Dr. Jason Earl – Director for the Willes Center for International Entrepreneurship at BYU-Hawaii

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About JASON EARL

Transcript:

Alan

Can you share a little about your background?

 

Jason

I started down the path of engineering, ended up in corporate finance, ran a startup company, which sold to a private equity firm, and went from private equity into academia. So I tell my students, I didn’t plan to be a teacher, I didn’t study to be a teacher and I’m glad it turned out the way it did.

 

I studied at BYU. I have a bachelor’s and master’s in engineering. So my first job out of school was with Exxon Mobil in New Orleans. I was an offshore structural engineer. So we built huge offshore oil platforms. We built pipelines and gas plants. And the interesting thing was that I thought I was going to be doing engineering, but really, it was project management on a massive scale. So I was spending anywhere between $20 to $30 million per month, which in Exxon terms is just pennies. But there was a huge hole in my education, because I didn’t know how to hire and fire, how to manage budgets, how to track spending, and my boss pulled me into his office after six months and said, we need to send you to assertiveness training, which in Exxon terms means you’re about this close to, to getting fired. This assertiveness training was only two days long, but it changed my life. It was it was a whole new perspective on what it means to really manage and lead. When I came back, I changed up my entire team, got a whole new budget, and we finished the project. When I met with my boss, I said, Paul, everything’s finished, it’s to code, but please don’t fire me. I’d overspent by about $20 million. And I remember Paul saying, Jason fire you we just spent an extra $20 million training you, now we can actually use you. And so they actually sent me to business school at Tulane. So while I was working at Exxon, I wanted to Tulane for nights and weekends for three years, finished up the MBA. And that kind of opened my mind to this whole new world of the combination of engineering and business.

 

Alan

Now you switched over from the energy field at Exxon into a private equity group, what transitioned you into that?

 

Jason

From there I went into another mining company, called World Minerals. We had just  finished putting in the last offshore oil platform in California right off the coast of Santa Barbara. And my next assignment was going to be an Africa. And I was a newly minted MBA. And I really wanted to find something in that Santa Barbara area. I remember getting on monster.com. And I typed in engineer MBA, some crazy salary. And this job popped up with a company called World Minerals. And they were looking for someone who could do strategy, planning, and M&A. I really wasn’t qualified to get the job, but that MBA does all kinds of things and opens all kinds of doors. And so we took the job, we moved our family from New Orleans to Santa Barbara. And that’s really where my education in finance took off. We we had a really good CFO. He said, you know, Jason, the thing I like about us, I only have to tell you once and you get it, so I’m going to make a deal with you. He knew how clueless I was. He said, You come in every Saturday morning from eight to 12. And I’ll teach you corporate finance. And he did for a year. I owe John Liechty a lot. He pretty much taught me everything I knew about how to value a company, how to acquire a company, how to really lead a team. So that was kind of the shift to finance.

 

I was there almost five years. And I learned you, if you live by the acquisition, you pretty much die by the acquisition. So a big French company came and bought us. The senior management got golden parachutes. And I was just kind of stuck like there was there was a lot of pressure to perform, and the whole culture had kind of changed. And that’s, that’s really, when I looked at doing my own startup. I wanted to stay in the area, and my wife wanted to stay in the area. And so we met with some local entrepreneurs, jumped into a startup, we had an angel inves`tor there in the Santa Barbara area, who was very patient, very generous. And that’s how we, that’s how we got into the startup back in my old roots in engineering.

 

We were designing high strength concrete. So mixed designs, that To be honest, it was just, you know, three of us engineers and a laptop, but we had an algorithm to optimize these mix designs. And we started landing some pretty big projects. And then a venture capital firm in Beverly Hills took notice. And they introduced us to their people qnd the next thing I knew we were meeting with the New York port authority on the design for the Freedom Tower in New York. So that entire foundation, the core, the shear walls, that’s all our concrete, super high strength had all of these criteria that we had to meet. It was it was an awesome experience. Watching the company grow from three people to 63 people in such a short time period is really fun.

 

Alan

So what led you into teaching?

 

Jason

What happens with these VCs is they put you down a track of spending so much that you you’ve got to just have explosive growth. And so they brought in some really qualified people, you know, people with like, 30 years of management experience in that industry. And there’s this feeling like, you’re the right person to start it, but you’re not the right person to grow it. And it seemed like the next chapter was to move on. I had a good friend at BYU-Idaho, who said that there was a position, they were looking for someone with private equity experience, who could also teach finance to engineers. My wife was not excited about leaving Santa Barbara, but we went up to Idaho, we met Kim Clark, who was the president at the time and there’s just this overwhelming feeling like this is this was the next step so we took a 90 degree turn into to academia.

 

Yeah, it was the middle of winter we. We left December 15. I think we showed up right before Christmas. And there was like six feet of snow. We lasted five winters. Part of the deal I had with my with wife was that she wanted to have an indoor pool. She’s like if we can do that I can survive the winters. And she ended up teaching a lot of kids in the community. So she ran the pool business I taught at BYU Idaho. But yeah, we lasted five years before we came to BYU Hawaii.

 

Alan

What are you teaching at BYU Hawaii.

 

Unknown Speaker

So I work in the Entrepreneurship Center. We teach entrepreneurship classes, we also teach strategy classes for the business students. And it’s surprisingly our best students are not the typically business background students. They come from marine biology or elementary ed are one of these other areas, but they have an idea for a startup. And so it’s been an awesome experience to kind of see it come together the the science side of it, the people side of it, and then of that business model where the students can go back to their home countries and start their own business.

 

Alan

So based on simulations, you’ve done some research in that area. And how did that come about?

 

Jason

When I first showed up at BYU Idaho, they had a simulation for The business 101 intro students, and I remember running the simulation, and it was tough. And I met with the department chair and I said, I think this is overkill. Like I barely understand it. And I have an MBA. And I remember, this guy said, You underestimate our students, they can do it. So I kind of just threw my students into it. Part of it was, you know, an instructor who was new to teaching, so I didn’t really know how hard I could how hard I can push my students, but they showed an amazing ability to perform. And the great thing about simulations is you can compare results across universities all over the world. And the next thing I know, we’re getting a call from the CEO of the company in Chicago. And he’s asking us, hey, when did you start an MBA program? And I said, these are undergraduates, and he’s like, okay, are they seniors? I said, No, these are freshmen. He’s like, no way. So he jumped on a plane, he came out to BYU Idaho. And he saw our students actually running the simulation, teaching with it and he was so impressed he let me join their team that actually runs these simulations for executive programs at HBS, GE and Caterpillar. So that was kind of my that’s how I kind of got into it. And I found it so fascinating that I did my dissertation on it, we really looked at how to measure these gains in business knowledge and business acumen through simulations.

 

Alan

You know, it’s interesting, this is a development that it used to be just a straight case study. And going with online business simulations of courses, the students are getting a different experience. But how do you grade an online business simulation in the classroom setting?

 

Jason

You definitely don’t grade it at first, because it’s really frustrating. And almost like when an aircraft simulation, the students crash it over and over again. But really, the two ways we measure it is one is with the balanced scorecard. So we’re looking at their investments, not just in the company, but in the people, feedback from customers and we also look at their financial performance. And then in addition to that, we asked them questions in between rounds. So every round simulates a year. And we can hit them with 10 or 12 different questions about, if you were to make this change, what would be the impact on your competitor or your market share? And so I think one is really measuring business knowledge, and the other is measuring business acumen.

 

Alan

Thank you. Okay, so now I got a question for you, you got a student coming out of school, and they’re saying, you know, I’ve got all this great education, I’m going to go start a company, but I don’t know where to start. So if you’re advising one year students, how to go about taking their idea and implementing it into business, what advice would you give to them?

 

Jason

I think the biggest thing would be to identify the problem, typically, where there’s a burning problem, there’s a great opportunity. So if we could really ask the right questions to find the problem. And then find a solution in the form of a product or service. That’s the big step. Once you have that we can test it, we really like to set up small experiments, get it out there, get feedback from customers. And there’s such great tools now, especially online where for relatively low cost, you can get something out there, either on Kickstarter or online with samples and start to get feedback.

 

Alan

How do you teach somebody to innovate? Is it is it natural? Or is it an acquired skill?

 

Jason

I think it is natural, but I think it starts to go away. There’s something with these students in their, their early 20s, where they’re actually pretty creative. And a lot of these great ideas are not coming from my staff. They’re, they’re coming from the students. And yeah, I don’t want to offend your audience. But I think the older we get, the less innovative and less creative because there appears to be more risk.

 

Alan

Can you tell us about how innovation can help to create new markets? Yeah,

 

Jason

It’s probably been most apparent in these developing countries that a lot of our students come from. Students here at BYU Hawaii come from over 70 countries around the world. And when we look at innovation there, it’s typically not high end, really expensive, it’s often fairly low end and it’s really not great quality. But the telltale signs is that it’s low cost, it’s scalable and it’s serving non-consumers. What you’re basically looking for is people who, who normally could never buy this thing, suddenly have access to it. And a great example would be in Cambodia, where you just don’t see beds, like, people don’t sleep on beds, traditional beds are expensive. But there’s, there’s, there’s an unmet need there. And if you had a way to develop a low cost bed that could actually be manufactured and made available, that would be an innovation for them. So it’s, again, it’s not a fancy app, it’s not 5g networks, it’s, it’s, it’s finding that that unmet need and that opportunity. And I think just a quick example, one that blew me away was in Mongolia, we’ve got quite a few students from Mongolia. And when you go out to visit, there are there are hotels there in the big city. But for a lot of these adventure tourists, there’s no traditional motel or better bed and breakfast. And so you find these people out in the countryside, you take their gares or their yurts, and they put them on Airbnb. And so these people, they have smartphones, they have access to a 4g network. And they can make more off of a month of Airbnb than an entire year of selling Yak or Yak milk. And the customers love it, they pay $60 a night, they have an authentic, amazing experience. And it’s a market creating innovation that just wasn’t there four or five years ago.

 

Alan

Managing risk. How do you coach a person that’s risk adverse in terms of moving forward in stepping into the future to solve problems?

 

We basically teach the not all risk is created equal. So we imagine it is a bunch of coat hangers that are kind of all tangled together. So if you can find a way to detangle or unbundle the risk, and separate the financial risk from the people risk, from the technical risk, and then once you’ve got that identified, you can basically find ways to mitigate that risk, and push it off the table and get it to someone else or eliminate it. And I think from the outside entrepreneurship looks very risky. But when you talk to some of these successful entrepreneurs, they they’re actually highly risk adverse and they’ve found incredible ways to eliminate or dramatically reduce the risk.

 

Jason

There’s three things that you should never risk, right. You should never risk your your family, your faith, and your friendships. And so when I look at savings for my family, or for the future education of my kids, like that’s just sacred, like, I wouldn’t touch that I would not want to risk that. I definitely would not want to take out a line of credit on my home and risk the house for my family. But I think if you can put something together that has real potential, and you can outline what those risks are, and then go to people who appreciate what you’re trying to do. They understand the risk and they’re okay with it. I think that’s really where you’ve got the right recipe for success. And in our case, it was an angel investor, who had some experience with several startups in the area. He saw the potential and i think it seemed it risky, but we were also backing up all of our technology with patents. And he had those, you know, in his name, he was going to have the intellectual property. So we really tried to show that we were going to do this over time kind of scale the venture, but also only take on the money as we needed it. So rather than just write a check for $5 million, we basically had this tranche every three months, we got, you know, half a million dollars. And we were very careful to report- Here’s the cash flow. This is when we hit cashflow positive, this is when we’ll hit breakeven. So they can, they can pretty much see our progress as we as we tried to execute on the plan

 

Alan

How important is collaboration when you’re scaling your company?

 

Jason

It’s vital, those first four or five people will make or break your company. And so I think having a certain level of trust between all of you, but then just also appreciating that you’re not the smartest person in the room that other people could have good ideas. We had one guy in the lab named Johnny, who was a technician. But he was brilliant when it came to how to modify the mix design, how to make changes. I mean, he was a vital, vital part of our team.

 

Alan

So for the aspiring entrepreneur Do you have any final thoughts?

 

Jason

I think one of the greatest opportunities in this life is to create. I think we were born to innovate, we were born to create. I’m worried that as we get older, that gets kind of beaten out of us. And we just look for the path of least resistance. But there’s nothing better than looking back on something that that you created, and more importantly, that you created with the team. As I think back to 15 years ago, I don’t really remember a lot about the profit that we made, or the competitors that we beat out of the market. But I do remember those relationships. And I think creating something where you have a team that cares about each other, you remember how people treated you and hopefully you remember how you treated others. And, and it just provides a whole new future, like having people out there that trust you and that you can point to as  friends and I think it’s scary at times, but there’s definitely a way to do this and really be proud of what you’ve created.

 

About Jason Earl

Dr. Jason Scott Earl is the Director for the Willes Center for International Entrepreneurship at Brigham Young University Hawaii.  As an Associate Professor of business management he teaches classes in strategic management, venture creation, and entrepreneurial management – areas of expertise developed during his career.  He has conducted strategy and finance training for MBA students at Harvard Business School (HBS) as well as Senior Executives at General Electric (GE), ABB, Insperity, Accudyne, Marvell, and Illumina.

 

Jason graduated from Brigham Young University with B.Sc. and M.Sc. degrees in Civil and Structural Engineering and was hired by Exxon Mobil in New Orleans as a structural engineer. He completed his MBA in corporate finance at Tulane University.  After graduating from Tulane University, he moved to Southern California where he accepted a management position with World Minerals Inc. as Director of Strategic Planning & Finance.  During five years with World Minerals, he was heavily involved in the valuation and acquisition of eleven (11) companies.

 

Jason went on to become President of StarStone, LLC – a leading material science technology company based in Santa Barbara, California.  The parent company was acquired by a private equity firm (Pacific Capital Group) in 2007 under the name iCrete, LLC.  Since that time, he has completed his Ph.D. and taught at BYU Hawaii where he has worked with international students from over 70 countries around the world.  The student social entrepreneurship group (Enactus) is run by the Willes Center at BYU Hawaii and has won the National Championship four times over the last six years (2015, 2018, 2019 and 2020).  Jason loves to spend time on a motorcycle with his beautiful wife Natalie.  They are currently in the midst of raising 5 boys and one little girl.

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