Pascal Finette: How a German drill sergeant used Sheer Grit to became a world renowned entrepreneur

Pascal Finette - how a German drill sergeant became a world renowned entrepreneur

2.5 million dollars and three years of work, blown up in an instant. Game over.

And to quote our guest Pascal Finette, it indeed felt that way: 

“I was pretty depressed actually. For about two months I didn’t leave the house, kind of Garfield-esque.”

But then, reaching his wit’s end, he decided that he had to do something and he had to do it now.

“I finally decided I needed to do something, so I bought a ticket to go to Nicaragua, not having known anything about the country… It was like mega-transformative for me. It was just phenomenal.”

And now?

“I don’t really have those anymore… after [that] I never had a moment of a sustained period of feeling [down].”

What had me curious was how that one trip had helped him move on from depression and, years later, become a world renowned entrepreneur. But I also wanted to know, what could we learn from this ourselves and apply to our own entrepreneurial journeys?

But I’m ahead of myself.

Recently, Pascal Finette graciously shared his entrepreneurial journey, ranging from the depths of depression to launching several startup accelerators, with us. Pascal currently runs all things startup at Singularity University Labs; is a entrepreneur; startup mentor; and global keynote speaker at conferences such as TEDx Orange County CA, NASA Open Innovation Summit in Texas, and Startup Week in Austria.

 

When you’re stuck in concrete, pivot

When we’re young we all have lofty dreams of our professions as an adult. Knowing Pascal well, I was curious, What could he have possibly wanted to be when he grew up?

Pascal:

My dad is an entrepreneur; he had an engineering company, doing fairly sophisticated stuff around concrete, of all things. It was like a small company, like a ten-person company, but very niche, very specialized like top in their field literally in the world. I think it was always like – oh my God, I want to do this, like I wanted to be in the company, and then while I was high school age, probably, I started working in the company, like in my summer breaks, just making some money and working alongside my dad.

You know, working with concrete is really dirty, because you’re on building sites all day long, and you come home and you get shit underneath your fingernails, and it’s loud and stuff, and that was when I realized I didn’t what to do that; I really don’t want to. And then at the same time my dad bought me my first computer when I was like 12 or so, and so, I got really into computers, and I was like- that’s really cool. So I started thinking I wanted to do something with computers.”

Lucky him, it’s not every day that we figure out our primary industry at age 12. From there though, everything was not so smooth. You see, in Germany at the time, military service was mandatory…

 

Hacking an ideal job from the German military

Pascal:

When I grew up, we had military service in Germany. So the way this works is… this sure gives a good indication of my life. The way this worked at the time was that you had to go to military for one year. There was about a 50/50 chance if they actually draft you to go there. Germany is not a nation at war, so they are not doing anything dramatic there. Because they only need a certain amount of people, there’s a good chance they actually don’t draft you. You have an option to do civil service, but if you opt for civil service, they always make you go to civil service because they needed people.

I was sitting there and was like what do I do? Do I play the lottery or do I go for civil service?

So he played the lottery… and lost.

I get my drafting letter, and I’m like, “fuck! Need to go.” I panicked and wanted to go do civil service, and I’m like: “Hey can I still come?”, and they are like, “No. After you get a drafting letter, that’s impossible. “I was like, “Great. Shit.”

Like most entrepreneurs, however, Pascal quickly came up with a plan to get the best possible outcome from his options.

Then I had this flash of insight: nobody wants to go to the military because it’s a mandatory thing you need to do, not a job. I was like, “Hey, if I go, and if I’m really nice, and if I tell them that I would love to go, they would probably be nice to me.” I go into the recruiting office and, and I’m like, “I am so excited that you drafted me, this is amazing!”

If you know anything about the military, at least in Germany… the Air Force is the lightest load ever because they fly planes; they are not digging trenches, you’re not on a freaking ship or something right? You just basically have a very easy job. And they were like, “We’re so excited that you like this…” Because everybody hates it right? And I’m like “I’m so excited. Can I go into the Air Force?” And they are like “Of course you can!” Then they sent me to the Air Force. And then I show up at the Air Force, and the Air Force in Germany has this slightly weird model where they determine what you are going to do for the year the moment they see you. So they run you through a battery of tests and basically boot camp, and then decide what to do of you, which kind of make sense.

So I show up, and again, I do the same trick. So I’m like, “Okay, so what’s the coolest job I can do here? “And the options were like I can protect like the freaking airfields in the middle of nowhere for like a year, and basically do loops around the airfield. I can take an office job where I photocopy and bring someone coffee or I can become a drill sergeant. I was like ”that’s cool; I will become a drill sergeant. So again I got there and said, “I am so excited to be here. Can I be a drill sergeant? “They were like “yeah, we are so excited!”

Pascal rides a $2,500,000 rocket right into a 2001 crash

After leaving the military, Pascal packed his bags to attend University. Midway through, however, the Dot Com frenzy was in full swing with companies millions of dollars off little more than a business plan sketched out on a napkin. Not one to let this opportunity go by, Pascal raised $2.5M as a solo entrepreneur creating e-cards.

For three years Pascal ran his startup, hiring a dozen employees and inking some valuable deals. Things were looking great – right up until the 2001 “Dot Bomb” internet bust that took out everyone, including: Webvan (burned $771M in 2 years), Pets.com (burned $300M in 2 years), and Kozmo.com (burned $250M over 3 years).

The Dot Com boon and Dot Bomb crash

Not long after the bust, investment dried up, contracts stopped, and the company was out of gas. He rode the highest highs and the lowest lows, so I was curious about how he handled the situation.

 

Pascal:

[I felt like] total shit. So failing felt [like] shit for a couple of reasons.

The first is I actually put quite a bit of my money, which was effectively friends and family’s money, into the company. So despite the fact that I raised a considerable amount of money at the time, I also put in about $200,000 of my money that I scraped off from friends and family who gave me the money based on the promise of – “Oh my God, this is going to be like the most amazing thing.” That doesn’t make you feel good, and they were like all super gracious, but at the same time, it’s hard.

For him though, losing the money and company wasn’t the most challenging part.

The second thing that really got me is I had like a team of 10-12 people and they were all there because I sold them a dream. It was like we’re going to do this, and it’s going to be amazing. And then the dotcom crash happened, and I felt responsible for them. So I spent quite a bit of my time in the last days of the company, finding jobs for them. So I called friends and I’m like “hey, I’ve got this amazing marketing person, and bla bla bla.” And I got them all placed, which I think is a really great thing. Today by the way, I understand much better that a lot of the responsibilities were actually not mine because people make their own decisions and you don’t need to actually own all of their decisions, but at the time, I felt really responsible.

On the road to recovery “I bought a ticket to Nicaragua”

After about two months of being garfield-esque, depressed, and barely leaving the house, he realizes that the current situation is not going to get him anywhere. It was there that he had a moment of breakthrough.

Pascal:

I finally decided I needed to do something. So I bought a ticket to go to Nicaragua, not having known anything about the country. [So] I Googled it, and the only thing I knew was Nicaragua is safe had this weird notion of – I go to South America and I look at all the countries, like I looked at the countries and I said Honduras – you don’t go because it’s really not that safe. Mexico, I felt was kind of boring because it’s developed.

Nicaragua is super undeveloped, like I’ve never heard of this, more or less right? And then the US government and the German governments had no warnings on them. So I bought a ticket and I went backpacking in Nicaragua, Costa Rica and Panama for 3 months, which was like mega-transformative for me. It was just phenomenal, like totally disconnected, like in the middle of nowhere.

I could definitely relate. During my own moment of depression and Garfield-ism the only thing that helped was getting away from everything and gaining perspective on the world.

Of course, no one could have anticipated what happened next.

 

9/11 and a brave new world

Pascal:

[Nicaragua] was great; it was a trip of a lifetime. And then on my second or third to last day, something like that, I was about to fly out, 9/11 happens.

Bocos del Toro - Where Pascal Finette went diving
Bocos del Toro

So I was in Panama diving in a region, Bocos del Toro, basically on my way back, it was like the last thing I wanted to do- diving there, and then I see freaking 9/11 happen. I knew I was like ok, and I knew when I go back and life will be very different. It kind of felt weirdly connected. It was like my life went from this weird thing which was the startup to depression, went on this trip, and then 9/11 happened. So the world has changed itself. It’s a new world I stepped into. So it felt weirdly connected, and then on my way back, I actually had to fly through New York because my connecting flight was through New York. It was like totally bizarre because we were in the plane, we land and you see the smoke still coming up where the towers were. It was crazy, and you can imagine what security was like- bizarre. But yeah, it was a pretty interesting experience.

Building a billion dollar business off of mini motorbikes

Quickly after his trip to Nicaragua, Pascal gets a call to work at eBay Germany, then in its very early days and taking off like a rocket.

Pascal:

So I went to eBay Germany. I was one of their earlier employees, and eBay was super amazing. It was like incredible growth, like a total rocket fueled growth there. So, I learned a lot about how you actually design networking systems when you’ve got so much growth, which is a completely different challenge, and a very interesting challenge in and of itself. So, how do you not screw it up in these kinds of things?

A great question! So I dug deeper…

I think what we did really really well at eBay, especially on the holidays, was to really understand and listen to the customer. So first of all, fundamentally understanding how marketplaces work. Market places have this equilibrium between sellers want to go where the most buyers are, and buyers want to go where the most sellers are, which is the reason why if you get this right, marketplaces always go to basically monopoly because it spirals upwards

eBay sellers are also a power law distribution. So you’ve got a few sellers who make massive amounts of revenue on the platform, and then you’ve got like this long tail of like you and I who are selling only like one item a month. So really focussing on these ‘power-sellers’ and really help them build their businesses, and then you go to them, you understand what they are doing.

For example, a seller comes and says, “Hey I’ve got this crazy thing coming out of China, and it’s like mini motor bikes. I’ve got a couple of container loads full of that.” Then going into the market, doing pre-emptive marketing for the product, and then you create this like tension between the sell and buy side. So you finally tune the market basically. That was really interesting; it was really fascinating.

 

Pascal co-founds an art gallery “just because you can”

After his time at eBay, Pascal had the luxury of trying out many different paths, including co-founding an art gallery and purchasing other companies.

Pascal:

Fast forward, I leave eBay, I go to a US software company that did tools for eCommerce vendors, and I did acquisition for them. So I bought a couple of companies for them in Europe and ended up running one. One of the acquisitions needed a lot of love, so I ended up spending a lot of time working for that. I figured that I didn’t want to do that, so I left them. In between. I co-founded an art gallery, just because you can. It was an art gallery in Berlin which I ran on the side, it was fairly popular and infamous. I started a consulting business which helped startups to go cross-border, so we took companies from the UK to Germany, Israel to France, and those kind of stuff. I sold that company because I realised I don’t want to do consulting. Took that forward and co-founded a Venture Capital Fund focused on eCommerce.

So we set up a small fund, but it became quickly very clear that in Europe, you need to be in London to do funds; [like how] you need to be on Sand Hill Road [to invest in startups in the US], that kind of thing.

And with that, he was off to London. But not for long.

 

When life gives you a half million users, take them: Pascal’s trip to Mozilla

Pascal:

…then Mozilla called me, and said, “Do you want to build and run our Mozilla labs program?” Which was like – explore the fringes of what the web looks like, and this was the interesting days of Mozilla, like Firefox 2, 3 and 4, so like when there were 500 million users, 30% market share, really influential.

During his time at Mozilla Labs Pascal created Mozilla WebFWD, a startup accelerator focused on open source companies. This is also the time where our paths first crossed. Of course, it wasn’t until two years later, as I was waiting for a date (who was late!) outside of The Creamery that our paths crossed once again.

Just a few months after that, I learn that Pascal joined Singularity University to build out a startup accelerator focused on companies looking to positively impact a billion lives.

So that was really fascinating. I did this for four years, probably my longest stand ever. So in short it was fun. Then I left, went to Google, spent 90 days at Google.org, didn’t like it. I quit, focused on a couple of nonprofits I had been working on for a while, built them up, and then, when I was done with that in the summer last year, I came to [Singularity University].

In the eye of the Singularity: How he arrived at the Singularity University

Earlier Pascal had mentioned that he gained a deeper understanding of humanity during his time as a drill sergeant. I was curious, was that the reason that he ultimately joined Singularity University?

Pascal:  

I think I’m [at Singularity University] for many reasons… so I’m a mentor and on the Board of the Unreasonable Institute. I was sitting down with these social entrepreneurs, and they all tell me about the stuff they are doing, and they are all like deeply passionate about a particular area. You’ve got this woman about child abuse; you’ve got this guy who is doing water.

…but I couldn’t find an individual problem space which I deeply cared about, like I was like – Oh my God, I really want to fix this problem, you know. Most people have like a single thing that really touches their heart and makes them go up in the morning. Something which is really like- this is a big problem which affects me. I didn’t have that.

I was really disturbed by it.

That was so weird. I’ve got empathy and compassion and everything for these people, but I can’t find the thing.

After a while, it occurred to me that what I do care about most is the people solving the problem; I don’t care about the problem, I care about the people solving the problem.

 

His lesson for entrepreneurs: “There are no maps…everybody has their own path”

With decades of starting and investing in startups, plus a boatload of experience mentoring entrepreneurs, I had to ask him what was one thing that he’d like us all to take away. Like always, Pascal didn’t disappoint.

Pascal:

I think the most important piece for me is always like everybody has their own path. In one of my presentations, I always close with – there are no maps. I think that’s really important for people to understand, because a lot of people read a book about Steve Jobs, and they are like, Oh my God, I need to be like Steve Jobs.” Or they read Elon Musk’s biography or whatever it is, like they read this interview, and they are like, “Oh my God, I need to do this.”

Understand that there is learning in there, but really figure out what your path is, because there is no map for you. Everything is so contextual to who you are, what the circumstances were, you know. All these pieces around there, which you typically don’t see because everything is so complex.

So what do I learn from that? I presently take some learning out of that, but there is no blueprint. You cannot say “here is the blueprint, now repeat. That’s the thing which I find dangerous, like a lot of the stuff which I find on the web, like ‘here is your growth hacking’ you know, one-on-one, like If you do this, you will get this. It’s just not true. It’s like super super individual. So that is the one thing I would make everyone aware of, and learn as much as you can, think about stuff and choose your own path.

 

Pascal’s final thoughts

On leadership

Pascal:

Management for me is really about you set the vision. So you set the endpoint. You explain how you think we should get there, you get the right people on board, and then you let them solve the problem, and your role solely becomes supporting them and removing roadblocks. A lot of people call this servant-leadership, which I find is a weird term… Your role solely becomes like how can you support them, how can you make them better, how can you surround them with the resources they need.

This still is a key reminder for myself, to be a great leader, be a great servant. Of course, there’s always a counterexample, eg. Steve Jobs, however for us leaders that would like a company and a life (novel concept, I know), we must learn to let go and let others thrive.

 

Staying out of doldrums (now with lithium)

When probed about how he handles the day-to-day or prolonged times of being down, Pascal answered:

Pascal:

You know I don’t actually have those [doldrums] anymore, so it’s actually fascinating. I have them on a micro level, like sometimes I come home from work and I’m just frustrated over some shit. Mostly, what I do is I just go for a run, like just clear your head, like go for a hike or something, like go into nature, especially here at Silicon Valley where you go up into the mountains, it’s just gorgeous.

It’s really hard to beat, and I remind myself how fortunate and lucky I am that I’m here, the epicenter of tech, all these kind of stuff, living a life which is comfortable right? It’s like amazing. How much more amazing can it be. There’s great food here, and all these kind of stuff. I think after Nicaragua, I never had a moment where I had a sustained period of life feeling shitty. Didn’t have them anymore.

What I took from this is that zooming out and gaining perspective is key. For example, when I come home from a hard or unproductive day working, it’s easy to get down. When I think about being a tiny mass of meat on a small rock that’s one of ~300 BILLION stars in this galaxy alone, it’s hard to feel like my problems matter much in the scheme of life.

So when things get tough, get away, zoom out, and gain some perspective to regain clarity.

 

Key Learnings

After taking some time to reflect on Pascal’s story, there were a number of lessons to take away:

Be different to get what you want. Pascal realized that if he went into the military doing the same thing as everyone else, he’d get the same fate. Instead he realized that he had to be different and proactive to get what he wanted. By knowing what he wanted and going for it in a manner different than his peers, he ended up with the best job he could find at the easiest branch of the military.

 

Try lots of things and enjoy the path. Pascal created an art gallery, Venture Capital firm, ran another startup, and generally tried a lot of things that seemed interesting before settling on Mozilla during his longest tenured position.

With my own path starting aimed at being a research doctor (childhood), to Mechanical Engineer (college), to entrepreneurism it’s been a windy, but thrilling, path.

 

Put yourself in the ideal environment to thrive. Pascal realized that his VC firm had to be in London for it to thrive in the UK. If you are in the US and are passionate about acting, you have to be in LA to reach “The Show”. For finance or fashion I’d point you to New York. Of course, for entrepreneurism I’d be happy to welcome you to Silicon Valley.

 

When you get disturbed, get excited. Oftentimes I’m uneasy or unhappy when disturbed, an obvious statement. What I, and many others, have come to learn, however, is that breakthrough usually happens when we get disturbed.

Pascal was disturbed when he couldn’t find a single problem area that he was passionate about. Through that feeling, however, came his breakthrough: “After a while, it occurred to me that what I do care about most is the people solving the problem”.

I’d love to say that every time I’m disturbed with myself I get excited but that just isn’t true – I blame it on human nature. I can say, however, that nearly every time I’m disturbed it pushes me to discover why I’m disturbed and what I can do about it which usually leads to a breakthrough.

 

Focus on what moves the needle. The Pareto Principle states that “for many events, roughly 80% of the effects come from 20% of the causes.” During his time at eBay Pascal and crew relied on this principle with their power sellers. Nearly all of their sales were coming from a select few sellers.

For the rest of us, this tells us we should be focused on the few things that will actually move the needle for our careers, relationships, or business. In business I call this our One Big Win, the one thing that actually drives the needle so far that everything else becomes irrelevant.

Power Law Distributions

 

“If you do nothing else, subscribe to TheHeretic.org

Coming from Bill Joos, one of the co-founders of Garage Technology Ventures (with Guy Kawasaki and others, it’s quite the endorsement. The Heretic happens to be where Pascal posts quick, 1-2 minute vignettes on entrepreneurism. I subscribe, I suggest you do too.

Also, a huge thank you to Pascal for giving our community some of the precious free time he has. Besides The Heretic, you can find Pascal leading all things startups at Singularity University and at dozens of keynote speeches.

 

But if you do a second thing, get our free eBook full of unique productivity tips.

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About Garrett Dunham

Garrett Dunham is a Silicon Valley born-and-raised entrepreneur, keynote speaker, and startup advisor. His companies have been featured on the New York Times, NBC, TechCrunch, Fast Company, and Venture Beat, among others. He spends his days mentoring startups at Start-up Chile and Singularity University, building products, and blogging about entrepreneurial success and self optimization.