Author Archives: C. DAY

Education Demands of a Rapidly Changing Economy.






Chancellor Eloy Ortiz Oakley, California Community Colleges


The head of California Community Colleges discusses partnering with businesses to train and reskill the workforce and his role in reimagining the current education model through online learning.

The global economy is in the midst of rapid transformation. Across industries, digital technologies are destroying established business models and creating new ones, which has led to a shortfall of qualified workers to fill open positions.1 Requirements are changing so rapidly that many workers who have been with companies for years wouldn’t be considered today for those same jobs without additional credentials. It’s little wonder that upskilling and reskilling have become a top priority for companies and government administrators alike.

US community colleges—and comparable postsecondary schools in other countries—have a critical role to play. Long important players in vocational education and workforce development, their traditional focus on technical skills and industry-specific certifications have made them indispensable to sectors from manufacturing to healthcare. And with an expansive network of institutions across the country, community colleges are well placed to serve both traditional students and adult workers seeking to expand their skills and expertise.

Eloy Ortiz Oakley, chancellor of the sprawling California Community Colleges system, understands intimately how integral these institutions are to the continued vitality of a changing economy. His vantage point isn’t just professional but personal: Oakley’s experience as a community college graduate has indelibly shaped his views on the system’s role in creating a qualified workforce. We recently sat down with Chancellor Oakley at his office in Sacramento, California, to discuss the future of public colleges, the importance of public–private partnerships, and the potential of technology and online learning.

McKinsey: How would you characterize the ability of public education in the US to meet the needs of today’s economy?

Eloy Ortiz Oakley: Our educational model often no longer works. The current pipeline consists of K–12 education, a four-year institution or a community college education followed by a transfer to a four-year university, and then sometimes graduate school. It is a very siloed process with rigidly segregated levels of higher education.

Instead, we may need to think about a K–14 model. We’ve seen some success with this approach across the country. P-tech is a great example: it is a six-year high-school program, developed through a public–private partnership, that allows students to graduate with both their high school and associates degrees. This model truly prepares students for the future of work.

McKinsey: What is the role of community colleges in preparing people for the workforce?

Eloy Ortiz Oakley: Whether students are coming to us right out of high school, after serving in the military, or from the workforce to reskill after a layoff, community colleges are a great fit. So many people who were able to get good jobs coming out of high school now need additional skills, often because employers are demanding postsecondary credentials.

Community colleges have both experienced faculty and support systems in place. And we open our doors to all students, regardless of where they have been, how they did in high school, or how they have done in life.

McKinsey: What are some of the ways your community college system is using technology to help students navigate through higher education?

Share: A door to greater opportunity

Eloy Ortiz Oakley: One of the challenges in community colleges is that we have historically placed students in what we call remedial or developmental education classes based on their standardized test scores. That’s a disservice to these individuals because it doesn’t really represent how well they can do in college.

We are doing a tremendous amount of work to better understand students’ skills and talents, and to place them in college in a way that allows them to progress as quickly as possible. We’re getting much better information and using predictive analytics to better understand students’ educational attainment when they come to us and determine which courses they should be taking. For example, to place students today, we’re taking high school transcript data and creating algorithms that we call Multiple Measures Assessment and Placement (MMAP) models. These MMAPs will improve as we gain access to more and more data about a student’s life experiences—education, work, internships, clubs, activities and so on. As we get better at collecting that data, the MMAPs will give us much better information on how to personalize education for each individual. We want to be able to tailor an educational experience personally for you the day you walk in the door and having access to data is going to give us that opportunity. Students will be much better placed than just walking into a class of 50 as one of many, where our faculty and staff see only the average of what’s going on in that classroom.

So many people who were able to get good jobs coming out of high school now need additional skills, often because employers are demanding postsecondary credentials.

McKinsey: Community colleges have increasingly been working with the private sector on training programs and curriculums. What are the elements of effective public–private partnerships?

Eloy Ortiz Oakley: The employer–community college partnership is critical to ensure that the private sector has the workforce it needs to grow. We see the economy changing right before our eyes, so without this strong partnership we’re going to fail to educate a sufficient pool of workers.

We need employers that are invested in the future of public higher education to be at the table, helping us to design curriculum and advising us on how to upskill and reskill the workforce. For example, Genentech in the northern San Francisco Bay Area, has partnered with colleges such as Solano Community College to create and prepare an entry-level workforce. Solano Community College in partnership with Genentech has also developed a bachelor’s degree that feeds into its particular industry, enabling more folks in the workforce to move into management positions.

Most companies understand the value of partnering with broad-access public education institutions. Whether they are an automotive manufacturer or a tech company, they are already spending to train new employees, reskill them as workers progress through the ranks, and retain talent in a tight labor market. Community colleges are the ideal partner: we’re already here, we’re affordable to many students, and we’re located throughout the country. Moreover, we’re designed to adapt to the changes in the workforce much more quickly than public or private university systems can.

McKinsey: So how do you pitch a community college student alongside a student from a top-name university?

Eloy Ortiz Oakley: Part of the challenge we have today is the way that we communicate value is the diploma that you offer on your résumé. Not that one degree is better than the other, but if you have a degree from an Ivy League school, that communicates a certain value, while a degree from a public university conveys a different value. In the future, I think we’re going to rely less on where a degree came from and more on the entire picture of degrees, experience, and demonstrable skills. That’ll force us to reassess the value we create through our credentials.

The goal, really, is about building a portfolio so that people can accumulate and demonstrate knowledge to an employer. The challenge for us is, how do we take a student’s information over a lifetime and package it in a portfolio of skills for an employer, including education, military service, and skills gained as an adult learner? Think about how employers are screening applicants. They’re using various algorithms and predictive analytics to screen applicants out on a number of criteria. Applicants rarely get a chance to sit in front of people anymore for a first interview.

McKinsey: Are you talking about a digital portfolio of some sort?

Eloy Ortiz Oakley: Yes, I think having a digital portfolio is the wave of the future. Right now, every time you apply for a job or go to school for an advanced degree, you have to request your transcript from the university you last attended. That is such an outdated way of helping us understand what your skills and talents are.

In contrast, LinkedIn, Indeed, or any of the other job services are essentially digital packages. They capture work experience and duration, education, membership in different organizations, and hobbies and interests. We have also seen advances in student portfolios.

It’s really about how we package all of these skills in a way that’s transferrable and follows individuals throughout their career. It’s unclear what that will look like, but I think being able to demonstrate the accumulation of all your talents and experiences is a much better way of understanding how you’re going to fit into my company or my venture than just a college diploma.


Two Great Social Startups Doing Good

This Bar Saves Lives founders are Hollywood actors two of whom were inspired by a trip to Liberia to help build a bridge.  Ryan Devlin went to Liberia with Todd Grinnell where they met kids who were suffering from severe malnutrition. It was heartbreaking… but also inspiring because they saw the incredibly simple, life-saving nutrition that was returning them to health. They decided right there to get more nutrition to kids in need, so back home they met up with friends Ravi Patel and Kristen Bell to figure out how. They made a LOT of snack bars in our kitchens and then partnered up with the best non-profit orgs around. Before long, This Bar Saves Lives was born.


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Poe: Why Entrepreneurship Is Like Getting Into the NFL


It’s the first thing any aspiring startup founder is told: the odds of a new business succeeding are low. The failure rate of any U.S. company after five years is over 50 percent and over 70 percent after 10 years. A venture-backed tech startup sees even more disappointing statistics, with failure rates ranging from 75 to 90 percent within the first two years, depending on the study you cite.

Dontari Poe is fully aware of those statistics — but he’s used to beating the odds himself. That’s part of the reason that the 27-year-old NFL defensive tackle, currently with the Carolina Panthers and formerly the Atlanta Falcons, joined the increasing ranks of entertainment figures participating as an angel investor in technology startups.

“For one thing, the odds of hitting a unicorn are about the same as making it to the NFL out of college. Like 1 percent. That means it’s a numbers game,” Poe says. “You have to be prepared to lose some, just like games.”

His activity started when he noticed other athletes getting in on the tech space.

“I see all the NBA guys doing it…” Poe says. “Tech is everywhere. It is in all our lives. You got to get in the game with it to understand it.”

His investments have primarily been in companies that tackle problems in the social sector: for example, Silicon Valley-based Lab Sensor Solutionsdevelops ‘mobile sensor as a service’ devices to track lab samples, while New York-based DailyPay is a fintech company that helps workers who live paycheck-to-paycheck by allowing them to receive earnings before their regularly scheduled payday.

“For me, you have to make a profit and do good by people,” says Poe, who comes from a modest background in his hometown of Memphis, TN, where he was raised by a single mother. He like to work closely with the companies he invests in, as he sees the entire startup process as a team effort, “like football.”

“I look for the passion, experience, hustle and humbleness,” Poe says on what he looks for in a startup team. “Startups are hard. You need a lot to go right. That means you need help. If you can’t ask for help, you’re going to fail.”

Poe’s background has inspired efforts beyond financial investing, as well: in 2016 he launched a program for his non-profit, Poe Man’s Dream, focused on connecting underserved youth to the startup world.

During ‘Poe Man’s Challenge’, startup founders preparing for a pitch event (for which Poe was one of the judges, along with other athlete investors) were required to mentor those youth prior to the pitch. The students were then given the opportunity to pitch the entrepreneurs, with the winner receiving a scholarship.

The winner of the Challenge, water quality startup Sutro, also received an additional investment from Poe. The San Fransisco company makes sensors that monitor the chemical levels in swimming pools to ensure safe levels.

Though his investments thus far have been far from home, Poe is also focused on improving the statistics of his hometown. While Memphis does have a burgeoning entrepreneurial scene, figures that came out earlier this year showed that the metro area is the poorest large metro in the country — and may be getting poorer.

To work on improving that, this summer Poe Man’s Dream hosted a three-day camp for Memphis’s middle and high school students to learn from local entrepreneurs. The students engaged in activities like creating pitch decks and presentations based on real tech startups. The winning student team took home a $500 prize.

“The camp exposes them to a different way of thinking. Like, I could do that,” says Poe. Part of the problem, he says, is that Memphis’s youth don’t often see successful entrepreneurs that “look like them.”


What Silicon Valley Won’t Admit About Technology and Progress

Circa 1871: Thomas Alva Edison (1847–1931) American scientist, inventor. 

Last spring, I finally visited one of the United States’ industrial shrines: the Thomas Edison National Historical Park in West Orange, New Jersey. Before the rise of Silicon Valley, Thomas Edison was the country’s greatest technological celebrity and, even now, no Silicon Valley billionaire approaches Edison’s portfolio of 1,093 US patents. (For example, Amazon’s founder Jeffrey Bezos is on just 81, Facebook’s Mark Zuckerberg is on 31, and Google’s co-founder Sergey Brin is on 20.)

After touring Edison’s laboratory, shops and a replica of his original Black Maria film studio, I reflected on what Edison might have thought of the iPhone SE and Waze software that had conquered my aversion to the chronic congestion and confused highway grid of northern New Jersey, testaments to the success of Edison’s friend Henry Ford. He would have admired the miniaturisation of today’s smartphones and the software that can give turn-by-turn instructions with no additional charge to the user. Waze is far from perfect; on my return trip, it originally pointed me in the wrong direction at the entrance to the Garden State Parkway. But Edison insisted on how much work was needed to overcome difficulties, so the glitch probably would not have dimmed his admiration for Waze’s parent company, Google (now formally Alphabet).

The main Edison building was a three-story encyclopaedia of all the tools available in his time for marshalling a staff of master tinkerers, including some with the university credentials that Edison himself never acquired. The machinery advanced in stages, from heavy equipment on the ground floor to the most delicate work on the third. It was a machine for designing, prototyping and developing other machines, and Edison’s magnificent office-library-trophy room included a cot for his schedule of frequent naps.

Edison might be the last great self-taught inventor who also brought technological research and design into the 20th century. By building a staff of researchers, some trained in the emerging US academic science programmes, Edison’s laboratory served as a model for the 20th century’s great industrial laboratories, including General Electric, Bell Labs and the chemical and pharmaceutical giants. Edison’s role in power generation, musical recording, motion pictures and other technology remained an inspiration for decades. Yet some influential economists insist that the age of rapid development of transformative inventions, pioneered by Edison, has reached an end.

The first prominent warning was sounded by the US economist Tyler Cowen in The Great Stagnation (2011). With this short book, Cowen proposed that the economic woes of the US reflected the exhaustion of centuries of comparatively easy innovation, which he compared to the ‘low-hanging fruit’ of a cherry orchard. Another US economist, Robert J Gordon, brought a historical perspective to Cowen’s argument that the low-hanging fruit of innovation had already been picked. In his book The Rise and Fall of American Growth (2016), Gordon described a golden age of rising living standards in the century from 1870 (the year after Edison’s first patent) to 1970. He questioned the impact of the web’s lower transaction costs on the quality of life.

Cowen and Gordon both acknowledged the power and market capitalisation of companies using cloud services to bring buyers, sellers and advertisers together — from Amazon and Google to ‘sharing economy’ newcomers such as Uber and Airbnb. Neither of them, however, considered the possibility that it is not exhaustion of limited technological options but these firms’ success in attracting capital that has held up productivity growth. Two other academics, Clayton M Christensen and Derek Van Bever of Harvard Business School, have made a distinction between ‘process innovations’ that speed manufacture of existing products and reduce transaction costs, and ‘market-creating innovations’ that give rise to new industries and employment. Surviving buildings of Edison’s vast factory complex in West Orange, now undergoing redevelopment as loft apartments, still testify to the jobs that Edison’s laboratories created.

Buildings such as Salesforce Tower and the new Apple headquarters in downtown San Francisco offer six-figure salaries for programming talent. They do not offer the kind of well-paid blue-collar jobs of the half-century from 1920–70 that Gordon studied. There is no proof, but it’s worth considering whether the skyrocketing market capitalisation of Silicon Valley’s so-called ‘unicorns’ — corporations that are worth a billion dollars or more but have not yet gone public — are growing at the expense of undercapitalised market-creating innovations. Consider two facts: first, every year magazines such as Scientific AmericanMIT Technology Review and New Scientist publish lists of ‘breakthrough’ technologies. Yet at the same time, as the historian of military technology David Edgerton has documented in The Shock of the Old(2006), the actual rate of technological change is surprisingly slow.

The stark fact of technological transformation from the late-18th century to the late-20th is that there was scant low-hanging fruit. Innovation, much less transformation, was arduous and slow. In a book that launched a genre, Self-Help (1859), the Scottish physician-journalist Samuel Smiles presented the leitmotif of success as almost superhuman perseverance under difficulties (quoting John Ruskin on patience as ‘the finest and worthiest part of fortitude’). In his bestseller, Smiles inspired readers with tale after tale of craft heroes such as the 16th-century French Protestant potter Bernard Palissy, who burned his household furniture to perfect his glazing technique.

It took decades for the efforts of dozens of inventors to be melded into industries

Like many later motivational works, Self-Help could not avoid survivorship bias; there must have been many equally resilient entrepreneurs with brilliant ideas who simply ran out of chairs — or money — to burn. But it is important to remember that the triumphs of physics, chemistry and engineering that Gordon and other economic and business historians highlight resulted from years of struggle. Most took decades to become consumer staples. They were slow to scale. Often, investors were patient, if only because, even after the rise of US science, there was no investment alternative.

Begin with Edison himself. His real genius was not so much the first commercially practical lightbulb filament but an entire system for the generation, transmission and sale of electrical power. Ultimately, the alternating-current technology developed by George Westinghouse proved more profitable and easier to expand than the direct current that Edison insisted was safer, and Edison’s financial backers merged his company into its rival. Mass electrification needed other inventors as well. While most households in Northeastern industrial states and California had electric power by 1921, every lightbulb took 30 seconds for a skilled glassblower to produce. The modern Corning ribbon machine, which could produce 300 lightbulbs per minute, was not developed until 1926. The electrification of most of the South and West, and the rural Midwest, did not start until the 1930s. Mass electrification outside the big cities took half a century.

Typically, entrepreneurship depended less on the ideas of a single experimenter than on the formation of patent consortia pooling multiple inventors’ ideas. It was the failed actor Isaac Merritt Singer with his legal ace Edward Clark, for example, who launched the sewing machine industry. The former mill mechanic Gordon McKay unleashed the giant United Shoe Machinery Corporation — a company as controversially dynamic in the 1890s as Microsoft would become a century later — by combining shoe-manufacturing patents. (McKay’s immense bequest to Harvard probably funded some of the computer science professors who taught Bill Gates and Zuckerberg.) It took decades for the efforts of dozens of inventors’ proposals to be melded into industries, and more than another 10 years for the ideas of Nikolaus Otto, Gottlieb Daimler, Carl Benz and Wilhelm Maybach to coalesce in the original Benz automobile in 1886. The first high-quality, popularly priced assembly-line automobile, Henry Ford’s Model T, did not appear until 1908.

Mass print media, too, demanded perseverance. At the beginning of the 19th century, paper was still made sheet by sheet. The first patent for the continuous production of paper with a system of moving screens and rollers was granted to Louis Robert in 1799. The English paper manufacturers Henry and Sealy Fourdrinier made technical improvements to this process, but not enough to make it practical, and they were forced to declare bankruptcy after spending £60,000. It was a third party, the engineer Bryan Donkin, who finally made usable continuous papermaking machines based on the first patent.


The Agile Manager.

Agile development was defined by Eric Ries in his book The Lean Startup.  It is the breakthrough idea that software (a product) should be built iteratively with pieces customers value most created first.  Lean Startup allows companies to create order not chaos by providing tools to test a vision. as ideas are put through the build-measure-learn loop. But, who manages in an agile organization and what exactly do they do?  This article in the McKinsey Quarterly (July 2018) answers these questions.

The agile workplace is becoming increasingly common. In a McKinsey survey of more than 2,500 people across company sizes, functional specialties, industries, regions, and tenures, 37 percent of respondents said their organizations are carrying out company-wide agile transformations, and another 4 percent said their companies have fully implemented such transformations. The shift is driven by proof that small, multidisciplinary teams of agile organizations can respond swiftly and promptly to rapidly changing market opportunities and customer demands. Indeed, more than 80 percent of respondents in agile units report that overall performance increased moderately or significantly since their transformations began.

These small teams, often called “squads,” have a great deal of autonomy. Typically composed of eight to ten individuals, they have end-to-end accountability for specific outcomes and make their own decisions about how to achieve their goals. This raises an obvious and seemingly mystifying question for people who have worked in more traditional, hierarchical companies: Who manages in an agile organization? And what exactly does an agile manager do?

Lay of the land

The answers become clear once you understand that the typical agile company employs a dynamic matrix structure with two types of reporting lines: a capability line and a value-creation line. Nearly all employees have both a functional reporting line, which is their long-term home in the company, and a value-creation reporting line, which sets the objectives and business needs they take on in squads.

In agile parlance, the capability reporting lines are often called “chapters” and are similar in some ways to functions in traditional organizations (you might have a “web developers” chapter, say, or a “research” chapter). Each chapter is responsible for building a capability: hiring, firing, and developing talent; shepherding people along their career paths; evaluating and promoting people; and building standard tools, methods, and ways of working. The chapters also must deploy their talented people to the appropriate squads, based on their expertise and demonstrated competence. In essence, chapters are responsible for the “how” of a company’s work. However, once talent is deployed to an agile team, the chapters do not tell people what to work on, nor do they set priorities, assign work or tasks, or supervise the day-to-day.

The value-creation reporting lines are often called “tribes.” They focus on making money and delivering value to customers (you might have a “mortgage services” tribe or a “mobile products” tribe). Tribes are similar to business units or product lines in traditional organizations. Tribes essentially “rent” most of their resources from the chapters. If chapters are responsible for the “how,” tribes are responsible for the “what.” They set priorities and objectives and provide marching orders to the functional resources deployed to them.

Management roles

In this world, the work of a traditional midlevel manager is reallocated to three different roles: the chapter leader, the tribe leader, and the squad leader. Let’s examine the responsibilities of each and the challenges they pose for traditional managers looking to become agile managers.

The chapter leader

Every functional reporting line has a leader. This chapter leader must build up the right capabilities and people, equip them with the skills, tools, and standard approaches to deliver functional excellence, and ensure that they are deployed to value-creation opportunities—sometimes in long-term roles supporting the business, but more often to the small, independent squads. The chapter leader must evaluate, promote, coach, and develop his or her people, but without traditional direct oversight. Chapter leaders are not involved in the day-to-day work of squads; they don’t check on or approve the work of their chapter members, and they certainly don’t micromanage or provide daily oversight. Instead, regular feedback from tribe leaders, team members, and other colleagues inform their evaluations and the kind of coaching they provide. Since they’re not providing direct oversight, their span of control can expand greatly, a fact that can eliminate several layers of management. In fact, chapter leaders often free up enough time to tackle “real work” on business opportunities as well.


“Find a Need and Fill It”.

These words were on the Henry J. Kaiser cement trucks when I was a kid in the SF Bay Area.  No entrepreneur lived the phrase more than Henry J., who at one time or another applied his business acumen from dams to dishwashers, but is best known for WWII Liberty ships, Kaiser Permanente Medical program (forerunner to modern HMO), and the Henry J. Kaiser automobile (produced as jeeps during the war).

Another equal compelling entrepreneurship story is that of Stitch Fix, which started as a clothing alterations service, now has 83 stores across Canada, and has gone viral.  Stitch It Clothing Alterations has been a choice for a trusted, convenient, and professional clothing alteration service since 1989, when it began as Stitch It Canada’s Tailor Inc. Their story starts at a first shop in Square One Shopping Centre in Mississauga, Ontario. It was inspired to fill an evident market gap in having tailoring services available where clothes are purchased. While this had long been standard at menswear outlets, there were no similar options for the whole family to seek alterations for any type of clothing. After customers kept coming to Stitch It founder Alain Baird’s clothing store asking for custom stitching, he decided to do something about it.

Although mall developers were originally skeptical about the need for a tailoring service located within the mall, Stitch It’s tagline service, “Pant Hems Done While You Wait,” was immensely popular, and lines of customers formed out the door and into the mall. Stitch It then formed a partnership with a major retail conglomerate to meet demands and maintain such overwhelming success. Over the next decade, Stitch It expanded, acquiring one of its competitors, Needle N’ Thread, and branching into a budget alteration service, known as Sew Right, and a U.S.-based service in Minneapolis, Minnesota, under the name of Can Do Clothing Operations.

Now a popular internet site, it personalizes style to the individual family member, serving men, women, and kids.  Customers can fill-out a style and price preference and leave choices to a personal stylist.  Shipping is free both ways.

Stitch Fix makes shopping not just convenient, but effortless. Like other online retailers, Stitch Fix saves trips to the store by shipping items directly to you. Their  Personal Stylists also save you the time and trouble of selecting clothing and accessories. Many enjoy the ease and convenience of automatically scheduled shipments that arrive at a frequency of their choosing. The dressing room is your home.  Stitch Fix has a mobile app to make the ordering more convenient.

Stitch Fix found a niche, provided a needed service, iterated, and scaled their business.  Pure, true entrepreneurship at its best! 💡🎯

For more information on Stitch Fix differentiation, go to:

35 Innovators Under 35, Go Bears!

A Berkeley professor, graduate student and recent alumnus — all affiliated with the Department of Electrical Engineering and Computer Sciences — have been named to MIT Technology Review’s 2018 list of “35 Innovators Under 35.”

Assistant professor Alessandro Chiesa, Ph.D. student Chelsea Finn and 2016 Ph.D. John Schulman were selected for the prestigious honor, which recognizes exceptional young innovators whose work will influence technological advancements for years to come.

Chiesa, 30, is the co-founder of Zcash, a cryptocurrency that ensures complete privacy in online transactions. Using zero-knowledge cryptography, Zcash guarantees the validity of transactions while enabling users to shield sensitive data and protect themselves from identity theft.

Finn, 25, is working out of the Berkeley Artificial Intelligence Research Lab, creating algorithms that enable robots to learn as children do — by building on previous play and observations. Robots in her lab are tackling such challenges as using a wooden shape-sorting toy, and Finn plans to introduce more advanced tasks such as setting a table, in hopes of having robots master tasks by exploring and trial-and-error instead of programming.

A research scientist at OpenAI, Schulman, 30, is developing novel algorithms for reinforcement learning applications, which reward machines for a correct response. Currently, he is using the 1991 video game Sonic the Hedgehog — which emphasizes speed and physics — as an accurate way to test an algorithm’s ability to apply learned skills to different scenarios. Schulman hopes these machine-learning algorithms can eventually be used in areas such as robot locomotion.

Chiesa, Finn and Schulman are featured online at the MIT Technology Review and in the July/August print magazines, which will be available July 3. All honorees will be recognized at the annual Emerging Technologies (Emtech) Conference, September 11–14.


Military Best Entrepreneurship Training Program in America

One organization has produced more business owners than any other single institution in the nation.

It has a proven track record of teaching leadership, strategic planning, creative problem-solving, task execution, and resiliency—all traits essential to business ownership. It is not a fancy MBA or university program.

The organization is the United States military.

For many years, military veterans have become entrepreneurs at a much higher rate than non-veterans. Indeed, a shocking 49% of World War II veterans went on to own or operate their own businesses, according to a study from Syracuse University.

In the modern era, an exciting veterans’ entrepreneurship movement is once again spreading across America. These so-called “vetrepreneurs” are thriving. They have their own accelerators and incubators, their own venture capitalists, their own support organizations and coaches, and even their own Shark Tank stars (shout out to Navy SEAL-led Bottle Breacher and Army Ranger-led Combat Flip Flops).

Vetrepreneurs do things differently. They apply lessons from military service to business. They unflinchingly handle risk. They rely on a tight-knit network of their fellow veterans for support and encouragement. And they understand perseverance like no other group of individuals in the country.

The habits and practices of veteran entrepreneurs hold lessons for every business owner in the United States.  I interact with these incredible entrepreneurs and business owners every day. My company, StreetShares, has funded more than 300 veteran-owned businesses since we launched two years ago.

Financing veteran-owned businesses has become my mission. I served as an officer in the Air Force for nine years and returned from Iraq in the summer of 2008—just as the financial crisis was beginning. My generation of veterans would transition out of military service in the wake of the financial crisis. Unlike prior generations, capital would not be available to us. I spent a couple years at a Wall Street law firm and gained a solid understanding of capital markets. Then, in 2013, I partnered with a very talented and experienced banking executive named Mickey Konson—also a fellow veteran—to form

We had a vision for an alternative small business funding platform that would make lending safer by harnessing the social trust that exists within groups of tight-knit individuals, such as veterans. We believed we could optimize the interaction between borrowers and investors in a social-lending model in order to achieve maximum risk reduction on a loan. Lower risk would mean a lower interest rates for borrowers and safer returns for investors. Using this method, veteran-owned small businesses obtain loans at 2-4% lower interest rates. We called our invention “affinity-based lending.”

We were a true startup. We spent the first nine months operating out of the basement in my house outside of Washington, D.C.. We had a skeleton crew of interns and paid all the start-up costs out of our own pockets.

To launch and grow StreetShares, we relied on four key lessons we learned in the military :

  1. Set a clear strategic mission and break that mission down into smaller tactical goals.
  2. Recruit talented people, build esprit de corps, and hold our team accountable for daily progress toward tactical aims.
  3. Keep mission focus at all times, but allow people to innovate in furtherance of the mission—“adapt and overcome” as the military saying goes.
  4. Lead from the front, and be prepared to get dirty.

We hired several military veterans, and we applied elements of military culture to our startup.           It worked.

We have empirical support now that our veterans-funding-veterans model reduces risks. We won a major award from Harvard Business School for the concept, won other awards for our team and culture and we have raised three rounds of equity capital and more than $200 million in lending capital. In short, we have a successful, growing startup built on lessons we learned in the military.

Most importantly, we relied on the military community to make it work. Just as military members on foreign battlefields rely on each other, so too do veteran entrepreneurs. We have partnered with more than 30 veterans organizations to help us reach our customers. These organizations encourage and train veterans in entrepreneurship and business ownership. In two short years, we have amassed a large network of over 16,000 military business owners, entrepreneurs, military spouses and investors in the rapidly-growing StreetShares community. As a result of these relationships, we have found ourselves in the center of the veterans’ entrepreneurship movement in the United States.


Mark L. Rockefeller is the CEO of StreetShares, America’s #1 funding source for veteran-owned companies.  Courtesy of Forbes 8/3/2106.