some have huge personalities, like the brand-entrepreneurs we call “Rockstars,” while others can be shy. But they are all dreamers with big ideas. They're also committed to their companies and have a sense of giving back.
TNW: Our January Editorial was Theme Africa and we published several articles about why most entrepreneurship in African countries tends to be on the micro scale (over regulation, for example, and the dependence on extended family eating up capital). What advice would you give to entrepreneurs with a high impact mindset who are facing barriers to growth such as these?
LR: One tactic I've always used is stalking people.
Don't be afraid to stalk people who have had success and who can be helpful to you. It's an underrated start-up strategy.
If the people you need to reach aren't on your continent, then stalk them online. I'm still stalking people! Also, I'd encourage entrepreneurs like this to try something really innovative; something so "crazy," that it can attract the attention of people who can help.
TNW: There are some amazing metrics on the Endeavor site showing the impact the organization has had since its inception in 1998. Is there one particular case study or achievement in the company's history which makes you most proud?
LR: I'm proud of a lot of things we've done at Endeavor. But more recently, I'm really proud of the help we've been able to provide to high-impact entrepreneurs in the Middle East in the wake of the Arab Spring. There is so much opportunity in this region. For instance, there are more than 344 million Arabic speakers worldwide, yet less than one percent of online content is in Arabic. So, through Endeavor's office in Jordan, we mentor entrepreneurs like Wael Attili who founded Think Arabia, a production company that creates original content in Arabic in the form of cartoons and mobile phone applications.
Think Arabia recently completed an animated short for Google with great success and I believe that the company is well-positioned for explosive growth in the region. Despite the instability in the Arab world, entrepreneurs there are thriving.
I have seen that entrepreneurs thrive amid chaos and instability. They don't wait for the perfect time.
TNW: In 2011, you were named in the Forbes Impact 30, a list of the world's top social entrepreneurs. Which other social enterprises do you admire, and why?
LR: I admire many social entrepreneurs, but I’d like mention two companies created by Endeavor entrepreneurs that I think are fantastic. One is Kommunity Group, a company led by Shane Immelman that makes portable desks for poor children in South Africa - who go to schools that don’t have desks. By selling sponsorships and advertising, Shane’s team has distributed hundreds of thousands of lap desks to children in South Africa.
I’m also very excited salaUno, a brand new Endeavor company in Mexico that helps to prevent avoidable blindness through its private vision centers and clinics. They provide high quality, low-cost cataract surgery to low-income Mexicans. And within a year, they have completed more than 2,100 operations!
Also, I think it’s interesting to note
the findings of a recent study we conducted at Endeavor that I wrote about in
the Harvard Business Review. What the
study concluded was that the organizations that put an emphasis on making more
money were ultimately able to make a greater social impact than those that put their
primary emphasis on social issues.
TNW: Do you have any heroes or mentors?
LR: Edgar Bronfman has been a great
mentor to me. He is the Chairman of Endeavor's Global Board of Directors and he
has pushed me to reach higher with Endeavor. I once presented a plan to the
Endeavor board where I said, "we plan to expand to 20 countries by 2020."
Edgar said, "I prefer the sound of 25 countries by 2015." And that’s
our current goal.
TNW: Is there anything we haven't asked you but you but you would like to share with our community?
LR: Well, I'm actually writing a book on Entrepreneurship from the 15 years I've spent working with entrepreneurs around the world. But I'm curious to get feedback from readers to find out what they want to read. So, I would love readers to visit my site, www.lindarottenberg.net. Thank you!
Sign Up to our Newsletter
So you enjoy The NextWomen. Why not sign up to our monthly newsletter?
You get a Letter from the CEO :-), the chance to catch up with the best of our recent articles - and some extra things we throw in once in a while.