SOM professor talks entrepreneurship

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David Cromwell

Though David Cromwell is a self-proclaimed Type B personality, he was once the President and CEO of J.P. Morgan & Co. In 1996, Cromwell—an adjunct professor at the Yale School of Management (SOM)—left Wall Street after growing tired of its impossible hours and money-hungry youngsters.  Cromwell decided to take the knowledge he gathered on Wall Street and transform it into a classroom experience here on campus. Since coming to Yale, Cromwell has won the “Teacher of the Year” award four times and teaches courses that have grown to be some of the most popular on campus.

Cromwell began teaching at Yale by mere coincidence. With a house in New Jersey and a farm in Maine, New Haven is the perfect halfway point between the two. When Cromwell retired from JP Morgan at age 51 and decided he wanted to try his hand at teaching. A friend introduced him to Yale’s School of Management (SOM), and he was able to fill a gap in the school’s curriculum at the time. They were lacking a private equity class—an area that was quickly becoming one of intense interest. “I was hired on the spot,” he recalls, and began his first semester teaching “Venture Capital and Private Equity Investments.”

After a year of teaching the class, Cromwell won his first “Teacher of the Year” award as a write-in candidate. The widespread appraise of his class prompted SOM to encourage Cromwell to teach another course. “I figured I could probably teach the other side of private equity,” he says, alluding to his “Entrepreneurial Business Planning” course. Both these classes, Cromwell emphasizes, are about learning the soft skills necessary in the business world.

“The number one skill,” he says, “is that you have to have people trust you.” Whether teachers, clients, peers, customers, or coworkers, it’s impossible to get very far without widespread trust. He explains trust goes hand in hand with integrity. Students, he explains, enter his classroom all claiming to know the meaning of the two words but most, if pushed, cannot define them. For Cromwell, integrity is keeping promises, and it’s something  he believes that can be easily learned. Honesty, however, is an entirely different case, a more innate characteristic that cannot be taught but most definitely a necessary and advantageous one.

While trust and honesty are of important, Cromwell says likeability is a necessary trait of the successful entrepreneur. Likeable people are those that actively listen, make eye contact, refrain from talking all the time, and have empathy; they really care about what others are saying. Likable people do not use technology in excess, or, as is the case in Cromwell’s classes, at all. “There are no laptops and no damn smartphones in my class,” he says. “Teachers that care should make you pay attention in their class.” Smartphones and laptops have unfortunately become an all-too easy distraction for many students’ classroom experiences, but Cromwell tells his students to either close their laptops and put away their phones or let them both find a new home in the trash bin.

Aside from the no-technology rule in the classroom, Cromwell’s classes are unique in the amount of feedback students receive. He says that all his students praise the amount of feedback as “the most they’ve ever received in any of their classes ever.” Cromwell uses music lessons as a metaphor to explain his teaching style. He says that when trying to teach a complicated subject, it’s important to demonstrate a little and then allow students to try for themselves. Cromwell doesn’t use any teaching assistants in evaluating the assigned group projects. Instead, teaching assistants assist only in filtering through the students’ peer reviews on each other’s strengths and weaknesses—a process that adds to the already extensive feedback they receive from Cromwell himself. This, he hopes, can best prepare them for the startup world.

“Startups are a very risky business and sometimes they crash and you’re left with nothing,” he says. Most startups according to Cromwell fail and when they do, fail quickly. An entrepreneur’s job, he insists, is to take that failure, learn from it, and start again with just as much enthusiasm and a little more savvy the second (or seventh) time around. It’s not necessarily the idea, but rather the execution. To try and avoid the crash-and-burn, “you need the right people,” he says. Two, preferably three people is optimal to make a startup work. If it’s just two people, it needs to be “you and someone that’s totally different from you,” to make sure as many bases as possible are covered. A techie needs a salesperson and a salesperson always needs something to sell, so this sort of paring works to any startup’s advantage. The founders’ ages are also important: Cromwell notes that most people start at around age thirty, when they have completed undergraduate and graduate degrees at business schools like SOM. In order to succeed, young founders must have an exceptionally strong team or an even bigger idea.

Even with the right team, the right idea, and the right implementation, Cromwell is quick to note that a startup’s success is very much tied to the economic climate. If the economy is doing well, people are more likely to start their own companies and therefore more likely to have something take off. Cromwell notes that most jobs are in startups and thinks that around half of all billionaires have, at one point or another, started their own companies. America has always had pioneers pushing the boundaries, moving west, and resisting the sluggishly mundane.   “Entrepreneurship is at the heart of the American spirit,” he says, and it only makes sense that entrepreneurship has and continues to thrive.

As we wrap up our conversation, Cromwell tells me with a huge smile, “Boy is it fun when it does work! The difference between Wall Street and startups is that even when Wall Street does work it isn’t fun.” Startups give the chance for new companies, new jobs, the means to make people happy, make money. Cromwell really gets excited talking about the possibilities of entrepreneurship and how he has seen first-hand the entrepreneurial spirit change the surrounding New Haven start-up scene. From first arriving at Yale to now, the Yale Entrepreneurial Institute has become a formidable presence on campus and, Cromwell happily notes, some small-scale hedge funds have begun to make their mark in the entrepreneurial investment scene. Finishing up our interview, enjoying the last few bites of chicken wings that are not too saucy but really, I must agree with Cromwell, just right, he encouragingly admits, “Creating a new business is rewarding as well as enriching.”

Photo Credits: SOMFoster and Partner

Lucia Herrmann

Lucia Herrmann is a junior in Silliman College and an Architecture major. Lucia writes for the YE Mag, is a proud member of Design for America's education team, plans events with Silliman's Student Council, and performs her own spoken word with Teeth Slam Poets. She always has a notebook or sketch pad on hand, and adores sunny afternoon naps in the courtyard.

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