Nature Vs. Nurture: Entrepreneurship and How Our Upbringing Can Influence Our Future Ambitions
Coming to Canada
Daniel Rodic: You moved here from Kenya. What was it like growing up here?
Reza Satchu: Moving here was interesting because three unusual things happened. Number one, it was unusual that we left what seemed like a reasonably stable, comfortable place in Kenya to come to a place that we’d never been to. We’d never seen snow before and didn’t know very many people. So, it was a jarring experience, but it was an immigrant experience like many. Number two, I immediately skipped a grade. It’s remarkable that the Mombasa education system was apparently more advanced than the Toronto education system, but I did skip a grade. Number 3, my parents made a conscious decision to separate us from the Ismali community. My brother and I didn’t really grow up as part of any immigrant community even though we were immigrants to this country. So, I think the combination of immigrating, skipping a grade and then having a sink or swim mentality where we’re not here as part of a community but rather trying to figure out where we’re going to find our lane — all of that created an interesting dynamic. The upside was that my mom, dad, brother and I formed a very tight circle. The downside was I often felt somewhat isolated being in a new environment.
We were very driven to overcome obstacles that were not of our own choosing. Each little obstacle we overcame gave us more and more confidence.
Daniel Rodic: When you moved here with your family, I imagine your parents had their own stress with not only raising you, but also just living their own lives…
Reza Satchu: I would say that my parents are the true heroes. People who choose to emigrate for the betterment of their children… I have a huge degree of respect for them because in many ways, it’s hardest for them.
My parents immigrated here and left a place that was reasonably comfortable to start over again. Neither of my parents had gone to college. My mom came here and became a secretary and my dad spent two or three years figuring out what to do. He didn’t really know what to do, and I think he had one foot still in Kenya. He was less committed to Canada. He eventually found something that he felt passionately about, but I think for them, it couldn’t have been easy.
Daniel Rodic: What were your interactions like with them on a day to day basis? Did you spend a lot of time with them?
Reza Satchu: My parents were very present; they were fantastic parents, but there were trade-offs. For example, we went to public school in Scarborough, but we didn’t have the money to live close enough to school. So, every other kid went home for lunch, but we didn’t. Every other kid could walk home from school. We had to wait a couple hours for my parents to come back from work to pick us up. And so, I think there were trade-offs, but it was never a feeling that my parents weren’t trying their best, It’s just the cards that were dealt at that point in time.
One day, my mother turned to me and said, “The two of you are going to Harvard.” Which was an absurd thought, a completely absurd thought. And then, both of us ended up going to Harvard.
But, what they always had was a belief that we could accomplish anything. I think that having at least one person in the world believe in you is a very valuable thing.
Daniel Rodic: Your parents consistently gave you that boost of confidence when you needed it. Kept you pushing yourself, and encouraging you to face challenges. So, what are some other ways they built your confidence?
Reza Satchu: They certainly tried their best to build our confidence and my father in particular…
It was always remarkable to me that my father, who grew up in Kenya, was sent to England for boarding school and lived in a variety of uncomfortable environments, yet still had a really strong conviction that our family would progress and would succeed here in Canada. I think that conviction really flowed through to us.
For example, at the age of 10, I had a paper route and I was the only kid at that age who was working. It seemed a little scary to be out there delivering papers in the evening and it wasn’t the safest neighbourhood but my father pushed me to do it. Even though he was thinking “this is dangerous,” he had confidence that I could figure it out or learn something from it. My key learning from that paper route was around a failure that I had…I still think of it to this day. When you deliver papers, you have two kinds of customers: you have those that pay you weekly and you have subscribers. The problem is that subscribers would only give you tips once a year at Christmas. So, it’s critical that you make it to Christmas because those tips could represent 30 to 40 percent of your profits. I was so miserable delivering these papers in the snow in November that this older kid pounced on my weakness and said “Hey, I’ll buy the paper route from you.” He offered me something which was much less than what I was going to make three weeks later when I went for collection and I still sold it to him. I’ve often thought to myself that that was just a lack of resiliency. So, it was a good teachable moment to realize my mistake at the age of 11.
Daniel Rodic: Thinking back to that time after you sold your paper route, before you’re going to go to college, what are some of the other lessons you learned early on?
Reza Satchu: Very early on, I realized that the greatest thing that happened to my family was the opportunity to immigrate to Canada.
Even during the hard times, it was clear to me that at least here we had the optionality to do something amazing and to build something that was pretty interesting as a family. That’s driven a lot of my behaviour in terms of where I choose to live and where I choose to spend my time — what I care about. It was an event that very early on as a kid I thought was a pivotal moment. I always thought to myself that one day, perhaps, I can do something interesting to pay it back. We actually immigrated here on Canada Day on July 1st, 1976. I still remember becoming a citizen a few years later and I’ll tell you what, it took us a long time to become citizens — five years. So, I think that is a very important event in my life. In terms of the entrepreneurial journey, very early on, I saw my father make something out of nothing as well; he became a real estate salesperson and I still remember, early on, delivering cards saying “Satchu sold this house for thirty two thousand dollars” and then he became really successful over the next 10 years or so. I watched him act like an entrepreneur, make stuff happen and do things differently. That, to me, was a very important window to see what is possible. When I think about my teenage years, I don’t feel like I hit my stride then. I felt like I was a kid looking in from the outside, so I wouldn’t say I had an innate confidence at that point in time. Meaning I wasn’t someone who’s going to stick my neck out. And perhaps it was some of this dislocation, just getting comfortable with all of it, but I don’t look back on my teenage years and think that was a period of time when I knew exactly what I was doing. I knew what I was motivated by, but I didn’t know how to go about doing it.
I often say that having obstacles that are not of your own choosing, like an immigrant experience, can be remarkably valuable because you learn a lot about yourself.
I don’t view my teenage years as years where I was necessarily entrepreneurial or a natural leader. I view my teenage years as me trying to figure out what I was good at, where I could compete and what path I was going to follow.
The journey to Wall Street
Daniel Rodic: When did you start feeling the self-confidence to do the things that you’re known for today?
Reza Satchu: There are three moments that I think about:
- When I met my wife at McGill. She was beautiful, smart and someone I clicked with early on.
- When I discovered my place on Wall Street. All the smartest kids were going to Wall Street. I didn’t know anything about Wall Street, but I read this article and it talked about how all the kids from Yale, Harvard and Stanford were dying to go to Wall Street. So, I decided in my fourth year at McGill that I was going to try to do the same.I think I sent out 200 resumes and 200 letters and got rejected everywhere and then finally started calling Canadians who worked on Wall Street after 5 p.m. with the hope that they’d pick up. Eventually, Sharon Simmons at Merrill Lynch picked up and within two minutes I tried to give her my story and she said “OK, where are you?” And I fibbed. I said I was in New York because I didn’t want to introduce the concept that I didn’t have a work visa and I’m in Canada. She says to me, “OK, well why don’t we meet in an hour?” So, I’ve got to backtrack very quickly and somehow I convince her to meet me the next morning. I’ll never forget that meeting because she asked me some hard questions and it was clear that I didn’t know the answers. I was way less versed than all of the other people they interviewed. She turned to me and said “Reza, you seem like a nice kid, but you don’t know anything. Why would we hire you over others who know more?” And I said “Listen, here’s the difference — all those other kids left their dorm rooms, went to their elevator bank, saw a sign-up sheet that said “Who would like to interview for Merrill Lynch?”, put their name on, were called two weeks later and were flown to see you. I said, “The difference between myself and them is that I only learned about Wall Street a year ago. You’re the first person that I’ve met from Wall Street. I’ve been rejected 200 times and I drove all night to be here to have this interview.” And, she liked that answer. It was a teachable moment for me, recognizing that your story can be very powerful in the face of others who seemingly might have better stories.
- When I went to Harvard to do my MBA. I remember the first day thinking “This is a mistake. There’s no way I deserve to be here.” It’s probably one of the last times I can recall feeling a lack of confidence. I mean, walking into the class thinking you’ve slipped through the cracks because everyone else here seems so damn impressive. At Harvard Business School I learned that I am as smart as those kids. I can accomplish more. It was an important experience for me from a confidence perspective.
Daniel Rodic: Harvard, then, is kind of a jumping off point into the start of your true entrepreneurial career ?
Reza Satchu: I realized at Harvard that ultimately at my core, I wanted to swing the bat. I wanted to be the guy making the decisions. And I wanted to be that guy as soon as possible.
I was less afraid of failure — I was more afraid of just never getting up to bat. So for me, the concept of being in an advisory business or working for someone my whole life was not something that would make me feel great. I would rather have swung the bat and failed a bunch of times than never swung the bat at all. At Harvard, I realized that I wanted to be an entrepreneur and that decision had something to do with my childhood. I wanted to have freedom. I wanted to have the freedom to make my own decisions. The freedom to figure out how to spend my own time. The freedom to figure out who I was going to work with and, most importantly, the freedom to really have an impact. That’s what drove me.
I wanted to be an entrepreneur because I felt it was the best way for me to get what I wanted most, which is freedom. And hopefully be a force for good and have people in my company or in the community follow in a way that is beneficial too. Hopefully, a lot of people.
Daniel Rodic: When you’re finishing off Harvard, you didn’t jump into building your company right away. Why not?
Reza Satchu: I opted to join Fenway, a start-up private equity firm, instead. There were three partners and myself. I turned down a number of larger, much more stable private equity opportunities to do something riskier. In retrospect, I think the reason I took the risk was the opportunity to do something entrepreneurial. To have more freedom. Yes, there was a risk that it wouldn’t work. However, I had a real opportunity to accelerate and learn not only about private equity, but also everything about building a business — the positive and the negative. I viewed Fenway as a start-up in training for me. I was the most junior team member and what I’d say is that experience became a hugely valuable one. I’ve been quite fortunate in having people early in my career, people of real significance, take a real interest in what I was doing. I think that they vastly increased the probability that I would be successful.
How to find a mentor with your best interests at heart
Daniel Rodic: So, when you’ve noticed “hey someone has some interest in helping me,” how have you approached building a mentor / mentee relationship?
Reza Satchu: This is interesting because now I find myself on the other side. People only have so much time to dedicate to younger people, meaning there’s only so much time in the day, so the question is: How do you choose? How do you decide who you’re going to spend your time on? For me, if I look at the three most important mentors in my life, I think I was good at figuring out who was also on a trajectory and if both of our trajectories could accelerate from this relationship.
Two reasons why someone might want to mentor you:
- They think there’s something about you that would enable their impact or advice to have an exponential effect. It doesn’t mean that it’s always going to happen, but it means that there’s some optionality around it. I think that people saw in me some level of optionality.
- They like you as a person. They’ve actually got to like you. They’ve got to want to actually spend time with you and they actually have to like your story and like your values and like what you’re trying to do. That this is someone that I want really want to help, bet on and spend time with.
At Merrill Lynch, my mentor was Stan O’Neal, a truly remarkable person. His great-grandfather came to America as a slave and he grew up without running water in Birmingham, Alabama. He came from adversity to a position of power at Merrill — he was the head of my high yield group and ultimately became Chairman and CEO. Although he had a different story, I think we identified with each other. I worked really hard for him and he ended up paying that forward for me. He wrote my reference letter to Harvard Business School and ultimately invested in a variety of my businesses. And then, when he hit a rough patch at Merrill, I sent him a letter saying, “Your legacy is much more than Merrill Lynch’s stock price, it’s in all the people like me who were inspired by you and have done more because of you.”
Then at Fenway, there was a fellow named Peter Lam who took great interest in me and, at the age of 28, he made me a full partner. We raised a 500-million-dollar fund, followed by a billion-dollar fund. My wife and I were finally able to pay off our student debt — I owe Peter a lot.
Daniel Rodic: Whether with Stan, Peter or others, how did you grow your relationship with your mentors over time?
Reza Satchu: I was very careful to make it powerful and impactful every time I interacted with my mentors.
I’d go see Stan once or twice a year. Either I had something of significance to tell him or something of significance to ask him. I tried to make sure that the meetings were meaningful and short. I always made sure that we had some laughs and I became very close friends with his assistant — which is also key.
And so, when I think about my role as a mentor now and why I created NEXT, it really has a lot to do with trying to find people who have real optionality. I view my class as a mentorship class and what I want is to make sure that I am spending time with people that I like, but also people that have tremendous optionality. The joy I get is knowing or hoping that NEXT has a positive impact on people like you, Daniel.