When It Ain’t Worth It

I’m no biz school whiz kid, but I’ve got enough advanced formal education under my belt to know most of it’s not going to help you in the real world.

If, like me, one of your guilty pleasures is watching the Donald Trump “Apprentice” show, you’re aware that the game is on between street savvy and book smarts in the culture. I don’t really feel the two groups on that show are good representations — they’re too young, mostly, and I think the producers picked people they knew would generate ego-driven drama (the stuff that boosts ratings). But the whole concept is intriguing enough to keep talking about, anyway.

I’ve always said I could turn a near-illerate street-wise salesman into a killer copywriter faster than I could someone with a Ph.D in English Literature… because the hard part is waking up your Inner Salesman, not learning how to cross t’s and dot i’s and conjugate transitional verbs.

I’ve also discovered that this kind of choice seldom comes up in my teaching duties. The vast majority of people who come to me for advice are entrepreneurs. The Ph.D’s and the Business Majors are attracted by the corporate structure of the mainstream marketing world, where bullshit and attitude can actually get you promoted. Entrepreneurs are often (like me) the sort who wither in tightly-controlled chains of command.

Working for the Man sucks, basically. Unless you enjoy it, in which case I don’t have a lot to say to you. Go for it, dude. Enjoy the nonsense and the back-stabbing and your sterile corner office.

Of course, while we entrepreneurs smugly tout our independence, integrity and real-world approach to Operation MoneySuck… the corporations are where the really, really, really big money is. Halbert and I often lament the sad fact that — while we know exactly how to sell a ton of any kind of car GM cares to offer — we will NEVER get the big multi-gazillion-dollar contract. Because we don’t have fancy offices, and we can’t talk the kind of Power Point happy talk the Madison Avenue suits spew.

Corporations don’t trust freelancers, because they don’t trust truly effective tactics. They like it nice and safe, and they like rigged games where they can’t lose. So they pump money into politicans for pork barrel consideration. And keep their marketing on a tight leash.

I’m thinking about all of this after reading about Carly Fiorina’s outster at Hewlett-Packard. She was all bluster and fancy presentation, and her one “big idea” as CEO was to merge with another company. To create “synergy”. And the board of directors let her do it. They are enthralled by words like synergy. Sounds edgy.

Oooooooh. I get all tingly just thinking about synergy.

Of course the merger sank HP’s stock (and the big winner will probably be Apple, since the merger also swallowed up one of their more savvy competitors and left a gaping hole in the market). And Carly was humiliated. With a $21-million goodbye package.

She’d better be friggin’ humiliated. Cuz that’s the only thing stockholders have to enjoy. Barron’s still rates HP as a “no buy”. It’s a wounded duck, because for 6 years the company was run by a CEO who was clueless about selling stuff.

Anyway, here’s the lesson for us entrepreneurs: It’s all about the point of diminishing returns. You can earn a million bucks without much extra help at all these days on the Web, with some decent marketing and basic “job it out” know-how. But something happens when you start bringing in the big bucks. I’ve seen it so often, I’m starting to think it’s a given.

You get the urge to become more “respectable”. You hire an assisstant. Get a nice office somewhere. Hire more staff. Take on a partner. Branch out with new projects in every direction. Invest in wild, “fresh” directions, cuz you got de magic touch.

One day you discover you own a warehouse.

And suddenly you don’t look like an entrepreneur anymore. Worse, when you crunch the numbers at the end of the year, you aren’t earning as much as you did when it was just you and the dog at the kitchen table making it work.

Think of it this way: If you take on a partner who’s 50-50 with you, you have to double your gross to earn the same. Add staff and real estate and better clothes (cuz the sweats aren’t going over big at the office anymore), and you’ve got to bring in four or five times your original income to match it for take-home.

Even worse, you now have a monster to feed every month, whether you feel like it or not. And everyone who’s had to meet a payroll knows that there are times when everyone else gets paid, while you do not. You, as the boss, are the sugar daddy to a whole new family now.

And, at some mysterious, point, you cease being an entrepreneur and transform into an appendage of The Man. (Though you probably will never have a $21-million bail-out package waiting for you, should you fail.)

So be sure you understand what’s important to you before the money starts rolling in. Because madness awaits those who are unclear on the concept. If you became an entrepreneur because of the freedom and independence, you have no business shackling yourself to a burgeoning organization that requires your total immersion 24/7.

And really… though I know it sounds stupid and cliche… the piles of money aren’t all they’re cracked up to be. There’s a point where it just gets ridiculous how much you have… and that point comes much sooner than you expect. And you’re suddenly faced with that horrible question: Are you the job, or are you a real person?

As an entrepreneur, you have total control in how that question gets answered, even if you need a little time to figure it out.

Corporations demand (and get) your soul. If you decide you’re more than the job, you gotta leave. Or get punted out.

Something to think about, as you rake it in.

John Carlton

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  • Awesome post, John. As always. Some entrepreneurs get stuck in the “empire” mentality to the point that they have no more lives. I’ve seen this too many times. Sure, they get to a point where they can afford beachfront vacations and executive hours and extended weekends.

    (Although rare. I’ve seen more entrepreneurs dealing with serious “let-go” issues than a CEO with a PhD who was hired after the “empire” was created. I personally know of one guy who started as a one-man show, and now has 60 employees, a huge office and tons of headaches. He recently paid like over half a million to a consulting company to learn how to … delegate. Ugh.)

    (Ya, nice to be on the beach with fancy drinks with little umbrellas … ’cause you’ll need the alcohol to numb the pain of the looming heart attack.)

    On the funny side, check this site out. Check out every page. Damn funny.

    huh? Corp.


  • ken calhoun says:

    Great post. Here’s a thought. I spent the first 10 years of my life (21-30 yrs old) working in big corporations, and it gave me a lot of great experience. And it was paid experience, in the corporate world, which was great…for a time…

    For the last ten years, I used what I learned there (project management, team, mgmt training), to apply to what I do now as an entrepreneur. I always knew I’d be an entrepreneur, but I worked in the system to gain the experience, which I knew I’d use outside of it some day.

    Always a lone wolf, the executive VP who did my exit interview at Ford Motor world headquarters said, “you’re a top performer, but you’re not a team player”. No joke. I don’t like politics and helping others look good. It’s bs. I said its’ hard to fly like an eagle when you’re surrounded by turkeys. He said that’s my problem. I said no, it’s yours. And walked outta corporate life forever. And it’s been great. Moved to hawaii, great life and more.

    Glad I never had to make payroll. John your article should be must-reading for all the small biz owners out there.. so many I worked with, looked exhausted and broke. But at least independent. But payroll, other employees, just another kind of prison, like corporate.

    Been working in my shorts in front of the pc making a bundle for the last 5 years and it’s great. I like it solo. thx for the blog, great stuff in here.

    ken calhoun

    p.s. how do I put paragraph spaces in here? couldn’t find at the movable type site..

  • Michael Platt says:

    Hi John,

    What a great blog. I’m glad to see you fixed the technical part, so we all can keep up to speed with your posts.

    I know a little while back you offered to answer some questions. I don’t know if that was a one time shot or an ongoing thing…but…if you ever need some ideas for a blog entry, I’d really like to hear your thoughts on the “back-end” of marketing….where the real money is made. Any tips, strategies, battle plans, or secrets you’d be willing to share for rookie direct response marketers like myself.

    Thanks for everything!


  • AC Blair says:

    Hello John

    I am a divorced Mom of two girls under 11 and I want so badly to build a better life for us. I discovered how to make money in brokering hard money loans. Sometimes I will make 8 or 10 grand at a time. I worked with other successful investors and brokers in Washington State. I was a little discouraged about a 1.3 million dollar deal that took months then fell through. I lost my well you know on that one. So I left the brokerage house and found one RE Attorney whom I have as my one and only private investor. To date I secured a couple of large commercial pieces of property with a 14% interest only loan on the short term. I am having a hard time though on my own and would like to know if you could give a gal a little advice on a start up internet biz that would allow me some financial freedom. Like a vacation once a year of some music lessons and gym for my girls. I hate being poor. I just thought after reading your blog that you could and maybe would advise me.


  • Slimane says:

    I totally agree with the say that “higher education is no guarantee for a sucessful career”. In this material world , being poor is a horrible thing.
    Money doesn’t buy you happiness , but it buys you a good car and a good house and every good thing that money can buy. It is the 2nd best in life, I haven’t known anyone who has it all (hapiness and buying power), so I settle for the second best.
    I learned this the hard way. I am 45 now and I spent most my life in formal eduation, thinking that it would secure a good life for me.
    What an illusion !
    I am now coming back to basics and trying a gradual entrepreneurial approach to fighting my biggest enemy (poverty). Any advise, (not including those ” get rich quick internet scams”) is welcome knowing that I want to start with a tight budget.

  • haha, I hope I get that point soon where my problem will be resisting the urge to get a fancy office 😉

    But seriously, I’ve met so many people who have amazing lives, doing what they love and getting paid very well for it, having a good time traveling the globe.

    Do they have a private beachfront? Nope. But they don’t mind jumping into a lake with… well, anybody.

    They comfortably dip into exclusive 5 star environments, turn around and do a little barbeque in the park.

    They realize when they’ve been working too hard, make a few phone calls to rearrange their schedule and hop over for a week of diving in Thailand, cycling in Italy or whatever floats their boat.

    One of them is actually coaching lots of high-level executives from companies like Coca Cola, IBM, government agencies, etc. They have their nice family villa, a Jaguar, a Benz and a Jeep in their garage, an attractive wife, two kids… and they’re on medication and behind that expensive facade desperately trying to get a life. The ones I talked to I’d call good people who tried very hard and finally succeeded climbing up that latter – just to find out that it’s the wrong latter.

    However, having been running my own businesses for several years now, I’ve learned that as an entrepreneur you do have the OPTION to really do it your way – but it still takes a lot of guts. And while the corporate world sedates their slaves with “security” (at least until they figure out that computers or Indians can do it cheaper), I have to admit that every once in a while when I meet a guy my age who’s earning five times my income all the while looking fancy and smug – I do get jealous and feel resentment. Funny enough – it’s not so much about the money or the car, but about the respect they get. (But even that is a lesson for me in how I treat other people and communicate with them – bathing them in the same amount of respect that I secretly crave).

  • Jesus Miguel says:

    I remembered Ben Suarez in his book “7 Steps To Freedom” so much, while reading this post.

    -Keep your overhead low at all cost.
    -Know the fancy things corporations appear to be:
    Fancy buildings, fancy staff, fancy presentations…

    It’s really a suckers game.

    Thank you John.

    I’m with you, I value my freedom.

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