The Challenge To Change: It's Time To Reconsider New Models Of Success

Since Teach Your Children Well came out in the summer of 2012 I have been on a perpetual book tour. I have spoken in many of the wealthiest enclaves in this country to parents who send their children to the most prestigious independent schools. I have also spoken to parents who are squarely middle or working class at public schools that range from the notable to the unexceptional. I have spoken to top-level executives from Google and Microsoft, American Express and Morgan Stanley. I have also spoken to the boots on the ground people who work for these companies. I’ve been to Austin Texas, but also Midland Texas. To the Upper East Side of New York, the North Shore of Chicago and Beverly Hills as well as Knoxville, Nashville and Memphis. I’ve crisscrossed the country speaking to parents, teachers, administrators, professors, business executives, regular folks and billionaires. While the wealth disparity in this country is increasingly shocking, here is what has surprised me most. Regardless of where I am, and whom I’m speaking to, change – in our value system, in the way we parent, in what we expect from our children – has been consistently met with a combination of interest, appreciation, apprehension and resistance.

This mixed bag of reactions to the call for change is understandable. Change, for most of us, is hard. Change that involves our children is particularly hard. Experts throughout the country are pushing for a new way of thinking about success for our children. We’d like parents to understand that every child is different, that there is no such thing as “one size fits all” when it comes to measuring success and that the historical measures of success, grades and SAT scores, are limited in their ability to predict success for our children. We are proposing a new paradigm, one that is more closely aligned with what research tells us about child development and the best practices of educators. We’d like parents to keep the bar high for their children, but to make sure that bar is in line with their abilities, interests and well-being. We value what used to be considered “soft skills” and are now considered indispensable for healthy emotional development as well as employability. Skills like creativity, resilience, integrity, perseverance and self-motivation. We believe that we are still educating and still parenting using a paradigm that provided the heartbeat for America in the Industrial Age but is increasingly inappropriate for the needs of 21st century America. So while there is general agreement, among parents, educators and business leaders, that change needs to be made the process has been surprisingly slow and fraught with uncertainty and anxiety.

After The Price of Privilege was written in 2006 I anticipated resistance to change. After all, most of us had been unaware of the psychological toll that was being exacted on our children by our high-pressure, high-stakes educational system. Traveling around the country I found the predictable questioning of data and conclusions. “ A little stress is good for kids.” “I worked two jobs when I was a teen, it didn’t hurt me.” “Kids are resilient. They can make up sleep later.” Eight years later these comments are no longer part of the discussion. One in four high school kids have significant symptoms of either depression or an anxiety disorder. One in four college kids abusing substances. 17% of kids at the Ivies self-mutilating. A 78% increase in suicide among young girls, a 34% increase among teens in general. Parents are aware and educated about the fact that an extreme emphasis on metrics, on perfection, on a narrow version of success is working against the healthy development of their children. Almost all the questions that I am asked now have to do with how to reverse the disturbing trends, how to create a healthier paradigm and how to work as a community to effect change. While I certainly don’t have all the answers to these questions, research and common sense draw some pretty hard conclusions. Kids shouldn’t be doing 4 hours of homework a night. They need the amount of sleep recommended by the American Academy of Pediatrics (approx. 11 hrs. for younger kids, 9 hrs. for preadolescents and adolescents). Being overly focused on content often excludes the necessary development of socio-emotional skills. The effects of unsustainable levels of stress are being seen in the offices of not only mental health workers, but also internists, pediatricians, orthopedists and GI specialists. Kids now report that the greatest stressor in their lives is school.

So you’d think that we’d be clamoring for change. Insisting that our schools pay more attention to kids well-being along with educating them with an eye to the needs of the 21st century. You’d think that we’d have reconsidered the value of praise, perfection and insisting that metrics tells the whole story. But in fact, there is not picketing at our schools, no marches in the streets and only minimal changes in most of our households. We are convinced of the need to change and terrified of implementing it. We worry that if we change too quickly, while others hang onto the old paradigm, that our children may be left behind. That our changes may disadvantage our children when it comes to the intense competition we feel awaits them in school, in work, in life. If our son doesn’t join the traveling soccer team at 8, how will he be able to compete at 13? If our daughter doesn’t take 4 AP’s her junior and senior year, how will she get into a top school when her best friends are taking 5 AP’s? Can we really insist that our teens spend the summer working at Target when his friends are off to developing nations building water treatment plants and school buildings? Aren’t we depriving them of both a cultural experience and a great looking transcript?

So here’s the thing. An exhausted, frightened, stressed child is unlikely to be successful in the long run. It has always been our job, mothers and fathers alike, to first and foremost protect our children. To keep them safe. Yes it takes courage to swim against the tide, to make decisions that are not aligned with what appear to be community values, to take a risk and decide that our children are better served by being protected than by being pushed. Over and over in my office I see teens in tears because they fear disappointing their parents with a less than stellar grade or field performance. It’s time for us to step back and reconsider what we have always known. That our children are precious. That they need and deserve to be protected. That their worth can’t possibly be measured in grades or scores

Those of you who are joining the Evergreen movement, or who are just curious about it, have already begun to reconsider models of success. The fact that things have traditionally been done one way, or that others are following a particular path, are simply data points, not imperatives. There are always options. The exact questions that you are considering for your business and your life are the same questions that you should be considering for your family. What does success look like over time? What are my values? Am I really implementing those values in all aspects of my life? We know change is hard. But it is exactly this capacity to change, to create and to adapt that makes for healthy lives, healthy businesses and healthy families. There is no such thing as reconsidering your business model without reconsidering your parenting model. Healthy people are intact and integrated. You can’t be one person at work and another at home. If you want to build something enduring, something Evergreen, you have to clearly and consistently understand that what you are building has a long time horizon. Your child’s grades today are incidental compared to the importance of the person they will grow up to be 10 or 20 years down the line when they walk into their own lives, marriages and businesses. Keep your eye on the long view. On everything.

Madeline Levine, Ph.D. is a psychologist with close to 30 years of experience as a clinician, consultant, educator and author. Her New York Times bestseller, The Price of Privilege, explores the reasons why teenagers from affluent families are experiencing epidemic rates of emotional problems. Her latest book, Teach Your Children Well, also a New York Times bestseller, l gives practical, research-based solutions to help parents return their families to healthier and saner versions of themselves by remembering that successful parenting is measured 20 or 30 years down the road, not at the end of any particular grading period. Dr. Levine is also a co-founder of Challenge Success, a project at Stanford’s Graduate School of Education. Challenge Success believes that our increasingly competitive world has led to tremendous anxiety about our children’s futures and has resulted in a high pressure, myopic focus on grades, test scores and performance. Challenge Success provides families and schools with the practical research-based tools they need to raise healthy, motivated kids, capable of reaching their full potential.


Welcome To The Evergreen Journal

Why does the world need an Evergreen Journal? We have met countless entrepreneurs and executives who have too long toiled in obscurity as they build and grow great Evergreen businesses. They have no place — physical or virtual — to congregate, share ideas, and learn from each other.

For the most part, these leaders do not seek the limelight, they are intrinsically motivated. But they do hunger to get to know other executives building companies with similar mindsets and for the opportunity to learn and help influence best practices for building great, enduring businesses. The Evergreen Journal is for them. The Evergreen story needs to be told.

So what is “Evergreen”? We put it this way:

Evergreen entrepreneurs are purpose-driven leaders with the grit and resourcefulness to build and scale private, profitable, enduring, and market-leading businesses that make a dent in the universe. They measure success by how well they deliver on their mission and they embody the 7Ps: purpose, perseverance, people, profit, private, paced growth, & pragmatic innovation. [For more, please read our post on The Evergreen Movement.]

Evergreen entrepreneurs combine the passion and talent of great Silicon Valley entrepreneurs but are wary of any path that compels them to a pre-determined exit or a growth-at-all-costs approach. They are building companies to last, not to flip. Evergreen companies range from long-standing, closely-held businesses like Mars and SAS Institute, to great lifestyle brands like Peet’s Coffee, to newer growth companies such as Quest and Zoho. What they have in common is their passion to build purpose-driven, private, profitable, enduring, and market-leading businesses.

There is no standard bearer exclusively focused on this type of company — until now.

That’s why we created the Evergreen Journal, a new publication of record for the Evergreen movement — covering the people, companies, and ideas driving the Evergreen approach to company building. Our purpose with the Evergreen Journal is to tell stories about and share insights from Evergreen exemplars (sometimes in their words, sometimes in ours) to help the community learn from each other and grow. We also believe that a broader general awareness of the Evergreen idea will help nurture a growing base of talent, customers, partners, and service providers who want to work for, buy from, partner with, or provide services to Evergreen businesses.

Today, there are plenty of publications that cover the venture backed startup world, and one could spend every day of the year at different tech/startup event if one had a penchant for stale coffee, big pitches, and small talk. But very little is written about and for the Evergreen mindset. A major difference between these publications and Evergreen Journal is, of course, that EJ isn’t much interested in who is funding what company at what valuation but we will cover the business and personal side of Evergreen.

The Evergreen Journal will be written by, for, and of the Evergreen community and will be a platform for Evergreen leaders to share their thoughts, views, and insights with the community. We already have almost two dozen guest writers lined up and we encourage any Evergreen leader with something of value to bring to the community to get in touch and make an editorial contribution.

While we, by definition, narrow our focus on the types of companies we write for and about, we are broadening subject matter. In addition to our two initial articles from Tom Bliyeu of Quest (Inc. 500’s second fastest growing private company) and Roger Thornton (serial entrepreneur who is “Green with Envy”), we will publish in our next edition a moving article from NYT best-selling author and child psychologist Madeline Levine and next month you’ll find tips on how thrive in the quest for genius, by Dr. James Rouse. It’s time we stop pretending that there is a hard line between business and life, and explore how to thrive in both — and understand how each supports and shapes the other.

So, we publish this in service of you — the reader — in the hopes that it will provide knowledge, insight, and ideas that will help you professionally and personally and that it will encourage the evergreen community to come together and continue to blossom.

This is the first step in an uncertain and winding journey and we invite anyone with an interest in the Evergreen movement and something valuable to contribute to get in touch, give us your feedback and guidance, point us in the directions of great evergreen people, companies, and ideas, write letters to the editor, and throw your hat in to be a contributor.

Co-create this with us!


Turning Green With Envy: Why I Want To Build An Evergreen Business

In the spirit of full disclosure, I must admit that my passion for the Evergreen model does not derive from some magical experience with a wonderful Evergreen startup, but rather from a lifetime engaged in the polar opposite model of financing and building companies. In fact, it might be difficult to find a person with a less Evergreen past. I joined my first venture-backed startup company straight out of college in 1987, founded one myself in 2002, and spent the bulk of my career in between working on early stage startups with a small group of VC’s in Silicon Valley. Even the few large companies I worked for long ago (Apple & Sun), were built to grow and IPO fast. But alas, I have become a convert. A convert to the other side of green.

I firmly believe that the Evergreen model is best suited for those that actually enjoyed and thrived in the “traditional” model (the venture path). I loved working in the traditional model. My own experiences have seen that model make hundreds of friends and colleagues wealthy beyond dreams and return billions of dollars to the wealthy people that were “kind enough to give us their money for a while.” I genuinely admire the VC’s I have worked closest with and yet I still think the Evergreen model is the best path forward for me.

So then why would someone like myself reject something that has worked well? Two reasons: one financial and the other sentimental.

The first is simply sound financial advice. If you have a large ownership position in a successful, growing business the last thing you want to do is sell that position (unless of course you think that business is headed for turbulent times). Let’s say you build a new company that grows to an enterprise value of $250M growing at 20-30% YoY (which would be a bare minimum prerequisite for an attractive exit for a technology company in the traditional model). Let’s say, as the founder and CEO, you own 10% of the company after 4 rounds of venture financing netting you about $15M after taxes upon the sale or IPO of the company (assuming you liquidate your entire position in an IPO). If you have done this, congratulations, you are clearly a great entrepreneur, but as an investor, you are an idiot – you just sold the thing every investor on the planet is looking for – growth! Before you sold, you had $25M working at a 20-30% growth rate and probably a nice annual dividend if it’s an Evergreen firm. Now you have $15M to go invest. Simply put, it is not sound investment strategy to sell things that are successful and growing – those are rare. The only assets you want to sell are those that you think are going to shrink in value. Of course you could IPO and retain your shares, but others have covered the pains associated with an IPO in today’s capital markets.

There is one key consideration to this advice: the risk exposure deriving from nearly all of one’s wealth (and income) derived from a single business. If that business falters you lose everything. Unless you were fortunate and born with considerable wealth, you may indeed want to cash in from the aforementioned business simply for the purpose of diversification. For first time entrepreneurs an IPO or sale coincidental with the goals of your VC partners can mean paying off a home and making long term, safe investments to ensure a comfortable retirement for you and your family. For the entrepreneur that has accumulated enough wealth and achieved diversification, the Evergreen model allows you to keep your money working where it works best and where you have the greatest impact on its growth – in the company you are running. Even if your Evergreen business grows at a slow rate, it is easy to outpace returns found in the broader markets today and your Evergreen dividends enjoy a favorable tax treatment. In order to safely do this, the entrepreneur has to be able to hedge the risk exposure in the business through other investments and this is why the Evergreen model is best suited for those that enjoyed success in the traditional model.

THE SENTIMENTAL REASON?

Letting go of what you have built gets more and more difficult over time. Perhaps the greatest joy one can experience in the professional world is to build a company from the ground up and get to carefully choose all the people that will form the culture of the new firm. I have often found myself saying, “I would rather fail with this team than succeed with some other.” Few people get to enjoy this. When you sell to a larger firm or in most cases when you go public, bureaucracy and oversight become the primary functions and little things like sales and product development take a back seat. This is a gut-wrenching thing to watch and, frankly, I don’t want to do it again. If I build a company that I like to work at, I want to stay there for as long as I can generate profits at a paced growth.

These days, I am working on another non-evergreen company, probably my last. I split my time between a home near my office in Austin, Texas and my home in Las Vegas, Nevada. Like most people that enjoy living in Las Vegas, I do my best to avoid the strip. However when I do visit there, usually to entertain friends visiting from out of town, I enjoy watching the omnipresent competition between the two fundamental types of gamblers you encounter in a casino. One is a reckless speculative fool, either oblivious to their statistical disadvantage or convinced that they will somehow be “the lucky one” and exit the casino a winner. Throwing caution, reason, and their money to the wind, they press on with reckless abandon and ultimately wake up, hung-over with an empty wallet, and head for the airport. The other competitor in this arena understands every possible variant of the game, establish a structural advantage, and then slowly and consistently grind out small wins over time by diligently and patiently playing their advantage. Am I referring to professional gamblers? No. I mean the casinos owners – the house. Some of the greatest Evergreen businesses and entrepreneurs ever could be found on that strip. There is a famous saying in Las Vegas, “There is only one way to make money in a casino – own the casino.” As far as starting new business ventures, personally I am done being a lucky tourist, I want to own the casino.

Roger Thornton is the Chief Technology Officer of AlienVault, a security company that develops a platform designed and priced to ensure that mid-market organizations can effectively defend themselves against today’s advanced threats. Roger’s career has been dedicated to the development of technology and new business ventures based on technical innovation. Over 25 years in Silicon Valley and abroad, he has drive the formation and growth of dozens of new companies and hundreds of products, serving in a wide range of roles from engineering, marketing and management to investor/advisor.

1: March 2014, National Venture Capital Association’s (NVCA) performance benchmark, the Cambridge Associates LLC U.S Venture Capital Index®.


Entrepreneurs Are Made Not Born

Like so many others, I was born into slavery.

Thankfully, I don’t mean the unimaginable tragedy of slavery in the truest sense of the definition. Rather, I’m talking about the mental shackles of a worldview constrained by fear and helplessness.

Helplessness. That’s the chain that binds. That’s the reason that, to paraphrase Thoreau, most men lead lives of quiet desperation. They don’t believe that they have a choice. They are endowed with certain skills and not others. That’s just the way the cookie crumbles. Or so they believe. They strive to make the most of what they have rather than pushing themselves to grow and develop.

At least that’s how it was for me.

Here’s the harsh reality. I am not a born entrepreneur. [Gasp!] I sprang forth from the womb entirely average. I was not precocious. I never had a lemonade stand. I was the worst paperboy in town. I wasn’t smart enough to convince the neighbor kids to pay me for the privilege of painting my aunt’s fence. My combined score on the SATs was 990. Ouch. And when I left for college, my own mother (and biggest champion) quietly assumed that I would fail and return home.

But I didn’t. I ultimately excelled.

The question is why? How did the kid who was voted class clown rather than most likely to succeed end up succeeding?

Helplessness Is an Illusion

I often tell people that the easiest way to tell the difference between someone who thinks like an employee and someone who thinks like an entrepreneur is to watch how they react to a daunting obstacle. Someone with an entrepreneurial mindset doubles their resolve when they hit a big obstacle and steels themselves for a fight. It never occurs to them to give up. A daunting obstacle just means that they have to work harder to reach their goal.

Someone with an employee mindset on the other hand hits a big obstacle and relaxes. There’s nothing left to do. Sucks, but that’s just how it goes sometimes. They are helpless in the face of overwhelming odds.

The most terrifying part of the mental Gitmo that ensnares people with an employee mindset is that they actually believe they are helpless. It’s not just a feeling. They believe it to be true. Why fight a fight you can’t possibly win? You’ll just die tired. The sinister way in which that defeatist mentality imperceptibly erodes people’s potential is terrifying. It traps them in a prison with invisible walls, so they don’t have any impulse to try and escape. For years I couldn’t see or feel the cuffs that bound me. I was essentially waterboarding myself, all the while believing that I was free.

The thing that finally made me realize that I was trapped? A unicorn. Two of them actually.

Drowning is a Terrible Way to Die

When you’re clipping coupons to make ends meet (true story), millionaire entrepreneurs seem a lot like unicorns. But here they were, offering me a job. Not the type of job I had had up to that point, where you keep your head down, do as little work as possible and avoid punishment at all costs. No. This was a startup. There were so few of us and so much to do that there was nowhere to hide. I was told I could have any role in the company that I wanted, but I had to earn it. Then they dropped me into the deep end of the pool and walked off.

When your choices are to sink or swim, growth happens pretty quickly. The bad news is, as we all instinctively know, there is a third choice – the one most people choose: get out of the pool. But this time I didn’t get out of the pool. Why? Because the first thing these two entrepreneurs taught me is that helplessness is an illusion. It was hard to believe as I thrashed around in the deep end, sucking down gallons of metaphorical pool water. But they assured me that every problem has a solution. Even ignorance. Even lack of talent. Even being in way over your head. To find the solution I just needed to be willing to grow. And growth is always an option.

And thus the real journey began.

Think and Grow Rich

The realization that growth is always an option was liberating. It set me down the path of abandoning what Carol Dweck calls a “fixed” mindset in favor of a “growth” mindset. I had to stop thinking of my current abilities as the definition of who I am. Just because I’m not currently good at something doesn’t mean that I can’t get good. Or even great. I just have to set about relentlessly acquiring the skills I need to succeed.

Goal-oriented personal growth is a brutal journey of coming face to face with your limitations. I have yet to find a short cut around the emotionally difficult work of admitting one’s current inadequacies and setting about turning them into strengths through disciplined practice. If you’re willing to do the work, however, regardless of whether or not you sprang forth from the womb cloaked in mediocrity as I did, you really can develop the growth mindset of an entrepreneur and race, shackle-free, towards the extraordinary.

The details of what exactly constitutes the mindset of an entrepreneur would require an entire book series to adequately define. For now, suffice it to say, that just as Neo in The Matrix realizes that there is no spoon, an entrepreneur is someone who realizes that there are no shackles. They can see that the prison of fear and helplessness is only in the mind.

Tom Bilyeu is the co-founder and president of Quest Nutrition, a company that is revolutionizing food and making healthy eating fun. Tom leads the sales, marketing and media teams while also helping to guide the company’s culture of passion and transformation. Tom believes that missionaries build the best businesses and he filters all business decisions through the lens of Why rather than What.