May 16, 2013

How and when I realized I was going to become an entrepreneur

In 1987, during my third-year at the University of Chicago, I spent time in the basements of two different buildings on campus. Most Monday afternoons I’d walk down the stairs to A-Level in the Regenstein Library to browse through the newest editions of the business magazines that usually came in that day. And on a few other days of the week depending on my class schedule, and maybe even on Mondays, I’d have lunch in the Gargoyle Café in the basement of Stuart Hall, one of the buildings on the main Quad that housed the Graduate School of Business, now the Chicago Booth School of Business, where most MBA students ate lunch.

Regenstein Library 

Upon entering A-Level of “The Reg” from the main stairwell, I’d turn to my immediate left to face the librarian who I'd ask for the newest editions of the business magazines kept behind the desk. Then, I’d walk around the corner into the reading room to one of the over-sized lounge chairs that circled an even more over-sized ottoman, where I’d sit and read for the next hour or so, the “or so” part depending of course on how long my nap was, which, it being a Monday, depended in turn on how much recovery I needed from the previous weekend’s activities.

As I remember it, most of the articles in those business magazines were about big companies. Some articles were about what some Big Company A had done that was going to lead to faster growth and more income and a higher stock price. Other articles were about how some Big Company B had made a mess of it and what they needed to do to clean things up. And still other articles were about the CEO at a Big Company C who was at the center of a corporate drama, and who was made to look either really dumb for having made a bone-headed decision or was made to look really smart for having cleaned up the last CEO’s mess.

These magazines were, and probably still are (though I don’t read them anymore), the People Magazine of business, more gossip than news, more speculation than fact, and I loved reading them as much as people like to read about movie stars, mostly to imagine what decisions I would make if I were in charge.

After a number of issues over a short period of time, I began to observe that since the smart decisions these CEO’s made seemed to me so obviously smart and the dumb decisions seemed so obviously dumb, there must be something about Big Companies that led to making dumb decisions, because every Big Company that got themselves into trouble had made what appeared to be some obviously dumb decision when an equally smart decision, as evidenced by what the next CEO did, was staring them right in the face.

Being a University of Chicago man, nothing irritated me more than watching smart people make dumb decisions.

Standing in sharp contrast to all the articles about Big Companies were the handful of articles about Small Companies.  What the Small Companies that I read about were doing was always far more interesting to me than anything a Big Company was ever doing, and since the Small Companies usually competed in the shadows against Big Companies (and still do), and since Small Companies have to out-maneuver Big Companies either by being smarter or by being more innovative or by introducing a new business model or by altogether inventing an entirely new market category, the only articles that ever made it in into the magazines about Small Companies were when they were doing something right.

Small companies were always represented as the underdogs, as they should be, swimming against the tide, and since I’ve always felt like an underdog myself, and since I love (and everyone loves) stories about an underdog overcoming long odds to beat the favorite, I became enamored with Small Companies. I loved that they were able to compete and to succeed against Big Companies. I loved that they were fast-moving and nimble. And, more than anything, again, as a Chicago man, I loved that they always seemed to do the smart thing.

Of course, I didn’t read about how often Small Companies failed or did dumb things, both of which happened as we all know with a much greater frequency than they did in Big Companies. But those were the articles that were never published.

Reading these magazines began to feel like reading the Sports section in the newspaper and going into the library on Mondays began to feel like checking the previous night’s scores. After a few months, I had my favorite teams (the Small Companies) and favorite players (the entrepreneurs) and started to speculate about who would win the division (who would take which market). It got to where I could almost predict the kinds of articles I was going to see in the coming issues based on the recent headlines in the Wall Street Journal, so I started to look forward to reading about last week’s big upset (Small Company eating Big Company’s lunch).

It didn't take long before I began to associate smart to Small Companies and dumb to Big Companies and so, naturally, I started to develop a strong bias against Big Companies. I concluded, rightly or wrongly, that most Big Companies were ripe for some Small Company to come along and out-fox them, that Big Companies were generally accidents waiting to happen, and that the last place I would want to work – the last place anyone should want to work – was a Big Company that was about to get disrupted by a Small Company or that was about to make a really dumb decision, either of which was invariably going to happen.

The Gargoyle Café

The other basement where I spent time was in the Gargoyle Café in Steward Hall, the building on the Quad that housed the business school, where most of the MBA students took lunch. I told myself I ate lunch there because it was the only place on that side of campus where I wouldn’t have to pay for a copy of the Wall Street Journal, knowing that the MBA students would buy them and then leave them behind after they finished their lunch when I could then scavenge a free copy, but the real reason I ate lunch there was to be around the MBA students themselves.

The lunch crowd there couldn’t have been more different than the lunch crowd at any other place on campus. It was full of button-down shirts and loafers (vs. t-shirts and flip-flops) and neatly cropped hair (vs. pony-tails), and the conversation centered on corporate strategy (vs., say, Aristotle) and the optimal career path (vs. which bar had $3 pitchers that night).

I was as out of place there as any other undergrad would have been, had there ever been any other undergrads there besides me.

Sitting there, eating my sandwich while pretending to read the paper, I’d listen to the MBA's talk, say, about Big Company A‘s go-to market strategy for a new product or about some fancy bit of financial engineering recently implemented by Big Company B. They’d discuss and debate with just enough of a cockiness and an edge for me to picture myself reading about one of them running a Big Company one day – that was probably their goal – but, hopefully, also as UofC men, not because of some major blunder they’d made.

I don’t ever remember anyone ever talking about something that a Small Company was doing, or about working in a Small Company, or about going into business for themselves one day – doing a startup – we use the term startup now though I’m not even sure that was a real word in those days. Didn’t they realize that all the interesting stuff was happening in Small Companies? Didn’t they realize how much opportunity there was for smart people like them to make a big difference in a Small Company competing against a Big Company? Didn’t they realize that’s where all the fun was?

I wanted to jump into countless conversations and try to talk some sense into them, but, being an undergrad, they would have probably thrown some obscure economic theory at me that explained why Small Companies were at a severe disadvantage, or another theory on the risk-reward analysis of receiving a steady paycheck, which mattered to them more than it mattered to me and more than I thought it should have.  Of course, I didn’t have the same student loans most of them did or the ego for the need for a big paycheck, either.

No, these MBA students weren’t underdogs or interested in anything having to do with Small Companies.  They were on campus to learn the tools needed by Big Companies and to learn how to become Big Company people. They were mostly bound for Wall Street or management consulting or the finance or marketing department in some Big Company.

As I looked over the lunch crowd, the only underdogs I saw there, other than me, were the Gargoyle Café staff, picking up the sandwich plates and chip wrappers that the MBA’s thoughtlessly left behind.

So I’d spend my Mondays reading about business and I’d spent my lunches the rest of the week among the future leaders of Big Companies, bouncing back and forth, week after week, watching the theories I’d formulate about Big Companies and Big Company people from reading about business on Mondays confirmed by my experiences eating lunch with MBA students the rest of the week.

Maybe, somewhere deep down inside, I felt that my thinking about Big Companies was misguided and that by hanging out with MBA’s over lunch I would somehow warm up to Big Companies and Big Company people. That never happened. Instead, I came to realize that I was never going to feel comfortable with Big Companies or working with Big Company people when I could be an underdog in a Small Company.  There was nothing inherently wrong with Big Companies or Big Company people, it's just that I wasn’t one of them.  I was a Small Company person. And I was an underdog.

As time went by, I felt more strongly than ever that I needed to compete against these MBA's and beat them at their own game of business through a Small Company, and even more strongly than I wanted to reprimand them for leaving behind their trash in the Gargoyle Café.

Being Doug Tompkins 

Then one day I read the article that summed up all my feelings on Big Companies and Small Companies and on what was possible to accomplish through a Small Company that, in retrospect, changed the course of my life. It was a profile of the clothing brand ESPRIT and of the (then) husband-and-wife team of Doug and Susie Tompkins, who had founded the business out the back of their VW van back in the early 70’s, and by this time had grown into a leading fashion brand and retailing powerhouse with hundreds of stores around the world.

As inspiring as the story of the company’s rise in business was – the classic bootstrapped business built with grit and determination – that’s not what I remember about the article. I don’t remember whether they were featured for being smart or for being stupid or whether it was even an article about the company – maybe it was about Doug and Susie Tompkins.

I just remember that one of the pictures showed Doug and Susie and two other senior executives sitting around a long, rustic kitchen table, obviously in their home, sipping coffee while discussing a major strategy decision.  Everyone was dressed casually, except for Doug, who looked like he had just returned from a morning of snow shoeing, which he very well could have since the view out the kitchen window behind the table was of snow-covered mountains. These people didn’t look much like business people and it didn’t look like what I thought a business meeting ought to look like.

Doug Tompkins, I read further, was an adventurer. His first passion wasn’t business at all, it was mountain climbing, and one of his climbing buddies was one of my personal heroes, the legendary climber Yvon Chouinard who had founded Patagonia. Doug's second passion was business, if it even was a passion, and prior to founding ESPRIT, he had started and then sold The North Face, the climbing and camping equipment company.

I had just returned to school from a 90-day Colorado Outward Bound leadership development program where I had fallen in love with climbing, the mountains, backcountry skiing, challenging myself against nature, and living an outdoor life, and now here I was reading about a guy who seemed to have figured out how to have both a business and an outdoor life.  Doug didn’t seem to be in business to make money as much as he was in business to support his outdoor habit, and having his own business was his vehicle to create the time, the money, and the resources to plan whatever outdoor adventure he wanted to do next. It was his company with his rules and he had designed his role in the company in a way that supported what he wanted.

How cool was that? That's exactly what I wanted.  In that instant I saw that it was possible to have both, and I saw that the path to having both was to have your own business.

I’m sure I could have concluded much the same thing from any number of the other small business articles or entrepreneurs if I had been paying more attention, or from Yvon Chouinard's story and Patagonia for that matter, but for some reason I didn't. The combination of a small business, a big personality, the great outdoors, and the context of bouncing back and forth from one basement to another was why it hit home for me when it did.

It was a revelation, and from that moment forward, all I ever wanted was to become my own version of Doug Tompkins.  I'm still working on it.  Needless to say, it hasn't been easy.

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