In September, we got together with four successful young
entrepreneurs to discuss the challenges and rewards of growing a
business. Our entrepreneurs are members of the Young
Entrepreneurs' Organization (YEO), a network dedicated to
providing education and support to young business owners worldwide.
Our thanks to YEO strategic alliance/press manager Tracey Spotts
for coordinating this event, and to the people who took time from
their busy enterprises to shed some light on the trials and
triumphs of entrepreneurship.
GAYLE SATO STODDER:Jumping into entrepreneurship
is a huge step. How prepared were you for the
challenges?
CLIFF MICHAELS: I attended University of Southern
California's (USC) entrepreneurship program. But I'd be
sitting in economics class listening to a lecture on profit margins
and theory, and I was chomping at the bit. I had already started my
first companies by then, so I knew where I wanted to go. And school
just couldn't go fast enough.
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MICHAEL KITE: I went through school, but nothing
really prepared me for what I was stepping into when I took over
this company. I was in ROTC, and USC was pretty good as far as
providing leadership opportunities, whether through fraternities or
in the classroom. But as far as actually stepping from a scholastic
environment into plastics--it was a stretch.
GAYLE:Do you think it's possible to prepare
yourself fully for everything you go through as anentrepreneur?
RINA YASUDA: I don't think so. I don't
feel I'm prepared for any situation, although I do feel I'm
learning every day. I try to take every situation as an opportunity
to learn something new.
GAYLE:What's been the biggest challenge in
making the transition from ordinary citizen to
entrepreneur?
ERICA WERTHEIM-ZOHAR: What hasn't been
a challenge?
MICHAEL: By far, for me, it's understanding
the minds of consumers. I'm still constantly baffled when it
comes to marketing. A few years ago we came into the market with
the least expensive hot tub for the consumer's money, but we
had trouble selling in the beginning because consumers thought the
low price meant they were cheap. They aren't cheap; we're
using many of the same components more expensive brands use. It was
a challenge to get it through my thick skull that we'd have to
raise our prices--for no apparent reason other than to raise the
value of our product in consumers' minds.
GAYLE:How about for you, Rina?
RINA: Just getting through the first two years was
probably the biggest challenge for me. I had these incredibly
talented, bright young kids working for me, and I wanted so much to
give them what they deserved. That was a huge responsibility.
CLIFF: That brings us to another major issue.
Getting great people--not good people, but great people--has got to
be the biggest challenge. Of course, the initial challenges [in
starting up] are trying to understand the competition and how
you're going to differentiate yourself. But then it goes back
to getting great people. We need people who are not only smarter
than us, but who are also so talented that they can walk away from
our company at any time. We've got to find those people and
somehow give them incentive to come and work here--and stay.
ERICA: My biggest challenge has been freeing up my
time. Money was not the reason I got into this business. My
motivation was to feel like I was worth something, that I could
actually provide something someone else would be willing to buy.
Now my big challenge is slowing down. When your company is growing
so fast, you can get taken in so many different directions that,
finally, you have to say, "You know what? I'm buying a
house and fixing it up and focusing on the important things,"
and you let your business naturally do what it's supposed to
do.
GAYLE:That sounds very healthy.
ERICA: I never used to be that way. I was sure I
was going to have an ulcer two years ago. I was always stressed
out, because I wanted to do everything myself. Now I have a whole
new outlook. And I think I've become more successful because of
it.
GAYLE:But stress isn't always easy to contend
with, is it?
RINA: [Entrepreneurship] is stressful, and
there's also an overwhelming sense of loneliness you
experience--at least, I did in my first few years. You're
really alone. Even if you have employees, you can't lean on
them. You can't share whatever payroll issues you're having
that month. You've got to be strong.
GAYLE:How do you get beyond that?
RINA: That's one of the things that makes YEO
so valuable: I've met people like Cliff who are going through
the same things I am. I can call Cliff and talk about those issues
because he's been through it. He can give me ideas of people to
call or what to do.
GAYLE:It's not just the access to advice,
either, is it? It's also the emotional support.
CLIFF: It's really like AA for entrepreneurs.
My advice to anyone starting a business is to get a peer group
together. Find business owners who can understand your problems or
who are within your industry. You can all help each other.
GAYLE:Obviously, starting a business is a
bit of a trial. But what's the upside, from a personal
perspective? How has being an entrepreneur changed you?
MICHAEL: I think that when you don't have
anyone to answer to but yourself and your customers, you take a
different view of life. When you have a job where other people have
authority over you, you're constantly trying to impress them
because if you don't, you don't get promoted. When
you're an entrepreneur, you don't have that stress. You can
take the time you need to solve problems correctly because
you're not pressured by outside authority. I'd say being an
entrepreneur has mellowed me out considerably.
GAYLE:Mike, you're the first entrepreneur in
my 13 years of doing this who's said entrepreneurship has
mellowed him out.
MICHAEL: Well, I think it has.
GAYLE:Don't stress levels rise when people
feel they're not in control of their work? Maybe there's
some benefit in having control over what you're
doing.
MICHAEL: Right. Control over your destiny.
GAYLE:In recent years, we've heard more
and more stories of ridiculously young entrepreneurs making
ridiculously large fortunes after what seems like a nanosecond of
work. How does that affect the way you view your own
success?
CLIFF: It doesn't. Who cares? I applaud any
entrepreneur who is successful.
GAYLE:It hasn't raised the
stakes?
CLIFF: It has in the fantasy world where everybody
thinks they can just put a ".com" at the end of their
business name and make a ton of money--or in the world where people
think "Well, if that guy can do it . . ." without really
understanding what goes into building a company. Success
doesn't come about by happenstance. Come on.
GAYLE:But what might have seemed like an amazing
valuation five years ago wouldn't necessarily be today,
right?
CLIFF: Sure. When we started writing the business
plan for Firstuse.com, valuations weren't going through the
roof like they are now. And we had no idea we'd be in a
position to get valuations that to a lot of people might seem
really high.
GAYLE:So that inflates your sense of what
your company and your efforts are worth?
CLIFF: No. To us, the high valuation makes perfect
sense when you think of the dynamics of where technology transfer
is going. But that's a whole other conversation.
RINA: What Erica said earlier is also true:
It's not just money that's a motivator. It's the client
e-mail that says, "Great job!" I send that kind of
appreciation out to my employees, and it makes a difference. They
say, "That really meant a lot. I'm really happy
here." That feedback is rewarding, too.
GAYLE:Are you glad you became
entrepreneurs?
ERICA: My dad is an entrepreneur, so I grew up in
that kind of family. For me, it would be hard to go to work for the
other team, to work for somebody else.
MICHAEL: I'm basically unemployable. I look at
my skill set and think, "You know what? I wouldn't be of
much value to anyone, unless the job was to be an
entrepreneur." I wouldn't want to be there at specific
hours. I'd want to be compensated for all the extra time I put
in.
Maybe I won't be doing this forever. Maybe five years down
the road, I'll sell it off and open a small restaurant and bar
on the beach somewhere. I'd be happy doing that, but it's
got to be mine.
CLIFF: Also, when it stops being fun, the
game's over.
MICHAEL: Yeah. If I'm bored, I'm out. Just
because I'm mellow doesn't mean I want to sit around all
the time.
CLIFF: It's not just me, either. Personally, I
need to know that when everybody [at my company] comes to work,
they love what they're doing. We had people through Labor Day
working around the clock. We couldn't pay for that. We
couldn't tell people that was their job. They do it because
they want to--they know we have deadlines to hit and they did it.
But when that kind of enthusiasm is gone, it's over.
GAYLE:Are you getting what you want out of
your business?
RINA: Oh, definitely. Not only independence, but
being able to act as a leader for people who work for me, making a
difference and setting a standard. There's nothing like it.
CLIFF: I look back at myself 10 years ago as
somebody who was very quick to react, very impulsive. But you get
humbled. Problems you never imagined hit, and you have to learn how
to react. I've stopped being the boss of everything. I
can't control it all. I'm just trying to keep moving and
enjoy the ride.
Freelance writer Gayle Sato Stodder (gsato@pacificnet.net) is
co-author of Entrepreneur Magazine's Young Millionaires
(Entrepreneur Media Inc., $14.95, http://www.smallbizbooks.com).
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