Entrepreneur Fred Schaufeld Is Always Ready To Rock And Roll

Back in his early college days, Fred Schaufeld was shy, didn’t date much, didn’t have many friends, and was petrified to raise his hand in class for fear of having to speak in public.

Then, he did something totally crazy in his junior year at Lehigh University. He ran for the elected post of the school’s student activities concert chairman — and won. Suddenly, he was the guy in charge of bringing top concerts to the school.

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Did he ever. He brought the Marshall Tucker Band, Journey, the Allman Brothers, James Taylor, Hall and Oates and Ozzy Osbourne. And don’t forget Cheap Trick, Frank Zappa and the Grateful Dead.

Schaufeld brought 20 major headliners to the school that year. He even took a public speaking course and learned how to stand in front of 6,800 screaming fans before each concert and shout at the top of his lungs: “Are you ready to rock ‘n’ roll?”

Build On Your Success Like Fred Schaufeld

Fast-forward to today, and Schaufeld is still rockin’ in his own financial successes. He founded the then-novel extended warranty company National Electronics Warranty Corp. — or NEW — for $79 in 1983. Berkshire Partners later bought it for $1.2 billion.

The company later merged with Asurion, now a $44 billion insurance giant. The venture capital firm he cofounded, SWaN & Legend Venture Partners, invested in Kind Healthy Snacks when the company was valued at $200 million. Mars ultimately bought Kind for about $5 billion. When he first invested in Cava Group (CAVA), it was worth about $70 million. Today, Cava is worth roughly $10 billion.

Keep Seeking Opportunity

Schaufeld is no jock, but he’s got an affinity for investing in Washington, D.C.-area sports teams.

He is a partner in Monumental Sports & Entertainment and part-owner of the National Hockey League’s Washington Capitals, the National Basketball Association’s Washington Wizards, the Women’s National Basketball Association’s Washington Mystics and the Capital One Arena in Washington, D.C.

At 66, does that mean he’s now ready to throw in his towel? Hardly. “I’ll retire when I’m horizontal,” he said.

Until then, he says, he’ll keep reaching for new opportunities that knock him out of his personal comfort zone.

“If everything is going perfectly, you get lazy, fat and tired,” he said.

Schaufeld: Learn From Setbacks

Things seemed to be going perfectly when his venture capital firm, SWaN & Legend Venture Partners, was helping Kind Healthy Snacks find its mojo. At the time, Kind was the only brand sold on Starbucks (SBUX) shelves nationwide that the coffee kingpin didn’t own. Then, out of left field, Starbucks kicked Kind out.

“That forced us to build our own brand,” he said. Kind never looked back.

Prize Honesty

Neither has Schaufeld, who says honesty is every leader’s greatest asset. That honesty isn’t just to others, but to oneself. “You need to know your strengths and weaknesses. You need to know what you love and hate. You need to know your values,” he said.

The best leaders also learn to adapt, he says. For example, leaders will sometimes run into people who they are certain they don’t like. What’s most important, he says, is to stay open to the possibility of learning to like them and respect their ideas.

Know Time Counts More Than Money

The best leaders, he says, learn to value time over money. If you are miserable every Monday through Friday so that you can have terrific Fridays and Saturdays, the math will never work out, he says.

That’s one reason he carves out time every day for self-care.

Schaufeld does this by beginning each workday at his Leesburg, Va., estate with a two-hour walk — often bringing along one or two of his dogs.

He walks for up to six miles no matter what. He wears a pair of walking boots, so he’s not bothered by rain, snow or temperature fluctuations. While he walks, he typically brings his phone and earbuds and figures that he gets more work done while walking than anywhere else.

“I’m under sun, clouds and sky instead of fluorescent lights and dropped ceiling tiles,” he said. “I’m a lot sharper while walking than while sitting on my ass at my desk.”

Schaufeld: Value Exercise And Movement

One of the biggest business deals he was ever involved in — putting together a syndicate to purchase Cava stock — took place while on a long, morning walk. “I looked down at my white German Shepherd, who nodded and approved the deal,” he said.

His ability to bring humor into life — in or out of the office — is what those who know him best say makes Schaufeld such an effective leader.

Once, in the midst of a high-level negotiation with a client, Best Buy (BBY), Schaufeld didn’t like the discussion’s direction. He used an unlikely prop to stop it: a banana.

To show that he was done discussing the matter, he stopped and put his feet up on the desk. Then he opened his briefcase, took out a banana, and started chomping on it. “We’re not talking about this anymore,” he said, between bites. “We’re done negotiating.”

Sitting with him in the room was his longtime business partner and former NEW CEO, Tony Nader, who still remembers the scene. “It was so outrageous that even the Best Buy team couldn’t help but laugh,” said Nader. “They could see that he was serious, and we ended up getting what we wanted.”

Play It By Ear

His ability to improvise has always been his superpower. At age 14, he was washing and vacuuming cars at the used-car lot in Westbury, N.Y., that his mother took over and successfully ran after her husband died. Soon, Schaufeld was riding bikes around town to pick up license plate applications not just for his mom’s lot but for a bunch of car dealers in town.

He started working for a car warranty company only to discover it was a scam. That’s when he decided to start his own auto warranty business, NEW, which was one of the few on the up-and-up.

It didn’t take long for him to figure out that warranties didn’t have to be limited to cars. He expanded the business into retail, including large appliance clients like Best Buy.

These warranties ultimately became the most profitable part of the store, he says, because they require zero inventory and very few employees. The key to running a successful warranty business, he says, is simply to run it ethically.

When he ultimately merged the business and later sold it to Asurion, he made a fortune.

Get Others On Board

His success, in part, came from his ability to explain his goals to his employees and get them to embrace them.

When NEW was still a small but growing warranty business, Nader recalls one strategy session when Schaufeld asked each member of his team how big they thought they could build the company.

At the time, NEW was worth about $10 million. One employee said $20 million. Another suggested $30 million. And one daring employee predicted $100 million. That’s when Schaufeld rose to his feet and forecast $300 million — then proceeded to convince every executive board member but one that it was possible. Schaufeld ultimately sold NEW for $2.8 billion.

Build A Powerful Routine Like Fred Schaufeld

Schaufeld is a man of habit. He skips breakfast — except for a protein shake now and then. He nibbles a chopped salad for lunch. And for dinner, he has soup and salad also prepped by the French ambassador’s former head chef.

But Schaufeld sees a successful career as anything but routine.

“There is no such thing as true success,” he said. “You should always be striving. But you never really finish. You just run out of time.”

Keep Your Mind Sharp

That sounds much like the endless virtual chess game that he’s been playing for years with Jose Andres, the famous restaurateur and humanitarian who runs the World Central Kitchen. They play on a virtual chess app — each one always trying to out-strategize the other.

When one game ends, they play another — with pride as the only prize.

For each match, it’s as if something inside Schaufeld’s psyche reverts back to those electric concert years at Lehigh and silently nudges him to ask himself on cue, “Are you ready to rock ‘n’ roll?”

Fred Schaufeld’s Keys

• Founded National Electronics Warranty Corporation (NEW), acquired by Asurion in 2008. He then became a successful early investor in companies like Kind Snacks and restaurant chain Cava.
• Overcame: Shyness in early childhood and in college.
• Lesson: “There is no such thing as true success. You should always be striving. But you never really finish. You just run out of time.”

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