The Upside of Having Setbacks
A friend of mine recently visited me at CitiStorage, because he wanted to look in a box I'd stored for him many years ago. He gave the bar code to my assistant, and a few minutes later, the box appeared. "Wow," he said. "How did you find it so fast? That's amazing!" His comment made me think of all the changes we've made to our systems over the years, most of them in response to a problem. That's how every business expands—by fixing one problem after another. In going from the 27 boxes we started with in 1990 to the 4.5 million we have today, we've had to solve a ton of problems.
I've tried to keep that in mind while getting my latest business, Black Gold Suites, up and running. As you may recall, it's the first of three hotels I'm building in North Dakota, where the oil boom has brought tens of thousands of people to a formerly desolate region and created an acute housing shortage in the process. The resulting opportunities are great, but so are the problems.
For example, we've heard from other hotels that, in winter, strangers often sneak in behind guests at night—when the front desk is unmanned—and sleep in hallways. I don't begrudge anyone a warm place to sleep, but hotels that double as homeless shelters don't survive. So we're installing security cameras throughout the facility. Then there was the challenge of getting our gas and electricity hooked up. Although the utility company kept promising to do the work, nothing happened for months. Finally, we asked for a specific date and got one barely a month before the opening. When we asked what the holdup was, we were told there was a shortage of licensed workers—but not to worry: The ones we needed would soon finish their schooling and receive their licenses. "This is crazy!" I said to my partner, Steve. "What if these guys flunk out?" Fortunately, they passed.
Meanwhile, the cost of everything—real estate, labor, materials, deliveries—has skyrocketed. If we were starting to build today, it would cost at least $2 million more than we're spending just for the hotel construction. It would, that is, if we were allowed to build at all. There are already construction moratoriums in some cities, as the need for public services outstrips the government's ability to supply them.
So we obviously have more problems in our future. I can't say I look forward to them, but I do enjoy the process of finding solutions for them. As a wise man once said, a company is only as big as the problems it can handle.
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