The Tribe Has Spoken

Anybody can start a business . . . but not everybody makes it. Meet the <i>entrepreneurial </i>survivors.
From the November 2000 issue of Entrepreneur

How peanut butter and jelly sandwiches started is a mystery. All historians know is that during World War II, soldiers in the U.S. Army were eating them. But nobody knows who the first person was to slap such a pairing together between bread.

Why does this matter to you? Well, if you're reading this article, chances are you're about to start your own company, which means you're probably going to be strapped for cash, and PB&J may well be the only thing you can afford to eat. So now you have something to think about between those long, lingering bites of your sandwich.

Actually, you'll have plenty of other things to think about besides the origins of Jif and jam. Making the leap from employee to entrepreneur is a courageous move. Suddenly, you'll be making all the decisions. If you can't initially afford employees, you'll be the CEO, CFO, marketing executive, receptionist and janitor. If you do have enough funding to hire employees, that brings its own stress, enough to overwhelm the best of entrepreneurs. All this is bound to get you asking: How can you go from being bossed to being your own boss without causing your friends to make a few well-placed calls that lead to a lockup in a padded cell?



Geoff Williams is a part-time newspaper writer and full-time freelance magazine writer in Cincinnati. But he vividly remembers impoverished writing days where all he could afford to eat was his daily morning egg and forkfuls of peanut butter out of a jar for lunch and dinner.

Starting Out During Hard Times

Two-and-a-half years ago, when Jory Rozner decided to throw it all away and start anew, she was a 29-year-old in Chicago making $200,000 per year as a national sales manager for a telecommunications firm: "I don't know anything about technology, I had never managed people and I had never done sales. But I said OK [to the friend who offered me that position]."

Rozner had always liked to take chances, so when the company experienced what she calls a "management schism," she says, "I decided to start my own thing." That thing? Totility Solutions! It was a firm that provided technology to offices! To restaurants! To any business that wanted it, and . . . "I did it for six months, and made $24,200," groans Rozner. That's great for pocket change, but Rozner had expenses.

Meanwhile, her previous lifestyle was knocking on her door. Rozner had purchased a condo, which was still under construction. And suddenly she was asking herself, "How am I going to pay the rest of the down payment, and [where will I be able to get] the money when I have to move in?"

But while working on Totility Solutions, Rozner came up with a new business idea, Zipple. Her vision: a Web site for the Jewish community. While on the site, Jews could learn about their religion, meet faith-minded people, look for Mr. or Ms. Right, or find a virtual rabbi.

Says Rozner, "I gave up everything I was doing and moved into my parents' basement." The basement had an aging mattress lying against the wall, crammed in with other pieces of furniture and well-worn clothes that Rozner's sister was storing. And it had no windows. Rozner propped up her desk and set up shop. "I became known as the basement lady," she recalls.

True, Rozner had the security of not paying rent, but there was still the stress of the unfinished condo she couldn't afford. Meanwhile, she was living under not just her mother and father's floorboards, but also under their parental microscope. Her parents would often ask, "Why don't you get a part-time job in the mean-time?"

And Rozner would wonder, "In the meantime of what? Like while I'm waiting to not do this anymore?" Her sister, who was working on a master's at Harvard, and the rest of her family and friends, says Rozner, were looking at her as if to say, "You bought a computer a year and a half ago, and you barely know how to do anything on it-who are you to be doing this?"

Ditto with the potential investors, who gave her looks that said it all: "You don't know anything about the Internet. You're not a rabbi. You're not a Ph.D. in Judaic studies. You're not a leader of an organization. Who are you?"

Undeterred, Rozner depleted $40,000 from her savings-only to get zip for her work on Zipple. Meanwhile, her credit card debt was expanding and would ultimately total $20,000. The minimum payments were (gulp) around $800 per month.

Debt piled up with no income for eight months. It was, to lowball it, a depressing situation-which wasn't lost on Rozner, who kept thinking: "I'm 30, and I'm living in the basement of my parents' house. I'm broke. I'm not married; I'm not dating anybody. This is sort of pathetic."

Think you're in dire circumstances? Don't be so hard on yourself-read "Don't Be A Downer" to help you get out of the darkness.

Taking A Risk

Dennis DeAndre, 32, can relate to Rozner's plight. Before his life crumbled, he was a 27-year-old in real estate making $150,000 per year. "I had it all," says DeAndre, a San Francisco resident who saw "a tremendous opportunity" and decided to start his own company in 1995.

Many people cease the day; it's entrepreneurs who seize it. DeAndre quit his job and started a then-unheard-of company: a commercial real estate multiple-listing service. He called it LoopNet and managed to collect $80,000 in angel funding. At the time, it seemed like an ample amount of money. It wasn't. Although the commercial real estate market embraced his idea, income was maddeningly slow to arrive. The $80,000 came and went. And so, "after I burnt through my own cash, I started selling all my assets. This is a great example of what not to do: tying your own life too closely to your business,"

And over four years, DeAndre sold his house, his stocks, his Ford Explorer . . . and then maxed out his credit cards to the tune of $12,000. All the while, DeAndre toiled in a windowless office whose air conditioning was controlled by the company next door. And because there was no ven-tilation, he says, "every day, the office was 85 degrees. It was so hot, that, I swear to God, by noon every day, I was wearing suit slacks but no shirt. These executives were walking by, and I'd be in there bare-chested, working in my office."

Meanwhile, his wife knew she had married a man whose bank account had come to rival Snuffy Smith's; but she didn't know that their savings had dwindled to $300 of credit. DeAndre's wife had had a job when they married, but after her mother had a stroke, she quit to stay at her bedside in the hospital, and DeAndre didn't have the heart to advise her not to. "We lost our only income," says DeAndre, who was working 20 hours per day.

For nothing.

Well, actually for something.

Snap out of it! Read "Opportunity Knocks" to find out how to have a positive start-up mindset

What They Did

DeAndre was working for a happy ending, of course. He got it, just a few hours after his frazzled wife fainted at the hospital and was sent to the emergency room. DeAndre left the hospital at 5 a.m.; at 8 a.m., $300 away from certain doom, venture capitalists agreed to keep his company afloat. Today, LoopNet has 120 employees and is the largest service of its kind.

Rozner, too, found the funding she needed. She moved out of her parents' basement more than a year ago and into her condo. Zipple, which has 15 employees, has received $20 million in venture capital and expects to make close to $1 million in revenue this year.

So now you know that Rozner and DeAndre made it. Clap, clap. Your burning question is: How will I make it? How can I stay focused on my business in the midst of all the pressure around me?

Presuming Rozner and DeAndre's advice is "one size fits all," here are some suggestions worth considering:

Remind yourself why you're making sacrifices. DeAndre kept envisioning the difference between what would happen if his business bombed and what would happen if it didn't: "The difference between success and failure was, you're out of work, looking for a job-or you control one of the biggest exchanges in the world. Commercial real estate: It's a three-and-a-half-trillion-dollar marketplace." But DeAndre kept things in perspective. He knew if he failed at his business, two armed guards wouldn't appear at his office one day to drag him outside, blindfold him and ask if he had any last words.

Rozner agrees, employing a "what's the worst that can happen?" mentality. She argues you can always pull yourself out of debt (she's still paying off those credit cards) and "you can always fall back to what you were doing before, whatever it is. If you're a lawyer, you can always go be a lawyer again. If you're a salesperson, you can always go sell something again. If you're a writer, you can always write something."

Bad days can equal good. There were times when Rozner took stabs at rejuvenating her love life. It didn't always work. She says, "When I'd get blown off, that would motivate me to be...Career Woman! It all depends on what motivates you. Some people are motivated by the carrot on the end of whatever; some people are motivated by [an] 'I'll show them' [attitude]."

Don't let the competition scare you. "Put the blinders on," advises Rozner. "The market's really big. Somehow, Borders is in business. So is Barnes & Noble. So is Amazon.com. Burger King's in business, and so is McDonald's. Kentucky Fried Chicken's in business, and everybody's doing OK. So you say to yourself, 'There's enough space out there,' and if you're going to work harder, and longer, than anybody, you will succeed."

It's Up To You

The important thing is the first step: Just start it. "A lot of people keep saying, 'I don't have that [start-up] money yet,' and they never get around to doing it," says veteran entrepreneur Jim Gustafson, a free-lance writer who left a $70,000 department manager job at a fast-food chain 12 years ago, when he was 42. In his bank account was enough money for one month. His wife, meanwhile, was earning $5,000 per year, just enough to cover their health insurance, by teaching half days at a Catholic school. They had two children to support "who were unwilling to take jobs at a Nike shoe factory," Gustafson jokes.

Is your subconscious playing games with you? Check out "Doggone It! People Like Me!" to help you overcome that little negative voice.

"I wanted to be in a situation where failure wasn't an option," he adds. "I had no alternative but to make it. We had nothing to fall back on. So getting motivated was really easy."

Funding is important, but ambition is arguably more so. Rozner says that before she became her own boss, she envied other entrepreneurs and wondered what they had she didn't. "And then one day it hit me," Rozner says. "I'm just deciding not to do what they're doing. And that's what motivated me. I kept saying, 'There's absolutely no reason I can't do this.' "

Even if you have to eat a lot of peanut butter and jelly to survive, at least you're doing what you love to do, right? "If you're going to work and doing something you ab-solutely hate, why bother?" says Rozner. "No amount of money in the world is worth that."

Survival Of The Fittest

These nuggets come from Stever Robbins, a Cambridge, Massachusetts-based venture coach who teaches leadership techniques to entrepreneurs and upper-management executives:

1) "I remind myself daily of my goals, dreams and why I'm doing this wacky self-employment thing."

2) "I use marketing as an excuse to write articles and publish them on my Web site to explore different creative concepts. I work on the Web site itself as a way to keep my thoughts flowing."

3) "I make sure to have a couple of lunches a week with really cool people who stimulate and challenge me."

Survival Tips

Bill Lampton is the author of The Complete Communicator: Change Your Communication, Change Your Life (Hillsboro Press) and a business speaker and consultant in Gainesville, Georgia. Here are his tips for dealing with the stress and making the entrepreneurial cut:

· Get physically fit. "This helps prevent solitude, since so much exercise is social. Even while walking alone, I'll stop to chat with neighbors. Three mornings a week I go to a fitness center. One morning a month my sweating buddies join me for breakfast. Equally as important, exercise helps us maintain personal pride. And we can sell ourselves better when we consider ourselves attractive. Many studies confirm that exercise reduces tension-and with no steady income assured, there's plenty to reduce."

· Select a method for replenishing your spirit. "For me, that's memorizing inspirational sayings and poetry, and repeating them during my morning walk. Others may choose to increase involvement in religious or charitable organizations. Whatever our choice, so much goes out of us daily, there must be new intake that's energizing and uplifting."

· Close the curtain on failures, sound the trumpet for successes. "Tiger Woods loses golf tournaments but expects to win the next week. Any entrepreneur can experience despair by lamenting the contract that doesn't come through or the direct mailing that draws few responses. Far healthier to celebrate our achievements!"

· Play and relax. "Take a day off a week. Keep up with your longtime hobbies. Admire sunsets, wiggle your toes in sand at the beach. Honor your personhood to prevent becoming petrified."


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