Read the full February edition of Originate Report here.
Wisdom From the CEO: Adham Sbeih
CEO, Socotra Capital
Can you explain a time where you faced adversity or had struggles early on in your career?
There were so many, I could write a book on it. I honestly thought I was put on the planet to ride a bike fast and never thought about anything else. In fact, I didn’t even get started in commercial real estate lending until I was in my late twenties.
In my first commercial real estate job, I was supposed to do business development for a bank. I cold-called local developers and commercial real estate investors beginning at 6 AM every morning. It was not my most effective marketing attempt, but it was worth a try. Unbeknownst to me, I was leaving messages with thirty or more “ums” in them. The prospect actually played the voicemail for the whole office to hear as “an example of what not to do”. Then, he called me in for a meeting and put me in an all-glass conference room. He left me in there for half an hour, and allowed his employees to poke their heads around the corner, point at me, and laugh. Obviously, I did not “close the sale” on that one!
How did these experiences mold and shape you into the leader that you are today?
I think that those kinds of experiences keep you filled with humility and gratitude. Always be grateful for the experiences that toughen you up and be humbled by the fact that it is likely to happen again.
What did you do in the beginning to start your business?
I sold my house in 2005 to raise money and waited for the opportunity that I knew would be coming. I sat for two years before I quit my day job and began working at Socotra fulltime, the week Lehman brothers collapsed. Back then, I did everything: found the loans, found the lenders, drew the loan documents, and collected the payments from the borrower.
What risks did you have to take and how did you have the courage to continue to push forward?
I burned the boats so to speak; there wasn’t any other option. I had left a good paying job and had to work, or I would be homeless. I knew I could originate loans; I wasn’t so sure about raising money. My partner John, however, was confident he could raise money, until it took us three months to raise $580,000. I still have the first check we ever received for $10k after five months of work. I remember our first full year in business I earned $3,000 and I didn’t have any other sources of income. I lived off the absolute bare minimum. For me, at 35 years old, I spent $18,000 all in on everything: rent, health insurance, car insurance, gas, food, clothing, internet, cell phone, and car repairs. Everything.
What habits, mindset, or perspective have helped you succeed as a business owner?
I work to have a growth-oriented mindset. The possibilities are endless and opportunities are infinite. I am a big fan of the “aggregation of marginal gains”. What can we be doing better? Where can we find additional opportunities? What can be improved? It is a constant push and it never leaves my brain. It’s what I am thinking of when I wake up in the morning and it is what I think of when I go to sleep at night.
What excites you about your role as CEO currently today?
I think in the near term, we will have some great opportunities coming out of the pandemic. I enjoy challenging our team, seeing them grow and respond. I am excited to continue to grow Socotra and provide value to our investors, good loans to our borrowers, and solid careers for our team.
What has been your favorite aspect of being an entrepreneur over the years?
I have enjoyed watching our team grow. We hire a lot of college kids as interns – close to a hundred now. Some of them have stayed on with us after college and have become superstars. I really enjoy watching people grow and develop.
What piece of advice do you have to share with other entrepreneurs and CEO’s that are in the early stages of building their company?
If it were easy, everyone would do it. It’s hard work. It’s lonely. You must embrace being uncomfortable, not knowing the answers, being unclear of the path forward, and make very difficult decisions with limited information on short timelines. It’s definitely not for everyone.
What activities or resources would you recommend other entrepreneurs to invest their time in?
I spend a lot of time and money on learning both for our staff and myself. I have personally been attending toastmasters for 16 years (in part due to my propensity for saying “um!”), I have won numerous speaking awards, learned about leadership, running a meeting, listening, and giving criticisms. Additionally, I hired a business coach very early on in my career and have continued working with him to this day as do a few of our key people. I got involved with local non-profits and was on the Sacramento Zoo board for nearly ten years. It put me around other successful people from our city, and I got to see how they think and operate while making lifelong friends with a passion for animals. Finally, I joined Vistage which is a peer-based CEO group. Just feeling like there is someone else out there that runs into the same issues you deal with daily can help you feel a lot better.
How do you make sure your company stays ahead in this industry?
We do all the normal things – go to industry events, talk to folks in our business, use our resources and network within the industry. We are not afraid to look for third parties that may have an expertise in an area we don’t yet understand. I take time away from the office to work on the business. We also have an advisory board made up of people from a variety of industries who help hold me accountable.
Who is someone that has had a significant effect on your career and why?
My deceased partner, John Ingoglia’s father – Donald Ingoglia. He had been the CEO of a food distribution business with 700 employees. He had essentially retired and had an office at his friend’s law practice to do hobby work as an attorney. For several years, I would spend every Thursday afternoon with him. We mostly were working on his real estate projects, but we would discuss all sorts of topics. It was the first time I had ever spent significant amount of time around a highly effective leader. I would listen to his war stories and his strategy and thoughts on some of our existing issues. Sadly, he passed away in a tragic car accident in 2013.
Is there anything that you wish you could go back and tell yourself at the inception of your company?
Hang in there.
What tools do you use to aid you in your role as CEO to be most efficient, organized, and focused?
I find that if I am doing the right things personally, the business follows suit. At the start of the pandemic, I created an activity tracker. It’s basically a spreadsheet with about twenty items that make for a successful day. It includes items like taking my vitamins, going to bed by 10 PM, writing in my gratitude journal, telling someone thank you, calling my parents, logging my food, exercising, hitting balls at the driving range, and drinking 100 ounces of water. Each item is worth a point. Ten points is a successful day, and 65 points is a successful week. When you are the CEO, your business is part of you. It is so easy to push on the business stuff and ignore the personal. The two are integrated and need to be viewed together.