ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.
The story of the successful immigrant entrepreneur moving to a new country, seeing a need and working as hard as possible to build a business around it isn’t a new one. In the U.S, it’s a big part of what we call the American Dream. But the stats on this still might surprise you.
While immigrants make up 14% of the U.S population, they own about a fifth of new businesses. 45% of Fortune 500 companies had immigrant founders. Four in five founders or top executives at billion dollar startups are first or second generation immigrants. And the research shows that immigrant founded companies grow faster and survive longer than those founded by natives, contributing trillions of dollars to the economies of their adopted countries.
The most talked about immigrant founded U.S company might be Google, now Alphabet, but consider also Nordstrom, WhatsApp, Chobani, Calendly, Zoom, and thousands of other small to medium sized businesses across the country.
Our guest today has talked to many of these entrepreneurs, studied their strategies and pinpointed the common principles that have propelled them to long-term success. She says that any leader can learn from their examples. And at a time when anti-immigrant sentiment is on the rise around the world, we wanted to ask her what impact related policy changes might have on entrepreneurial innovation.
Neri Karra Sillaman is an entrepreneurship expert at Oxford University, a founder herself of the luxury leather goods company, Neri Karra, and the author of the book, Pioneers, Eight Principles of Business Longevity from Immigrant Entrepreneurs. Neri, welcome.
NERI KARRA SILLAMAN: Thank you very much Alison.
ALISON BEARD: So I’d love to start briefly with your own immigration story and how that led you to both study entrepreneurship and become an entrepreneur yourself.
NERI KARRA SILLAMAN: I was born in Bulgaria to a Turkish ethnic minority, and in June of 1989, the communist dictator, Todor Zhivkov, asked us to leave Bulgaria. So in June of 1989, with only two suitcases to our name, we left Bulgaria.
There were 360,000 Turkish Bulgarians who immigrated that summer. When we got to the border, I remember all the confusion, fear around me, and I will never forget my father screaming like a wounded animal as he ran towards the border and he threw himself on what he called motherland soil. Looking around me at that time, I had two realizations. One was my childhood just ended. The second one was I need to get a good education.
I received financial aid at the age of 18 to go from Turkey to University of Miami, and I was once again an immigrant. I remember feeling very much like fish out of water because all my classmates around me felt very much at ease when talking to the professor, very much at ease, comfortable in their own skin. We had a computer class and it was the first time that I saw a computer in my life.
ALISON BEARD: And as you started studying entrepreneurship, as you continued your educational journey, what gaps did you find in the research on immigrant success?
NERI KARRA SILLAMAN: At the time, I was actually with my family, a few years later started to build a company ourselves. And the lessons that I was seeing in the literature, first of all as someone who wasn’t just an academic, but also who was practicing entrepreneurship, some of the advice didn’t fit what we were doing as a refugee family trying to build a business with zero capital and with very limited resources. What stood out to me was just how different it was, what you did on the ground versus what was written in the books and in the academic literature.
For me, especially when it comes to immigrant entrepreneurship, for instance, there is a lot emphasis on necessity entrepreneurship. And it is the case for many of the immigrant entrepreneurs because they often don’t have the resources, their education is not recognized in the country that they immigrate to, so they are often forced to become entrepreneurs. The entrepreneurship literature will often ask the question, why are immigrants more likely to become entrepreneurs? But they rarely ask a question, why are they more likely to start businesses that last?
ALISON BEARD: So why is longevity the key measure to consider for you?
NERI KARRA SILLAMAN: The majority of startups today fail, even the majority of businesses today last about an average of 18 years. As a refugee founder, immigrant entrepreneur, it was very important for me to create a business that will be prosperous, that will have longevity. I was fascinated to understand how iconic brands are made, for example. But as I start to delve deeper into the literature and into my research, I had to change the definition of longevity and reframe that because no company can last forever, is what I’m trying to say. So it’s not so much about the fact that you are going to last for thousands of years but what impact are you making?
ALISON BEARD: And a lot of the companies that you have studied are, in the grand scheme of things, relatively young. I’m thinking Calendly, Noom, WhatsApp, even Chobani. How do you classify them as long lasting companies at this stage?
NERI KARRA SILLAMAN: For me, business longevity is a company that has made an impact that has lasted long enough to create an impact in the ecosystem that it finds itself in.
ALISON BEARD: And all those companies I just cited certainly have done that in their respective industries. So you looked at eight key principles that drive immigrant and also second generation entrepreneur’s long-term success. Briefly, that’s bridging cultures, building from the past forward and the future back, forging authentic connections, generating profit the right way, building community, reframing rejection, frying in your own oil and daring to play your hand. I have to start by asking you to explain the most interesting one. What does frying in your own oil mean?
NERI KARRA SILLAMAN: That’s a wisdom from my grandfather. When we were growing up in Bulgaria, he was an orphan at the age of 15, had to look after his five brothers and sisters. He would always tell us it’s very important to fry in your own oil, which means to be self-sufficient.
So I work with a lot of start-ups, I advise businesses. What I was seeing especially was that they will try to immediately raise money and grow quite fast. That’s almost like a trap that a lot of start-ups tend to fall into. And it can have devastating consequences.
What advice can I give? It was that fry in your own oil; grow at a rate that also matches your profitability and you are self-sustaining as a company first because this will allow you to be a lot more creative. I think that’s an important element when it comes to helping them building sustainable businesses of longevity.
ALISON BEARD: And that seems linked to another principle, generating profit the right way. Why do you see this sort of dual pursuit of both purpose and financial success as something that immigrants might do better or more naturally than others?
NERI KARRA SILLAMAN: Because of their backgrounds, they’ve usually come from countries with a lot of uncertainty. They’ve seen what lack of education, losing trust in institutions and having lack of resources, not having the right ecosystem can do not only to the people who live in that country, but even to the health of a business.
I have a section in the book that says Milton Friedman’s advice is no longer applicable because it’s not about putting company profitability and company first, but recognizing that you are part of this ecosystem with suppliers, customers, the nature, you are all part this big ecosystem, and in order for you to be successful, all of these elements have to work together.
ALISON BEARD: That links to yet another principle, this idea of clear vision. And you say that immigrants do that by moving from the past forward and the future back with three specific steps, identity, intention, and imagined future. So explain that process to me.
NERI KARRA SILLAMAN: Founder of Moderna, Noubar Afeyan, he has a plaque on his desk that says trust your crazy idea. He claims one of his main elements is that he builds his businesses from the future back. But what does that mean? You have to have identity. Your past informs your future.
One of the other entrepreneurs I interviewed, the founder of Numi Tea, she said, “Entrepreneurs have to look within first, understand their past, where they come from, what bothers them and what they want to change and then look out there.”
So I thought that was an interesting one and very much related to vision. So you have to first ask yourself what matters to you, what your values are. And intention has to do with the fact that what in the world doesn’t align with your values? And then you have to have that crazy idea and trust in that crazy idea. And trust is the ability that allows you to keep going no matter what, and believing in that crazy idea.
ALISON BEARD: And it’s interesting because you think, okay, for an immigrant entrepreneur, they’re looking back to their past, that involves migration, but any entrepreneur could look back to the past of things that they experienced in their childhood or a friend or family member who had a healthcare issue or even a consumer problem that they face on a daily basis and sort of use that past experience to inform their intention and imagined future.
NERI KARRA SILLAMAN: One thing I want to really clarify, in the book I talk about immigrant entrepreneurs, but like you said in the beginning of our conversation, this is very much applicable, replicable. It can apply to anyone who is not an immigrant entrepreneur.
ALISON BEARD: Right. Another of the principles, the ability to bridge cultures seems like an obvious asset that immigrants bring to the table. How, though, does it really help them build these kinds of businesses you’re talking about, the ones that have longevity?
NERI KARRA SILLAMAN: I put this principle first because it, in my opinion, underpins everything else. Immigrants see the world and look at the problem from a very different angle. They can look at a problem and ask a question that normally other people wouldn’t ask. Another important element is the institutional distance because when they start building their companies, their cross-cultural ability allows them to reduce that institutional distance between doing business of two different countries. They can also start a business simply because they come from a different culture, as is in the case of Hamdi Ulukaya with Chobani. He comes from a Kurdish Shepherd family and he brought yogurt to U.S.
ALISON BEARD: I eat it every day.
NERI KARRA SILLAMAN: It’s a great product. And one thing I want to add here, founder of Wondery, Hernan Lopez, he’s an Argentinian immigrant and he says coming from two different cultures allows you to read tomorrow’s newspaper today. And that’s about recognizing inflection points because they happen so often, especially in today’s fast-paced environment, you can spot changes and you are able to adapt a lot faster than other companies would.
ALISON BEARD: So it’s almost like your experience with change and cultural differences allows you to anticipate a big cultural shift. And he, with Wondery, anticipated the rise of podcasts.
NERI KARRA SILLAMAN: Yes, that’s right.
ALISON BEARD: tConnections is an interesting one for immigrant entrepreneurs because they typically don’t have them. There’s no existing support networks of family and friends when you’ve moved to a different country. So what lessons can non-immigrants take away from how they overcame that obstacle to build social capital anyway?
NERI KARRA SILLAMAN: It’s very true. So when immigrants come to a new country, they often lose their family, their friendships, the social network that sustained them, and they try to immediately rebuild in any way they can these new connections. And every single connection matters a lot to them. That’s why I have many of the principles, for example, homophilic ties, which is birds of a feather that flock together principle, community principle. And in the case of immigrant entrepreneurs, what I’ve seen is they established these ties in a very strategic way. Nothing is by accident. They use a lot of storytelling, they are very dynamic and they evolve over time, and there is a continuous nurturing of these relationships.
ALISON BEARD: And I think we often, when we think of immigrant entrepreneurs, think of connections within that cultural group, but you cite examples of people connecting over heritage, experience and values as well as geographic background.
NERI KARRA SILLAMAN: Absolutely. So again, you don’t have to be an immigrant, you don’t have to be a refugee in order to create this, what I call, quasi-family or create connections with other people. You can bond over the fact that you believe in the same thing or you have the same vision for your company. When you are building a company, you can take these elements and implement them yourself.
ALISON BEARD: So that does lead right into community building. How do the entrepreneurs you study do it differently?
NERI KARRA SILLAMAN: They do it differently because the other person matters to them greatly. For instance, in the case of Hamdi Ulukaya, when he first started to build his company, he didn’t have a lot of capital, but he had those other people who were part of the old craft factory. And he says, “When I start to build my business, I ask those people, ‘If you see me doing any mistakes, just tell me.’” So that’s a very interesting one because there is not this cult of a leader, but rather a cult of a community.
ALISON BEARD: So is this existing community of Americans that had worked in the craft factory and he was turning it into a yogurt factory, and he made that community his own?
NERI KARRA SILLAMAN: That’s right. To this day, he hires refugees in his business, and that’s a very important part of how he does business. It’s based on community. It’s based on how can I create better life for other people?
ALISON BEARD: So let’s try to quickly touch on the last two principles. How do immigrant entrepreneurs reframe rejection in a way that we can all learn from?
NERI KARRA SILLAMAN: That’s one of my favorite principles. With immigrant entrepreneurs, they are expecting almost to be rejected. They expect failure and they are not afraid. Or to them it doesn’t mean rejection. To them, the word no doesn’t mean it’s a rejection. Isaac Larian, the founder of MGA Entertainment, he constantly says no is the beginning of business. No is the beginning of negotiation.
ALISON BEARD: Right. And I imagine that sort of the resilience that they’ve developed from moving countries, establishing entirely new lives, is a big part of that. Being able to recover.
NERI KARRA SILLAMAN: Absolutely.
ALISON BEARD: Yeah. Finally, dare to play your own hand really is about capitalizing on luck. So how did the entrepreneurs that you talked to explain how they did that?
NERI KARRA SILLAMAN: When I was setting out to write the book, I thought I knew what I was going to say more or less, but my analysis led me to some very surprising principles and insights. So luck is one of them. Luck, again, it’s quite strategic. It’s linked to hard work. So it doesn’t happen to you simply because you were there at the right time, met the right people. You may have these elements happen, but you need to know how to recognize it, and then you need to put in the hard work and utilize all the other principles I talk about such as cross-cultural bridging or homophilic ties or importance of community or reframing rejection.
ALISON BEARD: Yeah, it’s the ability to make your own luck in a way.
NERI KARRA SILLAMAN: Absolutely.
ALISON BEARD: Sort of create so many opportunities that there will be one you’re able to seize on.
NERI KARRA SILLAMAN: Yes.
ALISON BEARD: So in reading the book, I did think of one very prominent counter example, particularly when it comes to achieving profitability the right way. One very famous business flame out recently was WeWork, which was founded in the U.S by an Israeli and had a spectacular rise and fall due to financial mismanagement. Is that just an anomaly or is there a danger that you’re cherry picking the best immigrant entrepreneur case studies and ignoring those failures?
NERI KARRA SILLAMAN: Of course. Every research, every study has its limitations and certainly mine does as well, but I want to emphasize what we can learn from immigrant entrepreneurs. Immigrant entrepreneurs are not monolith in any way. There are those who have failed, there are those who have done things that can be controversial as we are seeing today. So I’m talking Elon Musk here. But it doesn’t take away from the fact that immigrant entrepreneurs are quite impressive, have built impressive companies, and as you cited in the beginning of our conversation, they make up 46% of the Fortune 500 companies and statistically, they build businesses that last longer.
ALISON BEARD: And so we’re talking now about lots of well-known companies. In general, the examples you cite are new companies, certainly, and some startups, but things we’ve heard of, Noom, Calendly, WhatsApp, etc. Do you see the same principles at work in all of the smaller immigrant-led businesses that we all see in our own communities? Are the same principles playing out?
NERI KARRA SILLAMAN: Yes, they are. Also, when I was writing the book, I was comparing, contrasting these principles to my own lived experiences as an immigrant entrepreneur, and wanted to see how did this affect me? How did this play out in our business? But I went a step further than that as well because as I mentioned, for several years now, I’ve been working with startups, advising startups, and I wanted to see how do these principles work in their context? And I see it very much applies there as well. For instance, I can give you an example, fry in your own oil. A few years ago, which was a student of mine from Oxford became a financial advisor to a startup, so she would ask me very informally about that particular startup. So one thing I said to them, you are over-borrowing without being mindful of your sales.
And unfortunately that company bankrupted, even though it was created with the right principles, they were clothing in Africa and contributing to the community in Africa, but if they were not careful with their finances… And it was a great idea, but over-borrowing without being mindful of your sales and your profitability, it’s basically a death knell for the company.
ALISON BEARD: So it’s a good reminder that you can’t just adhere to a couple of the principles, you need to work on adhering to all of them. What about intrapreneurs, the people creating new products or services within their organizations? Do you think that immigrants bring something special to the table there too as well?
NERI KARRA SILLAMAN: I think they do. This can apply to even people who are not entrepreneurs, who are not building businesses. For example, it can apply for your career as well, for early career professionals when they have a vision for their career, how they want to build their career. You can even apply it in that context.
ALISON BEARD: Yeah. The best example of an intrapreneur that I found in your book was that the founder of Duolingo actually created CAPTCHA also when he was at Google.
NERI KARRA SILLAMAN: Yes, that’s right.
ALISON BEARD: You say a few times in the book that you’re not trying to make a political statement on immigration, but as I said in the intro, for the past several years, there are countries around the world that have seen increased anti-immigrant sentiment and they’re electing leaders who are trying to limit immigration. In the U.S. right now, we are deporting university students, for example. So if that trend continues, what do you think that the long-term result will be for those countries that are less friendly to newcomers?
NERI KARRA SILLAMAN: It’ll be devastating. You are right. I do say several times I’m not trying to make political statement in the book, and I don’t want to even say I’m political because this is just simply being a human being. I want us to go beyond the divisive rhetoric when it comes to the world, immigrants and immigration, because statistics do not lie. Numbers do not lie.
And if we continue with this, we are already seeing people don’t want to come to U.S. There are travelers who are boycotting, students who are not likely to choose U.S. And entrepreneurship at the end of the day needs stability. They need ecosystems that are going to nurture these startups. When you have this constant disruption, while disruption is something that immigrant entrepreneurs are familiar with, you need the right soil in order for the flower to grow, let’s say. The founder of Udemy, Eren Bali, he immigrated from Turkey to U.S specifically because he knew that he cannot grow Udemy in Turkey. He wanted the ecosystem of the Silicon Valley.
ALISON BEARD: So which countries would you say are the best environments for would-be immigrant entrepreneurs right now?
NERI KARRA SILLAMAN: A lot of them we are seeing them already. Europe, Singapore, Berlin, we have Paris. We are seeing actually the governments quite mindfully trying to offer the right conditions for entrepreneurs.
ALISON BEARD: And how would you respond to the argument that immigrants, whether they’re workers or entrepreneurs, are taking opportunities away from native-born citizens?
NERI KARRA SILLAMAN: They do not. Again, they do not. And again, numbers, we have statistics and numbers of… They pay taxes. They are contributing to the country that they immigrate to. This is incredibly important for them. We see it in the businesses that they create, we see it in the everyday lives. And yes, you can take a few examples. If you want to create your political rhetoric and say, “Oh, they’ve done this in an unlawful way,” but ultimately what statistics and what facts show us that immigrants build and make America great.
ALISON BEARD: And other countries too. They’re creating more jobs than they are taking.
NERI KARRA SILLAMAN: Completely.
ALISON BEARD: Certainly from the economy. Yeah. So in conclusion, you talk about kindness being a unifying theme for all of your principles that you derived from your research on immigrant entrepreneurs. Why is kindness something that you see more in those study subjects and why do you want more of that in business?
NERI KARRA SILLAMAN: Because it’s, for me, what unifies all the principles that I talked about. Without kindness, you cannot practice community. Without kindness, you cannot reframe rejection. You have to be kind to yourself too. Without kindness, you can’t give back. And for me, it’s the secret ingredient that allows for everything else to happen.
ALISON BEARD: Well, you’ve offered us lots of lessons, and that final one is a good one to end on. Neri, thanks so much for being with me today.
NERI KARRA SILLAMAN: It was my pleasure. Thanks for inviting me.
ALISON BEARD: That’s Neri Karra Sillaman, an entrepreneurship expert at Oxford University, entrepreneur and author of Pioneers, Eight Principles of Business Longevity from Immigrant Entrepreneurs.
And we have more than a thousand IdeaCast episodes, plus many more HBR podcasts to help you manage your team, your organization, and your career. Find them at HBR.org slash podcasts or search HBR on Apple Podcasts, Spotify, or wherever you listen. Thanks to our team, senior producer Mary Dooe, associate producer Hannah Bates, audio product manager Ian Fox and senior production specialist Rob Eckhardt. And thanks to you for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Alison Beard.