How to start a business at 18?
18, is a magic number for many. It is the sweet moment of becoming a legal adult.
For Bassim Hamadeh, 18 was about becoming CEO of his academic publishing business.
While others were only complaining about an inefficient university publishing system he sought to revolutionize it. His company, Cognella, has managed to reduce the publishing time of university teaching materials from years to months. How did he do it?
Listen to the following Success Harbor interview to find out!
Read Raw Transcript Now:
Presenter: Hello, everybody and welcome to the Success Harbor Podcast with George Meszaros, where it is all about making success happen for you.
Success Harbor: Hi, everyone! This is George Meszaros with Success Harbor and I have Bassim Hamadeh with me. Bassim is the Founder and CEO of Cognella Academic Publishing. Cognella has worked with over 3,000 professors nationwide and over 450 schools. Welcome!
Bassim Hamadeh: Thank you, George. Great to be here.
Success Harbor: Thanks for being here Bassim. You have started University Readers that is now Cognella when you were only 18 years old. And most guys at 18, have no interest in academic publishing but you saw an opportunity there. So what is it that you saw that others didn’t?
Bassim Hamadeh: Well, I would say that is a good question. I have always been sort of entrepreneurial, well before the age of 18, and I think a lot of that sort of comes from my upbringing. My parents were immigrants to the United States and kind of came here with nothing and then really taught us and told us that hard work ultimately reigns supreme. And so, growing up, I didn’t have an allowance. If I wanted money or something, I had to go and ask my parents for it. I had lots of chores to do around the house and got my first job at the age of 14 cleaning meat machines. But before that, if I needed money, I needed to come up with a way in order to get it. And so, there are only two ways you can go. You can either end up stealing or you end up trying to create a business to make money. And I began by selling candy to the kids in the 7th grade and made money that way. So I would go to Costco and buy candy bars or whatever it was. I think the price at that time was maybe a quarter a candy bar and you sell it for 50¢ and there was a time I was making $10 or $15 a day so I…
Success Harbor: Did you get in trouble with it a little?
Bassim Hamadeh: Ultimately, I did get in trouble with the school and the whole operation was shut down. But you know what? I think what it taught me though was that there are other ways to make money other than just getting a job. When I went to UCSD and I was a freshman there, I had enough money for tuition, and my parents were paying for that, but they were not giving me any extra money. So nothing for going out, nothing for extra food beyond what was bought on campus so I knew I had to get a job or start something. And so I was looking out for an idea because I would prefer to start a business than flip burgers on the main campus food court. And so, there I was standing in line waiting to buy a course pack, which are what these kinds of custom published materials are called on campus. Essentially, an assembly of professor notes or other reading materials that are put together and the whole process by which I was buying this course pack I thought was broken. The lines were long and unlike a campus bookstore where maybe you would go in and get the product, get the book, and stand in a long line and pay for it, this service on campus that was run by the students run more like a ticket counter. So you would wait in your long line and then when you get to the front of the line you would tell the attendant or the cashier what book you wanted, and they would go get it and they would ring you up. And on the very first day of school, I was waiting in this long line for probably about 2 hours. I was maybe the third in front of the line at that point and they ran out of the book I wanted. They would open this door on the side and they would write on a board the books that they ran out of and it was basically “Come back tomorrow”. I mean, it was the most broken process I can imagine and then the idea was born which I can do better than this.
Success Harbor: It sounds like the Soviet Union a little bit, standing in line for bread and then, after 2 hours they say, “We run out of bread. Come back tomorrow.”
Bassim Hamadeh: I mean, it just seems so backward to me. So I think, rather than being, yes I was 18 and I was looking to start something so my eyes were open to this and I think most people probably experience frustrations in their lives as they go through the process of being a consumer. And, you can complain about it, right? Or you can do something about it. So I was really willing and ready and open to start something and so when that idea sort of came to me, it was really a no-brainer at that point to run with it.
Success Harbor: But this is so interesting to me. I am sorry to interrupt. But, I remember when I went to San Diego State now I remember these long lines in August. And it was still hot and, I was spending hours there and, everybody complained but I didn’t even think of starting a business so it is really interesting to have that kind of thought process. Did anybody else talk about that with you or did you share the frustration with you or anybody? I mean, I just want to get an idea of the thought process that you have in your head at that point.
Bassim Hamadeh: At the time I wasn’t really sharing that idea with my friends or something like that. I just basically said, “I got to do something about this” and I was just really laser focused and I began to see how I can make this work. How would you get these products printed? Who could do that? How would I assemble the products? What about the copyright implications and how would I get those? So really, I just have begun researching just like you would any research project on how I could possibly put these projects together and really the more I investigated the more I realized there was an opportunity. So, for instance, the service on campus required the professors to do all the work. They had to deliver to the service in the middle of campus one-sided copies with one-inch margins. They had to label things in a certain way so that the service could then get the copyrights and get the books produced. And I thought that was crazy. I thought, “Well, gosh! Why don’t I just go to the professor’s office and do it all for them?”, so I just began thinking about all the pain points along this product line and just began to simplify it as much as possible from a consumer’s point of view so that is sort of what I did and how I have begun to pursue it.
Success Harbor: So give us an idea on how Cognella works and what is it they does better than the traditional method of publishing, academic publishing?
Bassim Hamadeh: Sure. Well, to give you a little background on the business. So the business was founded as University Readers, the company name and that was back in 1992 and so it has been a long time. It has been 22 years or something like that. It is unbelievable. I recently had my 40th birthday and here I am still in the business. I probably would have never imagined that at the age of 18. And we are around 70 people, right here in San Diego and we do have sales reps or acquisitions editors who work for us and they are in different college-clustered towns around the country. As a company, really our mission is to make publishing really easy and that is sort of what we stand for and we want to work really closely with professors to really make the entire process as easy as possible and we do it through two of our brands. One being University Readers which is the initial course pack or custom publishing brand that we offer. Those are for professors who want to put together something fairly quickly. It is only for their own course. The product finish is good but it is not put together at the same quality let’s say above a professionally published book would be. And it is, like I said, closed circuit so really only for them and their students. And then we also offer Cognella Academic Publishing which sits under the Cognella corporation and that is for professors who not only want to use materials for their own courses but believe a broader market exists for those works. And so we spend a lot more time on those products finalizing the look and finish, proofreading, copy-editing and designing, from the covers and the internal layout and making sure the content works perfectly not only for the course but would be well-served by professors teaching similar courses around the country and then we nationally market those products. So that is essentially what we do when we put products together for our faculty members. We also work with programs, some business schools, some entire institutions where we provide all the publishing requirements for the school. But our bread and butter are making publishing really easy for these professors.
Success Harbor: Okay. Now, I read that you worked for about three years as an engineer before you decided to go full time with your business. What was the reason for that? Give us an insight into, why you went as an employee for 4 years before you actually said, I am behind this 100%.
Bassim Hamadeh: I don’t know if there is a great learning lesson from this but I can just kind of say what my experience was at the time if that is of some use to any of your listeners or readers. So when I started my business, I was not thinking of creating something that would be long-lasting. That was not on my mind really. I was a college student looking to make money to help pay for my college expenses and saw it as a service in which I could do that. So when I graduated, the business was doing well, it was growing, it was local, it was really primarily just that UC San Diego and in the San Diego area. I studied engineering, structural engineering, so I graduated and I did what all structural engineers would do and you go get a job in structural engineering and that is what I did and kind of following these social norms. And I worked as an engineer and I kept the business really part time. And I never thought again the business would be my full-time profession and I saw myself going down an engineering path. I always had business aspirations, entrepreneurial aspirations but I saw that maybe in real estate development or starting my own engineering firm or really staying close to my profession and to my education. But truth to be told, I think what I discovered working full time in that capacity, I realized that what I really love was business building. I found myself loving a lot more with the business side or with the business that I was and operating than I was with the engineering challenges. I also loved and realized that I love to do a lot of different things and I like to learn about a lot of different things and business really allows you the opportunity to do that regardless of the industry you are in. So yes, I was in publishing and I was learning a whole lot about publishing but, I am learning about accounting, finance, marketing, sales all these things that are universal. What I didn’t love about the engineering profession in that role was it was just so specific. I learned so much about exactly what I was doing in designing but I didn’t feel the same level of intellectual fulfillment that I got from learning about a lot of different things. And so, there in came this point in time where the decision was really easy for me. The business had been growing. At one point, I was making more money with my part-time side business than I was full time working as an engineering student and so I realized I had to basically put in full-time efforts and really see what I could do with the business. So that I ultimately made my decision to break away and pursue the business full time.
Success Harbor: And how difficult was it for you to actually say, “I am now a full-time entrepreneur and I am not an employee anymore”?
Bassim Hamadeh: It was difficult. It was psychologically very difficult to leave the profession because I had studied it for five years at UC San Diego. It was a very challenging program and you are imagining all those hours working in the labs and the weekends when you are studying for exams and all that, and the three years of the profession, so I was 8 years in. So it was really hard to make that kind of break and I talked to everybody about it: my friends, my parents, my brothers and any other confidants. And so it was difficult, but once I did it, I felt so good. I felt so refreshed and this weight off my shoulders saying now I get to do really whatever the heck I want to do. And so I am now sort of in charge of my own destiny. I would say there was one more thing that made it a little easier for me and it was that I knew I wanted to continue to further my education. I knew at that point when I left that I wanted to go off and get my MBA. And so, that made it a little bit easier because in my mind it was, “Okay, let me focus on the business for one or two years and do as much as I possibly can with it and see where it goes. But in the end, it doesn’t really matter because I want to go off and get my MBA anyway.”
Success Harbor: So tell me. Now, I mean, obviously, you have your MBA. Do you think it is necessary to be a successful entrepreneur?
Bassim Hamadeh: I don’t think it is necessary. No, I actually don’t think it is necessary. Do I think it is helpful? Yes, I think it can be helpful. I do think in some ways it can also be hurtful.
Success Harbor: In what ways can it be hurtful?
Bassim Hamadeh: Well, it is a tough thing to say because I would say for me, I definitely took advantages away from having the MBA. So maybe I will say how it helped me and then I can describe for somehow it can hurt them. So the first way I think it was helpful is well, one, I never studied business in college. I studied engineering. So when I left and began to run my business full-time, there were a number of challenges that I faced, I think right away. One was understanding the accounting process, the accounting statements, financial statements and then making prudent business decisions based on those statements. I didn’t have that background. Now, not to say I couldn’t learn that on my own and in fact I did begin to take extension classes in accounting through UCSD to learn accounting and finance. I also took some marketing classes and other things so I would encourage some level of education. I think that is beneficial so that you can talk the language of business and not learning all only by the seat of your pants. So I think that was a good thing. The other was it just so happened at that time, this was sort of in the beginnings of the .com heydays and we were approached by another company that wanted to buy us and they were interested in acquiring my business. I did not know how to even fathom a discussion related to an acquisition. How would I even think about my valuation? Is this something I want to possibly pursue? I have begun to talk to other folks who either had an MBA or had a lot of experiences in business to get their mentorship, their advice or coaching and I think that was good. But I also realized that I would like to be on the other side of the table. I would like to have that kind of knowledge that I would be able to evaluate something like this on my own and although getting mentors and advisors and all that is great, I just realized I was clearly missing some educational background that would allow me the opportunity to entertain this idea and do so intelligently. So I just felt like something was missing. And then the other I think that is maybe not talked about too much is just having the self-confidence to do it. When you don’t have the degree, you don’t have the education, you look at others and you think somehow they are more knowledgeable than you and I can’t say I had the full confidence to say that I was an equal to others maybe in the business world so I felt like the MBA afforded me the equality psychologically. That, once I get that degree or once I get the education, there is nothing stopping me because I am in equal to anybody else who has those degrees. There is no magic sauce that I haven’t learned. And so I think there is a little bit of that and I just don’t want to dismiss that. So I think all of that plays an advantage. Now, certainly once you are in school you learn a lot about entrepreneurship, about all the different facets of business, you do case studies, and you begin to really think about businesses in a different way and challenge yourself to do so. So I think if anyone wants that MBA and they want to go after to get a business degree I would highly encourage it. I think it was a great educational experience for me and I also know a lot of great people and learned a lot from a lot of different facets of experiences that I think ultimately has shaped who I am today. I think what can hurt you though is I look back at some of the entrepreneurs that I know in San Diego who now run successful businesses. Some of them don’t even have college degrees and they are running really substantial businesses. Some are mom and pop shops and have grown and done really well. In other cases, there are fairly sophisticated businesses. And I think what I have realized is that the higher up you go in your profession or your career working for somebody else or getting an MBA let’s say from a fancy school and then when you graduate you have a lot of opportunities. In some cases, too much opportunity can work against you because now the risk becomes greater. I can graduate from a top MBA program and earn a $100,000 or I can try to start a business and with that comes risk. And so I discovered looking at some of the entrepreneurs locally and I realized they didn’t really have too many choices. They were either going to graduate and take on a blue-collar role, nothing wrong with blue collar roles, but if they are looking to make a lot of money, they are probably not going to make that and achieve a level of success in a blue collar role working let’s say in a manufacturing environment and they knew that. Or they would have to start something and if it didn’t work, what was the worst case scenario for them? And so, I think a lot of them felt like they had no choice and with not having that extra choice I think they put a lot of extra focus in energy in the business and potentially made it more successful. And then as you get a little older, I think there just become more risks in your life. You generally become a little more risk averse. You may get married, you may have children. The risk of starting something is greater. And if you already have a solid career or you are making a strong income, it is just very risky to leave it so that’s why I think sometimes the MBA can hurt you.
Success Harbor: Yeah, I am a believer in education but I also believe that like you said, it is not one or the other. You can really succeed in both ways and you see evidence from them all the time. What I want to ask you about is the early years with Cognella or University of Readers and selling because I did read about you were pretty much the sales person for the company in the beginning and how did you deal with the skeptics about your accelerated publishing model. I mean, this was something new, right? So you have to sell that as a new company, but it is also kind of a new idea. What kind of a pushback or did you get any pushback? What was that experience like?
Bassim Hamadeh: Now, what’s funny is the very early years so this was when I was selling University Readers as a business and I was a college student at 18 years old, so a freshman at UCSD. How was the professor going to trust this 18-year-old or this freshman? When they think about a freshman, they probably think about a kid, some of them who don’t show up to class or some of them who don’t get in their homework assignments on time. So, I certainly didn’t advertise the fact that I was a student or a freshman. I just had a title of director of operations so I was just an employee for the company as a director and that was what I was doing going out there to sell my business. So again, the first thing I did was give myself a title that others would see and respect, versus having a title of a freshman student at your school. So that’s kind of what I did in the early days. Now, certainly if they asked and it came up, of course, I told them I was a student but at the same time, it wasn’t something I was willingly advertising either.
We did offer an expedited publishing service. So in University Readers we still have that today. We publish most custom products in as little as two weeks and on the Cognella Academic Publishing model side, we publish titles from beginning to end in about three months. And yes, most titles today, publishers will take several years to publish a book and get it out of the door. So certainly, there have been some skeptics in that. And, the way I get beyond that is I have never thought of myself as a sales person per se although I love sales and I love business development and those aspects of the business. I have always seen myself as a consultant, a very knowledgeable consultant. So I always approach every conversation that way. So I think you win over skepticism because you are able to describe things in such detail and you are able to talk about the process and the way you do things and then consult on the problems in the industry or with the specific project that there is a lot of trust that is built in the room. So, I don’t think about it as sales and I think about it a little more as consulting.
Success Harbor: Go ahead. I’m sorry.
Bassim Hamadeh: Well, after that I just want to say that if I cannot make a process better or a product better or a title better or something like that with a customer I am speaking with or a professor or anybody like that, then it is not just the right deal for us. But if I think about it all as a consultant like how can I improve the current scenario or situation then that is how I find if there is a win-win to be had.
Success Harbor: Tell me what were some of the biggest challenges let’s say in the first few years in business? I don’t know if you want to deal with maybe when you went all out full-time with the business or maybe just really in the very beginning in addition to obviously selling the product but other challenges that were, catch you up at night in the early years.
Bassim Hamadeh: Oh, I mean there have been so many things. There is perhaps this notion that entrepreneurs are either risk seeking or are these warriors who don’t worry about anything and they pave new roads and I think for some of course that is true. I think a lot of entrepreneurs worry about a lot of things and I think in many cases can be paranoid about things that can go wrong. And frankly, are not as risk-seeking as many would believe. And so I worried about a lot of things and struggled a lot in the early days. I can tell you well the first challenge I faced was I didn’t have any money so I had to go out and print business cards and flyers and circulate them. I did that by going off to Kinkos and making the business cards and the flyers and charging that first amount. I think it was about $100 to make the business cards and everything and the flyers and then getting a phone number back in the days, there were no mobile phones. I had a pager. So yeah, it was a pager number. So someone would call you and they would page you with a voicemail and then you could always call them back. So that was my communication. That was my office at the time. So no one ever got me live. They would call and then reach my office and so obviously things have changed with telecommunications today. So one was coming up with that initial money, just to be able to charge it and then circulate the flyers and then worry about what if I get no business? How am I then going to pay for this amount I just charged? The next was the very first project that I got. Am I going to be able to deliver this project on time? I was nervous about it and I remember the first day of school, for that very first project I got I don’t think I slept a wink that night. I was so nervous about making sure the books would get delivered on time and that the students would be willing to accept the price that I had…everything. I was fairly nervous about it. The other issue that came up at the time was I needed somebody. I needed a printer who would believe in me to print my product without any money. I didn’t have money for a deposit or anything. So I remember when I went to go and find a printer to take this on, the very first order, it was okay you got to give me a 50% deposit which at the time was I think $2,000 or $3,000. And I said I don’t have that and I had to convince them of my business, explaining my business to them and how I was going to do it and how I got the sales and they believed in me. So sometimes you have to even sell to your vendors. So, I had to sell to that person who believed in me and said, “Fine, I understand and just pay me 2 weeks after the first day of school.” And I paid them that first amount and then trust was born and then we worked together for years. So those were all challenges. I would say the biggest challenge though when I graduated was then trying to grow the business. I took the model that I had at UC San Diego where I was very hands on. I was hiring student reps to go to campuses and sell the books in the classrooms and then they would meet with me and collect all the money and do the accounting on the money and then as I began to expand the business I said, “What if I grow off and go to UC Irvine and UCLA?” And so I began to hire these campus reps and I wanted them to work the campus exactly how I worked the campus. Go and get the books printed locally or I would print them and ship them to them. And then you go sell the product, you collect the money, you hire sales reps, and so I was trying to scale the business model and doing exactly what I did in San Diego and that did not work. I couldn’t find student workers who were as diligent as I was, as entrepreneurially minded who had the same sort of rigor and how they would handle all processes. So very quickly the business began to unravel as we expanded and I realized I needed to centralize this business: accounting, distribution and production all has to be centralized. And so that is kind of what I did. And then thankfully at the time e-commerce models were born. It was much easier to offer an e-commerce service and so that’s why I decided to do it. I am going to centralize this as a San Diego based business and we are going to be selling off an e-commerce website so I am handling all the transactions and then let’s have external workers and let them be sales people. Let them go out to professors and sell the product and the service, but we are going to handle everything on the backend.
Success Harbor: So with all the challenges, was there ever a time when you wanted to quit like seriously consider quitting?
Bassim Hamadeh: I never really thought I would give up on the business or quit. I definitely, there was a time when I went to business school, I began to think about what else can I do. Because I wasn’t thinking about the business as significantly as I probably should have. I was thinking about how do you go and start the next Google when I went off to business school so that was sort of on my mind. But I had taken some good courses there and I realized that the business I had was a real business. At the time it was about a million dollars in revenue and maybe 5 employees and we were solving a real need and I thought there was a lot of opportunity to grow it. But I cannot say there wasn’t this moment in time where I didn’t dismiss it a little bit like it was too small, too mom and pop and I should be doing something bigger. And really what I realized was it was a great little business that had a lot of room for growth and that there are a lot of different businesses out there. There are small businesses that you can run in a little more sophisticated way. There are mom and pop shops. Those are perfectly good businesses. Anyone who has the right mindset and dedication can run. And the larger businesses out there, you can go out and raise a bunch of money from VCs and try to go for broke. And I think what I realize was the business I had was great and that there are a lot of different paths to entrepreneurship and this was just one of many. And I think a lot of us may get seduced with reading about the new tech darling and thinking that that’s what an entrepreneur should be pursuing and that is a very small percentage of businesses out there. There are so many others. So just for others to keep that in mind. If you have the resources, you can raise the money and go buy a business, a small business. That is, you are being an entrepreneur if you go out there and buy a business and then try to grow it. So operating a business better in a more sophisticated way is entrepreneurship.
Success Harbor: So in 2004, your business had about a million dollar in revenue. We are talking about 10 years from now. Can you give us an idea in terms of where you are as a business? Can you share any of that with us in terms of your revenue or give us an idea like okay you were at 1 million 10 years ago, where are you now?
Bassim Hamadeh: Yeah, I am fairly comfortable doing that. I mean, we are around at $10 million year business now. So we have grown roughly 10x in revenue, head count, and so fairly more significant today. That was back like I say to do the years on that. That was when I was in business school and graduated. It was around 2005 or so when I graduated from business school. So in the course of 9 years or so, we have grown around 10x.
Success Harbor: You just mentioned Google or building a billion dollar business. But you have a company of 70 people and $10 million which is a bigger accomplishment that anyone or most people that ever tried to build a business. It is a huge accomplishment, it is what I am trying to say. Do you ever pinch yourself or you feel that you are a success or you feel like you are not a Google?
Bassim Hamadeh: Let’s say it is an interesting question. I don’t aspire to necessarily be running a Google or someday. That is not really on my radar. I am happy with what we have done. And so again, I really appreciate the words of encouragement. With that being said, I do feel sometimes that we have only scratched the surface and there is so much opportunity out there and that we need to be doing more. And so, the only time I feel a little bit sort of funny about where we are is that we are limited by our own cash flows. One thing we didn’t really cover is kind of how I can financed and grew the business but we have only grown the business via our own cash flows and we have never gone out and raised any money.
Success Harbor: And why not raise money?
Bassim Hamadeh: I just, I always felt uncomfortable with that.
Success Harbor: Is it because of the ownership? You don’t want to give up any of the ownership or what is the reason?
Bassim Hamadeh: It is not on the ownership side because we have launched a very good stock option plan for our key employees and I am happy sharing the wealth with the people who are in the business and helping to grow it and they essentially become co-owners with the option plan especially when they exercise the options. I want people here who work as key folks within our team and that’s probably around 25% to 30% of the folks who enter that kind of status. That is either the senior level or supervisor or management level where they get extended an opportunity to participate in the stock option plan. So I am happy sharing in that and having multiple owners in the business. You know what it is? It is the risk that comes with equity financing. There is just risk in that. It is from the liquidity preferences, to guaranteed returns and so I have always been hesitant to take on any additional funding. I would say though a little bit is by design with our business. I started the business part-time. I grew it part-time. By the time I would have thought about raising money, we already had fairly significant revenue. And so, if you are going to raise money at that stage there is just more to lose. It is almost like the first time you raise money, you want to do it when you have nothing to lose. There is no revenue, you are pre-revenue, you are doing friends and family and you have already begun that process of raising money and you do it early. And once you do that, you already kind of open the spigot, you open the risk profile, you open everything else and you are doing it when again there is very little to lose. But if you do it later in the stage of a business, there is just more at risk.
Success Harbor: Yeah.
Bassim Hamadeh: So that was my thing with it.
Success Harbor: You are way beyond the idea stage where most business gets funded. It is pre-revenue, it is more of “Okay, we have a prototype. We have a beta software and give us some money” but when you put 20 plus years into a business, it is such a different picture isn’t it?
Bassim Hamadeh: Well, it is different even if we say 5 to 10 years ago, it was different. That’s why I didn’t personally do it but truly that speaks of risk. I think had we raised money, we probably could be bigger and stronger today. But really definitely there is no way of knowing for sure. With investment and investors come, sometimes the business gets pushed in different directions which may not be to the benefit of the business. I guess I just wanted a pure play. I wanted a business that we could set our own domain and we are not doing it to try to please other investors or owners in the business. We have never raised any debt. I have always been worried about black swan events and you just never know when they can happen. Warren Buffett would always talk about that and being debt-free. So are we operating our business in the most… is the financial structure of our business the most advantageous, the capital structure? No, probably not because debt right now is cheap. So should we be heavily debt laden and then using that to fund growth? Some would say that’s smart but there is really a lot of risk in that. A couple of things go wrong and the debt holders come calling and you lose your entire business. So I am operating the business I guess in a fairly risk averse way.
Success Harbor: Do you have time for two more questions?
Bassim Hamadeh: Sure.
Success Harbor: Because I know we went over and I apologize about that.
Bassim Hamadeh: It is okay. No, it has really been a pleasure to chat with you.
Success Harbor: So you are now a CEO. It is more than just somebody that is trying to sell some custom published books. So it is very different. You have a team of 70. How is your life different now and what are some of the challenges of a CEO as opposed to somebody that has just has a mom and a pop business? I am not trying to put down mom and pop businesses but it is very, very different types of challenges. I am assuming that. But that’s really and I am not going to go around the circle anymore. But pretty much give us an idea of what is a day like for you as somebody that runs a team of 70?
Bassim Hamadeh: Well, I think… So, one I can say that I can’t do any of what we have done without great people working for me and with me at Cognella. And I really value all the contributions our team members make. And we talk a little bit about our company as a family and really more like a team because people each play different positions and we have to play together in order to win. And so I want to say that is first and foremost. Everybody who works here or really works anywhere is working through their own voluntary enlistment. So just always remembering that you can never really tell somebody to do something. They have to sort of volunteer to do it. That is the nature of our workforce today. And so keeping that in mind, the most important thing really becomes the culture and then trying to just nurture the right environment and the culture where people are happy at work, productive, love to be here. And, we are not perfect for everybody. And in fact, the quickest thing that goes wrong really is usually in a cultural mismatch for some reason, for one reason or another. So we are at the best place for every person. So trying to find the right people who have the right mindset or the right attitude to come and work with us and to make the company great becomes one of your major priorities. Because as you grow from let’s say a size of 5 or 6 and you have your hand on everything when you have 5 or 6 people in the room and you are working together to 70 people, you don’t have as much control. So ultimately what you are hoping for is that you get the right people on board with the right culture that people do the right things and that the culture helps guide that mindset of productivity and everything else that goes along with running a business. So I think that’s probably what I really think about the most and probably deal with the most. When there are issues around the culture or trying to make sure that someone is living by our cultural standards and kind of our code of conduct and things like that. There is a lot more psychology I think in the business and a lot more related to interpersonal dynamics than I ever experienced from the early days when it was all about driving the business and getting sales. Now it is a lot about being a mentor or a coach and trying to push people in the right direction. So I think I worry about that a lot more. And then just try to put in a fun environment. I mean we all work hard in this. In the United States, people work a lot of hours, more than probably most other countries. And so we want to have fun at work and I really value personally as a leader, work life balance and I really value health and fitness so we have driven a lot of that internally in the company. We have on Mondays a group that plays tennis. On Tuesdays, we have company boot camp. I actually lead the boot camp sessions and about 10 of us that do it every week. Wednesdays, we do yoga. We have a yoga instructor who comes to the company and we do it. Thursday, we do boot camp. Friday we do volleyball. We have added softball and that is going to happen on Wednesday evenings and we usually play about six months out of the year. And typically on Sundays, we have a soccer team. So we are very active and it just delivers so much extra benefits to the company. You get to hang out with your colleagues at work and do it in a social setting. You are doing it in a team environment when you are playing sports or you are doing it with a boot camp class together. You get to inter-mingle so sometimes some departments don’t have a lot of chances to work together but they get to experience each other on a sports team. And the best part is soccer, volleyball and different activities that we lead, usually somebody in the company becomes the coach and it is so nice to have somebody who maybe isn’t typically in a leadership position within the company be a leader or a coach as I would say out on the soccer field. So we do a lot of things like that I think and those are the things that I am thinking about on a constant basis.
Success Harbor: Okay. How do you deal with the ups and downs? I own my own business for 10 years and not as long as you have but there are lots of ups and downs but is that something you are dealing with even today or you are immune to that? Share that if you would.
Bassim Hamadeh: I am a very emotional person, a very emotional being in the sense that I am in tune with my emotions. I care deeply about the scenarios or situations that arise positive and negative. I try to be very introspective with my role and how to handle something. So absolutely lots of ups and downs both internally because of a failure. Let’s say we hire the wrong person for a role, well that is a failure. If we hired somebody who didn’t have the right skill sets and put them in a role where they were not successful, I failed that person. And so I don’t look at it as, well, they failed us because they don’t have the right skill sets. It is we should have known better. So yeah, I take some personal weight in things like that or, if you go after a big deal and you can’t or you don’t win it or if there is any kind of issue internally that you are having to deal with, yeah there are a lot of ups and downs there.
Success Harbor: Does it get easier though over the years I mean you are looking at 20 years in business, it is easy or not?
Bassim Hamadeh: Well, I think putting things that I once thought were really a big deal, kind of like the major crisis, now putting it into context of that is not a major crisis that is the day and the life of a business person. It’s like the very first time an attorney sends you a letter for something. The very first time it is like your heart sinks and you panic, like what is this all about. And now you realize well that is just the way business operates. But there are people out there who sometimes want to take something from you or want to defend something so whatever that reason is, it is just that is the nature of the beast. And so yes, in some cases it does become easier. In other cases, to me the ones that are the hardest and I think don’t get easier over time are some of the personnel issues when something is very emotionally charged. Those don’t ever get easier because you never want to add tension, drama or anything else in somebody else’s life. That never becomes easier when you need to let somebody go. That has never become easier for me to let anybody go. It has to happen and you got to do it the right way, always. You got to make sure they are not surprised when the moment comes if they have lots of forewarning, ways to improve and all that. But I can’t say letting somebody go and knowing that there is a family on the line or know they are going to go through unemployment that is somehow going to get easier and that just doesn’t. But you got to put it into perspective and realize what you are doing is for the betterment of the business because we have to be strong. Because you asked me earlier, being a CEO and how is that different? Well, yeah I look around the room of 70 people and I say there are a lot of people who rely on us; we have to be successful not just for me. I want to be successful so I am proud of what I am doing but there is a lot of responsibility here. There is a lot of weight on the shoulders related to other people’s lives that we affect. So it is internal; it is the clients that we support and work with. So yes, there is more responsibility I think and that you certainly do have that extra weight that you have to contend with.
Success Harbor: So what is the next big milestone for Cognella or where do you see the business in the next 5 to 10 years? How do you think of your business? Do you look at the next big goal or do you like that okay what is going to happen in 5 years with us?
Bassim Hamadeh: Certainly I have a 5-year plan and I have a financial model that we have built this 5 years out. Right now the way I think about what we are doing, a couple things: we have a model that works and we are scaling. So it is staying really focused to that. Stay focused on scaling this business that is working. And try not to get too caught up in the most recent press release because as a business you can end up chasing a lot of different things either, market forces or competitors or doing different things. I think sometimes that can work for you or can work against you. So as long as we keep talking to our clients and we are providing services for them and filling the need that we know is there and growing, then let’s stay true to that. So that is kind of step number one: keep growing the model and make sure it works and then keep testing to make sure that we are not missing something. The model is working and growing and we are analyzing it so that is the first thing. The second thing is just thinking about technology and how our business is changing. What are the things that we are doing as a company that is helping stay on top of and maybe even ahead of the curve? And so for us it is working around technology related to interactive content and making sure that we have amazing learning outcomes for students and what does that look like. And so definitely it is thinking about our next product line and how we offer something that speaks to the nature of students today and in the future. So, some combination of continuing to do what we are doing while making sure we’re thinking consistently and smartly about new products and how we release them.
Success Harbor: My last question is what is your advice if you have just one thing that you could say to somebody that either wants to take their business to the next level or somebody that does want to take the plunge and go and start a business?
Bassim Hamadeh: I would say well if they want to start a business and that is really on their mind, they need to find a way and just go and do it. Just go and do it. Try to do it early. Experience is overrated. You don’t have to be 40 years old and you gained all this work experience and then now you feel ready. The reality is that work experience that you got over the course of 20 years may or may not benefit you when you start your business. And like we talked about earlier, the longer you wait, sometimes the more risk averse you become. So if you have the opportunity to start something sooner rather than later, you just do it. That would be my first piece of advice. The second would be to try to find a mentor, someone who has done it before you that you can talk intimately about your fears and your issues. And I think I should have added that in the question that you asked me earlier which is how do you deal with the ups and downs. Well, I have a handful of mentors that I go to on a fairly regular basis about issues that I am contending with and different mentors serve different roles. So build an advisory board. If you have a business you want to take it to the next level, put together any kind of board or even an advisory board. Go build one. There are a lot of people out there who have a lot of experience and advice and they love helping entrepreneurs get to the next level. And you can offer a stock option plan and offer some kind of advisor options or something like that and generally think about that group of advisors that you want to build or that mentor and see where they fill a certain… it is going to be hard to get one person to be that kind of holy grail of an advisor for you. Usually, you need at least maybe 2 or 3 to help fill different gaps. In some cases, maybe someone is really strong in sales and business development. For someone else maybe someone who is really strong in operations. For someone else it may be strategy. So that would be one thing. And then maybe another thing would be try to get advisors or mentors who fill different generational gaps. I have learned the most from an advisor of mine I would say who is a generation above me and it helps me because we talk about not only business but personal things. His children have grown up and gone through college and are now working. And so thr advice he gives me even in upbringing my three small children I think is just amazing. So it is not only pursuing the entrepreneurship path but maybe just making sure you surround yourself with people who really want to help you and you are also providing a benefit to them; keeping them engaged in business or challenges and you are serving as a friend to them as well.
Success Harbor: Well Bassim, I really appreciate your time today. It has been very insightful and I learned a lot and I am sure our audience as well. How can people can connect with you or reach out to you? What is the best way to do that?
Bassim Hamadeh: Yeah. Well first, thank you for the invitation. I appreciated it. It was fun. If someone wants to reach out to me and there is a follow-up to the interview by all means, they can email me if they like [email protected] and I’m happy to be of service.
Success Harbor: Thank you very much. I appreciate it.
Bassim Hamadeh: You bet. Thank you, George!
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