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CHAPTER 2

THE REAL ENTREPRENEURIAL EXPERIENCE: CODE RED

I’m only an average man, but, by George, I work harder at it than the average man.

—THEODORE ROOSEVELT

The entrepreneur suffers more bureaucratic foolishness than you can possibly imagine until you deal with it firsthand. As an entrepreneur, you are drafted into service without compensation as a bookkeeper and tax collector for at least three different governments (federal, state, city) and for at least a dozen different taxes, some dealt with twice monthly, some monthly, some quarterly, and some annually. There is nothing that politicians and bureaucrats understand less or that costs and frustrates entrepreneurs more than this enslavement to government.

Some years ago, I had one friend, an owner of a small retail business, who got so angry over all this that one day, when his mail was filled with more letters from government agencies than anything else, he had a heart attack, tax notice clutched in hand.

Former Senator and Presidential candidate George McGovern bought a bed-n-breakfast as a retirement adventure. Subsequently, in an article he wrote for Inc. magazine, he confessed that he was overwhelmed with the nonsensical, outrageous government interference in his business. He said, had he understood this when in the U.S. Senate, he’d have voted very differently on a large number of issues and laws. McGovern subsequently filed bankruptcy and publicly blamed much of it on the burdens government layered on his business. He even noted: “A critical promotional campaign never got off the ground because my manager was forced to concentrate for days at a time on needlessly complicated tax forms for both the IRS and the state of Connecticut.”

This points out the fatal flaw of a noncitizen government, taken over by professional politicians lacking real world experience.

If you’ve read Ayn Rand, as most entrepreneurs have and all entrepreneurs should, you can certainly see the events of her visionary novel Atlas Shrugged marching toward us with frightening and depressing speed and apparent inevitability. Very recent events have made this book much more timely—and frightening. But its underlying message is that those of us who choose to be the producers of wealth and creators of business better shed any thoughts of appreciation or even fair treatment by the government or the population at large we support, and live as we see fit for our own satisfactions. We should expect and accept undue interference and opposition as the reality and recognize it is our willingness to triumph against it—a willingness most couldn’t muster on their best day—that makes our success possible.

As entertainment, at the conclusion of this chapter, you’ll find a “legal document” that I created and published in my No B.S. Marketing Letter. Feel free to copy it and share it with any other business owner you think might enjoy it. It speaks to the litigious and regulatory intensive environment in which we operate. A little entrepreneurial humor.

Government interference and idiocy—tax upon tax, regulation upon regulation—is only one of the many severely annoying, emotionally challenging distractions from productivity that the entrepreneur confronts hour by hour, day by day. There are also employee problems, vendor problems, financing problems, customer problems, and competitor problems. On top of all that, there are the times when nothing’s going right and red ink is flowing all over the checkbook like blood.

How You Respond to Pressure

Determines Your Success. High

Tolerance for Stress and

Pain Is a Skill Successful

Entrepreneurs Are Paid For.

You might think entrepreneurs are paid for creating or inventing, making or providing exceptionally appealing products or needed and valued services, or for managing and growing and expanding their businesses effectively, or for building up equity within a business. But these achievements are actually possible only for the entrepreneur who masters the management of problems. Who can, again and again, pass the tests of creativity and will placed before him.

Almost every legendary entrepreneur is severely tested at one time or another, one way or another.

When I interviewed Tom Monaghan of Dominos Pizza years ago, he talked about going from “entrepreneurial wiz kid” to “village idiot” overnight. Trump has nearly gone broke more than once. Bill Gates spent years mired in federal anti-trust litigation. Should you attempt anything of real significance or expansiveness, you too will be tested.

In The New Economy, the tests will come more frequently, more quickly, more furiously. Regulatory changes took away telephone prospecting and a large part of tele-marketing, broadcast faxing, and broadcast voice messaging or “robo-calling,” all marketing media relied on by hundreds of thousands of businesses—and some businesses did not survive the loss or never recovered from it. As I write this, at least 11 states’ legislators are contemplating do-not-mail regulations similar to the do-not-call laws, these laws are potentially paralyzing to businesses’ growth and outreach to new customers. A change in federal law streamlining the unionization of workers in smaller businesses is gaining steam in Congress; local laws placing all sorts of food ingredient restrictions and disclosure requirements on restaurants are proliferating; and I could go on and fill ten pages with the list of other threats. Add to this the constant, rapid changes in technology, fast-changing consumer demands, the commoditization of product and service categories by the internet, liberaliz ing of global trade thus multiplying imported goods in every imaginable category—even food. Again, I could continue. The New Economy Entrepreneur lives in a heightened, high-threat environment. If the government had a color-coded chart for it, every day would be Code Red.

“The only thing you can be certain of in business is that problems you have not thought of are headed your way.”

—MARK BURNETT, CREATOR OF

SURVIVOR AND THE APPRENTICE;

AUTHOR, JUMP IN!—EVEN IF YOU

DON ’T KNOW HOW TO SWIM

To be very candid, I am pleased that I have done most or all of my creating and building and have accumulated sufficient wealth that I do not need new earned income. One of the few good things about approaching 60 wealthy, instead of being 30 years old, is that I will not be battling to build businesses in the current and foreseeable conditions, which I view as more difficult and daunting than any I dealt with. I do not envy the entrepreneur on his way up. The New Economy Entrepreneur will, in my opinion, have far greater need—and more daily need—for extreme mental and emotional toughness and resilience than his predecessors. I pride myself in being a “stress camel”—able to endure enormous heat and keep moving forward over great distance without even a sip of relief. You’d better be. To say something encouraging, The New Economy also offers opportunities that are greater than ever, media and technology conducive to faster speed of startup and growth than anything that existed before, and a no-boundaries marketplace accessible to all. But with that comes a whole new level of threat, hazard, and pressure. How you personally respond to threat, hazard, pressure, and crisis will have a great deal to do with your success.

A while ago, one of my long-time clients had built up a $20-million-a-year-plus company, but through a sequence of misjudgments, others’ greed, partner disputes, and attempting to go public, he lost control not only of his own company but all the intellectual properties he had personally created over a decade that made the business possible. Ultimately, he was unceremoniously escorted by security guards out of his own building.

While many would panic or rail against the injustice or roll up in a ball and die, he is a true entrepreneur. He methodically went to work on the problems, but also instantly went to work creating an entirely new business, new products, new opportunities. He operated simultaneously on multiple tracks, all aimed at the same chief objectives. In only a few months, he had settled the dispute, re-acquired all his products and publishing rights, and developed a new, fast-growing, much more profitable company.

I think one of the secrets to success is that, no matter what, you have to crawl out from under, set aside, and ignore all the bureaucratic B.S., the million little irritations and problems, even crisis in order to keep the process of getting, serving, and satisfying customers as your number-one priority. This is easier said than done. There’s so much of the other that entrepreneurs and their typically small, over-worked staffs can too easily fall into the trap of viewing the customer as an interruption and obstacle to getting the necessary work done.

Sometimes, when the problems are overwhelming, resilience and determination are the only resources and pride is the only immediate reward. You’ll be hard pressed, for example, to find an entrepreneur who hasn’t had the experience of meeting the payroll by the skin of his teeth, having nothing left over to take home to the family, having to tell the kids they can’t afford this or that, taking calls at home from personal bill collectors, and then lying awake at night, staring at the ceiling, wondering if, at next paycheck time, it will be any different. But pride can keep you going. And keeping going is the only way to get anywhere!

There is the axiom: it is difficult to remember your objective of draining the swamp when you are up to your ass in alligators. But that is exactly what is required of the entrepreneur.

Even when I was at the helm of an ill-advisedly acquired, deeply troubled, money hemorrhaging, chaos and crisis riddled corporation, I pulled myself out of the alligator-fighting for at least one hour every day, to re-focus on the objectives, to get something done that was positive and productive and goal directed.

Take a Trip Down Lonely Street

Whether you’re winning or losing at the moment, the isolation of the entrepreneurial experience is surprising and dangerous.

For some, the loss of social community is significant. This was expressed in an article in Entrepreneur magazine by Beverly Bernstein, who left a job with Mattel Toys to start her own consulting business. After two years, her business was booming and she was earning twice her old salary, but she missed the camaraderie of the corporate workplace. “When you start your own business, you don’t have the same collegial relationships as when you work inside a company,” Beverly explained. “I missed the laughter and the interchange of ideas. I missed the energy. And I miss them.” The danger in this is hiring people you can’t really justify having, hiring friends or making employees into friends.

For many, the absence of “sounding boards” produces uncertainty, self-doubt, indecisiveness, and procrastination. The entrepreneurs in my coaching groups have always talked about the isolation they often feel. They lament having no one of like mind and common understanding to test their ideas on, brag to about their victories to or to discuss their problems with, and cite that as a great benefit of being in one of my groups. They can’t have open and frank discussions that, in any way, reveal anxiety or weakness with employees or associates, nor can they too happily celebrate their successes. Civilians, i.e., nonentrepreneurs, can’t understand them at all.

Even isolation inside a business or its industry or profession can be creatively paralytic. Too often, the owners of hardware stores only attend conferences with other retailers, only read their industry’s trade journals, only pay attention to what their direct competitors and peers are doing. If they grow their company, they tend to hire people with experience inside their industry. All this reinforces the way things are and avoids questioning it. Specific to marketing, I call it “marketing incest,” and tell people it works just like real incest; with each generation, everybody gets dumber. And dumber.