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You Win! Poor You!

Critics are following your every move. Competitors are targeting you. Your friends resent you. Now why'd you have to go and be a success?
October 1, 2000
URL: http://www.entrepreneur.com/article/32348

Martha Stewart treats her staff like slaves. Oh, yeah? Howard Schultz "picks on the little guy" by shamelessly opening new Starbucks cafes beside independent cafes. Well, listen to this-Jeff Bezos is trying to send brick-and-mortar bookstores to an early grave; maybe he should focus on getting Amazon.com into the black instead. And Bill Gates-well, he just has too much money!

From tabloid fodder and paranoid proclamations to pure envy, the public sure spends a lot of time tarnishing what are supposed to be joyous success stories. Let's face it, if Gates didn't rank as the richest person in the world in this year's Forbes list, he'd still get picked on-only for being poor instead of rich. So are the years (or months that feel like years, given 20-hour workdays) invested in erecting new industries, adding to today's winning ideas or merely establishing career autonomy all worth it if they make you the bull's-eye in the latest mudslinging match? Well, we found that even if dues paid include botched friendships, the threat of corporate collusion and sheer exhaustion, pursuing "the dream," for most entrepeneurs, is worth the cost.

Facing Fierce Competitors

Even after recounting the loss of valuable time with his wife and two small children, who stayed behind in Ohio while he laid the foundation for his business in Atlanta, William Roth, 32, wouldn't choose a different path if he had the chance. His brainchild, ChannelLink, started in January 2000, is a Web-based trade exchange connecting pharmacies with pharmaceutical manufacturers. "When you're sitting in business school, define the coolest thing you could do, and it would probably have to do with pharmaceuticals, health care or technology," he says. "And here we are, an Internet company focused on the top pharmaceutical manufacturers, and we're being embraced by the buyers to the point that they're hugging us at trade shows."

While buyers have warmed up to the ChannelLink concept, wholesalers such as Cardinal Health, where Roth served in various positions for 10 years, cringed at such a business model. In response to Roth's new company, wholesalers announced their own exchange, as did medical surgical manufacturers intending to add pharmaceutical products. But despite the head wind, Roth negates intimidation with confidence: ChannelLink's niche-name-brand pharmaceutical manufacturers and fragmented pharmacy buyers-goes beyond what he believes wholesalers can achieve. And, he says, "there are always governmental eyes threatening any kind of collusion implication, so the lawyers we've spoken to don't see the manufacturers coming together to rally behind that."

When you create a new business model, which Roth did when he introduced the trade exchange now recognized by industry experts, competition will undoubtedly pop up. For Roth, it's only validation. But when your former boss, after hearing about your idea, hops on a corporate jet just to talk it down to one of your co-founders, it's gotta sting. "That's been really awkward, because if you asked anyone at Cardinal what I was like, they would've defined me as extremely loyal and dedicated," says Roth. "But within two weeks, all that unraveled. The friendships I made in my 10-year career there-it's interesting how it all changes."

Michael Reed, 31, and Alan Ezeir, 32, co-founders of dotcom domain name alternative WebSite.ws in Carlsbad, California, have also had to defend their idea from defamation. But with projected 2000 sales of $20 million, up $17 million from 1999, it hasn't been too worrisome. Take, for instance, Scott Blum, founder of Internet superstore Buy.com and Internet incubator ThinkTank, who, according to Ezeir, told him that ".ws" would be a huge branding challenge. The sentiment was seconded by another industry insider in a San Diego Union-Tribune article. But the comments didn't stop Ezeir: "AT&T was the only [long-distance] company in 1984, and then MCI came along, and a lot of people probably said there's no way another phone company's going to have the ability to come on the scene."

Ezeir, a "serial entrepreneur" who met Reed when he tried to couple telecommunications and the Internet in 1996, hasn't spoken with Buy.com's Blum since WebSite.ws topped 60,000 registrations just 120 days after launching service in spring 2000. He still hopes to work with Blum in the future, though.

Other than discouraging words, WebSite.ws hasn't encountered any all-out assaults from competitors. But if you rattle an industry like William Roth did, it's inevitable other parties will try to counteract the threat. According to Michael O'Connor, an executive consultant for corporations at The Fortunate 500 Foundation in Naples, Florida, and co-author of The Platinum Rule (Warner Books) and People Smarts (Pfeiffer & Co.), when rival companies conspire against you, values (or lack thereof) come into play. To put it plainly, ethics are the least of competitors' concerns when their survival is at stake.

You could join them, but watch your back. "The only way you get people not to be 'shady' competitors is if you do something for them, and they play the Godfather game with you-'You scratch my back; I'll scratch yours,' " says O'Connor. "But when you no longer have anything to offer them, then you're no longer going to get the same response from them."

If partnering with competitors is out of the question, but their attacks show no signs of stopping, O'Connor recommends confronting them. "The best way to approach them is directly," he says. "Say, 'I understand your goal is to win, and I want you to understand my goal, in terms of our relationship, is simply not to lose.' " A signed legal agreement helps, of course. "Otherwise," says O'Connor, "just don't bother with those individuals. Create relationships with [those who have] a value system more likely to contribute to your success."

Jealous Friends Hindering Success

She's never worried about ruthless competition, and she certainly didn't think twice about telling friends she was developing a terrific PR firm. But while menacing rivals stayed in the shadows, friendships took a strange turn for Marni Salup, owner of Salup Public Relations Ltd. in New York City, a firm serving the lifestyle arena. And in the three years since founding her public relations company, she's learned more than she thought she would about personal relations. Longtime friends who doled out bad advice, discouraging her from taking risks because, says Salup, "they were projecting their personal issues" into the matter, come to mind. "It's not so much that friendships have terminated, but they've definitely changed," says Salup, 28. "I've really learned who I can trust and look to for insight."

If friends start trying to dash your hopes with cruel sneers, hold their own low self-esteem accountable. According to O'Connor, people who resent your business success might try to get even with you or, as in Salup's case, block you from being successful. Others who are more indirect about their resentment might abandon your friendship altogether.

"Some [people] think you're flat-out nuts because they can't comprehend the idea of charting your own course," says Roth of the mixed response he's gotten from friends. Unfortunately, his long hours don't give him time to confront the issue. "Sometimes I see my family [who relocated to Atlanta in May]," he says, "but I haven't really seen friends outside of work since November."

Curiously, family members have warmed up to Michael Reed, despite his round-the-clock dedication to WebSite.ws. "They've come out of the woodwork and become more amiable now that things have been taken to another level with our business," he says. Just familial concern? Perhaps-but not likely.

Employees Who Want More Money

Success spawns lots of interesting occurrences. After signaling WebSite.ws' success by moving to a bigger location, Ezeir and Reed were shocked by how many employees asked for raises. "I can count on half of one hand how many people have not asked for a raise," says Reed. Reports of fake bills from unknown vendors, increased charges from regular vendors, invoices from prospects charging for the time it takes them to read WebSite.ws pitches, and outlandish rent are all real-life "success stories" enjoyed by the duo.

And don't forget the investors who wouldn't give the ".ws" concept the time of day, leaving Ezeir and Reed no option but to fund the company themselves. "Now everyone's trying to congratulate us and get in on it because they see what we've done," says Ezeir.

As for those needy employees, some raises were given, but "just because" bonuses weren't. "It's not just because the company's doing well that we're suddenly going to give raises regardless of whether [employees] deserve it or not," says Reed. And so far, the nonraises, plus a photograph accompanying the Union-Tribune article of each founder standing beside his Ferrari, haven't sparked ill will or accusations of greed.

The Benefits of Being Successful

So, is taking flak from industry peers, losing friends and putting your health at risk with stress and no sleep worth it? "This has been tougher than I ever imagined," admits Roth, who keeps a sleeping bag at the office and showers at a fitness club. "Running a business is pretty stressful . . . but if it were easy, there'd be a [huge] number of us out there."

Ezeir and Reed don't want it any other way either-but they're glad they started their business when they were footloose and fancy-free. Says Ezeir, "I enjoy the success because I know what it's going to give me: the ability to do what I truly love, which is walk into a classroom and teach kids about entrepreneurship without worrying about paying the bills or if my parking meter's going to run out."

With new boundaries between friendship and work, Marni Salup, who has ambitiously grown Salup Public Relations from one client and a three-month contract to 15 clients, has accepted obstacles as part of the job. She envisions, at times, moving to an island and opening a windsurfing shop, but realizes she'd wind up either back in New York or doing PR on the island. You see, it's just in their blood, and a billion tense moments can't change that. Maybe to ease those pangs of success, you should do what Salup wishes she'd done earlier: "I would've started practicing yoga."