We’re excited to introduce you to the always interesting and insightful Zoot Velasco. We hope you’ll enjoy our conversation with Zoot below.
Alright, Zoot thanks for taking the time to share your stories and insights with us today. Folks often look at a successful business and imagine it was an overnight success, but from what we’ve seen this is often far from the truth. We’d love to hear your scaling up story – walk us through how you grew over time – what were some of the big things you had to do to grow and what was that scaling up journey like?
Business success is like improvisational theatre. My first career was as an actor trained at Second City, the famed school for improvisational theatre that spawned shows like SCTV and Saturday Night Live. In improv, you learn to listen to what your partners say, and respond by saying “yes, and.” Improv and business is about listening to the community, finding the need, and agreeing to meet it.
In 2007, I was recruited to Fullerton from LA, to manage the Muckenthaler Cultural Center, a beautiful 1920s mansion on eight acres that serves as a regional arts center for North Orange County. It is a public-private partnership, owned by the city and run by a charitable foundation for which I would be the new CEO. The only problem is that that organization was circling the drain. They were spending $550,000/year while taking in $420,000 and quickly burning through cash and a small endowment. If they went under, the city would retake control of the center, something no one wanted. To add to the issues, at the end of the first year, the Great Recession started. Arts organizations were losing an average of 20% in revenue. The city wanted to cut all funding it gave us, which at that point was approximately $132,000, a quarter of the budget when I started. The walls were closing in. Over the next few years, we grew 300% in revenue, audience, programs, and endowment. We even had a rainy-day fund. By the time I left in 2016, we had grown 400%. How did we do it?
The previous CEO viewed “The Muck” as it is affectionately called in Fullerton, as a pretentious place for high-minded art aimed at the well-educated among us. I did not. I started with a 90-day evaluation, or listening tour, in which I interviewed all major stakeholders one-on-one. I conducted 11 focus groups including the Latino community, the Korean community (our two largest ethnic groups), youth, seniors, visual artists, and performing artists. We sent out surveys and reviewed old archives and documentation. From this, we discovered some important things. We were not serving the community. Our demographics were majority White and over 60. Our programs were poorly attended and were mostly put on by board members for their friends and family. Our programs in 2007 had more people on stage than in the audience.
This provided some opportunities. We treated the music series as a co-production putting the onus on the producers to find an audience or be shut down. To their credit, they did find an audience. We wrote a grant to the Irvine Foundation to increase Latino programming. We partnered with the Korean Cultural Center to bring us free, high-quality Korean programming. We hired new artists that represented the city’s demographics. We hosted big gallery openings in Chicano art including career retrospectives for luminaries Frank Romero and Jose Lozano. Our largest gallery attendance in the history of the center came when we did an exhibit on Korean quilting. By the time I left, the center’s demographics mirrored the city.
We renegotiated our rental contract with our catering partner and became the number one wedding venue in the county, resulting in a social enterprise that provided over $500,000/annually. We changed our membership policies, costs, and perks and did a member drive raising memberships from $2000/year to over $80,000/year in 2010.
We started an outreach education program in 2009 including the first STEAM programs in Orange County, adding arts and design to STEM programs in school. By 2016 we were at 45 outreach sites and bringing in $600,000/a year in education contracts. This outreach also freed us from space constraints.
Our growth at a time of recession came from strategic partnerships over community needs that were not being addressed. It’s the first rule of business: Find a need and fill it. But in the process, we also created equity and inclusion. We had a multi-tiered program with many free programs, some programs that were moderately priced, and a few that were expensive. That model is made for both equity and black ink in the bottom line.
In 2012, I was asked to write a book on our model and how we grew in the face of recession. That book, The First 100 Days: Leading Small Non-Profits Outs of The Wilderness, led me to another career, because I said, “Yes, and.” The President of Hope International University, also in Fullerton, was in my Rotary Club and read my book. He offered me a scholarship to their MBA program. Another Rotarian in Long Beach somehow got and read my book. They hired me to start a nonprofit executive training program at California State University, Long Beach in 2014 when I finished my MBA. In 2016, that program moved to California Polytechnic Institute, Pomona. In 2018, I was asked to take over as the Director of the Gianneschi Center for Nonprofit Research at California State University, Fullerton.
In that role, I was able to do a research project to see how others handled the Great Recession. I asked the research question, “How many organizations grew from small to large in the Great Recession when most were shrinking, and what did they have in common?” I picked Orange County, Riverside County, and San Bernardino County as my study set because these three counties when taken together mirror the US in demographics. Out of almost 6500 charitable organizations, I found only 29 that grew during the recession and were able to sustain that growth. I interviewed most and studied them all. My findings mirrored my own experience with The Muck.
Traditional nonprofit business lore will tell you that you grow on securing big donors, hosting big galas, and writing grants. But my research found the opposite. None of the 29 “Recession Stars” as I call them grew on any of this. They all grew on earned income streams. And they all grew just like the Muck: Evaluating the community need and filling it through strategic partnerships, great programs, and staff that bring in money through earned income streams. You can read all about it in my new book, small to LARGE: Growing Social Impact Organizations Against All Odds which can be found on my website at 4M-pact.com or from the publisher, Kendall-Hall.
As a result, I now teach my methods, consult, and run leadership programs. I am still saying “Yes, and.”
Great, appreciate you sharing that with us. Before we ask you to share more of your insights, can you take a moment to introduce yourself and how you got to where you are today to our readers.
Like any good business professor, I started as a professional break dancer. I learned business from hustling since I was 13. And everything I learned about leadership; I learned in prison. Let me explain:
As an infant, I was burned in a fire and lost all the muscles in my right foot. I grew up with many surgeries and braces on my leg. Yet I wanted to be a dancer like Gene Kelly and Fred Astaire. I learned that I could not be formally trained as a dancer, but when I was in high school, my New York neighborhood was starting a new trend with dance battles we now call breakdancing. I didn’t need training for this. And my favorite dance was The Robot. I watched the Six-Million Dollar Man on TV. I was part robot with my braces and surgeries. After much practice alone in my room, and the prospect of pretty girls who like dancers, I danced in the circle and found acceptance for the first time.
By the time I was 13, I was working four jobs outside of school. I mowed lawns or shoveled snow on the weekends; babysat on Weds and Fris; cleaned offices on Tues and Thus; and had a paper route in the mornings. My motivation? My mother was a terrible cook. I had to earn my own money if I wanted to buy my food. I was bragging to my wife recently about what a great salesman, I was as a kid. My sister (who we were visiting) overheard, and said, “You weren’t so great. Everyone just felt sorry for you with all your braces and scars.” That never occurred to me. Regardless, it gave me confidence I carried through life.
In college, I joined a dance company and within a few years was making good money street performing and doing gigs. I moved to LA to work in film and television and studied theatre. After working with Prince, Michael Jackson, Arsenio Hall, and others, I realized that my aging body was not going to last forever. And I enjoyed my day job more. I taught theatre in juvenile halls and prisons. It was very rewarding in ways Hollywood was not. Soon I was asked to manage a prison arts program. After 12 years as a dancer and actor, I switched to administration.
My program involved outside artists and inmate workers, who are not shy about critiquing your performance. I learned so much about leadership from my charges. Our award-winning work is still in museum collections to this day. We produced plays, videos, CD albums, books, artwork, and a youth deterrent program. In 2000, the program was shut down statewide in budget cuts. I was hired by the City of LA Cultural Affairs Department, where I managed the building and opening of four new art centers, six partnered centers, and several festivals. After a change in leadership there, I left as a consultant rescuing organizations that were failing, which led me to the path I described in thelast question. One side note, in 2012, Governor Jerry Brown restored the arts programs in prison and I was one of a few chosen to help with that restoration.
Breakdancer to Business professor. I’m proud of it all.
Can you share a story from your journey that illustrates your resilience?
My whole life has been about resilience. I do believe, as Angela Lee Duckworth shows in her TED talk, GRIT is the secret to success. Growing up with a disability in a low-income neighborhood with a mentally ill mother as my only caregiver, my entire childhood was about resilience. But when you start with that mindset, it is easy to adapt it to any situation. Also, growing up as an outsider, helped me learn to both fit into any situation and yet never fit in. I spend my life on the fringe which I use to my advantage to be close to everyone but not get too close to very many. I find this is a useful attribute as a leader, where you need to be an advocate but can’t get too close to maintain independent decision-making.
I know that my students like the mantra that it’s OK to fail. And I agree. But an important caveat is to provide a space for your team where it is ok to fail and test the concept of your theory of growth but do it small enough where when it fails it doesn’t tank everything else. I teach my students that innovation is not about creativity, as everyone thinks. And this is coming from someone who made a career in the arts. Innovation is the scientific method. A theory of change, tested over and over in experiments that are small and controlled.
What I have learned most from a life of resilience is what I call the “Taco Cart Theory.” If you want to open a restaurant, don’t spend a fortune and open one in the best street in town. Most of those go under in a year. Start with a taco cart. Perfect your recipes. Then move to a lunch truck. Then a brick and mortar. Grow sustainably testing in ways that don’t break you. This is how I have always worked. Test and retest the boundaries in small ways and then grow with proof of concept. This is not only resilience but also innovation and sustainability. This is success.
Any fun sales or marketing stories?
My favorite lesson in marketing comes from the world of social media. Even as my organizations were succeeding, I was often being dinged by my board saying, “You have to do more on social media.” And we opened accounts and experimented. But it felt like we could never keep up with it. It also felt like smoke and mirrors, like success on the internet was mostly a feedback loop of the same people “liking” your posts as a reflect more than any real engagement. It always bothered me. Then in 2019, I was now a professor of Marketing at Cal State Fullerton and running a conference for charitable sector leaders. This gave me the opportunity to invite high-impact social media influencers to some and speak about what makes them successful. One of our speakers ran the social media for the Mars Rover and won Webby and Grammy Awards for her work. Others were top influencers on Youtube and Instagram.
All gave the same advice.
1: It’s easier to grow an online network if you have an in-person network first that is strong.
2: You don’t need to be on every social media platform to be effective pick the one or two that work for you and focus your energy there.
3. Don’t be that person at the party who just rambles on about themselves all the time, which is exactly what most people do on social media. Follow the acronym LEAD: Listen actively and learn what that platform community wants and likes. Engage with them in comments and posts rather than talking at them with your stuff. Add value with each post that brings something to the table. Deepen relationships as you get to know people online. Start to know them offline.
I found this incredibly helpful and freeing in my own work.
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