The Insiders

Four young entrepreneurs get down and dirty about the pains and pleasures of running their own businesses.
Magazine Contributor
11 min read

This story appears in the February 2000 issue of . Subscribe »

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.

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, 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 ( is co-author of Entrepreneur Magazine's Young Millionaires (Entrepreneur Media Inc., $14.95,

Meet Our Panel

  • Michael Kite, 27, took over Ontario, California-based Freeflow Products Inc. in 1994, a manufacturer of custom-molded plastic components. "My father gave me the opportunity of a lifetime right out of college," Kite explains. "He owned this business, which was losing money, and he said, `If you can turn a profit at this, you can have it.' " Under Kite's leadership, the firm has moved from the red to the black, and from an industrial base into more diversified areas, including its own line of hot tubs.
  • Cliff Michaels, 32, is cofounder of, an online registry in Westlake Village, California, that provides third-party authentication of intellectual property and vital records. Before launching in 1997, Michaels was cofounder of Visual New Media, an Internet development and commerce company. He is also founder and CEO of Michaels & Associates, a real estate finance company, where he negotiated more than $100 million in transactions. "I've never actually had a job," Michaels confesses. "I started with a whole bunch of little businesses right out of high school."
  • Rina Yasuda, 34, developed her interest in marketing and graphics by acting as an impromptu consultant for friends. "When I realized I could make a living doing what I loved, I started Insyght," Yasuda says. That was in 1995. Today Insyght Interactive Inc. in Beverly Hills, California, provides marketing-related services including print media production, presentations, and public relations.
  • Erica Zohar, 28, founded American Groove Los Angeles in 1995 with $10,000. Today, her women's and children's high-end sportswear is available nationwide. "We started small, with just six samples and a shared booth at a trade show," she says. "I was working out of my home. But we got into the contemporary sportswear business just as it started going bananas. We were one of the founding companies in our niche."

YEO For You?

To qualify for Young Entrepreneurs' Organization membership, you must be under 40 years old and own a business with annual sales of at least $1 million. For more information, call (703) 519-6700 or visit

Contact Sources

American Groove, (888) GROOVE-ME,, (805) 370-3737,

Insyght Interactive Inc., (310) 247-3840,

Young Entrepreneurs' Organization, (703) 519-6700, ext. 137,

More from Entrepreneur
Entrepreneur Select: A Fund For Entrepreneurs, By Entrepreneurs

Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation.

Book Sale - Save 60%!

Through 6/20/21, save on our collection of recommended side hustle and Start Your Own books, including:

  • Start Your Own eBay Business
  • Start Your Own Business
  • Start Your Own Etsy Business
  • And more

Use code SIDEHUSTLE2021 to claim your savings!

Whether you want to learn something new, be more productive, or make more money, the Entrepreneur Store has something for everyone:
  • Software
  • Gadgets
  • Online Courses
  • Travel Essentials
  • Housewares
  • Fitness & Health Devices
  • And More

Latest on Entrepreneur