Beating the Competition With “Soft Power”

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Gazi Haxhia was the only MIA student at Columbia that slept on a couch salvaged from the trash. “I had to do research on who was throwing out furniture to get the one with the fewest piss stains.” He went without food. He was called crazy for thinking he could make it. Other immigrants went to less costly universities so they could support themselves by working in a pizza parlour and sharing apartments.

Gazi was a working class Albanian trying to make it at the Ivy League school after the fall of communism in 1990. He had to convince the Dean to waive his tuition because his salary as a professional dancer did not allow him to save enough money to pay, even though he had saved since he was six years old. In an effort to show goodwill, Gazi sent letters to everyone he knew asking for a contribution to his tuition and in doing so received a dividend from an investment he made many years before.

When he was younger, Gazi worked as a tour guide in Albania in order to learn English. He would bring tourists into his home, share what food he had, and connect with the people he met in the most authentic way he could. One of these tourists, Chris, responded to Gazi’s letter and pledged $2,000 to his tuition. Several of Chris’ friends were moved by the story and contributed $3000 more. In total, Gazi raised over $10,000 from people with whom he’d connected with. The effort moved the Dean to tears and Gazi was given the scholarship he needed.

When Gazi gave a guest lecture on entrepreneurship at the Yale School of Management on April 15th, he did not discuss business strategy—product-market fit and pitching techniques—instead he told stories of how his human connections had materialized nothingness into prosperity, over and over again in his life.

I tried to push him to talk about hard skills necessary to succeed in emerging markets. I asked him how to compete, thinking I’d found a way for him to talk about strategy. Instead he told me stories of his competitors trying to succeed in his markets by forcing their own way rather than adapting, “you have to know what is universal about your business and what you have to adapt. You can’t play the German in Georgia, the real winners will be the ones that play the game.” Gazi’s trajectory from humble beginnings to Albania’s tourism and travel tycoon provides some pretty irrefutable proof of an indispensable element of entrepreneurship–that thing we pretend to have in our VC pitches: hustle.

When he opened the first General Motors dealership in Albania, he and his business partner had to get guns and defend the dealership themselves during the Albanian Crisis of 1997. He put his life on the line to stand up to gangsters who threatened his business in order to maintain the trust GM had put in him when he promised to bring them safely into the country.

Gazi invests in people. One of his graveyard shift employees routinely gave great service to customers—eventually Gazi sent the man to Bled Slovenia. He paid full tuition and gave him his own house to live in without charge or stipulation. “I never asked for anything in return, he never had to sign a contract to return after university, because if he came back out of obligation then his heart never would have been in it, and that’s not how it works.” That man is now the general manager of Avis Albania.

The secret to magical growth in adverse circumstances, according to Gazi, is what he calls “soft power”. Guns, tanks, and money are what he calls “hard power”. Soft power is the power of stories, human connection, influence, and what he calls “selling from the heart”.

“I call my Chinese partners on Chinese New Year, I send thoughtful gifts to every contact I have, but not just to play the fiddle, because people can tell when it’s not from the heart.” Gazi proves his theory with stories of how a thoughtful gift of a scarf turned into €200,000 in annual business in a way he could never have predicted involving a bus full of Chinese tourists and a pissed off Montenegrin border guard.

That tourist who gave Gazi his first check to get his MIA, now is a great mentor of Gazi’s company, which does €14 million in sales with plans to expand to €100 million in the next five years. To achieve this, Gazi relies on nothing more than the value of his relationships, “if I can convince people to do something, the money will always be there. I just find a new opportunity, form the right partnerships and that’s it… easy.”

“Give before you get, always,” Gazi says, “if you invest in people with all your heart, your bank account will always be full, even when you have no money.”

Cameron Rout is a dual degree student at the Yale School of Management where he is earning a Master of Advanced Management along with an MBA at IE Business School. He has a background in engineering risk management for the oil and gas industry but also has experience with lean startup methods. Cameron is joining Google as a Product Manager upon graduation this year.

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