The

Entrepreneurial

Code

Lessons from an

Ivy League Entrepreneur

Chapter Twenty

“The opposite of bravery is not cowardice but conformity” –Dr. Robert Anthony

 

When Johnny got back to his office, he recounted the whole experience to his partners and they shrugged it off like it was exactly what they expected.  Working with the school was not going to happen.  Therefore, it was time to make a decision to move forward or quit the business.

Although the Bullfrog Card was successful, they had no partnerships with other schools.  They had a new marketing alliance with CMC, but no guarantees of future business.  There were also other risks they faced.  For example, university customers would wonder why their school chose not to work with them.  As a result, their credibility could be damaged before they even got started.  In fact, Johnny feared the University might badmouth them if contacted by administrators at other schools.   What made Johnny and his partners think they could possibly pull this off? Was it going to be that difficult of a market to break into? 

It was impossible to know the answers for certain. As the partners discussed their predicament, it was difficult not to be biased by the camaraderie.  The three had come so far together that it became difficult to imagine quitting. They speculated what their lives would be like in a year if they dismantled the business.  Johnny would probably be working long hours as an analyst at an investment bank, while Abe traveled around the country as a management consultant, and Maverock worked for a Fortune 50 company.  It didn’t sound so bad, but they weren’t jumping up and down about the prospects.

 In some of their late-night sessions, Johnny and his partners speculated about how much money they could make as entrepreneurs.  They entered financial projections into an Excel spreadsheet, so they could alter assumptions.  Maverock included a formula that applied an IPO multiple to earnings, so they could calculate their net worth.  Maverock would sit behind the computer, plugging in different scenarios.  The game was surprisingly entertaining and addictive to play. 

The more sleep-deprived they were, the more fun it became.  There was at least one scenario where the company had operations at 500 schools, and the partners were worth a few hundred million dollars.  It didn’t matter how ridiculous the assumptions seemed, because as young business owners, the possibilities brought big smiles to their faces.  In contrast, their expected salaries and bonuses in corporate America didn’t have the same allure of possibility.  If Johnny and his partners accepted regular jobs, their chances of becoming multi-millionaires anytime soon were practically non-existent.

As they sat in the office, deciding the fate of their company, Maverock began playing “what if” scenarios. What if they went for it and were successful?  What if they could get a few schools to give them a try?  Playing the “what if” game can be dangerous if not put into perspective.  While hope is a critical element of success, it must be balanced with the downside risks when making decisions.  Unfortunately, Johnny was getting swept away by the potential riches that could be in store for his company and the risks began to fade.  For entrepreneurs, it’s more exciting sometimes to get euphoric.          

Johnny was torn.  He still acknowledged their business could fail for reasons beyond their control.  Yet, it bothered him to consider Maverock and Abe might stay and become multi-millionaires, while Johnny collected his salary elsewhere.  It was depressing for Johnny to think he might have missed his big chance. 

Eventually, both Abe and Maverock agreed to stay with the business.  They believed in the product.  Once they had a few university customers, they believed success would be imminent.  If the company had to set up programs “at cost” for the first few schools, they would do it to build credibility in the market. 

Johnny called his father, who had made a lot of sacrifices to send him to the University.  Johnny told him he didn’t know what to do, but he was more excited about staying with the company than accepting his job alternatives.  Johnny’s father listened carefully to his son’s explanation and said, “It’s the things you don’t do that you regret in life, not the other way around.”  And with that, he gave Johnny his blessing, and Johnny made his decision. 

Copyright  2005 by Chris Cononico
All rights reserved. No part of this manuscript may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the author, except by a reviewer who may quote brief passages in a review.