I have had two pivotal events in my life. One of those is what got me started teaching; and the other is what motivated me to begin my career as a teacher of entrepreneurship.
The first pivotal moment took place right here in New York City in the clear sunlight of day. It was September of 1981 and I was out jogging in FDR Park. Suddenly, I was being attacked by a group of young teenagers who were armed. I ran away, being chased. This event -- one of pure, exhilarating terror -- had a huge impact on me psychologically. I had flashbacks and could not work, feeling afraid of young people who looked like those who had mugged me.
I sought out help for these terrors and went to see the world-renowned Albert Ellis, who specialized in helping people overcome their fears by using Rational Emotive Therapy. In our first session, I was so discouraged that Ellis laughed at me, and assigned two of his assistants to act as my therapists instead. Together, they had me write down what I was obsessing about: I felt ashamed that I got mugged and like a coward, I ran for my life. Under their guidance, I changed that sentence to the following one: I was attacked by an armed gang and heroically escaped with my life.
Even more effective than these repetitions was Dr. Ellis's assignment for me: to flood the experience by reliving it. As a result, on March 6, 1982, I began teaching at the Boys and Girls High School in the Bedford Stuyvesant section of Brooklyn. At that time, this was one of the worst schools in New York state, so bad that Governor Cuomo almost had it closed down after a student was shot and killed there.
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Every teacher has been in a situation like this -- when you feel invisible, or even worse, when you feel like a foil for contempt. During these moments, you are ashamed. At the same time, you are scared that you will lose your job; that people will find out that you are a fraud; that everyone will know you cannot teach or lead; and that you will never work again.
Thirty-one years ago on March 6, 1982, I was in a class at Boys and Girls High School and I totally lost control -- my second pivotal moment. Feeling humiliated and frightened, I stepped outside of the classroom in the midst of the chaos. Closing my eyes, I knew I had to act. Taking off my watch, I had an idea that I yelled to my class: "What would you pay for this watch?"
You could hear a pin drop and, as if by magic, I became a teacher with a classroom fully absorbed.
Out of nowhere Tyron, one of the most troublesome kids, said clearly: "I would pay $25. Nice watch Mr. Mariotti."
Another echoed him, "I would go $20."
Suddenly, the class was debating the value of my watch, so I pushed them: "Where does the store buy it from?"
If the first question began my career, this second made it last a lifetime. The beauty of the production structure and its secrets poured out of me. It is the entrepreneur that brings goods to the next level, satisfying customer needs. The successful entrepreneur makes a profit buying low and selling high; the unsuccessful entrepreneur sells at a lower price than he buys, operating at a loss.
The entrepreneur is the time traveler of business, essentially connecting different parts of what Hayek called the production structure -- by buying at one moment in time and selling at a future time -- the profitable entrepreneurs and their companies stay in business and expand while the unprofitable ones lose money and go out of business. A key role of markets is the process of determining who are the successful entrepreneurs and who are the ones who waste resources by operating at a loss.
The role of the entrepreneurial educator is first and foremost to raise the consciousness of the student in relation to the entrepreneurial process -- the entrepreneur is a provider of a solution for the needs of a customer. In the 1980s, I spent 8,000 hours in the classroom working on basic lessons for teaching young people to be comfortable with the process of entrepreneurship and most importantly, helping them to assess the risks of owning and selling over time.
The entrepreneurial toolbox is a powerful one when used effectively. The ability to adapt, to learn from mistakes, to be persistent, to correctly measure risk relative to rewards and to be able to view the world from a forward-thinking perspective -- to imagine what can be possible and to take action in the present to make it happen in the future -- are the most important entrepreneurial characteristics. Arguably, the biggest breakthrough of the last 50 years in education is that entrepreneurship can be taught; and the younger student, the better the lesson and impact.
You see, I believe that the entrepreneur is truly a time traveler -- one who masters how to move between the stages of production. In order to understand this concept, which is somewhat complex and certainly unbelievable, you need to understand Friedrich Hayek's business cycle theory. Hayek was an Austrian economist made famous by his understanding of economic liberalism. He looked at the different stages of production in relation to consumption -- early stages would include creating the means of production, while the late stage might be the final output before a product is consumed.
Looking at the triangle, we can see how, by necessity, the entrepreneur needs to understand the early stages while predicting the consumer habits at the later stage. Without this dual look, the entrepreneur cannot create a product or service that meets an unmet demand. The entrepreneur time travels to the future, looking for the output that is consumed; then back in time, to build an essential part of the production of that output.
And, this is my message today for you: young people have an advantage in learning about the entrepreneurial frame--they are more comfortable with risk and ambiguity, and they have been raised in the midst of the technology explosion hence, they have seen their peer group make billions of dollars and become global heroes. They have grown up witnessing massive problems that have been solved by other young entrepreneurs--Apple, Google and Microsoft are just three of thousands and thousands of examples of entrepreneurially-driven companies that solved problems for millions of people and made their owners billions of dollars in profits.
As I learned recently at the Castrol workshop, entitled Disruption Is the New Norm, which was reaffirmed by invaluable input from Janvi Jhaveri, a strategy and innovation consultant, improving our level of what we at NFTE call 'entrepreneurial attitudes and knowledge' is absolutely vital for our future as the world we live in has problems, and if not confronted and solved, these economic problems could add significant detriment not just to the American economy but the livelihood of people around the planet.
Me and Carlos Dominguez, senior vice president of Cisco