Teaching future entrepreneurs

• The conventional education system emphasises discipline and avoiding mistakes, fostering a fear of failure.
• Failure is more common than success in entrepreneurship; understanding this can help manage expectations and build resilience.
• Encouraging family members to experience cycles of success and failure through venture studios helps prepare them for involvement in the legacy business.

Adil Alzarooni is that rare thing. Both the chief executive of a family office and an academic with a doctorate on family businesses. Here, he talks to CampdenFB about the fear of failure, why education should be reformed, and his thoughts on family legacy. 

How significant is the fear of failure and how do you fight against it?

One can’t help but notice the chicken-and-egg scenario at play. The education system, economy, government, and politics are all designed to cultivate a specific lifestyle – one that emphasises discipline, avoiding mistakes, living a conventional life, and waiting for retirement. This is the norm in most parts of the world and what schools prepare students for.

There is, however, an alternative lifestyle that we were never trained for: the lifestyle of the entrepreneur. This is markedly different from that of an employee. I’m not suggesting that one is superior to the other; rather, it’s about having a choice. The problem is that we’ve traditionally only been trained for one path, leaving the other much harder to navigate. 

I often use the analogy of studying medicine: typically, a medical doctor, someone with practical experience, teaches you. The same applies to fields like architecture or engineering, where professionals in the field impart their knowledge. But when it comes to studying business, the teachers often lack real-world business experience. Successful businesspeople are hard to find in academia because they are usually preoccupied with their own ventures.

In life, failure is far more common than success. Statistically, nine out of ten companies fail within the first three years. The entrepreneurial lifestyle is not just about individual endeavours; it’s about teams managing risks, recognising that failure is likely, and maintaining resilience despite setbacks. 

I’ve come to realise there is a significant gap in our education system. I’m working to change this by highlighting the statistics of success and failure. It’s crucial to understand that passion and support are important, but one must also deal with the reality of the numbers. 

This realisation has dramatically changed my perspective on life and what we should prepare for. We are not equipping generations to handle stress and failure; instead, we punish them for their mistakes and discourage them from taking risks.

We are not equipping generations to handle stress and failure; instead, we punish them for their mistakes and discourage them from taking risks.

You deliberately went out of your way to get experience outside the family before you came back to head the family business. To what extent did that shape your philosophy?

I used to believe in the traditional approach of working for someone else as a way to gain experience and knowledge. However, after reflecting on my own experiences, I no longer hold this view. 

To truly learn and develop, especially early in one’s career, one needs to be exposed to as many variables and experiences as possible. This breadth of experience is crucial for meaningful learning and growth.

This is why, for the future generation in my family, I encourage them to avoid conventional work after high school and college. I see college as a part-time endeavour. Instead, I involve them predominantly in venture studios and startups, engaging them in multiple ventures simultaneously. They take on different roles in each venture – perhaps handling marketing in one, accounting or finance in another, and e-commerce logistics in yet another.

The goal is to expose them to as many real-life experiences as possible early on, allowing them to navigate their learning curves and make mistakes sooner. This approach helps shape their mentality so that by the time they graduate from college, they have the freedom to choose their desired lifestyle. The college degree then becomes an insurance paper, rather than a defining factor.

Through these varied experiences, they will discover something they enjoy and want to master. The hope is that they become accustomed to the entrepreneurial lifestyle and make an informed choice about their future, whether they stick with entrepreneurship or explore other paths.

One of the biggest challenges for a family business is to diversify. Do you listen to your children? 

One principle I emphasise and personally adhere to is that success in business means ensuring your failures are less costly than your successes. Failure is inevitable, but it’s crucial to minimise its impact, especially in the early stages. I encourage involvement in as many startups as possible. They can always share thoughts and opinions, but their focus should be on critically evaluating existing ideas, asking questions, and making recommendations within their assigned roles.

The goal is to learn deeply from these experiences. After going through several cycles of failure and success, one is better prepared. Ideas shouldn’t come out of the blue. Instead, they should be the result of thorough homework and research. When someone thinks they have a good idea, they should research it, come back with findings, and show how they analysed costs and potential impacts.

Moving to healthcare, in retrospect was absolutely the right thing to do at exactly the right time but it was a fairly big shift for the family. How did you convince the family to do it? 

Reflecting on my experiences, I realise that luck, or perhaps the grace of God, played a significant role. For instance, I stumbled upon a great team in healthcare, and it turned out well for me. Healthcare continues to be successful and is close to my heart. Similarly, education has become a passion of mine. Both sectors not only benefit people but are also financially rewarding, which is an excellent combination.

However, if asked whether I thoroughly researched and planned every aspect of my ventures, I would have to admit that I didn’t. The success I experienced earlier was as much due to fortunate circumstances as it was to any deliberate strategy or careful selection of teams and investment sizes.

Education is clearly very close to your heart. What else are you looking to do within the sector?

I have not yet achieved my objectives in this sector. With Citizens School, my goal is to help produce a generation that is ready for the entrepreneurial lifestyle. Additionally, I aim to cultivate a generation that understands how to gauge and enhance their quality of life for themselves and others. This objective will take a few more years to realise.

It necessitates a very different educational approach. We call our teachers ‘mentors’ and believe their skills need to be repurposed, and parents’ mindsets also need to evolve. Children must be surrounded by a supportive system that understands and appreciates the differences in lifestyle and the ultimate objective.

The ultimate objective is to train individuals for a specific lifestyle they can handle if they choose, one that significantly involves quality of life, approached scientifically. My focus is not solely on children but on a broader audience. This also means engaging with authorities and all stakeholders within society who influence the educational experience.

Is it a challenge to get people to listen? 

To be frank, Citizens School has certain elements that make it appealing regardless of whether one comprehends the broader vision. It offers a certificate of British curriculum education or an IB education, boasts a great location, excellent facilities, and a positive atmosphere. It’s a happy place with strong considerations for safeguarding and other aspects that parents typically seek. Parents, having gone through similar educational experiences, often look for what they know. However, many don’t realise they are aligning with a specific lifestyle and overlook that there are alternative lifestyles.

Most people think of entrepreneurship as a subject or a single entity, but it’s more than that. It’s about learning core subjects like math and physics, as well as handling risks, managing stress, and improving communication and teamwork skills. After going through a conventional education experience, children might earn certificates, but their character also evolves – they become more confident and creative. Over time, parents begin to understand our broader objectives and join the initiative.

The school is new, only two years old, and it has yet to deliver fully on our aims. We know that achieving our objectives requires teams that can deliver on such goals. This isn’t a role for part-time individuals seeking a casual engagement; it demands entrepreneurial spirits or those who wish to gain a deep understanding of the entrepreneurial experience.

Fortunately, we are identifying potential teachers eager to go through the learning curve to become the mentors we envision. It’s a process that will take time.

The biggest problem for families in MENA is the shift from the second to the third generation. Do people understand the ideas of legacy and what they should be? 

For any business, including family businesses, to survive, they need to be agile, innovative, grounded, and follow best practices to stay alive. This requires clarity on how to keep the business viable. Then, there’s the family element to consider. We need to re-evaluate constantly why the family members want to stay together. Forced relationships often lead to the decline of many family businesses.

If family members don’t see the value in staying together – whether in terms of scale, cost, market power, or legacy – there’s nothing wrong with them parting ways. Money should serve to enhance the quality of life, not be an end in itself. It’s crucial to periodically reaffirm the purpose of the family’s unity and ensure they understand its benefits.

Ensuring family members feel valued and secure in their roles, maintaining proper governance, challenging the business structure, fostering innovation, and diversifying are all vital. Continuously emphasising these points helps family members see the value of staying together. Without this clarity, they become consumed by small problems and aren’t aware of the benefits of maintaining a substantial collective wealth or running multiple businesses under one team.

You can implement governance measures, involve third parties, and set conditions, but if family members don’t see the value in staying united, it won’t work. It’s essential to address the family’s psychology. Once that’s managed, you can put in place all necessary measures for proper governance, ensuring no surprises.

As I mentioned, I prefer not to bring family members into the main business from day one. Instead, I advocate the creation of something like a venture studio. For example, I run a venture studio called CapiZona, with a core team that sets up many small, cost-effective businesses. Throwing the next generation family members into this environment allows them to experience cycles of success and failure, learning the hard way but inexpensively. After a few cycles, you can identify those who understand the application of concepts related to entrepreneurship and innovation, and are ready to be involved in the legacy business.