From an early age, Sam saw possibilities – and growing up in an entrepreneurial environment, he was encouraged to act on them. Soon he was ‘inventing’ little mechanisms and gadgets. Following his primary school years, he pursued and achieved a degree in engineering and worked, successfully, for a couple of companies. That’s where we pick up his story…
“I had attained a modicum of success by my mid-thirties and was sitting on my patio with Tim, my friend and neighbor, who worked in finance. He asked what I was tinkering with now and I gave him a quick sketch of the high-tech patent I was finalizing. I shared that I had just been offered a seven-figure deal and was conflicted about ‘selling my baby’. Tim opined that a seven-figure deal for a patent pointed to a strong potential for eight-and nine-figure success. Coupling that with being able to guide the growth and development of ‘my baby’ – Tim convinced me to pass on the offer and really sink my teeth into this project.
Several personal guarantees later, some shiny equipment populated some office/warehouse space and I was on my way. Knowing that I needed people with different skill-sets, I brought in some leadership and financial experts (tapping my friend Tim as the CFO).
We attracted some seed money from our network of family, friends, and business aquaintances and that’s when things started picking up speed.
For awhile, everything went right: products were developed, tested, and presentations were made into several industries that we thought the most applicable. The President made the case that we needed a few more pieces of the puzzle to really hit this out of the park so he brought in a rainmaker and some investment bankers so we could secure the money we needed to become fully operational.
My proudest day when a little sideline, consumer application started selling. It wasn’t big numbers, but it was actual income and we finally had some black ink on our books!
And that’s when it all went wrong.
The President and CFO thought that the consumer sideline product was de-positioning us in their efforts at enterprise-wide solutions – so leadership voted to shut it down. My vote being the only dissenting one but I was told that I needed to let these people do their work.
The rainmaker was opening doors and starting big conversations. But when I met with the enterprise-wide potential clients, things felt ‘off’ and I felt like I was getting looked at sideways.
The Marketing Manager pulled me aside one afternoon and told me that the rainmaker was making a mess of our company’s efforts and reputation by mis-stating products, over-promising on price and deliverability, and not painting a very nice picture of me personally.
I went to the President and told him my thoughts of what was going on and that I thought the rainmaker should be let go. He told me that he couldn’t let him go because he and Tim had signed a contract with him that included incredible guarantees. We couldn’t afford to fire him!
Now the company was really struggling. Our culture, which I was once proud of, had become divisive and territorial. Our enterprise-wide prospects weren’t signing and I was told personally by one of them that when my company gets its act together to call them again.
The final scene started out quietly. At a quarterly board meeting, we were reviewing product development and sales efforts when the President announced that he had a plan that would fix things, right the ship, and get us unstuck. The plan was quite simple. Reform the company leaving the debt on the machines in the old one and start fresh. I read the plan and discovered that I would have zero ownership in the new entity. I voted no – the rest of the board, my friend Tim included – voted yes.”
It took Sam years to pay off the machinery debt and make good on some family and friends that also got left behind. It took him longer to let go of the white-hot anger. He admits that it makes him smile that the new entity floundered about and has yet to make anything of themselves.
The moral of this story is twofold.
#1 Money is not the answer. Sam would have been better off partnering with people/entities that had distribution, sales channels, complimentary products, etc rather than getting money.
#2 People are everything. The right ones can make anything work. The wrong ones can may anything fail.