The recent #sharktankweek series on LinkedIn, and this #behindthescenes article, How to Move From Corporate Exec to Entrepreneur by Sally Krawcheck inspired me to share some thoughts on entrepreneurs. I consider myself an entrepreneur, but I’m an employee and I wear a suit, not a hoodie, so I may not look like one to you. I think that’s because a lot of us subscribe to certain myths about what an entrepreneur does or is. Do any of these sound familiar to you?
Myth #1: Entrepreneurs are doing something disruptive.
My dad was an entrepreneur. He was a blue-collar guy but he always had his own business. For most of the time I was growing up, that was a tobacco and candy wholesale company. He didn’t redefine the business with a new model or take down an entrenched competitor, but he was able to carve out a niche for himself in a specific territory with a specific value proposition. His main motivation was that he didn’t want to work for anybody else.
For years I saw that, the ups and the downs, the good years and the bad years. That’s just what he did and how life was. I had never heard the word entrepreneur.
I picked up my work ethic from my dad. In college, I worked full time as a marketing analyst, and I also had a mentor, Forest Majors, who had his own consulting company. Forest was an amazing mentor who selflessly shared his experience, insights and expertise, which accelerated my learning and validated that I had what it takes to be successful in business. I spent a lot of my spare time on weekends with him soaking it all in. For months I waited for him to say, “Why don’t you come work with me?” Finally I said to him, “Forest, this is great, but I think there’s so much that we could do together.”
He said, “Kurt, you need to set up your own business.” At first it felt like a gut punch, like I wasn’t good enough to work for him.
Then he said to me, “The lessons that you’re going to learn when it’s your own business versus getting a paycheck will change your whole outlook on life.” So, I started my own business while I was still in college. He was was right, it did.
Myth #2: Entrepreneurs have a grand vision
My business, ESP (Executive Services Plus), helped large sales organizations with remote field offices set up databases to do everything from sales forecasting to lead identification and demand generation. BIC Corporation was one of my clients. One day they made me an offer I couldn’t refuse and I went to work in Corporate America.
The job was to introduce technology into a non-innovative business. At that time no one had PCs, only dumb terminals. I revamped their entire sales forecasting process, helping move them to PCs and ultimately to sales force automation and using retailer and point-of-sale information to make fact-based decisions
One project I worked on showed them how much money they were losing due to out-of-stocks, which is when a store runs out of your product. We were able to use data to calculate for one store and one SKU what the cost of that out-of-stock was.
No one could believe that we had this information, or that our calculations were correct. When they conducted audits and did their own pen-and-paper calculation, they saw that it was true and they changed they way they did business for every SKU at every store.
Looking back, those things were visionary for that company at that time, but they just seemed to me like the right thing to do for the business. This was all back in the early ‘90s, when the inventions of Bill Gates and Steve Jobs were changing the world. We were just figuring out better ways to sell pens. Vision comes in all sizes and colors of ink.
Myth #3: Entrepreneurs work at startups
After BIC I went to work for a company called Renaissance Cosmetics. The real attraction there was Tom Bonoma, who was CEO of the company and a professor at the Harvard School of Business. I got a decent education, but not Ivy League, so working with Tom was a chance to have some Harvard learning rub off on me. Tom was all about work ethic, and the entrepreneurial aspect of the role for me was to learn all I could and to prove that I could play with the best of them.
I noticed though, that the companies that were making news were in high tech, and there were all these stories about guys my age or younger becoming zillionaires, so I switched from CPG to high tech and headed out west to work at a company called Accrue Software. Again the challenge was to learn and grow. I wanted to prove I could transition to the cool, high tech dot-com world.
Myth #4: Entrepreneurs are out to cash in big
Accrue enjoyed tremendous growth and I gained credibility in the software industry, so much so that when they were forced to sell off assets during the 2003 dot com bust, I was able to raise funds and buy out part of the company, which became Pilot Software.
Accrue grew by acquisition, making their first of many just after I had arrived. I had done a dozen acquisitions or so at Renaissance, so Accrue tapped me every time they bought a company. They would give me all of the assets, all of the people, all of the contracts. They would integrate the technology into their core stack and I would run the legacy standalone business.
When the dot-com bubble burst, I became responsible for selling off these “non-core assets.” There was one that wasn’t hunting, so I started talking to some friends about ways to improve the pitch. Some of them happened to be some guys at U.S. Trust that thought it sounded really cool as is. They asked me, “What if we gave you some money and you ran it?”
I hadn’t really thought about it, but it all worked out and in about three months time I was at the helm of my own company again. We had 17 employees including myself. The goal was to build it into a really big business. There was never any consideration of going public. Within six months we were cash flow positive and profitable. We only ever had series A funding. When we finally got acquired by SAP, we were in excess of 70 people and 150 customers.
Myth #5: Entrepreneurs can break all the rules
After the Pilot experience, I had earned my stripes as a Silicon Valley startup entrepreneur. When we sold to SAP, I didn’t stop being an entrepreneur. But, I had to be creative in a very different environment and figure out how to navigate a big ecosystem and a structured bureaucracy. I fulfilled my 18 months obligation and then went running out of there because I couldn’t figure out how to define a path for myself.
From there I went to PWC for the opportunity to restart their SAP implementation practice. I needed a clearly defined challenge. And I needed the autonomy to meet the challenge.
My experience and observation is that entrepreneurs need to have to have some rules or constraints pressing on them to squeeze out that drive and creativity, but not to the point of constriction. The vision or challenge can be identified by someone else, as it was at PWC, but then you can’t tell me how to get there. Or you can tell me what rules I have to follow and what resources I have, and then the challenge is to see what I can create given those parameters and resources. But you can’t tell me both where to go and what to do.
At PWC we built the business from zero to a very big number that I can’t disclose in just 14 months. Then the leadership team said to me, “It’s time to relax and hang out.” As soon as they said that, even though the money was good and I liked the people, I instantly went into a dark place. I had to move on. I’m not a hang out kind of guy. I actually went back to SAP for a few years, where I did series of short, clearly defined assignments.
The one truth
Which brings me to the one truth about entrepreneurs: They are born, not made.
Clearly I inherited some entrepreneurial gene from my dad. It’s hard not to notice that you’re different when you’re walking along a sunny beach with your college buddies, and you’re in a three piece suit toting a brick-sized cell phone because you’re in between appointments, and they’re all in their bathing trunks because their summer job is lifeguarding.
Sally Krawcheck in her article describes entrepreneurs this way: “Someone who is a self-starter, passionate about a business, optimistic (some even to the point of marginal delusion), who can handle the heat and the stress.”
I would add that entrepreneurs not only handle but thrive on the heat and the stress. Entrepreneurial drive, for better or worse, won’t let you hang out or be content with the status quo. That’s why I recently left SAP again to stand up the sales organization at an early stage startup, ClearStory Data.
Entrepreneurs need to be working toward a challenge and a vision to be happy. Whether that is to change the world, sell more pens or to be their own boss, they just keep marching and pushing towards that vision regardless of what stands in the way. We’re born that way, and entrepreneur is simply a convenient label for what we inevitably make ourselves into.