April 16, 2024

The Saturday Profile: A Brazilian Magnate Points to Himself for Inspiration

EIKE BATISTA fidgeted in his chair, bristling at the memory of his former anonymity.

“Brazilians think that I appeared in the year 2000 from scratch,” said Mr. Batista, Brazil’s richest man.

Few Brazilians had heard about his adventures in the Amazon in his early 20s, he said, when he dropped out of college in West Germany to trade gold and bet his winnings on building a clunky-looking machine in the rainforest to process the precious metal without pick-and-shovel miners.

Instead, Mr. Batista surfaced in the gossip magazines only in the 1990s after he married the model and Carnival dancer Luma de Oliveira. Back then, his father, Eliezer Batista, a beloved former government official, told him to keep a low profile, as his son’s rapidly expanding fortune made him a target for kidnappers.

Mr. Batista has done anything but hide. At 55, he is not only considered South America’s wealthiest man, with a fortune estimated by Forbes at $30 billion, but he is also one of Brazil’s most public figures, a serial entrepreneur with boundless energy to sell himself and his country.

“My race horse is Brazil,” he said from the sprawling 22nd-floor office of his EBX Corporation headquarters, which has a long deck overlooking Guanabara Bay. “And Brazil today has the wealth that America had at the turn of the century.”

While President Dilma Rousseff has held up Mr. Batista as an example of private-sector execution, rival businessmen have contended that Mr. Batista’s chief skill was as a salesman, persuading investors to bet about $24 billion on his start-up companies in mining, oil, logistics, power generation and shipbuilding.

“They think he sells too many dreams and not enough reality,” said Olavo Monteiro de Carvalho, a former partner in an Amazon gold mine.

Early this year, Mr. Batista has a chance to shed that label when his oil company, OGX, is expected to begin producing crude from an estimated 10 billion barrels of offshore discoveries.

Mr. Batista’s logistics company also plans to open a $2 billion “superport” in Rio next year that he said would be Latin America’s version of Rotterdam. Set on land one and a half times the size of Manhattan, it will handle some 350 million tons of imports and exports a year, including oil and iron ore from Mr. Batista’s companies, he said.

Brazilians remain divided on the man most simply know as Eike. Some view him as showy and a megalomaniac, scoffing at photos of him in pink ties and posing beside his $1 million Mercedes McLaren.

Mr. Batista is unapologetic, saying he is trying to break a cultural conservatism around wealth that his father was a part of, and teach Brazilians to look up to their entrepreneurs the way Americans do.

“I want to help a whole generation of Brazilians to be proud,” he said. “I am rich, yes. I have built it myself. I have not stolen it. Show it. Just brutally show it.”

These days, Mr. Batista is fully unshackled. He travels the world in his $61 million Gulfstream jet, often giving talks, and interacts with his more than 539,600 Twitter followers, to whom he offers “educational phrases” meant to inspire.

In his office, he displays framed photos of his days as a champion powerboat racer and a sword given to him by a grateful Japanese partner in a gold deal.

He peppered his German-accented English — one of five languages he speaks fluently — with French phrases like “Voilà!” and “C’est la vie.” His infectious laugh recalled The Riddler from the 1960s “Batman” television show.

Mr. Batista said his journey began as a “quest towards financial independence” and a burning desire to escape the shadow of his famous father, a Brazilian engineer who helped increase Brazil’s international trade in commodities.

BORN in the Brazilian state of Minas Gerais, Mr. Batista is one of seven children. When he was small he suffered from chronic asthma. His mother, a German, put him in a swimming pool. “It opened up my lungs,” he said. He remains an avid swimmer and runner.

When he was a teenager, his family moved to Europe, living in Geneva, Düsseldorf and Brussels. Mr. Batista’s father, who back in Brazil had been president of the state mining company, decided to go into a “friendly exile” when Brazil’s military government branded him a Communist for his fluency in Russian, one of several languages he speaks. In Europe, Eliezer Batista worked to build the mining company’s international business.

In the 1960s, he recognized Brazil could profit greatly by exporting iron ore to Japan. But the distance was tremendous, so Mr. Batista persuaded shipbuilders to construct huge carriers, and he led the development of a Brazilian port deep enough for the ships to dock.

The younger Mr. Batista said his father “did a lot of incredible things for Brazil,” but he was “never a risk taker.”

His parents returned to Brazil when Mr. Batista was 18. He stayed behind in Brussels and went door to door selling insurance, later trading diamonds and corned beef.

Article source: http://www.nytimes.com/2012/01/21/world/americas/a-brazilian-magnate-points-to-himself-for-inspiration.html?partner=rss&emc=rss

Unreasonable Institute Teaches New Paths to Social Missions

And so, to foster some practical zaniness, Mr. Epstein is a co-founder of something called the Unreasonable Institute, in Boulder, Colo. For the last two summers, he has helped preside over this academy for entrepreneurs who want to solve social problems and make some money, too.

Part schmooze-fest, part group hug, this six-week program connects entrepreneurs with one another, as well as with executives, investors and thinkers who might help them. Its name derives from a quotation by George Bernard Shaw: “All progress depends on the unreasonable man.” For good measure, Mr. Epstein recently had the world “Unreasonable” tattooed on his derrière.

Welcome to the age of the spreadsheet humanitarian. The central idea of the Unreasonable Institute is that profit-making businesses can sometimes succeed where their nonprofit counterparts might falter. Mr. Epstein, 25, and a serial entrepreneur, says the Unreasonable Institute wants people who are willing to think big, even when skeptics scoff.

Competition is stiff. This year, about 300 people vied for 26 spots. Many who have attended praise the program for its networking opportunities. Some  have even gotten businesses off the ground.  

 One of them is Ben Lyon. Two years ago, Mr. Lyon, a recent college graduate in international relations and economics, was in Sierra Leone and feeling highly discouraged. Through a nonprofit group, he had tried to start a pilot program meant to allow microfinancing organizations to receive loan payments via their cellphones. But he just couldn’t get it off the ground.

Today, he is running Kopo Kopo Inc., which is based on that earlier effort. With four full-time employees in Kenya, it offers a mobile payment app that helps people make purchases in areas where banks don’t exist or where fees are too high for the poor to open accounts.

How did it happen? Mr. Lyon, 24, originally from Hanover, N.H., attributes his success to a commercial structure he created with the help of the institute. So far he has raised nearly $1 million from institutional investors.

 “We select for-profit ideas that we think have the ability to meet the needs of at least one million people,” says Mr. Epstein, who founded the institute along with Teju Ravilochan, 24, and Tyler Hartung, 26.

The selected entrepreneurs include people like Myshkin Ingawale, 28, of Biosense Technologies, which makes a device that tests women and children for anemia; Luis Duarte, 30, who started YoRecicolo (I Recycle) in Monterey, Mexico; and Jamie Yang, 31, founder of a EGG-energy, a company based in Tanzania that sells rechargeable batteries through a portable power grid.

The institute conducts its program at a fraternity house it rents at the University of Colorado. The six weeks are intense and communal. Fellows sleep three or so to a room. A chef prepares three in-house meals a day. The fellows dine at a table seating 60, alongside mentors who might include the chief technology officer of Hewlett-Packard or the former director of Google.org.

On any given day, the fellows might go on a hike or a bike ride with a potential investor, attend a workshop about building corporate partnerships, or take part in “family pitch night,” when two entrepreneurs present their companies to the rest of the group for feedback. At the end of the program, the fellows travel to San Francisco and pitch their ideas to a group of investors.

Mr. Epstein says market-based solutions are important in spurring economic growth throughout the developing world.

“This is really in contrast to the prevalent model of international aid,” says Cynthia Koening, 33, who attended the program this year. Her company, Wello, based in Rajasthan, India, is aimed at people — most of them women — who must walk long distances to bring drinking water to the home. Her cylinder-shaped product allows women to roll water home from the source rather than carry it on their heads, which can be dangerous and time-consuming.

Ms. Koening says the decision to run Wello as a commercial business — it will sell its product, the WaterWheel, to consumers — was an easy one. “When people make choices in a market economy, they are deliberately choosing the solution that best meets their needs, she says. “Also, we don’t want to have to depend on donor grants and donations. That’s not sustainable.”

MR. LYON, of Kopo Kopo, agrees that it’s time to use more commercial muscle to help solve global woes. His company plans to generate revenue through small subscription fees. “The nonprofit space has been so massive but has had disproportionally little impact in solving some of the world’s biggest problems,” he contends.

But investors can be leery of commercial social ventures. One obstacle is due diligence. Investors generally “can’t go to Liberia or New Delhi to kick the tires before they write a $50,000 check,” says Nick Flores, investment director at Investors’ Circle, a network of more than 150 people who finance businesses with a social or environmental impact.

Article source: http://www.nytimes.com/2011/10/23/business/unreasonable-institute-teaches-new-paths-to-social-missions.html?partner=rss&emc=rss

Start: Starting a Teach for America for Entrepreneurs

Andrew Yang thinks Venture for America can create 100,000 jobs by 2025.Courtesy of Venture for America.Andrew Yang thinks Venture for America can create 100,000 jobs by 2025.


The adventure of new ventures.

Each spring, well-heeled recruiters from financial and consulting firms lay siege to college campuses. They wine and dine the best and brightest students, siphoning future leaders off the top of the talent pool.

How can start-up founders compete?

A serial entrepreneur, Andrew Yang, thinks he has the answer. Venture for America, a nonprofit he founded this summer, recruits college seniors to spend two years after graduation at start-ups in struggling cities. For the inaugural class of 2012, he expects to place about 50 fellows at renewable energy, biotech and Internet ventures in Detroit, New Orleans and Providence, R.I.

“People think college seniors are deciding what they want to do based on native desire or affinity, but that’s not the case at all. Organizations spend millions of dollars to recruit them,” said Mr. Yang, a start-up veteran and most recently the president of a test-prep company, Manhattan GMAT, which Kaplan Inc. acquired at the end of 2009. “If we want to see our young people do things to help get the country back on its feet, we have to make it as easy to go work at start-ups in these cities as it is to work at investment and consulting firms.”

Venture for America is inspired by Teach for America, the staggeringly popular initiative that places top college grads in low-income schools. Nearly 48,000 applicants, including 12 percent of Ivy League seniors, vied for that program’s 5,200 slots this year, according to its administrators. “They have become one of the most singularly successful talent recruiting organizations in the world,” Mr. Yang said admiringly.

So far, Venture for America has attracted strong partners. Brown University is providing classroom, dormitory and dining hall space in June for the fellows’ five-week introductory boot camp. “Philanthropic, entrepreneurial types,” Mr. Yang said, have committed a combined $500,000 in funding, half of which has materialized. (IAC, which hosted the program’s kickoff this summer, donated $25,000.) The organization’s roster of board members includes Doug Ulman, chief executive of the Livestrong Foundation; Tom Ryan, chief executive of Threadless; Murray Low, director of Columbia Business School’s entrepreneurship center; David Tisch, managing director of TechStars in New York City; and Andrew Weissman, a partner at Union Square Ventures.

College seniors are responding, too. Venture for America has received more than 700 applications since it began accepting them in August. This month, the organization has embarked on a whistle-stop recruitment tour, with information sessions at Princeton, Harvard, Duke, Dartmouth, Stanford and other schools.

Salaries will range from $32,000 to $38,000 plus health insurance, provided by the start-ups that employ fellows. And if a fledgling company tanks in the middle of a fellow’s two-year commitment, that fellow will be placed elsewhere, an effort to mitigate the risk of failure inherent to start-ups. Companies that have committed to hire fellows so far include Drop the Chalk, an education company based in New Orleans; Federated Sample, an online sampling start-up, also in New Orleans; and NuLabel Technologies, an adhesive and printer technology start-up in Providence. At the end of each two-year program, the top-performing fellow will win $100,000 in seed money.

Venture for America’s ultimate goal is ambitious: creating 100,000 jobs by 2025.

“We believe that job generation is a social good,” said Mr. Yang, who sees the program’s creating jobs in two ways. “First, we’re going to supply promising companies with the talent that it takes for them to succeed and get to the next level.” Second? “We’re going to socialize and train a generation of our top college graduates to themselves become business builders and job creators. That’s how we think you get to the 100,000 jobs.”

What do you think? Would you hire a Venture for America fellow? Is this a good way to create jobs? And how can the program avoid Teach for America’s biggest pitfall: retaining talent when the two-year placement period ends?

Article source: http://feeds.nytimes.com/click.phdo?i=2f72d2b6ea17c1675a039942fc4aa441

Conversation: Franchisee Challenges a Restaurant Chain, to the Benefit of Both

He had been a serial entrepreneur since the 1980s, starting and selling a small commercial printing company and then a share of a drug-testing business. After buying and selling real estate for a few years, he decided to try franchising. Although he feared the role might be constraining, Mr. Tankel had heard that Applebee’s was an entrepreneurial restaurant chain, and he went to its headquarters in suburban Kansas City, Kan., to meet with its chief executive.

Sixteen years later, Mr. Tankel owns 34 Applebee’s. He has repeatedly challenged the corporation to accept changes to its formula — from its uniforms to its menus. His first restaurant on Staten Island took in $3.5 million the year it opened, 1995 — a time when the average Applebee’s was taking in $2.2 million.

Today, his Times Square location has the highest annual revenue, about $13.5 million, of any Applebee’s in the world. His 34 locations average $4.25 million in revenue, double Applebee’s nationwide average. (The numbers were confirmed by Applebee’s.) The following is a condensed version of a recent conversation.

Q. You have said you loved building companies. Why did you buy a franchise?

A. I saw an opportunity. I went to visit the company’s headquarters in Kansas and felt there was the opportunity to bring entrepreneurship to franchising, marrying the best of both worlds.

Q. You bought the right to start a store whose concept was created by someone else, with a set of protocols already in place. Is that entrepreneurship?

A. Maybe this kind of thing isn’t for the average franchisee but we pushed the envelope right from the start, took those protocols to the next level, and I think that’s entrepreneurship. We changed the uniforms for instance, got rid of the baggy shirts and ties. If you’re sitting at a bar, you want the woman behind it to look good, not buttoned up.

I remember when we started karaoke nights in Staten Island. We had a huge line outside, but the franchisor didn’t permit karaoke and they said we had to stop. I told them, ‘I’m paying you a fee to do business, so unless you want to pay us for the customers we are going to lose, it’s not appropriate for you to ask us to stop.’ They cited us for going against franchise policy. I was known as a troublemaker.

Q. Why did you decide to keep buying locations?

A. Nothing succeeds like success — it’s intoxicating. And it’s still gratifying for me. It’s gratifying now to see us go into underserved neighborhoods in and around New York City and see people on the periphery get a job, get skills and grow. We’ve opened restaurants in low-income neighborhoods like Bedford-Stuyvesant, Jamaica and the South Bronx, and we are usually the only sit-down restaurant in the neighborhood, one of the few places where customers are all treated with respect.

Q. What have you learned about doing business in those neighborhoods?

A. When we open a restaurant and are interviewing, we will have guys show up with their pants hanging below their crotch, their hat on sideways, answering our questions antagonistically. Our recruiters will say to them, ‘If you’re here for a job, go home and get dressed like you’re applying for a job and then come back.’ Many will go home, change and come back.

Q. Do you hire differently than other Applebee’s?

A. In the New York market it’s hard to find people with good attitudes, so we try and hire by personality. We can teach you to cook, to make a drink, to be a server, but we can’t teach you how to be nice.

Q. How do you screen for nice people?

A. You see it in a person’s demeanor and mannerisms; it’s in their smile. Is it sincere? It’s the way you shake my hand, look me in the eye, the way you say hello.

Q. You opened your first Applebee’s in Staten Island, a location Applebee’s insisted did not fit its model. What didn’t they like?

A. It was in a mall that had just completed a big addition, and the restaurant was to be at the rear entrance to the mall. Applebee’s wanted it to be at the front of the mall, so people would see it as they entered.

Q. Why did you open there anyway?

A. We felt comfortable being in the rear because there was a big parking lot and an entrance to the mall there too. Today both entrances are used equally. I felt and I still feel that we know the New York marketplace better than they know it from Kansas.

Q. What else did you do that went against the model?

Article source: http://feeds.nytimes.com/click.phdo?i=56d4fce88e3a5b13b6e6aea26a04edf6

Small-Business Guide: A Few Accounting Essentials Are Crucial for Survival

It is, for example, entirely possible for a company to be profitable but fail anyway because it does not have enough cash coming in to pay its bills.

“It’s like a racecar that goes too fast and runs out of gas,” said Doug Tatum, a serial entrepreneur who is a visiting professor of entrepreneurship at Middle Tennessee State University in Murfreesboro. Business owners do not necessarily need to know how to prepare a balance sheet, but they do have to know which gauges to watch.

One obvious step is to work with a bookkeeper or accountant, someone who can help navigate arcane accounting and tax rules and organize your affairs. But owners should understand that accounting is not just about paying taxes or reporting results.

“Small-business owners tend to hate accounting because it’s boring,” said Brian Hamilton, chief executive of Sageworks, a company in Raleigh, N.C., that tracks financial data for privately held businesses. “The mistake they make is not thinking about how they can use certain numbers as tools to better manage where their business is headed tomorrow.”

What follows is a guide to better understanding the numbers that drive a business. As the examples make clear, even smart people with advanced degrees can become confused by accounting issues. DON’T MISTAKE DEBT FOR PROFIT After earning a master’s degree in industrial engineering, Bart Justice figured he would get a job doing computer simulations or technical sales. Then in 2004, he learned about the paper-shredding industry, which was booming because of a rash of new security laws. Mr. Justice obtained a loan from a local bank to buy a mobile shredding truck, hired a truck driver and opened shop in Huntsville, Ala., as Secure Destruction Service.

The company hit $70,000 in sales its first year. Within four years, Secure Destruction had annual revenue of $500,000 and employed six people across two offices, one in Huntsville, the other in Birmingham, Ala.

To finance his growth — adding a shredding truck, for example — Mr. Justice kept borrowing money from the bank, not realizing that the more he grew, the more he needed to borrow because his revenue was not covering his expenses. The loans meant he had money in his accounts — but it was borrowed money.

“I knew how to print a financial statement from QuickBooks, but I couldn’t tell you what it meant,” he said.

It was not until early 2008 when he joined a peer group for Christian business owners called C12, that Mr. Justice was forced to confront the truth. “They would ask me questions about my numbers, and I didn’t know how to answer them,” he said. “They told me my business was going to fail unless I got a handle on paying down my debt.”

He hired an accountant and began analyzing how aspects of his business were performing, which led him to sell several pieces of equipment and to stop serving clients if he was losing money on them.

The advice proved timely. As the recession set in, the market for shredding collapsed. But with a leaner and smarter operation, Secure Destruction survived.

MANAGE RECEIVABLES Two years ago, Paul Burns brought on Eric Edelson as a partner to help run Fireclay Tile, which is based in San Jose, Calif., and manufactures ceramic tile using recycled materials. Mr. Edelson, who had left a career as an investment banker in New York to get an M.B.A. at Stanford, knew the business had been struggling, but he was hopeful that he could help.

One number that looked impressive to him was the company’s accounts receivable balance, which was more than $100,000. That was money owed to Fireclay by its wholesale clients. “At first, I thought it was kind of neat since we could count on all that cash coming in,” Mr. Edelson said. “But after I started digging into it, I noticed a lot of stale accounts that were more than six months overdue.”

Mr. Edelson hired a third-party company to help Fireclay collect its receivables, but many of the companies had gone out of business. Sensing a lost cause, he changed tactics. After writing off most of the balance, he stopped sending new shipments to customers who had a balance due and started getting more upfront payments and staying on top of customers.

By making sure customers could not buy more tile until they paid for what they had already bought, Mr. Edelson gave his customers an incentive to pay up. That has helped cut Fireclay’s receivables balance to less than $30,000.

UNDERSTAND YOUR EXPENSES After he graduated from law school five years ago, Daniel Gershburg, then 24, decided to open a bankruptcy and real estate law practice in Brooklyn. “I literally didn’t know anything about accounting,” Mr. Gershburg said. The only number he paid attention to was the gross sales he was pulling in through retainers.

Article source: http://feeds.nytimes.com/click.phdo?i=d19dc4c5e178fab5a17bf01dfb88eb2e