She's The First Bangladeshi Woman to Work On Wall Street. This Is The Mindset Shift She Made to Convince Skeptics to Invest In Her Longshot Mission. As every entrepreneur knows, getting others to believe is the first major hurdle. Durreen Shahnaz, founder of the world's first social impact stock exchange, shares her hardwon insights on selling unconventional ideas.
By Frances Dodds Edited by Mark Klekas
Key Takeaways
- Learn how to defy the odds and get others to believe in your mission.
- Where to find allies to change established systems.
- How to look beyond labels and foster action in your community.
It's not hyperbole to say that Durreen Shahnaz's lifelong business model has been defying the odds. But even after climbing to the highest rungs of the global finance world, her playbook for convincing people to invest in "high risk" ventures remains refreshingly practical and welcoming. If you've ever found yourself pitching an idea that others say is impossible — because it's unusual, idealistic, or simply doesn't align with the interests of whoever is writing checks — then take note, because Shahnaz's story is a masterclass in the art of winning over powerful allies.
Shahnaz, 55, was born in Bangladesh, one of the poorest countries in the world. She came to the U.S. alone at 17, went to Smith College, then got a job at Morgan Stanley — making her the first Bangladeshi woman to work on Wall Street. She worked in microfinancing at Grameen, the World Bank and Merill Lynch, founded an e-commerce company, became the youngest-ever VP at Hearst, heading their Asia operations. And finally, she founded Impact Investment Exchange (IIX), the first-ever social impact stock exchange that connects investors in the world's wealthiest countries to mostly women-owned businesses in the Global South.
But that's just an abridged version of her resume. In her new book, The Defiant Optimist: Daring to Fight Global Inequality, Reinvent Finance, and Invest In Women, we get a deeply raw and human glimpse of what it means to fight your way past seemingly immovable obstacles for decades.
Shahnaz came from a world in which a woman's worth was measured by her ability to bear sons. Her grandfather, Dadu, used to tell little Durreen that, according to astrology, the moment of her birth would have been a big deal, if it weren't for one immutable aspect of who she was. "The moment is called chura moni: chura, the peak; moni, the jewel," he told her. "When a boy child is born at the very time that you were born, the universe ensures that he will reach great heights… But alas, the moment of chura moni was wasted on you. You were born a girl."
Here, Shahnaz talks about hardwon lessons, "aha" moments, and the perspective shift that's helped her to win over unlikely partners in long-shot causes.
Back in 1999, you founded oneNest, an e-commerce marketplace that connected women artisans in developing countries to Western buyers. Ultimately, that venture didn't play how you'd hoped. But were there any "aha" moments in that experience that you were able to put to use in years to come?
With oneNest, the big thing was to help all these SMEs (small and medium-sized enterprises) around the world to sell their products, right? But what I realized when we were doing it was — and this tells you how little I knew back then — that they didn't have money for working capital. So if they got an order, like someone says, "I really love this, I will order 40 handbags," they didn't have money to buy the raw materials to make those handbags. So we ended up giving a lot of those businesses capital.
And in doing that, I realized, Oh my god, we have to almost act like a bank, to give these people money to create the thing so they can sell it and then pay us back. Grasping that it's not just about access to a market — but access to capital so they can participate in the market — was definitely probably a seed for creating the Impact Investment Exchange years later.
In your book, you write very movingly about the end of your journey with oneNest. In the months after 9/11, you were a new mother and a Muslim American, trying to run your company in downtown Manhattan — and your investors essentially pushed you out. They wanted to sell the company, and they wanted a white man to do it.
Just thinking back to how hard it was with that company, I still feel like I have wounds from that. When you've worked so hard and you have all the credentials, and then you walk into the room and people just see this brown woman with "risk" written on your forehead. There has been some progress since then, but still less than 2% of VC money in Silicon Valley still goes to women. And a fraction of that to people of color. So things haven't really changed, you know?
What I did in Asia, Africa, and the Pacific, with the Impact Investment Exchange — I could never have done it in the U.S. It's sort of hard for me to think about, because even though we've been in Singapore for 19 years, I still kind of feel like New York is home. I spent most of my adult life here, and each time we come back, I get off the plane and literally feel like I can exhale. But I've asked myself, as an Asian American, could I have built this here? The answer is probably no. And it's so bizarre, because this is the land of entrepreneurs. So in the book, it was kind of hard not to sound bitter about it. But I wanted to be able to step back and say, this was the lesson learned.
And what was the lesson learned? Did you come to understand something about winning people over, even if they start from a place of dismissing you?
To change a system, you are often trying to get people to change something in which they have a very comfortable position. Why would they want to change it? It's almost like you have to find that little hole where you can wiggle your toe in and push the door open. I didn't have this wisdom with my first company, but one thing I've learned is to always remember the bigger thing that you're trying to do. I hate using war analogies because it shows my mind has been shaped by all these male-dominated systems, but it really is like that. I have to remember that I can still win the war, even when I'm losing the battle.
Case in point, when we did the Women's Livelihood Bond (at the Impact Investment Exchange), my husband and l put in all of our money. And in the book I just sort of say, "And then the bond sold." Well, it wasn't really that easy. When selling the bond, I actually stepped back and said, you know what?
The biggest risk in this whole bond is me. If I go in and try to sell something called the Women's Livelihood Bond, it will never sell. So I had to swallow my pride. I said, I'm losing the battle of feminism here. And I'm the biggest feminist — whatever people make the term, I don't care. But I had to swallow my pride and say, I will get a caucasian man to go out and sell it.
He can say, 'Hey, this is a really cool instrument. These are what the returns will be, and the Australian government and the U.S. government are backing it, and they have an AAA rating. Think about it, because it's a really amazing investment for you." I knew if I did that, they would never believe me. Am I proud of this? No. But am I practical? Yes.
And that was six years ago. Since then, we've put out five bonds in the market. We are now putting out a hundred million dollar bonds. We've never had a single loss. So I had to lose the battle to win the war.
That's very real. There's so much dialogue now about how that kind of sexism or racism is unacceptable that it can be hard to believe you still have to make concessions until you're staring it down.
Yes, and I hope this story won't turn people off. I remember I shared that story with a group of Stanford students a few years ago. There were like 300 students, and I could tell they were really turned off when I said that. I could see it in their expressions. I just let it go, but inside I was thinking, You have no idea how hard it is out there. You don't wanna believe that's the reality. You guys think that the world is just all waiting for you, but it is not.
It sounds like another big lesson is to seek out the help of allies.
What we did with IIX was create a very effective ecosystem. I pulled my media experience and my finance experience together, and we went deep on research and educating people. In the process, we created an ecosystem where everyone could see themselves and their position in it. When you think about the word "allies," it kind of sounds like they're just doing something for you. We wanted to show people that we were their partners. That we are doing something for them as well.
Now we have all these lawyers and accountants in all different countries because we are also bringing them business. Our bonds are supremely sophisticated, so we need really stellar law firms to be working on this, or else investors won't come in. Sherman and Sterling has been with us throughout, and we could never afford their fees, even discounted. But basically Sherman said, "You know what, we'll just take this on pro bono. We have X amount of pro bono hours that we have to do anyway, and this will actually open up other things for us, and it's a good thing to do." So they have a massive team from Tokyo, Hong Kong, New York, London working on our bonds. Like 20 attorneys on each bond. And each year, they have tons of lawyers who want to work on this because, you know, they feel like they're killing themselves for these big corporations and then all of a sudden they're like, "Oh my God, I'm doing exactly the same thing, but I'm impacting all these women across the world and connecting them to these big investors." So I think it's important to create an ecosystem where everyone feels that they're getting something out of it.
As you're talking, it's reminding me of some conversations I've been having lately with men in my life who are grappling earnestly with feminism, and how they can play a meaningful role in improving society, as opposed to just feeling like they shouldn't exist.
Yes, exactly! The Asia Society is doing a big thing for my book launch, and I'm making sure that we have two people speaking. One is an Indian American woman investor, and I wanted her there because you don't often see women of color investors. And then I also have the U.S. head of ANZ Bank, the big Australian bank who's been our partner in Asia and Australia. I wanted him there because he was instrumental in selling our bond, and also to say, this is a thing we are all a part of, regardless of gender or race.
It's also funny you say that about men and feminism, because I did this talk last week at a bank, and there was this one guy who kind of hung around after. He came up to me and started talking very quietly, and I realized that he wanted to have a private conversation. This was a white man, and he goes, "I want to ask you something, because I read your book and I was really touched. But I'm very confused by all this woke stuff right now. What you talked about is inclusion, but you don't sound, you know, woke."
And I looked at him, like, How do I even answer this? So I said, "What are you asking?" And he goes, "Well, are you woke?" And I said, "You know, at my age, I think I'm too old to be anything. But let's put that aside. I don't think you should be influenced by labels so much as actions. If you could relate to the book, maybe you're just looking at the surface. Maybe by looking a little deeper, you could ask, "Why are they saying all this? Why are they angry?" And he thought about it, and said, "Huh, you should really talk about this more." [Laughs] I was like okay well I do have a company to run! But going back to your point, I do think a lot of men, and white men especially, are feeling like, "Where do I belong here?" To succeed, we have to build a better ecosystem, where everyone knows they have a place.
