Ryan Rutan: Welcome back to another episode of the Startup Therapy podcast. This is Ryan Ran joined as always by my friend, the founder and CEO of Startups.com, Will Schroeder. Well, it's no secret I don't think anybody listens to the podcast that you've, you've said many times that, you know, entrepreneurship is what kind of yanked you out of being a, a kid with nothing to founder with full control over their destiny, to the extent that we have full control over our destinies as founders or anyone. But here's the question, man, like. I, I want you to back into that. I want you to talk about how that worked for you, and, and I think today we want to talk about like, can that same ladder be climbed by millions of other people who, who, who start where you did or start anywhere on a relative scale, and can it be used to to alleviate or eliminate poverty?
Wil Schroter: Yeah, it's, it's interesting. I don't think it it can be used universally like pull everybody out of poverty. I think what it can do, and I know I know you feel the same. I feel like what entrepreneurship can do is it can create a flywheel that starts things going, right? It's, you know, if we look at it it's how America was built on that flywheel, right? You know, where these industrialists, you know, started to build what became modern day America by planting those seeds, and in most cases they came from nothing, and they were able to use what became the American dream. In order to build this next generation of wealth and success, and I think about this a lot. This was my story. I was the kid that that came from nothing, you know, and, and worked really hard and, you know, pursued the American dream. I genuinely believe that that is accessible to a lot of people. Now, when I explain my story and I say, hey, you know, I live the American dream. Here's typically what I get in in today's environment, right? I get, look, you're a middle aged white guy, of course you had the American dream, right? Like, and and I get it, I get it, right? Um, it it wasn't quite that easy. And so, you know, I came from a very difficult childhood in a very underprivileged environment, and I guarantee you by the time I was graduating bottom of my class in high school, no one was like, oh, smooth sailing for that guy. They were like. 18 months before he's in jail, tops, like there's there's nobody who was betting on on my horse, at least of all me, by the way. But what I discovered, almost inadvertently, was that I had the ability through no one else's help, by the way, right? I think this is the most important part, and by no one else's help, but also no one else stopping me either, right? To be able to create and develop a life for myself through entrepreneurship. Um, I would have been a terrible employee. That would have not gone well for me, just not the way I'm built, but it turns out I was a pretty good entrepreneur. And Ryan, I think when we look at the opportunities of planting that seed, someone, you know, early in their life, not that it's the only time they could do it. I do think it is one of the most valuable things we can teach a generation that is underprivileged, that is in poverty all around the world. This isn't just, you know, United States or anything else like that. I think teaching people to fish, you know, the the old the old, um. Uh, adage that if, if you wanna, uh, uh, beat a man for a day, you give him a fish. If you wanna feed him for the rest of his life, you teach him to fish. And I genuinely believe that entrepreneurship is that fishing pool, that ability for you to earn for yourself, but more importantly, to create a flywheel in your community. And pull more people around it. What do you think?
Ryan Rutan: Yeah, I agree. I think, I think that the flywheel concept is super important and you know, we've, we've seen it, you and I have seen it. It can change communities, it can change families, it can change entire countries, right? When, when the entrepreneurial spark starts, I mean, like you said, it is sort of what what created the the United States and I think we can't overlook that, right? It doesn't mean that entrepreneurship is for everyone, meaning that not everybody has to be a founder, everybody has to start their own business. But in some of these communities, in some of these situations, when someone does that, right, and then all of a sudden you're creating employment, you're creating opportunities, you're creating secondary economies that flow down into that. Right, right, like, you know, coming, you know, having recently left uh Latin America and and Guatemala in particular where there were a ton of impoverished people, right? It's also a massive hustle culture. And people didn't sit around and go, ah, impoverished, don't know what to do. They were like, what am I gonna go do today? What am I gonna sell? How am I gonna do this? Somebody would start a business. Business would start to grow, right? We saw, we saw somebody build uh little things like a a a very local restaurant, right? Well, the local restaurant creates a secondary economy because you've got some people that work there. They're buying from the local farmers, right? The local farmers bring up. Local farmers start to make more money, they start to feed more money into the economy, you get it, like the, the whole thing snowballs. It's economic development as it's supposed to work, right? Somebody generates economic opportunity, there's trickle over, trickle down, and all of a sudden you start to see things, things blossom. And I think the other thing that gets lost in the mix in a lot of cases, and we start saying like, yes, entrepreneurship can solve some of these problems, people go like, yeah, of course you guys think that way cause it's what it's what you've done. Yes and no, but I also think that this is what the piece that I think gets lost is that it's such an extensible set of skills, like it it's at its core, and I think you said this, like you learned that you could do this on your own, on your own, right, with nobody else's help and nobody else getting in your way. It teaches you a lot about self reliance, which is gonna be useful no matter what you end up doing. So I think we're not saying, you know, entrepreneurship at the expense of everything else. But we're saying it's a set of skills that if you, if you master them, or even just learn them, understand them, intellectualize them. It can impact a lot of what you do in life.
Wil Schroter: Well, also, it has this massive germinating effect of everybody around you, OK? So if you think about this, it wasn't that Will started a company earlier, you know, the company that did well, it was that while he was doing that, how many other people did Will impact along the way? How many other people did he employ at an unreasonably young age, not mine, but. Theirs and incentivize in condition that they could do it. I told you this before in my lifetime, I've hired thousands of people. Within that group, I keep a list of a summary, if you will, a spreadsheet, call it what it is, of all the people that I've employed that have gone on to become CEOs, right? It's well over 100 people that I've employed, just me, little old me. I'm not like that important. I'm not being modest. I'm just like, I'm not freaking. Steve Jobs, right? 100 people that I've employed have gone on to become CEOs, not VPs. I'm not counting anybody that was also a great job, by the way, right? Like other C levels, I mean,
Ryan Rutan: specific ones that made it to top seed,
Wil Schroter: the CEO in most cases founders, right? Um, in some cases of of massive companies like representing billions and billions of dollars. And so what we're really talking about, we're saying alleviate poverty. It's not making everybody a founder, it's making enough people founders. Yep, that flywheel in their community and the people around them elevates. And I think it's incredibly powerful and wildly misunderstood about how we get there.
Ryan Rutan: 100%. Yeah, it'd be funny to look at that list, I mean fun, interesting to look at that list now and just see like, how many people are they employed? Oh, that's what I'm saying, right? That's how what is, what is that spread look like, right? You know, it's funny, I, I, let me, let me give you the other end of that spectrum. These were, these were not CEOs, but it goes back to just like how a little bit of entrepreneurial spark can go a long way. When I was a kid, we used to do like when when there'd be snow days, I think I've told you this story before, and there were snow days. I got so excited, not because we had the day off of school. But because I knew I could go shovel snow, right, make money. I didn't just shovels shovel snow. I had a tractor, I would drag driveways, I would bring friends along. I would, I had a group of friends and then on Sundays they would call me. They're like, are we going, are we going? Because they knew we were gonna make hundreds of dollars that day as, you know, 1314, 15 year olds, we would go out and we were all doing other entrepreneurial stuff too, but like. It was super fun to see that like, because I had figured this thing out and I had the drive to do it, all of a sudden people would flock around and they're like, we want to go to, let a bunch of guys into the into the tractor and we go out. I drag driveways, I shovel the sidewalks and everybody made money, right? And it was super motivational and it was fun because at least a couple of those guys went on to be entrepreneurial. Now I don't think I caused it, but I was certainly part of that. journey where they were like, hey, I can just go out and find my own way, make my money. I don't need to go get a job. I can just go find ways to hustle and make money, right? Which I think is super powerful to teach people.
Wil Schroter: You planted the seed of hope, and I think this is where it starts. My own story that that I've given to you before of when the seed of hope was planted for me. I'm 8 years old, I'm a kid who couldn't. Even afford lunch, incredibly poor, generally didn't know where my parents were. Every day, uh, before I would go to school, I'd be at the bus stop, and one day I had scrounged up a quarter for whatever reason, lunch was $1 at the time because I went to school in the Stone Age, and I go across the street and I buy some now and later candies with my quarter cause that's what I was gonna eat for the day, like that was my my meal provision. I hop on the bus and a kid asked me if he can uh have one. I'm like, I really can't. I'm not trying to be a jerk, but like I literally that was my lunch and it's, it's, by the way, being poor is humiliating, and one of the things that, you know, they don't put in the in the brochure, and so I was like, can't. He's like, well, what if I give you a quarter for one, right? And I was like, fine. He gives me a quarter, I give him the noun laters, he hands them all back, it only takes one. And what he meant was I'll buy one of them for a quarter, one of them and somebody else over here and say, hey, can I buy one? And I'm like, yeah, he gives me a quarter and like my head explodes. Like I had no idea how commerce worked.
Ryan Rutan: The concept of arbitrage is born in Will's mind, but
Wil Schroter: that was the moment, right? And, and, and I, and I told you this before, at lunch that day, I, I went to the lunch lady and I gave her the 1st $1 I'd ever earned to buy my own food. I mean, very appropriate for what we opened up with, which is teach amen to fish. And it was game on from that point on, right? It was the first time I realized, without anybody teaching me, I just fell into it, that I could create my own outcome. And that is an incredibly powerful, incredibly, I mean, transformational changed my whole life on a random Tuesday that you'd have never guessed, right? And I realized at that moment that my condition in life didn't determine. What I was allowed to do, and that created a seed of hope. That's all it did. It created a seed of hope. And Ryan, how many founders do we talk to that sold candy in school that, that shovel
Ryan Rutan: driveways literally had the I had the lemonade wagon, not the lemonade stand same damn thing, right? It's such a funny thing that it's, it's a, it's a lesson that gets learned so early in life. And again, just a seed, not even necessarily a lesson, it's a lesson of sorts. But I think that there's there's something really interesting too, that it, it tends to start early and it starts small, and it doesn't correct much. I think that's the thing that's the point so encouraging about this. It was like everybody else who's listening and is saying like, yeah, I don't really buy into this, like, it can start super small, right? The whole point. We're not saying turn somebody who's in in what what other word like a hopeless situation, resourceless situation into the next, you know, tech founder of of a unicorn, doesn't have to be that either, right? You know, it was, it was selling candy, it was shoveling snow. That was the other thing. So going, going back to Hope, I don't remember exactly. I do remember that it wasn't like the first time I went out and I was like, hey, does anybody want to go shovel snow with me? And everyone was like, yeah, we'd love to, right? It was after like the 3rd or 4th time that I had gone out and made a couple $100 and they were like, There's some hope, right? Some hope was created, like, I hope I make some money too, like I will go do that. And and again it was just a little little seed got planted and then that's where it starts to spread to others as well.
Wil Schroter: It's where it spreads. There's something called jealousy that is also a very powerful motivator, right? Super. We always see it now, we see it like in the startup world where you see one of your, what we'd call your idiot friends get funded, and you're like, dude, if that guy can do it, that guy is an idiot,
Ryan Rutan: right? It can't be that hard, right?
Wil Schroter: I always joke that the reason there's 100 people on that list of CEOs was because of me, because they were all like, dude, if that guy can be a CEO, I can absolute gut it so low. What's
Ryan Rutan: after CEO? I'm gonna do that.
Wil Schroter: But I want to talk about, you know, 3 different legs that this thing needs to stand on, but, but, but I don't want to lose sight of the hope uh component. The reason hope is so fundamental before everything else as a requirement, is actually because we deal in the business of hope. And I don't mean that like in a greeting card way. I mean, if it weren't for hope, we wouldn't go pursue things that pay no money, right? That would make no sense whatsoever, right?
Ryan Rutan: Let me go build something that's never existed before to see if people wanna buy it and make it enough fun that I want to keep doing this for a long time until it's finally successful.
Wil Schroter: Absolutely,
Ryan Rutan: um, there's no hope behind that. It is very quickly.
Wil Schroter: If we take away hope and reward, OK, reward is kind of a given that if you do something extraordinary that that's reward. Now, that doesn't exist everywhere, right? If you're in a society that fundamentally doesn't reward risk or a culture. That doesn't reward risk, you know, for a lot of cultures, they are culturally biased against entrepreneurship, because they don't believe in risk. I talk uh to this uh a lot of my friends who are coming from like an Indian family or an Asian family, they're like, risk, risk is not like celebrated the way you guys celebrate it.
Ryan Rutan: You follow the the most likely path. With the shortest distance to the largest reward, right?
Wil Schroter: 10%, right?
Ryan Rutan: You follow the educational path and you become doctor, lawyer, engineer, and that's it.
Wil Schroter: And to be fair, that's 100% logical. Yeah, that's 100% logical. That is a very obvious and logical path to go. Which is the problem, right? The problem being, in order to go down this path, you have to have the hope of doing the illogical and having that have a better outcome. If you're not inspired, if you don't have that hope that something better is gonna happen, you won't even try. We look at it and we say, someone has to feel so good, so confident, if you will, or hopeful, hope and confidence aren't aren't the same thing, so hopeful. That what they're about to embark on, however small, will have the reward they expect it to, that they're willing to do it at all. And given we're in the business of hope, that is, that is a form of capital that when you take it off the table, nothing even gets started. We don't get to the parts where you need like dollar capital, right? If, if in a society, if in a community, if in a family, hope has been withdrawn, you will never see entrepreneurship.
Ryan Rutan: Correct. Yeah, and, and I think again like it's as you said, it's, it is, it is a currency. In the entrepreneurial space, hope isn't fairy dust, it's fuel. It is literally what drives us at certain points, it is all we have right at the earliest stages and sometimes in the later stages when things aren't going well, it's all we've got, and we have to be able to rely on that as a propellant, and it's a
Wil Schroter: powerful one. There's a line in the matrix that uh Larry Fishburne gives as Morpheus. And he says, or maybe it's not I I I actually I think it's, it's whoever the bad guy was at the time, and he says, uh, hope, it's your, as a human race, it's your greatest weakness, it's your greatest strength, right? And I, I thought that was, that was such a perfectly delivered line, right? And it's so true. as founders, it's our greatest strength and weakness. The greatest strength for all the obvious reasons we just described, and it's our greatest weakness because it makes us do dumb shit with a smile on our face, right? It makes us take ridiculous amounts of risk that can ruin us with excitement, right? And again, that is such a powerful component. Now let's talk about how you, you, you get that flywheel going.
Ryan Rutan: Yeah, so I think that's, I think it's super important because I think as as people are listening now, they're like, OK, great, but like, where does it come from,
Wil Schroter: right? It comes in in tiny tiny uh successes. It's that kids selling candy as that that that expands. And so I, I say look for very tiny wins as early as possible, tied to your own outcomes, OK? So if I say, hey, you got a job and you got paid, nothing wrong with that. But let's say you're you're 15 years old, right? You get a job and you get paid and you understand the value of work and reward, incredibly powerful, but it's different than you created that work, right? In your case, it uh it would have been in, in looking for an opportunity to shovel a driveway, right, that you could get paid for and then doing it on your own accord, you know, developing customers, having a product pricing, etc.
Ryan Rutan: I just thought of one of the funniest examples of earliest early early early entrepreneurship, we carried our canoe 3/4 of the mile down State Route 42, to get to Deer Creek. We throw it in Deer Creek to float inside the local golf course, and we filled that thing with, I think it was like, I don't know it was like 1800 or 2000 golf balls that had been. Into the river, we just dredged the river for hours on end. I pulled this thing up, and then we had to call my dad actually one walked home. There was no way to call that. I had to walk home, ask my dad to come and bring the pickup truck so we could haul it back because we were like, we carried the canoe over when it had 2000 golf balls and it we could no longer carry it anywhere. Now we got, we got all the gold, we can't get it home, but it's so funny like where you just go looking for these. Things and, and right, I think there's something fun there because like that one was pure hope. We did all of that work to go find out if there were even golf balls in them, yeah, we'd seen some bad golfers, we knew there was gonna be some balls in there, but like out in the middle of nowhere in London, Ohio, and we are carrying a canoe down a highway, Hope was heavily involved there, like, I hope we go find some stuff, right? It's that mix of like hope and adventure and that to some degree like a little bit of Childlike navitages to say like, let's just go do this, let's try it. I hope it'll work out, but let's try it either way. There's something really powerful about that.
Wil Schroter: And the trick there is you just need to inspire one Ryan, who then inspires and and cajoles 10 of his friends. That.
Ryan Rutan: I inspired one Joey and one Nick, and that's correct,
Wil Schroter: that's it, right? Um, I think the mistake is that like, you know, we have 100 kids in a in a classroom, for example, and all 100 kids have to become entrepreneurs. No, technically, you just have to get it right with one or two. If that, and they will pull enough other people along, that that's how the flywheel, uh, gets created. Now the other thing that that that, uh, you know, happens when we, when we create that flywheel is those people go on to have kids. Who are now inspired and educated with that hope. You know, our children, Ryan, are inspired and educated with that hope, which has so much value because you're literally grooming. The next group of founders from day zero, incredibly powerful. And, and what I love about this, this mission, and again this is very ingrained in what we do at startups.com, is that you're basically saying, I only need to be right as far as, you know, grooming this next ground 1 in 100 times, but when I'm right, it'll create 1000 people behind it. That's the part that I think people miss, right? It's a germinating effect, but we, we need to start early. We need to get those early wins, you know, with with kids early. It doesn't have to be kids, but it's a great way to start. And even small wins are big wins. Even the small ones, you know, right, you and I were talking a while back, you're saying how like it's the person. Guatemala with a food cart and then all of a sudden they come home and they had more money than they had yesterday or income at all. And people go, oh, food cart, not Microsoft,
Ryan Rutan: right? No
Wil Schroter: food cart,
Ryan Rutan: it's amazing, right? Figure out what's gonna take me from where I am now to a place that's significantly better, right. It's not a life of luxury, but it's a life where there was steady income and they could put food on the table every day without question. That's a big deal.
Wil Schroter: There are two very different paychecks. There's a paycheck you get from your employer, and there's a paycheck you get from yourself, OK? There's a pride that comes with the paycheck that you create for yourself, exactly how you felt when you came home from a long day of being a kid. Shoveling driveways, you were tired, but that money in your pocket was money correct, right? But it was money you
Ryan Rutan: wake up the next morning hoping it's gonna snow again. Dude, right,
Wil Schroter: that dollar I gave to the lunch lady was the best dollar I've ever spent in my life. Not because I could get lunch. That was actually pretty cool too, but because it, it was my dollar and I knew I could do, I could make another one.
Ryan Rutan: Remember that used to be a thing, like you would see the first dollar,
Wil Schroter: right?
Ryan Rutan: In businesses you go into a business on the on the wall behind, right? There would be the 1st $1 on the wall. Why? Because it took a lot of work to get to that 1st $1 and getting it felt amazing, right? And it wasn't that it was a dollar, right? It's not about the amount, it's not about the, it's, it's such a symbolic thing, um, that goes. goes so deep into the the experience that that individual had to get to that point, right? And then to know, because it's it's a fundamental representation of that
Wil Schroter: hope. We converted hope to pride. We converted hope to when somebody framed that dollar, they were proud of their accomplishment as they should be, by the way
Ryan Rutan: proud of the accomplishment. And it had been recognized by someone else, right? Someone gave them that dollar. Someone said, you've done something of enough value on your own, I am gonna compensate you for it.
Wil Schroter: And if hope is contagious, pride is the bazooka canon of contagion, because it shows everyone else that it can be done and that it should be done. Which is incredibly powerful. So let's say that that hope is the first leg, if if not the first phase, that if we don't have hope, nothing gets started, like that is the beginning of the flywheel, OK? But the other side of that I thought was kind of interesting was this idea of a willingness to fail. Right, let's say that this is the second leg, and people say, well, obviously in entrepreneurship, it's not just taking a job where you are going to get paid, you're gonna do a lot of work and you may fail and not get paid. But I think what people miss when they, they hear about that is people who are broke can't afford to fail. They don't realize that the reason a lot of people can't get into entrepreneurship, you know, folks that are in some level of poverty or low income, uh, situation, is that failure is not an option. And people used to say to me all the time, this is weird for me to even say, this is actually on a magazine cover where I'm on the cover of the magazine, right? And it said um something to the effect of like something to something to fail. Uh, I, I, I can't remember like what what the the phrase was I should know because it was on like the cover of this magazine. Wa't nothing to lose, nothing to lose, right? You know, it's something like that, right? Yep, and I think the idea was that I was so young and I was so broke that I had nothing to lose. I think that is such a gross misunderstanding. Of what being underprivileged means, dude, if I failed, I could not pay for rent. I had no home,
Ryan Rutan: right?
Wil Schroter: I couldn't buy food.
Ryan Rutan: I can't
Wil Schroter: like, yeah,
Ryan Rutan: there's a lot to lose. There's there's a lot
Wil Schroter: there's way more to lose, and I think what's missing, and again this, this kind of second leg and thing is understanding that folks who are broke, I'm just gonna use that as as the the overall term, cannot afford to fail. And therefore they can't afford to try.
Ryan Rutan: That's the thing, right? Without any kind of gap between you and the grounds, like it's there there's no room for risk. There really there's there's just no space for risk at that point, and, and that's a tough one to get around. Right? It's a very tough one to get around. You know,
Wil Schroter: something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you, which means the answer already exists, you may just not know it, but that's OK. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups.startups.com. So if any of this sounds familiar, Stop guessing about what to do. Let us just give you the answers to the test and be done with it. You could go back and you could say, well, hold on a sec, that doesn't all hold up because many of the immigrants that came to America, um came with nothing and started phenomenal companies. And it's like, yes, there is a version where you can say I have no choice to be suc but to be successful, but you didn't have that choice. It's not like I chose to fail, right? So saying you, you don't have any choice. But to be successful, the implication, which isn't entirely wrong, is that I just had to keep grinding. Like I, I, I just couldn't stop uh stop myself. I couldn't give up because I didn't have anywhere else to go. Now there's some truth to that, but that doesn't guarantee success. You can have that same condition and
Ryan Rutan: fail. Bottom where there's nowhere to go but up, doesn't guarantee that you go up. You can also just risk and stay at rock bottom, right? You can just, you can, if nothing else. Rising in that sense when there's no safety net, it can actually absolutely make a bad situation worse. Let's just say it's already as worse as bad as it could possibly be. It's also gonna guarantee that you stay there,
Wil Schroter: correct, right? I, I'll give you some examples. I had so little money that a meaningful capital cost, and I'm talking like $100. was inaccessible to me, right? I, I remember going to the ATM to to the Chase Bankers Bank one back then, uh, ATM on campus, and I needed to get like $16 cause I knew that that's exactly how much I had in my bank account, but the ATM only dispensed $20 bills, and I could not get my money. I was so pissed off. I, I couldn't get my $16 out of, you know, out of the bank that
Ryan Rutan: I my fortune from me,
Wil Schroter: right? And so I guess what I'm saying is at that level, you are so fundamentally constrained. That it's actually just way hard to be successful because like you can't go without a paycheck. I'll give you an example. You know, I'm building a house and all of the different trades that that are that are working like the electricians, the um concrete guys, whatever, are all floating some payroll capital with their with their crews, some uh capital for the the supplies, materials, until the. Job is done and they get paid. Well, that's a luxury to be able to have access to enough credit that you can pay someone this week even though you're gonna get paid later. Poor people don't have those fundamental luxuries. They, they don't have access to credit, they don't have access to capital, and by virtue of that, they don't have that pad, that luxury of failure. Which prevents them, fundamentally prevents them not only from from uh getting started, but from being successful even if they are started. I think it's very misunderstood when folks are saying now, it's just it's help these poor people out, you know, like in in a very like kind of sardonic way, like, yes, you wanna help them, but dude, if you don't understand their condition, you're not being very helpful right what I'd say.
Ryan Rutan: Yeah, if you give you can give people like let's say the understanding, the motivation, the hope, all of that stuff. But if they're still in a position where risk is a luxury they can't afford,
Wil Schroter: yeah, especially family, right,
Ryan Rutan: right, it's, it's a hell of an anchor.
Wil Schroter: And so, you know, when we talk about what do you do in that situation, right? OK, you wanna help these folks out. But they actually don't have the luxury of doing what you're asking them to do, which is, which is assume risk. You've gotta provide some level of cushion, that's usually where capital comes in. Ryan, I've been banging my head against the wall for decades, thinking about what this looks like. So I want to beat this up a little bit with you. There's kind of two schools of thought on this one, OK? As I've seen it, and I'm sure there are others. One is some form of of entrepreneurial welfare. Right, vis a vis, you know, some sort of grant program or some like universal basic income, uh, which I know is is is a cagey topic, but UBI for entrepreneurship, OK, sure. So some sort of like, hey, let's let's give that person just a little bit more net in order. For them to get further. I don't think a lot of people would argue if they could see it being used properly, OK? The other side of the course is just straight up like venture capital for, for low income, right? Like, um, this isn't a grant, this isn't like, you know, you don't pay it back. It's, it's not welfare, it is an actual investment. And you have to pay it back or said differently, like people don't pay venture capitalists back unless there's an upside, but you'd have to see enough return, you know, it's kind of where like social impact investing comes on, could be able to make that right could venture debt, kind
Ryan Rutan: of be in the form of a loan could be right.
Wil Schroter: When you look at those two versions, like, I, I hate to use the term welfare cause that's got such a stink to it, but you know, some sort of support program, social safety net or, you know, social, and I'm not trying to just rebrand it. I'm just saying we aren't just talking about paying people to not work, we're paying people to work like hell. And then the other side of it is uh an investment with an expectation or return. How do you see those two camps, like, you know, which. Kind of appeals to you differently, like, you know, where do you see them working differently?
Ryan Rutan: The challenges because we're trying to talk about, we're trying to talk about how to elevate people out of the risk component of it, right? How
Wil Schroter: to capitalize them so that they can pay the, the, the workers and materials on the concrete job so they can do the next concrete job. I again, I'm being very simple, but if it's
Ryan Rutan: something that like, so if it's that specific, right? So if you can get into a situation where like they're Essentially there's a guarantee, but like it it's almost factor financing at that point, right? Like you're, you're just essentially saying like we're gonna, we're gonna be able to give you money uh to, to overcome cash flow gaps. That's one thing. If you're saying venture debt at a larger level where it's gonna be based on some further down the road, possibly type outcome, that still feels like depending on how it's structured, that could still have some some risk to it. Right, right, for kind of that may not be looked at as as completely unrisky. Maybe I'm just becoming more of a socialist as I as I get older, but like I do feel like providing some sort of a minimum basic income for for founders. Again, minimum basic income for founders based on other socioeconomic factors like the same thing you have to do to go through like FAFSA, right? You have to go through and and and file your federal form for financial aid. If you qualify, you get this much and here, here are the terms. Something like that feels fairly interesting to me.
Wil Schroter: Actually, hold on, you know, right, I never drew that parallel. I'm so glad you said and I'm gonna hand this back to you in a second, but I want you to build on that. We have exactly this welfare program for education,
Ryan Rutan: but, but it implies going to get some capabilities to work instead of just actually going to work, right? So to me, if that's what we're trying to create. I employable people, employ them, right directly. Let them employ themselves, uh, let them put whatever skills they have to work in again. There could be some, you know, the, the FAFSA in this case would look a bit different. You would, you would have to show some capabilities, you'd have to show some, uh, not, not just need, right? It's not just need based, um, but in the same way, like, even, even with FAFSA, really you're passing two tests at the same time. You're passing the entrance exam to the university, and you're passing the the requirements from a financial standpoint. If you could do both of those things at the entrepreneurship level, I'd be all for that. Right? There's gonna be metrics you have to keep hitting just actually the parallel is beautiful because in the same way, if you start getting garbage grades, you're out, right? If you don't hit your metrics at the set aside for that business, whatever that is, like, you gotta hit revenue by by month 2. You have to start employing people by month 5, whatever it is, like we can come up with the criteria for it, doesn't feel that hard to manage, and it has a much more direct and measurable outcome than an education.
Wil Schroter: It's got a very powerful, almost like self. Direction, self motivation, self-interest, like one of the problems I have with paying into the university kind of scheme, if you will, is that there are really no guarantees. It's like, oh, you'll get a job, maybe, who knows how I was gonna get that job anyway, right? Like it's really hard for me to
Ryan Rutan: graduates right now how guaranteed that is.
Wil Schroter: I guarantee they feel, but, but I guess what I'm saying is there's something really fascinating about this idea that the government, as an example, as these main funding entity, feels very confident that if we send more people through this, this amorphous thing called education, higher ed, that we'll get payouts. So we should heavily subsidize it at both the state and federal level. Families feel that way, that we should save for college because, you know, that is the thing. And this isn't being anti-college. It's, dude, if we already have this program and it's very well understood, and like, imagine if we call that a welfare program, right, an educational welfare program, which it is. But here, here's what's interesting about it. Nearly every student loan is a non-collateralized loan, which is damn near impossible for a founder to get. Said differently, if I say I want a non-collateralized loan because I'm gonna become a theater major, which I was, so. I did make that ask, right? We're like, dude, red carpet, here's all the opportunities for you. But if I want to take the same amount of capital and I want to go build what became a $700 million dollar company, they're like out of luck, no interest, right? Get out of
Ryan Rutan: here. Go
Wil Schroter: back
Ryan Rutan: to
Wil Schroter: your theater program. And so, uh,
Ryan Rutan: the irony, right? The,
Wil Schroter: the irony, but, but the parallel there is beautiful.
Ryan Rutan: Yeah, I mean like it's literally staring at the face. It's it's sitting there, that that is the the framework that you could easily just sort of copy paste over top of entrepreneurship, couple little tweaks, and you're retrofit and ready to go, right? And we have no issues with that. And the other side of that is, think about the scale at which that operates, and think about the scale at which you would need to do this for entrepreneurship. There's not going to be nearly as many people that would want to do this as that, right? So it's it's also an infrastructure will be far easier to manage. And think about when you end up giving money to college students, it goes to one place, about two places, the local beer hall and the university, right? But it goes to the university. When you give money to entrepreneurs, where does it go? It doesn't go in their pocket because, yes, yes, we can create some sort of minimum livable thing, right? But also it's gonna go to local suppliers. It's gonna go to their employees. It's gonna go to other service providers. Li go the back into the economy. Yeah,
Wil Schroter: directly drive the economy. Now here's what's also interesting. You put somebody through 4 years of of undergrad, OK, and then. go on to become middle manager, they're gonna generate a tiny amount of payroll taxes, you know, by virtue of what they kick into the system, Social Security, what have you in the US. But you create an employer, they're gonna pay payroll taxes, which a lot of people, like, a lot of people actually our, our listeners definitely know this, but a lot of people don't know that employers match the amount that, you know, in payroll taxes that they pay directly in addition to what you're paying, right? So like, Like I love when people say, uh, Jeff Bezos or Elon Musk doesn't, don't don't pay their taxes. Dude, do you have any idea how much Tesla or Amazon has paid in payroll taxes, right? More than any human will ever pay in a million loopholes
Ryan Rutan: for those, zero loopholes for those. It doesn't matter like there's a loophole for everything when you're wealthy. Nope, nope, it's paid. Every single time,
Wil Schroter: as business owners do you have any idea how many taxes we pay, right? Like, you know, like without even trying. And so my point is, you give this money directly to the, the right individual, meaning just somebody who has, has an affinity for entrepreneurship. You're not only, you know, like paying for an education, but you're also paying exponential amounts of give backs and tax. You're then creating jobs, you're then inspiring more people. I mean, the investment on an ROI basis, we're gonna take Pell, you know, and everything you you pick up through FAFSA, etc. and instead pour 10% of that specifically into entrepreneurship, dude, the ROI on that would be.
Ryan Rutan: It feels pretty hefty. I feel like we need to call somebody, Will.
Wil Schroter: If only there was a platform, right? But I look at that as well, just going back to, you know, failure, you know, being a luxury, that's essentially what we've done in education. If people had to pay out of their own pocket, right? There's no loan program, there's no subsidy. You had to pay with your extra cash, which I did because I worked my way through college. You'd never do it. I was making 10 bucks an hour, right? Like trying to pay for for education and everything else like that, and it was brutal, and I was paying cash on the barrelhead because I didn't have access to debt. And I guess what I'm saying is like, we have a program now that honestly doesn't work that well, you know, being higher ed, where we are already deferring failure, right? We're saying, look, we get it, you, you can't live uh and go to school at the same time and, you know, afford to fail. So for 4 or 5, sometimes 6 years, uh, not counting grad school, we're gonna, we're gonna fund you. We're gonna make sure your, your bills are taken care of, that your necessary expenses are covered, so, so that you can that that you can have this pad. In order to do this thing in entrepreneurship, we have one program, it's called go fuck yourself. Yeah, and you still have to pay every level, yeah, exactly, that's our FAFSA and it's brutal. I, I genuinely believe that creating a safety net, and I mean this in the most productive way possible, would have. A massive impact on a lower income or impoverished community that would allow them to do things that they just simply can't do. I think that's, that's the second leg, give people just enough pad to allow them to to um absorb some failure to create success.
Ryan Rutan: Well, man, just hold on that for a second and think about, think about how that impacts the first leg. Think about how knowing that you have that, think about how that changes. The hope dynamic, because there is that line you have to draw with like, am I being, is this hope or is this delusion?
Wil Schroter: Right, I mean, really, because it depends on the
Ryan Rutan: I want, but if I'm held back by, if I'm held back by the risk component, if I can't risk, then hope is just delusion. If I, if I actually can't go do the thing, it is just illusion. And so if we can have hope, but if hope can be built on a foundation of of what what just basic security, right, right, yes, yes, I'm not going to starve to death by trying to do this, then I can actually put my hope to work.
Wil Schroter: So if we're talking about FAFSA, we're talking about education, that leads us to the third leg, which is the idea of a bunch of people in any community, impoverished or Or whatever, going out and building successful startups with no access to the education of what this takes, the mentorship, etc. it's the equivalent of saying we want more doctors, but we won't have any medical schools, right? In order to become a doctor, you sort of have to go out there on your own, get some surgeries under your belt, kind of figure it out. And if people don't die in the process, you know, you get a high five, you become a doctor. That's literally what entrepreneurship is. It's go out there, figure it out, we're gonna give you no education, we're gonna give you no guidance, and if you somehow figure out one of the most complex possibilities you could possibly encounter, then we'll tax the hell out of you.
Ryan Rutan: Yeah, yeah, we'll tax you.
Wil Schroter: I think that I teach this this class in middle school, uh, at my kid's school on entrepreneurship. And what I tell the kids in the first days of class is that what I'm going to teach you, I'm, I'm gonna teach you what's possible, essentially hope, right? But I'm also gonna give you the tools, the specific tools to go do it. And I, and I call that agency the ability to, to recognize that you can be your own, um, governance in the tools to make that happen. What we do at Startups.com is fun it's literally what we do all day long. We teach 1. 3 million companies and the founders within them, that agency, those tools, we give them that mentorship to say, here's what to go do next. And they're like, damn, I didn't know I was supposed to do that. And I was like, how could you?
Ryan Rutan: would you would you know I would do this? not in medical school. You're in entrepreneurship where there, there is no one to tell you. Yeah.
Wil Schroter: Correct. I think what we're missing, um, and again this is directly part of what we, what you and I do, what we're missing is a very structured way. To say, here are like the 20 things that you need to know, whether it's fundraising, uh, getting customers, you know, you name it, but here's how to actually do it, because the chances are that wherever you came from, you actually know how to do all of these different things all at the same time, all related to a product that you just invented 5 seconds ago with a team that never existed. Um, in a market that probably doesn't exist yet is 0, right? It's 0, right? And yet the fundamental programs and access and fabric of teaching people how to do this is so up. Like it's so bad. It blows my mind that we have as many successful founders as we have. Given how insanely broken the education and mentorship component is,
Ryan Rutan: yeah, worldwide, goes back to that hope component. And look, hope doesn't always come from from a position of like, I have nothing, so I hope I'll get something, right? Hope comes from like seeing that problem you want to solve. It comes from, you know, wanting to make that dent in the universe, and it comes from not wanting to suffer anymore from something you've suffered from or not wanting someone else to to suffer. And so I, you know, it does, it makes a lot of people do really crazy shit.
Wil Schroter: Yeah, right, right. No, I, I agree. What's crazy to me, OK, imagine a founder checked the first two boxes. They said, you know, I've got the hope. I, I actually, I genuinely believe in myself or my opportunity, or I even believe that the world exists in a way that that that could potentially benefit me. Not everybody feels that way. Second, I've got a tiny bit of capital. Forget how I got it, right? Just I have a tiny bit of capital or I live with my parents and they'll just keep feeding me some sort of safety net. So I got those two things covered, but I still know what the hell I'm doing. That is the given. No matter where you're coming from, we have people coming to us from all walks of life, from the most impoverished to the most uh privileged, but the one thing that they share is they've never done this before, and they have no idea what they're doing and they're terrified. What a massive impediment. I go back to again, I, I always use the, the, if everybody wanted to become doctors, but med school didn't exist, and you just all had to figure it out as you go. First off, think of how many doctors we'd have that are the most terrifying doctors of all time. Yeah,
Ryan Rutan: think about how many countries we have because they would have gone through, uh, you know.
Wil Schroter: But
Ryan Rutan: think of how many doctors we'd have,
Wil Schroter: right? We'd have, we wouldn't have hospitals we have it now, right? Like it would be so unheard of that that would even be a career path, right? You know, that that would be the, the child of an Indian family being like, hey, mom, dad, I want to become a doctor like, oh God, no, don't do that, right? We're just gonna go figure stuff out and maybe like not kill people.
Ryan Rutan: It is funny because when we look at like how much entrepreneurship drives the economy, right? Like when we look around, like a lot of the businesses that we engage with, most of the things that we do. Had some level of entrepreneurial beginnings, right? Like, Correct. Even hospitals to some degree, had an entrepreneurial element to them because we used to just have, yes, doctors and we had offices and we had surgeons, but we didn't have hospitals, and hospitals really the business side of medicine. And so, despite that, we haven't created this sort of certain pathway around becoming. An entrepreneur that we have around these, these other things. And of course we've we've done some things, right? Like there, you know, there are university programs to teach you how to be an entrepreneur. I think you and I would both kind of shake our heads a little bit at the outcomes there, but like there's some stuff has happened, but not, not nearly as much, right?
Wil Schroter: I think for a lot of people, right, I, I think the part that they want to. Do it, but they have no access or even if they had access, like, I can get into Harvard and I can get into their education or their their entrepreneurial education program. I don't know if they have one, but assuming they did. It still probably isn't gonna teach me most of the things I need to know. Like, in other words, the places people would fundamentally go generally just don't work. Well intentioned, right? Always well intentioned, but fairly ineffective. And so I look at it and I say, damn dude, that seems like a pretty big problem if what you just said a moment ago, which is so true. That in the United States alone, it literally is the definition of a startup, you know, it was started by a bunch of founders who then had a crazy idea to go to an unproven market, right, and were willing to fight for it, quite literally, and created an atmosphere where hope was its greatest asset. You know, people come to the United States because they believe that their lives can be better. There aren't a lot of countries that have that universal calling card. That says your life will likely be better if you come to this country, uh, incredibly powerful asset, right? One questionably that maybe we're trying to destroy right now, but I'm not gonna be political about it. But that said, We then have this ability um for people to come here and say, damn dude, there's enough wealth here, generationally, etc. that there's enough people out there that can make these sacrifices, and we have enough of a social safety net. Again, that's even coming down to, there's people that can live with their parents because their parents can afford to support them in order to take some chances. There are many countries, many parts of the world, that's not even an option. Right, right, like, uh, if you don't work in in bringing money this week, we're all screwed. So of course you can't not work and not bringing money this week because you might bring in more else uh later. But then if you think we built a country this big and this powerful as far as an economic engine, without ever having any formality as to how we did it, it's kind of mind blowing. It is like how the hell did we even get here?
Ryan Rutan: People that were willing to take the risks,
Wil Schroter: right? We got here despite ourselves,
Ryan Rutan: yeah, despite, despite the odds. Look, it, it, it did cost a lot of people everything, and there's plenty of stories and, and so it's, it is not, yeah, the the the the road to entrepreneurial success is paved with the failures of others in a lot of ways. And I think one of the questions we're asking is does it have to be, right? Does, does it have to be. Massive success versus abject failure. Why are we, why are we drawing this hard line, um, and why are we, why are we not creating better conditions such that, you know, the outcomes could be? Better defined. The outcomes could be more reasonably achieved, uh, de-risk it for people a bit, like I, I think it would be amazing to be able to do that. And Correct, amazing at a lot of levels, not just to say so oh so people can try it, but like when it starts to work, and I guess it's you sort of have to look at that and go, if it's already worked to any degree, and we can look around and go, it's actually worked a hell of a lot, where You and I sit right now, we're in two different places. We're using a tool right now that was built by someone, uh, an entrepreneur to facilitate this type of video communication. I'm using an iPhone started by, you know, built by one of the most famous entrepreneurs of our, our, our generation to film this thing and just like all the stuff that's around us like we're surrounded by this stuff. Clearly it works. So the fact that we're not doing more as a society, as a nation, as, as, as a community, just even global entrepreneurs, to provide a better pathway for this. Feels kind of bananas.
Wil Schroter: Well, here, here's what I would say, you know, the initial question, can entrepreneurship help alleviate poverty? It already has. It didn't make all poverty go away, right? But if, if you had any question about whether entrepreneurship can have the transformative effect of transforming communities, it did for an entire country, right? Like entrepreneurship, like the America is a case. Study of entrepreneurship at so many levels. And so to your point just a moment ago, the fact that we haven't said, oh, I know, let's go all in on this thing in a very deliberate manner to inspire hope, to create that, that safety net to to get more people to be able to to make that leap. And this is everywhere, by the way, you know, globally, and to be able to provide the tools to Say, and here's how to do it. It blows me away that it hasn't been done formally and deliberately on a global scale. What's so exciting about it is the fact that as we head toward this path, toward this goal, everything we just described of inspiring hope, of creating uh an environment where you can try in creating the tools to teach you how to do it. We actually don't even need to get it that right. Success compounds. Success compounds. We need to be right 1 in 100 times because when we are, that one is going to exponentially blow up this flywheel that we're trying to create. So all we need to do as a society, globally, isn't to Try to make everybody an entrepreneur. It's to try to plant the seeds so that we get a few. And those few plant the seeds to get even more, and we make entrepreneurship a fundamental part of the fabric of our society globally, which gives everyone the opportunity and the hope to build something and build their own life on their own terms, exactly how they want to live.
Ryan Rutan: Overthinking your startup because you're going it alone, you don't have to, and honestly, you shouldn't because instead, you can learn directly from peers who've been in your shoes. Connect with bootstrapped founders and the advisors helping them win in the startups.com community. Check out the Startups.com community at www.startups.com to see if it's for you. Could be just the thing you need. I hope to see you inside.