Transcript: Greg Malkin on Building Businesses, Shaping Minds, and the Entrepreneurial Spirit

Good morning, and welcome back to the show. We are here with Mr. Malkin, the legendary former math and business teacher and founder of the Youth Entrepreneurship Institute. How are you, Mr. Malkin? I'm doing well and excited to be here. Yeah, we're excited to have you on the show. Yeah, thanks for taking the time to come in here. Sure. Congratulations on your successful podcast. That's amazing. Thank you. Thanks. So, Mr. Malkin, going back to the beginning of your career, you started a company called Technical Software. What was your journey to starting that first company, and was that the first job you had out of college? Great question. So, my journey to Technical Software started in college. I started my first business in college. I needed to pay my way through school. That really ignited the bug, although actually, even in high school, through our club, I had to sell ads in this basketball program. So, that, even earlier, kind of came. It gave me the bug. But, I started Technical Software in 1983. The IBM PC, Bill Gates, MS-DOS, all that stuff, came out in 1982. So, and I was an engineer, and had done some computer work in college with punch cards, done some computer work. My first job, actually, was for a chemical company in Cleveland called Diamond Shamrock. Which is not in Cleveland anymore. But, I ran the computer center, if you will. It's hard to believe I was 22. Ran the computer center at a facility out in Painesville that is now being turned into a solar farm. It's cool. We got the Northeast Ohio, got $128 million from the federal government to turn what was a brownfield into a solar farm. But, that was when there were mainframes and mini computers, and so I really got a feel for computers. IBM PC comes out, and it seems to me that computers would have a big impact on engineering, all kinds of engineering. So, and I've always liked company names that, or organization names that tell you what they are, that themselves are branding. So, Technical Software, pretty obvious, it's old. Technical Software, that was the business. Young Entrepreneur. Institute, very obvious what we do. I had another company called Model Landmarks, which is the old scale models of historic landmarks, even so, there's a theme there. Yeah, so, my journey really started in, I would even say high school, but definitely in college, got the bug, and then saw the impact that personal computers could have on engineering, and I was just in the right place at the right time. And, business. Took off, and, yeah, the rest is history. You know, we've interviewed some other alumni who've been at the head of businesses, and they've talked about building their companies based on specific values and ideas, and just how they want to run a company. What values did you build Technical Software on, and how do you think that just applied to the rest of your life?

It's an interesting question. So, I'm going to be, I've got to be transparent and honest here. When I started Technical Software... I started it with some very specific strategies in mind, but I wouldn't say there were particular values in mind. And, so, the idea of an understanding what culture and values in a business, what that even means, you know, I was 20, so, 1983, I was 29 when I started Technical Software. You know, that... I wasn't old enough to understand that, okay? So, you know, it'd be easy for me to say, oh, yeah, you know, I had all these values, and, you know, this manifesto, blah, blah, blah. Nah, you know, it was, I wanted my own business, wanted to be my own boss. I saw the revolution in personal computers. There were some other aspects to the strategy related to the kinds of things I wanted to do, but in terms of culture and understanding culture, I would say that came probably 10 years later, maybe 15 years later, after I'd, you know, at that point, I had, so, when I left the business, I had 300 employees, but at that point, I would say maybe I had 60, 70 employees, and began to understand what culture, business culture was, and the impact of my values on the people, and the business, and the strategy. So, that actually came later. So, I guess, you know, I matured later than many of the other alumni that you've been, you know, like, looking back on running that business, do you think that anything, you do anything differently running that business, or would you actually spend those years in a different field completely? No, you know, I'm very happy with my life, and I don't think it's fair. I've never been the kind of person to look back and say, you know, I should have done this if I had known what I know now. Well, you know what? At that time, I didn't know what I know now. And so, that's not true. It's not really fair for me to criticize my 25-year-old self or 35-year-old self for things. I always, I will say, you know, getting back to your question about values, some personal values I've always had is I always try to do my best, you know, every day, and give it my all no matter what, even if it's a job, you know, I worked for, I was at our bees in high school, and freshman year in college, I was in the school cafeteria washing dishes, you know, but still, you know, even those jobs, and certainly in my business, and in teaching at U.S., and in Young Entrepreneur Institute, every day, just try to do my best, and every day, try to do better. So, there is a whole business philosophy that we teach in the Young Entrepreneur Institute about connection. Continuous improvement. I didn't invent that idea. It goes back to the late 1940s, a guy that we actually study in the microeconomics class at U.S. Just the idea that, you know, you don't have to, and actually, Warren Buffett has talked about the same thing. That's one of his philosophies, so I don't want to say that I've invented this or it's some, you know, amazing thing, but it's the idea that just every day, just try to make some improvement. And those incremental little improvements, the whole idea of compound interest also applies to you personally, so you make little changes in your life, and, you know, over the course of a year, two years, a decade, you become substantially better. So, when I look back, again, kind of your question about the starting of the business, I'm a much better entrepreneur and business person today because I've had 50 years of experience, and for me to say, oh, you know, I should have been a better entrepreneur 35 years ago, that's not really fair. Because I've just continuously improved over that period. You know, it sounds like an incredibly rewarding chapter of your life, but after that, you embarked on a new one and joined U.S. originally as a math teacher, as you said in an interview, after selling technical software, and then later started the Young Entrepreneur Institute. How did that really come to be, and what was that journey to U.S.? So, that journey started while I still had my business. I volunteered for a couple of organizations. In Cleveland, Junior Achievement is one of them, a well-known organization to teach business principles, financial literacy, entrepreneurship, and I taught, actually, financial literacy in 7th to 7th graders in a Cleveland school district. That was probably my primary volunteer. And I also volunteered for an organization called E-City, which is folded in. It's kind of gone now. But it was... It was very focused on teaching high school kids entrepreneurship. And there, I volunteered in their summer camp. I also became certified as an entrepreneurship teacher through that. And what I found was that I love teaching. This was early 2000s. So, before I came to U.S., I still had my business, which I left at the end of 2002. So, I have to say, when I was in high school, I went to Cleveland High School. I did not go to U.S. I'm sorry. U.S. is an amazing school. I was... Cleveland Heights High graduate. I did not really like school. I'm sorry to say. I didn't like... I just... You know, as an entrepreneur, you know, I just... That structure just wasn't for me. What I found, though, is being a teacher, I loved being a teacher. So, I'm not sure. There's some dissonance there, right? I'm not sure about it. But anyways, so I did that volunteer. Found I really loved it. So, when I sold the business, trying to figure out what to do next, I went back and got my master's in education because I wanted to get into the field. And I wanted to work with young people because the younger... What I found in working, having my business, I was a teacher, you know, teaching my employees how to be. And that was part of the culture. I wanted to start earlier to have impact on people. You can have much more impact when somebody is, you know... Five years old to 18 years old than when they're 40 or 50. So, I really wanted to work with younger people. So, I went back, got my master's. And I have an engineering degree. I can teach BC AP calculus. There aren't that many people who can do that, actually, as it turns out. And people who can teach BC AP calculus generally don't become teachers. I'm sorry. They become engineers. And they become scientists. Or they become accountants. They don't become teachers. So, after I got my degree and my license in public school teaching, actually, I had a public school teaching license in math. When I applied for jobs, I had a number of job offers. But every place I interviewed, I said I wanted to start an entrepreneurship club. Because that's really why I went into teaching was to share... You can probably tell that I'm very passionate. I'm very passionate about business and entrepreneurship. Very excited about it. And I think it is just a really important thing for young people to learn about and experience. So, every place I went, I said I want to start this club. And some people were indifferent. Some people had no interest at all. Some schools. Both private and public. I interviewed at both. So, I started at U.S. in 2005. I was interviewed in 2005. I was actually interviewed by Rick Hawley. So, not... You know, this is... And by the way, Patrick Alliger, your current head of school, he and I started at U.S. exactly the same year. So, I've known Patrick for a long time, who's an amazing person. And you guys are really lucky to have him as head of school.

And Rick Hawley, the headmaster, when I said, you know, happy to teach any kind of math you want me to teach. But this is what I want to do. He was the only person. We said, oh, yeah. Sure. Yeah, yeah, yeah. Go ahead. And in my mind... By the way, there was no master plan here. I really just wanted to start a club. My mind was just a little club. But he was supportive. I got hired. And the first year... So, the 2005-2006 school year. 2006 was the first business plan competition, the Entrepreneur Cup. The one where you guys came in second last year. That was the first year. And that was the first... That was the first entrepreneurship thing at U.S. And then, yeah, it just organically grew. So, what was your initial vision for the YEI when you first started that? So, my initial vision was not what it is today, which is an amazing organization. And Eileen Frankel is doing a great job as executive director. It was to share my passion for business with kids. And like I said, I didn't really have a connection with U.S. Actually, I didn't really know that much about U.S. Never had any friends here when I was younger. It is an amazing place. And I am so lucky that I found U.S. And U.S. found me, honestly, because it is such a fertile place for innovative entrepreneurial things. And starting young entrepreneurship was a very entrepreneurial thing. And I think that was what I've learned and didn't really quite understand when I was... When I was interviewing, is that most schools are not entrepreneurial. That is not part of the school culture. They're big ships. They're bureaucratic. They move slowly. Tradition is very important. U.S. is a very entrepreneurial place. You guys won't realize it until you're older, I think. But it's a unique culture here. And it's a unique place. So, initially, it was just that. And then, it started with the class. I'm sorry. The competition. And then, the next year, I think, was the first year we had a class, which was not called Michael Economics at the time. It was something else. And then, after a couple of years, we had the competition, the class, a couple of other things we did. The Britton D. Morgan Foundation found out about what we're doing at U.S., found out what I was doing at U.S. And said, hey, you know, can you help do that with other private schools in Northeast Ohio? So, there was a woman at the time, the president. Deborah Hoover. Deb Hoover. And she and I were basically partners. And if you look at the alumni annual giving report, you'll see that the Britton D. Morgan Foundation has given multiple millions of dollars to U.S. to support entrepreneurship. So, there was a real partnership between. And I really have to give credit to Deb Hoover, her leadership, her vision around the entrepreneurial ecosystem. And opened my eyes. And opened my eyes to taking YI to the next level. Because in my mind, it really was just U.S. boys. And I was very happy with that. But I am entrepreneurial. And, I don't know, things just grow naturally with me. It's always been about, again, you know, continuous improvement. And so, yeah, long answer to your question. Yeah, no, that's great. And, you know, you said your goal at the beginning was to teach those kids younger and kind of instill the entrepreneurial spirit. What do you think the YI does to do that, to accomplish that goal? I think the most important thing, well, there's two pieces. So, our mission is we believe every child should learn about and experience entrepreneurship. That's basically the vision. And that really was the vision. It started as a vision, not every child. It was every U.S. student, right? And actually, it really started every U.S. high school student because I was a high school teacher then. But it was all about learn about and experience. And really, if I could take a second to explain why I think it's so important for every child to learn about and experience entrepreneurship in America. And there's a couple fundamental reasons. One is there's a lot of talk in media today about late-stage capitalism, anti-capitalism, right? In the political ferment about this. That whatever you may think of capitalism, we, America, is a capitalistic economic system. Political system is different. We're a democratic political system. But our economic system is a capitalist system. There are other economic systems out there. You guys have probably learned about those and will learn about those in your classes. Particularly if you take econ and other things. But we live in a capitalistic society. And my, this is just my opinion, strictly my opinion. I don't think. I don't think outside of the classes we teach that the educational system in this country does a good job teaching how the capitalistic system really works. And no matter what you do, even if you end up becoming a teacher, you still live in a capitalistic system. And understanding how capitalism works, I think, is essential for you to be a successful American. Whatever you end up doing in your life. So, learn about. Really understand. Understanding the capitalistic system from the inside and the outside. And very practical. Very practical. And that gets to the experience. I think the best way to really understand the capitalistic system is to experience it. Which is why we have the Young Entrepreneur Market system. I think you guys actually are experiencing it. And so, for the listeners, as we were coming up the stairs here, I was asking the guys if they have sponsors yet. They've got a really successful podcast. And in my mind, I'm the entrepreneur. Boom. I go to sponsorships, right? Because that is the capitalistic system. And to sustain. And I will challenge you guys that what you want to think about is sustainability. And so, you're sophomores now? So am I? Okay. You should be starting your planning right now so that when you graduate, you are confident. That this podcast lives on, right? You need to set it up in a way that it carries on. And that is not a trivial task, okay? But that is a different mindset for yourself. So, as you go about this, you want to structure it thinking, okay, how hard is it for somebody to take my place? And then by senior year, you need to have those people in place. Which really means, you know, even junior year, you need to start structuring and talking to the administration. Right? But funding, you know, yes, you've got plenty of funding now. But how do you continue then? And maybe it is the parent association or maybe it is the school. But you could also create your own independent sources of funding, which gives you independence. Right? So, I'm a big believer in that. So, technical software. Getting back to that. I rebranded it. When I sold it to a public company, we became a division of the company. I used their stock and money to buy a bunch of other companies. And I rebranded that whole package. It's now called Imaginate Technologies. It exists today. It's got, I think in 2024, it did $100 million or something in business, something like that. So, that company still exists. And obviously, Young Entrepreneur Institute, Eileen Frankel, has taken over from me. It still exists. Right? So, anyways, I'm kind of getting off track. But I think that's important. And I think that you guys start thinking about that. It's part of that mindset, entrepreneurial mindset. And the capitalistic system. And then the other reason that I think it's important, that Young Entrepreneur Institute is important and what we do is so important, is that in your lives, Charlie and Jack, you're going to have certainly multiple jobs in your life. You'll probably have multiple careers. I really had one career as an entrepreneur. But even so, they were very different businesses. And it's the idea of taking ownership of your life. So, ownership is a fundamental part of capitalism. And the idea of taking responsibility for your actions, having agency in the education space, we call it agency. So, hopefully, one of the mindsets that we foster in the Young Entrepreneur Institute is that sense of ownership of your life. We think that's critical. In the future, in a perfect world, what do you think? What do you think the YAI could look like? Well, ultimately, I'm all about growth. And every child should learn to buy and experience entrepreneurship. So, that's a ridiculous goal. Every child, that's not going to happen. But, so, we got a Young Entrepreneur Institute, got a very large grant from the Walton Family Foundation, which I'm very grateful to, to do the work. We're doing in Arkansas. And let me also, if I could just real quick back, take a step back, because YAI's, there's the mission, but the tactics, if you will, or strategy, which is slightly different than mission, has evolved. So, it's gone from, you know, classroom classes and competitions to the idea of. And so, the reason the Walton Foundation gave us this grant is because what we've done, and really, it was Deb Hoover, if I go back to the Burton D. Morgan Foundation, really was me, it was her vision, but I came to understand it and implemented it. She funded it. I did it. Was Junior Achievement is a great organization. Girl Scouts, great organization. Both of them do great jobs teaching entrepreneurship. The Network for Teaching Entrepreneurship, NIFTY. I mean, there are lots. There are lots of organizations that are doing interesting work in the youth entrepreneurship space. The difference is they, and their other, Hawken has a great entrepreneurship program, and St. Ed's, and whatever. Okay.

What makes, and I'm a big believer, and this is something, again, you guys should think about for your podcast. I'm a big believer that to be sustainably successful, you need to have a unique, you need to be different and better. Right. So, it's not. It's not enough to be different. You have to be different and better. And so, you know, unique competitive advantage, again, goes by many names in the MBA world. But YI now is really about building ecosystems. So, we support Junior Achievement. We support the Girl Scouts. We support Hawken. We support anybody and anything that wants to do youth entrepreneurship work. And so, you certainly, and really most people in Cleveland don't realize that Cleveland has, probably, well, has been recognized as the strongest youth entrepreneurship ecosystem in the United States. An organization did a study for another foundation called the Mott Foundation, who also funds us to help build ecosystems in other parts of the country. So, the U.S. community doesn't really realize that YI is this whole thing where U.S. represents probably less than 10% of the work that YI does. A hundred percent of the funding that YI does outside of university school, like I've just described it in the stuff in Arkansas, and we do stuff in Michigan, a lot of stuff in Michigan, and all over the state, none of that is paid for by university school. So, no tuition, no alumni, none of the endowment. I like to say that YI is a profit center, in fact, for university school. We generate funds. It's for the school. So, it's a very unique partnership, and that's one of the amazing things about U.S. I don't think there's another school in the country who is as entrepreneurial and would allow a YI to exist, and there's so many advantages for YI. So, we use university school, if you think about this ecosystem thing, we actually use university school as a laboratory, really, to test things and try things. And so, when I was there, and I think Eileen has kept, every employee at YI has to be involved in some university school activity to really get their hands, again, it's that practical experience. If you could recommend one singular, I know there's a ton, but if you could recommend one singular book on entrepreneurship, what would it be and why? Wow. You know, so I'm going to talk about the book that had the most profound impact on me. I'm not sure it's the best business book. But it had... It really profoundly changed my life, okay? It's a book from the 80s, so I'm an old man, okay? So, it's a book from... And I still read business books, so I'm a lifelong learner. But this, you know, the rest of the books were not as impactful. The book is called The E-Myth, E, capital E, and then the word myth, M-Y-T-H. It is by Gerber, I think his last name is. Millions of copies have been sold. But it's about a woman, actually. So, it's a story, but a woman who's a baker who decides to open a bakery. And it gets into the... And it's the whole story of that, and there are other things, but I think the story part helps to understand it. There's a big difference between being a baker and running a bakery. And it's the big difference. And so, this was the first... There's two insights from this book that I got. The first one... Because there's a difference between working in your business and working on your business. So, right now, you two, Charlie and Jack, are working in your business. You are doing a podcast. So, you're working in your business. But as the owners, entrepreneurs of the podcast, you need to think about working on the business. Like, how are you going to make it sustainable? That's working on the business. So that when you graduate, you know, I can tell you, 10 years from now, you graduate from college, and this podcast is still in existence. You will be super proud. And you should be super proud. So, that's my challenge to you. That 10 years from now, this still exists. That is not easy. I can tell you. What you're doing is hard. Making it so that that thing exists 10 years from now, that's really hard. Okay? So, that was the first thing this book gave me, is working in the business is different than working on the business. Being a baker is different than running a bakery. Totally different. The other thing was understanding that the business, or this podcast, is a thing. It's not you. Right? So, up until the time I read this book, which I read it in the early 90s, there's no way I could have sold technical software. So, I have one daughter. But in those days, I used to say I have two kids. My daughter and technical software. Both my children, and I'm very proud of both of them, and, you know, I want to see them grow. What I realized was, no, I have one kid. I'm not going to sell Shana. That's my daughter. Technical software is just a thing. It's processes, it's systems, it's customers, it's computers, it's a building, it's whatever. But it's just a thing. Okay? It's an asset. And until that, and by the way, I've purchased a lot of businesses, and I can tell you that there are a lot of entrepreneurs who don't understand that. And when you buy their businesses, they don't understand that I own your baby. I'm sorry. It's mine. And I'm going to do with it what I want. And, you know, if you sell your children, then don't sell your children. But that allowed me to understand, like with your podcast, and with technical software, and with Young Entrepreneurs Institute, that now Eileen Frankel is running YAI. It's not mine. It's hers. And so, where it goes, the only thing I asked, actually, I asked Eileen. I mean, exactly what I asked you guys. I said, when I left, it was 10 years, 15 years while I was 15 years old. I said, I want to be invited to the 25th anniversary. Don't care what it looks like. Don't care what you're doing. But I want to be invited. I want it to exist. So, long answer to your question. You know, from hearing these experiences, you sound like such a motivated and kind of just curious guy in everything you do. After working at U.S. for 16 years, and, honestly, becoming a leader in entrepreneurship, and all things related at our school, what was that decision like to finally retire? It was a really easy decision. I'm sorry, guys. And it gets back to what I just said. You know, YAI is a thing. My career is a thing. And it's something else that I've learned, again, as an old man. It's nice to have chapters in your life. So, K through graduating college was sort of a chapter in my life. A young entrepreneur. Techno software. That was a chapter in my life. Had a beginning and an end. Very happy with that chapter. I like the fact that it ended. I really do. And then, U.S. and YAI is another chapter in my life. Glad I did it. But I'm glad it's over. And because now it's a chapter of my life. The reason I made the decision was very, very simple. I have a granddaughter. And being a grandfather is the greatest thing. And so, that's what I wanted to focus on. You know, you've received many awards for your work. And your time as a teacher, a business leader, and that mentor aspect. What drives you to make such an impact on so many students and people? And what keeps you creating every day? I guess the question that I'm kind of asking you. That we ask a lot of our guests is, Mr. Malkin, what is your why? So, my why, you know, has multiple dimensions to it. One thing is, this is fun. I'm having fun. This is fun. What I'm doing with you guys is fun. When I mentor executive directors of non-profits, that's fun for me. Not fun for other people. Like, it's definitely not fun. It's not something my wife would ever want to do. She has different fun. But I've been very fortunate. And this is a piece of advice I'd give to the two of you. Is life is short, it turns out. If you don't enjoy what you do. Do something else. Life is short. And particularly as you're an adult in the work world. So much of your waking life is spent working. And if you hate your job, that is soul-sucking. It is just, and I see it.

So, I've always, I've been fortunate. I've always enjoyed what I've done. And loved working at U.S. And I loved Y.I. Not every day, obviously, was like wonderful. Just like. Yeah, not every day is wonderful. But, number one, it's fun.

Second thing, I think, for me, the why is helping people. If you look at even what I learned. Getting, you know, that question about values. Right? I didn't start technical software with any kind of broad values in mind. But what I learned was one of my fundamental values is the importance of helping people. That if you have a, you know, what I would tell my employees at technical. Software is everybody's a customer. So, people understand that you treat the customer. You treat them well. And, you know, you're friendly and all that sort of stuff. And you want to help them. Right? But I sincerely tried to help my employees. Which sometimes meant that, you know what the best thing for you? You need to find a job somewhere else. And I will help you do that. I will, you know, I want you to be happy. If you're not happy working for me, life is short. Work somewhere else. And my success. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. I'm happy. My suppliers. A lot of entrepreneurs think they need to beat up on their suppliers. And get the best price and whatever. I never had that attitude. My attitude was, I need to help my supplier. I need to help my vendors. You know, I need to add value to them. So, I think that helping, you know. And when I looked at this working at U.S. You know, my job was to help U.S. Not just teaching. And not just through YI. But just in general to help. which is why I'm here with you guys. I want to help you us, right? And then finally, I think the third dimension of that is you have to have purpose. And I think I've really understood that now as a retired person. It's easy not to have a purpose as a retired person. It's easy to have a purpose when you have a job or you have a family. You got to pay the mortgage. You got to send your kids to college. You've got to pay for health insurance, you know, all that kind of stuff. So I think purpose. Well, Mr. Malkin, it's been great having you on the show today. Thank you so much for taking the time to just share your experiences and share your great stories. To our listeners, thank you so much for tuning in. And we hope you join us next Wednesday for another episode of Late Start Show. Thank you, Mr. Malkin.