Could Bernie Sanders, a self-described "democratic socialist" and Wall Street's biggest critic, be an entrepreneurial genius?
A closer look at the ideas and methods propelling the 'Feel the Bern' phenomenon, and interviews with entrepreneurial experts, show that the Sanders campaign has displayed plenty of business smarts tailored to today's market. His renewed momentum after a win this week in Wisconsin — making it 7 out of the last 8 contests for the Vermont senator — has been built on age-old entrepreneurial tricks and business trends that Sanders has turned into a large, vocal and "profitable" slice of the U.S. electorate.
To start — and to cover quickly what should by now be obvious — while Hillary Clinton and Republican candidates receive "handouts" from corporations and billionaire donors, Sanders has managed his campaign like an entrepreneurial start-up, funding it from the ground up.
After rejecting all super PAC support and special-interest money, Sanders focused heavily on small money donations. President Obama's original run for the Oval Office set this trend, but Sanders recently broke fundraising records with more than 6 million individual contributions, almost tripling the record set by Obama in 2011.
Sanders' marketing appeal has leveraged an American public growing more and more dissatisfied with campaign finance loopholes. Ben Cohen and Jerry Greenfield, the Vermont-based founders of Ben & Jerry's, speaking from their car on the way to a Sanders campaign event, said, "It's all supported by the ultra-wealthy and the corporations, and that's the elephant in the room that nobody except Bernie wants to address."
Sanders is the first politician for whom Cohen and Greenfield have ever campaigned.
Coming into the race as a virtually unknown senator from Vermont, his biggest hurdle was name recognition and getting on the public radar, in much the same way that fledgling start-ups need to gain traction to attract investors. Ben Cohen said, "When Ben & Jerry's was first starting out, a major way that we got people to find out about us was with bumper stickers. We distributed tens of thousands of bumper stickers! They were available at the counter, and people would take them because they were so moved, not only because they loved the ice cream but because they loved the way the company was doing business."
The Ben & Jerry's founders said the broad message of the Sanders campaign captures societal tensions in the same way that many successful recent brand ad campaigns do. While they did not provide specific examples, Dove's Campaign for Real Beauty resonated by debunking the unattainable and demeaning physical standards women are held to; Chipotle — at least until its recent E. Coli outbreak issues — struck a chord with consumers opposed to big agriculture through its practice of buying ingredients locally and encouraging small businesses.
"An entrepreneur is someone who understands a particular market segment, who can energize that base and who can get it to take action," said Lyneir Richardson, executive director of The Center for Urban Entrepreneurship and Economic Development at Rutgers Business School.
Richardson said that shattering the individual donor fundraising record shows that "Senator Sanders' 'product' is hitting its target in a way other candidates' 'products' may not be, given their lack of crowdfunding."
While stressing his views were offered as an entrepreneurial expert and not as an endorsement for Sanders, Richardson noted that start-ups often achieve success not by discovering an all-together new market but by tapping into one that has been overlooked by established competitors. That is, by many accounts, a big part of the buzzy business school term "disruption."
"Bernie Sanders is speaking to a segment that not only other politicians but most big corporations want to figure out how to sell to: millennials," Richardson said. "Everyone's going after that demographic right now, and millennials are responding to Sanders in a way that the rest of the country and business world is watching and learning from."
The Sanders campaign did not respond to requests for comment.
Bernie Sanders is speaking to a segment that not only other politicians, but most big corporations want to figure out how to sell to: millennials. [They] are responding to Sanders in a way that the rest of the country and business world is watching and learning from.Lyneir RichardsonThe Center for Urban Entrepreneurship and Economic Development
Sanders' success with millennials can be linked to a number of disruptive business traits his campaign has translated to the political arena.
"With disruptive companies, in the broader sense, what occurs is that they shift some constraint or parameter that has allowed an industry to behave a certain way for a long time," said Rita Gunther McGrath, professor at Columbia Business School. "In politics, those parameters are that you had to have paid media coverage and you had to have huge cash flow from the beginning," McGrath said (she also stressed her views should not be read as an endorsement of Sanders as a candidate).
Sanders has taken this a step further by relying on crowdfunding, the latest incarnation of a classic entrepreneurial approach.
"Bernie Sanders has ... taken advantage of this trick serial entrepreneurs use," McGrath said. "He's creating his 'organization' without having to invest a lot of money up front … because so many people participated by contributing money, and that's part of why he has such a loyal following." She added, "You have to get critical customers locked in early … and once they've made that investment, they tend to be more committed to following through later on. ... Now he's got this legion of committed investors."
"When you have a groundswell of people who support you, if you can get them to use their visibility to get your name out, it's a really inexpensive way of growing your brand," Cohen said. To promote Bernie Sanders, Ben and Jerry, along with a number of volunteers, decided to create light-up "Bernie 2016" signs to sell on Etsy. Customers can pick between different types of signs, all varying in prices from around $8 to $12.50 each, and all revenue goes toward shipping and paying for materials.
McGrath said it's impossible to separate the disruptive business traits of the Sanders' campaign from the broader disruption this year of the political sphere.
Sanders has had the strongest support with millennials, because he speaks directly to the issues that affect them, like job insecurity and student debt. "His campaign is disruptive not only with the market that it's cornered but also in the sense that [Sanders] is appealing to neglected 'customers' by raising issues that other candidates have not focused on — at least, not until after he did," the Columbia Business School professor said.
A bum business rap
Sanders' anti-Wall Street platform can become so great a focus for the media that it is, wrongly, equated with a pervasive "antibusiness" philosophy.
Noted New York Times columnist Thomas Friedman recently wrote, "I'd take Sanders more seriously if he would stop bleating about breaking up the big banks and instead breathed life into what really matters for jobs: nurturing more entrepreneurs and starter-uppers."
Friedman failed to notice what the entrepreneurial experts see within the campaign's success story. Furthermore, the Times' columnist disregarded specific Sanders' platform issues that support entrepreneurs and small business.
In his Six-Point Plan, Sanders advocates that small businesses should have access to the same low-interest loans the Fed offers foreign banks. When small businesses can more easily access loans affordable to them, investment grows domestically rather than overseas, giving the economy a boost. Sanders helped pass the Small Business Jobs Act, which gave low-interest loans to small businesses and offered around $12 billion nationally in small-business tax breaks in 2010. It also provided $30 billion in capital for small businesses.
The Sanders antibusiness narrative may have reached its apotheosis on Wednesday. In response to questions from the Daily News editorial board about his plan to break up the Wall Street banks, Sanders gave comments that became fodder for widespread media attacks that he didn't even know anything about the one business subject synonymous with his campaign (the specifics under debate were, not surprisingly, more nuanced and technical than the attacks would have it.)
Sanders rhetoric does make it easy for critics to view him through an anti-business prism. In his comments to the Daily News, for example, he said GE was among the companies playing a role in destroying the moral fabric of America. But Sanders also said, "What I foresee is a stronger national economy. What I foresee is a financial system which actually makes affordable loans to small and medium-size businesses. Does not live as an island onto themselves concerned about their own profits."
What I foresee is a stronger national economy. What I foresee is a financial system which actually makes affordable loans to small and medium-size businesses. Does not live as an island onto themselves concerned about their own profits.Bernie Sanders
In the last quarter of 2015, the campaign raised almost $33.6 million, out of which 70 percent came from contributions of less than $200; only 1.3 percent of fourth-quarter donations came from maxed-out contributors, or individuals who contributed the $2,700 maximum allowed by law.
Ben and Jerry themselves contributed $1,411.23 each. Greenfield emphasized the importance of authenticity. "Most important is to ... mean what you say and say what you mean. That's the way to develop trust with your consumers or, in Bernie's case, trust with your constituents," Greenfield said. "He's been fighting for working people, the middle class, veterans, students, seniors, and he's never wavered, and people see that consistency and dedication."
In March, Sanders raised $44 million, breaking his record of $43.5 million in February and bringing the candidate's total for the first quarter to $109 million, coming from more than 6.5 million individual contributions.
"Bernie is a true democratic revolutionary who's running his campaign in a way that's never been done before. And he's just barely scratched the surface," Cohen said.
— By Sonam Sheth, special to CNBC.com