Can you risk every penny you have on one bet? To get your full entrepreneur’s wings you have to do it. I did. More than once. Want to know what that’s like? When you open that door it never leaves you. It visits you in dreams. It taunts you and tempts you forever.
This example starts very early on a Saturday morning about 35 years ago. I was playing golf on my own, experimenting, privately exploring hidden features of the course nobody else gets to see, when I noticed there was another player in front who had stopped. He was waiting for me. When I reached him, he suggested we play together. I agreed and regretted it. I now believe he did not exist and that he was a supernatural presence sent to save me. We could call him Clarence. He wasn’t there to play. He wanted to talk. I was thirty-one, he was ten or fifteen years older. As we walked to the next hole, he told me.
“I’m a millionaire – but I’m not happy”.
I gritted my teeth. This remark came at a bad time. Unlike him I was not a millionaire. I was in the parlous state of trying to become one. Two years into the life of a start-up. This particular start-up was my first and it was passing through a pain point that I am now very familiar with. It was running out of money. The living dead. A beached whale. I had borrowed, re-mortgaged, sold my car and taken on night-work to keep it alive, but it was dying, and, on this day, it was nearly dead. If external “professional” investors had been involved they would have killed it.
Nevertheless, I had found time on a Saturday morning to get away from everyone and everything and play nine holes of golf. To observers it might have looked bizarre (I was crap) but it was not really golf, it was an escape. A gulp of air for a drowning man – and now my new bipolar mate wanted to tell me about his millionaire problems.
“I’m not unhappy” he said, as I teed up my ball, took an almighty swing and missed. I swore (silently) and pretended it was a practice. It didn’t matter, he wasn’t watching.
“It’s just that I am not … you know… happy”
Smack. This time it flew straight for about 100 yards before swerving 180 degrees to the right. No matter. That was part of the plan. That’s why I aim 180 degrees to the left. This is unsettling for people on other fairways who think I am aiming at them but, thanks to my slice, they have nothing to worry about – usually. When it goes straight, they scatter, and things get socially awkward.
He put his ball down and continued.
“I thought it would be different to this”.
He took an easy, relaxed swing and clipped the ball in a lazy flight straight to the green, where it settled next to the hole. That’s when I should have realised; he was my Guardian Angel. Instead, all I knew was that he was really, really… pissing me off. He continued.
“I made my money out of importing non-standard ring binders. I don’t sell to the public. I sell to business, mainly American companies in Europe. They use them for their training materials. We have very big customers, Hewlett-Packard, Boeing, IBM… The mark-up is 400%. But it’s not … I don’t know .. it’s not satisfying. And, then there’s the money. When you don’t have money you don’t have to worry about it. But when you do you have to be always worrying it. I could spend it, but I’ve got the things I want.. you know .. the car.. the boat.. the house.. kids in private school. Now, I have to worry about investing it. And, another thing, people treat you differently. They think I can solve their problems.. just because I am .. you know .. rich.”
I hadn’t said a word. We had reached my ball, 30yds short, sitting in a divot. If I had been on my own, I would have moved it, but I felt compelled to play it as it lay. Whump. The club dug into the ground. A carpet of mud with a ball on it rose up and splattered down exactly where it started from.
If Clarence was a real person and not a Guardian Angel, I hope I helped by listening and not killing him. I think that’s what he needed (listening to). And that’s what I gave him. My silence was born out of irritation and resentment, but it did the job. I wasn’t rude. I can be rude but on that day I wasn’t rude. I was too distracted to bother. On any other day he would have got an order to man up and face his problems. We never met again. But he has haunted me a lot since then. Was he sent by a mystery force – God? – to make me reflect on start-ups? Did God want me to abandon this punishing pursuit? Was God warning me about the shallowness of wealth? If so, it didn’t work. I kept getting on the start-up bike. Eventually, when I made some money and got: the big car…. the big house.. the kids in private school, (I didn’t want a boat but I thought about a helicopter), I noticed Clarence was right. People were treating me differently. I was being pestered to solve their problems and … I wasn’t happy. I wasn’t unhappy but far from reducing the pressures of life, financial success had multiplied them. If I set up Millionaires Anonymous this will definitely be one of our discussion topics.
Anyway, what Clarence Ring-Binder did not know was that I had just made a very big entrepreneurial decision and I was playing golf to run away from it. My business was down to its last £20k. Back then that was enough to pay the staff a month’s wages and close it down. We were technically insolvent. Legally, as a director, I could only continue operations if I honestly believed we could service our debts. As we made a loss and were out of dosh this “belief” was wafer thin. I was hanging onto a thread by my fingernails.
This last £20k had been loaned by my parents who were ordinary people living in a semi-detached house and this was their savings. They said I could use it on whatever I wanted and repay them when (or if) I could – but it was all they had. There was no more. Every money cupboard in my reach was stripped bare to feed the hungry child.
So, what did I do?
In the parlance of our trade (start-ups) this is a character defining question; do you or don’t you “roll the dice?”. In this case it would have to be a roll that paid back instantly.
The business was a computer training company. Back then in 1988 we taught new computer users how to use spreadsheets, word processors and databases. 1988 predates the Windows you know. It predates Microsoft Office. This was Web minus 10.0. Sales were rising but we had high, inescapable fixed costs, so we were going to run out of runway (cash) before we took off. This (thank God) was an era when bank managers could still use their own judgement to support their clients. Mine, Stuart Warpshire at Barclays, had been magnificent. I was sitting on a big unsecured loan which he had authorised on top of the crippling secured loans hanging over my house. But we had reached the limit. I was beyond his help and had to decide what to do. Who knows how or why, I came up with an idea. I rang the Sunday Times and asked how much it cost to buy an advert on the front page of the Business Section. After some discussion, a very accomplished salesman said £25,000. I offered him twenty, he agreed and the deal was done. My idea was to advertise a totally original course: “Lotus 123 Introduction for Directors, taught by your peers with relevant Director level case studies and attended only by other Directors”. We had no such course, but I was confident we could knock one up if it worked. My sense was that Directors had the power to buy and were probably paranoid about falling behind on this new skill, so you know… let’s roll the dice.
That was the Friday. Playing golf with “Clarence” on Saturday I was a day away from knowing if it would work. Let me describe what that does to your sleep. You DON’T. You lay awake worrying and regretting. Your imagination concocts vivid screenplays of bailiffs, bankruptcy hearings, angry employees not being able to pay their bills and worst of all – the humiliation of public failure. The crushing humiliation. The knowledge that everyone you know – friends, family and enemies will see that you tried and failed. That is entrepreneur hell. That’s why I was in no mood for moaning millionaires.
So, what happened?
In those days there were no websites, so newspaper adverts contained a tear off coupon for people to write their name on and request details by post. There was also a phone number for those who had the courage to call and ask for information. Back at base you had an answerphone. This had a cassette tape and a little LED message counter. The counter showed how many messages had been left while you were away.
Sunday came and I bought my copy of the Sunday Times. My stomach heaved when I turned to the business section. Sure enough, there it was. It hadn’t been a dream. I really had spent every last penny on an advert. It looked ok. Credible even. But it marked a binary moment in life. Here in my hands was success or failure. It was a bank holiday weekend, so I had an excuse to run away for one more day. I didn’t go into the office to check the answerphone until the Monday. My logic was the same as a patient waiting for the results of an X-ray. Until you get bad news you haven’t got the disease, so – put off getting the news. Thirty years later I can still remember every detail of that cold dark drive, entering the empty office and taking the lift, listening to the beep of the alarm as I punched in the door code for what could be my last moments as a respectable and solvent businessman. But, I won’t describe the dark thoughts of hopeless despair spinning in my head. The very dark DARK thoughts.
The lock clicked. The door seemed heavier than normal. I leant on it, and it swung open. The digital readout on the tape machine was visible within a couple of steps. Much as I wanted to look away my eyes were drawn to it. The display that held my future in its digits was clearly visible, but … there was no number. It was just flashing. Crushed. I knew what that meant. The machine had malfunctioned. I probably hadn’t loaded the cassette and there was no space for messages. All that money wasted. Instant self-recrimination. “You tosser. You total tosser. You deserve to lose. How could you mess that up?” I shuffled up to the machine, in tiny bits, a completely broken man. I entered the error code and waited for it to say what was wrong. Then I heard the words.
“You have 54 messages. Replace tape and reset”.
What..?
54 messages. It was full! Despair to ecstasy. The biggest emotional bounce in the shortest time in human history. Sure enough, there was message after message asking for details, requesting a place on the course, asking when the earliest course was, asking how much extra it would be for a private course. In that exact moment I knew we were saved. I can still vividly remember the dizzy feeling of relief and vindication. And, that flood – a flood of life sustaining money didn’t stop for two years. Individuals, Top 100 company directors, whole departments from Marks & Spencer, Xerox, Hewlett Packard, Thames Water, Natwest Bank flowed through that course. Way back in 1988 I was working 20 days a month personally generating £2,000 net profit a day and so were two colleagues also giving the same course. We wiped our debt in months. The land of plenty. A rich harvest of money.
That was my first business. It was started by three friends who exchanged the £3 share capital in a pub. I still have the coins taped to a piece of cardboard. Within six months both my partners had departed for reasons I accepted but meant I had to keep a struggling business alive by day and search for new partners by night. I pulled it off by promoting two employees and between us we paid back the departing directors in full for their shares. For the next three years we had a Wednesday night meeting every week. All decisions were argued through to a unanimous vote. This worked until I felt we should reinvest our winnings to expand the business. My partners had no interest in doing so. They voted against taking the risk to make a “life-changing” amount of money. That’s another one of our entrepreneur expressions. A “life-changing” amount of money is not a specific sum. It is just that amount that transports you (personally) from your current life to another. The amount varies by person. My colleagues had achieved theirs by securing a comfortable living. I had greater ambitions. However, – and this is important – and it is where professional investors in start-ups are often wrong – for me money wasn’t my prime motivator. Schumpeter was right about entrepreneurs. Money is a measure of success not the goal. My goal was to make a big business that was respected for following the right values. Being from a humble background, that’s what motivated me. Much more than money. I wanted to do that so that I could make all the posh gits who looked down on me when I was young – eat dirt. Lots of it. If the only way to do that was to make a lot of money (something they worshipped) so be it. I wanted wealth to cause pain to all those middle-class people who turned me away from tennis clubs, cricket clubs and golf clubs when I was younger. I would show them who had the real class. The class to make a big business that delivered value and was fair and generous to employees, customers and suppliers. And, in reflection, that’s what Clarence the moaning millionaire was missing. He wasn’t an entrepreneur. He hadn’t made a business that was respected for all the right values. He had just made money. He could still have been my Guardian angel. Maybe that was his message. I dunno. It was weird.
And now a vitally important word on precarity for non entrepreneurial professionals especially those who work in finance, risk and project management in global business. It doesn’t matter how much advice you get from McKinsey et al, or research and modelling you do, new ventures are always unpredictable. The vast majority will fail to meet their targets and the only way you can find the winners is to start them all and eliminate the losers. The losers are valuable because they expose the winners. Don’t fret about it. And, don’t worry about being associated with “failures” or “blaming” the people who manage them. They helped find the winners. Get on with it. Stop doing even more research and forecasts. Roll the chuffing dice. Take the gamble. In a global mega corp you can back all the horses in the race. One will win. You can’t lose. It’s the opposite for real entrepreneurs, for them to find out they must bet everything on the one horse they are riding.
This invites the question, what would you rather be? A start up in a mega corp or an independent where you are funded by your own “hurt money”, (that’s another startup term and it marks a huge difference in culture). Would I put my own hurt money into a startup in a mega corp that has huge financial reserves?
Err nope.
Why?.
Because global firms are ultimately controlled by the culture of finance, risk and career professionals whose priorities are buried in preserving their personal reputations and not growing new ventures. And that’s a bigger obstacle than anything the market will throw at you!
[Note: as I promised in the Read Me First notes. Everything in the Land Rover Diaries is true. “Clarence” wasn’t his name but the whole account happened word for word as best as I can recall, and the Sunday Times advert took and repaid every last penny and many borrowed ones].
