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It was the roaring 1980s, and Martin Varsavsky was about to receive his MBA from Columbia University—and he still couldn't get a job. His fruitless job search was probably the best thing that ever happened to him.
Varsavsky, the irreverent closing speaker at the "Growth Opportunities in Latin America" conference, has started six successful companies in fifteen years. Entrepreneurship is in his blood, and it became obvious during that job search.
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| Entrepreneurs [are] misfits. We're not like people who could get a job. We hate jobs. | |
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| —Martin Varsavsky |
Varsavsky said he would go to interviews only to be tripped up by the "Where do you see yourself in five years?" question. "I would say, 'Well, as your boss.'"
"They didn't want to give me the job," Varsavsky told the conference audience at HBS.
Ironically, he was rejected by the same bank that eventually gave him the capital to start his first venture.
"Now, these people [on the hiring committee] didn't know that there was another group at that time who was actually looking at my loan application for my first business. And the same people who wouldn't give me a $40,000-a-year job gave me a $12-million loan," he said. "Fortunately, they never found out because these banks are really big and nobody ever talks to each other."
"Regarding what to do in life," he continued, "I think there's no recipe, but... entrepreneurs, many times, like myself, are people who couldn't get a job. We're misfits. We're not like people who could get a job. We hate jobs," he said.
Work smart, not hard
In his remarks at HBS, Varsavsky also set out to debunk the notion that entrepreneurs are slaves to the grind.
"I think there is a myth with entrepreneurship…where you've got to work hard. I'd like to volunteer a different theory that I've learned living in Spain for the last [few] years," he said. "I've never made more money in my life not working hard."
He founded his company Ya.com in 1999 by luring twenty-six people away from Terra, the Spanish telecom giant that is now Terra Lycos. He called his hires "the best Internet people in Spain," and said the company he had started with 38 million euros sold a year later for 550 million Euros.
"It was, of the six companies I built, the shortest, quickest, sweetest success. I don't think I worked more than 200 or 300 hours putting that company together. It was the right vision, the right people," he said. Knowing when to walk away and let people do their jobs, Varsavksy added, was what made the company such a success.
"I think the key to [being] an entrepreneur is to interview the right people, have the right vision, and get out of there. Just get out of there."
"Entrepreneurs are disturbing to their companies," he said. "People don't want to work for entrepreneurs."
Varsavksy has managed to recruit a number of high-powered executives away from established companies to work for his start-ups. "Now, how do I get these people to work for me? [By] giving them shares...but also getting out of the way."
Falling markets should not distract entrepreneurs from remaining as true to their vision of their company as possible. "Do you manage your company thinking of the market, or do you manage your company thinking of your company?" he asked rhetorically. "I think companies have fundamentals. I think people used to look at them. And sometime two years ago, there was a divorce between common sense and the stock market," he said.
Another company Varsavsky started in 1997, Jazztel Telecommunications, is a competitive local telephone service provider. He started it with $5 million and it is now worth about $500 million. However, at one point it had a market value of $6 billion. Watching the market can create a tension, he said, between the desire to stick with and build a company and the realization that one's share in it may never be worth more.
Although he wasn't able to sell his shares in Jazztel when it was at the height of its worth, he said, "All my instincts were saying `Sell, sell sell,' and all my instincts were to build a company."
Educating on the Internet
Currently, Varsavsky is president of Jazztel and EINSTEINet, Germany's first broadband application service provision. But he is also focusing on charitable pursuits. Last April, the Varsavsky Foundation donated $11.2 million to the Argentine government to launch the Internet portal www.educ.ar.
Through educ.ar, Varsavsky is working to deliver content to public schools where students have been unable to afford even textbooks. He hopes to reduce the "digital divide" in Argentina, where 25 percent of the population in the Capital Federal region has access to the Internet, compared with less than 10 percent of the overall population. He would like to see penetration reach closer to 45 percent, and believes a system of satellite-linked laptops in schools would go a long way toward connecting students and helping them learn.
He said the plan has met with some resistance from teachers who fear that their students will adapt to the technology more quickly and hinder their ability to teach. Varsavsky said he has tried to convince teachers that their roles as interpreters of information will become even more vital as student access increases.
He likened the situation to one with which many American parents are familiar. "The kid tells the parent how to use the VCR, but the parent tells the kid what's going on in the movie," he said.
Varsavsky said he prefers to keep his charitable efforts somewhat separate from his business; for example, he believes more in individual giving than in corporate giving. He said businesses could only benefit from a more educated and more prosperous population.
"The biggest business opportunity of Latin America is to turn poor people into consumers," he said.
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