Episode with guest: Martin Babinec
(This episode was recorded in January of 2021.)
Key Episode Take-Aways:
1. It is important to have people share a common set of values if you're going to be successful. (click to jump to this topic below) And also, alignment of values with the team, because I'm a believer, especially with my HR background, and how important it is to have people share a common set of values, if you're going to be successful.
2. If there is transparency and people are informed, they don't have to guess what is happening. (click to jump to this topic below) So yes, there was an absolute interest in wanting to know what was going on. Because as you speak about within the Great Game, if you don't communicate what's really going on, people just take their best educated guess and it's usually the wrong guess is usually worse than the reality of the situation.
3. Millennials value transparency and being engaged. (click to jump to this topic below) The millennials who really value that transparency and value being engaged. Instead of being told you have to wait your turn, till you're in management, and are at the top of the pyramid before you get access to that kind of stuff.
Continue scrolling to read the full episode transcription.
Welcome to the "Change the Game" Podcast, where we share stories of open-book management and highlight capitalism at its best. Thank you for tuning in to this episode of the "Change the Game" Podcast with guest co-host Jack Stack as he interviews author Martin Babinec. In this episode Jack discusses with Martin how common values, predictability and transparency can give your business value. Here's your hosts, Rich Armstrong, and Steve Baker.
Steve Baker 0:28
Welcome back to the "Change the Game" Podcast where we are changing the game by doing business differently. And we're highlighting stories of capitalism at its best. I'm Steve Baker. And as always, we've got Rich Armstrong, president of the Great Game of Business here and co-author of our new book, Get in the Game. Hi, Rich.
Rich Armstrong 0:47
Hey, Steve. Doing good. How are you?
Steve Baker 0:49
Very good. In fact, I am titillated because today, we have got two layers of awesomeness happening. We've got our special guest, Martin Babinec, I'll introduce him in a moment. But we've also got a guest co-host, Jack Stack, our founder and CEO of SRC holdings. Hello, Jack.
Jack Stack 1:08
Hello, Steve. Hello, Rich. And hello, Martin.
Martin Babinec 1:11
Hello Jack, Steve, and Rich, thank you for inviting me.
Steve Baker 1:15
Yeah, it's great to have you. For our listeners, they may not know this. But Martin, you've been around the Great Game community for a long time. You've been a successful entrepreneur, venture capitalist, founder of several not-for-profit organizations. You know, we know you as the founder, CEO and board member of TriNet Group Incorporated, and longtime friend and proponent of the Game. Martin, your new book More Good Jobs: An Entrepreneurs Action Plan to Create Change in Your Community. Sounds amazing. Why don't we start out tell us a little bit about the new book?
Martin Babinec 1:51
Well, let's say the book reflects a goal on my part to help other people in their communities, engage and support entrepreneurs starting and growing companies. So, you might say I'm an entrepreneur that believes a lot in helping other people become entrepreneurs, and grow successful companies, because of the impact that successful companies can have in changing lives, in improving families and making a difference in their communities. So, I'm a firm believer of that. And it's thanks to the exposure of the Great Game of Business going back many years that helped crystallize the thinking for that being a major goal for my life. And so, launching the book and going through that process, forced me to think hard about well, what does that really mean? And how can I help get that message out and help others make progress along similar lines.
Steve Baker 2:54
I love it that ties beautifully into our mission of transforming 10 million lives in 10 years. And I know that you and Jack have a lot of history, and there's just preparing for this podcast, it was great to hear you guys talking Jack, I'd like to invite you to maybe start that conversation again, like to capture some of the ideas that were being thrown around.
Jack Stack 3:17
As you were introducing Martin, one of the first thing that really came into my mind was this concept that I guess we both feel very strongly about. Started so many years ago, it was a totally experimental Free State stage of the game, you know, it's only put it together and I think Martin is a perfect example. I talked about people about who is really built this and that and, you know, tried to grow on the idea. And I remember countless number of hours at very early now, apparently very, very middle 90's. Okay. Are we used to have a tremendous amount of discussion on what was right, what was wrong? Well, what can we do better? And, you know, I would tell you that he was probably a founder of the whole idea of The Great Game because of his inputs. And not only in the demonstration of the company that he started, okay. But also, we had a lot of discussions about the growth of a successful company. We went from the very, very beginning of sharing information to the very beginning of sharing the how you how you provide equity, how you how you go from 100% and engage other people in terms of the community and not feel guilty about losing the 100% that you have, and how do you best handle that kind of an opportunity and then to be with him today and seeing how, as a founder, he's gone from 100% and he's got now 1% he was always about creating the bigger pie. I mean, he never was Just thinking about how do I make my piece of the pie really big, better, he wanted to make everybody's piece of the pie get him. So, we had a lot in common in terms of trying to figure out how to diversify the opportunities and, and make sure people are we're understanding what it was we're doing. And I think a lot of times the very beginning they thought were crazy. Okay. I mean, I mean, I thought he was crazy for sure, because he had this unbelievable idea that I couldn't even understand and that was what was really bad about is that these this goes back to the Inc. days, Inc. Magazine days and one of Inc.’s favorites was a guy named Tom Golisano, who ran paychecks. Okay. And, you know, obviously, Martin had a similar idea, okay. But little did anybody realize that while everybody was promoting paychecks, Martin went on to be like an Inc. 500, fastest growing company. Winter five times, I don't know of anybody in the history of that Inc. 500. Think that 5000 that was on a five, five times as a fastest growing company in America. So, and I got to be able to, you know, work with him, and talk with him. And he's probably one of the smartest guys in terms of, I mean, by time I got done talking to Myron, in the early days, I was exhausted, I had no friggin idea. What this guy's thinking was where he was at that I mean, he was one day he was domestic, the next day was International, he was dealing with so many variables in terms of compensation in terms of employee benefits and programming styles and keeping his overhead down and running out of cash flow. And, I mean, it was like, the kitchen was on fire. And I wanted to, I was always looking for Well, how where's the exhaust? You know, where do you even start, and, you know, to be able to see what he has done today. And, and to be able to set the groundwork as a validation that this is achievable. I mean, you can't take it away. Now, all we can do is try to figure out is that, how do you? How do you bring this shining light to the marketplace? Right? I mean, he's got it figured out. And the problem is, is that I think the similar problem here with a great human business is, this is so damn good, how come more people are doing it. And I think if anybody would understand that he kind of accentuates this in terms of the book that he's written. And I want to tell him is that I bought 20 books, and I sent them to my, all the college presidents in Springfield, Missouri. I sent it to the mayor, I sent it to the CEO of the Chamber of Congress, and it was for Christmas, right? And I said, Hey, I know this guy, this is really good stuff, you know, maybe you guys ought to read it. As far as you know, what you learn from hanging around a guy like Martin is that when he does something, you want to be part of it, and you want to be able to, you know, bring other people in terms of what the ultimate outcome of what he's trying to do and in what he's trying to do is build better communities. Okay, he's trying to create successful people. And I mean, it's sort of a noble his cause. And that's my total reflection on this guy from start to finish. And he's been the same all the way through, all the way through right from the very beginning to where he is today. So, it's been a hell of a ride, I wish I was able to see more of them. But this is a great time to get back together.
Martin Babinec 8:31
It is a great time to get back together, believe me, there's a without a doubt a stop. And Springfield is on my horizon. But as soon as we get this COVID thing behind us. But let me suggest that when it comes to the great game of business, the opportunity that I see for the Great Game that is yet to be realized, is in the what I call a book, the newer economy, or the innovation economy, because there are a lot of jobs being created specifically in the newer industries. And that's also where the next generation, there's a lot of next generation talent that want to work in these newer industries. And your millennials have an evolving set of values and interests that quite honestly map very well to the Great Game of Business. And yet, most of them have never heard of it. And so, what I would like to do is if it's alright, but you guys is trying to concentrate on this challenge of how can we get more exposure for the Great Game?
Steve Baker 9:41
Sounds Great. So, let's jump in. Do you want to unpack a little bit about your history and how you ended up where you are today?
Martin Babinec 9:48
Yeah, you know, I'll start with a little entrepreneurial story in terms of background to suggest that half the college I began as a Human Resources major in college, my first job, and only time that I worked for anyone other than when I started trying to was really working for the government. I used to work for Navy exchanges, which operates the post exchanges or retail stores for the Navy. And it was a fabulous opportunity, I never do anything different than luckiest guy in the world. Because I got moved around to a bunch of places East Coast, West Coast, Japan, Southern Italy, I mean, really diverse places. That forced me to learn how to put myself in other people's shoes the thought very differently than I did. And then landed in the San Francisco Bay Area in the mid-80s. And as soon as I got on the ground, I tried to look around for a job to get into the corporate world, get out of government and be in the corporate world. But nobody valued my experience. And they in fact that I was good for government use only. And as you know, from experience, and speaking with a lot of entrepreneurs over the years, oftentimes, it's the people that feel that they're unemployable end up becoming entrepreneurs. So, as I spent time looking around at what was the right path for me to start a company, since no one was valuing my skills. And I didn't know much about business models back then. But somehow figured out being a consultant and working on the billable hour was not really a good business model. I was fortunate to stumbled across what was then the emergence, they were only a, maybe a half dozen companies or so that were doing what today we call being a professional employer organization. So, we're a professional employer, in that it's a kind of a, you know, a business that you aggregate all these small companies into one group and share the relationship of being an employer by doing that generating economies of scale. And what's not to like about that removing headaches with being an employer from a small business. And so, it sounds great. But the problem is, as all entrepreneurs who are trying to do something new, in a business that people aren't familiar with, there's a big chicken and egg scenario of, hey, you're trying to sell something based on economies of scale. But when you begin, you got zero scale. So, this was a really big struggle. And this all happened before I met Jack. All right. So, we start the company, we're a resounding failure, we're about to go out of business after about 18 months, because we used every single dollar, we could beg or borrow from friends, destroyed the credit limits, blew through my 401k saving everything. And the only way we got out of it was coming up with a plan to sell some shares of China to private investors. Now we had to have a plan because we were a failure at that point. And our plan was, we are going to become focused on a vertical market and narrow vertical market. And we're going to sell China services only to emerging growth technology companies. And that was, I won't say lucky because there was a lot of thought, but that was the saving grace for the company. Because with that move, not all sending -
Jack Stack 13:23
Was it an international investor?
Martin Babinec 13:25
At this point in time. It was before we had a relationship with an international investor that I'll get to that. All right, yeah. So, this was just small angel investors, we raised a total of $50,000, in that first investment. And with that investment, that was the difference between going out of business and my being here to share the story with you today. All right. And so, we met went full bore down our chosen vertical market, it was the right vertical market, this is starting 1990. And I had a passion conviction to make sure I'd be paying my investors back. Alright, because now it's not just about me. But we have people that took a big bet on me and Krista, my co-founder, my wife, all right. And we said we got to get the investors paid, we got to grow. We got to get out of this, this funk that we're in. And the beauty that came out of it was it brought me into the world of Silicon Valley, because up to that point, we were just selling to general small businesses in general, small businesses did not want to buy TriNet services because they never heard of it. It was too hard to understand. It was an innovation; small businesses don't embrace innovation. All right. So, but in Silicon Valley, our value proposition map to what these startup companies needed, which is why we selected it as our vertical and more importantly, they were open to embracing something that was new and innovative. That brought me into this world of innovation economy. I was a startup, I thought I was starting a small business. But really, I was doing a startup. By the way, a slight interlude here, there's a difference between being a startup and a small business. They both might have just a small number of employees, all right. But a startup is specifically growing with an idea of having a national or global audience. And also, is really being based on an innovation that the market has not yet embraced. So, I fit that definition of being a startup back when we started in 1988. But it took me getting into Silicon Valley before it began to appreciate it. So low and behold, we get through that, we get through that hurdle. We start ramping up come 1994, companies growing. I met Jack in 1994. And you remember where that was? Jack at MIT?
Jack Stack 16:01
Yeah. Birthing of Giants.
Martin Babinec 16:03
Yeah. Birthing of Gants. Right. You talk about the Birthing of Giants. Well, the people at all.
Jack Stack 16:09
I was there for 18 straight years. Yeah, I think 40 to 60 CEOs there every single year. Yes. And it was a great experience, because the times changed in the business cycle. And I think the.com was hot. And everybody that was sitting at audience was more concerned with flipping companies, during companies Remember that? Yes. It's crazy.
Martin Babinec 16:35
So, I'm there in 1994 rejects. So that's just the ahead of the.com, .com comes in 95. Right. But it's on the horizon. And, and so I hear Jack's message. And it completely aligned with our goals for the company because I firmly believe in transparency.
1. It is important to have people share a common set of values if you're going to be successful.
And also, alignment of values with the team, because I'm a believer, especially with my HR background, and how important it is to have people share a common set of values, if you're going to be successful, and you're going to fight your way out of you know, really tough challenges as SRC had to do in the early days. And so, the message resonated. And then I started getting more of my team members on board with that. And then we began that journey of learning the Great Game of Business and deploying it. And so then in 95, we got to a stage where we really were growing successful, like the.com happens. And there was this huge amount of growth opportunity. We had all these friends on Sandhill road, which is ground zero for venture capital in the world. And we could get into talk to the VCs, which was hard to do even in those days. And they said, Martin, we love China, you know, what we can invest in you because you're a service business. And they passed. So, we had all we had all this great opportunity to put capital to work to scale up, we could see this market coming right at us. And nobody would give us capital and that Jack is how we ended up going overseas, we ended up getting an investor from the UK. And the important thing about that investor, which was a public company, investor, public staffing company, was that they believed in the long-term commitment to a vertical market, which was us. And as a public company, they were all about being predictable, and transparent. So, we were with that investor, we sold them a controlling stake in the company, which they paid a high premium for, on a basis of what we call per worksite employee basis, it was the highest premium ever paid for a PEO at that point in time. We did it because they gave us a good spot of capital, it was about 4 million in capital for this tiny company. And that capital really allowed us to scale the business. And it was with a partner that we were very well aligned with. And we then went to work on public market discipline. And that was the second half of the 90s and in which we rode the.com wave. All right. So, that's an important piece.
Steve Baker 19:24
So, talk about that Martin because the public market discipline is something that I don't think a lot of people think about or are even aware of, but like I read about you in Bo Burlingham, his book finished big. And you talk about you know how you learned about it and how it was a tough lesson but ended up being one of the most valuable Can you define it and talk about a little bit?
Martin Babinec 19:48
So, the thing about being a public company as it is today is that public company investors show no mercy and the chairman from our institutional shareholder, the corporate from the UK, his favorite saying was, you're only as good as your last quarter. All right, because if you if you set expectations, and if you fail to meet the expectations, you will be pummeled. Alright, that's public market discipline. So, to be a, if you're a private company, and you can be predictable, and you can be specifically, consistently predictable. This is how the best public companies give value. It's being both predictable, and being long term, consistently predictable. And at the same time, of course, you have to have transparency and all that. And so, you can't get involved with things like related party credit transactions, you have to have real audits in real, real solid accounting, and you have to have an engaged team, you have to have a lot of the features of being a public company. And here, we were a small private company, putting those things in place, while we're a private company. And yes, we rolled our numbers up to a public company. But they gave us a lot of latitude and support and help instill in us the importance of being accountable. So, when Sure enough, we hit our speed bump. And we went to our investors, because our $4 million deal was in trenches. And we missed a target a key revenue target, because we had a bunch of customer concentration risks that left at the same time, suddenly, we missed our numbers. And we thought, Hey, we got all this demand right in front of us, surely you the investor will advance us. This next cosh is like, no, that ain't going to happen. You know, that's called. Right? What is that? I kept my job, right. Because remember, I'm a minority shareholder now. All right. But this is public market discipline. And yes, we learned a lot by going through that. And then we advance to the stage at the end of the 90s, where we have 99% of our revenue coming from ".com" customers. And for anyone in this audience that understands what it was like, at the height of the ".com." The actual high point was in March 2000, we fought for tried to go public on March 2, 2000, NASDAQ was at its peak, alright. And here we have 99% of our revenue coming from ".com" customers, we're selling the pickaxes in blue jeans to the gold miners. Everybody loves that story. All right. And then the air starts coming out of the bubble. And then we got dragged through an SEC process, which another whole story, alright, because we went out on the roadshow, but not until October of 2000. So, in October of 2000, was a completely different place. And by the way, you never go out on the roadshow to go public. Unless you're absolutely sure you get the deal done. Because you know, the work involved to do that the distraction, the drain on the team, the setting the expectations, everybody's getting out their calculator and looking at how much money they're going to make when the company goes public, especially when everybody in the company has options. And the incentives are spread all over the place. Think of the dynamics inside a company like that. All right, we get to the end of the road show. And we don't price, we abort the offering. We you know, we felt the pricing could not make sense. And we’re aborting the offering. So, I'm one of the very few people you'll ever meet. that have been through the IPO process twice with the same company, alright. But aborting the IPO, which then led to the ".bomb" era, if you know your history is starting 2000 and running through 2002, we were then retrenching at a speed that was even greater than we had grown the previous three years. Think about that on the impact of the team. And when I look back and say how the heck did we ever survive? The answer really was the Great Game of Business. And I mean, that's what's really our commitment to have been playing the Game through that entire cycle. Boom. And believe me during the boom period, we had lots of challenges. It wasn't so much it was hard to find business if you were in today. He also tried it and calm you loved it. Yeah, it was it was a bonanza. If you were in operations and customer facing it was a disaster because the demand far exceeded our capability to deliver. So, we have all the pressures of hyper growth hypergrowth still trying to change the wheels on the bus while we're flying down the highway during the ".com" era. And then finally, retrenching and laying people off, trying to keep the ship afloat. Because, you know, if you look at the map of the NASDAQ 2000 to 2002. And put it on a map, I actually have a slide on it, I can show you comparing it to the 1929 Dow. The trend is exactly the same, it's really similar. It was like the Great Depression, you were in the, in the tech industry as we were. That's what that's how bad it was.
Steve Baker 26:02
So, can you give us an example of how the Great Game of Business helped you through that process? Because I know you were transparent and communicative to your people. But you know, a lot of folks ask us well, what if you share the bad news? What will people do?
Martin Babinec 26:18
You know, the transparency of sharing the bad news is critical. Because if you think of the people in the company who have the most talent, they're the ones that as the ship starts to sink, they're the ones that can most easily jump off. If they are if they have talent that is in demand. And they can see the company is going south. And even though we have a strong product, the market is falling apart all around us. So, the best people, the best salespeople, the best technical staff, the best customer service, people who had the skills, most in demand, were the ones that could most easily leave. So how do you keep the reason we survived is that we kept the best talent, because we were transparent, not because we kept the cards close to the vest. But because we were transparent about exactly where we were, at every step of the way. And we invested throughout the boom process. And going down. We were always investing in financial literacy, that journey of increasing financial literacy never let up. Which is critical. I you know, people are not brought as new hires into a company, knowing how to read a P&L or balance sheet, much less understanding both of them and how they fit together. So, we always went out of our way to work on financial literacy, every meeting we had, and we had, we had our own meeting rhythm and how we did that, how we reported out numbers, how we educate a new talent, how we reinforce that message. But that's a key piece of the game. It's like you the journey of education and bringing up financial literacy is an ongoing journey.
Jack Stack 28:15
Can you say Martin, that that's where a lot of your sanity lied during that particular point of time, is you had that routine that see the market discipline, when I hear that I think about the ownership discipline, okay. And this whole idea of if someone's betting on you, you got to cover the bets and your wide concern about paying it back. And, you know, granted, yes, there are market disciplines, but they're really ownership just disciplines that you hope to them to share with everybody else. So, they understand what disciplines really mean. You know, I mean, isn't a discipline a command and control? I mean, it's a different, it's a discipline of engagement. And did you find it interesting that in your pursuit of financial literacy, just how interested people really, really got?
Martin Babinec 29:03
Absolutely. I mean, I wasn't surprised because we built it into the culture. Yeah. But it was very clear. People were paying attention.
Steve Baker 29:12
Yeah, right. Right.
Martin Babinec 29:13
And it also, it really helped, that we had a strong board, we've always had a strong board. So, as a CEO, I put a lot of emphasis on composition of the board, how I interacted with the board, and building support with the board for the things that we were doing, including transparency.
2. If there is transparency and people are informed, they don't have to guess what is happening.
So yes, there was an absolute interest in wanting to know what was going on. Because as you speak about within the Great Game, if you don't communicate what's really going on, people just take their best educated guess and it's usually the wrong guess is usually worse than the reality of the situation. So, keeping people informed during the down period, and exactly where we were. And as we had a lot of hard decisions, we basically cut the company workforce in half over a period of a year. All right, as an entrepreneur, entrepreneurs struggle mightily myself included with laying anyone off. Because I always felt that was my neck on the line when I asked them to join me. And I'm the one that screwed up, when I then had to say, you have to leave. All right,
Jack Stack 30:31
it should be their decision to leave not your actions that they cause them to. I felt that paradox. That pressure just to rewind for a second. And I think what was interesting was that the disciplines that you're talking about are the deliverables that you'd get when you engage everybody in terms of knowing what's going on, and then as their contribution. So, what that ultimately reflects is, the stronger you're building your literacy base, the more accurate your forecasts were, it fit in with your whole idea of transparency, okay, there is a, there's a real deep need to do that in order to be able to be right. You know, you cannot be right by yourself. But maybe you can, in some cases, okay. But in order to be able to hit them hit that quarter-to-quarter mentality, okay? Or whatever the long-term value proposition is it you need a steady stream of team members, okay, that are all aligned in terms of thinking that will set the standards for themselves, and then execute on those standards. And there's nothing stronger than that.
Martin Babinec 31:38
But here's another side to that, that we haven't touched on. And that is the importance of saying, it's not about just a top-down forecast that everybody buys into. The Great Game is about how do you get it from the bottom up? Yeah, right, you've got a repeatable unit, rolling up with predictability to a department rolling up predictability to the next level, so that we consolidate everything, and you have buy in at each segment of the company's hierarchy. So, it's not a top-down forecast. It's a forecast that's organic, moved upwards? And yes, there has to be some balance. The board says you got to be here, you know, and then you go back to the team and talk about, well, how are we going to get there and put those pieces together? That can't just be done by the CFO. It can't be done by the CEO and CFO huddling in a room and figuring that all out? No, it's about having a widespread amount of engagement, which is the fundamental premise behind I see, the Great Game of Business.
Jack Stack 32:40
Yeah, it's all about, obviously, getting to the common good, by letting the common good in participate in the ultimate decision-making process of the of the company, you know, but that comes with education, right? I mean, it really comes with you just can't go out there and expect it to come in as a MBA or as a, you know, a new hire. I mean, it'd be great if we had worker ready people like that. So, I give, I guess what I want your involvement is, is that you've come to the conclusion, it's business, it's got to be the teachers, right? Yeah, that's kind of the message that we really want to have. It's not the fact that we want a scuffle education. And if they wanted to come to the party, that would be really good, okay. But business leaders, business, people have to take up this call to arms, and they have to realize that they have a mechanism to be able to teach people how to be that successful. So, you run a company like that. And now you're later on in your career, you're trying to run a community, like your community just gets bigger and bigger, doesn't it?
Martin Babinec 33:45
Yes. And, and even for the people in that era, where we laid people off, we're still I'm personally in touch with a lot of those people that left the company during that era, and still feel their time working at TriNet was the most important part of their career in terms of the foundation that they learned there, they then brought elsewhere. All right, and it's still a defining piece of individual career path.
Jack Stack 34:13
And that just puts fuel in your tank, right? I mean, isn't that isn't that saying that what you're teaching and what you're advocating is passed on not only to families, okay, that learn from this, but also to future job opportunities. And how many people have you had that said, I'm working right now. And I don't have the tools that I had at TriNet. I mean, I definitely heard that. How do they expect me to do this job, but they don't give me the information to be able to get it done? I mean, you're trying to, you're breaking you're trying to break an industrial society mentality that's been here for 100 years.
Martin Babinec 34:52
Yes. And this is also why I feel in the opportunity step is before the Great Game. The innovation Economy represents a real, real path to grow exposure of the game with an audience that's hungry for it, including.
3. Millennials value transparency and being engaged.
the millennials who really value that transparency and value being engaged. Instead of being told you have to wait your turn, till you're in management, and are at the top of the pyramid before you get access to that kind of stuff. You know, today's millennials, they want to be engaged in a way, no matter what their role is, they want to know what's going on, they want to be part of it. Even if they don't have an official management title, they want to contribute.
Jack Stack 35:40
Well, they were taught certain values of you raise your family, I raised my family, and I think the education system is basically changed since I went to school, whereas now there's so much involvement in the community and so many courses of action that they have to take when they're going through school. So, they come out ready to make a difference. But there isn't a place for them to be able to make the difference, what you do is the minute they get on board, they're making a difference right from the very start. And that is what's also cool about a situation of this nature that this kind of a system blends into all changes in economy all changes in the marketplace, as prepared for whatever comes along even a pandemic.
Martin Babinec 36:23
Yes, we got it out. So, when we got to a stage where I could see the company's growing well, and I'm actually looking forward to the transition out of an operating role and made a decision to move my family from Silicon Valley where we started the company, to my hometown, in Little Falls, New York in the very middle of New York State. That was way back. So, it's still amazing to me. You know, we, we went ahead and kind of made that move in 1999. Before we went public, thinking that, hey, I was going to transition after we take the company public, I'll transition out as CEO then and because of the ".bomb", that didn't happen, I ended up commuting cross country, instead of for a couple of years as the original plan, I ended up commuting for 10 years, essentially. And all that time on planes. In the contrast, between my two valleys, the Mohawk Valley, which is where my home Little Falls is. And Silicon Valley, the contrast between those two valleys was so stark. And I kept thinking, well, someday I'm going to stop this commute. And, you know, what do I want to do in terms of the next chapter? You know, it wasn't to start another company, because I've been really blessed. I have there I don't really have a need to start another company. No, certainly not financially. And, and I think my calling is to really help others start a company. So how can I best do that. And that contrast between how things work in a place that is an entrepreneurs supporting community like Silicon Valley, little that I know when I started trying to it's the most entrepreneurs supporting place on the planet. I didn't know that when I started. But now when I'm back in my hometown, and I can see such a difference. They'll upstate New York is like the Midwest, really, it would not be that different from Springfield, okay. But we have some advantages, including over the Midwest, where I'll say here, we've got 100 plus colleges and universities that collectively enroll more than a half million college students’ big number, largest concentration of STEM programs as a region of any place in the country. More than three and a half billion a year in corporate and academic research. That's a big deal. Close proximity to the capital markets in institutional and personal relationships with Wall Street. All right, big deal. You have all these assets, great infrastructure, and yet on the metric of venture capital investment, and remember, venture capital professional investors going into that highest growth, opportunity, private companies, and that metric of the 18 regions in the United States track for venture capital when I began this journey in 2010. I've seen Europe was ranked dead last number 18 of 18. So, as I'm, you know, spending this time going back and forth, I'm thinking, What's wrong with this picture? Here? We got all these assets, and we are dead last. All right. There's something wrong with that picture. That's what put me on this journey to say I am only one guy. How can I change the direction of an entire regional economy? And so, we began this journey of saying, how does one create not just a single entrepreneurial community But because we're spread out upstate New York over seven distinct metro areas, how can we create a community of entrepreneurial communities? And that journey began with the starting of the Upstate venture Connect nonprofit in 2010.
Steve Baker 40:16
So, as we looked at this one is for our audience, what is your involvement at this point in 2010, with TriNet? And your not-for-profit push that you're trying to come and tell me?
Martin Babinec 40:32
I stepped down as CEO in 2008, until 2010. And 2010 started, and I remain on finance Board of Directors today. And then, in 2010, with the starting of the nonprofit of safe venture connected started this journey, it's now in the 11th year to help other communities start and grow companies embracing principles of what it is to be a supportive community for entrepreneurs, especially creating jobs in the newer industries. Because among other things, I was aware when you fit that definition of a startup that I described, or any company that is selling its product or service to a national or global audience. And then the second condition is to be based on an innovation not yet embraced in the marketplace. Now broadly embrace for everyone job created with a company that fits that description. Five jobs were created in the local community. That research was born out by an economist Enrico Moretti, who's out of Berkeley, and the book is called New geography of jobs, something I would highly recommend for those who are interested. And so, by creating more innovation, economy, jobs in a local community, you can accelerate overall job growth, and importantly, wage growth in communities. So, the focus of upstate venture Connect would then be how are we going to increase the number of companies in the innovation economy, not relying on government subsidies to attract big corporations to come in, which is the typical move in which the data proves out is very unsuccessful and is a waste of taxpayer money. But instead, grow those companies organically. And that's the mission that we've been on and will continue to be on watch.
Steve Baker 42:31
Well Martin thank you so much, Jack, thank you as well, it's been a great discussion. I've just taken so many notes. I do like the fact that you guys have really kind of identified this idea that change really does start at the top. It's one of our core values and one of our higher laws of business. But the real change happens when we allow that environment to reach people in education. And then it's a groundswell it's really got to be, you know, the support comes from beneath from bottom to top. So that's some big lessons there. You can't boil the ocean. I think another good takeaway. And the couple of books that I wanted to point out, you mentioned for our listeners, the new geography of jobs and the startup community way that you recommend it. And of course, I heard there's a great book called More Good Job: An Entrepreneur's Action Plan to Create Change in Your Community. Folks, you can learn more about Martin and everything he's doing in his community at moregoodjobs.org. Martin Babinec.
Rich Armstrong 43:36
Great, Martin, thank you so much.
Martin Babinec 43:38
All right Rich, Steve, and Jack. Take care.
Steve Baker 43:44
Well let's keep the conversation going. Guys send us your stories, your best practices, your ideas, your challenges, your victories, your questions, and remember, you're not alone. This is capitalism at its best. Thanks for joining us. We will see you next time.
The Change the Game" Podcast is produced by the Great Game of Business. To learn more, visit greatgame.com.