News » Business

Entrepreneur Scott Jones talks about risk


1 comment
Scott A. Jones, honorary chair of the 2013 Spirit and Place Festival, describes himself on Twitter as: "Lemonade Salesman / Father to 5 boys / Serial entrepreneur / Dog lover / Food enthusiast / The Guy @ChaCha / Complicatedly simple kind of man" - SCOTTAJONES.COM
  • Scott A. Jones, honorary chair of the 2013 Spirit and Place Festival, describes himself on Twitter as: "Lemonade Salesman / Father to 5 boys / Serial entrepreneur / Dog lover / Food enthusiast / The Guy @ChaCha / Complicatedly simple kind of man"

Editor's note: This article has been amended to clarify Jones' answer on the political risk associated with pursuing HJR6, the referendum on the definition of marriage.

Scott Jones is well known for several reasons: His knowledge of technology and business has earned him many millions of dollars. He stokes the entrepreneurial spirit in Indy kids through his Lemonade Day initiative and their imaginations at the Indianapolis Children's Museum dinosphere. Also, his wife, who goes by @VeeVee on Twitter, started a social-media frenzy when she tweeted accusations of infidelity. [We mention this last one to establish some background for comments printed later in this story.]

Jones is honorary chair of the 2013 Spirit and Place Festival, a 10-day series of events that kicks off Nov. 1 with a $20,000 competition in which four groups (chosen from a pool of 43 applicants) will present their concepts for re-imaging race. Be at the Indianapolis Museum of Art at 7 p.m. to watch live as Javier Barrera of the Latino Youth Collective, Pete Hylton of IUPUI's Motorsports Engineering Program, Danicia Malone of the Indianapolis Neighborhood Resource Center and DeShong Perry-Smitherman of A Girl's Gift, Inc. try to sell the audience and the judges on their ideas.

On the eve of the competition, Jones spent some time exploring the concept of risk with NUVO's news editor, Rebecca Townsend. The interview is slightly edited for length and clarity.

NUVO: Please explain how you came to be honorary chair of this year's spirit and place.

Jones: I'm not exactly sure how they decided to appoint me to that position, but I live my life pushing risk to the limit. Maybe it's obvious in the business world that I do ... I take risks in life not just in business, but I'm very open to those types of things.

NUVO: Have past Spirit and Place events stuck with you or affected the way you think about anything in particular?

Jones: This was new to me...I do things within the community like Lemonade Day and lymphoma walks, and I support the Children's Museum and the Indianapolis Zoo, but this is a really a different dimension, which I like — I particularly like this topic. When they did ask, it didn't take me long to say yes.

NUVO: What do you hope this year's festival accomplishes?

Jones: I hope that it opens people's minds, that it invites change in our lives and in our communities. For example the competition on re-shaping notions of race that opens the festival tomorrow night at the IMA. It's an important opportunity for all of us to step inside our boundary lines.

I went to IU. I was there for six years and became an assistant in the dorm, for two summers I chose dorms where I was the minority, one of handful of white people. Walking into cafeteria every day completely changed by perspective of race. Most people don't get to experience that for extended periods. That exposure, which I had as a teenager, was been helpful for my entire life.If we can do something like that with this festival...

NUVO: I read the festival's mission "to be a catalyst for civic engagement through creative collaborations among the arts, humanities, and religion." It seems you've endeavored to provide a catalyst for the way people connect with information. What do you think your company ChaCha has contributed to the world of ideas and the level of social conversation?

Jones: It's quite interesting: The new version of ChaCha that you can download allows you to connect to people that you don't necessarily know, they're not your friends right now, but on any particular topic you might choose, you get connected to have a conversation.

The Old ChaCha didn't used to work that way: You'd ask a question and we had a guy who would look it up somewhere on the Web and give you an answer. The

newChaCha is different, it's much more a of social app that puts you into connection with somebody who either says they know or they might be an expert, but you are in conversation, you're SMS texting with that person immediately on whatever topic you want.

There's nothing like it.,,, Quora ... none of them do real time conversation with an expert or fan of a particular topic.

NUVO: So, in a way, you're expediting the conversation?

Jones: Yeah, around the world.

NUVO: What risks are we taking as individuals as more of our lives and experience is channeled through social media and the digital universe?

Jones: I think social media in some ways is forcing and in other cases inviting people to put themselves out there in a very public fashion and express ideas and get feedback on them instantaneously. We didn't have that a decade ago, or before. This is way new and different from where we've been — all of human kind.

NUVO: OK, timeout. Quick social media experiment. I Tweeted out that I was going to talk to you 10 minutes before you called. Let's check to see if anyone has any questions for you. ... Rats, no one has weighed in. Not good for my social media cred.

Jones: Well, we'll have Vee put it out there. She'll get responses.

NUVO: You're known for your success in business. How have the changes in the size of your bank account over the years affected what risks you've taken? If you are scrambling to make something from nothing are you apt to take bigger risks or do you tend to risk more when you know you have a bigger cushion to pad your margin of error?

Jones: I personally think I take equivalent risks no matter what the bank account says. But I find when the bank account has less in it, I'm taking risks, but I'm smarter about it. Like necessity is the mother of invention. Well, if there's not enough money there if you don't make a sale, it's like you're operating without a safety net. I find my decisions are actually better when there is less in my bank account, if that makes sense.

It's ironic, but my risk profile is not a lot different. I've noticed that about myself. Even when I started the voicemail company, I had no money in the bank and neither did my partner. We started taking those envelopes that came in the mail for credit cards, we signed up for all of them, then maxed out our credit cards. If it hadn't worked, we would have been bankrupted in our mid 20s. But the pressure was on. As is the case with most entrepreneurial ventures, it was not linear path. We really had to figure it out and there was a lot of pressure to do so from ourselves.

NUVO: And from every major credit card company in the country ... How do the risks we take with money compare to the risks we take with love?

Jones: Gee, I think money is lot easier. On the love side, I'm assuming you've paid attention to what happened in my marriage in the last few months. It takes some risks to stay in. It was a real challenge for us, but we've got two children together. I've got five children over all and I want to keep the family together and it's important. It takes a lot more fortitude to take risk in love than it does in finance.

NUVO: What about the risks we take with our lives? What lessons have your learned from the risk of death?

Jones: When I was younger, you feel invincible and are willing to do things — you don't know what can go wrong. As I get older, I know what can go wrong and I get pretty stressed, like panic attack. I've noticed that my boys and my wife, who are younger than I am É they have a different perspective. They feel like I'm a killjoy. But I've gotten to a place where I'm more comfortable with death having gone through cancer and helicopter crashes and some other things. I've had some times to reflect on, "Hey, I could actually die!" Many people don't get that until they're well into their 50, 60s and 70s. I got it in my 30s and 40s and now I'm 53. I've faced death a few times and it changes your perspective, like: OK, if it happens, it happens. But

I'm not going to live my life smaller because of it. I'm going to live large and take risks. I've got a young family who doesn't know any better. I'm not going to take stupid risks for them, but you have to live life to its fullest.

NUVO: What is the greatest risk we face as a nation right now?

Jones: Being complacent is a huge risk. Those on other continents are much hungrier than we are to have success — and I'm not taking financial success, I'm talking happiness in our lives. It seemed like a couple world wars focused the energy to be more positive, but I wonder today ... We've got other countries who are highly motivated to succeed financially, educationally, pushing the limits of science and art. They just seem more motivated and we're kind of complacent. We've had a century of successes, but if you measured the velocity of these successes in each of these different dimensions, I think other countries are accelerating faster. It seems hard to conceive, but we'll get left behind. Like the frog boiling, we won't know it until it's too late.

NUVO: What risk do you associate with climate change? I've been interested to see the local response — or lack thereof — to the most recent IPCC report.

Jones: I haven't seen that, give me a quick one-minute summary.

NUVO: More than 200 authors from 39 countries underscoring the cataclysmic changing-climate trends playing out across the world and trying to hammer out how to limit global greenhouse gas emissions when there is protest from emerging economies who have not had the advantages a century's worth of progress on fossil fuel. It's a huge business challenge, really.

Jones: Yes, it is. China, for one, doesn't want to stand by and say, "Sure we'll put a cap on our industrial age." It doesn't seem fair, but we are at a place where if all the countries don't work together to save out planet, I'm convinced — and it sounds like a lot of scientists are, too, at this point — that we've got a major problem. Again, it may be one of those things that will creep up on us. It almost feels like we're compromising in all our decisions. And, if we stay on this track, we'll compromise too much for too long. And it might be unrecoverable. It's a bit of a pessimistic view, and I don't normally take that point of view, but I try to be both an optimist and a realist, and I don't see us doing the things we have to do to fix this. It's just getting worse and getting worse at an alarming rate. I suppose humankind will come together when it becomes obvious we've really screwed things up, but does it really need to take that long?

NUVO: What risk do you think Statehouse Republicans face if they pursue HJR6, calling for a referendum on the definition of marriage? In this session, there will be political risks, don't you think?

Jones: I think there is some political risk. But geez, it's an obvious thing to do at this point. Many states are ... I don't want to be the last state to have enacted this legislation, like we were with daylight saving time. We do we really need to be last for this issue? It's obvious what the outcome is going to be. And we really need political leaders who are willing to take risk, like Mitch Daniels was. I'm assuming our governor and the Legislature will take the necessary risk to make this a better place. Why are you in politics if you're not going to do that, right? [Jones later emailed to added extra clarification: I am in full support of same-sex marriage.]

NUVO: How much risk do you think the Federal Reserve is taking with its strategy of long-term low interest rates?

Jones: There are certainly risks, but it's managing risk. There are risks on either side of the equation, whether you let the rates rise or you keep it where it is. I personally agree with the current policy and I think it will allow better growth ultimately to keep the rates low. So, is there risk to that? Sure, but what's the competing risk?

NUVO: So do you think we're back on the rise economically or do you think we haven't felt the true pain yet?

Jones: That's a good question. I personally believe we haven't felt the true pain yet. I hope I'm wrong. It feels like, as I said earlier, we're complacent as a nation. Unless we pull together as a nation and as communities and look at different ways to approach health care and approach growing business, we're falling behind. And when there is global competition, we've never had to really experience that. Well, we did a little bit with the automotive industry 30-40 years ago, and we see what happens there. That's going to crop up in dozens and hundreds of businesses and industries. We're going to have to grapple with that. Yeah, there's a lot of pain that we're going to have to go through. And I think we'll respond to that pain, but it's almost like we're waiting for the pain to happen before we do the right thing.

NUVO: It will be interesting to see how it plays out. It's very difficult to figure out how to invest in this current environment, you know?

Jones: Yeah. To that point: I invest more in the things I'm doing. I find it very hard to decide where to place my bets when it's in someone else's hands, so I invest in the things I'm doing as an entrepreneur, which is beyond ChaCha — it's robotics, stem cell research, it's kind of all over the map. There are things in which I can play a role and steer, outcomes that can be managed.

NUVO: In your own life, which risk has had the greatest payoff and which the greatest cost?

Jones: The greatest payoffs are the personal risks for me. I mentioned my marriage earlier. In the six years I've been in this relationship, there have been a couple major challenges that most marriages would not have survived. I've taken the risk to say, "I'm staying in this time and I'm making a go at it, basically no matter what."

I had not just my friends, but legal counsel and everybody else saying, "You're freaking nuts to stay in." But I think the risk I've taken has paid off. We'll see. We've got the rest of our lives to live, but it feels like that ... in all my life and all the risks I've taken, this is one of the bigger risks and the outcome is the most valuable and beneficial to me and to my family. That's the biggest success coming out of a risk.

On taking risks and losing, nothing comes to mind right away, except back when I started Escient here in Indianapolis on the Westside, I acquired 13 or 14 companies and distilled it down into five operating companies, one of which was Gracenote, which exited for $260 million and it powers iTunes and it has like over 150 billion transactions a year. But there was another subsidiary ... I thought it was going to take longer to enable data storage as cheaply as is done now. Today, you can buy $100 disk drive that holds a terabyte. I wanted to house music and movies in your home in what I called the Entertainment Furnace. So, I made the wrong bet and ultimately lost out against Netflix and Amazon instant video. Everything's in the cloud now with very inexpensive storage. So, I made a bet and lost tens of millions of dollars on that one. But I learned some things along the way. At first I thought I was early, but things went so fast in the ecosystem around me, that I ended up being late.

At first I was early, then it zoomed right on by.


This Week's Flyers

Around the Web