And we lived happily ever after?
No, I went bankrupt again. The guy who lent money to me for the long-distance company really lent it to the corporation, but he came to me to get it back. Then he got a lawyer, and I couldn't afford to fight it, so I said, What the hell, and filed personal bankruptcy.
* * *
INC.: Would you do something different now if you had to do it again?
KOSS: Yes. I'd have filed earlier. I wouldn't have trusted the banks that we were going to work this stuff out together and all that nice stuff that they talk about before they turn you over to the workout people.
PERKINS: The idea of filing sooner assumes you've got money stashed to hire competent attorneys. No good lawyer is going to take a bankruptcy case on contingency -- on the assumption that you're going to survive and pay him later.
SALVATI: No, they'd be crazy to.
PERKINS: But no entrepreneur is going to take money from investors saying it's to keep his company alive while he's really stashing it to hire a bankruptcy lawyer. That would be wrong.
SALVATI: But it's not just stashing up money to go into bankruptcy. Bill decided he couldn't take his long-distance company any further and sold it off. Is that failure? We sold a business to another company, many people kept their jobs, and my customers did not get damaged by picking up the phone and not getting a dial tone. I view that as a success.
INC.: You -- all of you -- had expectations. You had fantasies about where this business was going to take you, dreams. What happened when reality didn't match
the dream?
LEWIS: It was devastating.
KOSS: You go into a survival mode. Remember, I'd been at it for more than 30 years, and most of that time, even though it was my company, I was subject to other people's control. Holy mackerel! It was 20 years before the bank didn't make me sign everything over -- family, dog, kids, the whole deal -- to use their money. Years! I knew what it was like to wear a collar, and I didn't like it. Now I was wearing one again.
LEWIS: The answer is, there is no alternative. You dust yourself off. . . .
There was a time, though, when I sat in my office and cried, and then I put a gun to my head.
The things that were going on in my life -- I'd lost my company, lost my home, lost everything. I couldn't handle it. Like the AA people, I turned it over to someone or something stronger than me -- to God -- and that's the only thing I could do.
I begged the telephone company not to turn off my service. It was so demeaning.
KOSS: Humbling, very humbling.
LEWIS: Yeah, and that was the good part. I was a peacock, man. I had limousines, chauffeurs --
PERKINS: But see, I never had all that stuff. Don't look for my condos in Brazil and bank accounts in Switzerland, because anybody who knew me knew damn well there weren't any. What caused the problem was that these lawyers think everybody else, including maybe themselves, would do that kind of thing, so they think you did it.
INC.: What benefits come from this experience?
LEWIS: Listen, this lesson was extremely expensive. I paid dearly, my family paid dearly, and I'm a no-good jerk if I don't come away learning something from it. Yeah, I learned a lot. I'd be an incredible CEO for some company. I'm the best.
* * *
INC.: You haven't chosen to do it for someone else, though.
LEWIS: No, well. . . .
* * *
INC.: You've started another company of your own. What lessons are you applying?
LEWIS: I don't stay in hotels that cost $200. We had our first sales meeting in Vegas two weeks ago, and the 20-something agents who came paid their own way, their own hotel bills, everything. Back during the Phone Company Inc. days I would have paid it all. I probably would have hired some dancing girls, all that stuff. I've learned how to get more for my dollar, not to throw money around.
I've done one thing I feel good about, though. I bought a Porsche a couple of weeks ago. I kept thinking, I get up at 3:00 in the morning a lot of times and go to the office, and then I go home and sleep; then I go back to the office and home to sleep. What am I getting out of this? I want a toy, something I can touch and feel, you know? So I bought a Porsche.
* * *
INC.: Does it ever go through your mind that this business might fall apart, too?
LEWIS: Hell, yes, but you don't let that be a negative. You make it a positive by keeping an eye on those cracks in the floor and making sure that nothing falls through them.
KOSS: I learned about OPM -- other people's money. Leverage was the way to go, they told me: leverage, leverage, leverage. I tell you now, that's not the way to go.
SALVATI: You know, when we filed bankruptcy, it was the first chance I had to breathe in 15 months. We were practically insolvent the day I walked into the company. We never had enough money. I went without my paychecks.
That's not the way you think it's going to work when you come from a big, prestigious firm. With the bankruptcy, now all of a sudden I knew there was a light at the end of the tunnel. Part of the reason we had survived as long as we did was that we had always behaved as if we were in bankruptcy, and now we actually had the court protecting us.
* * *
INC.: So, for John and Mike, bankruptcy was a help?
SALVATI: There's a lot of disappointment in seeing something go so far but not as far as you'd hoped. We didn't reach our ultimate target, and I felt bad because there were shareholders who believed in me, banks, creditors, employees. Still, we built something from zero to a pretty substantial company on a tremendous growth curve, and I took a few things away from that experience that I use today.
INC.: Is failure -- to the extent that bankruptcy is seen as failure -- a culturally acceptable event?
LEWIS: Oh, yes. It's as if you're in a stock-car race. You run out of gas every once in a while, so you have to make a pit stop. Then you get back in the race and keep gunning that sucker. I can't put it in words too well, but that's the way I think of it.
KOSS: Failure is when you join the turf club. Anything else is an experience that didn't work out too well. Bankruptcy is a tool. If you try your best and you're an ethical and honest businessman and circumstances work against you, the tool is there to give you a chance to start over. We started over, and my God, look at all the jobs and the families we saved.
