James Rhee: The Power of Kindness in Business

Guy Kawasaki:
I'm Guy Kawasaki, and this is Remarkable People. I want you to meet James Rhee. He is a Harvard Law graduate, a former high school teacher turned private equity investor, and unexpected CEO. James blends math and management with emotions. And he marries capital with purpose.
He's recognized by many organizations for his transformative leadership, his TED talk, The value of kindness at work, and his podcast interview with Brené Brown has captivated millions of people. James was the chairman and CEO at Ashley Stewart. This is a testament to his resilience and innovation because Ashley Stewart was a struggling retailer for plus-size Black women, which doesn't exactly describe James.
Beyond the private sector, James serves as the Johnson Chair of Entrepreneurship at Howard University and as a senior lecturer at Duke Law School. Plus, he's affiliated with the MIT Sloan School of Management.
His book, red helicopter: lead change with kindness (plus a little math), delivers great insights on catalyzing change. Join us as we delve into James remarkable journey. It's filled with wisdom, kindness, and a commitment to positive impact. I'm Guy Kawasaki. This is Remarkable People. And now, let's explore the world of James Rhee.
Actually, give me a second here. I want to mention that Madisun and I, the producer of this podcast, have finished and published a book called Think Remarkable: 9 Paths to Transform Your Life and Make a Difference. So in addition to James's book, you should read our book if you want to make a difference and be remarkable. Now here is James Rhee.
James Rhee:
How long have you two known each other? Like a long time?
Guy Kawasaki:
Four years, maybe.
James Rhee:
Yeah. I can tell you guys have been doing a bunch together. It's good. It's fun. Yeah.
Guy Kawasaki:
We met in the water, which actually I read in your book that you never were successful in standing up.
James Rhee:
Oh, man. I'll hold you to that. I'll come visit you. You give me a lesson. My kids won't teach me. They're like, "Oh, we can't."
Guy Kawasaki:
We'll make you better than your kids. It's not a problem. The guy at Madisun surf camps, the remarkable surf camp. I will take care of that. You talk about a lot of Korean terms in your book, and I just want to know, is there a Korean term for sandbagging and excessive modesty, and excessive humility?
Because this whole story in your book about, "I'm a second generation Korean American from a simple background. I happened to have a Harvard undergraduate degree, Harvard law degree, law review editor. I worked at McKinsey. I turned around a retailer for Black, plus-size women. I started a private equity firm. I'm affiliated now with Howard, Duke, and MIT, but it's just little ol' me." Come on, James. Be serious, man. You're an overachiever.
James Rhee:
Maybe, and I didn't go to McKinsey. My wife went to McKinsey. She wanted to go. I actually signed my offer letter and then she wanted to go and I didn't think it'd be good for us to work together, so I ripped it up and went to finance instead. But it's indicative of the decisions I make. I tend to prioritize my relationships with other people first. I think it's a quality definitely I have from my parents.
No one's crying me a river, and I'm not asking anyone to, but as I've gotten older, yeah, when I look back, the path wasn't so easy. It wasn't, and there were a lot of things I think that when I was younger, I guess I was an overachiever and that's not a great thing. It causes a lot of stress and lack of self-awareness.
So I think as I'm older, I give myself more grace to say, "Look, it wasn't as easy. It's not easy for anyone." But I know from the outside, give me a break, but I think a lot of the book is trying to show to everybody that there's a lot of remarkable people and they didn't have those things on their resume, and I admire them for it.
Guy Kawasaki:
As you struggle with this kind of reckoning about private equity and Harvard and all that stuff versus the concept of Jiang and caring for people and empathy in a sense, did you have to overcome your Harvard and private equity background to reach a different place?
James Rhee:
I did. I think I've been fighting for most of my life. After I graduated from college, I went and taught a high school. And I think I am a teacher. I think that's my nature. I'm a caregiver, but I was in debt, and money is part of the equation and I have testosterone too. And so I saw all these things happening, and for a while, I think, particularly in my thirties, I was mistaking my identity for my professional identity.
And it's easy to do when you come from a background where I didn't have anything. I was a public school kid. I think Harvard was the first, quote, "brand" I had. And that sometimes can be a pretty weighty albatross around a shoulder when you don't know how to wield it. Sometimes it subsumes you, which I think it did for me a little bit during my late twenties and thirties, and I didn't like it.
Guy Kawasaki:
So just backing up a little bit, the title of your book is red helicopter. Now I read the book so I know the story, but can you just explain the origin of the story for people? I'm sure no one's ever asked you this before.
James Rhee:
I think we all have a “red helicopter” story. For me, the literal story is that when I was five years old, I came back around Christmas time from my public school kindergarten class with this two, three, four dollar toy that was a red helicopter, and there were all these series of misunderstandings like, "Did you steal it? Did you take it from school?"
And then my Korean parents saying, "Oh, we screwed up. You're never going to make it in this country because we didn't know you're supposed to give toys at kindergarten. Is that how it works?" And I'm like, "No, you didn't screw up, Dad, Mom, not this time." But I'm the only one who got one. And they got frustrated with me, particularly my dad, about like, "Why?" And I just wasn't sure.
And so they found out later on, I've been sharing half of my perfect lunch created by my very devoted Korean mother, who expressed her love through food. I've been sharing half my lunch with this boy who came to school without lunch a lot. And I found out later from my parents that his dad didn't have the time, wherewithal. He had just lost his wife.
And so my friend was the youngest of four kids. And so my memory was mistaken. It wasn't the whole family who came in, it was the dad and the two older boy siblings of my friend. And they just gave it to me, and they didn't say anything. They just gave it to me. And I remember the dad patted me on the head.
And it's a good teaching because I figured it out late. One, it was gracious, but two is that he put responsibility on me to find out why. And once I found out why, it just stuck with me. And that sort of very simple, intuitive wisdom, it's really hard to keep it, and it's really easy to confuse Harvard degrees or whatever with wisdom.
I think great leaders, great people, great brands are, they're transcend, they're wise. And for me it's been that sort of mnemonic, just a symbol of just reminding me of that simple wisdom.
Guy Kawasaki:
You lowercase the R and the H. Why are they lowercased?
James Rhee:
Because I think a kid would write it like that. It's play. It's funny. In some pretty serious venues like MIT Executive Ed, where I teach some executives, or even in boardrooms at Howard, I make people read Harold and the Purple Crayon. I just said, "Isn't this fearless leadership and creativity?" No matter what happens, no matter what trials and tribulations he confronts, he just takes out a crayon, he draws something.
When he's falling, he draws a balloon. And I just said, "How brilliant is that?" He follows the moon instead of the sun. Lunar cycles are so unpredictable. He's not beholden to time in a different way. And then I love when he gets hungry, he makes pies, and then he shares it. He doesn't want to have waste or muda in Toyota production terms, so he draws a porcupine and a moose and he shares it with them.
I just think Harold and the Purple Crayon, he's a great entrepreneur, he's a great leader, he's a sustainable leader. And so that's why lowercase R, lowercase H, I said, "It's childlike wisdom." Do you like it? You're the brand expert. Do you like how it looks? Was it appealing to you?
Guy Kawasaki:
I love the story. Don't get me wrong. Earlier in my life, I started a company called garage.com and garage.com, it was trying to be a matchmaker between two wings of the butterfly. One wing was all these entrepreneurs. The other wing was all these investors.
And so garage.com was going to be in the middle connecting investors and entrepreneurs and we lowercased the G in garage because we had this very clever thought we could say, "We put the capital in you, not in our name," which I thought was very clever.
But I got to tell you that was a mistake because in all the news coverage and all that, God forbid if somebody started a sentence with the name of our company, what do they do? Lowercase it or uppercase it? So that's that problem all the time.
And then there were three or four other companies that did the same thing, but they had uppercases. So it was very easy to spot proper nouns. But when it became like, blah, blah, blah, blah, and garage.com, your eye not seeing the capital G, you start wondering, "That's such a generic word. Is that a typo? Is that for real?" That's what I think, but hey.
James Rhee:
All right, we'll see.
Guy Kawasaki:
Yeah, we will see.
James Rhee:
I don't know, I got to come up with something then.
Guy Kawasaki:
I can work on that on the side for you.
James Rhee:
That would be great.
Guy Kawasaki:
I don't want to get read too much significance into the metaphor of the helicopter, but as you point out, a helicopter flies right, left, up, down, front, back, that's six directions. And also, the hardest thing in a helicopter is to hover, as opposed to fly forward, backward, up, down, right, or left. So this flying in six directions and difficulty of hovering, does this also apply to life?
James Rhee:
It is. It's this red helicopter in addition to getting people to really trust their intuition, see new patterns, not rely on just complete binary mechanisms, which increasingly people seem hell-bent on going to. Yeah, I think it's a better trope for at least this fifty-three year old guy and dad and husband, and I've been an investor and I'm a life entrepreneur.
I think it's a better trope for life. I think as kids or maybe in school, if you ask people, would you rather be a jet plane or a helicopter? I bet a lot of people say they want to be a jet plane, they want to fly fast, high, they want to have power, they want to be the pilot, they want to carry a lot of people. And I don't know if that's the right sort of visual. And so I'm asking people, maybe particularly in inflection points in society, business, when you can't rely on patterns.
In chaos, I think I'd rather be a helicopter. I can fly in six different directions. I have vertical lift. I don't need a long runway. I can land wherever I want to land. And I think it's a great symbol of agility and agency. So you can't carry a lot of people, but you are in control, and I'd rather be in control and have a great team around me. But that doesn't mean I fly them.
It means I help them find their own agency too. And if you look at the illustrations, I have the helicopters flying in bird fractal like formation. I think a great team is independently agile, each member is buying in and is individually agile. And then the group, from a physics standpoint, is collectively agile. And so, from a orgs theory standpoint or just from a growth standpoint, I think it's a pretty good metaphor for leaders to keep.
Guy Kawasaki:
I think it's very good. Maybe if they make a movie about this book and we can get Tom Cruise to play you and it'll be like Top Gun three, the helicopter version and there's potential.
James Rhee:
There's been some inquiries over the years of turning this book or story now that it's a book into a movie. And I always say, "Hey, we don't have to exaggerate the story. It's a pretty simple story of a lot of people doing some decent things together." I said, "The only embellishment that I want, if someone plays me, I want the guy to be shredded."
Guy Kawasaki:
Somebody like Henry Fielding.
James Rhee:
Yeah. I've met Henry before and I actually said that to him. I was like, "This doesn't come naturally, Henry." And by the way, for your listeners, I'm not shredded. For your listeners who can't see me, I'm like the opposite of shredded. And people always laugh way too much when I say that. And then I'm like, "Hey, you're hurting my feelings now."
Guy Kawasaki:
Well, I could see it now. So it's Henry Fielding as you and directed by Jon M. Chu, and Michelle Yeoh will be your mother. There. Done. Everything casted.
James Rhee:
There you go. There you go. And maybe Viola Davis, that would be awesome if she played the counterpart heroine. And you know this, the way this story is, and I mean it, the real protagonists and heroes of this story it's the women that I worked with and my mom. They are. Yeah.
Guy Kawasaki:
Okay. Let's go down that path. So give us the gist of how you went from private equity to CEO of a company, of retail stores for Black, plus-size women. Forty-two years old, Korean American, leading a store for Black, plus-size women who's Korean American, two degrees from Harvard, background in private equity. Those things don't fit together exactly.
James Rhee:
No, that is like the Sesame Street jingle, one of these things don't look like the other. I was at a place in my life. I think, in a lot of ways, it's a parable. It's where sometimes people get, you're thinking about things. I was dad, young forties. I guess on the surface of it, I was, quote what you were saying, "I was achieving. I was master of universe, whatever that is."
And at the time, my dad was dying. He died two years later, after I made this decision. I admired my father. We had a complicated relationship. I admired him, and he took care of a lot of people. He saved a lot of lives, my dad. And then I didn't love the way that this world that I lived in, which I didn't grow up in, were talking about the company or the women that served.
And this is meant to be, we're going to have a fun conversation, but yeah, let's be real, like the financial markets and things. It's not conducive to plus-size, Black women. It's just not. And I was in that place and I'm like, "I'm a former high school teacher and I went to law school not to be a lawyer. I thought I was going to be a public defender."
And so in many ways, I am now, in a weird way, it's just the heart there. It just struck me as not great. And so, just for your listeners, I took six months off of my life. I said that I would go and be interim leader of this company that was about to liquidate, and I have a fair bit of experience in distress situations, and I thought that the Wall Street connections I had would buy this company a little bit of extra time.
It would be less bullied, less completely eviscerated. And I did. I bought a little bit of time, but much to my chagrin, after six months, I failed. No one came to help, and I was stuck. What am I going to do? I really believed in the vision of the future.
I really believed in the math and the vision for the company, and I really believed in my friendship with the women that I had been working with for those six months, but no one believed it. And so I ended up staying for seven years. I called in some favors, and I showed up at the bankruptcy court and said, "I guess I'm an owner, and I'll stay and run it." That's what I did.
Guy Kawasaki:
Vastly underplayed here, the transition. So let's take you back to the first day and you're in that makeshift conference room and you bring up the subject of kindness and math to a room full of Black women who are running a retail operation. How exactly does that work?
James Rhee:
Yeah. Look, I went down there, and I think in the book I said I was wearing pleated khakis. It's also a fashion business so that was the best I had. Think about Boston private equity attire. And I had no reason nor justification to put on any pretense. It was actually very liberating. I would just said, "My name is James. None of my pedigree matters to you.
Honestly, it doesn't. I am the least qualified person potentially in the world to be standing in front of you on every front. I've never run a company. Yeah, I used to wash dishes at Red Lobster, but I'm not a woman. I'm not Black. I have pleated khakis. The hurricane of bankruptcies is coming at this company. No one cares." In this moment, it's actually ironically, very, it's freeing. I didn't have fear. It wasn't debilitating fear.
It was freedom to tell the truth, and that was the truth. And if I think if I had said anything else, I know what I'm doing. I know exactly what I'm doing, which a lot of leaders say when they get parachuted into something, they're like, "Do you know who I am?" No one cares. And so I said I was going to learn a lot, so I asked people to help me. I'm like, "Come teach me."
And I watched for people who could teach me because if you can't teach someone, then you don't know it. And so I learned, and then I was very grateful for them. The reason why the red helicopter story came back, I buried that story for a long time. It was embarrassing. But the reason why it came back during that time, I was overwhelmed with how generous the women in the stores were to me.
Just picture me this guy in pleated khakis, Asian guy, walking into predominantly Black neighborhood stores. And they've been burned a lot before, not just at this company but their personal lives. And they accepted me. I can't emphasize enough how generous they were to me, and it felt great. I was grateful, particularly, I have dying father.
And that's not easy being that guy in Boston private equity, it's just not. And I've always tried to be, and I realized, and I'm like, "Look, this is who I am." All the things I'm good at, like quant, music, whatever it is, law, that doesn't go away just because I'm generous or just because of myself.
In fact, as I hope the readers will know, it made me smarter. It made me more capable of doing and seeing things that didn't exist before. And that was the speech. Not that inspiring I know, but in the moment, it was honest. It was the truth. And I think that did inspire people.
Guy Kawasaki:
And I don't know if everybody realizes it, and you mentioned it in your book, but a Black community and Korean people, they have this history. So the Korean person owns the liquor store in the Black community. Rodney King images appear. It wasn't necessarily a friendly relationship between Koreans and Blacks back then.
James Rhee:
Yeah, and maybe still. Sadly, that's a lot of that still exists, but there's also a lot of stories that don't get told that while this was happening to me over the last ten years, I've met so many people who are Black and Korean who have wonderful friendships. Those stories, it just doesn't play to the ratings. And that's part of why I'm telling this story. And this happens.
This is not a superhero story. I believe this story happens every day. The women that were leading the stores do it every day, and no one tells those stories. My mom led every day, no one tells her story. The vast majority of the world, their stories are not told. And so I've taken this opportunity that's why I've written the book. I go through a lot of perspective change, and there are lots of moments of weakness.
And I'm honest with people, I'm like, "There were times I wanted to go home. I didn't want to do this." And I was cursing at myself and saying, "What are you doing? You idiot." I said that a lot in the motel room. I don't want to spoil the end of the book, but it's public. Yeah, I felt like I had done a good job, not from the financial results or the gains on the private stock, but it was that after I had left that Howard University asked if I would be the Johnson Chair of Entrepreneurship.
It was that phone call to me that I looked in the mirror, and I got very emotional. I just said, "The way I did it, I think I did a good job." And if I can be the Johnson Chair of Entrepreneurship and also teach at MIT, and I think things are possible in this country. And I think that relationships between two schools that don't know each other very well, if I can play a small part in getting them to know each other well and engineering new solutions, that gives me a lot of hope for this country.
Guy Kawasaki:
Yeah, and I want to point out to listeners that Howard University, not Harvard, Howard University, asked you to do this out of the blue. And Howard University is a historically Black university, which I think makes it an even bigger deal. Arguably, it's a bigger deal than if Harvard asked you to do this. It's more flattering, I would think.
James Rhee:
Yeah. When MIT called me to teach, I was very excited, but I didn't cry. When Howard called me, and Howard is the mecca. This is in DC. It is maybe the HBCU. Yeah, I cried. It was so shocking, and it felt like that chest feel that I felt when I was five years old when learning about why I got a red helicopter. It's when you earn it. When you didn't think anyone was watching and you didn't expect it. It is nice when you do that, that down the road someone says, "Oh, we were watching. We would really love for you to be part of this."
And that took a lot of courage from Dr. Frederick. I'm sure that he had to think, as I'm inviting this Korean American, Boston-based private equity/CEO guy to be the Johnson Chair of Entrepreneurship. The Johnson family founded Ebony. I'm sure he had to think about it. So it took him to have courage to say, "When you look through all of this, he is the right guy." I'm grateful to him.
Guy Kawasaki:
I would say that is one of the most flattering things that could happen to anybody. I would have to say that.
James Rhee:
Thank you.
Guy Kawasaki:
Not that I want any HBCU to call me up and ask me to do that, but I'm saying that would just make my day. I don't know, more so than an Ivy League. Frankly, I wouldn't affiliate with an Ivy League these days. I think they're so tarnished, and not by plagiarism, but by their graduates. But anyway, that's a different subject.
James Rhee:
No, it is. But I'm glad you brought it up. You were right. It was funny in the beginning you were teasing about having two degrees from Harvard, and I was talking about the weight of it. Yeah, I'm really proud to be teaching at Howard, and I'm really proud to be at MIT. They're both in Cambridge, and I loved my time at Harvard.
I think I wrote in the book that I think there's a big difference between, and I know there's a big difference, and you know this better than anyone, it's pedigree versus performance, but it's also wisdom versus, quote, "education." And we are seeing that systemically in our country right now. I think there are a lot of people in this country who underestimate themselves that pedigree, a credential.
It is important, but it's nice that those credentials and pedigree prereqs are getting less important over the next thirty years. Show me the person that they get it done, and they're rawly intelligent, curious. You don't have to go 250,000 bucks in debt to prove that to me.
Guy Kawasaki:
Well, I would also say, show me the Harvard graduate who underestimates himself or herself. Point a few out to me, but let's not go too deep on the anti-Harvard theory. When you got to Ashley Stewart, by the way, I never heard of Ashley Stewart until I read your book, but when I learned that it was named after Laura Ashley and Martha Stewart, I could only laugh. That is just hilarious.
James Rhee:
I wrote, it was the irony of it. It's a false aspiration for these women.
Guy Kawasaki:
Because Laura Ashley and Martha Stewart, you couldn't be whiter, right?
James Rhee:
Totally. And it was found in 1991, so this generation of young people, they wouldn't stand for that. It's the standards of aspiration. They're very different. And I think it's healthier than it was when I was growing up. Yeah.
Guy Kawasaki:
Although you have to say to her credit, Martha Stewart is hanging out with Snoop Dogg these days.
James Rhee:
Yeah, Martha Stewart. Martha, she's cool.
Guy Kawasaki:
Yeah.
James Rhee:
Yeah. I think she's cool. There's so many sides to her. Yeah, the image that was portrayed to us, just cookie-cutter, clearly that's not her. She's a pretty interesting person. I'd love to meet her.
Guy Kawasaki:
I would love to. I actually had her on this podcast, but I only had her for five minutes in the green room, but she is definitely a remarkable woman. When you got to Ashley Stewart, what business did they think they were in? Fashion, retail?
James Rhee:
Yeah. They thought that they were selling clothes to size twelve and up, plus-size women, and I didn't. I thought that they had 3,500 square foot of space of safety. They were selling courage or selling self-permission, confidence. And that the way it manifested itself, in order to stay in business, they had to transact something, so they sold clothes.
And I think in the book I write about capital-p Product versus lowercase-p product. And that's something in your career you've done incredibly well. The capital-p Product, what is it? It was really putting in a philosophy and saying, "Okay, once you have the philosophy, the brand, then you can have lots of lowercase-p products."
It took a while for that mind shift to happen, to really take hold a couple of years. And the way I could convey it was through media. It was through song. It was through getting people to feel it and see it.
And so that's why I built out a whole sort of internal media department, but the other big way was just changing, this is where it gets maybe boring for your listeners, but I unleashed myself and the finance, and the whole ops from gap. I wanted to create a beautiful, consonant system, and accounting does not allow you to do that. It doesn't. It records. And so that's what we did.
Guy Kawasaki:
And can you just mention, because I think it's such an important lesson, that at least my interpretation is that you truly understood what Ashley Stewart stood for, not by hanging out in the headquarters but by going to the stores?
James Rhee:
Yeah, the headquarters didn't do any of the answers, and they didn't know the product. They didn't know the customers. So yeah, it was pretty quick. I just left and just was hanging jewelry and trying on thing, talking to customers, seeing their interaction with the kids, listening to the words that they were speaking with.
And I've done this a lot as an investor, this is my job before I did this in my forties as CEO. I would do this whenever we invested in Meow Mix cat food, and that was one of my first investments, and I remember back then, I think I was twenty-nine at the time, thirty.
We bought it at a Ralston Purina, and we literally bought the ingredient list and set up a company from scratch in four months, and I basically was on secondment. I thought it was normal to do that as a private equity guy, I'm like, "Okay, we got to set up a company."
So I set up a company, but I remember telling everyone, every number, marketing, org, every decision we make. Every employee has to understand and it has to be consonant that Meow Mix is like Wendy's, not McDonald's, it's not Burger King. I think it's Wendy's for cats. And once people were like, "I got it." A bit of an attitude, a little bit different, the third player.
It made sense who we hired, what we said, what type of brand extensions we had. Why would Wendy's do that? Wendy's wouldn't do that. And anyway, that's what I do for a living. It's taken me a while to understand that it's sort of hearing the sound of a brand and then putting it into math and music and org. That's what I do.
Guy Kawasaki:
I must admit that I don't completely comprehend the McDonald's, Burger King Wendy's, metaphor. So what is Wendy's in that mix?
James Rhee:
It's quirky. Even the signage and the branding with Dave's daughter, it's quirky. Even if you look at their Twitter account, there's a little bit of 'tude in the Wendy's Twitter account. It's not mean, it's not harsh, but it has a distinct voice. There's a point of view, and it's that third player that says, "Okay, big guys, big girls. You two can fight it out to say who's the best? That's fine. We are the best. We are Wendy's.
That's who we are. So if you don't want that or that, come to Wendy's." It's fine. Square patties, just baked potato with what they do. They're different. And they've never tried to be better than McDonald's or better than Burger King. Those two have gone back and forth. Coke, Pepsi back and forth.
Wendy's, I think, as an observer and as a consumer of it, I eat it too much still. I think they've always tried to be a really good Wendy's. And in fact, after word got out with Ashley Stewart, what we did in the local papers in Secaucus, so three years, four years.
The owner of the Wendy's franchise, I forgot about this, sent me gift certificates to his Wendy's, not the franchisee of McDonald's or Burger King. It was Wendy's. And he said, "Dude, you should come here. Here's some free food. You're working hard. We're proud of what you've done. It's awesome." It was Wendy's.
Guy Kawasaki:
Wow. That's a great story. Is that story in the book?
James Rhee:
No. I literally had forgotten about it, but yeah, I got this really cool letter on letterhead. It had the pigtail girl on the letterhead, and, "Dear Mr. Rhee, we are watching. We're very proud of what you all did. Keep it up. And here's fifty bucks' worth of free food," which I basically consumed in three sittings. So yeah, I remember in the book I said I gained a lot of weight. It was not an easy run, but it was worth it.
Guy Kawasaki:
That's like Madisun and I sending you MERGE4 socks.
James Rhee:
I'm wearing the socks. Look, I'm wearing them. I got in the spirit, but thank you. They're comfortable. Yeah.
Guy Kawasaki:
If you need any more for your kids, let us know. As far as a little piece of business advice, how can people understand what business they are in?
Because I think that is one of the most difficult things to see, especially when you're in the business, and I would make the case that Kodak invented digital photography in 1975, but I think they thought they were in the business of chemicals on film, chemicals on paper from the outside looking in.
I would say Kodak was in the business of preserving people's memories, but they didn't see it that way. So how do people figure out what business are we truly in?
James Rhee:
Yeah. I think I would answer that in maybe two ways and my way. I'll answer it in counterpoint. So the first one is that, and I tell this to grown up executives who run major companies, you're running a lemonade stand, and it's in my book, chapter five. It's a lemonade stand of you, always will be. You can't get that. You don't understand what the product is. It's not the lemonade in a lemonade stand, it's you, why people buy lemonade.
And if you don't understand a basic P&L of a lemonade stand and the balance sheet of a lemonade stand, how can you run a 20 billion dollar company? So get the fractal rights. That's number one. And people get it, it's amazing the eureka that people, I see in their face. The second thing is, you have to solve a problem, and you have to have a product that solves a problem, and hopefully you're really passionate and intimate with that problem.
It helps, and if you're not, I hope you're highly empathetic, but yeah, solve a real problem and care about it, and then deliver it. And it doesn't matter what the product is over time, it changes with tech, with consumer interest, but really try to solve a problem such that you do it so well.
Maybe you put yourself out of business, but I think over time, with the loyalty that you develop for actually doing something, not just talking about it but doing it, I don't think that your consumer base will really want you to go out of business, and they'll help you adapt and be agile. So that's my two pieces of advice. Solve a problem so well, that's so real that you care about that you solve it such that you put yourself out of business.
Guy Kawasaki:
What business is your book red helicopter in?
James Rhee:
It's a tough question. I go back and forth with HarperOne on this. Is it a business book? Yeah. Is it a memoir? Yeah. Is it a philosophy book? Is it just a really compelling narrative? Yeah. I think it's why I wrote the prelude the way I wrote it, but I think the business really, when you put it all together, it's about change. It's change, and it's the change inside you.
It's whether you are a CEO in charge with changing an organization or whether you are a part of a family and you want to change the family dynamics, it's change. It's just like before, when I think that people are mistaught about what to be line like, you should be a plane versus I'm saying, "What about a helicopter? That's pretty cool. It's pretty agile, handles chaos much better than a plane does."
But I think that this book also does that for the concept of change. I think the way it's taught often, and it is taught often, and a lot of this is getting debunked in business schools now, it needs to be debunked faster. Change is not violent, it's not angry. It's not, quote, "masculine" on a horse. Change, like the best change, it's actually quite calm and it's relentless, and if you do it that way, it sustains and it's actually ends up being much faster. It's like The Tortoise and the Hare.
You give people agency to find that change, and to do it that way, you have to be very patient, and you have to be able to really present your vision of change in a very multisensory way, visual learner, quant learner, legal learner, doesn't matter. Can you convey that same story, that same song of change in multiple, quote, "languages"? Not literally just languages like Italian or Korean, or French. It's languages of money, languages of philosophy, languages of org, languages of anthropology, doesn't matter.
So that's what the book is about. It's about just giving people also comfort when saying, "You can do it and don't get bullied either."
Guy Kawasaki:
I love that explanation. If you were to ask me, Guy, what business is red helicopter in the book? I would say that it is inflection points for dummies. It's all about inflection points, how you navigate inflection points to me.
This is a leading question, but aren't you basically refuting much of what private equity does? The image of private equity is like some Wall Street guy goes in, buys something, cuts it up into various assets, sells pieces off, flips it and makes a billion dollars, and none of that was what you just described. Are you refuting private equity?
James Rhee:
I think there are many different forms of private equity and many different types of investors of private equity. In the most basic form, when I was first joining it, I didn't know any of this. I was a son of a freaking pediatrician who went and taught high school.
So I was learning on the fly, but in the beginning, there were two types of private equity firms. There was ones that were more deal guys, like they came more from an investment banking and it was in, "Hey, how much EBITDA? What's the leverage? Let's do deals." It's financial arbitrage.
And then there were other people who came more from, quote, "the consulting world," that were more strategic and knew how to think about market share and margin improvement at the gross margin line. I think that as I've gotten older and wiser, and I think the industry has evolved too, and I think the West Coast has done a much better job of this than the East Coast.
In retrospect, I probably should have lived on the West Coast. That's the other realization, who also control the financial capital too. I'm seeing things change, and that existed much less when I first started out in the business. But yeah, private equity has its worst, creates very little value. It's arbitrage. Not true arbitrage, but financial arbitrage. But at its best, it does create real value.
Guy Kawasaki:
Would you want your kids to go into private equity?
James Rhee:
No. I'd like them to know the skill set of it. I would like them, if they wanted, to learn it. I valued my career in it. I still manage money. I wouldn't want them to stay in it. I realized very late. I hope, Guy, you can glean this from. I'm a creative, I always have been. I think that just the way I look, the generation I grew up in.
You got a few years on me; I wish I'd known you earlier and I didn't understand what a creative meant. I thought it meant just someone who plays music or draws or sculptures and things, but it's not. I think that's the other thing I hope that this book shows. It's a mindset. I'm a creative, like Harold and the Purple Crayon. I've drawn a life for myself.
I help other people draw life for themselves, and I want my kids to create. I think creatives create real value. By definition, they do, it's something that didn't exist before. I don't want them to just move lawn chairs or deck chairs on a boat. That's not what I want them to do.
Guy Kawasaki:
Well, while we're on the topic of kids, would you want your kids to work for Goldman Sachs or McKinsey?
James Rhee:
Same answer. In the beginning, training, getting exposure. If you want to talk about the opposite of helicopter, I'm like the opposite of a helicopter parent. It's more the helicopter definition of agency. It's a lot of free will for me. It's informed free will. And so, as part of being informed, if you want to try on lots of hats, do it. For me, I've done that my whole life.
People have always wanted to put me in a box. It's driven me nuts, and I just don't do that to people. I'm like, "Okay, you did that and you paint here and you do that and you like that. That's cool." I will not put anyone in a box, particularly my kids, and they should try on lots of hats and suits and get skill sets.
I've done a lot of different things in my life. I think the book is really arguing for lateral education and it's systems dynamics. I think it's very dangerous to be a vertical learner, particularly when everything that's vertical, it's going to be automated. It's going to be all machine-learned. And so humanity, to me, at its best, is lateral. And I said this at the end of the book, "I will not treat people as a zero or a one. I treat people like there're a two."
And I don't want people to treat me like a zero or one because, as an investor, you don't make money either as a zero or one, you're supposed to be predictive of a future. And so that's what I want my kids. I would like for everyone to have that ability to do that, to have the confidence of the informed agency to carve out a future for themselves, and then hopefully take a lot of people along for the ride.
Guy Kawasaki:
I'm third-generation Japanese American. My grandparents came to pick sugar cane. My father was a real estate broker. My mother was full-time mom. My father became a state senator in Hawaii, and now I have four kids. Don't get me wrong, I didn't have this really tough life like poverty and not enough clothes, not enough to eat that kind of life.
So I'm not trying to make myself into a hero. I had a good middle-class upbringing without trauma, and yet I worry that my kids, in a sense, I could hand everything to them in their life. You don't need to work summer times to afford college. You don't need to work during college. You don't need to work during high school. Do you ever worry that in the third or fourth generation of an immigrant's family that your kids are going to lose the edge?
James Rhee:
Totally. And it happens, it's what happened in the seventeenth century to the Puritans. It was the third generation, 1670s where that happened. I think in some ways it's happening on a macro scale with this country. Greatest generations, then you have the next generation, particularly if we cut off the legal immigration spigot, not so wise.
So you want to hear something. It sounds like I'm going to get the bad dad award. So I'm going to just tell the story. I like to tell stories that make me look stupid. Long time ago, there was a board game that my brother and I played all the time. We had Bonkers!, Careers, and Monopoly and we saved those games. We played them every day, but they were still in pristine condition because, the way we grew up, if we lost pieces or broke it, we weren't getting another one.
And so when my kids were, I don't know, like ten, eight, six, I gave them these board games, and then within a day, they lost the pieces to two of them. And I'm sitting there. I'm like, "Okay, these are fully depreciated board games. They're worth like a dollar and whatever." But I was mad, and I said, I sounded like my dad, "Your dad had this. These are the only games we had. I saved them for forty years for you," whatever it was.
And then my oldest was upset. I think the other two were too young to really get it. My oldest said, "We're doing the best we can, Dad." And I'm like, "Oh, you're a bad dad." But anyway, so that story, I'm like, "Was I a bad dad? Yeah, maybe I was bad dad." But that story captures what you are saying. But I'm glad in a lot of ways they're like outgunning me from a creativity standpoint.
I realized, it took me a long time, and you have other guests who can speak about this more intelligently, but it took me a long time, particularly during my forties, I got it, to find that spirit of abundance again. It did. Did that red helicopter kid? I may not have enough. I'll give you half my sandwich. I'm not going to ask a question, just have it. We're fine. It's funny.
When you're in your twenties and thirties, you can lose that. And even though you're earning more or gaining more, you become self-centered and selfish, and it really limits your creativity. And my kids have much more of that abundant mindset too, partly because they don't have to worry about saving all the stupid pieces for Bonkers!. So in some ways, it works in a good way for them.
Guy Kawasaki:
Are your kids driving?
James Rhee:
All of them. Yeah. The youngest one just got her ability to drive alone. I love it, and it sucks too. Then you don't talk to them anymore in the car and bopping along to music, and yeah.
Guy Kawasaki:
Okay. One bad dad to maybe another bad dad. You tell me. My youngest son, he has a car, and it's an electric Hyundai. Hyundai makes great cars. I think, not that because you're Korean.
James Rhee:
That sounded like an advertisement right there, like a product placement.
Guy Kawasaki:
Well, it's not like they're paying me, but I think South Korea or Korea is the new Germany. But anyway, so my son has this Hyundai, and I go in the car sometimes and there's four empty cans of Liquid Death, four empty bottles of water, his clothes. It's a fricking mess.
And I look at that, and I say, "God, man, when I was in high school, I would've killed for a car. I would be washing that every week. I would win the Toyota Corona concours d'elegance if that was my car and you treat this car like shit."
And I say, "God, man, am I spoiling him? Am I ruining him? Is he going through the rest of his life thinking that life is a silver platter?" So you don't need to be my psychiatrist, but you ever have thoughts like that?
James Rhee:
Yeah. And I love this bad dad competition. We should have another conversation just who's the worst dad. I don't know. All my kids, they work not during the school year, but one of them does. And they like it. I think they have a healthier relationship with money than I did. I didn't have any.
And then, when I started having some, then it's all. I'm just in a different place now in my life in terms of the attitude toward money. It's really important you how to use it. And it comes when you don't even think about it. Seriously. I'm telling someone that knows that and has lived it much longer than I have.
What concerns me more, I live in a lot of different worlds right now. And one of the things that I should have said when I was begging for money for Ashley Stewart during that six months, I made some predictions about the world. In college, I studied the nineteenth century. I studied the 1830s, 1840s, 1850s, 1860s. I studied when everyone thought the telegraph and the railroad was going to exhilarate and bring humanity together, and technology.
That's what I wrote my thesis on was just people not being direct in addressing the problems and ultimately, we had a civil war. It's a fascinating time. The founding fathers died fifty years later, thinking about our generation now, greatest generation, that generation has died off in terms of service. I went around after everyone rejected me in the world to get money.
I also made the argument about the zeitgeist. I just said, "Watch what's going to happen to this country." I'm telling you, as a humanities person, there's a reason why Margaret Atwood's book is so popular now. There are things happening, and people behave in certain ways. Our cycles, America's not immune to this. It's already been through it.
And I worry more about that for my kids, and they are too. It's these broader forces that I worry about for them. And so a lot of why I wrote red helicopter and the story of what we did, and I will not let anyone tell me something's impossible anymore. I just won't. We have a right, the group that did this together, and sitting at my desk at Howard University, I can look at people and say, "I'm sorry. It's not impossible. I'd rather you just say that you're choosing to not do it."
Guy Kawasaki:
I had Margaret Atwood on this podcast. She is brilliant. I had to chase her across Canada in a train. But wow, that was a really powerful interview, but anyway. She certainly has predicted the dystopia that we're now going through, and anyway. Okay, the last big topic.
James Rhee:
Are we're going back to bad dad?
Guy Kawasaki:
No. No, we're going to good mom.
James Rhee:
Okay. Yeah.
Guy Kawasaki:
The writing you did about your mom, I think, was just so heartfelt and so brilliant. And about a week ago, we interviewed Angela Duckworth and she had a very kind of similar feeling story where she said, "When I was young, my father was the huge influence, forced me to achieve and blah, blah, blah. And I never realized, however, that my mother was such a force. She came from Taiwan to America, not speaking the language, not knowing anybody. She wanted to be an artist, but she subsumed her desires to be a mother and a wife and never really got to blossom. And then my father died and now she's ninety, but now she's just blossoming and becoming an artist and all this kind of stuff."
And let's just say that most people don't ask Angela Duckworth, the mother of grit, about her mother. But I just want you to discuss the influence your mom had on you and how you came to realize this.
James Rhee:
Yeah. It's a wonderful way to ask the question because so much wisdom is in what Angela was saying. It was similar to the helicopter versus airplane or work versus life, it's perspective. Just like an artist, the importance of negative space, or in leadership, what you don't say or when you're composing a piece of music, that you have the cello lead and not the violin.
It's these decisions of what doesn't get said. My mother, like a lot of great leaders, she did. She didn't speak, or there were no histrionics. She did consistently every day. And yeah, I didn't appreciate it as much when I was in my teens. And then, as I got older, you really watch what my mom did.
My mom was so intentional about her life. The thing that struck me is the fact that she renewed her nursing degree in a second language, twenty-five years after not doing that, being a house mom, in a language that made her very uncomfortable. English always did.
And that she chose to use that to go take care of the soldiers who fought in the Korean War, who saved her life when she was ten or nine. My mom was so intentional about how she planned and lived her life. She lived her life in a giant set of concentric circles, which is one of the inspirations for the cover of the book. She thought that way.
And I didn't see it for a long time. You want to talk about bad dad. It's also being an idiot guy sometimes when you're younger. And as I got older and I realized she led our house.
She took care of my father for fifteen years with Parkinson's. She did it, and she never asked for credit. My mother was a great investor, not with money but with other forms of capital. And when I look back, I learned some of my greatest lessons in being an investor and leadership from my mom. I miss her. It took me a long time to write this book because I had to get to a place where I could try to be objective about losing the most important person that it was for me growing up.
Guy Kawasaki:
Yeah. It's a common theme, James, and many of the people we interviewed that as they get older, they understand and appreciate their moms more and more. And it's happened over and over again in this interview, and I think you'll enjoy this story. I'll close with this story. So another Angela Duckworth story.
So she's telling me about her mom, and she says, "My mom is eighty-nine, she's living in an assisted living place and she's now blossoming as an artist." So she went to the director of the assisted living place and says, "I want another room." And he says, "What's wrong with the room you have? Don't you like it?" And she said, "No, I'm going to keep that room. I want a second room to be my art studio." So at eighty-nine, she's doing that. And I think that is a great story.
James Rhee:
That is a great story. I'm fifty-three in about a month, and so I'm thinking to me, for myself, I'm like, "Okay, from twenty-two to fifty-two, thirty years, one generation. It was an interesting life, learned a lot of things, met a lot of great people, met some not so great people too and stubbed my toe, made some mistakes." And I'm looking at the next thirty years of my life when I'm eighty-two.
That's why I'm trying all sorts of new things at fifty-two because I suck at a lot of things I'm doing right now. But at eighty-two, I don't know, maybe I'll be passively good at them, keep me alive longer because the synapses in my brains are going to be forced to not be comfortable to learn some new things. Like surfing. I'm going to take you up on surfing. I do.
Guy Kawasaki:
Okay. Two last thoughts for you, James. So one is, you should consider doing a podcast because, fifty-two times a year, I have to figure out a guest. I have to learn about private equity and selling clothes to Black, plus-size women this week. I had to figure out Angela Duckworth the week before.
I interview Vivek Murthy, surgeon general, Bob Cialdini, Neil deGrasse Tyson, Stephen Wolfram. Every week, I have to figure out something completely new that keeps your brain active, I hope. And then, since you mentioned the S word, surfing. You're fifty-two, I want you to know that I took up surfing at sixty.
So if I can take up surfing at sixty, you could actually wait another eight years. Although if you want me to help you with surfing, you cannot wait eight years. You better get your ass out here now. That's part of the growth mindset. At fifty-two, you take up surfing. By the time you're sixty-two, I guarantee you, you'll be very good. Now's the time, baby. Don't wait till you're sixty.
James Rhee:
I'm doing it. I'm going to come out there. I'm going to take you up on it.
Guy Kawasaki:
Okay. And if I can't help you, certainly Madisun can, because she's a very good surfer. So that's James Rhee. I hope you enjoyed his stories about private equity and math and management and turnarounds, and the values that he has come to adopt later in his career. It's a very interesting story. Be sure to check out his book, red helicopter.
I want to thank the Remarkable People team. If you think this podcast sounds good, it's because of Shannon Hernandez and Jeff Sieh, sound design mavens, and my producer, Madisun Nuismer, who is also the co-author of Think Remarkable. There's Tessa Nuismer, who's our researcher. And then there's Luis Magaña, Alexis Nishimura, and Fallon Yates. Until next time, Mahalo and aloha.
And I hope that you read our book, Think Remarkable, because I guarantee you, it will help you make a difference and be remarkable.