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Hi, I'm Amy Bernstein, HBR's Editor-in-Chief. And I'm Amy Gallo, a longtime contributing editor to HBR. Along with Amy B., I host our Women at Work podcast, which now releases episodes every other Monday, year-round. That means more practical advice and more insights to make you feel seen and supported in your career. Subscribe to Women at Work wherever you listen to podcasts. Welcome to the HBR IdeaCast from Harvard Business Review. I'm Alison Beard.
The story of the successful immigrant entrepreneur moving to a new country, seeing a need and working as hard as possible to build a business around it isn't a new one. In the U.S., it's a big part of what we call the American dream. But the stats on this still might surprise you.
While immigrants make up 14% of the U.S. population, they own about a fifth of new businesses. Forty-five percent of Fortune 500 companies had immigrant founders. Four in five founders are top executives at billion-dollar startups or first- or second-generation immigrants. And the research shows that immigrant-founded companies grow faster and survive longer than those founded by natives, contributing trillions of dollars to the economies of their adopted countries.
Our guest today has talked to many of these entrepreneurs, studied their strategies, and pinpointed the common principles that have propelled them to long-term success. She says that any leader can learn from their examples. And at a time when anti-immigrant sentiment is on the rise around the world, we wanted to ask her what impact related policy changes might have on entrepreneurial innovation.
Thank you very much, Alison.
So I'd love to start briefly with your own immigration story and how that led you to both study entrepreneurship and become an entrepreneur yourself. Absolutely. So I was born in Bulgaria to a Turkish ethnic minority. And in June of 1989, the communist dictator, Todor Zhivkov, asked us to leave Bulgaria and
So in June of 1989, with only two suitcases to our name, we left Bulgaria. There were 360,000 Turkish Bulgarians who immigrated that summer. When we got to the border, I remember all the confusion, fear,
Around me and I will never forget my father screaming like a wounded animal as he ran Towards the border and he threw himself on what he called motherland soil Looking around me at that time. I had two realizations one was My childhood just ended. The second one was I need to get a good education and
And it defines everything that I do today. I received financial aid at the age of 18 to go from Turkey to University of Miami. And I was once again an immigrant. I remember feeling very much like fish out of water because all my classmates around me felt very much at ease when talking to the professor, very much at ease, comfortable in their own skin. And
We had a computer class. We had a computer class, and it's the first time that I saw a computer in my life. And as you started studying entrepreneurship, as you continued your educational journey, what gaps did you find in the research on immigrant success? At the time, I was actually with my family a few years later, started to build a company ourselves. And
The lessons that I was seeing in the literature, first of all, as someone who wasn't just an academic, but also who was practicing entrepreneurship, some of the advice didn't fit what we were doing as a refugee family, trying to build a business with zero capital and with very limited resources. What stood out to me was just how different it was
you know, what you did on the ground versus what was written in the books. For instance, there is a lot of emphasis on necessity entrepreneurship. And it is the case for many of the immigrant entrepreneurs because they often don't have the resources, their education is not recognized in the country that they immigrate to. So they are often forced to become entrepreneurs.
The entrepreneurship literature will often ask the question, why are immigrants more likely to become entrepreneurs? But they rarely ask the question, why are they more likely to start businesses that last?
So why is longevity the key measure to consider for you? The majority of startups today fail. Even the majority of businesses today last about an average of 18 years.
As a refugee founder, immigrant entrepreneur, it was very important for me to create a business that will be prosperous, that will have longevity. I was fascinated to understand how iconic brands are made, for example. But as I start to delve deeper into the literature and into my research, I had to change the definition of longevity.
and reframe that because no company can last forever.
So it's not so much about the fact that you are going to last for thousands of years, but what impact are you making? Yeah, and a lot of the companies that you have studied are, in the grand scheme of things, relatively young. You know, I'm thinking Calendly, Noom, WhatsApp, even Chobani. How do you classify them as long-lasting companies at this stage?
For me, business longevity is a company that has lasted long enough to create an impact in the ecosystem that it finds itself in. Yeah. And all those companies I just cited certainly have done that in their respective industries.
So you looked at eight key principles that drive immigrant and also second generation entrepreneurs' long-term success. Briefly, that's bridging cultures, building from the past forward and the future back, forging authentic connections, generating profit the right way, building community, reframing rejection, frying in your own oil, and daring to play your hand. I have to start
by asking you to explain the most interesting one. What does frying in your own oil mean? That's a wisdom from my grandfather. When we were growing up in Bulgaria, he was an orphan at the age of 15, had to look after his five brothers and sisters. He would always tell us, it's very important to fry in your own oil, which means to be self-sufficient.
So I work with a lot of startups. I advise businesses. What I was seeing especially was that they will try to immediately raise money and grow quite fast. That's almost like a trap that a lot of startups tend to fall into. And it can have devastating consequences. What advice can I give? It was that fry in your own oil, grow at a rate that also...
matches your profitability and you are self-sustaining as a company first because this will allow you to be a lot more creative. I think that's an important element when it comes to helping them building sustainable businesses of longevity. And that seems linked to another principle, generating profit the right way. Why do you see this sort of dual pursuit of
both purpose and financial success as something that immigrants might do better or more naturally than others? Because of their backgrounds, they've usually come from countries with a lot of uncertainty. They've seen what lack of education, losing trust in institutions means.
And having lack of resources, not having the right ecosystem can do not only to the people who live in that country, but even to the health of a business.
You know, I have a section in the book that says Milton Friedman's advice is no longer applicable because it's not about putting company profitability and company first, but recognizing that you are part of this ecosystem with suppliers, customers, the nature. And in order for you to be successful, all of these elements have to work together.
That links to yet another principle, this idea of clear vision. And you say that immigrants do that by moving from the past forward and the future back. Yes. With three specific steps, identity, intention, and imagined future. So explain that process to me. You know, founder of Moderna, Nubar Afeyan, he has a
flag on his desk that says, trust your crazy idea. And he claims, one of his main elements is that he builds his businesses from the future back. But what does that mean? You have to have identity. Your past informs your future. One of the other entrepreneurs I interviewed, the founder of Numity, when I asked her, what's her advice to people who want to start businesses? She said,
Entrepreneurs have to look within first, understand their past, where they come from, what bothers them and what they want to change, and then look out there. So I thought that was an interesting one and very much related to vision.
So you have to first ask yourself what matters to you, what your values are. And intention has to do with the fact that what in the world doesn't align with your values. And then you have to have that crazy idea and trust in that crazy idea. And trust is the ability that allows you to keep going no matter what and believing in that crazy idea.
And it's interesting because you think, okay, for an immigrant entrepreneur, they're looking back to their past that involves migration. But, you know, any entrepreneur could look back to the past of, you know, things that they experienced in their childhood or a friend or family member who had a health care issue or even a consumer problem that they face on a daily basis and sort of use that past experience to inform their intention and imagined future.
One thing I want to really clarify, in the book I talk about immigrant entrepreneurs, but like you said in the beginning of our conversation, this is very much applicable, replicable. It can apply to anyone who is not an immigrant entrepreneur. Yeah. Another of the principles, the ability to bridge cultures, you know, seems like an obvious asset that immigrants bring to the table. How, though, does it really help them build relationships
these kinds of businesses you're talking about, the ones that have longevity? I put this principle first because it, in my opinion, underpins everything else. Immigrants see the world and look at the problem from a very different angle. They can look at the problem and ask a question that normally other people wouldn't ask. Another important element is the institutional distance because when they start building their companies,
their cross-cultural ability allows them to reduce that institutional distance between doing business of two different countries.
They can also start a business simply because they come from a different culture, as is in the case of Hamdi Ulukaya with Chobani. He comes from a Kurdish shepherd family, and he brought yogurt to U.S. I eat it every day. It's a great product. And one thing I want to add here, founder of Wondery, Hernan Lopez, he's an Argentinian immigrant, and he says...
Coming from two different cultures allows you to read tomorrow's newspaper today. And that's about recognizing inflection points because they happen so often, especially in today's fast-paced environment. You can spot changes immediately.
And you are able to adapt a lot faster than other companies would. So it's almost like your experience with change and cultural differences allows you to anticipate a big cultural shift. Yes. And he, with Wondery, anticipated the rise of podcasts. Yes, that's right. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast?
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Connections is an interesting one for immigrant entrepreneurs because they typically don't have them. You know, there's no existing support networks of family and friends when you've moved to a different country. So what lessons can non-immigrants take away from how they overcame that obstacle to build social capital anyway?
It's very true. So when immigrants come to a new country, they often lose the social network that sustained them. And they try to immediately rebuild in any way they can. And every single connection matters a lot to them. That's why I have many of the principles, for example, homophilic ties, which is birds of a feather that flock together principle, community principle,
And in the case of immigrant entrepreneurs, what I've seen is they establish these ties in a very strategic way. Nothing is by accident. They use a lot of storytelling.
They are very dynamic and they evolve over time. And there is a continuous nurturing of these relationships. And I think we often, when we think of immigrant entrepreneurs, think of sort of connections within that cultural group.
But you cite examples of people connecting over heritage, experience and values, as well as geographic background. Absolutely. So, again, you don't have to be an immigrant. You don't have to be a refugee in order to live.
create this what I call quasi-family or create connections with other people. You can bond over the fact that you believe in the same thing or you have the same vision for your company. When you are building a company, you can take these elements and implement them yourself. So that does lead right into community building. How do the entrepreneurs you studied do it differently?
They do it differently because the other person matters to them greatly. For instance, in the case of Hamdi Ulukaya, when he first started to build his company, he didn't have a lot of capital, but he had those other people who were part of the old craft factory. And he says, when I start to build my business, I ask those people, if you see me doing any mistakes, just tell me.
So that's a very interesting one because there is not this cult of a leader, but rather a cult of a community. So it was this existing community of Americans that had worked in the craft factory, and he was turning it into a yogurt factory, and he made that community his own. That's right. To this day, he hires refugees in his business, and that's a...
a very important part of how he does business. It's based on community. It's based on how can I create better life for other people. So let's try to quickly touch on the last two principles. How do immigrant entrepreneurs reframe rejection in a way that we can all learn from? That's one of my favorite principles is
With immigrant entrepreneurs, they are expecting almost to be rejected. They expect failure and they are not afraid or to them it doesn't mean rejection. To them, the word no doesn't mean it's a rejection. Isaac Larian, the founder of MGA Entertainment, he constantly says, no is the beginning of business. No is the beginning of negotiation. Right.
And I imagine that sort of the resilience that they've developed from moving countries, you know, establishing entirely new lives is a big part of that, being able to recover. Absolutely. Yeah. Finally, dare to play your own hand really is about capitalizing on luck.
So how did the entrepreneurs that you talked to explain how they did that? When I was setting out to write the book, I thought I knew what I was going to say more or less. But my analysis led me to some very surprising principles and insights. So
Luck is one of them. Luck, again, it's quite strategic. It's linked to hard work. So it doesn't happen to you simply because you were there at the right time, met the right people. You may have these elements happen, but you need to know how to recognize it.
And then you need to put in the hard work and utilize all the other principles I talk about, such as cross-cultural bridging or homophilic ties or importance of community or reframing rejection. Yeah, it's the ability to...
Make your own luck in a way. Absolutely. Sort of create so many opportunities that there will be one you're able to seize on. Yes. So in reading the book, I did think of one very prominent counter example, particularly when it comes to achieving profitability the right way. One very prominent
famous business flame out recently was WeWork, which was founded in the U.S. by an Israeli and had a spectacular rise and fall due to financial mismanagement. Is that just an anomaly? Or, you know, is there a danger that you're cherry picking the best immigrant entrepreneur case studies and ignoring those failures? Of course, every research, every study has its limitations. And
And certainly mine does as well. Immigrant entrepreneurs are not monoliths in any way. There are those who have failed. There are those who have done things that can be controversial, as we are seeing today. So I'm talking about Elon Musk here. But it doesn't take away from the fact that immigrant entrepreneurs...
are quite impressive, have built impressive companies. And as you cited in the beginning of our conversation, they make up 46% of the Fortune 500 companies. And statistically, they build businesses that last longer. Yeah. And so we're talking now about
Lots of well-known companies, you know, in general, the examples you cite are new companies, certainly, and some startups, but things we've heard of, Noom, Calendly, WhatsApp, etc. Do you see the same principles at work in all of the smaller immigrant-led businesses that we all see in our own communities? Are the same principles playing out? Yes, they are. Also, when I was writing the book,
I was comparing, contrasting these principles to my own lived experiences as an immigrant entrepreneur and wanted to see how did this affect me? How did this play out in our business? But I went a step further than that as well because, as I mentioned, for several years now, I've been working with startups, advising startups and
I want to see how do these principles work in their context. And I see it very much applies there as well. For instance, I can give you an example. Fry in your own oil. A few years ago, a student of mine from Oxford became a financial advisor to a startup. So she would ask me very informally about that particular startup.
So one thing I said to them, you are over borrowing without being mindful of your sales. And unfortunately that company bankrupted, even though it was created with the right principles. They were clothing in Africa and contributing to the community in Africa, but they were not careful with their finances.
Yeah, so it's a good reminder that you can't just adhere to a couple of the principles. You need to work on adhering to all of them. What about intrapreneurs? You know, the people creating new products or services within their organizations. Do you think that immigrants bring something special to the table there too as well? I think they do. This can apply to even people who are not intrapreneurs, who are not building businesses.
For example, it can apply for your career as well, for early career professionals when they have a vision for their career, how they want to build their career. You can even apply it in that context. Yeah.
The best example of an entrepreneur that I found in your book was that the founder of Duolingo actually created CAPTCHA also when he was at Google. Yes, that's right. You say a few times in the book that you're not trying to make a political statement on immigration. But as I said in the intro, for the past several years, there are countries around the world that have seen increased anti-immigrant sentiment and anti-immigrant
They're electing leaders who are trying to limit immigration. If that trend continues, what do you think that the long-term result will be for those countries that are less friendly to newcomers? It will be devastating. You are right. I do say several times I'm not trying to make a political statement in the book.
And I don't want to even say I'm political because this is just simply being a human being. I want us to go beyond the divisive rhetoric of when it comes to the word immigrants and immigration, because statistics do not lie. Numbers do not lie.
And if we continue with this, we are already seeing people don't want to come to U.S. There are travelers who are boycotting students who are not likely to choose U.S. And entrepreneurship at the end of the day needs stability. They need ecosystems that are going to nurture these startups. When you have this constant disruption,
While disruption is something that immigrant entrepreneurs are familiar with, you need the right soil in order for the flower to grow, let's say. The founder of Udemy, Eren Balog, he immigrated from Turkey to U.S. specifically because he knew that he cannot grow Udemy in Turkey. He wanted the ecosystem of the Silicon Valley. So in conclusion, you talk about consciousness.
kindness being a unifying theme for all of your principles that you derived from your research on immigrant entrepreneurs. Why is kindness something that you see more in those study subjects? And why do you want more of that in business?
Because it's for me what unifies all the principles that I talked about. Without kindness, you cannot practice community. Without kindness, you cannot reframe rejection. You have to be kind to yourself too. Without kindness, you can't give back. And for me, it's the secret ingredient that allows for everything else to happen.
You've offered us lots of lessons and that final one is a good one to end on. Neri, thanks so much for being with me today. It was my pleasure. Thank you for inviting me.
That's Neri Kara-Silliman, an entrepreneurship expert at Oxford University, entrepreneur, and author of Pioneers, Eight Principles of Business Longevity from Immigrant Entrepreneurs. And we have more than a thousand IdeaCast episodes, plus many more HBR podcasts to help you manage your team, your organization, and your career. Find them at hbr.org slash podcasts, or search HBR on Apple Podcasts, Spotify, or wherever you listen.
Thanks to our team, Senior Producer Mary Du, Associate Producer Hannah Bates, Audio Product Manager Ian Fox, and Senior Production Specialist Rob Eckhart. And thanks to you for listening to the HBR IdeaCast. We'll be back with a new episode on Tuesday. I'm Alison Beard.
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