The Entrepreneurs for Impact Podcast: Transcripts
#143:
[One of our most popular] Climate Investing, from Gordon Gekko to the Dalai Lama — Howard Fischer, Chief Evangelist at Gratitude Railroad
PODCAST INTRODUCTION
Howard Fischer:
In my pursuit of wealth with a hedge fund business, I sort of believe that greed is good. I would modify it and I would say greed consciously practiced can be good, but there are practices within the greed and capitalism, that need to be moderated. And as far as my approaching the Dalai Lama, Buddhism and meditation and spiritual reading have become a deep part of my life and it's really changed the way I see the world in every way. It affects how I invest, it affects who I spend time with, its affects how I see the world and so it really has been that kind of journey.
PODCAST INTERVIEW
Chris Wedding:
Welcome to the Entrepreneurs for Impact podcast. My name is Chris Wedding and I'm your host. As a former private equity investor, occasional monk, startup founder, Duke and UNC professor, and mastermind guide for our climate CEO peer groups, I launched this podcast to share inspiring stories of CEOs and investors tackling climate change. Honestly, just got a little tired of all the doom and gloom. Through these interviews, I hope we can all become better founders, investors, entrepreneurs, and human beings by digesting these guests' secrets to starting and scaling climate companies, creating careers of impact, building habits and routines for higher productivity and health, and growing through maybe life-changing books and podcasts that they recommend. All right, let's get started.
My guest today is Howard Fisher, the Chief Evangelist and Co-founder at Gratitude Railroad and CEO of Basso Capital Management. Gratitude Railroad's mission is to support investors in moving capital from traditional finance to impact investments that create deep social and environmental impact, without compromising financial returns.
His bio on the Gratitude Railroad website is delightful in its brevity and insight into who he is. And I quote, “Uphill over downhill; Snow over sand; Read over watch; Trees over skyscrapers; Pizza over steak; Conversation over gossip; Disagree over agree; Instinct over spreadsheets; Relationship over contract.” If only we all wrote bios like that.
02:34
All right. In this episode, we talked about his 40-plus years in the hedge fund industry. How his rebirth in 2013, while not religious, was like a metaphorical move from Gordon Gekko to the Dalai Lama. His financial reckoning during the 2008 financial crisis, when his hedge fund went from $3 billion to $300 million in AUM. The risks in wearing golden handcuffs from fat paychecks from big brand employers, which may be preventing folks from switching to jobs they care about, such as those tackling climate change. How philanthropy is broken and the government is not a great problem solver.
Again, in this case, when it comes to problems like climate change or other social challenges. Why we have to move more profit-driven capital to the climate sector. Examples of the climate investments they've made at Gratitude Railroad, including a focus on organic waste management. His theme of “Free the Money” and related investments in Climate First Bank and First Women's Bank. Why we can't ask people to eat their broccoli and I'm just going to leave it right there and not explain any of that to you. You’ve just got to listen. By the way, it's not a broccoli.
Some of his favorite books, such as The Book of Joy: Lasting Happiness in a Changing World, Soulcraft: Crossing into the Mysteries of Nature and Psyche, and The Nutmeg's Curse: Parables for a Planet in Crisis. How's that for diversity on your bedside reading table? All right, hope you enjoy and give Howard a shout-out on LinkedIn or Twitter by sharing this podcast with your people. Thanks.
All right, Howard, we're finally pressing record here. We joked before pressing record that it's nice to have something out of the gate as if we were back in my home state of Kentucky, the charging thoroughbred to keep folks attentive. You had great ones. So, a recent talk at MIT Sloan titled, Your Journey from Gordon Gekko to the Dalai Lama, dot, dot, dot, a rebirth. Being reborn rather.
Howard Fischer:
Being reborn, yeah.
Chris Wedding:
Being reborn in 2013, but not in a religious way. So, you're teed up, the audience is super curious, “What in the hell is Chris talking about?” Where do you want to start, man?
05:07
Howard Fischer:
Well, I've been in the hedge fund business for nearly 40 years and my goal in going to the hedge fund business was to get as rich as possible. I've achieved some of that. I’m not as rich as possible. I'm not one of those hedge fund managers you read about sitting at the stock piece auction last week, helping to spend a billion six on Paul Allen's art collection, but I've had some success.
Then the 2008 financial crisis happened and it looked me death in the eyes. I had a 3-billion-dollar hedge fund business that quickly shrank to $300 million. I had 75 employees that quickly shrunk to 25 employees and I was lost and I was confused. I guess right for rebirth, like many people are who find that maybe in a religious sense.
I had the wonderful opportunity to go to Harvard University and attend a program called the Advanced Leadership Initiative, where I spent three full semesters living in Cambridge, learning everything but business. I was in the Divinity School, where I studied Buddhism. I was in the Graduate School of Design, where I studied environment. I was in Law School, the Kennedy School, a little bit of everything. And that was a complete transformation of the person I was to the person I am today.
And so, yeah, in my pursuit of wealth with the hedge fund business, I wouldn't say Gordon Gekko was a pure model, though I sort of believe that greed is good. I would modify it and I would say greed consciously practiced can be good, but there are practices within the greed and capitalism that need to be moderated. And, as far as my approaching the Dalai Lama, Buddhism and meditation and spiritual reading have become a deep part of my life and it's really changed the way I see the world in every way. It affects how I invest, it affects who I spend time with, it affects how I see the world and so it really has been that kind of journey.
Another way I put it, which I didn't say to you before, when I went to Harvard in 2013, I was a center-right Republican, maybe fiscally conservative and socially liberal. Today, I have become a progressive, and if AOC ran for president, I would vote for her. I hear myself saying things that I can't imagine I would have said.
Chris Wedding:
Right. Quite the turn of perspectives for sure. So, as a reminder for listeners, you currently wear two hats. You lead Basso Capital Management, so still in the hedge fund space, as well as Chief Evangelist for Gratitude Railroad. And I think some listeners will know the latter, maybe they have raised capital or want to raise capital, the impact-focused, but returns-focused, as well, both from Gratitude Railroad. With that reminder to the audience, let's go back to what led you to choose that program at Harvard. What planted a seed in that turmoil of ‘08, ‘09, where you thought, “Yeah, that's the one I'm going to water.”?
08:12
Howard Fischer:
Yeah, that's an interesting question. Very simply, when the financial crisis happened in 2008, it was a really major slam to my life. I lost half my net worth, my business crashed, I was lost, I was confused, I was depressed, I was unmotivated, and I saw an article about an advertisement for the program in my alumni magazine. On a whim I applied, knowing for sure that Harvard would turn me down for the third or fourth time in my life. I didn't know why I applied and actually, here's a very good story that people tend to remember.
I got accepted, first of all. I was afraid to tell my partners in my hedge fund business. I wasn't sure I wanted to go. As I was driving there for the first session, I said to my wife, “We can still turn around now.” I got there. We're in a Harvard Business School classroom, even though the program affords you access to the entire school. I'm in front of all these people. I look around and I see these people in the room, I think they're all richer, smarter, and better looking than me and they don't really want to be there.
Then the professor leading the class calls on me as they do in business school classrooms, he said, “Howard, why are you here?” I said, “You know what? I don't really know why I'm here. I'm thinking maybe I should go back home and resurrect my hedge fund business so I could be a better philanthropist in the future.” There was an awkward silence in the room and people came up to me and said, “That was very courageous to say,” and 24 hours later, I never wanted to leave.
Chris Wedding:
Okay, so what other things transpired in those 24 hours that gave you confidence, conviction, clarity, et cetera?
Howard Fischer:
It was just this new world of relitigating, call it rebirth back then, but just like many of us go through numbers of versions of ourselves, I would say that I remade myself when I went to college. Maybe I re-made myself when I started having children. You think about drinking a fire hose, there's a course catalog with like 4,000 courses and all I wanted to do was learn.
10:16
As I said, I was maybe a center-right Republican before I got there and before I got there, all I read was Barron's and Forbes and Fortune and the Wall Street Journal and business books. I put all that down and I'm reading Buddhist spiritualism. I'm reading dozens of books, learning about science and nature and the environment and politics, and my mind was just exploding with new information and new people, new experiences. I went there thinking everyone at Harvard's a bunch of snobs and all I met was wonderfully kind, brilliant, passionate people who had tremendous knowledge to share and they wanted to share very willingly. Then I've made the greatest friends, I've had the opportunity to make in a very long time.
Many of us went to college and your friends from college may be your lifelong friends, or your friends from high school, but I would say that 75% or more of my social life has been with people I've met since 2013. Not only from that program, but through the work of Gratitude Railroad. It's a whole new way of living and seeing. There are all these people that I looked at and said, “Well, I don't really belong in this community,” I belong in this community and I got to meet people like you, Chris, and people that we share in common. It's just a whole new way of being that could make me happier.
Chris Wedding:
I love all that, of course. What I'm thinking about is, it took an event like the 2008 recession to catalyze this change for you. I think some listeners are debating, whether they shift from their current job trajectory, et cetera, to some place in the climate solution world. It's not quite this simple, but it feels like asking the question, gosh, should it take a financial crisis globally to move people from the current trajectory to something that creates the confidence and contentment that I think I see on your face right now?
Howard Fischer:
Yeah, I think it's a great question and it's a complicated question and it has many different answers. I would say, and you probably know this well too with your podcast and the people you’ve met, many people like me who've come to this work did go through some form of crisis. Whether it was a financial crisis, a lot of people I know were downtown on 9-11 and they witnessed that and that was a shock to them. Some of them were forced out of work. Some have come to it out of sheer goodness. Some have come because they have inherited wealth somehow.
12:46
While I was at Harvard in 2013, ‘14, I spoke to many business school students about that. I say the world in 2022, nearly 2023 is different, but when you go to a school like Harvard, you go to school any place and you take two years off from work if you're getting an MBA and you surmount big debt and you've forgone significant amounts of income, it's really hard to make that choice. And especially back when we started Gratitude Railroad, the opportunity to make competitive income in the impact world was very, very challenging.
It's changed a lot today. You can certainly work at even a Goldman Sachs or a TPG or BlackStone and do something, whether it's as meaningful and as impactful as may move me, there is much more of an opportunity to do that, but you have to be true to yourself and there's a balance. The one risk I always tell people about, you go take that job at McKinsey, and five years later, you're making a ton of money. You're traveling in a circle of people who work at McKinsey and Goldman and BlackRock, and it becomes really hard to make a change if there's an economic sacrifice. So, sometimes it's easier to start from the beginning, but you have to be able to make that choice. What are the options for you? Chris, again, what job opportunities are there? There are lots of jobs out there. Some pay well, some pay somewhat less well.
Chris Wedding:
On the kinds of career opportunities that exist for folks that want to do good stuff for the world, climate, sustainability, et cetera, and make market rate salaries. Yeah, like I think about a lot of the students that I teach at Duke or UNC, the kinds of job opportunities they're talking about I think, “Man, where was my head?” In the sand somewhere 25 years ago when I was in their shoes. I felt like I had really shitty career advice, which probably was true coming from the sciences. I mean, the career advice was, “Okay, cool, get your masters now.” But really, you're right, the world has changed and you can't have both.
Yeah, the golden handcuffs that you're describing are also real and beautiful and heavy, which it’s a good question to ask because one approach is start off on a career that is not the get a stamp on your resume, McKinsey for two years. The other approach may be equally valuable. That is, maybe someone lacks the business know how or real analytical skills, but go do that. Have a little cushion, let's say and then maybe if you want to start something, you now have a cash cushion, and you have analytical skills. Anyway, both can be good paths for sure. Let's go to Gratitude Railroad. So, listeners have heard it mentioned a couple of times. What is Gratitude and how did it start, Howard?
15:36
Howard Fischer:
At the program that I attended in 2013, the goal of the program was for people who were fortunate enough to be accepted to identify a project to dedicate the rest of their lives to that some of us already came from doing good work in philanthropy or whatever, that would serve the world in a better way. And my co-founder, Eric Jacobsen, discovered this thing called impact investing.
Whenever you discover something that actually had previously existed, you get a limited purview, but somewhat of a purview. And a couple of things that we learned or that we discovered at that time were one, that there were a lot of people talking about impact investing, it was somewhat ill-defined. All these people were smart and passionate, mission-driven, but mostly some were from endowments or foundations, some were lucky enough to be wealth inheritors. They had limited investment experience and there was a hesitation, if not a limitation on their ability to move capital. Eric and I felt that moving capital was key. Talking, going to meetings and writing papers and taking classes isn't going to change the world unless you move capital.
We were fortunate enough, both of us, due to the success of our careers, to be able to write capital. I've been in the hedge fund business, as I mentioned, almost 40 years, then it was 30 years. And Eric started and founded three fintech companies and then started a private equity business after he sold his third company. So, we felt we had the skillset to do that. We believed, and we still say this very openly, and I have this discussion with people, I mean, all the roles that this would impact, that largely speaking while important, the philanthropic model is broken. It doesn't have sustainability.
You write a check; you need another check the next day. It doesn't generally solve the symptoms. It's really good to feed hungry people. It's really good to clothe the people who don't have clothing. It's really good to do all those things, but it's not a solution. We felt, at the time, and maybe I'm feeling a little bit better in the last couple of weeks or months, that the government is also, generally speaking, an ineffective solution to most of the problems. It's powerful and it's important when it works, but it's confounding and limited and changeable.
17:53
Also, importantly, when you look at the pools of capital in the world, there's a professor at HBS named Michael Porter, who talks about the philanthropic pool of capital, which is the smallest pool of capital in the world. The next largest pool of capital is the government capital and then there's all the money in business. That's where all the money is. And if we have all these intractable problems, from climate change to systemic racism to education inequality, health and wellness access, we need to attract capital. So, we felt that we needed business to do this and that we needed to do it in a competitively profitable way.
Any one of these problems I mentioned needs trillions of dollars to solve. If we can't provide competitive returns, we're not going to attract the trillions of dollars. What we also felt was that much as the program had transformed us and educated us and motivated us, there were lots of other people like us out there who could be engaged. Part of the beauty of the program was that educational growth and the idea behind Gratitude Railroad was to take people who have capital, who have knowledge, who have experience, who have contacts. Who can not only invest in these companies, but they can serve as advisors, board members, connectors, marketers and all those things. So, it was more of, not just investing passively, but for some subset of our community, having an active role in the whole process, from discovery to diligence, to being a value-added investor.
Chris Wedding:
Right, so you saw the opportunity for impact investing. You recognized many players didn't know how to do it effectively, either lacking the impact knowledge or the investing knowledge. So, let's make this more granular. Talk us through a sequence of events that allows you to get these parties through transactions in the companies that matter. How does that work at Gratitude?
Howard Fischer:
There's a big change from the early days to where we are now. Now, we have four full-time employees doing diligence, but here's one story. I can tell a couple of stories you can redirect me. From the earliest days of Gratitude Railroad, I wanted to help start a public equity long, short hedge fund. And while public equities have certainly debatable, questionable impact on the nature of a company's business, one thing that most of us in impact investing focused on are private companies. Those are really great and they're really important. They have tremendous impact, but they're also highly risky and we all need something more liquid and less risky. So, for the first three, four years, I tried to find a team of people to make this business come to fruition.
20:41
Once we identified a team, we began to develop a rubric, a manifesto as to how this business would work. And once we reached that, we shared the vision with the core investors in the Gratitude Railroad community and we invested in the limited partnership so that the company could get off to start. Then we helped them grow their AUM, their limited partnerships. So, we invested in the general partnership and then we helped get the first 20, $25 million into the limited partnership to get that business off the ground.
So, that's one way and we could also talk about, you mentioned Joseph from Atlas Organics the other day, somehow, I don't remember exactly how, we came across this company that was developing a municipal composting business. Composting is a recurring theme at Gratitude Railroad. I have a personal deep interest in the beauty from all, a philosophical way, as well as an environmental way of composting. We invested in this small, impactful, municipal composting business that grew into a much bigger business and we sold our stake after three years at a very nice rate of return. So, this becomes organic.
My job as the Chief Evangelist is to meet as many people as possible, and the more people you meet, this one we talked before you started recording about a family you want to introduce me to. I have calls like that every day and emails like that every day, and the more you're open to it, and Thomas Knowles, who runs the organization, is a junkie for the deals.
We look at dozens and dozens and dozens of deals. Very few make it to any level of diligence and very few make it to the point of an investment, but there's a whole world out there, just as you talked about, all the people you're teaching, can they start a company? Will they start a company? I encourage people to just to send me a note, take a look. You may not hear back, you may not get the answer you want, but the more we see, the more we can do.
Chris Wedding:
You mentioned the word community a few times and that is different, but in this case related to a typical limited partner, general partner, investor, and kind of investment manager structure. What does community mean to Gratitude Railroad?
22:59
Howard Fischer:
I think that's an important question. It also helps dispel one of the common misperceptions. For the most part, with some minor exceptions, which may change over the next few years, Gratitude Railroad does not control any capital. We are an affiliated group of independent investors who work together, diligence together, invest as a single entity for the most part, which makes life easy for everybody involved in the transaction, but each person makes their own individual investment decisions.
So, we're a community in the sense that we are operating independently from an investment perspective. For example, generally speaking, about half our investments are climate-centric. Some of our community only cares about climate investments. The other half is, let's call it border social justice, health and wellness education, et cetera, and some people only invest in that. There are ways to invest in everything without really being that complicated, but the community is a people who have been on a journey just like me, of varying ways.
Most of our members, they're investment bankers, they're hedge fund people, they're founders, all of whom have generally moved from a more conventional or a more standard way of looking at the world, which again, I'm a really old guy. Milton Friedman dominated the business world. When I grew up into the business world, no one was thinking about impact investing or very few people were, so most of us come from that kind of traditional bottom line only what's good for GM is good for America view. We have all evolved to somehow find a way to work together.
Chris Wedding:
When you describe what Gratitude does, I wonder if some listeners know of or have heard of the CREO group. I'm just curious, how are you all similar or different than CREO?
Howard Fischer:
That's a great question. When I'm asked to describe what we do, Toniic comes up, CREO comes up, YPO comes up. I would say one of the things that makes us different from all three, well, certainly more so from CREO and Toniic, organizations that we trust and respect and revere -- Eric is very active in Toniic. We have a very close relationship with CREO. Actually, my call just before this was with one of the founders of CREO.
CREO tends to attract a much wealthier family than we do. They're not-for-profit. We are for-profit and our core mission is to get people to invest. CREO is more about presenting ideas rather than encouraging the investment. And again, like both Toniic and CREO, we are independent investors on a single basis. I think the kinship we have with Tiger 21 is that we are focused on active, competitively profitable investment activity.
25:52
Again, CREO is a wonderful organization. We have exchanged members. There are a lot of people who have looked into CREO and decided to join us. There are a number of members in our community who are members of Graduate Railroad who are also members of Toniic and/or CREO. So, there's an overlap, but again, our focus is on, what are you investing in this month? And I think that's the biggest difference amongst us and them.
Chris Wedding:
Love it. Do you want to talk about maybe some other investments to make this more tangible for listeners? You mentioned Joseph McMillin at Atlas Organics. Are there a couple of other examples, investments [crosstalk – 00:26:25]?
Howard Fischer:
Yeah, you should definitely give me a pointer if I'm talking too long, I love to talk about this. Most years I develop a theme that I use when I share the story of Gratitude Railroad. I have two themes that I've been using in 2022. One is called Free the Money, which just means if you have money, you don't need to be constrained and invest in the blue-chip names, the bulb ratchet firms. Open up your world and invest someplace else. For example, in pursuit of that, I've invested in two different new banks. One is called the Climate First Bank. It's kind of explanatory what they do and these are all Gratitude Railroad community investments. The other bank we invested in is the First Women's Bank. Also, very explanatory.
We all know the problems with the big banks, JP Morgan, Citibank, you name it, they're funding many businesses that most of us would not approve of and they have big carbon footprints. They don't really care, they don't have high ESG values. So, for me, to invest in these two banks led by people who have important values from a gender perspective or from a climate perspective, that's a wonderful thing. So, that would sort of help describe free your money, don't write another check to Citibank, open an account at the First Women's Bank if you're so moved.
The other theme that I'm using in 2022, I call it climate to the people. It was interesting, I'll tell you a story. I was on a call with a gubernatorial candidate in a state that I will not name and I was on a phone with a group of other environmentally focused political donors. We're trying to explain to this gubernatorial candidate our views on the environment. Even though he's a democratic candidate, he had some questions about why the environment was important. And much to our surprise, he said something like, “You broccoli eaters have to stop telling us what to do.” Your mother would say, “Go eat the broccoli.”
28:25
Chris Wedding:
Oh yeah.
Howard Fischer:
He didn't want us to force it down his and his constituent's throats. I get it, but it's the same kind of thing. So, client to the people, how do we bring client positive opportunities to consumers without shoving it down their throats, without making it unpleasant, expensive, arrogant? So, I recently invested in a company called Wasted.
Wasted has modernized the very simple, the very old-fashioned, the very analog business of porta potties. The young people who founded this company, brilliant and passionate, were outdoors people and they noticed the horrible conditions of porta potties in the wilderness. And as they thought about it and learned about them, they found out that when you combine the liquids and the solids in a porta potty, it creates ammonia, which adds the unpleasantness of the experience.
In a wilderness porta potty, that's less of an issue than in a commercial porta potty, let's say at a venue for a big event or a construction site. But when you combine those two products together, it creates a slurry that has no economic value and the owners of the porta potty companies actually have to pay a tipping fee for it to be moved to a sewage treatment plant. So, not that this is rocket science, they've developed a beautiful educational-oriented porta potty that separates the liquids and the solids.
The liquids can be turned into a nitrogen fertilizer, so it's recovering it from a waste product and creating revenue stream. And the solids, again, much like the work of Atlas Organics can be composted into a soil amendment. So, we're taking a waste product and turning it into a revenue stream that provides positive opportunities to the environment. And it's an economic benefit to them so that they can price the same and make more money or price lower and capture market share. At the same time, because you don't have the ammonia in the porta potty because of the separation of the liquids and the solids, it's a much more positive experience for the consumers.
30:33
Look at this. This is a green toilet. We're separating these items. We're providing good things for farmers, we’re providing a better experience for you and it doesn't cost any more money. That's bringing climate to the people and that's the kind of investment that I really enjoy making.
Chris Wedding:
I love, Howard, how you went from a bank to a new version of porta potties. Like we just covered the full gambit of climate solutions in one--
Howard Fischer:
Yeah, Chris, I appreciate that.
Chris Wedding:
Hey, so back on the banks, Climate First Bank was the first one and then what was the name of the second one?
Howard Fischer:
First Women's Bank.
Chris Wedding:
Okay.
Howard Fischer:
One's a community bank based in Florida. First Women's Bank is more of a virtual bank than a physical bank. It’s started by women with incredibly successful careers in banking and finance who have recognized that banks treat women differently, even when they aren't supposed to. The way the world is today where you would hope that most businesses recognize the economic power, the educational achievements and just superiority, really, of many women in the business world that these women felt disadvantaged. We'll talk about the glass ceiling, what happens to women in North America, so they started their own bank and it's doing extremely well.
Chris Wedding:
Well, I'll tell you, in my ESG investing course at Duke last week, we were focused on the S of ESG and we were focused on gender diversity more broadly. We covered important readings from financial institutions around the growth of gender lens investing as an example. I put together this piece, 3- or 4-Pager on the McKinsey's and Baines of the world have said about, “Oh, look, guess what? No surprise, maybe more diverse businesses, boards, executive teams, et cetera. Guess what? That the profits are better. The losses are smaller, et cetera.” But as I walked around to each small group, as I was listening them discuss these readings, a lot of the female students were telling stories of their experience in the workplace.
32:40
And so, I redirected our conversation to cover their stories and man, I mean, the attention in the room was laser-focused. It's very real and I mean, as you're alluding to, it's not going away soon enough. Discussion topics not sufficiently covered, I think, but an ultra-frequent experience [crosstalk – 00:33:03] from the graduates.
Howard Fischer:
Yeah, I think what's interesting, I know you probably don't want to get too political, but there's a movement in certain state governments to push back against ESG and to look at it as something that's actually anti-competitive in restraint of trade. We may have some steps backwards in certain parts of this country as a result of that. We care deeply about it and listeners care deeply about it, but it's something we have to be aware of as we move forward. What are the impacts of this complicated environment in which interstate commerce is beginning to take place?
Chris Wedding:
Well, I think it relates to broccoli. I think it relates to your comment about broccoli.
Howard Fischer:
You're absolutely right. I need to get it and I'm trying really hard to learn how to speak to this. One of the conversations we had at Gratitude Railroad and I had with my co-founder, Eric, over the last week as we spent time together is, how do we bring a more diverse group of people into the community?
It was interesting, we had a retreat last weekend, as you know, or actually last week, and somebody happened to be local and showed up by invitation, who turns out to be, let's say, center-right, if not further than center-right. He was very, very open about his discomfort in walking into our room. I guess I could, because he's smart, he's capable, he's an experienced business person and why did we start Gratitude Railroad? Because we need trillions of dollars. If we're going to cut off some large proportion of the business community, because we're telling them to eat their broccoli, so to speak, it's going to be antithetical to the cause that we're trying to work on. We have to learn how to figure that out, but it's going to be complicated, but we'll see.
Chris Wedding:
Yeah, it also reminds me of parenting a little bit. We'll stick with the broccoli theme. It's like, we can tell our kids to do all kinds of things. Two of ours are teenagers right now. It works with moderate success and I could be frustrated or I can think, “You know what? Maybe I should model the behaviors I want them to follow,” and so they see the benefits of those behaviors and maybe that's the teaching that takes place. I will say we gave our 17-year-old The Daily Stoic book for his birthday.
35:30
Howard Fischer:
Great book.
Chris Wedding:
Quite a gamble. It could have easily become something he proxies his computer up with versus reading, but totally has latched onto it.
Howard Fischer:
That's cool.
Chris Wedding:
Anyway, hopefully, he has seen me eat the broccoli, perhaps. Anyway, going back to a prior thread in our conversation, Howard, of folks switching careers from whatever they're on, not climate to climate. One motivation could be, hey, look, there's gobs of money to be made in a venture broccoli, right?
Howard Fischer:
Yes.
Chris Wedding:
I may be using an analogy here. All sorts of motivations work. Come under the tent.
Howard Fischer:
I was reading an article yesterday, I forget what publication, you probably see it too, I think $165 billion has gone into climate venture in the last few years. That's a lot of fees. That's a lot of potential carry. That's a lot of good. Again, I grew up in a world of, I went to Wharton as an undergraduate, the goal was, let's see how rich you can get.
People today have a higher level of values around where they dedicate their career and the climate crisis is that much worse today. It's that much more in evidence and we're fighting for our lives. So, there is that motivation as well, but I think you're right. I mean, as even Larry Fink, who I have complicated thoughts about says, the first trillion-dollar company is going to be a climate company.
Chris Wedding:
Well, that's a great thread to build on, Howard. I was giving this talk at the local Research Triangle CleanTech Cluster, sit’s trade association whose purpose you can imagine. I was pulling on a similar stat to I think what you just mentioned, which comes from Bloomberg New Energy Finance. The one I was looking at talks about, I think $165 billion in 2021 to corporate finance, so both public equity, M&A, and venture, and then something like $755 billion on the low carbon project side, so $920 billion collectively.
37:31
Pretty nice, clearly up two, three X in the last three years or so, but as you know, and you said it earlier in this podcast, most experts project we need to be investing 5 trillion, not 0.92 trillion per year by 2030 to hit these climate goals. So, plenty more opportunity. No one's late to the party. Anyway, bring it on, private sector.
Howard Fischer:
Exactly.
Chris Wedding:
Let's switch over to the non-business side for a second now, Howard, as we wrap up here. What advice might you give your younger self to be more effective, happier, more impactful, let's say?
Howard Fischer:
I saw that question in your list.
Chris Wedding:
Damn it, letting.
Howard Fischer:
That's probably the hardest. What advice would I give my younger self? I don't really have any guidance that would be there. I guess, I could say this, be bolder, take more risks, be willing to make more change proactively rather than it happening to you. That's what I would say.
Chris Wedding:
I think listeners definitely get why you said the last part. It doesn't have to take, although often it does, very extreme conditions to shift us. All right.
Howard Fischer:
Right, most of my change came out of things that happened to me. Like I got fired in one of my first jobs after undergraduate school. I still haven't told my mother, that was 35 years ago. The financial crisis of 2008 certainly changed the direction of my career. So, that's one thing that I would like to share with people, be bold, take some risks, don't wait for the change to happen to you.
Chris Wedding:
I like it. Tell us some habits or routines that keep you healthy, sane and focused.
39:26
Howard Fischer:
Almost every morning, you mentioned daily meditations, Daily Stoic, I spend five to 20 minutes reading something spiritual like that, whether it's stoicism or Buddhism or poetry. And then I sit and meditate for 15 to 30 minutes depending on the amount of time I have. It doesn't happen every day, I happen to miss it today.
Chris Wedding:
I won't tell anybody.
Howard Fischer:
75,000 people you’ve got on set with you.
Chris Wedding:
I won't tell anybody.
Howard Fischer:
That's okay. I'm okay with that. Riding bikes is a very important aspect of my life. I try to ride bikes as many days a week as I can, indoors or outdoors. Matter of fact, my hedge fund business is named after a bicycle I bought just before the formation. I rode it almost every day for three months during that process, kept me mentally fit, physically fit, and it gave me a lot of time to think and read. I think while I mentioned my study reading, pre-meditation reading, I'm always reading two or three books at the same time and so much of my conversation, my thinking, my life is driven by books and the books I've read. I find that an essential aspect of my life as well.
Chris Wedding:
Well, that was a good tee up for the next question, but before we get there, you mentioned that many mornings you have this period of reflection, reading and meditation, not all mornings. I'm glad you said that and the same is true for me, and it's also a huge part of who I am or what I want to be. But I think some people will tell me, “Oh, well, I can't stick to it,” or, “I can't make the time for it.”
There's a lesson from the guy that wrote the book, Essentialism, McKeown, I forget his first name, but he talks about, if you want to stick to a habit, lower the bar. He's like, if you're going to journal, say, “I cannot write more than five sentences per day. No, I'm sorry. You're feeling verbose with your pen, too bad. Five sentences max. You want to floss? Sorry, only one tooth this week, that's all you get.” Anyway, I think giving ourselves more grace, lowering the bar can be a really good way to get those habits that we want to have.
41:46
Howard Fischer:
I agree 100%.
Chris Wedding:
You've been teed up. So, books, if you had to pick two, three, four books, they can be business, they're probably not going to be business, what might you recommend for listeners?
Howard Fischer:
Oh yeah, I really [inaudible – 00:42:01] just to refresh. There's so many. They have to come up in every conversation I have.
Chris Wedding:
Let me bring up one. We’ve talked about this book before we pressed record, and you mentioned you've given it to many, many people and the author was at your retreat. So, I've keyed it up. What is this book?
Howard Fischer:
We'll start with that. So, The Book of Joy, thank you, Chris, is about a week that the Dalai Lama and Desmond Tutu spent together as two incredibly wonderful close friends whose busy travel schedules don't let them get together much. And knowing their health and their travel schedules, they thought this was the last time they would be together. It's about joy in the face of challenge.
The Dalai Lama had to escape his home in a very precarious way because the Chinese were coming to capture him and possibly kill him. And Desmond Tutu, who existed under horrible conditions in South Africa under apartheid and they are both happy and joyful and positive. I talk about this a lot with my life coach, the gift of adversity. They both had significant adversity, which has given them great gifts.
I read this book at a time when there was another transition going in my life, a change of sorts, and I've shared it with literally dozens and dozens of people who are going through a confusing and difficult time period. And for many, many, it has resonated. I think it's a great book if you're just looking for peace and calm and guidance. That's a great book. There's so many. I'm trying to think of what I read most.
Another interesting book, when you're talking about people who are in career changes, if you want to go even more deeply spiritual, there's a writer named Bill Plotkin who writes about searching for your soul. The first book of his that I read was called, his name is Bill Poltkin, Soulcraft was the name of the book and that recently had a great impact on my life. I read a book of definitions of words. I'm very semantic in the way I look at words and very careful sometimes it frustrates people who are trying to communicate with me. There's a book by a guy named David Whyte called Consolations, which is called The Solace, Nourishment and Underlying Meaning of Everyday Words. Really beautiful and interesting. I’m trying to think about something I can keep going if you want, I’m just trying to pick some things out. It was a really moving book.
44:27
Chris Wedding:
Yeah, let’s do two more.
Howard Fischer:
I read another book. This book is called The Nutmeg's Curse, which is really an environmental tome written around an island, I think it's in the Pacific Ocean. You know what was also really, really important, I think and really meaningful was the Ministry for the Future. I've heard a number of these climate, science fiction, future books. It really taught me a lot and there was definitely something in there. The 1619 project was really eye-opening for me, even despite all the work I've done in, let's call it diversity and systemic racism.
Chris Wedding:
Perfect. I think we're kind of out of time, unfortunately. How about, is there a final call to action, message to those that you want to hear from, let's say, Howard?
Howard Fischer:
Sure. For people, I don't want to hear from them or I want to share to them?
Chris Wedding:
Yeah, you pick. You have the microphone.
Howard Fischer:
Well, I'll do both. I think that sometimes where you are in your community, there's a comfort zone that exists. I have found, and I will grant you that for a number of reasons, it's easy for me to be outside the quote-unquote, norms of my society and my community. But if something moves you instinctively, follow your instinct. Don't be limited by what your friends say or what you see on TV or what's expected of you.
Free yourself to be the person you want to be, address the problems you want to address. I've invested in many businesses where the idea is that every time you shop, it's important. Everything you eat is important. Everything you say is important. Every time you vote it’s important. And if any of those things that move you, that support your values are different from everybody’s -- People don’t like to go out to dinner with me because I question the waitress or the waiter, the server about the providence of the food, but it's important to me and it's an object lesson. People may make fun of me, they may think about it, but I don't stand down.
46:40
Again, I understand that I'm in a position where it's easier for me not to stand down, but the less standing down, the less compromising you have your values, the more positive impact we'll have on the world.
Chris Wedding:
Well, I should make a broccoli joke right now, but I'll just leave it there.
Howard Fischer:
Okay.
Chris Wedding:
Hey, Howard, great stuff.
Howard Fischer:
Thank you.
Chris Wedding:
We're rooting for the continued impact at Gratitude Railroad and all of the companies that you'll invest in.
Howard Fischer:
I appreciate everything that you're doing, Chris, to bring this knowledge to people and support their work and teach them and guide them and all that important stuff too. So, thank you for your work, Chris.
Chris Wedding:
Hear, hear. Cheers.
Thank you so much for listening. Seriously, the world needs you and I know your time is super valuable. If you want more content like this, please subscribe to our weekly newsletter at entrepreneursforimpact.com. If you like this podcast, please subscribe and leave a review on Apple Podcast or Spotify. I read every single one, I promise. These reviews are the number one way to draw more attention to the world-changing climate CEOs and investors that I'm lucky enough to be interviewing on the show. And each month I pick one listener review for a one-on-one brainstorming call with me. Who knows what can come of those?
47:59
Finally, if you're a growth-stage climate CEO looking for a confidential peer group to share best practices, expand your network, and scale your business, then please apply to join our Climate Mastermind programs at Entrepreneurs for Impact, where our current amazing members have created over $4 billion in company value to mitigate climate change. Until next time, keep on fighting those good fights.
ABOUT OUR PODCAST
We talk about #ClimateTech #Startups #VentureCapital #Productivity and #Leadership.
And we’ve become one of the top 3% most popular podcasts in the world.
Why do climate innovators love us?
Because of our inspiring guests — dozens of climate tech CEOs, founders, and investors that are raising or investing tens of millions of dollars and removing millions of tons of greenhouse gas emissions from the atmosphere.
Why should you listen?
To start, grow, and invest in businesses with impact, meaning, and profit.
Learn about our guests’ career paths, founder stories, business strategies, investment criteria, growth challenges, hard-earned wisdom, productivity habits, life hacks, favorite books, and lots more.
Who is the host?
Dr. Chris Wedding is a 4x founder, 4x Board member, climate CEO peer group leader and coach, Duke & UNC professor, ex-private equity investor, ex-investment banker, podcast host, newsletter author, occasional monk, Japanophile, ax throwing champ, father of three, and super humble guy (as evidenced by this long bio). 😃
Learn more here:
Climate CEO peer group community: www.entrepreneursforimpact.com
2-minute newsletter: https://entrepreneursforimpact.substack.com
Live online course about startup capital raising (coaching, peer feedback): https://t.ly/V6xcB
DIY course about startup capital raising (170 slides, 70-item library, 250-investor list): https://t.ly/QCcl5