Goodbye, Mom & Pop
This story appears in the May 1999 issue of Entrepreneur. Subscribe »
Jim McCann's father owned a business. "He was a painting contractor," McCann explains. "He had good years and bad. He had ideas for growing the business, but he also had five children to support, which meant his risk tolerance wasn't high." Neither was the burning, irrational desire to push the envelope. "Whether for financial reasons or because of the parameters that his psyche imposed, my father was a small-business owner. He did fine, but he wasn't an entrepreneur."
McCann, on the other hand, is the real deal. The 47-year-old president of Long Island, New York-based 1-800-FLOWERS parlayed a background in social work and $10,000 into a $300 million nationwide enterprise, consisting of 150 company-owned and franchised flower shops, 2,500 affiliated florists, five telemarketing centers, and an online presence that's growing like--well, weeds.
What separates McCann--and entrepreneurs like him--from the legions of small-business owners out there? It's not a matter of success or failure. The owner of a single profitable clothing boutique is not unsuccessful. Indeed, starting and running a business that pays your bills, meets its payroll and feeds the economy is a worthy accomplishment by anyone's standard--it's more, certainly, than most people manage in a lifetime.
And still, there's a difference. You see it in the shape of a company and the spirit of its founder: a delight in growth, innovation and risk. McCann calls his entrepreneurial character a "genetic defect," something so basic and profound it's undeniable. "Whatever I was going to be--whether I stayed in the nonprofit world or started my own business--I was going to grow [the enterprise]," McCann says. "It's part of my nature."
That nature is certainly what separates entrepreneurs from their business-owning counterparts. Although each entrepreneurial story has its own magic--a particular combination of luck and circumstances that makes it unique--there are also common themes. Here, then, are the major symptoms, six signs that you may be more than just an employee with a better-than-average profit-sharing program. If the profile fits, you just might have the e-gene.
Gayle Sato Stodder probably isn't a true entrepreneur herself, but she learned enough about them as a former senior writer for Entrepreneur that she could play one on TV.
1. That Vision Thing
Call them oddballs; call them geniuses--real entrepreneurs see potential where it doesn't yet exist. University of San Francisco business professor Oren Harari, author of Leapfrogging the Competition: Five Giant Steps to Market Leadership (Prima Press), points to Ted Turner as a perfect example. Way back when, Harari says, "Every piece of conventional wisdom said that launching CNN was an insane risk. At that time, the networks owned 90 percent of the market, and every one of them had a news organization. But Turner picked up on some trends that suggested an all-news cable network might be successful. People wanted more news than they were being offered. They wanted a richer breadth of information than they could get. And with more dual-income families out there, people were less likely to change their schedules to watch the news at 6 o'clock or 11 o'clock."
As we now know, Turner was not insane. Not only is CNN a commercial success, but it's also revolutionized the way people get their news all around the world. Not bad for an idea most people would have panned at the outset.
Of course, CNN is not the last good idea of its kind--at least that's the hope of Marc Collins-Rector, 31, co-founder of Digital Entertainment Network (DEN) in Santa Monica, California. Rector made a fortune with a previous venture that he launched in 1991: Bay City, Michigan's Concentric Network, was one of the first online service providers when the Internet was all but unknown. Rector now plans to bring the equivalent of series television to the Net. This spring, DEN will introduce 30 pilot episodes to the Web-surfing public on its site, http://www.den.net. The most popular pilots will become regular series, and--at least in theory--DEN will inaugurate a new era in interactive media.
Like any true entrepreneur, Rector is not operating on a whim. The technology that DEN has developed will allow people with ordinary (even slightly outmoded) personal computers to get good video quality--a critical barrier in Internet broadcasting. On the demographic front, Rector believes a new generation of entertainment seekers (ages 12 to 24) craves relevant programming. To that end, DEN's pilots are "narrowcasted" to niche audiences: A show called Chad's World follows the life of a gay teen; Tales from the EastSide relates to a young Latino audience.
"This is a hip, savvy and hungry audience," says Rector. "We're counting on their readiness and sophistication to receive content that is as unique as they are." Time will tell whether Rector is on target with DEN, but he's been right before. He still recalls the time--back in the early '90s--when a group of investors rejected his concept for Concentric. "Talk by computer?" they asked incredulously. "Young man, why would someone want to communicate by computer when they can pick up the phone?" Rector knew the answer then. Now, so do those shortsighted investors.
2. You Make Something From Nothing
Although real entrepreneurs have the ability to see potential that ordinary people don't, they aren't content to stop there. Bright ideas are a dime a dozen (evidenced by the number of times people see a new product and say, "Hey, I thought of that!"). The difference between an entrepreneur and a dreamer is action.
Skill is definitely a factor in entrepreneurial success, but entrepreneurs are more likely to earn an "E" for effort than for elegance. Why? Taking a raw idea and putting it through the many thousands of machinations that turn it into a thriving business is messy work--especially when you're strapped for time, money and experience.
McCann got into the flower business when he purchased a small flower shop. He knew virtually nothing about flowers--or retailing or running a business--but he liked the idea of selling flowers and believed in the profitability and longevity of the industry.
The small shop did well, and several years later, McCann began filling orders for a hot new telemarketing company called 800-Flowers. The arrangement was profitable until 800- Flowers encountered rough seas a year later. The company was underfunded and poorly managed, and its managers didn't understand the floral industry. McCann made an offer to buy the company, which, after two years of negotiations, he did. With effort and determination, he went on to turn the company (now called 1-800-FLOWERS) around, creating an empire. Entrepreneurship isn't about knowing how to do something; it's about knowing how to get things done.
3. You're Never Finished
That said, creating a winning business isn't like painting the ceiling of the Sistine Chapel. The ceiling, however large and difficult it is to work on, is at least finite. You create your masterpiece, and you're done. Old and crippled, maybe, but done.
Not so for the dynamic entrepreneur. No matter how innovative your original venture is, it's only the first in what you hope will be a lifetime of creative efforts.
For Ilona Karme, 36, and Nick Scalisi, 41, co-founders of Karmic Niche Inc. in Los Angeles, reincarnation is a regular event. That's not just because they create clothing designs with a Buddhist bent; it's also because they're constantly reinventing their business--spinning off new clothing lines and even new business concepts.
Although they launched Karmic Niche just two years ago, Karme and Scalisi already have annual sales of more than $3 million and five separate clothing labels: Little Thrills (tops and dresses for girls), Future Shock (tops for young men), Instant Karma (cotton tanks and sleepwear sets), Cheap Thrill (aimed at the junior market) and China Surf (surf-inspired women's casual wear). Karmic Niche also works with corporate clients such as House of Blues and MTV to create karmically correct designs for promotional T-shirts and accessories.
"It's demanding to come up with [and execute] new ideas all the time," says Scalisi, "but being an entrepreneur isn't about staying with the status quo."
The rewards of constant creation aren't merely financial. With each new challenge comes the satisfaction of having produced something. With every positive market response comes the joy of having connected with an audience. For true entrepreneurs--who thrive on growth--evolution isn't a chore. It's the point of the exercise.
4. You Bet Your Life
Everybody knows one: the would-be entrepreneur with a brilliant concept, executive skills, drive and determination--and an absolute inability to stake even half his checking account balance on a new venture. This isn't entrepreneurship; it's fantasy.
Real entrepreneurs stake their lives on their businesses. They mortgage their homes. They raid (with consent, of course) their parents' retirement accounts and their kids' college funds. They hock their appliances. They solicit investments from friends, associates--basically, anyone with a wallet.
This principle applies even to entrepreneurs in small-scale, noncapital-intensive businesses. Los Angeles entrepreneurial trainer Kimberly Stansell, the author of Bootstrapper's Success Secrets: 151 Tactics for Building Your Business on a Shoestring Budget (Career Press), calls herself a "solopreneur." She works alone, from home, and without any inventory.
But Stansell, who's in her 30s, rightly considers herself an entrepreneur, and here's why: Her enterprise is constantly evolving and growing--and she's willing to stake her assets and income on it. Since Stansell quit her "dream job" as a corporate personnel director in 1989 to start a homebased jewelry business, she's been through a few incarnations--first as a manufacturer and marketer, then as an author, and now as a writer, trainer, speaker and consultant.
Stansell's business is thriving, yet she doesn't always measure success by current income. "Every time I take a new direction, there's a dip [in my revenue]," she says. "It takes time to home in on what you need to be doing." And, for entrepreneurs, time is money. Yet Stansell considers her enterprise a worthy investment. "The potential is there to increase my earnings," she says. "And five years from now, I don't think it's unrealistic to say I could be earning five times what I'm making now."
Stansell's independence, capacity for change, diligence and intelligence define her identity as an entrepreneur. But so does her willingness to put her money where her mouth is. "I assume all the risk for everything I do," she says. "Any time a person has the courage to put all their resources into getting their ideas out into the marketplace, they deserve credit."
5. You Set the Standard
Getting credit is an issue for all entrepreneurs. Unlike employees, who might gauge their success by their succession of job titles (and corresponding salaries), or traditional business owners, who might track the stability and steady income they derive from their companies, entrepreneurs can't always measure their success by conventional indicators.
Why? For one thing, growing a business means channeling more profits into growth than into your pockets. This means that, even on the very brink of your big breakthrough, you may be up to your eyeballs in debt, flat out of cash, driving your neighbor's abandoned Subaru, and living with so much stress that you look like the victim of a war crime. The size of your bank account doesn't always reflect the might of your business.
For that matter, neither do plush, cushy offices, multiple locations and hordes of eager employees. Stansell--like plenty of other enterprising solopreneurs--is both challenged by and contented with her status. Her lack of accoutrements belies the expansive spirit of her venture.
In fact, says McCann, "What we once thought of as assets--real estate, machinery, number of employees--are now potential liabilities. The question used to be, How big can you be? Now people want to know how much you can do with the fewest number of people and resources."
As these rules change, one fact remains constant: Entrepreneurs make their own rewards, their own motivation. They don't rely on Aunt Gertrude's approval or validation from their good friend Bob.
6. You're Having Fun
For most entrepreneurs, the greatest reward is the journey itself. The entrepreneurs we spoke with have all had unglamorous moments, tales of desperation and woe, daily crises, foul-ups, hassles, and despair. But--God help them--they like it. Something about being an entrepreneur is, for them, a five-star, butt-kicking, rocket-boosting blast.
Last year, 29-year-old former talent manager Adam Bernhard joined forces with restaurateur Alan Finkelstein, 48, and veteran pizza maker Richie Palmer, 43, to launch a Beverly Hills, California-based chain of quick-service pizza restaurants called Richie's Neighborhood Pizzeria. So far, it's been difficult and stressful. With two locations up and running and another three on the way, Bernhard's role is to supervise infrastructure, staff development and crisis management. In between, for fun, he wipes down tables and dishes up pizza.
Still, Bernhard is nearly euphoric. This comes partly from his belief in the company's potential. "We have the ability to take this to an infinite level," he reports. "That's certainly exciting." But that isn't all. "There's something satisfying about feeding people," he suggests, "about having people work for us and being able to support their families.
"Last week, we had a customer call to ask whether we had a location closer to their home [30 miles away]," says Bernhard. "They liked the pizza so much and had such a good time that they wanted to come back. When I apologized and told them the location [they'd been to] was the closest, they sighed and said, `We'll just have to drive in, then.' That was amazing. That was a good feeling."
Spoken like a true entrepreneur.
Contact Sources
1-800-FLOWERS, 1600 Stewart Ave., Westbury, NY 11590, http://www.1800flowers.com
Digital Entertainment Network, 2230 Broadway, Santa Monica, CA 90404, (310) 998-1101
Karmic Niche Inc., (213) 624-6335, http://www.karmicniche.com
Kimberly Stansell, 6308 W. 89th St., #306, Los Angeles, CA 90045, http://www.kimberlystansell.com
Richie's Neighborhood Pizzeria, 12644 Mulholland Dr., Beverly Hills, CA 90210, (310) 278-6446
