Q+A The Education of Bob Compton

Bob Compton is an entrepreneur and venture capitalist with a lot of ideas and opinions. He has a talent for expressing them, as can be seen in a pair of documentary films that take American education to task. In Two Million Minutes, Compton compares high school education in the United States, India, and China. In Sole of a Hustla, to be released in February, he recounts the ups and downs of a Memphis start-up company that tries to make it big in customized athletic shoes.

A Memphian since 1997, Compton attended public schools in D.C, majored in liberal arts in college, and started his career with IBM in Indiana as a systems engineer.

“I noticed I was doing all the work, and the sales reps who were taking the customers out to lunch and playing golf with them were making all the money,” he says. “So I told the branch manager, ‘I can’t play golf but I think I can sell.’ It turned out customers were delighted to have a salesman who couldn’t play golf but actually understood the technology.”

After working for four years, he was admitted to Harvard Business School and earned an MBA. A professor of entrepreneurship got him excited about management of technology businesses. “I liked working with engineers, scientists, and customers,” Compton says. “I liked being close to the value creation process. My favorite experiences are two or three people with an idea and a piece of paper.”

One of the business visionaries he met was L.D. Beard, who had been president of Richards Medical, a company that sold slings and splints to orthopedic surgeons and held the rights to a spinal implant. Convinced that the company had made a breakthrough, Compton invested in it and joined the board in 1990. Richards Medical grew its sales to $300 million a year and merged with Sofamor Danek, which was in turn bought by Medtronic in 1999 for $3.7 billion.

Compton came to Memphis as president of Sofamor Danek. He stayed on with Medtronic for a year after the merger, retired “for about two weeks,” then started his new career as a venture capitalist and angel investor in companies in Memphis, India, and China.

His office in a renovated warehouse in downtown Memphis has a bare concrete floor and brick walls decorated with posters. Compton is dressed casually in jeans and an open-collared shirt as he describes a career that made him rich before he was 50 years old and his passion for movies, entrepreneurship, and education reform. But he still can’t play golf.

Why do you stay in Memphis?
My children were in school at St. George’s and had lots of friends. Memphis is a great place to raise a family. There was no compelling reason to move. We asked ourselves, is there something we can’t get in Memphis that we could only get if we moved? We love to travel, and Memphis is an airport hub. I can get to Europe, I can get to Asia. If we wanted to go skiing, we could get on a plane.
You have called Memphis “the city I hate to love.” Why?
Per capita, Memphis probably has more creative people than any other city in the United States. It has made me more creative. Memphis is the only city I felt compelled to write a poem about. There are so many creative people trying so many creative things, and the scale is small enough that you can get to know all of them. I could never meet a Craig Brewer [the Memphian filmmaker] in Hollywood.

So it’s access to creativity. That’s why I love the city. The part I hate is that the potential for the most part goes untapped because of weak government leadership and horrible political corruption. Our politicians and community leaders have not taken Memphis to its full potential.

Memphis’ claim to being an entrepreneurial city goes back to Holiday Inns and FedEx. One is more than 50 years old and the other is 35 years old. Is that claim still valid?
The people are entrepreneurial. Look at Richards Medical or Sofamor Danek or FedEx. On the other side of the coin, the University of Memphis is the largest university in America not to offer a single course in new-venture creation.

But it has the Society of Entrepreneur’s Hall of Honor.
Yes it does, but you can’t get a single course in entrepreneurship. The support systems here, I would say, are a decade or more behind Indianapolis, for example, where all the universities have faculties of entrepreneurship and there is both state and local support for entrepreneurs. In Indiana, an investor gets a 20 percent tax credit. If I was trying to raise money for a start-up in Memphis, there is no carrot to offer.

So there are things that other cities and states can do?
Yes, across the country they are doing it. In the last half of the 20th century you didn’t need a lot of training. But today there is simultaneous invention. I have found this to be true of every company I have invested in. I will learn within a couple months there are four or five other companies around the country that have started. But within the last six or seven years, I noticed there are also four in India that have started up. We have global competition at the entrepreneurial level. When Fred Smith started FedEx, there weren’t 20 venture capital firms who could immediately see what he was doing and start to copy it. Today they can. The entrepreneur can’t make beginner mistakes. If they stumble there is somebody in Boston or Beijing or Bangalore who is going to get ahead of them.

If there were a stimulus package for entrepreneurs, what would it look like?
There are four categories of a vibrant environment: technology, talent, capital, and culture. In the area of culture, our people in Memphis are more risk-tolerant than the average person in Indiana, Chicago, or Boston. We have a high tolerance for risk here. I’m not sure where it comes from, but that’s our culture. We have a little bit of capital, but there needs to be incentives to put it into new ventures and get tax credits. On technology, we should focus on our strength, which is the orthopedic industry.

What’s holding Tennessee back? We have a businessman governor and some famous entrepreneurs in Memphis.
I would say it’s the mayor and city council. They are the local leaders and they lack an appreciation for the value of the entrepreneurial sector to a vibrant local economy. And when was the last time Governor Bredesen came over to inaugurate an entrepreneurship center?

Actually he came over a few years ago for the new medical research center at the site of the old Baptist Hospital downtown.
So every five or six years he shows up and cuts a ribbon. To me, that’s not sufficient in the 21st century. When was the last time Mayor Herenton talked about entrepreneurship as the cornerstone of our local economy? And when did he or the city council funnel any money into supporting it? You can’t teach me to become Michael Jordan, but you can teach me the fundamentals of how to play the game. We need to teach the fundamentals of how to play the entrepreneurial game.

Let’s talk about Two Million Minutes. Give me a short explanation for people who have not seen the movie.
The four years of high school [last] two million minutes. The film compares and contrasts India and China and the United States. It illustrates that India and China allocate time and prioritize intellectual achievement. And students in America allocate their time across academics, outside work, athletics, and leisure.

What was your inspiration?
Thomas Friedman’s book, The World is Flat, opened my eyes. Second, as my children got into middle school, I became more aware of what they were studying, and it was the same courses I was taking 34 years ago.  Fundamentally, their education was about the same as my education and my parents’ education 60 years ago. When my parents were coming into the work force after World War II, America’s toughest competitors were Switzerland and New Zealand. Europe and Russia were bombed to the ground. When I got out of high school, Japan and Germany were our toughest competitors. In 30 years, look what they have done to our auto industry, which will go bankrupt unless the government steps in.

We’ve never faced competitors that were four times larger than us. That led me to want to visit India and China in 2005. I had no idea of making a documentary. I started blogging as I was traveling. What I was seeing absolutely stunned me. I took another trip five months later. The economic center of gravity has shifted to India and China.

Are your daughters into sports?
Both were very good athletes, year-round swimmers. Today they still play sports but only in season. I’m a big believer in team sports, but we have taken involvement and investment to an absolute extreme.

What foreign language do they take?
French, Spanish, and Latin are the three most commonly taught. Why do we still teach French? Because we have French teachers. But maybe it is because our economy is starting to look more like France, with government stepping in. Maybe knowing French will be an advantage as we slowly become the France of the 21st century.

Would you be comfortable with your children in a school in India or China?
Yes, because the cultures there support that. It is difficult for my daughters now because they are so focused on academics. That’s not held in high esteem in our culture. You don’t get a letter jacket for physics or robotics or debate. In America, to try to raise your kids with rigorous academic standards is a bit like swimming upstream.

You have said that if our athletic performance at the Olympics was as poor as our global academic performance, it would be a national crisis.
Exactly. We rank 23rd or 24th in math and about the same in science. If our Olympics team came back after finishing 24th, the President and Congress would mobilize our country and never allow it to happen again.

What was the most hostile reaction to Two Million Minutes?
The faculty at the Harvard Graduate School of Education. About 100 faculty members watched a screening. None of them had been in a high school classroom in India or China, and none had ever looked at the curriculum in those two countries. Unburdened by knowledge, they had a very strong opinion that the American education system was the finest in the world, primarily because America teaches everyone.

Where was the most favorable?
Huntington, West Virginia. Twenty years ago it had a population of around 80,000 and an economy built around steel and manufacturing. I screened my film at Marshall University in 2008 in front of about 400 parents and teachers. They had already felt the cold blast of global competition. Japan and Korea have hammered the steel industry. They watched neighbors lose their homes and move away. The fear was almost palpable in their questions about what their children should be studying in school and college.

In higher education, including at the University of Memphis, the U.S. educates a lot of Indian and Chinese students. Doesn’t that speak well for us?
The U.S. college and graduate school system is the largest and finest in the world. We have poured an enormous amount of money into public and private universities. India and China have a few top universities in engineering, but they don’t have the depth.  Both governments have looked at that and realized that to match it would cost billions of dollars and take 50 years. So they encourage their best and brightest to come to America. We not only welcome them but we give them scholarships.

Is that a wise policy?
It was when America offered the greatest economic opportunity in the world. After World War II we beat the Russians to the moon in part because of the German scientists who came here.

Since 9/11, we have dramatically cut back the number of people we allow to stay in this country to about seven percent of the Chinese and Indian students. A rational immigration policy would say if you get a Ph.D. in this country in science or engineering, we will staple a green card to your diploma.
Our immigration policy is irrational. In the last five years, Indians started 40 percent of the venture capital backed companies in Silicon Valley. Now the opportunity is back in India. They get their master’s and Ph.D.s and leave.

If not French, then what foreign languages should we be teaching?
We should be teaching Mandarin starting in grade school. The Chinese start English in first grade. I feel less strongly about Hindi because most Indians speak very good English. The languages we should teach are Mandarin and Farsi and Arabic. Mandarin we should teach for economic competitiveness. Farsi and Arabic we should teach for national security.

The problem with all three of those languages, probably any language, is they are best taught when we are young. You and I could probably learn Farsi if we had to, but we would really struggle. But if you are six years old, Farsi is fun.

If nothing else, wouldn’t it promote international awareness?
It would make us more aware of China and the Middle East and the history of the conflicts over there. My kids know more about Spain because they study Spanish. If my kids had studied Arabic and Farsi they would know more about the Middle East, which I think works to their benefit. That is going to be a trouble spot all their lives.

Your other movie, Sole of a Hustla, could not be more unlike your first movie.
Yes, in many ways. I invested in a company here started by five African-Americans who grew up in the ’hoods of Memphis. This was the first business plan I had received from black entrepreneurs in 25 years. They had a great concept in their ability to design athletic shoes in Memphis and have them manufactured in China. So I invested in a company to help them build it, called Game Time Athletics. Only a couple of them have college degrees, and one of the founders is a four-time convicted felon.

What I saw as I worked with this team was the failure of our education system. They struggled with things like cash-flow management and cost of goods sold. There is only so much I could teach them. The concept has the potential to be a $100 million business. But our public school system and our local college school system so shortchanged these guys by not teaching them entrepreneurial skills that they will never be able to build it into a large company.

I made the film because I believe, as Magic Johnson said two years ago at the National Civil Rights Museum, that we have more black millionaires than any time in history but we have fewer black business owners than we had in 1950. That local small business in the community giving jobs to the teenagers has been lost.

Who contacted whom?
One of the partners, “Big C,” read about one of my companies in the paper and called and asked to speak to me. I called him back 20 minutes later and we met at a Starbucks that day. This was in 2006.

You submitted it to the Sundance Film Festival and it got turned it down.
That must mean it’s a good film if they are not interested. Two Million Minutes was turned down by all of the film festivals but sold 20,000 DVDs.  So I expect Sole to be a big hit.

Through what kind of distribution?
The film will release in February, which coincidentally is Entrepreneurship Week and Black History Month. I hope this takes the same distribution avenue through high schools and universities. My dream would be that every minority high school student would see this film. Ideally, I would like to tour the country doing screenings at historically black colleges and universities and start the process there, maybe at LeMoyne-Owen here in Memphis and ending at my hometown, Washington, D.C., then get Magic Johnson to pick it up in his theaters out west. We have to teach our kids how to start businesses. It’s much more important than football.

For more information or to purchase a copy of Bob Compton’s film two million minutes, or to get a copy of his book Blogging Through India, go to www.2mminutes.com. For more information on True Memphis Invisible and other Compton artistic enterprises, go to www.truesouthstudios.com.