"It took me 20 years to make an overnight success." Eddie Cantor, the vaudevillian, said this in 1963, long after his red-hot career had cooled. But it could apply to almost anyone who wants to make a name for himself or herself. It took Holdstein about four years, and when his overnight success came, it almost destroyed him.
In 1975, Holdstein started Payday, a then-revolutionary company that provided payroll services to small businesses out of his San Francisco apartment. By 1979, Holdstein's company had swelled to several dozen employees and was pulling in about $4 million. At the time, Payday was considered one of the fastest-growing companies in the country. But that's when disaster struck.
"We couldn't keep up with the growth and nearly crashed," Holdstein, now 54, says. "I wound up firing my two VPs at the same time--my biggest management mistake. It took two years, and cost me probably $2 million, to correct my mistakes." About the same time the vice presidents were let go, Holdstein's CFO walked in one day with important news.
"It was the only time in my life when somebody said, `Sit down, I've got to tell you something,'" recalls Holdstein. The employees at Payday were organizing a union.
It was Holdstein's last chance to turn things around--and he rose to the occasion, giving the speech of his life, convincing his employees that unionizing wasn't the way to go and bringing his firm back from the brink. He sold his company, still successful, a few years ago and now runs Growth Strategies, a Kentfield, California, firm devoted to teaching entrepreneurs the lessons he's learned:
Lesson No. 1: Stay aware, entrepreneur, stay aware! "I was too busy trying to keep the wheels on. Nobody had any idea what the company was about," says Holdstein. So he advises that you should include a representative from the trenches in your top-level management meetings. "Bring in somebody from the mailroom," he says. "Talk about your company together. You'll bring in their perspectives, and it will add a lot of credibility to the process."
Lesson No. 2: Strategize, entrepreneur, strategize! "What I find typical," says Holdstein, "is that entrepreneurs are great problem-solvers and great in a crisis, but they aren't very good planners."
Lesson No. 3: Adapt, entrepreneur, adapt! (Hmmm, we're beginning to see why Dick and Jane lost some of their appeal.) "Most entrepreneurs do what I did," notes Holdstein. "They keep doing what they've been doing until they hit a wall, and only then do they make changes."
You need to prepare for a successful future and realize that when it arrives, your company will not operate the way it once did, says Holdstein, adding that he's made it his life's crusade to help entrepreneurs plan for success. And he seems sincere when he says that entrepreneurs can write him at email@example.com if they want advice (and presumably not just a consulting sales pitch). And what would some of that advice be? "If you're doing what you did in the past, then you're going to run into trouble. You've got to be fundamentally prepared to redesign the machine while you're experiencing a lot of growth."
And keep watch on the world outside, warns Holdstein. "A lot of entrepreneurs get stuck contemplating their own navel--wondering how they can do things faster, easier and cheaper," he says. "But if you're just turning the crank, trying to be successful, you're going to lose sight of what's going on outside, and you need to have a real understanding of the total environment that the company operates in."
Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.