Stacey Abrams and Lara Hodgson on Entrepreneurship and Self-Doubt

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Stacey Abrams met her business partner, Lara Hodgson, in the lunch line at a conference. They struck up a conversation, became friends, and went on to start three companies together, in professional services, manufacturing, and FinTech. They learned a lot along the way. In their new book, Level Up: Rise Above the Hidden Forces Holding Your Business Back, they share tons of hard-won lessons. By describing their successes and failures, they hope to smooth the path for other entrepreneurs, especially women and women of color.

The Women at Work podcast team spoke with Lara and Stacey about their experiences and the advice they have for other entrepreneurs around scaling, managing cash flow, partnering with customers, planning, and work-life balance (which Stacey refers to as “a lie from the pits of hell”!). Below is an abridged and edited version of the conversation. You can hear the full interview here.

What were the most important personal qualities that you brought to your entrepreneurship that made the difference in not only getting your businesses off the ground but then continuing to grow them?

Lara Hodgson: Without a doubt, I would say curiosity for learning and resilience/grit.

Stacey Abrams: I’m not a risk seeker, but I am very risk tolerant. One thing that always drew Lara and I together is curiosity: loving to learn new things, wanting to understand how things work and make them better, what a solution might look like, what new information might add to the equation.

Stacey, what would you tell our listeners about how you make business partnerships work?

Abrams: A lot of partnerships begin with long-term friendships and morph into a business partnership. Lara and I were friends: We knew each other. We liked each other. We could reach out to one another. But our friendship was built more on a mutual respect than it was on longevity.

So when we started working together, we had rules about how we would operate, what we would expect of each other. One of the most important aspects was a commitment not only to honesty, but also to transparency. Honesty is telling the truth. Transparency is telling the truth before you have to. We don’t wait for the hard question. We don’t wait for the mistake to be uncovered. We get ahead of it. And that helps not only our business relationship, but our personal relationship and our relationships with clients.

Lara’s one of the smartest people I’ve ever known. I trust her intellectual integrity so even when we disagree, which happens, we don’t distrust the fundamental premise of the argument. We may disagree over the solution, but we don’t doubt the other one’s grasp of the challenge.

Hodgson: Stacey and I didn’t go to the same church or have children in the same school. So our normal week allowed us time together, but it also allowed us time apart, which is important because it preserves the diversity of our thinking. Where a lot of partners go astray is they spend so much time together that they actually lose their diversity of thought and start to think alike. That’s dangerous. So Stacey and I always had the ability to approach a problem, appreciate the different perspectives, and then continue to develop those different perspectives by allowing our lives to have some distance.

In the book, you write, “Sometimes what’s holding you back is not a glass ceiling, but rather a sticky floor. Don’t let your self-doubt overcome you.” Can you talk about whether you dealt with this in starting your businesses and how you dealt with it?

Hodgson: I deal with it every day. Women and underrepresented founders can question themselves: “Am I good enough? Am I smart enough? Am I approaching it the right way?” What’s so valuable about our partnership is that it keeps us both grounded when we have those worries.

Abrams: We are exhorted, especially women in business, to be fearless. That is the dumbest advice. Because fears are real and salient.

Lara and I confront the fear. We don’t ignore it. We don’t pretend it doesn’t exist. But we try to investigate its roots and figure out how we can befriend it. How do you navigate it? How do you leverage it? That’s easier to do that when you have a business partner and a friend, but it’s possible to do even on your own. Make sure you’re not ignoring the warning signs but that you’re investigating and preparing for the danger.

Do you feel like being women helped or hindered you as you launched your businesses?

Abrams: Yes, both. As a woman of color, I don’t have the ability to leave behind the dimension of race when gender is also part of the conversation.

In the book, Lara and I talk about how there are expectations that come along with gender, or with race, and or with both — and the challenge is trying to understand which -ism you’re facing. But the opportunity is understanding how you can leverage the diversity and the distinction of who you are to differentiate yourself.

So as women in business, we often see problems in a different way. We are used to having to navigate and circumnavigate challenges. The same thing is true for people of color. We bring different perspectives because we don’t always have access to the traditional resources or standard opportunities that others may take for granted. What people see isn’t going to change even if we close our eyes really tight and hope they don’t notice. So instead you have to decide how you’re going to leverage it and prepare for when it is used against you.

Hodgson: I am very often, as you can imagine, on FinTech panels where I’m the only female. When that happens I choose to let being a woman be my superpower. What I mean by that is I’m not going to try to blend in. In fact, quite the opposite. I’m going to say something bold that makes the audience uncomfortable, and they are going to remember me.

Abrams: Part of the opportunity when you face those challenges is to insert yourself into the organizations that perpetuate them, and you don’t go in saying, “I’m going to destroy you from the inside.” You don’t come in as the conqueror. You come in as the inquisitor and you start to create change from inside. We sometimes let the size and scale of the challenge overwhelm us, and we become myopically focused on the situational to the exclusion of the systemic. But if we don’t address the systemic issues, the system just gets more hardened.

You write in your book about the net 30 payment system and how it hinders many small businesses. Do you think that is a systemic issue?

Hodgson: Yes, I think it’s absolutely institutional, and it’s an example of what Stacey mentioned. Most business owners think it’s situational, and quite frankly, we did the first time we came up against it. A net 30 invoice is when you deliver your good or service to your customer and you give them an invoice that says you can pay in 30 days. When we were growing our second business, our clients were asking for net 30, and Stacey and I thought, “Sure, we can give you that.” And we went to our suppliers and said, “Well, if we have to wait 30 days to get paid, would you give us 60 days?” It seemed like a great solution. We proudly walked away thinking we’ve got this in the bag.

And then that net 30 invoice didn’t get paid for 60, 90, 120 days. Our initial thought was that we messed up. That’s often your first reaction as an entrepreneur: “I messed up. I didn’t negotiate correctly.” But as we started to talk to other people, they said, “You just have a working capital issue. Everyone has that.” Stacey and I were thought, “Wait a minute. If everyone has this problem, then the existing solutions must not work very well.”

What were some of the sort of widely accepted practices that blindsided you two as you were getting your first business off the ground, and how did you handle them?

Abrams: As someone who didn’t go to business school, it was all blindsiding. My first company was a small consulting firm. I had one client, and they paid me when I sent them an invoice. So the first time I sent an invoice and got silence for 30 days, I was astonished. This was a major company and I expected them to remit payment in a timely fashion. And in our business together, I was responsible for accounts receivable so it was my job to go and find our money. These big companies that absolutely had the resources to remit payment would not do so for want of a few pennies. It was confounding. I was calling them and they were taking the call, which meant they had a staff

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