At the end of each issue we like to leave you with a brief interview conducted with a entrepreneur whose character and journey inspire us. Today, we welcome Jeff Sandefer, a master teacher and co-founder of the Acton School of Business.
Jeff Sandefer is an entrepreneur. He started his first business at the ripe young age of sixteen. After high school, Sandefer earned a degree in petroleum engineering from the University of Texas. He then went on to earn an MBA from Harvard Business School.
Following his upbringing in the oil fields of west Texas, Jeff founded Sandefer Offshore, an offshore oil and gas company anchored to the principle of agility. In five short years before Sandefer turned 30, the company generated hundreds of millions of dollars in profits. Following his adventures in prospecting, Sandefer went on to run Sandefer Capital Partners, a half-billion dollar energy investment fund.
Since then, and for the better part of two decades, Sandefer has dedicated his life to sharing his learnings and teachings with students of entrepreneurship. He’s won several teaching honors in the process including being named one of Businessweek’s top entrepreneurship professors in America and one of the top fifteen business professors in the world by The Economist, in addition to the respect of hundreds of students and budding entrepreneurs that have had the privilege of being guided by him.
The way we’ve heard the story, you elected to be an entrepreneur from a very young age. Tell us about that and how you found your entrepreneurial calling.
I started my first real business at age sixteen. For the previous two summers, I had worked as a day laborer in the oil fields painting storage tanks, and was willing to do almost anything to get out of the hot West Texas sun. While working for minimum wage, I noticed most of my coworkers spent more time loafing than working, leaving expensive equipment idle. So, I hired our high school football coaches and instead of paying by the hour, paid based on the number of tanks painted. Instead of painting a set of tanks every three days, the coaches and their football players underneath them painted three sets of tanks each day – a 900% increase in productivity.
We cut prices for our services a third below market and still made an 80% profit margin.
The lesson? Incentives matter. A lot.
As far as an entrepreneurial calling, I think we all weave the threads of our lives into callings that seem clearer in retrospect. The key for me is to always be honing my gifts, using them in a way I enjoy, to serve others and solve a deep burning need in the world.
Right now, in addition to leading Socratic discussions in the Acton MBA program, I’m serving as a middle and high school Guide (teacher), working in the trenches to help design a new way to deliver transformational learning to young heroes.
Jeff, you’ve run and advised countless companies in disparate industries and fields of study. What is the unifying principle that guides or transcends your work with each venture?
For bootstrapped businesses: listen to your customer and deliver more than you promise; create sales and operational processes and keep de-bottlenecking them; compete on quality and not price; and, focus on engaging world-class people because one extraordinarily talented and driven person is worth a hundred average ones.
For asset-based businesses: invest time to completely understand the market, cycles and players; negotiate the purchase, preferably after a busted auction has demoralized a seller; work hard to improve the asset or assemble a collection where the parts are worth more than the whole; and sell at an auction when people just have to own your type of asset.
Above all – the opportunity has to fit my gifts and where I care about adding value.
We read stories every day about entrepreneurial victories, but we don’t often hear about the stumbles, breakdowns, and missteps. If you wouldn’t mind sharing, what was the single most difficult obstacle you’ve overcome in your entrepreneurial journey?
My biggest personal failure was an early divorce, because it meant I had to live three blocks away from our daughter. Of course, a short time later I met Laura, which has meant sixteen years of being married to the love of my life and my best friend. But it still hurts not to be able to protect your young daughter when that’s your most important assignment.
On the business side, I’ve made plenty of mistakes, but hard work and perseverance – and being careful to limit the downside of any one bet – has overcome any stumbles.
Right now I’m struggling to understand why parents and young people “hire” a high school, and how we can design a learning environment that’s ten times more enjoyable and powerful.
There are more students of entrepreneurship today than ever. Why do you personally teach?
I learn something every time I lead a Socratic discussion, where collectively the people in the room are thirty to fifty times smarter than I am.
Are entrepreneurs born or made?
Made. I believe each person has a spark of entrepreneurship deep inside of them. But it takes a relentless dedication to discovering your gifts, honing them and applying them in the real world competition to become a successful entrepreneur.
You’ve said that a good name is more desirable than great riches. What does your name stand for? What continues to drive you?
Other people will have to answer the question of what my name stands for – I only pray Laura and my sons and my daughter have a good answer.
I’m driven by problems that need solving where I can make a difference, freed from the influence of corrupt politicians and rent seeking bureaucrats.
What is the final compelling question you’d leave our readers with today?
Life is short. Where will you invest time in a deliberate, sustained practice to make sure you aren’t wasting yours?