The

Entrepreneurial

Code

Lessons from an

Ivy League Entrepreneur

Chapter Fourteen

“The moment of victory is much too short to live for that and nothing else.”

– Martina Navratilova

 

During Johnny’s senior year, he enrolled in an Entrepreneurial Management class taught by Professor Trout.  A short and stocky man in his sixties with a head full of white hair, Professor Trout was the owner of a dozen small ventures and an animated speaker, who used to warn the class to never get a “j-j-j-j-job.”  He used to joke that he couldn’t even say the word. 

Professor Trout stood before the class wearing his signature blue blazer, hands on his hips, periodically glancing down at his phone.  A former lawyer by trade, the professor focused his lectures on the impact of entrepreneurship on a founder’s lifestyle.  Trout’s phone would buzz non-stop during class and the din was a constant reminder that the “Professor” was not an academic. 

Trout’s lectures were peppered with personal anecdotes about his businesses.  He once told a story about a breakfast meeting with an infamous “billionaire” alumnus of the school.  Apparently, the professor’s light fixture company had a mounting pile of unpaid receivables that were owed by the mogul’s hotel and casino. 

As the story goes, the billionaire’s wife invited Trout to breakfast and informed him the hotel/casino was going to declare bankruptcy.  She made the professor an offer to settle the outstanding bills for 30 cents on the dollar, or risk losing the full amount in a bankruptcy proceeding.  Unfortunately, 30 cents on the dollar was still a loss for Trout. 

You could see the anger in Trout’s face when he recounted the story.  Ultimately, he declined to settle.  As it turns out, the hotel/casino never declared bankruptcy and the professor was paid in full.  Whether or not that was a shrewd bluff or the professor’s good fortune is uncertain.  Professor Trout had dozens of stories like that.

At such a late stage in his professional life, Trout provided capital and strategic guidance to his portfolio companies as an angel investor.  Listening to him talk about his businesses, Johnny thought he was brilliant in the way he set things up for himself.  It sounded like the exciting career Johnny wanted. 

It was intriguing for Johnny to imagine he could share in the “upside” potential of a dozen start-up companies as an equity holder, while also participating as a director on the board.  If one company didn’t work out, he could still have others that might become hugely successful.  Although he didn’t have any money to invest in start-ups, Johnny was enthralled by the “diversification” possibilities. 

Although it was unrealistic for Johnny to think about becoming an angel investor at that time, he considered becoming a “venturepreneur.”   Venturepreneurship was Johnny’s idea of merging entrepreneurship with venture capital.  He believed that if he started a new business, raised capital, and got it running, he could eventually find other managers to replace him, so he could leave and start something else.  In that way, he could establish a portfolio of start-up companies just like Trout, but he didn’t need to have any upfront capital.

Unfortunately, Johnny still didn’t understand the level of unwavering commitment an entrepreneur needed to make his business successful.  It was dangerous for him to think about being an entrepreneur who dabbled in a diversified portfolio of companies, because it had the potential to cause him to lose focus.  As Mark Twain would say, Entrepreneurs have to “put all their eggs in one basket and watch that basket.” Diversification is for investors, not managers of start-up companies.

As part of the class, Trout liked to bring in current entrepreneurs to talk about their experiences.  Most of the speakers were 20 or 30 years older than the students.  They came from a broad range of industries and were generally successful.  The class heard the same message over and over again about how each was glad to be self-employed.  Sitting in the audience, Johnny saw ordinary-looking people recount how everything came together for them.  While the brief highlights probably didn’t do justice to the perils these entrepreneurs endured, Johnny was enthralled by their testimonials.

Some featured speakers touted how they sold prior businesses for big money.  As a student contemplating entrepreneurship, it was easy for Johnny to be motivated by these tales.  It always left him with the “If he can do it, then I can do it too” attitude.  It not only sparked a competitive instinct in him, but it also made him feel like other jobs would flail by comparison next to the huge opportunities afforded by entrepreneurship.  These guest speakers were tangible proof to Johnny that entrepreneurial success could happen. 

Among the entrepreneurs who visited as guest speakers, there was one who stood out Johnny’s mind.  Josh Wiggery was the founder of a successful basketball apparel company.  He was a 5’8’’ white Jewish kid with an MBA, but the really interesting things about him were his mannerisms.  He sounded like someone on an asphalt basketball court underneath the L-train.  It just didn’t fit with the way he looked. 

His presentation was also unusual because he talked about how much he loved the sport of basketball, and how that motivated him to start his company.  Josh told the class that he quit his job as a management consultant and he paid himself $1,500 his first year.  With no money, he joked that when he asked a girl on a date, it meant, “Come over my place and watch TV.”  He claimed that he lived on cans of tuna fish for a year, because that was all he could afford. 

Nevertheless, Josh didn’t seem like he regretted anything.  Clearly, he was proud of his company and he couldn’t imagine himself having a different job.  Josh seemed willing to invest years of his life developing his business.  Although he expected his company to be profitable, money didn’t seem to be his main motivator.  Simply stated, he loved the sport of basketball and wanted to be involved in the industry.

Josh’s enthusiasm for his business came through in the way he described his corporate culture.  One of his main criteria for hiring new employees was whether they liked playing basketball.  Johnny thought he was insane, but Josh was trying to find people that shared the same intrinsic motivation he did.  Every day, his staff took a break from work and played full court pick-up games, then went back to the office. 

Johnny had to admit it that it sounded like a great place to work.  Even if Josh’s business never made it, you could tell he was enjoying himself and his employees probably were as well.  It struck a chord in Johnny that for someone like Josh, entrepreneurship was a way for him to invent a job that inspired him in an industry he loved.  It was the freedom to wake up every day and do what he enjoyed. 

Unfortunately, even though Johnny knew there was something important to learn from Josh’s example, he was unable to put it into perspective.  Within a week, Johnny had all but forgotten about him.

Copyright  2005 by Chris Cononico
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