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Learning Points from Forbes Magazine’s 2002 ‘Future Capitalist of the Year’ featured in 1st Issue of Notre Dame Business Buzz Magazine

Opening Editorial Remarks:

The featured article below is one of the many stories that will be displayed in the first issue of the Notre Dame Business Buzz Magazine.  The Buzz will be Notre Dame’s first-ever student-run business publication.  While attempting to remain entirely unique in many regards as we have outlined in our long-term business plan, the Buzz is, to some degree, following the models of other successful business publications at other universities including the Business Today at Princeton, the Northwestern Business Review, the Harvard Business Review, and the Stanford Social Innovation Review. Aiming to circulate first on campus and then to a national audience, the publication’s purpose is to increase business-related dialogue and to share knowledge with the next generation of innovators and leaders at Notre Dame and beyond. 

 

Our student editorial board has agreed that a significant reason each of us had some success at Notre Dame is because other people have taken the time to take us under their wings, so to speak, and informally educate us  about some of topics you may read below.  And so in the future we desire to pass on articles such as these in hopes that it will strike a chord with you or someone you know.  Regardless, we hope you will take the time to challenge us further and provide us with some candid feedback.

 

Mark Bennett is a Managing Editor for the Notre Dame Business Buzz and Co-President of the Notre Dame Entrepreneurship Society. If you would like to write for the magazine, advertise for your company, or obtain any other information please contact him at mbennet2@nd.edu or the publication’s Editor-in-Chief, Christy Carr, at ccarr2@nd.edu

 

Inside the Mind of the Graduate School Guru

 

Forbes Magazine’s 2002 Future Capitalist of the Year Shares 8 Learning Points with the Next Generation of Innovators

Chad Troutwine

·                                 BA, Arizona State University ‘89

·                                 JD, Missouri Columbia School of Law ‘97

·                                 MBA, Yale School of Management ‘02

·                                 Celebrated Entrepreneur: Founder of Veritas Prep

·                                 Film Producer: Executive Producer of Freakonomics

·                                 Forbes Magazine’s 2002 “Future Capitalist of the Year”

 

August 3, 2008

By Mark Bennett

 

Part I. The Confusion

On a scorching summer night in 2008, I walked through the doors of Chicago’s Wyndham Hotel thinking I was simply attending my final preparation class for the GMAT. But, strangely, as I strolled into the classroom five minutes tardy, I realized there was an unfamiliar face standing in front of the class, and he was not talking about the art of mastering GMAT exam problems.  Who was he and what in the heck was going on?

 

Wearing a slick sport jacket with jeans, the mystery maverick used his booming voice and charismatic body language to engage the audience.  As I took my seat, he told a short anecdotal story about his phone interview with Columbia’s Graduate School of Business during his MBA application process in 2000.  He recalled with a half smile, “I thought it would be a good idea to relieve some of the tension of my long-distance phone interview by using some light-hearted humor.  So when one of Columbia’s alumni, who happened to be a distinguished French business woman, contacted me, I immediately asked her, ‘Am I dressed appropriately for this interview?’ ”

 

The mystery character then explained the end result of the joke and the implications for future applicants: “There was dead silence on the other end of the phone for what seemed like an eternity.  My joke flopped miserably and my interview was doomed before it even began.  The details of the MBA application and interview process really do make a difference.” Most of the members in the audience chuckled and nodded their heads in agreement. His perspective seemed to resonate. 

 

Still a bit confused, I leaned over to my classmate, Heather, and whispered, “Who is this guy? He’s pretty good.”  She whispered back, “That’s Chad Troutwine. He’s actually the founder of Veritas Prep. He’s here to teach us about the MBA admissions process.”  In other words, he was visiting this class in Chicago to explain the fundamentals about what to do (and what not to do) when applying to graduate business schools.   

 

Part II: The Blackberry Search

Now I was even more intrigued.  Under the desk and out of everyone’s view, I used my Blackberry to google-search Chad Troutwine’s background.  In seconds, I found his biography. 

 

The web searches highlighted many of his achievements.  Decades ago, Troutwine had recorded perfect scores on several standardized tests, allowing him to graduate from a public high school at the age of 16 and college at Arizona State University by the age of 19 in 1989.  In the ensuing years, he went on to receive his JD at Missouri in 1997 and his MBA at Yale in 2002, serving as a graduate assistant and lecturer and also preparing students for the LSAT and the GMAT exams.  While in business school, he and three of his classmates represented Yale at the annual Harvard Business School / Yale School of Management debate. Troutwine also delivered the final presentations in award-winning business plan competitions.

After working as a real estate developer and an attorney, he decided to launch Veritas Prep with Yale classmate Markus Moberg in hopes of creating the world’s top MBA preparation company.  Today, Veritas Prep operates in 60 cities around the world and employs more than 400 graduates of the world’s elite MBA programs.  Today, Chad leads the Veritas team out of its headquarters in Malibu, Calif., working in an office that overlooks the ocean and looks like a business person’s playground. 

Troutwine has also produced independent films that premiered at the Sundance, Toronto and Cannes film festivals, featuring more than a dozen Academy Award-winning actors including Elijah Wood, Christina Ricci, Vince Vaughn and Natalie Portman. He has also established an advocacy scholarship in the name of his parents at the University of Missouri-Columbia School of Law, where he graduated with honors.  In recognition of his endeavors, Forbes magazine named Chad its 2002 Forbes Future Capitalist of the Year.

Not bad. I guess I wasn’t the only one who thought he was “pretty good,” too. 

 

So what can aspiring leaders learn from his life experiences?

 

Learning Point #1: There is a less Glamorous Side to every Journey

 

But it wasn’t always so glamorous for Mr. Troutwine.  Although his test scores were impressive, several years ahead of his time, he was turned away by each of the Ivy League undergraduate and law programs because his grades were not spectacular nor were the institutions he had previously attended.

 

Nonetheless, Troutwine remained confident in his abilities and stayed focused on his goals.  From his ocean-side office in California, Troutwine explained, “I wish I could give you the real cliché story about how the failure drove me to success. But it didn’t. I understood their logic and reasoning for not accepting me. My problem was reaching too far for the stars and when it didn’t work out, it stung me a little bit. But I never got down on myself or thought I couldn’t cut it.  I knew I had the drive to go for it and the abilities to complement the drive — regardless of where I was at.”

 

In this sense, Troutwine’s story is one that has value to any person with ambitions. Each of us has unique talents, strengths, perspectives, attributes, or whatever one might want to call them.  However, not everyone will believe in you. It is the refusal to be discouraged and the faith that one places in their self that is often the hallmark of remarkable achievements.

 

The tides eventually turned.  After developing an impressive professional track record, Yale’s business school called his name — ironically, almost a decade after he had received rejection letters from the institution’s undergraduate and law schools.

 

But even at Yale, his life wasn’t necessarily rosy.  Troutwine recalled working 100 to 110 hour weeks with his business partner, Markus Moberg, to get his company off of the ground.  “The start-up phase was absolutely exhilarating.  It was common for Markus and I to stay up all night, writing and testing the GMAT preparation materials in order to meet the printer’s deadlines the next day.  After it was printed, we had to immediately FedEx the materials out so that students could begin using the materials.”    

 

Learning Point #2: Find Mentors

 

One of the main learning points aspiring leaders can take away from Troutwine’s story is the recognizing value of finding accomplished and considerate mentors.  Troutwine believes his mentors were some of the most pivotal figures in helping transform his novel business plan idea into an earth-shattering reality. 

 

In particular, he described his close relationships with professor David Cromwell, who was formerly the CEO of JP Morgan’s Private Equity Division, and Associate Dean Jeffrey Sonnenfeld, who directed Yale’s Chief Executive Officer Leadership Development Institute. 

 

Troutwine highlighted each mentor’s uniquely effective styles: “Professor Cromwell was warm and patient.  He wasn’t a cheerleader and he wasn’t overly critical.  But he was certainly a trusted advisor when we came to him.  Jeff, on the other hand, was the cheerleader. He was dynamic and charismatic and made you want to keep going.” 

 

In time, these mentors were able to use some of their personal contacts to formulate an experienced and high-powered advisory board that would give credibility to Troutwine’s company. 

 

Learning Point #3: Surround Yourself with the Best and Brightest

 

Chad’s goal is to maintain its reputation as the world leader in GMAT examination preparation and MBA Admissions Consulting in the years ahead.   What is the key to realizing these lofty goals?

 

Look no further than those who were recruited to lead the classroom exercises.  The Veritas Prep GMAT faculty is an eclectic bunch.   They have previous experience as former Harvard and MIT professors, Stanford directors of admissions, Division I athletes, rock musicians, scientists, high school teachers, debate stars, mountain climbers, political strategists, yoga instructors, professional comedians and jet fighter pilots. 

 

But every member of the faculty also has already scored in the 99th percentile on the GMAT — and they want to teach others how to duplicate their success.  The faculty members are valued so much by the company and the clients that they are paid three times as much as rival test preparation companies like Kaplan.  Surrounding yourself with the best and brightest people is an ideal way to create sustainable competitive advantage — no matter what industry you are working in.

 

Learning Point #4: Stay Focused in the Present and Remember Your Mission

 

For entrepreneurs like Chad Troutwine, resting on your laurels is not an option.  Rather, they elect to keep looking forward. 

 

When asked about the future of the company, he insisted: “We’re right where we envisioned we would be when we started this company five to six years ago.  But two to three years from now we’ll have to reassess where we’re at.”  That might prove to be an exciting assessment – especially when considering Veritas Prep is in the process of launching the biggest marketing campaign and global expansion in the company’s history. 

 

So has he got around to thinking about an exit strategy so he can eventually leave the business?  Troutwine scoffed at such an idea.  “When most people create a business plan, they have an exit strategy in the back of their mind and hope to sell the company to a competitor when the market conditions are right.  Well, this isn’t the case for us.  There is no exit strategy.   This is a company that Markus and I want to pass onto our children one day.”

 

Learning Point #5: Acquire the Skills of an Entrepreneurial Leader

 

So if the life an entrepreneur is so desirable, then why do so few people actually attempt to become one and why do even fewer attain sustained success?  Troutwine stressed that an entrepreneurial leader balances what seems to some like a paradoxical set of skills revolving around vision and execution.

 

He reasoned, “some people are very good at creating a vision but lack the organizational skills to turn the vision into a reality.  On the other hand, others are very good at planning, but they lack the confidence to act on a vision.  The best entrepreneurial leaders have a combination of both vision and execution. They plan long and hard about very good ideas.  Then, they dive into it.” 

 

Learning Point #6: Seriously Consider Graduate School in Some Form

 

Troutwine believes the benefits of a graduate school experience can be enormously rewarding, both intellectually and financially.  He stressed the importance of learning to apply one’s knowledge.

 

“In some ways, entrepreneurial instincts cannot be taught, but what graduate school does is teach you all the different applications of acquired knowledge – from contracting to hiring to strategic thinking,” he said.

 

He also emphasized the value of the social dimension of the experience, explaining the relationships that one builds during this period often can be invaluable during a person’s career.  “When I went to law school, I became friends with classmates who would go on to become high powered attorneys in different areas of the legal industry.”  Similarly, Troutwine explained that when he went to business school, he became friends with classmates that would go on to become stars in the consulting, investment banking, and private equity industries.    He said with a laugh, “The great thing is that I don’t have to be an expert on any of those issues or industries.  I can pick up the phone, call one of them and get their advice.” 

 

Learning Point #7: Reward Innovation in Your Organization

 

A fundamental component to the success of any leader is his or her ability to promote innovation. At Veritas Prep, the founders link innovative ideas with financial compensation through bonuses and promotions.  Additionally, Troutwine rewards innovation through emotional, social and intellectual recognition.  He said, “We try to create an environment where people want to present ideas.  We’re a small enough company (400 person firm) to actually implement our employees’ ideas.  Since we’re smaller, we can identify and reward performance and innovation quickly.  We never want to squelch an idea or enthusiasm.”

 

 

Learning Point #8: Don’t Just Do the Job. See the Bigger Picture.

 

Troutwine believes it pays to pay attention to the industry that you are currently working in.  Doing so, he explained, could provide you with the inspiration for an idea that will lead to a multi-million dollar company.

 

“The seeds of Veritas Prep were certainly planted during my time as a young instructor for Kaplan,” he said. “As I paid attention to the industry years many later, I noticed that the prices were doubling. Yet the teaching quality was diminishing drastically.  When I went to Yale, I had the professional and academic resources to nurture my plan in striving to create something that would serve these clients better.”

 

 

Conclusion: Chad’s Core Message to Future Innovators and Leaders

 

I had asked Chad all the technical business questions one could expect.  After an hour, we began to wrap up the interview. But I saw a grown 40-year-old man in front of me who couldn’t sit still.  He was still dying to share something with the students who would eventually read the article.  So it came as no surprise to me when he passionately interrupted me mid-sentence a few moments later. 

 

“Wait a second …What about the whole dream aspect? Did we really cover that? The whole idea that, as an entrepreneur - if you do it right - you can achieve great financial success and help people at the same time. You can enjoy the fruits of your labor.  You can create something out of nothing that you, your classmates, and colleagues, can enjoy for the rest of your lives.  It’s challenging, but it can happen.  You have to put in the long hours and it can be a grind at times, but it feels different when it is your own.  You can maintain the personal balance. It feels like … vacation.”

 

Looking back at my notes today, I can say with objectivity that we had already discussed this topic.  However, this observation made Chad’s last monologue all the more significant.  Chad was emphatic; this was the core message that Chad desperately wanted to pass on to the next generation of leaders and innovators.

 

Some people have come to know Chad Troutwine as the charismatic Californian who wins awards, drives Lamborghinis and pulls off the “sport-jacket-with-jeans-look.” But I’ll always remember him as the genuine business leader who looked a college student square in the eye and told him not to be afraid of pursuing his passions and dreams.

 

 

 

 

 Chad Troutwine will serve as the Entrepreneurship Society of Notre Dame’s Keynote Speaker of 2009 and he will arrive on campus on a date to be announced.  Students will have an opportunity to engage with him in discussion and tap into the knowledge he has accumulated over the years.  He will answer the questions of students on a host of topics ranging from entrepreneurial lessons to graduate schools to film production to his hobbies in martial arts and running.