The Heart of an Entrepreneur, Ch. 1

There was a moment that I will always remem­ber from my child­hood, one that rep­re­sents some nature-nurture shap­ing that had already hap­pened, and this “model scene”, as psy­chol­o­gists call it, is at the core of who I am today.

cg-overlay-imgI was about 12 years old and sit­ting at my father’s big wooden desk in the base­ment. He had set up a sort of office at a cor­ner of the painted con­crete walls, com­plete with a fil­ing cab­i­net or two, unfin­ished ply­wood book­shelves, a type­writer (man­ual) and an old Wol­len­sak reel-to-reel tape recorder. The desk was a seven-drawer model with a match­ing leather chair with a swivel and wheels.

It was a nice lit­tle setup for a 12 year old. My dad didn’t use it much, so I would come down there to type my papers for school. The base­ment was also a cool place to be, both in terms of relief from the Illi­nois cli­mate (mostly too hot and humid or too cold and dry) and from, well, the rest of my family.

A busi­ness­man was born

And in that moment, sit­ting in that big leather swivel chair, I real­ized that I wanted to be a busi­ness­man. I wanted to spend my life at that desk, or one like it.

I sit typ­ing this in my upstairs office with a big wooden table (the mod­ern ver­sion of the big wooden desk now that we are so much more paper­less), typ­ing on my mod­ern type­writer watch­ing my words form on the screen in the Word­Press edi­tor (the mod­ern paper, but iron­i­cally the font is a type­writer font) I real­ize that I’m liv­ing that dream, that inspiration.

It’s a bit more amaz­ing because my par­ents were pro­fes­sors, not in any way involved in busi­ness.  Even more sur­pris­ing, given that they were lib­eral eco­nom­ics pro­fes­sors, big fans of the social­ist labor move­ment in the early and mid-20th cen­tury (read: union­iza­tion), and they essen­tially viewed busi­ness peo­ple as “fat cats”, greedy, money-grubbing, Scrooge-like tyrants, the exis­tence of whom’s soul was a valid ques­tion. To be fair, this was in fash­ion back then, both in acad­e­mia and in soci­ety (think: Death of a Sales­man.)  Not some­thing that their son should aspire to, in other words.

Yet at that moment I knew it as a truth: I was going to be a busi­ness­man. And that’s what I’ve spent my life doing.  It hap­pened halt­ingly, much of it fit­fully, as there was some part of me that always ques­tioned whether it was okay for me to do. I tried to be a lot of things over the 40 years between then and today, but when­ever I found some­thing that I liked doing, I always wanted to make a busi­ness out of it.

I’ll never know where that came from, that desire to make busi­nesses, nor how it sur­vived despite the dis­cour­age­ment that I received from my par­ents. I spent a lot of my life feel­ing like I needed to apol­o­gize for even want­ing to start a busi­ness. So until just recently I never noticed how it hap­pened within me, the birth of a new ven­ture inside my head and my heart.

curi­ous george goes to school

It wasn’t like I didn’t try to fig­ure it out. After build­ing PDIT, a 60+ per­son Inc. 500 Award–win­ning con­sul­tancy, with two fellow-consultants in the 1990’s, I sold my shares and enrolled in USC’s Entre­pre­neur MBA pro­gram. My stated goal was “To fig­ure out how THAT hap­pened — how we actu­ally built a com­pany!” My BS was in Indus­trial Engi­neer­ing and Com­puter Sci­ence, so I had never really stud­ied business.

In fact it was worse than that: as an under­grad, I took one busi­ness class in the busi­ness school at my parent’s uni­ver­sity, a part of the uni­ver­sity that they lit­er­ally sniffed at. I dropped that class after I got a D on a quiz because of one ques­tion that I will never forget:

Ques­tion: True or false, a Bureau­cracy is an inef­fec­tive form of orga­ni­za­tional structure?

I said True, and the pro­fes­sor said False — when I asked why, he said that while every­body would agree that a Bureau­cracy was inef­fi­cient, it was not inef­fec­tive. At that moment in 1977, I fig­ured busi­ness wasn’t for me. I felt stu­pid. I dropped the class and switched to Medieval Stud­ies and Phi­los­o­phy.  Obvi­ously that didn’t work out either.

Twenty years later, I was at USC finally going to busi­ness school. It took me that long to fig­ure out what I had real­ized 25 years ear­lier sit­ting at my father’s desk — I wanted to be a busi­ness­man, an entrepreneur.

In grad school, one of the top­ics that fas­ci­nated me the most was orga­ni­za­tional the­ory. My favorite book dur­ing those two years at USC was The Nature of the Firm, writ­ten by Nobel Lau­re­ate Ronald Coase.  The book is essen­tially a bril­liant essay that explores why com­pa­nies (firms, orga­ni­za­tions) are “shaped” and man­aged the way that they are. I look back at this now and ask myself whether that monot­o­nous, bor­ing busi­ness pro­fes­sor in 1977 planted a seed in me with that ques­tion. Was it an “inflec­tion point” in my life?

Author Dave Logan, whose excel­lent book Tribal Lead­er­ship I highly rec­om­mend, has a (free) 21-day lead­er­ship train­ing pro­gram that includes an inflec­tion point exer­cise. I did the exer­cise the other day and it con­nected a few more dots for me. I’ve heard and read about entre­pre­neurs need­ing pas­sion regard­ing the prob­lem that their ven­ture is solv­ing. In my first startup, I think I was sim­ply pas­sion­ate about HAVING a ven­ture, so maybe that’s another ver­sion of it.

With­out the energy and drive that the pas­sion pro­vides, entre­pre­neur­ship is pretty hard to sus­tain. But where does pas­sion come from? Where is the muse that inspires and tick­les. I got a glimpse of mine when I did the exer­cise.   Thanks, Dave Logan for point­ing out that many times the hard­est moments inspire the great­est things in us.

Down and Out in Topanga, circa 2009

Come spring of 2009, ten years after grad school, I had been lead­ing the LA office of the mar­ket­ing agency Sapi­ent­Ni­tro for a cou­ple of years.  Over the course of the next few months, with the reces­sion and as we saw client bud­gets recede, the bad news came to me and some other directors.

I was pretty upset at being laid off. I had hit my num­bers — no I had blown my num­bers out of the water — in 2008 and had just closed a $1MM plus deal and had another $4MM in the pipe for 2009.  I felt this was an injus­tice, a vio­la­tion of how the game should be played, how I should be treated. There were a lot of other things that I wrapped into it, as one can do, find­ing fault in every­thing that the orga­ni­za­tion had done to, or not done for me.

I decided to write a book on how man­age­ment should work. I wanted it to be a really good book. One that you could pick up and quickly under­stand how an orga­ni­za­tion should really work, and how peo­ple should work with each other. I didn’t know what the book needed to say, but I also knew that none of the 200+ busi­ness books I had read dur­ing and since busi­ness school really pro­vided this information.

I was inspired. Inspired by some peo­ple who had just laid me off. I was pissed off — what they did was wrong, I told myself. And I was inspired.

out of the ashes

So I read a lot. I knew that there was an answer somewhere…probably in bits and pieces, but I felt it was my job to put it together. The next year was a highly pro­cre­ative period for me. I did a lot of con­sult­ing on agency projects, strat­egy and prod­uct devel­op­ment, and in 2010 I licensed and launched a prod­uct called Snoot! Nasal Cleanser. Snoot is a great prod­uct and it helps with some­thing else that I am pas­sion­ate about, the mis­ery of chronic sinusi­tis.  These were all fun, but none of them felt like a fit for me.  I kept moving.

By mid-2010 I was work­ing at an agency again, but there was some­thing that I had left unfin­ished.  I watched how they oper­ated and saw much the same thing I had seen else­where.  That ques­tion nagged me: How SHOULD you run an agency?

In late 2010, I man­aged a cou­ple of the agency’s projects and tried out some of the tech­niques that I had stud­ied. I had always been a very good project man­ager, but I didn’t really like being one — I hated sta­tus meet­ings, Microsoft Project, and every­thing that went with it. The job itself was dis­mal, we typ­i­cally tracked a dis­as­ter in progress, and rarely could really make a dif­fer­ence until there was a major cri­sis. You dealt with a lot of unhappy peo­ple all of the time. But these new projects turned out dif­fer­ently. Some of these tech­niques were working…working really well. And frankly, I was excited beyond belief. My heart still speeds up when I recount this to peo­ple, and even typ­ing it here.

a com­pany is born

So I did what an entre­pre­neur does: I com­mit­ted myself to this. I started con­sult­ing on how to run agency projects bet­ter.  I had a chance to refine my thoughts on what could work bet­ter.  At the core of my ideas was a way to use Agile (a method for man­ag­ing soft­ware projects) that would work for Agencies…the com­pany name? Agen­cyAg­ile, of course.

I added a lot more to the meth­ods: Drucker, Senge, Maslow, Mintzberg and a bunch of the old mas­ters that I had first read in grad school. And 30+ years of really great orga­ni­za­tional, cog­ni­tive and behav­ioral research on how peo­ple think, how teams work, and what makes peo­ple happy, drawn from Kah­ne­man, Logan, Sea­gal and Haidt, to name a few.

What does my new com­pany do?  We help agen­cies trans­form from the industry’s hier­ar­chi­cal man­age­ment model, replac­ing it with a team-based orga­ni­za­tion struc­ture that elim­i­nates or greatly reduces every major oper­a­tional prob­lem that they have.  Their employ­ees love it, and they make more money too.  We help them become “Bet­ter, Faster and Happier.”

We destroy the bureau­cratic model and replace it with some­thing agile, flex­i­ble, empow­er­ing and fun.  And it works.  Really, really well.

Answer: False. A Bureau­cracy is not an effec­tive form of orga­ni­za­tional structure.

This is the cor­rect answer for the indus­try that I now serve: adver­tis­ing and mar­ket­ing agen­cies.  Bureau­cra­cies just don’t com­pete well, nor do they scale well.  In the hang­over of the mid-century anti-business fer­vor, it was fash­ion­able to view the stodgy bureau­cracy as being some­how effec­tive, and some­what accept­able.  We knew then and know now the name itself is a pejo­ra­tive.  And out has taken 50 years for the new man­age­ment sci­ence to take hold.  Agile-based orga­ni­za­tion mod­els eat bureau­cra­cies for lunch.

Sit­ting this morn­ing at my wooden desk, I real­ize what a gift this has all been.  I give thanks to that pro­fes­sor whose name I can­not remem­ber, who inspired me to cre­ate some­thing dif­fer­ent and bet­ter, to think “Noooo, that MUST be wrong!”  And also my appre­ci­a­tion for those at Sapi­ent who decided I didn’t belong there.  They were my teach­ers, my muses.

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