After graduating from high school, I attended a community college before transferring to a four-year university. Unfortunately when I did, I did it in mid-year which really screwed up my schedule because I had missed most sequences that started in the fall.
I scanned through the class catalog hoping to find sessions that I could join which required no prerequisites. I found one and It was the Introduction to Continuum Mechanics. I went to my advisor who quickly told me that it was a bad idea. He explained that this was a very controversial course which attempted to unify existing mathematical theories on solid and fluid mechanics, and it would be best if I took it after I had some basic studies.
I pleaded with him that there were no other courses available and if I didn't take it, I would lose my status as a full-time student and therefore my financial aids. He relented but asked that I at least met with the instructor.
I remembered that day as it was yesterday.
I found the professor's office. I knocked on the door. The door open and stood there was an old gentleman half of my size. He invited me in to sit across his desk. I explained to him that I was a transfer student. I had not taken any upper division courses and was concerned that I might not be well enough prepared.
He immediately got excited. He jumped up. His nose was inches away from mine and he said, "Good. The less you know, the less I have to undo the damage."
My professor was absolutely right.
Studied minds could be so easily damaged.
After graduate school, I too became a professor but soon after I got bitten by the entrepreneurial bug to start my own company. I was smart. I was educated. I had a patented technology and all I needed was a worthy problem.
I wasn't interested in building companies as much as I was interested in joining an exclusive club for being funded by venture capitalists. Only the VC's could validate my genius.
As I explained in my book on entrepreneurship, I have done two startups in the last twenty years. The first failed miserably because I allowed my survival to be dependent on how well I pleased my investors. I was in a treacherous race to stay ahead of a house of falling cards.
By the time I started my second company, I learned my mistakes. I undid the damage and unlearned all that baby-talks popularized by the VC's. I did the opposite. I started with paying customers and I helped them find a better solution. I worked hard so that my success depended entirely on how well I served my customers.
In short, I have learned that creating value for a customer is a much more financially rewarding journey than creating valuation for an investor.
Unfortunately, it makes me sad to know that there are still many young and aspiring entrepreneurs who care more about valu-ation than value-creation.
The damage has already been done.
This is the first time in my memory of living in America that our nation is having a serious discussion on wealth, both the creation of wealth and the distribution of wealth. And it seems that the 99% occupy movement has finally trickled down to entrepreneurship.
Our nation needs entrepreneurs to rebuild its economy.
We need hard working businessmen and businesswomen who are willing to build long-term businesses, selling profitable products, serving customers, hiring workers and supporting communities. They are the 99% entrepreneurs and they are my inspiration.
What we don't need are celebrity entrepreneurs who are the 1% Silicon Valley type more interested in spending other people's money, getting eyeballs and flipping for a quick exit.
I plan to use Man'ority Report as a platform to celebrate the 99% or "lifestyle" entrepreneurs. Notice I am subverting the description "lifestyle" because in my past, working with VC's, being called a lifestyle business is their form of ultimate insult.
I am making the counter-point that VC's are full of crap.
If not for the luxury of improving our lifestyle, why put up with the never-ending rejections, humiliations, and hostilities.
What the VC's demean as a bug, is in fact a feature.
VC's are entrepreneurs' worst enemies.
If you ignore the VC's then you will find that owners of small businesses having less than 500 employees now represent more than 99% of America's companies. Together they employ 50% of our workforce and account for 65% the net new jobs created in the fifteen years prior to the recent economic downturn. And almost all are non-tech (but uses technology in serving their customers).
These entrepreneurs don't march to Wall Street. They march along main streets.
The following is an interview with Christian Reyes, my co-editor of Man'ority Report, who is an inspiring and successful "lifestyle" entrepreneur, living thousands of miles away from the Silicon Valley, simultaneously bootstrapping his young enterprise and his young family.
He is a testimonial to the strength and future of main street America.
I'm also a contributing editor for Man'ority Report, a proud father and husband.
I believe we are in total agreement that being a bootstrap entrepreneur is exceedingly demanding and difficult. But one thing we value is how we view success as a journey and not a distinction. In other words, failure is never an option and our survival depends on us being tenacious. Can we go back to 2008? Is it OK to talk about your last setback and how you recover? I think your story is both typical and inspiring.
I was newly married and expecting our first child, my wife had been laid off and with the start of the global economic meltdown my wholesale business took a fatal hit that I was ill prepared to withstand.
I was over leveraged and didn't plan for a catastrophic blow, and had to figure out quickly what I was going to do to support my family going forward.
So I bet it all on and started a new business having made the decision to never borrow money again, I bought a 10 year old truck and started a logistics company.
2009 was a long and hard year, I had constant anxiety barely making ends meet bootstrapping the new business and trying to meet all the obligations at home, I started incorporating cheap and free technologies into the business to give me a competitive edge and by the end of 2009 and early 2010 I started to gain some traction.
I added additional trucks to the fleet and started hiring and we have been doubling sales for 3 years in a row now, all done without debt and working off all my personal debt in the process.
It was a really tough time. the media concentrated only on rescuing wall street and underwater real estate. In reality, the small business men and women were taking the primary hits. Our hats are off for them.
On a slightly different topic, I notice you always introduce yourself as a father and a husband, in addition to being an entrepreneur. I think this is another difference of being a 99% entrepreneur, that our professional life is only part and not the totality of our life. Can you talk about how you reconcile the conflict, if any? It must be tough to have a young family and running your own business at the same time.
In my particular case there is no conflict, my family is my fuel and what gives me the passion to succeed. Like everything else in life, is finding the right balance between the long hours at the business and your family life.
I always make sure that I have enough left in my tank when I get home to interact with them.
You would be surprised at the sacrifices your family is willing to ensure as long as they know that they are important and that what you are building is meaningful to the family.
Thanks. one last question. What advise would you give to a young, first time entrepreneur? Someone who has a technical background and wants to make a difference. I know you have some strong opinion about debt and partners. Keep in mind that VC investment is another form of debt and perhaps the worse form of debt.
Well you may know the saying "the only ship that won't sail is a partnership." I think that in my case I rather provide the benefits of a partnership as far as compensation and perks but I want to retain control which is what you give up when you have partners.
Now, I understand that certain ventures lend themselves to partnerships and if you cannot avoid them you should keep some things in mind.
Partnerships in many respects are like marriages, you need to choose your partners carefully and maintain good dialogue as communication.
You also need to carefully craft the partnerships to deal with what happens in case of catastrophic circumstances like divorce, death, bankruptcy and any other life event that can impact you or your partners.
Not dealing with this types of issues upfront well cause a partnership to fail in every instance, dealing with them will increase the chances of the partnership succeeding.
The most important thing is to decide if this is a structure you can live with.
On the subject of debt is the one that you will get the most opinions, debt is crippling at any stage of business, it should be avoided at all cost!
Remember the golden rule, he who has the gold makes the rules. The borrower is slave to the lender, debt will make you desperate and stupid, and remember there is no "business" debt in small business, is all personal as lenders will make sign a personal guarantee to borrow when you are small.
Most successful businesses take 20 years to build, outside of the tech bubble, is a slow steady process that allows you to build on solid ground.
It's time to undo the damage.
Value Creation, not Valu-ation.
It's an American invention and it's our secret recipe to rebuild main street America.
Have a wonderful Sunday, everyone.