Hayes Barnard was sitting at a football match with a fellow chief executive when he decided to test a theory about what might account for his neighbour’s success.
“I gotta know,” ventured the founder of US fintech Goodleap “Is it daddy issues, near-death experience or learning difficulties?”
The CEO took a moment to recover from his shock at the question, but eventually replied that, indeed, he could attribute his entrepreneurial drive to a brush with disaster and a troubled relationship with his father. After another 15 minutes of brooding, Barnard recalls, “he looks over [and says]: ‘It’s the formula, isn’t it?’”
Long before he founded Goodleap, the green-themed fintech that finances about a third of all US residential solar installations, Barnard was a dyslexic child being brought up by a single mother who struggled to pay the rent. Ridiculed at school for his poor spelling, he was living in Creve Coeur, Missouri, a million metaphorical miles from the hubs of Silicon Valley and Wall Street that would one day make him a billionaire.
“I had a chip on my shoulder because of the learning disability. I had a chip on my shoulder because my father left me when I was two or three years old,” he says. “It creates a drive and an ambition to prove yourself.”
Barnard also had his own figurative near-death experience as he built a company valued at $12bn in its most recent fundraising round. After a few years selling software for Oracle in California and studying its founder, Larry Ellison, he set up a business called Paramount Equity Mortgage with two friends in 2003.
Five years later, an imploding US mortgage market precipitated a financial crisis and a reversal in Barnard’s fortunes that included a six-figure settlement with the State of Washington over mis-steps including some carelessly worded radio ads he had presented.
“I got smacked to the ground in ’08,” he says, recalling the loyal employees he had to lay off. But in the remains of his first business he saw an opportunity: to apply what he had learnt selling software and mortgages to the nascent home solar industry.
Among the customers of Barnard’s Paramount Solar business was SolarCity, the manufacturer and installer run by Elon Musk and his cousin. SolarCity bought Paramount Solar in 2013 for about $120mn, making Barnard its chief revenue officer.
Barnard left when Musk’s Tesla bought SolarCity in 2016, but began working on a “moonshot” plan to overhaul his old mortgage business. At a company meeting in a Sacramento theatre in early 2018 he told its 1,500 people they were going to build “the largest fintech for sustainable solutions”.
Instead of leasing or selling solar systems, they would finance homeowners’ purchases, letting them install the costly equipment with little or no cash upfront and pay off the competitively priced loans over several years.
The first management lesson Barnard says he learnt was that “leadership is measured by followship”. But when he set out this plan, an unnerving number of the people he led did not follow.
“About half the organisation thought ‘this guy’s out of his mind’ and left,” he recalls. Most people dislike change, he argues, and “it was too bold of an idea”.
The fact that hundreds of people who had worked with Barnard for years could not see the opportunity that he did raised a question: how does someone with his entrepreneurial drive make it infectious?
“The truth is, you don’t,” he says bluntly, estimating that 80 per cent of people “don’t have an entrepreneurial bone in their body”. “I used to try to shake them up and push them to be like me,” he admits, “and the reality is, no, that’s not what they want to do. They want security.”
Barnard credits his drive to his dyslexia, which forced him to work harder than his peers in school, gave him the ambition to prove himself to them and meant “I could see things a little bit differently than others”.
His vision for the business that became Goodleap was to bundle loans for solar installations, connecting lenders needing a sustainable finance story, a fragmented industry of manufacturers and installers, and homeowners wanting lower power bills and carbon footprints.
The company has financed $23bn of solar equipment, batteries and other sustainable fixtures, with default rates on its loans of less than 1 per cent.
Barnard’s pitch has persuaded private-market investors to put $2.25bn into Goodleap and helped him build an eclectic advisory council, which includes Jeff Immelt, the former GE chief executive, actor Edward Norton and NFL star Tony Gonzalez.
“[Goodleap] uses technology to link Wall Street to somebody who’s in Tucson putting solar panels on their roof. That is easy to say and hard to do,” says Immelt. “[Barnard] has a really compelling back-story and that transforms itself into an incredible drive.”
“Really good people know how to forcefully drive and listen at the same time,” he adds. “Hayes is one of these guys who can move at 100mph in a very driven way but at the same time be accepting feedback and [asking] ‘what can I do better?’”
Barnard admits that two years ago the company gave “serious consideration” to going public to give them liquidity but pulled back. An IPO is still “always on the table”, he says, but won’t happen this year.
After his scarring rejection in Sacramento, Barnard has honed his thoughts on how to be persuasive to his employees. His thesis is that the strongest leaders are the ones who focus on people: in a world where good ideas will be copied, companies must execute better than their rivals, he says, “and if you’re going to win the execution competition, you have to win the talent competition.”
They do that by satisfying top performers’ need for a sense of mission, according to Barnard. His recent distillation of that mission into a two-page document exhorts colleagues to “live for impact” and “sail blue oceans”.
Barnard has built a philanthropic agenda into Goodleap’s business model. After his setbacks in 2008, he took his top team to Mali to build a school. There he saw the need for electricity to power classrooms and clean water for people drinking “poison”.
So within a few years of launching his solar business, he set up a non-profit group. GivePower deploys solar-powered water and energy systems everywhere, from schools to elephant orphanages in countries from Nicaragua to Nepal.
Goodleap covers GivePower’s overheads but much of its funding comes from companies, whose donations give them a social responsibility programme and the opportunity to send employees on team-building treks to install its systems.
Barnard describes the brainwave when he worked out this funding model, in the shower on a yacht in Croatia, as “one of the best I’ve ever had in my life”.
He has taken his son and two daughters on those treks, saying he hopes “to shape their hearts”. Does he worry that, without the tougher start in life he had, they will lack his ambition?
“I think they are driven by mission and purpose,” he replies, “and that’s all I can hope for. But they’re not driven as much by fear as I was.” If his kids have daddy issues, they will not include the worry that their father might leave them unable to pay the rent.
At 51, meanwhile, Barnard still claims to worry that he could “lose it all tomorrow”. But, he adds: “I’ve learnt to dance with my fear a little bit.”