The Accidental Entrepreneur: My Crazy Roller Coaster Ride As A Clueless First Time Founder

Part 1: The Cow-Print Futon

Not all businesses are about the hustle and the grind. Sometimes it’s simply a matter of being in the right place at the right time. And in my case, being too stupid to know what I was getting myself into.

With my first two businesses I had managed to Forrest Gump my way into about $4 million in revenue over the first three years without any clue what the hell I was doing.

I couldn’t spell “entrepreneur” and I didn’t know the first thing about business, but thought I must be some sort of prodigy because of the amount money was flowing in.

When things are going well it’s because how smart we are, but when things go bad it’s because of “market forces”, right? I think that’s one of the first things that they teach you in business school.

To tell the story, let’s go back in time to the good-ole-days of the late 90s. At about the same time as the DotCom Boom-and-Bust, a lot of businesses were also investing millions of dollars to implement Enterprise Resource Planning (ERP) software. These were massive projects that involved high-price consultants who implemented these highly-complex software solutions that typically completely changed the way a business operated across the board.

The problem was that once these high-price consultants left, the existing IT teams were left to manage this massive new system with absolutely no idea how to do it. And if these systems went down, there was hell to pay.

There were a couple of software companies that launched a set of tools that were designed to help these teams monitor and manage the systems once the consultants packed their backpacks and hit the door. And companies were clamoring for these tools.

I was one of the first people to implement one of these solutions while working at Electronic Data Systems (EDS), which was my first big-boy jobs after departing from college. As a result, I had more experience with the tool than a lot of the people within the software company itself.

I had left EDS to chase after my share of the DotCom riches at a startup in New Jersey. But about a year later I was faced with the reality that I had picked the wrong horse.

No riches for me. Yet.

It was about that time that opportunity came-a-knocking in the form of a call from my old sales rep at that software company that made the monitoring tools, with a proposal:

“Listen. You are really good at implementing our tool. We are selling software faster than our professional services team can keep up. Worse, a lot of our people have no fucking clue what they are doing and are botching installs at major clients. If you go out on your own and set up a DBA , I will outsource a bunch of these installs to you. You can bill $200-300 an hour and I promise you that I can give you as much work as you can handle for a long, long time. Trust me, you will be finally making ‘adult money’.”

I didn’t want to sound stupid on the call, so I didn’t ask him what DBA was or if ‘adult money’ was was porn related, but they sounded cool. A web search told me DBA was “Doing Business As” (which is basically the most basic business type you can setup) and he later told me that adult money meant making over $300k/year.

As a kid who grew up in rural central Maine where my first job was picking rocks out of a potato field for $3/hour, that sounded very cool.

I definitely wanted adult money.

After a couple of weeks of himming-and-hawing, I took the leap and pulled the trigger. I gave my notice, borrowed $3,000 to buy a high-powered laptop that was big enough to need it’s own sherpa, and just like that I launched my first business: TLM Consulting.

Within the first 30 days and without making a single sales call, I had booked close to $100k in revenue and my only costs were paying back that laptop. This was more than I was making a year at the startup and triple what I was told I could expect in my first 5 years out of college..

I like this business stuff. Easy Game! You peasant workers shall call me Entrepreneur!

I’m pretty sure I had searched, “How much does a private island cost?”

I had also quickly gotten a reputation as someone who can handle the more tricky/complicated implementations, having been parachuted into two large clients with botched installs that I had been able to clean up.

I was crushing this entrepreneur thing.

And that’s what lead to a phone call from a guy who owned a small software reseller in Massachusetts just about a month after I had ventured out on my own.

“When we asked around about technical people that really knew the XXX product, your name kept coming up. We’d like to talk to you about a potential partnership.”

“We resell the XXX software in the New England region. We basically take a 30–35% margin for any deal we sell. We are doing well, but we are tired of losing about 1/3 of the value of each of these deals because we have to outsource professional services to another company.”

“We don’t do the consulting and you Don’t do the sales. What if we partnered up? What if you helped us to sell software and we give you a piece of that and we help you grow a team of consultants, and you give us a piece of that?”

I was intrigued enough to drive up to their offices later that week. I was making so much money as a consultant, the idea of growing in a large team of people that could all bill at these rates sounded awesome to me. I couldn’t yet really quantify how much value there would be for me in selling the software, but it sounded like it could be significant.

It turned out that we had much different expectations around what was a “fair compensation”. I wanted more to be guaranteed and they wanted more to be performance based. It took us a long time to come to middle-ground.

Ultimately, the end result of sitting in a conference room for almost 2 full days was that we would be launching a new company, “ConServ” (Short for Consulting Services — I know, it’s terrible, but whatever) of which I would be a 1/3 owner.

I would be paid a small base salary, a daily rate for each day of consulting that I worked myself, a hefty chunk of the profits made from any additional consultants that I brought into the practice (which turned out to be my master-stroke) as well of my share of the annual profits. I would also receive a healthy commission if I or one of my consultants were to assist with a software sale.

I would transition my existing deal with the software company such that my consulting engagements would now be booked through ConServ and ConServ would now be the exclusive professional services arm for the reseller.

I now had my second business within 60 days of quitting my job, this time with two business partners. The first business was summarily retired as a “raving success”.

I relished telling all my friends how I had to retire my highly successful “consulting practice” that was on track to book over a million dollars in first year revenue in order to pursue a much greater opportunity to partner in a business I expected to be $20 million in revenue in the first 5 years.

Bartender, is Johnnie Walker Blue really the best scotch you have? That’s a shame.

“But aren’t you sleeping on a cow futon in your office?” one of my friends asked?

Being so naive I had let my new business partners convince me that paying for relocation was a bad idea “for everyone”. Since the office had a shower, it made sense to “save our money until the revenues started to come in”.

Even though I had booked a lot of business, very little of it had actually made its way into my checking account. So I was all about saving money at that moment. I still had a cow-print covered futon from when I had moved to New Jersey that I would put in my office to sleep on.

At the time I also thought it was some sort of test by my new partners to see if I was ready to be fiscally conservative. Looking back I now realize that they were just two cheap bastards that didn’t want to spend a dime that could go directly into their pockets.

This would turn out to be a significant foreshadowing for things to come. And that cow print futon came to carry the symbolism of being naive in business.

To this day, when I do something stupid in the context of building or growing a business, I will “moo” loudly to myself as an acknowledgement of my misstep.

But considering how clueless I was, we still built a business that experienced rapid growth and significant success.

At it’s peak 2 years later Conserv had ~8 consultants and was generating over $2 million annually with almost zero sales and marketing costs. About 2/3 of this revenue was coming through outsourcing from the software company, and the remainder came through deals sold by the reseller.

This bears repeating, because it’s insane. We were doing over $2 million dollars a year with no sales and marketing.

It was a dream scenario, but I was so green I didn’t know how special it was at the time. I thought that’s just how business worked.

“Being a successful entrepreneur is extremely simple: Find a company that wants to give you money, hire people, get loads of money, buy a shrimpin boat, refer to everyone around you as Lieutenant Dan.”

But wait, there’s more…

The reseller was doing $1.5-$2 million in revenue a year in software resales, of which I also had a piece because I was involved with almost every sale.

And for one year, at 25 years old, I actually made adult money (and with the added bonus of not having to do any porn).

But spoiler alert: This story does not have a happy ending

The crazy thing about the software reseller revenue was that about a quarter (or more) of it came through deals we did no work on.

When I say, *no work*, I mean like, zero. Like, I’m saying we would book hundreds of thousands of dollars worth of deals with businesses that we had not only never talked to, and often had never even heard of. The only thing we did was receive a fax, type up an order, send the order via fax, send an invoice for our money.

This is something that’s known as a “blue bird” and it was actually insane.

More on that in Part 2 — Blue Birds In The Strip Club