The Spirit Of Independence; Connections
It is only half an hour's drive by freeway across Kansas City, Mo., from Tallgrass Technologies Corp. to East Bottom Salvage. But it feels, at first, like a visit to another country. Tallgrass founder David Allen works in a high-tech industrial park, a Midwestern outpost in the Silicon Valley style. East Bottom Salvage's Jim Cox does business among the junkyards and truck lots of Missouri River bottomland. Allen met me in a carpeted conference room, surrounded by the accoutrements of a thriving electronics company. Cox's office is an abandoned bus in a deserted salvage yard. To keep warm, he burns a scrapwood fire in a pot-bellied stove.
Yet for all their apparent differences, the two share similar battles. David Allen, shipping $47 million worth of product in 10 months, may worry about an eight-figure cash flow, while Jim Cox strips cars for $20 bills. That is, of course, an enormous difference. But the two men have something even more important in common. Both have put everything they have at risk -- not just their financial futures, but their faith, courage, and imagination as well.
Time after time in my months on the road, the Allens and the Coxes reminded me that the cliches about the lonely struggles of the entrepreneur have their basis in the solitary realities of everyday life. Large or small, high tech or low, a business's uncertainties are real, and losses are more likely than gains. Fail or succeed, no one who dares such risks can stay the same.Starting a business, and trying to make it grow, stretches people's sense of who they are, and of who they would like to become.
For all their feelings of isolation, however, none of them seems to struggle alone. To build a company, most must also build to team; that's both the genius of entrepreneurship and the challenge the entrepreneurial style poses to established companies. But there are other connections that matter, too, connections that are more fundamental and more personal -- ties to a family and a history, to memories of a father or dreams for a son, to a husband or a wife across a desk, or to a grandmother whose lessons lie in the distant past. Probe just a little below the surface, and the similarities you find are likely to run deeper than the differences.
"I had figured the harder you work, the more you're going to make. But there comes a time when you can only work so hard." -- Jim Cox
Jim Cox, 38, started East Bottom Salvage in Kansas City, Mo., in January 1984.
When I was a kid, my dad junked cars, and that was something I always liked. But then we moved to the city -- he moved up here to get work. A few months ago, he was killed.
He always told me that the thing to do was to have a job and a steady income, but I figured that he never really got a whole lot that way. The hassle of working for myself is worth the time and trouble, I guess. A man's got to do something to support his family, and you try whatever feels right.
I got two kids, and one more on the way, so this is a family operation here. My wife is almost eight months along, but I could hardly make it without her. She can still answer the telephone. I've got a hundred dollars' worth of ads in the newspaper; if I'm out in the salvage yard and the phone is ringing, I'm out. My boy, he's 12, he's getting to the age where he's a lot of help, too.
I quit school when I was 16 years old, but I went down to trade school and learned body and paint work. I've done that off and on for 20 years, working for various dealerships, and there were times I made a pretty good living at it. But when you're out there working on a percentage, you're thinking, Man, I'm working hard, and the harder I work the more money that guy is making. So I figured it's better working for yourself. The harder you work, the more you're going to make. The only thing I'm missing out on is insurance, and benefits. But look at my dad -- killed after 20 years on the job, and my mom can't get a thing out of them, you know? So what's workmen's comp and all that worth? And what's it worth going to a job like that every day? All my dad got out of it was hard living.
Anybody that's worked around cars, like myself, you're going to figure out ways to make money working on them, whether it's selling parts off of them or whatever. Or get into the scrap-metal business. I found out it's pretty easy to go out here and buy a car -- or it used to be -- for $35 or $40 and take it over here to Prolerized Steel and sell it for $60 after you've taken a lot of parts off of it. I found out I could make money that way. So here I am.
But it is just an everyday hassle. You've got to be here every day. You've got to be here the time that you put down on your license that you're going to be here, and you better not leave before that. Then, with every car you buy you have to turn it in to the police station. It's a lot of paperwork, and everybody knows your business, everybody knows how much you pay for something, how much you get out of it.
My only real problem is money. I don't have the money to do things right. If somebody called me right now and wanted to sell me a car, I don't have the money to go buy it. If I had some money, I could go out there and hustle for a couple of days, load a load of scrap cars after I get the good parts off, and take them over to the shredder. Then I'd have $200, or $300, or $400, enough money to buy that many cars again.
When I started, I started with nothing. And I still got nothing. I had figured the harder you work, the more you're going to make. But there comes a time when you can only work so hard. If you ain't got any money, you've got to sit back and think, well, I've got to figure out something else here to do to get some money so I can make some more.
"If have to be there five hours, we're going to talk computer supplies." -- Gale Sayers
Gale Sayers, a Pro Football Hall of Fame running back who played with the Chicago Bears from 1965 to 1971, started Computer Supplies by Sayers with his wife, Ardythe, in 1984.
I became athletic director at Southern Illinois University. I was there for five years, ending in 1981. But after a while I was kind of spinning my wheels there. I wanted to go to a program where I could use my talents more.
I applied at a number of major universities. And it didn't happen. Even though my name was Gale Sayers and I had a good program. . . . I think the main reason it didn't happen is that Gale Sayers is black. The same is true of professional football -- there are no black general managers, no black coaches. Why? It's a very closed society.
So I decided this: I'm getting out. I'm going to do it on my own, do it by myself, do it with my wife. We'll make a go of it ourselves.
Hey, I had a great deal of skill in football, but I've seen a lot of skilled people that didn't do a damn thing in the game, because they didn't prepare; they didn't go out there and work hard. Football season ended for the Bears, every year when I played, in December; by February, I was working out again for next season. You had to work at it; every year they drafted a running back to come and take your job. If they're coming to take my job, I'd better be ready for it.
Hard work in business means preparing, then it means calling on more customers than you thought you could call on. In this business, you've probably got another 50 computer-supply companies starting up every year. If they get some business from the people that you are serving, that means they're stealing some of your business.
The hardest thing for me is getting through all the talk about football before I get to my product. With a lot of people, it's, "How are the Bears doing?" "What do you think about the Super Bowl?" Buy eventually, if I have to be there five hours, we're going to talk about computer supplies. Every time I'm talking to somebody, I'm thinking computers.
"Once you ride in a limousine, it's just a car." -- Xavier Roberts
I met with Xavier Roberts, 29, in his new Atlanta penthouse; although the decorators weren't finished, the Dali already hung by the chimney, and the Picasso was in the bedroom. Roberts was a 23-year-old art student when he made the first of the Little People -- the dolls that later became known as Cabbage Patch Kids.
I wanted to be rich. I grew up pretty poor, but even back then I didn't want a Chevrolet, I wanted a Maserati. Even when I was really young, I didn't want a brick home, I wanted a penthouse in the sky. Like the one I've got now. But I didn't really care about having my own business. I was looking to be more of a famous artist, and it all started out as something to do for art.
I'd put, like, old clothes on the babies, scuffed-up shoes, and burp stains, to make them look really real. Then I went to garage sales and bought bassinets and cribs so I could display them like real babies, kind of laying there. Then I made up a couple and started selling them. It really wasn't a genius thing.
I never expected riots in a department store. But before I signed with Coleco, I hd 2,000 people once waiting in line to pay $130. So I figured they would do millions of them at only $20. These past two years I think we sold 18 million Cabbage Patch Kids.
I miss a lot of the early times. I don't get the same satisfaction, going out and doing promotions and signing parties, as I did first making the dolls. Meeting 2,000 people -- you're just running through them like cattle. It's a job.
Even artists have to do some shit, though, and I enjoy it for the most part. While the business was growing, I got to travel all over the United States, which I'd never done. I'm probably happier than the average person could ever be. But it's really no different. Making a $75 car payment six years ago was a big deal. Today, I've got something nicer, but it's almost the same. You get used to this, too. Like my Rolls-Royce, or my limousine. Once you ride in a limousine, it's just a car.
"On the day of the funeral we sat in the living room, trying to decide what to do." -- Mary Kay Ash
The Mary Kay style, with its pink Cadillacs and pep rallies, has turned Mary Kay Ash into a mentor to the 150,000 women who, as heads of their own small companies, sell $277.5 million worth of her cosmetics. The headquarters of the business she started 22 years ago in her living room are now in a Dallas skyscraper of golden glass.
Twenty-two years ago, a woman walked two paces behind the boss. Anytime I made a suggestion, my boss would say, "Mary Kay, you think like a woman." I had this terrible burning inside that said, women deserve more than they're getting.
So I sat down at my dining room table to write a book on some of the problems that I had had.I wrote down all the good things the companies I had been with had done, and wrote down the problems. One day I thought, If you're so brilliant, what would you have done to solve those problems? Almost like a game, I began to work out some solutions. And when I got the whole thing on paper, I realized that I had written a marketing plan.
Then I thought, Wouldn't it be great if somebody did this instead of just talking about it?
So I took my life savings -- knowing full well that if it didn't work, I had sawed a limb off and I would have to go back to work for somebody else for the rest of my life. I took every cent I had in the world and went out and bought formulations for a cosmetic that I had been using for 10 years that I thought was phenomenal. Then I had to get bottles and jars and write literature and everything else that goes along with starting a company. The one thing was, I didn't know about administration. So my husband was going to handle all the administration.
One month to the day before we were to open the company, he died of a heart attack at the breakfast table. So then the question was, Do you go on with this, or do you stop right there? Because, literally, half my company was gone.
But I always say, when God closes a door, he opens a window. And it came in the form of my 20-year-old son, Richard. On the day of the funeral we sat in the living room trying to decide what we should do. And Richard became the administrator. We did everything. We swept up, we mimeographed the newsletters, we filled orders, working sometimes until two or three o'clock in the morning. That was our inauspicious beginning -- in 500 square feet of space.
One of the problems that devastated me all my working life was that nobody would ever tell you what you had to do to get from here to there. So I worked out a ladder of success. You don't have to compete with anybody but yourself. It's in black and white. If you and your little group that you've recruited sell $3,600 a month for a certain number of months, then you win the use of a cream-colored Oldsmobile Firenza. Then you go on from there to a pink Regal, then to a pink Cadillac.
I feel like I'm doing something far more important than just selling cosmetics. I think we're building lives. It's incredible how a woman changes with Mary Kay. From a shy little wallflower who didn't know how to dress or do anything else, in six months she has more poise, she's personable, she looks pretty, and she has something to talk about. They are presidents, literally, of their own little companies, and they can make them as big as they want.
I often say I started with nine people, friends of mine, really, who just didn't have the nerve to say no. They didn't intend to stay around, but they were going to help me get it started. They were kind and sweet -- and last year, one of them made $325,000.
"If you want people to lead the parade, you can't fire everyone who leads it off course." -- John F. Akers
John Akers is president and CEO of IBM Corp.
When it comes to the subject of entrepreneurship, I may well be one of the least likely candidates you could find to lead the discussion. I have worked for only two organizations in my entire adult life, and would you believe that IBM is the smaller of the two? The other was the United States Navy, in which I was a carrier pilot for four years.
But I believe it is not only possible for a large company to be entrepreneurial -- it is essential. Small companies may have no choice but to behave in an entrepreneurial way. However, I believe that large companies also have no choice if they want to be able to survive in the long term.
Entrepreneurship is always a bet on people. That's just as true in a large corporation as it is in a small one. If the management of a large company wants to encourage entrepreneurship, it has to be willing to give other people the ball and let them run with it, knowing that they might fail; knowing that inevitably some of them will fail; and being ready to manage and digest that failure.
If you want people to step forward and lead the parade -- especially a parade into new and uncharted territory -- then you can't fire everyone who leads it slightly off course. You have to believe in people, and you have to give them more than one chance.
"Our stock man didn't show up today, so there were five cartons of suits that I opened, pulled out, and marked." -- Phil Kelly
Until 1983, Phil Kelly was chairman of Marshall Field's, by far the largest department-store chain in Chicago. Then Field's was purchased by BATUS Inc. A year ago, along with Joe Cecil, another former executive from Field's, Kelly opened the first Mallards, a men's clothing store. It is across the street from Field's.
I think every retailer believes that if he could start fresh, without the pressures of a corporate office, he might be happier.But the reality is that once you reach a certain level, it's very hard to give up that income unless you're desperately unhappy with what you're doing. I wasn't desperately unhappy; I loved Field's. But I wasn't given a choice. I guess BATUS Retail felt that I had led the business incorrectly.
I say "I guess," because frankly, nobody every really told me why they chose to bring in somebody else. I was well aware that it was going to happen, though, from rumors that they were interviewing for my replacement three or four months before I left. So I left. I was sorry to leave, but it wasn't the end of the world. Joe and I were able to start everything fresh, and if it works it will prove that some of the things I wanted to do at Field's were right.
It's different here; you aren't sitting in an office with people to delegate to. Take the day-to-day running of the operation. Either Joe or Ihave to be here at 6:30 on Wednesday mornings to let the cleaning crew in. Our stock man didn't show up today, so there were five cartons of suits that I opened, pulled out, and marked. Not the most thrilling thing in the world, but it's part of seeing it grow.
The problems we're going to have will come when we expand. How do you maintain standards when Joe and I aren't on the floor an hour or two each day? How do you make sure the salespeople remember service and value without the boss there? The only way we feel we can do that is to make a commitment to the people we hire as salespeople that as we grow, all our buyers, store managers, and merchants will come from our own pool of people. All of them will have proved on the floor that they understand, believe in, and can follow through on our concept of the business.
"I pictured a little industrial park with parking and shrubs in front." -- Francis Logan
Francis and Eileen Logan, both 40 years old, sit face-to-face at matching desks in a windowless office. He is chief operating officer, she is president, of Logan Engineering of New England Inc., the Waltham, Mass., sheet-metal shop they founded together in 1979.
Francis: I spoke before the Graduate School of Management at Boston College, here, with students all around, about being an entrepreneur. Cripes, was I nervous. I graduated from vocational school, and I'm up there talking to a business school.
I pictured the company as a 20-man shop in a little industrial park, with parking, shurbs in front, and lots of windows. We're already 10 people, and we're looking to move to an industrial park. So things are going like we wrote in our plan. Except we were going to be more profitable.
Eileen: Before we started the business, I thought he was much more aggressive than I am. But that's not what I found out. I always saw myself as kind of placid, but I'm not, at least not at work. I have a lot more opinions than I realized and I'm more assertive.
Francis: She's just not as loud as me.
Eileen: In fact, I think I'm probably tougher than he is. It's a good thing, because we're at a bad spot now. These past couple of weeks, we've been buried with work. It's exciting, and it's what we want, but it's overwhelming, too. It's taking too much out of both of us, 'cause we're too small to have a foreman. Francis has to be out there supervising the shop, helping in here quoting, and I'm in here all the time quoting, or working on the books. So we need to either go smaller, so that there's less of that, or get bigger.
Francis: If we were smaller, I'd have to go back to running the shop. But I wouldn't want to get much bigger than, say, a couple of dozen people. Then you have to start hiring a general manager, and doing this and that.
Eileen: This business gives me a sense of being alive. I don't knit and I don't sew. I don't have any creative ability -- except this. It's creative. It's taking a puzzle, putting it together, making it work, and seeing it grow.
"My father would say, 'He doesn't know anything, he just went to work with his father, that's all he could do." -- David Kay
Son of a Patterson, N.J., silk weaver, 66-year-old Andrew Kay founded Non-Linear Systems Inc. in 1952; today, thanks to the personal computer explosion, that company has metamorphosed into Kaypro Inc. Kay's 40-year-old son, David, started an electronics company and a windmill company, then worked as a contractor before he joined the family business as sales manager in 1980. He is now a vice-president.
Andrew: My own father was always trying to get out of the silk mill. First it was automobiles; he'd take an automobile apart and put it back together every weekend.Then he got into radios. Then sound on film. Not that he made any money, but every time something new would come up, he was into it.
The germ of the idea to have my own business came from him. It was the middle 1930s, the Depression.I was trying to decide what I was going to study, and I went to see Prudential in Newark to see what an actuary's life would be like. I said, "Pffft, that's not what I want to be doing the rest of my life." But I'll never forget what my father said when I told him about the salaries that actuaries made -- $15,000 a year. My father never had any money in his life; he was making $700 a year at that time. But he said, "That isn't so much." I was stunned.
I tried to start a business in several different ways, four or five things on the side, but each time things didn't seem to work out. My brother marveled at how I could just drop one thing with no regrets, forget the money, and go on to something new. My father was my model. I had always seen that no matter what happened, my father would always make out.
I've tried to spend time with my children through the years. I made a decision a long time ago that if it came right down to the wire, the business or them, I would take them. IBM was a family business once, too. I've taken them around the country on a business trip, seven weeks, went around the country, saw all my customers. All of them piled into a station wagon. We just took off. I nearly lost the business that time because of the guy I left in charge.
David has had to do things differently from me. His job is a lot harder. Before he came, there was essentially no sales department -- just 5 people. After he came in, it burgeoned up to 150 or 200, all with no background or tradition in the company.
David will hire people in, try them out, and if they don't work, let them go. I hesitate for a long time before hiring anybody in a position where he's leaving a good job; three weeks later he might be out looking for a new job. I don't like to do that. It really bugs me.
David: My parents always said, "You really ought to go work for somebody else, or do something and then come into the family business later." I remember if my father was dealing with somebody he wasn't happy with, he'd say, "He doesn't know anything, he just went to work for his father, that's all he could do." That made me want to be independent, outside the family for a while.
School was not that easy for me. I wasn't a testpasser type. So I've had to work harder than my father, and I'm more disciplined than he is. I'm also more at ease saying "I can't do everything," and having a management team do things for me.
I think it's because I don't have the aptitudes he does. He's had so much experience that he can almost always think of a better way to do something than the person doing it. But that falls apart when you have a company this size. Even though he can do it better, he has to accept their way. Otherwise, he won't have the time to do anything well himself. I miss being able to do things my way, though. I could do things more efficiently when I had my own business. And I miss the freedom. I'm very tied down here.
The funny thing is, a lot of people that've worked out here have had their own companies, but they wanted to be part of something bigger. That's what happened to me. My father's business was sort of sliding and he wanted me to come in and help him. This was 80 people when I came here, and my business only had 10 people. Today it's 550.
"Everything I did when I started my company, I now know you can't do." -- Barbara Gardner Proctor
Barbara Gardner Proctor founded Proctor & Gardner Advertising Inc. in Chicago in 1970. Today, the company has $7 million in annual billings.
My grandmother was the essence of looking inside for strength. She was very religious, but she didn't ask the Lord to do anything she could do herself. She taught me values: Don't worry about appearances, or money, or any of the externals. Get something in your head that no one can ever take from you.
White people used to like to pat me on the head. They'd always say that black children were cute, and they'd talk about how cute I was. My grandmother would say, "No, she ain't cute. But she's right smart, and she's going to amount to something one day." She didn't have any idea of what it was going to be, but she was absolutely confident that I was going to get out of Black Mountain, N.C.
My grandmother took great pride in being a housec-leaner, and she taught me to take great pride in that, too. In those times they had what was called the white-glove test, where these white ladies would come in with their white gloves and run their fingers underneath the tables and up over the doorjambs to see if my grandmother had left any dust. She never broke her conversation with them; she'd talk about all kinds of news and whatever, confident that the house was as clean as it could be, no dust to find. They'd leave, and she'd laugh so hard. She was making $2 a day, but I learned there that you do your job because you want to know nobody can do it better.
It didn't take me long in advertising to realize the facts of life. There were three things you could not do: one, be a woman; two, be an old woman; three, be black. And I was 30 years old, so that meant I was all three. Once a woman is past 25 in the advertising business, she's old.
This was during the time of the black revolution, supposedly, when everybody was going to run up and down in the streets, marching. We had a hair-care product account, and they wanted to have a demonstration in the streets, with all the women running up and down the street with this hair product on their hair, waving these cans in the air, demonstrating for this product. I said that was demeaning and stupid and I wouldn't do it. So, of course, I was fired.
You can't say, "I don't want to do that" if you work for somebody else. Work for yourself, and you can go broke if you don't do it, but you don't have to do it. I realized if I was going to work in this business, I had better work in my own company, because otherwise I was going to continue to get fired for the rest of my life.
I've changed since those days, though. Fifteen years of running your own business does some positive things for you and some negative things. You really begin to get a degree of self-assessment, to know what your delivery capability is and where your limits are. The downside of that is that you begin to know what you can't do. And everything I did when I started my company, I now know you cannot do. You cannot start a business and run it for two years losing $2,000 a month, but I did.
There was a way that I had at the beginning of dealing with clients that absolutely would be reprehensible today. I would tell them, very frankly, "This is it, this is the only way to do this. We will not do it three ways, we will do it one way, and that's it." I think the freshness of that, the innocence, if you will, was our saving grace. I did not understand as much about client handling and client politics as I do now. Then all I had was the idea and my commitment to fight to the death for it. And it worked.
But that comes only once in your life. Now I know the commitment alone won't work. So it doesn't.
"I could still lose everything. My home, my car, everything." -- Tom Pogemiller
In 1981, after five years as a Wendy's manager, Tom Pogemiller opened the first of his four Chuck E. Cheese's Pizza Time Theatre restaurants, a franchise operation founded in 1978 by video-game wizard Nolan Bushnell.
By 1980, Pizza Time was hot, hotter than hot, the prince of Wall Street, it could do no wrong. I went out there for the first franchisee orientation, before we'd even signed on. Nolan and all the executives walked in and said their thing; then they took us to a store where we saw people lined up in the broad day-light. I thought, Jesus, how can I go wrong? At that point, even the numbers of $800,000 to $1 million to open a franchise didn't scare anyone, including bankers.
In '83, the fad was over; all of a sudden an $80,000 store was doing $30,000. Meanwhile, Pizza Time was having a president-of-the-month thing. They were going through CEOs faster than I was going through aspirin. But they were saying, "Guys, don't worry, we're pulling this back together."
My wife and I went to a cocktail party at Nolan's big mansion, whatever the heck it is, that overlooks San Francisco, and when we got in the car and drove back to the hotel that night, she says, "You know, I should be impressed with this. But it doesn't make any sense when we see something like this and we see what we're going through on the home front."
I was at my central office when the press release came in the mail saying, basically, that Pizza Time Theatre had filed for Chapter 11. It wasn't even signed by anybody. The first thing I did was call my wife and say, "We've had troubles, but now I have no idea what to expect." One of the things that really bothered me was that my father-in-law had helped me out financially.
I could still lose everything. My home, my car, everything. I've personally guaranteed things. If it all collapsed, it would mean a personal bankruptcy. And yet, as much as I condemn Pizza Time, I've got to admit that for a young upstart like me, I had a lot of freedom. They didn't have the time to worry about what I was doing; they were too busy with their own growth. And believe me, if I had known how to run my ship back in '81 like I'm running it now, I would have had the money to weather this storm.
Who knows? Maybe I'll still be able to make it work.