4 Things I Learned About Entrepreneurship as an FBI Agent
In 2005, Jason Hogg founded the secure payment card company Revolution Money--literally starting it in his garage. The anti-theft prepaid card he helped develop eventually became the American Express Serve debit card when Hogg sold his company to American Express for $300 million five years later.
Sure, he had some startup experience on his resume and a Cornell B-school degree. But that's not what he says prepared him the best.
Hogg used to be an FBI special operations agent in New York City assigned to a covert squad doing undercover field work from 1998 to 2000. That is where he learned much of what he needed to know about being a successful entrepreneur.
"One of the first things the FBI teaches you is to be able to speak with people at all levels: As an agent, you deal with all walks of life, from CEOs to street criminals and you have to make a human connection with them and never be pretentious or presumptuous," Hogg says. "When you're an entrepreneur, you're also dealing with people from all walks of life, venture capitalists, board members, investors, technology folks, partners, and you have to appreciate everyone. Your company coming to fruition is contingent on your ability to make those connections and inter-operate with a broad swath of people."
Hogg, who's now a senior lecturer of innovation and entrepreneurship at Cornell, says he used four axioms he learned while at the Bureau during every step of his career as an entrepreneur, from the garage to the multi-million-dollar exit, and continues to use them today while filing new patents in the mobile-merchant space. Below, read the FBI-training mantras to help you become a better entrepreneur.
"It's better to be tried by 12 than carried by 6."
This quote evokes the sentiment of action in a life or death situation--it's better for you to be tried by a 12-person jury in court than it is to be carried in a casket by six during your own funeral. "To me, it's obviously action versus reaction to make sure you get back to your family at night while in the FBI, but as an entrepreneur and having that training I knew I had to make decisions and then be judged for them," he says. "Time is not your friend as an entrepreneur."
Hogg says you need to take chances and risks, but don't be reckless. You want your company to be around tomorrow. If you have to ask for forgiveness, it's better than telling your investors and customers that the show is over.
"Smooth is fast."
Hogg says that starting a company and going to market needs to be done quickly and correctly, but not rushed. "When it came down to doing things in the FBI, it wasn't about rushing. It was about being deliberate with speed, but being smooth so you get it right the first time. We were in situations with high stakes that had high consequences," Hogg says. "As an entrepreneur, there's an urge or impulse to get something out and make tremendous progress. But as I realized it, smooth and fast applies to entrepreneurship too because you don't have the luxury for a second chance. You are a new company, don't have a reputation, and only get one bite of the apple, so it's better to be smooth than fast."
"Be nice to everyone, but have a plan to kill them."
When making partnerships, pitching investors to fund your startup, and working with a larger competitor, you always need a plan for when things go wrong. The caveat to this, Hogg says, is to never show your hand, and assume positive intent and be kind.
"I think this applies particularly to small companies and their strategic partnerships. You have to understand what your exit strategy is, but be nice-going, assume positive intent and always think about what you'll do if they steal your idea, drive you out of business, or hijack you during a negotiation," Hogg says. "You have to understand you're the little guy and you're going into it with a behemoth." Always have a plan for when or if things turn bad.
"You don't need to yell and scream when you have a gun."
This is all about leverage and composure, especially while pitching your business to investors. Think of your disruptive idea as a gun, so long as you have that you do not need to scream to be heard.
"In the FBI, they taught us to always maintain your composure. People call you names or you can be operating in an unpleasant environment, but you can never lose your composure," Hogg says. "In business, when you're pitching your idea, on a roadshow, or raising funds, your leverage is your idea. If people don't like it, start attacking you, testing you, or just criticizing you, you need need to maintain your composure. This a skill you have to systematically work through."