May 2nd, 2021 | E050 From Farmland Through Wall Street To Silicon Valley: How To Join Tech Revolution as a Lawyer
Roger Royse is a partner in the Palo Alto office of Haynes and Boone, LLP and practices in the areas of corporate and securities law, domestic and international tax, mergers and acquisitions, and fund formation. He works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries.
Roger is a Fellow of the American College of Tax Counsel and former chair of several committees of the American Bar Association Sections of Business Law and Taxation. He has been an instructor or professor of legal, tax and business topics for the Center for International Studies in Salzburg, Austria, as well as the Golden Gate University School of Law and Stanford Continuing Studies. Roger also authored the book “Dead on Arrival: How to Avoid the Legal Mistakes That Could Kill Your Start-Up.”
Roger’s LinkedIn profile: https://www.linkedin.com/in/rogerroyse/ 🔥
Roger’s Twitter profile: https://twitter.com/rroyse00/
Roger’s personal website: https://rogerroyse.com/
Roger’s book “Dead on Arrival”: https://amzn.to/3bsUVvw (affiliate link) 🔥
The episode was recorded on April 24th, 2021. This material represents the speaker’s personal views and not the views of their current or former employer(s).
Natalia Bielczyk 00:09 Hello, everyone, this is yet another episode of Career Talks by Welcome Solutions. And in these meetings, we talk with professionals who have fascinating career paths, and who are willing to share their life hacks with us. And today I have great pleasure to introduce Roger Royce. He is a partner in the Palo Alto Office of Haynes and Boone, LLP, and practices in the areas of corporate and securities law, domestic and international tax, mergers and acquisitions, and fund formation.
Natalia Bielczyk 00:41 He works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. Roger is a Fellow of the American College of Tax Counsel, and former chair of several committees of the American Bar Association Sections of Business Law and Taxation. He has been an instructor or professor of legal, tax and business topics for the center of International Studies in Salzburg, Austria, as well as the Golden State University School of Law and Stanford Continuing Studies.
Natalia Bielczyk 01:16 It’s great to have you, Roger. Thank you so much for finding time to join us here on this little channel. And thank you so much for your time. I know that you’re a very busy person, so I’m very glad that you could find time for this. I’m very curious of how your career looked behind the scenes. And what were your major career turns and your most difficult decisions that you had to take on the way? I’m very curious to hear how this whole story, looks from your own perspective?
Roger Royse 01:50 That’s a broad, wide open question. Where do I start? I started my practice back in my home state of North Dakota, where I’m from. I know you have an international audience. It’s a small state, or it was at the time they’ve since hit oil there, so maybe I should have stayed. But I started representing oil men. In fact, we had an oil boom even when I was young, when I first got out of law school.
Roger Royse 02:15 It never occurred to me that I ever might want to leave the state until after I started practicing. But I represent farmers and I represented oil men, and banks that led to farmers, railroads, sometimes insurance companies. But it’s a very agricultural rural sort of practice. Later, when I was in New York, my friends would call it ‘buffalo law’, because we have a lot of buffalo in North Dakota wandering the plains.
Roger Royse 02:44 Sometime about 4 years into my practice … I mean, everybody goes, if you look back in your life and you try to measure your life. It’s always going to be in terms of turning points and tipping points, I mean, as you look back. Those are usually not good events. I mean, if you remember them and if they cause big changes in your life. I guess for me, it wasn’t good event. I just decided one day that I wanted to see New York City.
Roger Royse 03:11 And I went to New York City just to visit. And I said, ‘You know, I’d kind of like to live here.’ You know, this is exciting. And there seem to be a lot of people like me, you know, that are interested in the kinds of things that I’m interested in. And I had decided by then, that I was going to be a lawyer. Because you know, you never really know for sure if you’re going to do something until you give it a try.
Roger Royse 03:36 And I had a pretty thriving business, even when I went to law school. But it wasn’t very intellectually stimulating and that’s why I get into law. In fact, I felt guilty doing business because it was so easy.
Natalia Bielczyk 03:52 I mean, that’s what most people say about doing business. I will have more questions about this part.
Roger Royse 03:59 I’m happy to talk about that. On the other hand, it was just far more lucrative than anything else. But it just seemed to me that I ought to be doing something more intellectually challenging. That’s how I got into law. And as I got into it, I decided that of all the law that I’ve done, tax was the most interesting. And I thought it was again, the most challenging. And I do have a background, I’m a CPA. I have a background in accounting, so it’s kind of a natural.
Roger Royse 04:26 I went to New York City and went back to law school, got an advanced degree in tax law, and took a job with a large law firm on Wall Street. This is at the end of the 80s, it was a big time in the commercial world. A lot of big deals. You probably saw some of the movies that came out of that era. You saw Wolf of Wall Street. That’ll give you an idea of what my clients were like. They were you know, demanding. Yeah, high flying, a lot of characters.
Roger Royse 05:00 But you know, I was kind of used to it. I started with North Dakota oilmen, which are all characters; live by the dollar die by the dollar. And go out to New York, Wall Street investment bankers who have kind of the same attitude, just a different, you know; they’re just selling a different service. And again, turning points and tipping points, I had a great time doing that.
Roger Royse 05:22 But one day, we represented some movie studios on large financial, in complex tax matters. And the tax law changed one day and one of our clients was a big Motion Picture studio in Los Angeles. And nobody wanted to go and I was a new guy, so my boss sent me to LA. And I don’t want to say which studio it was, but they had their own hotel right on their premises.
Roger Royse 05:52 I basically lived on set for two weeks. I was walking around, you know, having coffee with movie stars. And you know, going out to discos at night and seeing famous musicians which was all quite exciting and plus the weather was nice. That’s the thing that struck me the most because it was March, when I came out. New York City in March is not a pleasant place. Los Angeles in March, like every other day in March, you know, it’s nice and sunny. And so, I said, ‘That’s it. That’s enough for me, I’m moving to California.’
Roger Royse 06:28 And I did. But as I came to California, as I interviewed up, and you know, I kind of looked around the West Coast. I said, ‘You know, LA is fun. But boy, Silicon Valley is where it’s happening.’ I mean, this is where the future is. Because this is the center of the technology universe. And a metaphor that I heard somebody else use once, but I’m going to steal it because it’s so good.
Roger Royse 06:52 The sense I got from other cities compared to Silicon Valley’s is a sense you might have when you walk through the airport, and you know how there’s the moving walkway. Being on the moving walkway is like being in Silicon Valley, everything is just moving so much faster with a lot less effort. If you’re not in Silicon Valley, you’re not on a moving walkway, you’re just watching things just move fast past you faster with less effort.
Roger Royse 07:21 And that is the sense I had about the way things were moving up here. I moved here and I had a look back; and that was a long time ago. And I’ve been doing tech startups; emerging growth and venture capital since.
Natalia Bielczyk 07:32 Okay, so you were doing this ever since you moved to California, more or less 30 years ago? That’s pretty much it.
Roger Royse 07:44 Yeah, that’s right. That’s right. It was 30 years ago, believe it or not, seemed like yesterday?
Natalia Bielczyk 07:49 Wow. I’m quite sure that there were also periods during these long 30 years. And there were also a few different stages of your career. I would like to know more about that. But first of all, how did it happen that you were already so successful as a business developer at such a young age, when you were still a student?
Natalia Bielczyk 08:15 As you said, it was easy, but you know, this is counterintuitive. I think for at least hearing in the Netherlands and in Europe, the belief is that 90% of all startups fail. That’s also what I see among people I know; it’s very hard for them to start. And in general, business development is considered hard. How did it happen? Maybe you’re a natural talent, maybe you’re a gem.
Roger Royse 08:44 No. Let’s talk about that for a minute. Because that’s a statistic that I use all the time, too. But you know, it’s a deceptive statistic. And let me tell you why. And kind of, let me focus on three things. Number one, 90% of everything fails. 90% of everything I do fails, you know, or maybe 80% because I launch all sorts of different initiatives all the time.
Roger Royse 09:07 I’m coming up with new products all the time. Most of them, they don’t go anywhere, you know. The market doesn’t like it, or I missed it wrong in terms of legal solutions. And I go up to my clients and I say, ‘Hey, here’s a really good idea, you know. You should do this; everybody should do this.’ And I’ll put a tremendous amount of effort in it, and I’ll go talk to a lot of clients. I’ve always done that my whole career and I did that when I was in business too.
Roger Royse 09:34 Most of the time, it’s going to fail, and you need to know that. That’s kind of what I like about Silicon Valley, people will get that here. Failure is not the end of your career. Failure is a learning experience because you know the next few of them are likely to fail, but then you’re going to hit that big one that does well. I’ll give you specific examples later if you’d like to hear them.
Roger Royse 09:54 But that’s not a statistic that’s unique to just companies. You know, that’s a statistic, that’s just the way capitalism works and the way free enterprise works. It’s a system of, we’re the life … We have a famous Supreme Court Justice once said, ‘The life of the law is experience, not logic.’ That’s the same with everything; it’s experience, not logic. You don’t know which idea or which company is going to succeed based on logic, you know based on experience. And it takes a lot of experience.
Roger Royse 10:28 In the business world, let me give you a really good example. I have a client, again I can’t use names, but he’s from Europe. And he developed around 40 apps, mobile apps. 39 of those apps failed, okay. One of them took off. One of them is now a unicorn. Okay, it is one of the most downloaded apps in the Apple App Store. It is hugely successful. And it’s worth billions of dollars. You know, so yes, the statistic is that most of the things he did fail. That doesn’t make him a failure. It doesn’t make his business a failure.
Roger Royse 11:08 It means you have 39 learning experiences before he hit the one that was hugely successful. I’ll never forget when I incorporated him, because he finally knew he had a winner. And that’s kind of true of everything. That’s number one. You know, people have to be ready to pivot and innovate and expect that some things work. And some things don’t and you just try stuff. I’ve seen many, many companies. And I’ve seen many more failures and successes, for sure.
Roger Royse 11:39 But those are just, you know, like I say those are just pivots. And there is one defining feature of successful entrepreneurs everywhere. There is one absolute defining feature. And that is grit. Grit. Grit, perseverance and endurance, that is the one defining feature. And if you look around, if you look at successful people, whether they’re startup entrepreneurs, whether they’re actors, whether they’re Texas oil men, or North Dakota farmers or whoever they are.
Roger Royse 12:16 Their one defining feature is they don’t hit a roadblock and give up. They just keep trying. And oftentimes that comes from early adversity, and just learning that the world is not your friend, and you’re going to have to work at it. And some of it is maybe just innate and inborn. But I think it is the one defining feature that you see everywhere. I wouldn’t get hung up on that number of failures; just expect.
Roger Royse 12:45 You know, I moderated a panel of venture capitalists here in Silicon Valley at one point. And I remember, one of the venture capitalists on the panel, we were talking about his successes and failures. And he said, ‘Well, I haven’t really had any successes yet’. He says, ‘I’m kind of young at this’. He says, ‘So far, I’ve lost about $100 million of investor money.’ And he wore that like a badge of honor.
Roger Royse 12:46 Now, in some countries, if you lost $100 million or some investors money, you’d have to kill yourself, you know. You’d have to go into another line of work. Silicon Valley, that’s a badge of honor. He said, ‘Look at all the experience I had. All the mistakes, I’m not going to make again.’ And he’s a very successful VC now. That’s about 10 years ago, he said that. He’s doing very well now. He’s on his third or fourth fund.
Natalia Bielczyk 13:34 No, that’s amazing. I fully share this view that this is absolutely a necessary ingredient to survive in business and to thrive. But I was always wondering, and I’m curious what you think about this. There is also a vast number of people who never succeeded. Those are the people who you know are kind of skipped from the discussion, you know.
Natalia Bielczyk 14:12 I mean, silent losers who try for many, many years, and eventually resigned or failed. They just got burnt out. And I’m just wondering you know, what is the eventual percentage of success rate for the population of people who initially tried. Because I understand that 90% of the time you fail. But people who keep on trying, many of them will eventually succeed even if they failed 10 times. But there is also a large number of those that will get nowhere.
Natalia Bielczyk 14:51 And I’m always wondering, what is the impact of the luck factor? If you learn from one project to another, and you improve every time, then eventually, what is your chance to succeed? Because I can believe that there are also people who just lack, the luck factor. And even though they are talented and they have grit, they might still get nowhere. I don’t know how to express it better.
Roger Royse 15:22 Yeah, I know what you’re saying. And it comes down to judgment. But luck is huge. I mean, I can’t tell you how many times I saw the Facebook idea. You know, before there was a Facebook. Zuckerberg got lucky. All right, it took a lot of luck for him to pull that off, because he was not the first person to come up with that idea. He certainly didn’t have the best technology. You know, he just got lucky. He was in the right place at the right time.
Roger Royse 15:49 And you can say that about almost every successful company. There’s a lot of luck that gets involved in that, there’s no doubt; you can’t deny that. But luck is not a strategy. You can’t rely on luck. Luck alone is not going to help. But you know, the big huge successes, you know, I guess you could say maybe it’s a numbers game or a game of odds. And you know, we live in a random world. We’re full of contingency and what the Germans call ‘das heim’. That’s contingency, forfeiture and the other thing is; and randomness.
Roger Royse 16:27 You know, you have to consider the effect of luck. But you also might consider that tension that there is between. In the Valley here, it’s kind of funny, we’re schizophrenic; we have two sayings. One is, you know that you really have to stick with it. Like I say, you have to have grit and perseverance, and hard work, and passion and commitment. On the other hand, you have to fail fast.
Roger Royse 16:56 Which is it? Do you fail fast because it’s a bad idea, so stop wasting time on it and go do something else? Or do you just commit to it because you have the vision, and nobody else does? And we can talk a lot about that. And we can say, ‘Well, maybe that’s just judgment and vision and knowing what’s going to happen’. I think there’s a lot of luck in that, and knowing whether you should abandon something or stick with it until the rest of the world catches up to you.
Natalia Bielczyk 17:27 Yeah, I think what you’re talking about is probably this concept of the dip. This period of time when you already invest a lot of effort and resources into the project, but there are no results yet. And almost every startup goes through that phase at some point, so there is still not enough traction. And the question is, shall we continue? Or shall we fail now and restart with another project? And I think many young companies have this dilemma, especially today, when there is this confounding factor; there is a Corona crisis.
Natalia Bielczyk 18:04 Sometimes it’s hard to tell if after the crisis ends, you’re not sure if you’ll start getting traction. Or rather, you have some structural fundamental problem that will never be solved. I have a feeling. I also have a lot of friends who are trying to pull off a company and they have this dilemma right now. They just cannot objectively judge the situation and figure out if they should just hope that after Corona, things normalize.
Natalia Bielczyk 18:33 And then, the company finally starts making profits or there is another reason why they don’t get enough profits yet. Very complicated. But do you think that with all your experience in this space, when you see a founder of a new company …? Let’s say a first-time founder. Do you think that with all the experience you have, you can, with some probability predict if this is going to be someone who eventually will succeed or not?
Roger Royse 19:09 I have a sense, yeah. I mean, I’m as much a VC as my venture capital clients, I have to bet on winners. Because if I don’t, I don’t stay in business very long. Because I don’t succeed unless my clients succeed. I have a little bit of a sense, and I do my own due diligence, but I really like to get a sense of a person. And it’s kind of somewhere in between. I want them to be committed, but not so committed that they’re going to do something crazy.
Roger Royse 19:39 And it’s intangible. I mean, certainly there are plenty of due diligence lists that you can go through. Let me put it this way, it’s relatively easy to figure out which companies are not going to succeed. I’ve got a good checklist and if they don’t meet all the, you know, team, product market fit, domain expertise. If they can’t hit all, you know, the categories on my checklist, we can cross them out.
Roger Royse 20:12 The figuring out who of the remainder are going to succeed, that’s a lot harder. You know, and I’ve missed some big ones that I just didn’t believe in at all. And it turned out, they proved me wrong. Of course, I’ve had my share of companies that just didn’t hit, you know, like I said, there’s a luck element. They just didn’t hit the market at the right time. But I think I’ve been pretty good at kind of having a good baseline.
Natalia Bielczyk 20:42 Okay, can you share some of these missed opportunities or not?
Roger Royse 20:47 Not by name, but well, I can share some of the winners that by name that have allowed me to. For example, I worked early on with Lyft, you know, the car company. That one, honestly, I didn’t get it. I just didn’t understand the gig economy. I’ll be honest with you. That’s why I have a lawyer and not a client, I guess. But look how hugely successful … Similarly, I done work for some of the big crypto exchanges. I don’t want to name them.
Roger Royse 21:25 I thought, ‘Well, that’s interesting. I don’t know, you know, how that’s going to do or not; it’s awfully risky.’ I would say that I didn’t have as much optimism in them as I should. But I figured there was, you know, … I stayed with them, I figured they would probably do well. But I had no idea they were going to, those companies, would do as well as they did. They put it that way. I knew they’d succeed; I just didn’t think they’d succeed as big as they did.
Roger Royse 21:53 Some of the ones … I’ll tell you one that I missed that I had been kind of kicking myself about. It’s a medical device company and they did check all the boxes. The team was, had a big pedigree. The technology was really solid and I passed on them. I did not take them on as a client. Because they had made so many mistakes before they came to see me; legal mistakes. And I said, ‘Look, you would have to execute perfectly. You’re going to have to get all of your stakeholders to agree,’ and all the stakeholders are already fighting.
Roger Royse 22:33 I had all the signs of a company that was just going to fail for political reasons. And I said, you know, ‘I just don’t think you’re going to be able to fix all these problems. I’m good, but I’m not a magician.’ And somehow, they did. You know, somehow everybody eventually realized that if they didn’t give up a little and compromise, and come to an agreement and clean up their prior mistakes, they would have nothing.
Roger Royse 22:59 And that one is a very, very successful medical device company. That’s one that you know, I probably should have had a little more perseverance with. But the signs to me were that, you know, they were too far gone. I know that’s kind of general. I’ve had winners and losses, we all do. And we all have to admit that; nobody picks all winners, nobody picks all losers.
Natalia Bielczyk 23:28 And that’s very interesting. You have brought … That means you have broad interests in terms of companies to work with.
Roger Royse 23:38 I work all across the spectrum. I do most of my stuff in agriculture technology, but a lot of HealthTech, a lot of FinTech. Some deep roots in blockchain; I work with a lot of blockchain companies. But in terms of industry, agriculture is really where I do the most, it’s something I know about. And that’s important to have a lawyer that understands your business.
Roger Royse 24:03 And then because I do so much from FinTech, I got to learn blockchain. Which is not just FinTech, it’s supply chain. It’s everything. Blockchain is ubiquitous or it will be. And of course, HealthTech, because that’s an area that’s precision medicine and digital health, is an area that is really seeing a lot of disruption these days.
Natalia Bielczyk 24:29 Very interesting. Indeed, these are the branches of IT industry that are now exploding. Are you also into quantum computing or nanoscience or topics like this?
Roger Royse 24:47 I don’t know a lot about the technologies, I have clients that do and that’s the good thing. as a lawyer, I don’t really have to know the tech that much. It’s nice if I know the industry that they’re trying to attack. But I just have to know how to protect their technology. Protect their ideas, not how to code myself.
Natalia Bielczyk 25:07 Could we, briefly, come back to this question about how to become successful in business at such a young age. Because I’m still bugged by that. And I would like to-
Roger Royse 25:21 You are bothered by that. I grew up in a small business family, an entrepreneurial family, my dad was a small businessman. And, you know, I learned at a super early age that I was going to have to work if I wanted anything, if I wanted any money. I mean, I was at what would probably be considered violating child labor laws now, you know, working in my dad’s trucks. I’ve got pictures of me when I was barely old enough to hold a watermelon trying to push them off the truck, because that was part of what he did.
Roger Royse 26:01 I’ve been working from as long as I can remember, but mostly for myself. By the time I was in high school, I was, … Like I said, I lived in an agricultural area. I remember, you know, buying truckloads of produce, and I wasn’t even allowed to drive. I didn’t have a driver’s license. But I would illegally drive my pickup, you know, out into an area and sit by the roadside, and sell fruit and produce along the roadside.
Roger Royse 26:31 By the time I got out of high school, I was importing all sorts of stuff. By the time I got out of college, I was importing from China. By the time I got out of high school, I was buying from wholesalers. And most of what I was doing was sitting alongside the road selling this stuff. But eventually, I was just doing a lot of commerce, just buying and selling things. And it was a lot of fun. You know, business is fun. Not every product was successful, you know, not every year was successful.
Roger Royse 27:03 But I had more good years than bad years. That’s why I say I got used to the idea that you’re going to win, and you’re going to win on some and you’re going to lose on some. But hopefully you’re good enough that the winners, you know, outpaced the losers, and you come out ahead at the end. I’ve always had that sense; I understand small business.
Roger Royse 27:24 But that was important for me as a lawyer because I had to understand what my clients were like, what they had to go through. I really got a taste of that about 15 years ago, when I opened my local law firm. Because that was a major undertaking for me. I had to sign a big fat lease, and I had to buy a bunch of equipment and furniture and make a huge investment, all on faith. You know, all on faith.
Roger Royse 27:54 But looking back on it now seems like an extreme amount of hubris and confidence. And it turned out to all play out the way I wanted it to. But I do remember what that was like. And you know, like they say, ‘There is nothing that sharpens your focus, like having to make a payroll.’ You know, I have to do that. And then I had to do that twice a month for the last 15 years.
Roger Royse 28:22 And just the startup, made me really kind of empathize with my startup company founders; I know what they go through. And that was one of the best educations I had because you can’t really experience. Because some of these things, just the administrative part. You know how you’ve heard the expression that you know, ‘For the want of a nail, the shoe is lost. And for want of a shoe, the kingdom was lost.’
Roger Royse 28:50 All these little things that had to be taken care of, or they cause major problems in your organization. That was a real good education. I’ve had enough background in business that I think I have a lot of understanding of what my clients have to go through when they start companies.
Natalia Bielczyk 29:08 But what was your first business then? Because from the context, I understood that you already created businesses before going to law school. What else -?
Roger Royse 29:20 Produce was my first business; buying and selling produce. But that was just small. My first real business was you’re going to laugh, you’re going to be surprised, was fireworks. I imported fireworks from China and sold them here in the United States.
Natalia Bielczyk 29:38 Wow, sounds fun.
Roger Royse 29:41 Yeah. It’s fun. It’s a fun business especially when you get to sample the products, because I always get a kick out of fireworks.
Natalia Bielczyk 29:50 How did you come up with this idea? It was, I believe, way before Amazon and AliExpress ever came to life.
Roger Royse 30:00 We didn’t have the internet then, so it had nothing to do with it. There’s nothing online about it. Although, these days, of course, you can buy all this stuff online. I probably should have stayed in that business. I’d probably be making a lot more money today.
Natalia Bielczyk 30:15 I mean, blockchain is also fireworks today.
Roger Royse 30:18 Yeah, there you go. Different kinds of fireworks now you have to deal with.
Natalia Bielczyk 30:22 It also blows up. Not far off from the original plan. Referring to that, you said before that, what can effectively motivate you is the necessity to get the paycheck and, you know, to make ends meet. But I believe now you must be a wealthy person, given all the success in all these projects. You know since I normally talk to people like me, who finished PhDs and who are now, you know, a few years into their new careers.
Natalia Bielczyk 31:05 I think most of us are not on that stage yet. We don’t have the luxury to be able to say that we are financially free. Not yet. But I guess you are. My question for you would be, what keeps you going? What gives you inspiration to keep on working? Because I can imagine this is an incredibly competitive space.
Natalia Bielczyk 31:31 And how do you find energy to still like …? To be able to work in these areas, like the areas that you chose, you have to always be on top of things and be at the frontier of the, you know, the development, technical development. And how do you find energy to still keep on going? What motivates you the most?
Roger Royse 32:01 You know, when people retire, I’ve heard it say that people retire so they can do the things they really want to do. I have the luxury where I’m already doing what I really want to do. And I have a few more things I need to get done. Let me put it that way. In a way, what else would I do? What would I retire to? Like I said, I do law. I do legal advice. That’s the product.
Roger Royse 32:31 But I deal with the newest, the most innovative companies and products in the world. I’m at ground zero for what’s going on and what’s happening, what’s starting. You know, that’s what I want to do. I don’t know how else to say it. You know, I’m doing what I want to, it doesn’t really feel like work. It’s feels like me doing the things that I want to do. I’ve got a lot of projects coming up, I need to get finished with. Hope this summer, if it kills me, I’m going to finish a book that I’ve been working on. I’ve got several other things, so let me put it this way. You’ll like it when you see it.
Natalia Bielczyk 33:16 I’m sure of that. What’s the book about? I’m very curious.
Roger Royse 33:21 My first book that I wrote was called “Dead on Arrival: How to Avoid the Legal Mistakes That Could Kill Your Start-Up”. And you know, I need to keep a copy around here. Here we go. The second book is a little more positive. The second book is going to be … This is a story about business failures. And what they should have done differently to avoid that result that I’ve seen over the last 35 years.
Roger Royse 33:48 Second book is about business successes. It’s about companies that did everything right, that I’ve worked with. And you might not have read about them in the newspaper, but they were very successful companies and successful exits. And the book is legal and business. And the book is finished. It’s just going through the editing process now and I hope that it’ll be completely done with it by this summer.
Natalia Bielczyk 34:14 Perfect. Again, I will have to track what you’re doing. Who is the audience of the book since it’s a treat on legal aspects of the business? Do you think that people who are genuinely interested in business development might benefit from reading it? Or is it more for the specific audience that is more into law and tax law, and your specific area of expertise?
Roger Royse 34:51 It’s for startup entrepreneurs and for those who advise startups. This is just basic ground-zero stuff that people ought to know. There’s a lot of stories in there about companies. I’ve already told you one of them, about the 40 apps. But there are a lot of other stories in there about companies that have done well, and how they did well and what they did right. And it’s also a good roadmap; it’s a good outline.
Roger Royse 35:21 You know, the thing is, you’ve asked me a lot about success and successful people and habits of successful people. I’ll tell you one, it’s to read a lot. You know, successful people are constantly learning; they’re constantly understanding. And one thing I keep telling audiences, I speak to 1000s of people every year, God every month. But I tell them, you know, you really have to self-educate. You cannot rely on the world to just give you these answers, or even tell you which questions to ask.
Roger Royse 35:56 You can’t even rely on your lawyer to tell you which questions to ask. You have to know that. Because a lot of lawyers will just answer the question asked. Maybe that’s helpful, maybe not so much. You need to self-educate. And then there’s not enough books out there that are easy to read on what questions you should ask your lawyer about law. The books that are out there on law are written by lawyers, so they’re exceedingly dull.
Roger Royse 36:25 They’re just so dull, and nobody wants to read them, and no one can get through them. Do the right thing. You know, and video blog post; I have hundreds of hours of video on all of these topics. I got podcasts that are busted up in a small segment, so they’re easy to digest. But self-education is really important.
Natalia Bielczyk 36:48 I fully agree. I’m very curious right now. I fully agree with what you just said that most books about law, they’re just too dry. Like, that’s very important to keep this style of writing vivid. I also wrote a book, and it is about the career development for PhDs. I was blogging for many years before, and I try to keep the style more like a blogger style of writing than a classic literature.
Natalia Bielczyk 37:25 And it resonates with the audience. I get a lot of positive comments that this book is easy to read. It just reads through very smoothly and not like a textbook. Also, effective use of anecdote is one of the, I think, ingredients for success. I’m looking forward to your book, then. I presume it’s going to be available on Amazon this summer?
Roger Royse 37:57 Yes. Hopefully, by the end of the summer, this year, for sure. And I’ve got a few other projects coming out, they’re company and startup related. Some legal products that I think it’s time that the world should see that I’m going to be promoting. And then, some social media experiments, technology solution that I’m involved in. Lots of cool stuff. Stay tuned. You know, you can follow me on Twitter, on LinkedIn. LinkedIn is the easiest.
Natalia Bielczyk 38:37 For all of you, guys who are watching, please check out this information. And all the links are below. All the information will be there. Maybe let me ask you, like, we have to slowly wrap up. But maybe, if I could still ask you about your general advice for young people at the start of their careers who are now finishing their university education.
Natalia Bielczyk 39:12 Many people today are dreaming of being free, being independent, being a creator of a new concept and a new startup. What would be, I guess … I mean, this is a very broad question. I know that we could talk for hours. But if you could give a few pieces of advice to all those young people on how to start. Or how to even figure out if you’re the right person to do it?
Roger Royse 39:46 How to figure out if you’re the right person to do it. Well, you get to try things, you know. I have a bias towards action. And I think that’s the important thing is you do have to just get out there and try it. One of the mistakes I see people make. You know, again, when I was talking about reading, read “The Lean Startup”. And listen to the podcasts, listen to “Masters of Scale”. One of the things you’ll learn from a lot of these folks, is that they will try things even though they’re not perfect.
Roger Royse 40:21 And they will just go out and pivot and innovate, and change. But it’s important to just get out there and do. And you might decide that you have a real aptitude for something, you might decide that not so much, but you don’t know until you try. That’d be my first advice. I see people that are paralyzed and afraid. And what if I’m not good at it? Then give it a try and find out. if you’re not, you’ll go do something else.
Natalia Bielczyk 40:54 Maybe one more question would be, if you had the chance to do something else, like, looking back at your whole career. I mean, if you had the chance to do something differently, or make a different choice at some point in your career. Is there anything that you would change or nothing at all?
Roger Royse 41:23 Yeah. You know, … Yes. I mean, I know everybody says, ‘No, I would do things exactly the same, I wouldn’t change a thing.’ That is such BS. You know, I subscribe more to the philosophy of Kierkegaard, the Danish philosopher, who once said that he regretted every decision he ever made. Because he knows there are 15 other decisions that he could have made that might have gone in a better direction.
Roger Royse 41:55 And then the other thing as a lawyer, I’ll be honest, we’re all frustrated businessmen. Because for the nine failures that I see, I also see the one humongous success, you know. And I see that every day; I see that every day. So yeah, if I could go back and do it again, I probably would have done something that would take a little less effort. And that would have been a little more high-flying, to be honest with you.
Natalia Bielczyk 42:22 It’s good that you say that. Because I’m a bit bored with all these people saying that there are no mistakes, they’re just lessons. I also regret a lot of my decisions because you only have one life. If a bad decision leads you to a few years of wasted time, then. I mean, it’s just about decision, you also have to admit to mistakes sometimes. Indeed, I agree with this.
Roger Royse 42:52 Yeah, I know. I heard Tony Robbins say once it’s, ‘You should be thankful for it. All those really bad things that happened to you, because that was a character building experience.’ And I’m thinking, ‘Well, yeah, but you know, you might have gotten by just fine without that character building experience.’ Your character might have been built, you know, just quite enough the way it is. I advise you to avoid those character-building experiences and try to go down the path of, if not least resistance just more success.
Natalia Bielczyk 43:23 Indeed. By the way, I have one, a bit unrelated question, but I’m very curious about this. If I have a chance, then I like to ask you a bit because it’s quite unrelated. It’s more about how the political system in the US influences companies in terms of taxation and law. Because, like every single time the government and the president changes, there is a major change in the whole taxation system.
Natalia Bielczyk 43:57 This is what happened recently, when Joe Biden took over the White House. From what I understood that there are lots of changes in the tax system. How do you feel about it? Is it that every four or eight years, you have to rescue all the companies you were working with from fundamental changes that happened in the market because of the political change? Is it difficult? Or is it not a problem in your practice?
Roger Royse 44:31 It is difficult. It’s like this and this is the best metaphor I have. And I’m primarily a tax lawyer, and I advise companies. Imagine that you’re out in the middle of the desert in the middle of the night driving a car, and there’s nothing around and you know you’re low on gas, but your gas meter is broken. And you know, there’s a gas station up ahead, but you don’t know how far and you don’t know when it closes. And it’s getting late at night, so you got to get there before closes.
Roger Royse 45:02 But if you go too fast, you’re going to use more gas, so you might run out before you get there. Just imagine that scenario, what do you do? Do you drive fast and take the risk or running out of gas and getting there on time? Do you drive slowly? I mean, is there even a gas station in front of you? You know, it’s like having a million variables. That’s the world I live in. It’s a world of a million variables. And tax is one of those variables when we advise companies, and it’s a matter of judgment, not science; and especially in politics.
Roger Royse 45:39 Here’s what we have now, four years ago, when we had a republican government, of course, the tax system changed. And it changed in a way that didn’t help us much here in California. But certainly, helped small business lowered the corporate tax rate, to the lowest level it’s been I think, since I’ve been practicing; maybe ever 21%. But a lot of companies did a lot of planning based on that.
Roger Royse 46:06 It also changed the whole international regime. But at the time, I remember telling people, ‘Well wait, you don’t know what’s going to happen in four years. There could be a democrat president.’ But that’s not enough, then there has to be a democrat Senate. And then there has to be a democratic House of Representatives, and they have to be far enough to let that; they’ll change the system. But we don’t know, there’s like a million variables.
Roger Royse 46:30 Here we are four years later and some of those variables have played out. We have a democratic president and senate, and house, but it’s relatively moderate. We don’t know. Even today, I don’t know. But the bet is looking like all the decisions people made four years ago, are going to turn out to be short lived. For example, I’ve had plenty companies that went into a corporate structure, because of that low rate.
Roger Royse 47:01 And that low rate looks like it’s going to go away, that’s almost a certainty. A lot of people did a lot of planning based on low capital gains rates. It looks like that might go away. A lot of people have always done planning based on the way our state tax systems work. That’s been proposed to go away. There are a million variables, but we still don’t know.
Roger Royse 47:20 Because it’s an evenly divided, you know, it’s an evenly divided Senate. it could go either way on this. Yeah, I mean, I could talk for an hour about tax policy and I already have. I’ve given presentations on this, trying to ‘read the tea leaves’ and ‘look at the crystal ball’. My conclusion is, that it’s just going to take you know, it’s a guess. It’s still a guess. I have a view as to what I think will happen. But even my view is, I’m in that car out in the middle of the desert in the middle of the night with not much gas and a broken meter. You know, it’s still a best estimate.
Roger Royse 47:36 And is the current government for blockchain, by the way?
Roger Royse 48:04 Yes and no? Okay, I’m going to get in trouble for saying this. But I’ll say more No than Yes and I’ll tell you why. Most of the blockchain initiatives have been promoted, not at the executive level, but in Congress by some congressmen. And they do not have the power they once had to push these initiatives, because the initiatives are generally less regulation. That is generally the initiative and that is not the position of the current government.
Roger Royse 48:36 This is especially true of securities regulation. We have a commissioner of the Securities and Exchange Commission who taught blockchain at MIT, so he understands the technology very well. But he is in favor of a strong regulatory regime. And unfortunately, when it comes to blockchain as it relates to securities like tokenizing securities, ICOs, etc. The rest of the world is not so much interested in regulating these things out of existence.
Roger Royse 49:07 The industry is pretty much up and left the United States. And while we’re making great strides, and we’ve got exchanges now in the US, alternative exchanges that can deal with tokens. I don’t think the tide is going to shift back. See the United States is all … I tell people, I’ve worked with a lot of non-US companies coming to the US. And the first thing I tell them, is you got to get used to the fact that this country is schizophrenic.
Roger Royse 49:33 It’ll drive you nuts. Because you’ve got competing policies and you never know which one is dominant at the time. And one of our policies in the United States is consumer protection. That is the dominant paradigm today; that is dominant under the democratic regime. The other is freedom of contract and free enterprise. And the right to go out and kind of, you know, build your business and enter into contracts with people, and make deals that you want to make. That is not the dominant paradigm today as of this moment.
Roger Royse 50:05 But that could change. You know, that could change overnight with that. It’ll change in two years or next election. That’s one thing that’ll drive people crazy. You have to balance those two things. And then we also have a federal and state system. We get that dichotomy going as well. In some states, like California, have a much different view of the world than states like Texas, you know.
Roger Royse 50:32 And so, if you’re doing business in the US, you’re dealing with both those states with two different views. I’ve forgotten what your original question was, but it had something to do with blockchain. And the answer is, you know, it’s a technology, it’s not going to be stopped, it’s not going to be held back. All of these.
Roger Royse 50:53 The thing about great technologies, to try to stop them through regulation is like trying to hold a wind up with a sail. And there are people out there with these sails trying to stop the wind from blowing. And they’re going to create a little shelter for a little while, but they’re not going to stop this in the long-term.
Natalia Bielczyk 51:10 But I was also asking, because here in the Netherlands, the Dutch government is officially pro-blockchain. But in fact, it is a difficult situation. When you make peer to peer transactions on blockchains, they don’t have any problem with it as long as it’s private transactions. But for businesses, for tax related purposes, it’s much more difficult then.
Natalia Bielczyk 51:39 And every company that has anything to do with blockchain payments, payments in cryptocurrencies and doing anything else involving blockchains, is under the scrutiny of the tax office. And my company is one of the first companies in the Netherlands that accept payments in Bitcoin and Bitcoin lightning for all our products. I’m under the eye of the tax office. Even though everything, you know, everything is like … There are logs of all the transactions and you know, there’s always parity of how much every payment is worth in euros.
Natalia Bielczyk 52:28 Everything is clear. But still at this moment, The Dutch government is very skeptical. I mean, I don’t want to say skeptical. But I think they are cautious about blockchain and for businesses to adopt blockchain, especially as a payment system. You can fall into trouble, into legal trouble, for this here in the Netherlands.
Roger Royse 52:59 I hope you resolve that. I was one of the first law firms to accept Bitcoin in payment. Nobody wanted to give it to me, but I was certainly willing to take it way back when. I take that back, I did get some clients that gave me Bitcoin in payment, and they regret it today. That’s the most expensive legal service they’ve ever received. You know, my experience … By the way, before we close, I have a long experience with working with companies from the Netherlands.
Roger Royse 53:29 As I said, I do a lot of work with agriculture technology, and the Netherlands is the number one agricultural country in Europe as you know; as you well know. The Netherlands government is also very committed to promoting agriculture technology within the Netherlands. They even formed a fund around that initiative.
Roger Royse 53:46 The Minister of Agriculture for the kingdom of Holland, when he visited California, he made two stops. He stopped to visit the Secretary of Agriculture in California at the governor’s office, and he stopped to visit me in my office and talk to some venture capitalists and some tech companies. There’s a lot of opportunity available in your own country.
Natalia Bielczyk 54:11 Great. It’s very interesting to know. I mean, I’m also not Dutch, I’m polish. I live in the Netherlands for some time now. But there are still lots of things about the Netherlands that I should learn probably. Yeah, I’ll definitely check it out. Okay, great. Thank you so much, Roger, for all these wonderful, wonderful insights and for your time; for your precious time.
Natalia Bielczyk 54:38 I know how much it costs. Because I know from our chat from four years ago, I met you in the Bay Area. And I remember you were telling me how much an hour of your office time costs. I know it’s a very valuable asset. Thank you for-
Roger Royse 55:00 It’s worse now. Well, you know, talk is cheap until you talk to a lawyer.
Natalia Bielczyk 55:06 Thank you so much. And I would like to thank everyone who is watching the episode. And if you would like to get more of this type of content, please subscribe to the channel. And thank you for being here with us and have a great day.
Roger Royse 55:23 Okay, thank you. Bye now.