Ready…
Jay Rogers is a bold guy! He is taking
on the big auto giants such as GM, Ford, Toyota , BMW and all. I met him through my circles at MIT at a dinner few days ago. He
started off by telling how he got started. His grandfather had a small motorbike
and automobile repair shop and he was only 7 when he started going under the
hood of cars. He grew up around cars; they are in his bloodline, as he put it. He
grew up privileged but their family fortunes dwindled over time and yet he
continued to nurture the dream of starting a car company someday. After serving
US Marines for 7 yrs and consulting with Mckinsey for auto industry, he met
Jeff at HBS. Jeff was equally passionate about cars and after a few months of
working together on business plans and other B-school projects, Jeff proposed –
“Let’s start an auto company”. The proposal was partially in jest at that time
but the idea grew and took a life of its own. During his summer internship at Cleantech
Inc., he learned that Cleantech wanted to invest in a car company. While Jeff
and Jay were figuring out the exact nature of their business, some professors
they bounced their ideas with remarked, “Not bad!”. They took those remarks as
positive signs and decided to reject salary offers in excess of $150k from the
consultants and investment banks of the world. It finally became clear to them
that they wanted to start a company because they hated some of the ways the
current auto companies were doing business – huge dealership overheads,
inventories eating into profits, inflexible design options for customers, and
huge barrier to entry for new innovations to make it to auto products. Also,
during their stint in the industry, they learned what bad managers do to the
company and customers and wanted to be in control of building a certain culture
in their company. Thus, they incorporated their idea.
Aim & Fire…
With HBS’ Prof. Clay Christensen, Prof. Kent H. Bowen, and MIT’ Prof Ed Crawley to reassure and hone their idea, Jay started up his 2nd company, this time with a solid foundation of business education from HBS. While at HBS, Jay figured out a funding opportunity that allowed him to take a trek to big auto companies to learn deeply about their business. A lot of information he gathered there as a student would either not be comfortable for him to gather or the companies wont volunteer to offer, once he became an entrepreneur. He also availed of the incentive HBS gives to its graduates who become entrepreneurs, in which their loans are completely paid off. Initial funding for the company wasn’t too difficult either. Their advisors from Harvard and MIT knew enough people with deep pockets and keen interest in enterprising ideas. Leveraging his HBS background for various things made it possible for him to sanitize the idea of starting up right after graduation.
The biggest challenges they face now are finding the niche customers interested in customized automobiles and building infrastructure for small manufacturing units. Jay said, his strength to face the challenges he faces everyday comes from his unfaltering commitment to his idea and the support from his family, especially his wife. He pays himself a paltry but reasonable $70k salary because his commitment to build the company is bigger than his desire to make money. He suggested the following rules to managing his personal and work life well – tell your wife everything everyday so that you don’t have to tell her about an escalated condition that requires you to spend extra time and resources toward them unexpectedly AND talk to the other co-founders upfront very candidly about the extent of ownership to avoid feeling of deception someday later. He described his role as an entrepreneur by quoting Howard Stevenson: “a relentless pursuit of opportunity beyond the means currently under control”. People can copy his idea, but not his passion. His passion, social support structure, preparation, infectious optimism and good fortune provide him with unique opportunity to pursue his role. These beliefs get him going when the chips are down.
Inspire…
Jay’s energy and passion are really inspiring. I do not have anyone in my near or extended family who has pursued entrepreneurship but I admire the ability to be able to take calculated risks and persevere to make good of them. In my mind, the most important thing before one commits to the life of self-employment, is to know oneself. Jay knew that working for someone else didn’t make him happy. From what I have learned of myself so far, I do like to create something out of nothing; however, I couldn’t muster up enough confidence to take so much risk by myself. I think my upbringing prevents me from viewing certain risks as opportunity. Still, I can imagine starting up with close friends who share my passions and beliefs related to the entrepreneurial idea. The idea of being in control of implementing your creative ideas excites me a lot (largely due to influences late in my life) but I am not sure if I would like to do it by myself. Also, I enjoy building teams but am not very good at technologies. Having a faculty in technology would help me start up more easily than without it.
