How to Knock Off Your Nasty Old Employer and Have Your Own Nice Little Business

October 9, 2017 in Blog,Essays

My first real job was as “backseat wiper man” at the Rockville Center Car Wash on Long Island. I was 14 and happy with the $1.25 an hour they paid me. A couple of years later, when I had a summer job as a housepainter’s assistant in swank Hewlett Bay Harbor, I became an “entrepreneur.”

What happened was this. My friend Peter and I were scraping the shingles on a big yellow house when the lady of the house, a Mrs. Bernstein, came out and asked for Armando, our boss. Armando’s routine was to drop us off at the work site at 7:00 a.m. and disappear until 5 or 6 in the evening.

We were left to do the work, with virtually no experience and only Armando’s advice on watering down the paint and “dry rolling” the second coat to guide us. (Dry rolling is when your painter pretends to be giving you a second coat when, in fact, his roller is dry. This allows him to get the job done twice as fast and save a bundle on the cost of paint.)

“I’m onto your boss, Mrs. Bernstein said. “How much does that cheap bastard pay you?” We told her. She harrumphed and disappeared inside. When she came out, she announced, “I just fired that good-for-nothing. But if you know what’s good for you, you’ll be here Monday morning. I’ll pay you an extra dollar an hour to finish this job properly.”

The point of this little story is to illustrate how I accidentally started working for myself. (Some other time, I’ll tell you what happened when Armando discovered our duplicity.)

I just fell into it. And I loved it. I although I didn’t stay in the painting business very long, the experience of having my own business became a habit that continued, with a few brief exceptions, for the rest of my life.

The stories that are told about entrepreneurs are about men and women with dreams. People who imagine building and selling better mousetraps, who risk all their money and time to make those dreams come true.

My story is not nearly as dramatic. And that’s probably why it’s seldom told. But it’s not a bad way to begin.

What Peter and I did, unwittingly, was to start a business by “knocking off” the business we worked for.

And this is not a terrible idea. (Well, that depends on how you do it.) In fact, it’s probably the easiest and surest way to become an entrepreneur. And I’ll bet it’s the most common way as well. Way more common than having the dream.

There are many significant advantages to starting a business that you’re already in:

 

  • You know the idea is viable because the business that employs you is viable.
  • You understand how it works from the inside out.
  • You probably have an idea or two about how you’d improve it.
  • You can access the knowledge, capital, and contacts you need while you are still an employee.

 

Of course, there is a significant ethical problem with doing this that I’ll discuss in a minute. But if you are interested in this approach, here’s how to get started:

 

  • Learn everything you can about the business you work for. Especially how sales are made and what, if anything, is unique about the product/service the company provides.
  • Make contacts – vendors, media people, and professional services – that you will need when your business is running.
  • Consult with them on what they believe are the critical concerns.
  • Locate a mentor, the best you can find, someone in the industry that is willing to advise you on your start-up. (With or without compensation.)
  • Figure out how to make the product/service of the business better. This will become the key to your eventual success. When you go out on your own, you want what MBAs call a “competitive advantage.”
  • If possible, “dry test” that idea in some small, inexpensive way. A dry test is one where you are testing the selling proposition by pitching the sale and seeing the response you get but not actually providing the product.

 

Now… regarding the ethical problem:

 

  • None of this should be done on company time or using company resources.
  • The product/service you develop should be in some way significantly distinct from the product/service your employer is selling now.
  • When you’re ready to start, consider meeting with your employer and letting him know your plans. You might even offer him the opportunity to invest in your business as a “thank you” for the experience you’ve gained as an employee.

That’s what Fahri Diner and Xiang-Dong Cao did.

They were sitting around after work having a few beers and complaining about their employer, Siemens Information and Communications Networks. (The story is true. I’m just making up some of the details.) Cao was saying that the work they did was not properly appreciated.

“They don’t appreciate the work we do for them,” said Cao.

“Damn right,” said Diner. “Hell, we should start our own business!”

“Damn right, said Cao.

Several months later, they said goodbye to Siemens and moved into a dusty warehouse. They telephoned former colleagues until they found two willing to work for them in exchange for stock. And with this meager core of four, they started their own fiber-optics transmission company, doing essentially the same thing they were doing at Siemens but with a few of their own improvements.

In a few short months, they had gone from wage-earning employees to brave new entrepreneurs in a business that eventually had a billion-dollar payoff.

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