John Lee Dumas: “Entrepreneur on Fire 801.” Who’s ready to rock today, Fire Nation? John Lee Dumas here and I am fired up to bring you our featured guest today, Catherine Hoke. Catherine, are you prepared to ignite?

Catherine Hoke: Yes, I am.

John Lee Dumas: All right. Driven by her hatred for injustice and love for the underdog, Catherine left behind a career in venture capital and private equity to pursue a higher calling. In 2010, she founded Defy Ventures, an organization dedicated to transforming the hustle of formally incarcerated individuals in equipping them to go legit.

Catherine, I’ve given Fire Nation just a little insight, so share more about you personally and expound upon the biz.

Catherine Hoke: Sure. How long would you like on me personally?

John Lee Dumas: Let’s get into it, girl.

Catherine Hoke: I’m French-Canadian born, California raised for the most part. I live in New York City right now. I used to work in venture capital and private equity. After being invited on a prison visit at the age of 26, I saw that many of the biggest underdogs in America happen to have rap sheets. They’re behind prison bars. I asked myself the question when I met them the first time, “What would happen if they were equipped to go legit with their skills?” That led me to start my first nonprofit, which is based in Texas. Defy Ventures is my second nonprofit. It’s my 2.0 attempt to scale something nationally to make a difference for this very overlooked talent pool.

John Lee Dumas: This is exciting stuff, Catherine. I think if Defy Ventures wasn’t available, a great name for your business could have been Equipped to go Legit. I just love that flow.

Catherine Hoke: I might change it now.

John Lee Dumas: She’s like, “Whoa. I do like that.” She’s on GoDaddy trying to buy the domain.

Catherine, we’re going to dive into your journey. We’re going to do a deep dive, and uncover some cool things you’ve experienced throughout your life. Before we get into that, you have a pretty – I want to call it a mantra/saying, more like belief that you’re going to share with Fire Nation today. Go ahead and share that.

Catherine Hoke: Sure. I like to ask people what would it be like if you were only known for the worst thing you’ve ever done? This is the story and challenge we face for people with criminal histories. It turns out that nearly one in four Americans has a criminal history, and most of them are not known for who they are today. They’re permanently known for the mistakes they made yesterday. I know that other entrepreneurs and leaders, we’ve all made many mistakes, so I like to ask that question as I frame the discussion for the work that I do.

John Lee Dumas: Let’s be honest with ourselves here. Anybody listening to this podcast right now, you’re going to kind of cringe if you actually pictured being labeled for the worst thing you’ve ever done. This is life. We’ve all been through the ups. We’ve all been through the downs. We’ve all done things we’re not proud of. I can definitely raise my hand in that category here.

When you put it that way, Catherine, it makes me say, “Man. Is it really fair that these incarcerated people do have that label?” People like myself and others who might be listening, who of course have done things we’re not proud of, have been able to skate by without that. Food for thought, Fire Nation, as we dive forward here.

Catherine, “Entrepreneur on Fire” is kind of a unique podcast where we interview entrepreneurs, and we don’t just talk about why you’re a rock star. We’re going to get to that. Believe me. We’ve got some awesome things to share there, by the way, little teaser. We also share your journey, and not just the successes but the low points, the failures, the struggles. That’s where I want to start today, Catherine, so take us to a time in your journey when you did fail, when you did struggle. Really take us down to that ground level. I want to be there, Catherine. Take it away.

Catherine Hoke: I would consider myself an expert in failure. The lowest point of my life was about five years ago. I mentioned that Defy Ventures is my second nonprofit that I started. The failure story that I’ll talk about was one that took place between the starting of my first nonprofit and my second one.

When I was 26, I was invited on that prison visit, and I started an organization in Texas called Prison Entrepreneurship Program, or PEP, which still exists today and is extremely successful there. When I started it, everyone said, “This is impossible.” This won’t happen.

Over the next five years, I ended up leading that organization to achieving some of the country’s best recidivism rate statistics in this sector that is typically marked by failure. Five years that looked really good that were a real struggle for me as an entrepreneur, but then at the end of that five years, I ended up making some really poor decisions.

I was married the first time when I was 22 years old. I’m 37 now. When I was 31, I was divorced. It was unexpected. It came unexpectedly for me. I had poured my life into the building up of my organization. I had missed many opportunities to be a wife. In the wake of my divorce, I made some really bad decisions that I regret to this day.

I ended up having some relationships with people who had been graduates of my program and had been released from the prison system. Although it wasn’t against the law, it was a really bad judgment call. It was a terrible choice and decision.

After making those decisions, one thing I did well – although it was very hard – was I was very honest with my choices and decisions. My honesty about these relationships led to a very public resignation process. The news picked it up.

The Texas Department of Criminal Justice told me that if PEP wanted to keep going, I had to resign. It was a fairly easy choice for me to make because I wanted my organization to be able to live on even if I was unable to lead it anymore.

When the news picked it up, it went across national news, and then even out globally. I was covered in the thickest shame of my life. I had been asking this question, “What would it be like if you were known for the worst thing you’ve ever done?” for years. Now all of a sudden this applied to me. I was divorced. I was broke. I didn’t have my organization anymore. So much of my identity had come from these things.

I think the worst part for me was that I was visionless. I imagined what would people say about me, and that no one would give me the time of day.

Around the same time the news went out, I sent a letter. We had 7,500 supporters at the time. I sent them a very full disclosure letter about my mistakes. I thought that was the end of my life. The big surprise for me in that was that I got within 24 hours 1,000 emails of love and support. “We stand with you. You’ve talked about second chances for so long that we want to be there for you.”

The problem was that I didn’t have an answer. This happened so suddenly that I hadn’t planned what I was doing next, so I took a year off to get more therapy than I care to admit, and to get my life on track, and to really think about what I wanted to do next.

I moved back to New York City because it’s my favorite city in the world, and I needed to get some energy back into my life. I got an offer to go back into venture capital, but the minute I got that offer, I felt like a sellout. I know very well what my calling is. Although I had messed up – and I had messed up so publically and was so covered in shame – the times when I’ve had the most joy in my life are when I was talking about the redemption stories of people who were behind bars, and seeing them reconnect with their families, and seeing them get a second chance.

That’s when I decided to start Defy again. When I started my first journey in Texas PEP versus when I started Defy in New York, it was even harder staring Defy in New York because as a second-time founder, I know all the things that can go wrong, and I made way more mistakes than just the ones that the news chose to write about. I know how hard it is to start something. I was insecure and wondering what people would say.

When I started Defy in 2010, it was a really challenge and struggle for me because I had to get over myself.

John Lee Dumas: Catherine, what I do want to jump in here and talk about is a sentence you said that really resonated with me, and I don’t want it to go too long before we talk about it for a second because I know that our listeners, Fire Nation, are going to get so much from this.

You said you were broke, you were shamed, and, the worst part, you were visionless. Fire Nation, why that’s so powerful to me, and why that just resonates with my core is because you can be broke. You can be shamed, and you can come back from that. What is terrifying, especially for people that have the entrepreneurial blood like Catherine, like myself, there’s nothing more terrifying than being visionless.

Catherine, speak to that specific word: visionless. How did you get over that terrifying visonlessness that you were experiencing to having a vision again?

Catherine Hoke: For me, part of being able to get to another vision required having the energy to get to a vision. I was so depressed and down on myself that even thinking about having another vision exhausted me in and of itself, without even knowing what that vision would be in the first place.

My first step was really that I took six months to heal and to get out from being under the public eye. I had a close group of friends that led me through my healing. I say they loved me back to life.

I did things that other people probably think are cool, like I went to the beach. I went to Costa Rica. That was even more depressing for me because sitting at the beach without a vision was – I didn’t feel like I deserved a vacation. I like a vacation if I have a vision. Even though I didn’t want the down time for me, I needed it to get myself back together in one piece, to get to a place of some strength.

The second half of that year, because I took a year off, instead of actually doing something, I took six months to explore what those visions could be. I played around with all kinds of visions. I didn’t have the money to do this, but I ended up getting personal loans with the hope that I would be able to pay them back at some point. Some good friends of mine were willing to give me this time, which was very valuable to me.

Part of that second six months to really develop my vision once I got a little more energy in me – and this was after I moved back to New York, by the way because I wanted to be around energetic people and feed off of their visions too – I started to explore every model of anything that interested me at all, so anything in social entrepreneurship, anything that was transforming the world. I just read everything I could.

Then I booked meetings with any leader I could just to pick their brain, to say, “I don’t know what I’m going to do next. What do you think about these ideas? What do you think my gifts are? What do you think I could do with my gifts?” Exploring other models that were inspiring to me gave me ideas, even reading about them.

John Lee Dumas: Catherine, you gave me permission in our pre-interview chat to break in when I felt like I had to. This is actually one of those moments because I don’t want too much time to go by without our listeners really being able to sit and absorb some of the powerful things you’re talking about here.

The fact that you were visionless, that in and of itself was one of the bigger struggles. Even taking these vacations, they felt empty inside because you still were lacking that vision, even the energy.

You first, Fire Nation, have to take care of yourself. What are you doing to get that energy back? Are you sleeping? Are you eating right? Are you exercising? These are the trifecta things that as entrepreneurs we all need to be doing because it all starts with energy.

Catherine, this is where I do want to shift this interview because you told us about that struggling point. Now we’re getting into that next phase in your life, but I want you to tell it in a story format again. This is the ah-ha moment section. Take us to that epiphany moment that you had for that next thing, and really tell us that story.

Catherine Hoke: The ah-ha moment that got me to start Defy, you mean?

John Lee Dumas: Yes.

Catherine Hoke: Okay. This was when I was still at PEP, and I thought my resignation could be around the corner. Stuff was breaking down. This sounds very random, but I took a trip to Rwanda, Africa. I actually got to go into a Rwandan prison there. This was pretty much 15 years after the genocide, so most of the people who were inside that Rwandan prison had been convicted for these atrocious acts that were committed during the genocide.

What my point is here is that these people were convicted of probably the worst and ugliest things I could ever imagine, like hacking heads off of babies, and women, stuff that I couldn’t even stomach.

What I found happening there inside the Rwandan prison is even people that I had labeled as being beyond God’s grace, or something that I couldn’t stomach, I found myself having this weird compassion for them, and thinking, “If these people are not equipped to go legit with their lives, if they’re not healed and equipped to go forward in their lives, what will happen to society?”

It was in a Rwandan prison, as I was about to hit my crisis, that I thought, “Regardless of what goes down, I need to keep doing this with my life.” I have a passion and a calling that I’m so aware of. How can I walk away from this?”

It was that ah-ha moment that I kept thinking back to, even when I didn’t have the energy, and I didn’t have a real vision of how to achieve it. I felt like I had to stay true to that calling.

John Lee Dumas: Fire Nation, this is the type of thing that even when things are falling down around you, even when you’re thinking that you’re coming to the end of something, keeping that open mind, and always just taking those chances, and having those conversations, and thinking about things that need to be thought about in your life’s journey can really lead you to things like Catherine experienced.

On a random trip to Rwanda, a lot of people would be like, “That’s totally off the map. She’ll get nothing out of that.” It ended up having a massive impact on the direction her life has taken.

Catherine, let’s be honest. You have a lot of things to be proud of throughout your life because you’ve done a lot of great things for a lot of people who otherwise wouldn’t have had these opportunities. If you could just take us to the moment you would consider your proudest entrepreneurial moment, what would that be?

Catherine Hoke: It was probably when I was at my first nonprofit, PEP. It was on one of the graduation days. One of them doesn’t stand out more than another. Only about half the men we served had graduated from high school. They had never even been in a cap and gown. Many of them had lost relationship entirely with their families, so we would recruit their families to come to the prison to celebrate their graduation.

PEP is a very tough, rigorous, challenging entrepreneur training program, so we would get them in their caps and gowns. Then I even asked the warden to allow us to get these little teddy bears into the prison. We would have 30 to 50 kids that we recruited into the prison, and we would tell them, “If you see your daddy in a cap on stage right now, and he has a teddy bear, that’s a gift for you.” These kids would run up, and they would wrap their arms around their dads, and the dads would tell them how much they loved them.

Watching that kind of family reunification, and a moment of pride for people who so often have never experienced a moment of pride and joy in their families, it’s something like that that is my proudest entrepreneurial moment. It’s creating experiences like that of connection.

John Lee Dumas: Powerful. Catherine, let’s continue moving these wheels forward to today, present times. You and I were chatting about some really exciting things that are happening in the Bay area with a company that a couple of people have heard of called Google. Can you kind of share with our listeners right now the one thing that has you most fired up today?

Catherine Hoke: Sure. I built Defy in New York City, and our recidivism rate is only 3 percent. Our employment rate is 95 percent. We’ve incubated 71 companies in New York City. This is great, but one of my mentors kicked my butt about a year ago. He said, “This is a drop in the bucket compared to the need in this country. What are you doing to scale this?”

In 2014, in March, we started to roll out a new blended learning model where we basically switched a lot of our teaching into an online training format. We’re not only an online program. We still have in-person application. We do a lot of business plan competitions, but switching our education into an online training format has been revolutionary for Defy.

In 2014, we served 172 people, which was a three-fold increase for us. Next year in 2015, we plan to serve 1,000. We are now national because we have a distance learning program, so we’re already serving people in nine states. We plan next year for 500 of them to be in the California Bay area because through our partnership with Google, we’re expanding massively.

We’re also starting to offer our online training courses to people inside prison so they can start their training while they’re on the inside.

Another huge exciting thing for us is that we recently switched. We’re a 501(c) (3) nonprofit that has relied on the goodness of donors, but this year we switched to a tuition model, so it’s earned income for us. That has been hugely successful, and we will be financially self-sustaining by 2017. These are all really big changes for us that we implemented in 2014 that we’re going to see the fruit of in 2015.

John Lee Dumas: Love that. Fire Nation, just the progression of what Catherine has built here, it’s inspiring to hear the passion in her voice. Catherine, we are about to enter the lightning round. Before we do, let’s take a minute to thank our sponsors.

Catherine, welcome to the lightning round where you get to share incredible resources and mind-blowing answers. Sound like a plan?

Catherine Hoke: That sounds good.

John Lee Dumas: What was holding you back from becoming an entrepreneur?

Catherine Hoke: Fear.

John Lee Dumas: What is the best advice you’ve ever received.

Catherine Hoke: To go big or go home, that what I was doing was good, but it was a drop in the bucket, so to stretch my mind even though I didn’t see the future, to stretch my mind on how to start solving this problem in a much more efficient way.

John Lee Dumas: Share one of your personal habits that you believe contributes your success.

Catherine Hoke: I report to a business coach on a daily basis on my personal vital signs, which I measure everything every day, like how many hours I sleep, how many emails I have in my inbox, which is part of my sanity, whether I work out, whether I do my quiet time. Every month, I take at least one of what I call a monk day, which is a quiet day with no email, no phone, so that I can think and create.

John Lee Dumas: A monk day. I love that. Catherine, do you have an internet resource like Evernote that you can share with our listeners?

Catherine Hoke: I don’t use anything very fancy. I’m a fan of all Google things.

John Lee Dumas: All things Google.

Catherine, if you could recommend one book for our listeners, what would it be and why?

Catherine Hoke: There’s a book called Switch, and the subtitle is How to Change Things When Change is Hard, by Chip Heath and Dan Heath. I’m a big fan of it because I’m always trying to change and improve things. This book helped me to break through.

John Lee Dumas: Yeah. Chip and Dan have written a slew of amazing books. Fire Nation, if you love audio, which I know you do, you can get an amazing audio book like this one for free at www.EOFireBook.com.

Catherine, this next question has been stressing you out a little bit, but it is the last of the lightning round, so sit back and see what you can come up with.

Imagine you woke up tomorrow morning in a brand-new world identical to Earth, but you knew no one. You still have all the experience and knowledge you currently have. Your food and shelter are taken care of, but all you have is a laptop and $500.00. What would you do in the next seven days?

Catherine Hoke: Okay. I’m a cold caller, and a salesperson, and I’m not shy about picking up the phone and calling anyone. I’ve used to even sell CUTCO knives as a teenager, so I would cold call and cold email. I guess I would use the $500.00 to buy a phone of sorts, and I would call and email every influential person I possibly could to have a meeting with them to tell them about my vision for changing this world, to make sure I got further support to do it.

John Lee Dumas: There you go, Catherine. Let’s end today on fire with you sharing one parting piece of guidance, the best way we can connect with you, and then we’ll say goodbye.

Catherine Hoke: Sure. Our website is www.DefyVentures.org. My email is Cat@DefyVentures.org. If anyone listening to this would like to be involved with Defy, we have life-transforming opportunities for our volunteers. We’ve recruited 2,500 executives to serve as volunteers as judges in business plan competitions that are held at Venture capitalist office. We have a distance mentoring program where you can mentor through Skype or remotely by phone to really transform an entrepreneur’s life, someone who’s going through our program and wants to become an entrepreneur. We would love to recruit people as sponsors, and judges, and as mentors.

John Lee Dumas: And a parting piece of guidance.

Catherine Hoke: If anyone listening to this is not yet an entrepreneur, I would say don’t let fear hold you back from achieving your dreams. This is going to sound so basic, but when I used to work in private equity and I was talking with one of my colleagues about wanting to jump ship to start my business, I was coming up with all these excuses and the fear associated with it. He looked me in the eye and was like, “Every day that you are not living out what you think you should be doing is a wasted day of your life.” I guess that’s the advice.

John Lee Dumas: I love it. Fire Nation, you are the average of the five people you spend the most time with, and you have been hanging out with Catherine and myself today, so keep up the heat and head over to www.EOFire.com. Type “Catherine” in the search bar. Her show notes page will pop right up with all this great stuff.

Cat, thank you for sharing your journey with Fire Nation.