Joe Alala, Founder/CEO of Capitala Group on Student Entrepreneurship, Failure, and Mentorship
Joseph Alala, III is the Founder and CEO of Capitala Group, an asset management firm providing over $2B in capital to small and medium-sized businesses. Joe received a bachelor’s in Economics from Princeton University in 1992, then graduated from Wake Forest University with a JD/MBA in 1996. Joe founded Capitala in 1998 — at the age of only 28 — in Charlotte, NC. Two years later, he became the youngest founding General Partner to receive a Small Business Investment Company (SBIC) license in SBIC program history.
I had the great pleasure of chatting with Joe about his path as an entrepreneur — his experience founding Capitala, past influences, and future visions as an entrepreneur. Here are some of my biggest takeaways from his story:
What have your overall experiences been in entrepreneurship?
“Going into entrepreneurship has been one of the greatest experiences of my life.”
“It’s one of the most challenging things you can do, but it’s very rewarding. The earlier the better, because when you’re older in life, you may not have the risk tolerance than when you’re younger.”
For Joe, staying informed about a wide range of business and entrepreneurial ventures is constant, strenuous work. But Joe stresses how he deals with it: Grit.
When making decisions, Joe has to “think at an asset firm level, but also at our portfolio company level. We have positions in 60 companies, and they’re all facing different issues. You’re always trying to forecast what’s going to happen in the future.”
“There’s no rest when you start your own business. You’ve got to be active every day and keep changing because the economy, markets, everything changes. So every day you’ve got to get up ready to go.”
How did your time as a student influence your interest in entrepreneurship?
As a college student, Joe first explored his interest in becoming an entrepreneur by running the student catering agency at Princeton. Joe recounts that his real-world lessons from student entrepreneurship were equally as fulfilling as his college education.
“That initial experience taught me a lot. Not only were you managing the student workforce, but you also had interactions with the full-time workforce. You’re learning how to actually manage a business and manage people.”
At the student catering agency, Joe learned valuable insights that led to his success as a student business leader. Many of his friends, who also ran student agencies, had such success that their pay after graduation was lower than when running their student agencies. That’s a pretty good gig as an undergrad, to say the least!
Joe also attributes much of his success to the resilience he built through sports. As a hammer thrower on the Princeton Track and Field team, his success was dependent on “grinding it out and not giving up” as a student-athlete, which translated to his passions through hard work as an entrepreneur.
Joe’s time as a student-athlete has influenced his hiring decisions at Capitala. “My firm is really big on hiring people from that background. We have a bunch of athletes…people who can show they’ll grind it out.”
“You’re going to have a lot of setbacks in any business, especially as an entrepreneur. It’s not easy, but it’ll give you some good personality traits.”
What is your advice to aspiring student entrepreneurs?
“One, I highly encourage it.”
“Two, if you’re going to pursue something, pursue something you’re passionate about, because it’s going to be a rollercoaster. Ups, downs, sideways, turns. But if you really enjoy what you’re doing, it’ll help you get through it.”
“Once you launch, you’ve got to have a lot of self and situational awareness, and sometimes you’ve got to adjust. You’re adapting your product or service to the change in environment, and you’ve got to keep plowing forward.”
“Your job should never feel like work. It should be what you want to do, a challenge to help you evolve as a person and become better. You don’t think ‘Oh, I’ve got to go to the office for three hours today.’ If that’s the way you’re thinking, then you’re not doing entrepreneurship right. Think instead: ‘I’m bringing value and having a positive impact’ through entrepreneurship.”
According to Joe, you can “reach people exponentially” through entrepreneurship. As a student founder, anyone can maximize their positive impact for a better world.
What advice would you give to students who lack the financial resources to start an entrepreneurial venture?
Joe explains that many of the biggest entrepreneurs did not have large pools of capital to build and expand. Instead, “they found a niche and something they were passionate about — and they made it happen.”
To Joe, the key for student entrepreneurs is to create a product or market that serves the right market space at the right time.
“If you find a niche, you can make it happen. Money will always follow success. If you have a product or service that is valuable, the money will be there.”
How have you handled failure during your lifetime?
Joe makes a powerful distinction between the two paths an entrepreneur can take after a failure: grit or quit.
“You’re going to have a lot of failures. Does it discourage you or does it make you work harder?”
“You’ve got to accept failure and try to learn from it, in order to adjust and move forward. Sometimes you’ll have to take the blame for a failure, but you can’t let it set you back to the point that you turn off.”
Additionally, Joe emphasizes the importance of team diversity to thrive in the presence of failure.
“You can’t surround yourself with everyone from the same groupthink. When you’re building a team, you’ve got to have diversity and always have to look at other people’s perspectives and think through it from a different lens — to actively look at other sides of the issue and see what they’re saying.”
This helps uncover the “blind spots” an entrepreneur may have in their approach, which can improve team transparency and success.
How did mentorship shape your journey as an entrepreneur?
“Mentors help you a lot. There are some things you learn with time and experience, and they can help you think through things and draw knowledge from their experiences, especially in different fields.”
Along his journey, Joe had a close mentor who gave back to the community, collected art, flew his own airplane, and lived every day to the fullest, even into his later years.
“He was always the smartest guy in the room. He had a passion for his life. I spent as much time as I ever could around him.” To Joe, mentorship plays a vital role in making progress and maintaining optimism as an entrepreneur.
How has it been for you to balance entrepreneurship with your personal life?
“For my business, you travel a lot. Family is most important, but being an entrepreneur and being a leader in a company takes you away from family. But you’ve got to be there for the important things. I’m bringing my son up this weekend [to watch a Princeton men’s soccer game]. Any big events, you’ve got to be there.”
“You’re setting an example [to your children, loved ones] if you’re working hard. It shows them that nothing’s going to come easy in life,” and Joe believes that his sacrifices will pay off, not only in his mission to help fund small businesses, but to motivate those around him to always strive for improvement.
Joe believes that students have the perfect opportunity to pursue their dreams of changing the world through entrepreneurship. Sports, passion, adaptability, and mentorship were all important factors in forging his path to success as an entrepreneur.
We hope that you can take some of Joe’s experiences and lessons to make the most of entrepreneurship as students!