BRIAN KENNY: Daniel Saunders, born in Salem, New Hampshire in 1796, has carved out a place in history as the founder of the city of Lawrence, Massachusetts. But what’s most interesting is how he did it. With real entrepreneurial instincts. Saunders apprenticed in the textile mills in rural communities north of Boston, all of which relied on the Merrimack River to power their operations. He knew that whoever controlled the water controlled the opportunity. So in the 1830s, he bought a small strip of land on either side of the river. Within a few years, he and his team of investors formed the Merrimack Water Power Association, purchasing even more land in the midst of which they constructed The Great Stone Dam, harnessing the mighty river flow. The influx of capital from Boston developers created a mill city almost overnight with red brick towers for a square mile. Lawrence was born and Saunders’s entrepreneurial spirit lives on. Today On Cold Call, we welcome Professor Jeffrey Bussgang and the case protagonist Wendy Estrella, to discuss the case, “Wendy Estrella, Scaling Multiple Businesses.” I’m your host Brian Kenny, and you’re listening to Cold Call on the HBR Podcast Network. Jeff Bussgang teaches in the Entrepreneurial Management Unit at Harvard Business School, and he is the co-founder and general partner at Flybridge Capital Partners. Wendy Estrella is the principal of Estrella Law and Co-founder of Estrella Enterprises. And she is the protagonist in today’s case and she’s joined me here in the studio. It’s great to have both of you here.
WENDY ESTRELLA: Well, thank you so much for the invitation. It’s so exciting to be here.
BRIAN KENNY: And Jeff, great to have you back in the studio.
JEFF BUSSGANG: Thank You. Great to be here, and very excited to be here with Wendy.
BRIAN KENNY: Yeah. And Lawrence is just up the road, but we appreciate you making the drive in on kind of a yucky, rainy day. I think people will be really interested, even if you don’t know about Lawrence. Lawrence is like so many cities across this country, and I think that the story of your finding your path in Lawrence and finding a way to create impact both in your own life and in the community is going to be great for people to hear. So, thanks for writing the case, Jeff, and thanks for being here to talk about it. I’m going to start with you. If you can tell us what the central issue is in the case and how you start the discussion in the classroom.
JEFF BUSSGANG: You bet. There are a couple of central issues in the case. Wendy has created not just one, but two successful businesses in the region. One is a law firm that’s a regional powerhouse multimillion dollars in fees each year, and the other is a property management and real estate development firm, which owns over $30 million of property and many millions of dollars in fee income. So, it’s a very interesting situation that she faces because she has to choose between one or the other, or can she continue to run both? But before we get to that question, the cold call I like to begin with is what accounts for Wendy’s success? In her background, you will find that this is a woman who is a Dominican Republic immigrant, a college dropout who came back to college after improving her English enough to get through community college, earned her way to eventually a law degree, and really pulled herself up by the bootstraps with no outside capital as she organically and incrementally built both of these two businesses in a parallel fashion in partnership with her husband. And our students are used to seeing very different founder journeys. They’re used to seeing technologists, venture capital backed, perhaps folks out of an Ivy League school or with an MBA. And Wendy’s profile, and Wendy’s journey is just a very different one that we really like to sit in for a few minutes before we face the big decisions ahead of her.
BRIAN KENNY: Yeah, part of the reason why I really enjoyed reading the case, and we’re going to get to you in a moment, Wendy, and hear more about your background. But before we do that, Jeff, let me just ask you why you decided to write the case. How did you hear about Wendy and why did you decide to write the case?
JEFF BUSSGANG: Wendy and I became friends through some civic work that I was doing in the city of Lawrence, which led to an executive education program in partnership with HBS that we call LEADS, where we assembled a group of local civic and nonprofit leaders and ran through an executive education course that led to also economic development initiatives. And Wendy was an inaugural participant in that program and she and I became friends through that. And when I learned her story over the years, I thought this would make an amazing case.
WENDY ESTRELLA: And this is super important, Brian. I was part of the first cohort. And I cannot tell you how much we’ve grown as a result of LEADS and not just me personally or my businesses, but also the community. Lawrence has been so much better. Jeff, thank you, for thinking of Lawrence. LEADS came into Lawrence and picked 30 leaders from the community. And we remained so close, and we’ve come up with programs and have come up with ideas on how to revitalize Lawrence and make it that city that it used to be. And I hope to give back through LEADS and keep working with others and inspiring others to do the same.
BRIAN KENNY: Yeah, that’s awesome. I’m glad you mentioned it. If there’s one thing that I think we’ve seen, it’s that programs like LEADS, there’s power in numbers, and when communities come together, it’s pretty amazing what they can accomplish.
BRIAN KENNY: Tell us a little bit about your background, and I’m curious about who your influences were as you were growing up and a little bit about what your experience was like coming to a different country.
WENDY ESTRELLA: I grew up in the Dominican Republic, and I’ve always shared the fact that I grew up in a very little town, which interesting enough, a lot of people from my town called Tenares, are now residing in Lawrence, which is great. To see a lot of people that I kind of grew up with. But what’s interesting is that I go to these little schools that were just a couple of hours during the day. We start at 8:30, but by noontime we had to get out so that the other grades can come in the afternoon. And I didn’t really read a book, which is actually quite interesting until I kind of made it after high school. Which is just another thing, more like when I got to Merrimack College. But it’s been a journey to be honest with you. And what I realized is there’s so many opportunities that were given to me and they started really early in my life. First one being a program that was offered to me when I was in high school. I came here when I was in high school, and my freshman year it was to actually participate in a program at Merrimack College.
BRIAN KENNY: Okay.
WENDY ESTRELLA: It was called the Accepted Challenge Program. It was a program for people like me, English as a second language, and to participate in a program after school just to learn more English and math.
BRIAN KENNY: And I’ll just tell our listeners if they don’t know, Merrimack College is a liberal arts school located in Andover, Massachusetts. It’s a nice sort of what you would picture as the prototypical New England College.
WENDY ESTRELLA: I didn’t know that it was such a great opportunity, because it ended up being that I got a full scholarship to go to Merrimack after going to UMass, and it was sort of like a college dropout and then got married really young. So, those opportunities are the ones that led me to where I’m at today. So every opportunity that I was giving, I was smart enough I guess, on my own to sort of take advantage of them. And it continues to happen, Brian. Today I sit here with Jeff who’s been an amazing person, an amazing friend, and someone who has recognized something in me and has given me so many opportunities to do great things like the ones we’re doing today. So it’s just been one opportunity after the next. And I feel blessed. And also it makes me think that these opportunities should be available to other people and letting other people know that the little things are the ones that can make a big difference in the future. So to me, those opportunities are the ones that have actually allowed me to be where I’m at today and have allowed me to do all the things that Jeff had just mentioned.
BRIAN KENNY: And being able to recognize an opportunity is an important part of that because sometimes people aren’t aware of an opportunity when they see it. So recognizing it, taking advantage of it, both of those are important. I’m curious if you ever saw yourself when as a young person saying, “Hey, I want to be an entrepreneur. I’m going to start my own thing.” Is that something that just kind of happened?
WENDY ESTRELLA: It kind of just happened, but I do have to tell you that since I was really young, I was always looking for that opportunity, whatever that opportunity was, I suppose. And I used to say, “I want to be a “licenciada,” without knowing what that was, by the way. Which means an educated professional and then decided to become an attorney years later. But I guess I always had that in me, that desire to doing bigger things and I dream a lot.
BRIAN KENNY: So Jeff, I know you work with entrepreneurs all the time, that’s part of your business. Is there a certain profile that people have that you would say these are the common characteristics of somebody who is going to not just start on something entrepreneurial, but stay with it?
JEFF BUSSGANG: I think what’s fun about this case in particular, and what’s fun about Wendy is that the surface attributes of the profile are very different here than what many students and many people are used to seeing. But the underlying attributes are very similar. And I just want to share to manifest what Wendy’s first transaction looked like just to ground us in the situation at hand. What age were you when you first bought your first house, Wendy, just so I have a…
WENDY ESTRELLA: I had just turned 19.
BRIAN KENNY: Wow.
JEFF BUSSGANG: So at 19 years old, Wendy and her husband, and she was married at the time, and I think you had a-
WENDY ESTRELLA: I just had a baby-
JEFF BUSSGANG: Had a baby.
WENDY ESTRELLA: … four days before.
JEFF BUSSGANG: So a teenage mom-
WENDY ESTRELLA: After the closing.
BRIAN KENNY: It’s a stressful week right there, I would say.
JEFF BUSSGANG: A stressful week. She and her husband bought a $65,000 house with a down payment of $2,500. They had saved $1,500 and they borrowed a thousand dollars from family members. So, just to get a sense of how granular and particular that transaction was, and that I would say willingness to take on risk represented. And from those humble beginnings, she has, as I said, amassed a $30 million real estate portfolio. And I think what’s amazing about her story is that the underlying attributes, as I said, that Wendy represents, willingness to take on risk, a sense of vision and a willingness to see that vision become real. Resilience, grit. She noted college dropout, but learned English to improve her ability, didn’t grow up reading books, became a law school graduate. I mean, just doing things that would not normally be expected of her. She said, “You know what? I can do this. I have this capability, or I have this interest or this desire, and I’m just going to go for it and not let people tell me, ‘That’s not what people like you should be doing.’“
BRIAN KENNY: Let me ask you this, Wendy. The case refers to some of the challenges that you had with just the language barrier and how that either slowed your progress or in some cases caused you to step away from things like being in college. How did you get past that, and why did you even decide to do anything near as ambitious as going to law school? That’s a hugely ambitious undertaking.
WENDY ESTRELLA: Just think of this coming from the Dominican Republic, not knowing a word of English. So going through high school all in Spanish. And then we used to take ESL classes every day, like an hour every day, and then graduating with the desire of going to college. And I think this desire of the world also to highlight people like myself, I was given an opportunity to go to college. And of course I was super excited. I could converse with somebody in English, but obviously the grammar-
BRIAN KENNY: Yeah, doing the work.
WENDY ESTRELLA: And the language, it just wasn’t there. And obviously I got into, out of all colleges, I went into UMass Amherst. At the time, it was like 35,000 students, and I was sitting in auditorium with all these people. I couldn’t understand half of the stuff that was being said. And of course I was sort of lost and I failed. I was kicked out. It was a secret that I kept for many, many years. It was more like, “Oh, I didn’t like it.” So that was the story that I used to tell people. And then I came back and that’s when I found Northern Essex Community College. And a lot of people, especially in our community, like, “Oh, community college, you’re going to…” They look down on you. But for me, it was such a life lifesaver. I went to Northern Essex, and guess what? I started taking basic writing, basic reading, and basic math. Everything was so basic, and it was sort of like non credit, because I just had to go through all these classes before I could take credit courses. So it took me longer. And while this is happening, I’m pregnant with Alex and I’m working, my oldest son. But that just gave me the foundation to continue. So, Northern Essex was that lifesaving part for me where I was able to get that associate’s degree and then transfer it to Merrimack.
BRIAN KENNY: Yeah. Yeah.
JEFF BUSSGANG: I think there’s something really interesting embedded in Wendy’s story and in the case, and just to pull a few of the threads-
BRIAN KENNY: Sure.
JEFF BUSSGANG: … that she mentioned that we try to highlight in the class, which is there have been a series of platforms and services that she was able to take advantage of. She talked about the high school program that gave her exposure to Merrimack College when she was in high school. She talked about the community college, North Essex. She talked about the bilingual educational program. And then later in her career, she takes advantage of some incredible accelerators, local regional support programs for small businesses. These platforms and programs have real impact. And when we talk about policies to help address the racial wealth gap, policies to help address advancement in society, in the US, Raj Chetty has this phrase, “Demography is destiny,” which is your zip code often defines your ability to advance and socioeconomic ladder.
BRIAN KENNY: Yeah, it shows you the power and potential of those programs when somebody’s willing to take advantage of them and put the work in. We talk a lot, there’s been a lot of research done by our Managing the Future of Work initiative here at the school about the role of community colleges, the important role that they can play and should be able to play. And you’re just a great example of how that’s really worked well. Tell us a little bit about Estrella Law. That’s the firm of which you founded and you’re the principal. What was your vision for that law firm when you started it?
WENDY ESTRELLA: At the beginning, it was just a career. I had gone to Merrimack and I ended up with accounting jobs, because that was my undergrad. And then I realized this is just not my path. And I came home one day and I said to Jose, “I really want to go to law school.” And Jose, he’s like, “What?” With two children, and at that point we had properties and I said, “We could do this. This is great.” And interesting, we have this amazing marriage, because this guy is super smart and super awesome.
BRIAN KENNY: Yeah. I should have asked about Jose earlier. Tell us about Jose.
WENDY ESTRELLA: Jose has an interesting background. He’s also from the Dominican Republic, and interesting enough, we’re sort of from the same town, but he’s from the mountains as I call it. We’re like 45 minutes away from where I used to live. But Jose comes from an awesome background whose father had a successful business. He owns a lot of land, he was a farmer, but that’s his background. And I’ve always said we’re having this conversation with Javier, our youngest son who’s now 20, yesterday, about how Jose has this incredible… Also, he’s such an executor. I’m more like the visionary. So I think the combination of the two makes us this great business partners that we are, but we saved, we never believed in debt. No one really talked to us about financial literacy, but we had something in us. And I always say, “Jose, you brought that to the marriage,” because I had a very different upbringing than Jose did. But that was a great foundation to have that we didn’t believe in debt. So, that’s how it all started. So, we kind of think about that and something that I try to teach other people like, “Listen, don’t get into this credit cards and debt,” that our community tend to do that at an early age. We were blessed enough to be smart about that. So when I said to Jose, “Listen, I can go to law school, we could do this.” We had a very small mortgage. We had real estate at that point. So, we were okay. We were financially free. It took him a little time to understand that I really wanted to do this, but again, he’s supporter and he supported the idea. So that’s how Estrella Law came about. And then during my last year of law school, I became pregnant of Javier. So, I am always doing things backwards, Brian. I don’t know if you realize it. There’s something about me. Why is this Jeff? So, that’s how Estrella Law began. And then we continued to grow our real estate portfolio.
BRIAN KENNY: I want to talk about the Estella properties, but I want to stay on the legal field just for a minute because you are the principal of a law firm that’s in a Latinx community. And so, I’m curious about what the landscape looks like for Latinx people who enter the legal field, because the case mentions that early on in your career, when you first walked into the courtroom, you were misidentified in that instance. Can you just talk a little bit about what your experience has been like?
WENDY ESTRELLA: It’s interesting, Brian. It’s been fantastic. Why? I’m in a community that there are very few of us. In fact, one of my goals is to really motivate other Latinx to become lawyers. It’s just not enough of us. So, I was blessed enough to be in a community that needed my services. I always said I always hit the ground running. So my practice kind of just took off. But 99.9% of my clients have always been the Latino community. And I’ve had this happen to me many times where I would walk into a courtroom and I would be asked constantly, “Madame interpreter, we’ve been waiting for you.” Or, I actually had a judge, I came to the bench and he says, “Madame interpreter, have you been sworn in today?” And I said, “Your Honor, I am not the interpreter. I’m the attorney.” And I kind of felt so bad for him because I honestly… He felt bad, I think. But again, Brian, I never took offense to that, because I always said the reason why that’s happening is because there’s not enough Latinx within the courtroom. Especially females in the courtroom. When they see a female in the courtroom, they automatically think they are interpreters. Just not enough of us. So I’ve always took it like, it’s cool, I get it, but we need to change that.
BRIAN KENNY: Okay. So now let’s talk about Estella Properties. And actually before you get into details, Jeff, I just want to ask you, because you mentioned it early on, she has essentially two businesses that she has founded and is running. That sounds like a lot for anybody to bite off. Is that common, uncommon? What do you think about that?
JEFF BUSSGANG: It’s one of the fun things about this case, I think. We teach, in our entrepreneurship classrooms, the power of focus. And we tell our students, “When you’re starting a company, focus on doing one thing really well, better than anyone else.” Yet here we have an entrepreneur who has been doing two things in parallel her entire career and has done extremely well in both fields. And I think it’s a common pattern that we see in minority owned businesses. And it’s something maybe worth my saying. I teach this case in the course “Scaling Minority Businesses” where we’re doing a deep dive on the challenges and opportunities that minority business owners face that may be unique. And one of the things that we see in the patterns of studying minority businesses is they often have side hustles and multiple plates that they’re spinning at the same time. It’s the way that they fund their business adventures because they have a harder time accessing financial capital.
BRIAN KENNY: So tell us a little bit about Estella Properties. And I can see just from reading the case, there are synergies between the two businesses. You have found a way to make them compliment each other, but what’s that business about?
WENDY ESTRELLA: We started in real estate again when I was 19. Jose was only 22 at the time. So, that’s really been the one baby that has grown with us and has grown more obviously during the last 15 years or so. But Estrella Enterprises started many, many years ago. And then of course came the law practice. And I came to that point where, like you said, how do I do this? And the advice has always been focus on one thing. But what I did find and the reason why I didn’t want to give up one or the other, especially the law firm, because it’s a career more than anything else because of the synergy between the two businesses. I focus strictly in the law practice and real estate law. I do everything that has to do with real estate law, which helps a lot. We also specialize in landlord, tenant law. Again, going back to having over 300 tenants, it’s very helpful when you are practicing in the landlord, tenant field. So it has great synergy. So that’s why I came to the realization that I could not give it up. Because it’s such great combination of the two. And despite the fact that it was a challenge, Jose was all up for that. “I totally understand where you’re coming from,” and he feels so much more comfortable knowing that I’m on the other side, dealing with the legal issues that we have with the real estate.
BRIAN KENNY: Sure helps, right?
WENDY ESTRELLA: Yes, it does. It does.
BRIAN KENNY: I mentioned the founding of the city of Lawrence in the introduction, but we should talk a little bit about Lawrence. It is known in a complimentary way as the Immigrant City. It’s got a huge population of immigrants. Many are Latinx. But can you tell us a little bit about what it’s like to do business in a city like Lawrence? I’m curious about who your tenants are, who your clients are.
WENDY ESTRELLA: I love Lawrence to begin with. And I say that because Lawrence has given me so much. It’s been our home since I came here as a teenager. And it’s a beautiful city. Our people are amazing, honestly. And it’s the opportunity that we’ve gotten has been endless. And I love the fact that Jose and I can actually provide good affordable housing to our own people. So, I think the combination of the love for the city and the love for all people has been a blessing because now we feel like, okay, we got to beautify the city by the property that we own. Now we have a better Lawrence. That’s how I feel. But we’re also giving people a place to live where they can call home. And it’s not only affordable, but also it looks nice. We take great pride in the work that we do in terms of maintaining our properties.
BRIAN KENNY: Jeff, in the work and the cases that you’ve written and the research you’ve done about scaling minority businesses, can you just talk a little bit about what some of the challenges are that underrepresented minorities face in trying to start and sustain and grow a business?
JEFF BUSSGANG: We study three main challenges, access to capital, access to supply chains and contracts/customers, and access to social capital and social networks. And what’s amazing about Wendy’s story to me is it’s an anti-gentrification story when it comes to the rise of a community. You mentioned Lawrence, a city of just under a hundred thousand people. 80% of the community is Latinx. Wendy has identified a market need that outsiders couldn’t access. And she’s been able to organically build a substantial business by serving the needs of that market with insights that only an insider could see.
BRIAN KENNY: The case mentions the Business Equity Initiative, and that’s one of the platforms that you mentioned earlier, the things that Wendy’s been able to take advantage of to help elevate the businesses. Can you talk a little bit about that? And Wendy, I’m curious to hear how you worked with BEI to achieve some of the goals that you’ve set.
JEFF BUSSGANG: The Business Equity Initiative was founded by Eastern Bank and spun out of Eastern Bank as a platform to provide advisory and strategic consulting services as well as capital to minority business owners. Founder and CEO is a visionary entrepreneur named Glynn Lloyd. We’ve had Glynn in the class many times, and they have now had, I think eight cohorts and about a hundred businesses go through the program. It’s centered just north of Boston and has a very regional focus.
BRIAN KENNY: And I think part of that program is that they bring business owners in, they teach them some of the things they might not know about how to run and sustain the business. So Wendy, can you talk a little bit about some of your experience there?
WENDY ESTRELLA: They came to our life really at the right timing. This is a time that we were considering. I was after this portfolio, talk about being a visionary. I was after this big portfolio of 188 units for about two years, and it kind of just came to us at the right time when we were part of BEI, so they helped us so much and going through the transition of growing like 300% our portfolio. And again, they gave us advice. We had a strategic advisor who was extremely helpful, it’s just amazing to be able to find the right programs for that growth. Looking at our finances and saying, “Okay, now you are at this stage, you got to think this big.” And that’s what BEI did for us. It helped us through the process. It helped us think bigger. It helped us connect to other people. And I was fortunate enough, we did it for the real estate and then I did it for the law practice. So again, it was fundamental in our growth.
BRIAN KENNY: And one of the things I always like to point out, we talk a lot about businesses that have programs like this and they’re working in the community. It is not about altruism. I mean, maybe they feel good about what they’re doing, but they do it because it’s good for them too. So this is a win-win type situation because by advising you and helping you grow your business, they’re creating a trusting relationship with a client who will continue to do business with them. We’re getting close to the end of our time. This has been a great conversation as I knew it would be. So I’ve got one more question for each of you, and I’ll start with you, Wendy. If you can just tell us five years from now, where would you be in your journey?
WENDY ESTRELLA: Five years from now, I see myself owning over a thousand units. I also see myself helping others walk the same walk, teaching others, helping others to become, especially in the Latinx communities, that we just don’t have that kind of resources. So I love to give it back by doing exactly that. My hope is to become a mentor. My hope is to become more like Jeff, identifying people that have an interest in doing what we’re doing and sharing how we’ve done it so that they could do the same. I mean, it’s generational wealth that I would love to see. And the same thing goes to the practice. I had mentioned to Jeff, and I think it’s interesting because Jeff, again has seen something so much bigger. I said, “Jeff, I want the practice to become one of those Boston practices that a hundred years from now, it exists.” And I think I want to be that one that when you look at the magazine, 100 top attorneys and why can’t one of us be there a Latinx, be like that generational law practice, not just that small practice that dies when you die. So, that’s my vision to continue to work with the practice that it could become so much bigger and become one of those Latinx that would be in the books.
BRIAN KENNY: Something tells me that you’re going to make that happen. Jeff, I’ll give you the last word. If you could just tell our listeners, if there’s one thing you want them to remember about the “WENDY ESTRELLA” case, what would it be?
JEFF BUSSGANG: Opportunity is everywhere. And great entrepreneurs seize those opportunities once they identify them. And great entrepreneurs can come in all shapes and sizes. But the ones that really succeed, identify and seize those opportunities.
BRIAN KENNY: So, thank you both for joining me today.
JEFF BUSSGANG: Thank you so much. Thanks.
WENDY ESTRELLA: Thank you. Thank you, Brian. This is a great opportunity.
BRIAN KENNY: If you enjoy Cold Call, you might like our other podcasts, After Hours, Climate Rising, Deep Purpose, IdeaCast, Managing the Future of Work, Skydeck, and Women at Work. Find them on Apple, Spotify, or wherever you listen, and if you could take a minute to rate and review us, we’d be grateful. If you have any suggestions or just want to say hello, we want to hear from you. Email us at coldcall@hbs.edu. Thanks again for joining us. I’m your host, Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School and part of the HBR Podcast Network.