Well thank you very much and thank you all for inviting me here today. It’s always a great pleasure to come and talk to fellow entrepreneurs about some lessons I’ve learned over a long career being an entrepreneur. I’m going to talk to you eventually about four things I’ve learned that increase your chances of success in being an entrepreneur.
But let me tell you about how I got here and became an entrepreneur and what I learned along the way. First of all, I went to college at the University of Dayton where I was an accounting major. The first thing that was really important in my career was that I knew about financial statements, I knew about bookkeeping, I knew how to read the financials our CFO. It’s really helpful to have some knowledge in the accounting world. You don’t have to be a CPA but know a little bit about accounting so you can honestly question your CFO to what he is doing. So after I finished college, I decided to go to law school, I went to the University of Michigan Law School in Ann Arbor, great experience and what law school taught me was not how to be a lawyer because in the system in the United States we don’t teach law. We teach as a way to think.
So what I learned in law school is the way to think critically, as a way to think logically, as a way to identify problems and deal with solutions. And that’s a great experience, it applies to anything you do in life. So I started out with a good basis, in accounting and law and I practiced law for about five or six years, had a wonderful time doing corporate and tax work and then one day I got a call from one of our clients, which is a big real estate firm and they said wed like you to come here and talk to us about becoming an employee. So I went and met with them and said what am I going to be doing and they said: “Well you’re gonna be raising money, putting together partnerships, raising money from investors, buying real estate. But we’re not exactly sure what you’re gonna do.” So I go home that night to my wife and I said that I’ve just taken a new job and shes horrified: What do you mean you’ve taken a new job. And I said this is great company, with smart people and the first question she had was: “How much are we making?” right, cause wives are much practical and I said: “You know they told me I’d be happy and I didn’t know how to negotiate above happy, so I took the job.”
When I got my first paycheck from the company I had no idea what was gonna be in it but I didn’t care because it was important to me I started in the great company and a great opportunity, great people and the money would work itself out. And I was there for seven years, and I had wonderful experience working with extraordinarily smart people, had very interesting work and what I did was I’m now 35 years old and I’m number three executive in one of the largest real estate companies in the United States and I walked in to the CEO and I quit. He was shocked, he goes: “Why would you quit? You got a great career path, a great job here” and I said: I just wanna start my own business and he said what are you gonna do and I said I don’t know, but I quit. I walked out and I knew how to raise money, I knew something about law and accounting and I bought a golf club company, my golf equipment and I bought a Halloween costume company where we had three thousand employees in the month of October, we had about ten in the month of September and we actually built this pyramid and hired all these people and I had no idea what I was doing. I was making the supple on the way but I was my own boss and it’s what I wanted to do. And I did that for about a year and it wasn’t what I was really good at, so I sold those two businesses, made a little bit of money but not a lot and got back into the real estate business where I really had passion.
I was buying real estate partnership interests, fractional interest in real estate and kinda going about it in the unusual way but it was my business and you know again it was an entrepreneurial startup. My wife and I started it with credit card debt, at the worst we had 80 thousand dollars of credit card debt at 18% interest and the only way we could make payments on that credit card or on our house mortgage was to get another credit card. Fortunately, about the time we ran out of the ability to get credit cards, we made a little money. Paid down some debts and the business grew and got a little better and eventually built a reasonably successful real estate business that allowed me to do some other things. This brings me to here and this is over about 20+ years.
So in 2016, I was the supporter of the republican party when President Trump was elected I called the White House and said that it’s my time in life to serve my country, I’d like to volunteer to work for the United States government, I’m available to anything you like me to do. They called me back a few days later and said we think youd be a good ambassador, would you like to do that? Yeah, of course. They said where would you like to go? Where do you think youd make a difference? And I said, could I go to Croatia? So I wound up being here in Croatia and I can tell you that there is nothing id rather be doing at this moment in my life that representing United States in this country. It is exactly what I should be doing. And I can tell you I never had the opportunity to talk to audiences when I was in my own real estate company we had the philosophy of the only whales who get harpooned are those that come to the surface, so stay below the water, make money, do your business and don’t go on and tell anybody what youre doing. So that all changed and here I am.
But let me tell you about four things that I’ve learned about. Before we do this the one thing that’s really important and it’s about luck. Too often we all think we’re smart and we do this stuff and maybe we are at times and maybe we aren’t but luck is always out there. When I was at this 80 thousand dollar of credit card debt, if there had not been some revenue coming in for another month or two I would’ve filed bankruptcy and I don’t think I’d be here today, maybe I would start over and maybe I wouldn’t but I was lucky. Don’t ever discount luck but there is also one of the part of luck we found the harder you work, the smarter you work, the luckier you get. So don’t forget to work hard and work smart but always remember that luck is the big factor in your success and sometimes in your failure. So one of the four things that you can control in becoming entrepreneur and the first thing is to have a good idea. People forget that sometimes, they come up with an idea and they get excited about it but it’s not really a good idea. But it doesn’t have to be a world-beating idea, it doesn’t have to be the best idea ever.
Facebook, one of the most successful companies in the world wasn’t the first one to do this, there was a company called MySpace that was out there before Facebook, did a very similar product and went bankrupt. Part of it was lack, part of it was missed management, but Facebook took their product and built it and made it better. Made it a better and better idea, but it wasn’t something unique and special, it was just another good idea at the time. But you have to have good idea. The bad idea causes lots of problems. Second of all, be passionate about what you do. I’ve done some businesses and I’ll tell you about one later, where I looked at the financial numbers and I looked at the opportunity to make lots of money, make millions of dollars and it all looked great on paper but I wasn’t passionate about it. And when I was not passionate about it you didn’t go an extra mile because you are going to have a problem as an entrepreneur, you will have setbacks, you’ll have difficulties and you need to have that passion, that energy where you’re going to work the nights, your gonna work the weekends, you’re going to do whatever it takes to become successful. So you gotta have a business where you feel passionate about. And I felt passionate about real estate business, I liked the financial structuring, I liked everything about the analysis of it. I’m more of a financial analysis and legal structure than I am an operator but I love that part of our business so I didn’t mind working nights and weekends.
I remember when we first started out, we had our two kids who were probably five and eight stuffing envelops to do mails for our investors around our kitchen table. So this wasn’t kinda where we’ve started out and somebody handed me the business. This was truly at our kitchen table with our little kids, helping us grow this business. But we were all passionate about it. The third is maybe the most important, always do business with great partners. If your partners are not good and you can’t tell if partners are good partners in good times. A great partner is there for you when you have a problem. Your partners are your investors, your bankers, your employees, your vendors, anybody you deal with. And your most important partner, by the way, is your spouse. So make sure you find a great spouse. I’ve been married for 39 years, so I think I have a good spouse. She has been with me the whole time building this business, she’s been an integral part of it and she’s been supportive and so without great partners and spouse again, I don’t think I’d be here. Do not underestimate the importance of knowing who you’re doing business with. Don’t get carried away with “Oh I can make a lot of money, this could open a lot of doors”.
Are they somebody who’s going to be your partner when theres some problem and if they are, grab one of them and make sure that two of you work together or group of you work together for your success. And then the final thing is “Don’t be afraid to take a risk.” You know, too often people analyze things and that you know I have minority partner in my business who’s my age, who’s a lawyer, much more of a lawyer than I am cause he looks at everything and sees risk. He sees things and always telling us lets not do that and I’m an optimist. I believe we should do everything. We have great partnership cause you know I have all these crazy ideas and he tells me they won’t work and we come to the middle and then we do the stuff that maybe has a better chance of success. But we’re not afraid to take a risk, were not afraid to fail because failure is an opportunity to learn and I don’t think there’s any entrepreneur in the world who hasn’t failed more than once. But the worst thing in failure is if you don’t learn from it, figure out what you did wrong, make it better. If you cant make it better stop doing it and go on and put your ego aside.
Don’t worry about what everybody around you says. If you’ve done all the right things and you take the right risk and you do it over and over your chance of success go way up. So I’m gonna finish up by telling you about one of my failures and obviously none of the entrepreneurs who are successful only do failures and you know I’m not here because I failed. I’m here because of successes but I did have a failure that I think is in eyesight was painful and shouldn’t have done it. I started an Internet company about 10 years ago and we were referal service for veterinarians. You know doctors that take care of pets and there was nothing really like that in the United States. It seemed like a good idea, there’s a hundred of millions of dogs in the United States. They all need to go to the veterinarian at some time. How do you find your veterinarian? At the time you kinda did a Google search but there was no organized way or you refer to a friend. Seemed like a good idea and when you ran the numbers, it was a great idea. Millions of dollars of profit, it was great. So I put up four million dollars of my own money in the company. Hired a bunch of people, wound up by doing it and two years later, four million dollars are gone, business is a disaster and we lost everything in that business.
Luckily, I had the real estate business and other things that I could afford to take a loss. Didn’t want to take a loss, but you know if you’re afraid to take a loss you’re not an entrepreneur. You have to accept the fact that you’re going to fail. So what did I learn in this Internet business is that you always go back and you try and do a test on what did we do wrong and I apply my four factors to that. Luck had nothing to do with it, good or bad. First was, it was not a good idea. It turns out that veterinarians love animals, they don’t love money. They like money. They all want to make more profits but it’s not what they’re about. So as we were to put together this business model on how we would bring them more customers. Our business model was, we would charge them 50 dollars for a customer and the customer to them was worth two hundred dollars on a first visit and two thousand dollars over the life of the animal. If you run a business model, you went to business school, if you told somebody you pay me fifty dollars and I will give you a two thousand dollar customer, who wouldn’t do that?! You would line up for that. But not vets. All they would tell us was you’re cutting into my profit marge with that fifty dollars. What profit marge, you didn’t have customers. So, we didn’t know that until we got way down the road and spent a lot of time and money, so it wasn’t a good idea.
Second of all, I was not passionate about it. I was doing it because I thought the financial numbers showed me that we can make a lot of money. Nothing wrong with having that even when your passion is great to have that business model but that wasn’t what I was in for. So when times were hard and when things there I just didn’t care that much. I just wasn’t passionate about it and so that was a big mistake. Third thing is I had a great partners though. I had a CEO in the company, who I hired to run it. He was a very good guy, very smart and I think he did best he could do with a bad idea. And that was a saving grace that we didn’t have bad partners and that CEO actually transitioned over as our Vice president of finance in our real estate business. He was a good guy and good partner to keep in a failed business. Again, it’s not about success and failure, it’s about who that guy was during troubled times. He did everything he could in a bad environment and that’s somebody I wanted to stay associated with, so he’s now one of the Senior executives in our real estate company.
And the last thing is to take a risk. I did take a risk but I took a smart risk. I put up enough money that I could afford to lose it. Obviously, you don’t want to lose it but put up an amount that I could. Take the risk, see what happens. The risk-reward seemed like it was worthwhile but I also stopped. When it wasn’t working, we concluded the work when we were not able to succeed. We said that’s enough, we’re out of this business and we let the employees go and we closed the website. I’ve got personal experience in these four factors. Had I focused on the first two better, really understood whether it was a good idea and maybe had a real passion about it maybe we would’ve succeeded. But we didn’t. So we try in our company, in our real estate business to never do that again. Only do stuff where we fit these four factors and luck comes along and sometimes it all works out and you succeed. I want to conclude by saying I want to really encourage everybody in this room, future entrepreneurs to focus on your factors in life. Take a chance, succeed. Good for you, good for your family, great for your country.
We in the United States are rooting for Croatia in a very strong way. This is a strong partner of our country, we have values that are the same, we have people that have the same interests in life and we would really like to see this country to succeed. Whatever we could do to help, we want to do. One of my goals in life is, my main goal in life is to represent the United States but when I will really feel successful is when I can find the United States succeeding and Croatia succeeding. I want all of you to go out and be the best entrepreneurs you can be and I wish you all great success.