Why Patience is a Sales Essential

Why Patience is a Sales Essential

By Paul Talbot

It's a pretty safe bet that few if any salespeople have ever been told," just be patient."

Patience seems to fly in the face of getting things done, creating urgency, and closing deals. Patience can often be mistaken for laziness, call-reluctance or any of the insidious forms of procrastination.

But sales professionals who dismiss patience overlook one of their most powerful, one of the most understood, and one of the least utilized tools. There are five vital aspects of the sales professional's world where patience comes into play. If patience is either dismissed or not managed effectively, optimum selling results simply cannot be achieved.

Let's start with prospecting. Prospecting is a sales professional's oxygen. It must always be present. Just as a
supply of oxygen needs to be continuous, so should prospecting. But when we examine why salespeople often fail to prospect effectively, the answer doesn't always lie in poor sales techniques. It often lies in a lack of patience. We know that roughly 80% of sales are made on the fifth call. The same holds true for simply securing an appointment. Yet the same studies reveal that after initial rejection, just 10% of salespeople plod
forward.

This plodding forward demands more than persistence and determination. Without patience, the determination and persistence will be subjected to unreasonable demands and they will eventually wither. A measured management of expectations in terms of the time, effort and thought it takes to set up an appointment is crucial.
Reasoned patience fuels this fundamental behavior of achievement.

Negotiating is an area where patience provides the professional salesperson with powerful advantages. Negotiations where concessions are made too quickly, where there is a rush to closure without appropriate understanding of the other side's position, or where artificial deadlines created by the other side are immediately agreed to, each tend to result in an unsatisfactory outcome.

The sales professional understands the crucial importance of constantly managing client and prospect relationships. This leads us into the realm of human nature. If we do not demonstrate patience in our dealings with the inevitable quirks, foibles and idiosyncrasies of the people we do business with, we will fail to effectively manage the relationship. Every sales professional understands this. The word we tend to use to describe the
process is "empathy." But without patience, empathy is hollow.

Professional salespeople understand that the task of identifying decision makers is both essential and complex. Failing to do this, rushing headlong into even an aspect of selling which would appear strategic and sensible,
such as a needs assessment, can prove premature if the salesperson hasn't demonstrated the necessary patience to understand the organization and how its members exert influence on purchasing decisions. This notion obviously holds true for less complex sales, such as dealings with a husband and wife.

We also need to be patient in managing our own business expectations. This comes into play both with individual deals we're working and our own career.

Selling is tough. That's why those of us who are good at it are so well compensated. Patience helps us all remember that what we do is difficult, that the relationships essential to success are not forged overnight. Neither is the ability to quickly use the sales professional's skills. Great salespeople are tough and demanding on
themselves. While this quality is basically good, it may turn sour if we do not administer it in a measured, balanced fashion. And of course this requires patience.
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Paul Talbot is the director of the Center for Inspiration and Motivation.

He invites you to subscribe to the center's complimentary daily newsletter, by visiting http://www.inspirationandmotivation.com/

Jesus loves me. He only likes you

'Jesus loves me. He only likes you'


December 15, 2006

BY MARK J. KONKOL Staff Reporter

The movie about his life -- Will Smith's "Pursuit of Happyness" that opens today -- is set in San Francisco, where Chris Gardner went from a homeless single father to a Wall Street prince.

But it was in Chicago where Gardner really struck it rich, starting his multimillion-dollar brokerage, Gardner Rich & Co., in a tiny Presidential Towers apartment 20 years ago.

He did it with $10,000 start-up cash and one piece of furniture, a wooden desk that doubled as the family dinner table.

"I didn't know that you couldn't do it, so I did it," Gardner says, sitting behind his new desk, the tail wing of a DC-10 jet.

Gardner, 52, insists the film -- which is based on one tumultuous year in the '80s that he and his 2-year-old son spent sleeping in parks, train stations and a public bathroom -- isn't just a tale of one guy's great success.

"It's the story of my life, but it's not about me. It's about every father who had to be both the father and the mother. It's about every mother who had to be the mother and father," he said. "It's about anybody who ever dreamed big and had someone tell them, 'No, you can't do it.' You can."

And it's in Chicago -- his town -- where Gardner says he captured the happiness he so desperately pursued.

At his street-level office in the shadow of the Chicago Stock Exchange, Gardner waxed about living the good life, about being a good man, and most of all, about being a good father.

On Chicago
"Man I love Chicago. If you got a dream and you're willing to work your ass off, Chicago is where you're supposed to be. And for African Americans in this country who have created tremendous wealth, a disproportionate number of them did it in Chicago. Oprah. Michael Jordan. John Johnson. Ed Gardner. Think about it.

"Chicago is a city of possibilities. A great place to raise my children. A city of folk that care."
On being a homeless father

"The hardest part was going to work and leaving your child with someone you don't know, hoping that everything is OK, and keeping in mind there's only so much a 2-year-old can tell you."
Testing Mr. Smith

"I went to his house with the script, my notes and a picture of me and my son in front of our first house after getting off the street. It was a test. I told him to pick between the script and the guys in the picture. He said, 'Tell me what's not on paper.' He passed."

A walk with Will

"One night I took this cat on a walk through San Francisco. Biggest movie star in the world with no security, nothing. It's midnight. We go to some of the places my son and I had to sleep. The park. Subway stations. We get to the public bathroom. It's a place I don't need to be. So I walked out. Will stayed inside. Seven minutes. I timed it. When he came out, he wasn't Will Smith anymore. He was Chris Gardner. A transformation took place. That's what you see on the screen."

On finding himself

"My first ambition in life was to be Miles Davis. I studied trumpet for 10 years. I didn't want to be a jazz artist. I wanted to be Miles Davis. My Mom sat me down and said, you can't be Miles Davis. He already has that job. You have to be Chris. That freaked me out. I mean, who is Chris? All I knew is I wanted to be world-class at something."

On fatherhood

"My stepfather always said, 'I ain't your daddy. You ain't got no daddy.' Too many men are in so much pain. So many have a hole in their soul in the shape of the father who wasn't there. Way back then I promised myself that when I had kids, I would be there."

On business success

"Don't be afraid to hire someone who is smarter than you. Just because they're smarter doesn't mean they get to make more money."

On hanging with Oprah

"She's like, wow. I mean, wow. Really, wow. That's all I can say."

On the secret of success

"People ask me what's my secret. I tell them, 'Jesus loves me. He only likes you.' I am his boy. I pray everyday, all day. So much I can't get my work done. Now I realize I am working, just with Jesus on speed dial."
On dating in San Francisco
"Unemployment will not help your relationship."

On Mayor Daley

"The day Richie is no longer mayor is the day I move out of here."

On raising rich kids

Like a lot of parents, we try to give our kids the things we did not have. Sometimes, we give too much. My kids have a highly evolved sense of entitlement. I created the Kennedys in chocolate. I came home one day, and they were arguing. My daughter says to me, “Tell Chris I get your Ferrari when you die.” She was 8.

On happiness

Money is the least-significant aspect of life. I know a whole lot of people who have a whole lot of money who are not happy.”

On having vision

There’s two kinds of people in the world. There’s the guy who looks at a steaming pile of manure and says, “Oh, poop.” And another who immediately says, “Ah, fertilizer.” I’m the fertilizer guy.

On canceling Christmas

I had the tree up and presents underneath. The kids decided to bring home report cards that started with the back end of the alphabet. I said, “Christmas, don’t touch it.” We left everything the way it was until the next report card came out. People were asking why the tree was still up in February. That started a new family policy: “No grades. No goodies.”

On losing 54 lbs.

I eat oatmeal. No sugar. No butter. No nothing. Just oats and hot water. Lunch is a protein shake with some egg whites mixed in. Dinner is broiled chicken and some vegetables. I try to get on the treadmill and do crunches. It’s nothing magic.
On meeting Nelson Mandela
I had the guys who make his silk shirts make one for me. I waited 27 days to spend time with him. When I first walked in, he said, “Chris, why are you wearing my shirt?”

On alcohol

Drinking was a problem in my house. I don’t want that, so I don’t drink. Scratch that: I don’t drink in this country. In the Caribbean, they put rum in everything.

On his next book

It’s a concept I call spiritual genetics. We understand that you might get your mom’s eyes and your dad’s nose, but you can make a conscious choice to embrace the spirit of the person you want to be. I could have been another alcoholic, wife-beating, child-abusing illiterate loser like my stepfather, and people would have said, ‘Look where he’s from. He didn’t have a choice.’ And I say that’s bull----.

On Maya Angelou’s perspective

I was frustrated my book only reached No. 22 on the New York Times bestseller list. She said, “Son, you’re looking at it the wrong way. When you touch people’s lives in a positive way, that matters most.”

Chris Gardner

Chris Gardner | Survival Guide: extended interview

By William Welsh
Staff Writer

Chris Gardner, CEO, Gardner Rich LLC
“A long walk to Wall Street is how others describe my life.” That sentence is emblazoned on the cover of Chris Gardner’s best seller “Pursuit of Happyness,” which chronicles Gardner’s climb to the top of the financial world following a bleak spell of homelessness in San Francisco during the 1980s.

Gardner grew up in Milwaukee, served in the Navy, then traveled to Golden Gate City in search of his dreams. An estranged wife, a toddler son and a housing situation that didn’t allow for children made him one of the city’s working homeless: those who have a job but no roof over their heads. Despite the odds against him, Gardner vowed not to abandon his son.

His rise from a trainee at Dean Witter to owner of his own stock brokerage firm is the stuff from which legends — and movies — are made. A Sony Pictures film based on his story and starring actor Will Smith opens in December in theaters nationwide.

Gardner spoke recently with Deputy Editor William Welsh about making it through hard times, owning one’s responsibilities and what it’s like to have a movie made about your life.


WT: When you were one of the working homeless in San Francisco, did you have hope that you would get out of the situation?
Gardner: We were homeless, we were not hopeless. There’s a world of difference. A lot of folks don’t realize it, but it’s estimated that 12 percent of all of the homeless people in this country have jobs and go to work every day.

One of the very memorable parts of getting ready to shoot the film “The Pursuit of Happyness” was Will Smith and I went for a number of walks. As opposed to sitting and talking, I said to him, ‘Let me take you and show you places where my son and I had to sleep.’ We went down into the subway stations, train stations, hotel lobbies, restrooms of subway stations, and Will is such a sharp guy, he turns to me and says, ‘A lot of these people look like they are dressed to go someplace.’ Some of them were — dressed to go to work in the morning.

In some communities, I’m told by the U.S. Interagency Council on Homeless, the number of working homeless is a lot higher. It’s up to 30 percent in some places.


WT: To what do you attribute your rise to the top?
Gardner: My mother. You don’t have enough tapes for me to go into it. I chose to embrace the “spiritual genetics” of my mom. We all understand genetics. You get your eyes from your dad, your mom’s nose, there’s nothing you can do about that. But your spiritual genetics you can choose, pick, embrace and commit to. That’s what I did.

Though my mom had too many of her own dreams denied, deferred and destroyed, she instilled in me that I could have dreams. And not just have dreams but had a responsibility to make them reality. My mom taught me from a very early age that I could do anything I wanted to do.

My first ambition in life was to be Miles Davis. I didn’t want to be a trumpet player, an artist or a jazz musician — I literally wanted to be Miles. My mom said to me, ’Baby, you can’t be Miles. There ain’t but one, and he got that job.’ But I made a commitment at an early age that I wanted to be world class at something. I studied trumpet for nine years. I wanted to be world class at it or world class at something. After I realized and accepted the facts [I redirected my efforts]. At 18, Miles Davis was in New York playing with Charlie Parker and John Coltrane. At the same age I was playing with some cats named Pookie and Ray Ray. It wasn’t going to happen. But I made a commitment to be world class at something.


WT: What important lessons have you’ve learned from your life experience?
Gardner: Man, I’m still learning. One is: The cavalry ain’t coming. You’ve got to do this yourself. How would you like to be one of them folks down in Louisiana or Mississippi waiting for that cavalry to come save you? Another very important lesson is that baby steps count, too. As long as you are going forward. You add them all up, and one day you look back and you’ll be surprised at where you might get to.


WT: What advice would you give people who are just starting out or who are trying to get ahead under difficult circumstances like those you experienced?
Gardner: Do something that you love. Whatever you’re going to do is going to be tough enough. Find something that gets you so excited that the sun can’t come up early enough in the morning because you want to go do your thing.
And you have to be bold because there will be folks who will say ‘you can’t’ or ‘you shouldn’t’ or ‘why’? There is a certain boldness to saying ‘Well, I really don’t want to be a high-powered corporate lawyer. I’m really passionate about painting.’

One thing I do say to folks — and I don’t put myself out here as somebody who has all the answers — but I do state the obvious when I say that no matter how much money is involved or no matter how easy it is for you to do, if you’re not happy, you are nothing more than a slave to your talent and money. So be happy.

WT: You own your own stock brokerage firm? What advice would you give anyone thinking about starting his or her own business?
Gardner: Hunker down, strap in and hold on. Hold on, baby! It goes back to the last answer about being happy. Hey, man, it’s hard out here. In my business, the brokerage business, you can walk on water in this business. You get to the other side, then the boys from Goldman Sachs and Bear Stearns are waiting for you. You have to be committed, and you have to find something that you are passionate about.

And forget about money. I’ve learned that money is the least significant aspect of wealth. Do something that makes you happy and makes you feel good about yourself. Do something that makes you feel your work is significant and meaningful. If you just want to make money, that’s a whole different trip. I can’t help you with that.

WT: How does it feel having a film being made about your life experience?
Gardner: I’ll tell you when I wake up. I now know the definition of surreal. On the first day of filming, I didn’t know where they were filming. They took me to 555 California St., the Bank of America world headquarters building. At times when I was homeless, I used to sleep in that building. Nobody knew. I never told that to the writers and never discussed it with the producers.
Another day filming. We’re going to film in Golden Gate Park. We’re filming in a place where I used to take my son to teach him how to fly a kite. We had nothing else to do, no other form of entertainment, no money. I told no one that.

[And] there’s a children’s park in San Francisco. They have a little concession stand. I talked about it in the book. I remember it well. I couldn’t buy my son a pop, it was 25 cents. If I bought the pop, we had to walk home.

WT: What do you hope that people take away from your book and the film?
Gardner: The film is going to focus on one year of my life. That year being the toughest, darkest, scariest year of my life. Living with a baby tied on my back, trying to work. It can be done. But you have to make it happen. And no matter what, you have to cling to it like it’s life itself, if that’s what you really want to do.

WT: Do you think that people who make it to the top have an obligation to mentor others?
Gardner: I do it [but], not out of a sense of obligation. I went to some very successful business people when I was trying to open the doors of my company, and none of them would give me the time of day. I made a promise to myself and to God. I said, ‘God, if you ever let me get to a certain level, I am not going to be like that.’

Just like anybody else, you’ve only got so many hours in a day, but as far as being available and accessible and have these relationships developing, I did something a number of years ago. I got involved with a program in Chicago that was designed to help young people get internships in the financial services business and learn the business at the exchanges, insurance companies, banks, money management firms, brokers.

The coolest thing in the world is walking up the street in Chicago, New York or San Francisco and having someone say ‘Hey, you might not remember me, but thank you for helping me get in the business.’ That was 12 or 14 years ago. These kids have graduated from college and gone to law school or gotten their MBAs and are running departments in some of the biggest financial institutions on Wall Street.

WT: So that was a way for you to give back something?
Gardner: You know how mountains get moved? Everyone who can move a couple [of mountains], move a couple. Those who can move rocks, move rocks. Those who can move boulders, move boulders. That’s how mountains get moved. If every one of us did everything we could, I believe we would be in a different world.

Costar

CoStar
Bethesda Metro Center, 10th Floor
Bethesda, Maryland 20814-5388
U.S.A.
Telephone: (301) 215-8300
Toll Free: (800) 204-5960
Fax: (301) 718-2444
Web site: http://www.costar.com

Public Company
Incorporated: 1998 as Realty Information Group, Inc.
Employees: 1,038
Sales: $112.1 million (2004)
Stock Exchanges: NASDAQ
Ticker Symbol: CSGP
NAIC: 518210 Data Processing, Hosting, and Related Services

Maintaining its headquarters in Bethesda, Maryland, CoStar Group, Inc. is a national provider of commercial real estate information services, relying on a massive proprietary database delivered through the Internet. Coverage includes 1.14 million properties in the top 50 markets in the United States, as well as London and portions of the United Kingdom. All told, some 30 billion square feet of real estate is covered, supplemented by 2.2 million high-resolution digital images of buildings, floor plans, and maps. Information is updated on a daily basis by a staff of more than 700 researchers, analysts, and photographers. Customers—which include brokers, owners, investors, and appraisers—are able to list properties and to manipulate the data in order to find properties that meet certain criteria or to conduct market analysis and other research. Through an acquisition in 2005, CoStar also offers a database of U.S. shopping centers. After fending off the challenges of numerous rivals, CoStar is the undisputed leader in its field. It is a public company, listed on the NASDAQ.
Launching the Company in the Late 1980s

CoStar was founded by its chief executive officer, Andrew C. Florance, who grew up in the real estate industry. His father was a top Washington, D.C. architect and other relatives were brokers. While earning an economics degree at Princeton University in the mid-1980s, he got his real estate license. He also made money writing software, experience that he would soon put to use while casting about for a business to start during his final months at Princeton. Florance considered launching a video delivery service, but abandoned the idea, afraid that any success he might achieve would only attract the notice of a larger competitor. He then decided to return home to Washington, after graduating from Princeton in 1987, to use the money he made writing software to buy and renovate abandoned buildings. "I was going to become a real estate tycoon," he told the Washington Post in a 1994 profile. He quickly grew frustrated with the quality of real estate information that was available, and realized that he could use his knowledge of computers to develop a commercial multiple-listing database service. At the time, real estate brokers compiled their own information, at great cost, essentially calling one another to share information. Florance's concept was to centralize the process, to call all of the brokers, then make the information available to subscribers, putting economies of scale to work so that brokers could eliminate their research staffs and obtain more accurate and comprehensive information at less expense. To start out, Florance, who set up shop in his parents' basement laundry room, inputted information that could be gleaned from sources such as Dunn & Bradstreet and government economic development publications. According to the Washington Post, "He proceeded to write software programs that could handle and sort the reams of data he collected…. 'I did it for a year, and I was broke,' he said."

Florance worked nights as a freelance computer consultant to support his daytime work of compressing the real estate assessment data from a mainframe computer into a personal computer. His first company was called Real Estate Infonet, geared toward publishing real estate public records. He printed ten copies of the 1,200 pages of information he had compiled, using a rented laser printer, and then sold them for $800 a piece. The algorithms he had devised to compress the information proved attractive to a number of companies and he was on the verge of selling his software to Planning Research Corp. when he found a backer in Washington lawyer Michael Klein, who assembled an investment group, allowing Florance to start a new company, Realty Information Group (RIG).
Late 1980s Real Estate Crash a Boon to CoStar

While Florance developed software to make use of the data, his researchers began to contact brokers for current information about what local properties were available. A number of brokers were suspicious of Florance's intentions, and some even tried to drive him out of the field. Attitudes changed during the real estate market crash of the late 1980s, however. Brokers were less guarded about their listings, since the information had always been an open secret. Under pressure to cut costs, it now made sense for brokers to eliminate their research staffs and essentially outsource the work at much less expense to RIG and its main competitor at the time, Cor/Net, which published Black's Office Leasing guide. RIG's competing print product was called Cornerstone, a quarterly leasing guide first published in 1989. For the next few years, RIG offered both the guide and its evolving electronic product, sold under the CoStar name. Revenues were meager at this stage, totaling just $30,000 in 1989, while expenses ran $1 million. But sales began to accelerate in 1990, reaching well more than $500,000.

Early on, after it became apparent that RIG had great potential, Florance recruited a seasoned executive to serve as president. Florance concentrated on developing the company's technology platform, but he eventually grew disillusioned with the president, despite the man's competence, because of his lack of vision for the company. Realizing that he was the only one possessing such a vision, he reassumed the post and led RIG through a period of tremendous growth during the 1990s. By 1992 RIG was entrenched in Washington, D.C., and now entered the nearby Baltimore market it had been eyeing for some time, again in stiff competition with Cor/Net. The company learned a valuable lesson in the process: The product had to be tailored to individual markets. Because Baltimore had more industrial properties the inclusion of ceiling heights was important. Moreover, terminology varied between markets. Washington's "core factor" (the location of elevators and other mechanical functions) was Baltimore's "public factor." It was a lesson that would soon be applied in other new markets.

After establishing itself in Baltimore, Florance realized the company had reached a turning point in 1992. If he was content just to do business in the Washington-Baltimore region, his success would breed his own destruction, as one day a larger company would come in and use its economies of scale to crush RIG—the very reason he abandoned the idea of a video delivery service. Thus he concluded that he had no choice but to keep expanding into new markets. It was also at this stage, in 1993, that Florance elected to cast his fate with the CoStar product and the electronic delivery of real estate information. He sold the Cornerstone print business to Black's and did not look back.

In an effort to ward off competition from better funded national companies, Florance eschewed secondary markets, electing instead to enter the largest markets, where cost of entry would become cost-prohibitive later on. Hence, his next strike was the largest real estate market of all, the New York City metropolitan area. In 1994 RIG gained a toehold in the market by acquiring Space Data Graphics. RIG did not enter New York unopposed, however. Two years earlier Realty Information Tracking Group began selling an electronic program, the RE/Locate system, which had won the lion's share of the market, and whose partners Michael Sapers and Bruce Weissberg were ready for a fight. Weissberg told the Washington Post at the time, "They'll [RIG] find out it's not quite the opportunity they thought it was." Weissberg was proved wrong, as RIG not only entrenched itself in New York City, it began spreading out across the country, initially entering a market by acquiring a local company and building on its base, but more often than not by starting an operation from scratch. RIG entered the Los Angeles market in 1995, California's Orange County and Chicago in 1996, followed by San Francisco, Philadelphia, and Wilmington, Delaware, by mid-1997. Boston, Atlanta, and Elmhurst, Illinois, were soon to follow.

With so many investors having a piece of RIG, there was talk in the industry that the company would be forced to make an offering of stock. In February Realty Information Group, Inc. was incorporated in Delaware. A month later the company filed for an initial public offering, revealing that its revenues from 1997 totaled $7.9 million, an 82 percent jump over the previous year, and that its accumulated deficit stood at $11.4 million. With the $23 million the July 1998 stock offering raised, plus a secondary offering of $100 million two years later, RIG was well positioned to continue its expansion. The acquisition of Atlanta-based Jamison Research in early 1999 moved the company into the Atlanta and Dallas markets, and later in the year RIG opened offices in south Florida. It was also in 1999 that RIG became more dedicated to the Internet, investing heavily in new online products and services and the development of a new browserbase interface to shift away from the delivery of information by CDs. Already about two-thirds of the company's corporate clients were receiving daily updates over the Internet. Although RIG predated the emergence of the Internet, it benefited from investor enthusiasm over online ventures in the late 1990s. Less than a year after going public, the company's stock grew nearly 400 percent, from its initial $9 price to $44.50 in mid-April 1999. RIG's main competition was now Internet-based, in particular Comps.com, a San Diego company that went public in May 1999, raising $100 million. Comps was devouring local research firms and appeared poised to go head-to-head with RIG, but in a matter of months it was swallowed by RIG in a cash and stock deal that closed in early 2000 and made CoStar the undisputed leader in its field. By this time RIG had taken on a new name, CoStar Group, Inc., which better aligned the company with its brand.
Company Perspectives:

Today, savvy commercial real estate professionals exchange, share and access information like never before. They recognize the advantages of using new information technologies. And tens of thousands of them rely on the nation's leading provider of electronic commercial real estate information: CoStar Group.
Completely Web-Based in 2000

In 2000 CoStar finished moving all of its information to the Internet, phased out CDs, and became completely web-based. Although the leader in its field, it was not without challengers. Investment banking giant Goldman Sachs launched a web-based service, Zethus Inc., that had the potential to cut out the broker, directly connecting buyers and renters of property, a move that CoStar had assiduously avoided, instead building its business around the broker. CoStar also faced a renewed challenge from an old foe, New York's RE/Locate, which in 2000 bought the in-house database of information in 47 markets from New York brokerage Cushman & Wakefield Inc. With backing from venture capitalist FrontLine Capital Group, Re/Locate transformed itself into RealtyIQ.com. Ceding the high end of the market to CoStar, RealtyIQ.com hoped to price its service to attract small and medium-sized firms. Other online rivals included start-ups LoopNet, PropertyFirst, Commercial Realty Online, and Commercial Real Estate Exchange. Within a short period of time many of these players were struggling and looking to sell out. In January 2001 RealtyIQ.com agreed to sell itself to Zethus, which in turn tried to sell itself to CoStar and others. It eventually filed for Chapter 7 bankruptcy protection and closed its doors, while RealtyIQ.com was sold for less than $4 million after burning through 70 million in seed money. PropertyFirst and LoopNet also merged, bringing together two money-losing ventures.

While the national competition fell by the wayside, CoStar, after more than a decade of establishing itself, neared profitability. Sales grew from $58.5 million in 2000 to more than $95.1 million in 2002. The company's net losses quickly declined, from $49.7 million in 2000 to $20.2 million in 2001 and $4.8 million in 2002. Finally in 2003 the balance sheet produced black numbers, as CoStar earned $100,000. During the year the company also completed another offering of stock, netting $53.5 million. At the end of 2003 the company possessed no long-term debt and had in hand $97.4 million in cash, cash equivalents, and short-term investments. During the course of the year CoStar rolled out its new web-based technology platform, replacing all earlier versions of the company's software, the retirement of which not only saved money but allowed the company to focus its resources on its suite of web-based services. The new platform was appreciated by customers, who used the high-end product, CoStar Property Professional, at a much greater rate than earlier services. The company's renewal rate approached 90 percent and one of the fastest-growing client segments was that of national customers, such as investment and commercial banks, life insurance companies, and institutional investment managers. A "light" version of the product called CoStar Property Express also was unveiled in 2003, targeting smaller real estate brokers and property owners who could either subscribe or use the service on an on-demand basis with a credit card. The year 2004 also marked CoStar's first foray overseas, when in January of that year it acquired London-based Property Intelligence PLC and its FOCUS brand. Because many of CoStar's largest U.S. clients also had operations in the United Kingdom, the company had a ready base of clients to draw upon.

CoStar followed an outstanding 2003 with an even better 2004. Sales increased to $112.1 million and net income soared to almost $25 million, due in large measure to a more mature sales force, which enjoyed the fruits of better retention of personnel. The company was even more flush with cash than in 2004, holding $117.1 million at year's end. The company continued to break into new markets, such as Nashville and Memphis with the acquisition of PeerMark. Also in 2004 it launched field research in the United Kingdom and began upgrading the FOCUS service in London and Manchester. The acquisition of Scottish Property Network in June 2004 allowed the operation to extend its coverage into Scotland as well.

CoStar was expanding on any number of fronts in 2005, entering new U.S. markets but also moving beyond commercial real estate. In early 2005 the company acquired National Research Bureau, the leading provider of shopping center information, opening the way for CoStar to become involved in the retail real estate sector. By the end of the year it planned to add 200,000 properties to its database. With other real estate sectors to tackle in the United States and the vast potential of applying its proven technology platform to the world stage, the future prospects for CoStar appeared bright.

Sports Psychology and Work

Win At Work Using Sports Psychology


So what if you don't play on Sunday? You might not be a pro athlete, but don't think that your weekly grind doesn't take a mental and physical toll. In order to do your best at work, you have to have the right mental approach. Many pro athletes use a sports psychologist, and you can apply some of the same techniques to your own work routine.

Visualization
Description: To practice visualization, athletes use pictures in favor of words to see what success looks like. According to Robert Troutwine, Ph.D., who is a consultant for a number of NFL teams, you should picture doing something over and over again, but make sure the image you have is of you doing it correctly.

Applying it to work: You can help yourself by picturing the flow of a presentation (before you give it) or imagining a meeting with a client. Don't focus so much on the words you'll use; instead, try to think about the big picture. If you find yourself slipping up at a key step, it's probably something you need to work on. If the visualization goes smoothly, do it again and again, so that when it counts, it'll feel like second nature.

Monitoring your self-talk
Description: Athletes talk to themselves as a way to focus and keep their confidence under pressure. Utah Jazz fans have seen Karl Malone talk to himself at the free throw line. What's he saying? He's reminding himself why he's there and why he needs to succeed -- for his wife and his family.

Applying it to work: You can do this too. You don't have to literally talk to yourself -- just listen to the voice in your head. If it sounds negative, back away and focus before you continue. That voice inside you is the best tool you have to tap into your psyche, so you need to listen to it.

Relaxation
Description: Getting proper rest is the key. But it also means taking timeouts during your day to rise above the stress. Athletes use everything from video games and music to quiet time alone. Of course, if you happen to play for Phil Jackson, you'll find yourself attending pregame meditation sessions.

Applying it to work: You might not always have time at work to relax, but at some point during your day, you need to make some time for yourself. Try yoga at the gym or pick up a hobby. If that's too much, take a walk at lunch. Anything you can do to take the pressure off will help you when it counts.

Though you won't be given a Heisman trophy at work, you should still set career goals to gauge your performance

Concentration
Description: Concentration is mostly a matter of controlling your mind and telling it to block out distractions. For athletes, this often means practice above all else. But what to practice? In Al Leiter's case, game situations could take up too much of his attention. Instead, the pitcher tried to concentrate on each pitch, and nothing more.

Applying it to work: Okay, so you don't practice work, but there are ways to get better. If you receive a new software program, play with it until you master it and you'll be a whiz at crunch time. Take a page from the pros and practice the essence of what you do at work. If you're a lawyer and your job is all about relating to a jury, you need to practice and concentrate on your public-speaking skills.

Mental routine
Description: Routines help you get into a zone. Anything that can help you focus will work. Athletes often try deep breathing, rumination or meditation. Anyone who's ever watched Nomar Garciaparra bat knows the importance of a routine. Graciaparra adjusts his batting gloves before every pitch. Yes, it's a little strange, but it also triggers his mind and tells him, "time to hit."

Applying it to work: For you, it could be as simple as that cup of coffee in the morning -- or maybe there's something else that just gets you going. Work that mental routine into your day. If you think better with a pencil behind your ear, make sure there are pencils on hand.

Letting go of mistakes
Description: You can learn from your mistakes, but once you get the lesson, let it go, or you'll dwell on it. According to Ken Ravizza, who has been a consultant for the Angels, pitchers need to learn this lesson the most. After a pitcher makes a bad pitch, he's very likely to do it again if he can't put the mistake behind him.

Applying it to work: Maybe you blew a big assignment. It happens. Own it and forget about it. It's sounds simple, but it can be tough to forgive yourself. Remember that what is in the past is beyond your control. In other words, you can't do anything about it, so stop worrying.

Setting goals
Description: Goals come in three varieties: performance, outcome and doing your best. In other words, you can set personal goals, goals for winning or goals that simply ask you to give 100%. Coach Pat Flannery of the Bucknell men's basketball team set a goal for his players: Have fun in the game. That goal came from the advice of a sports psychologist, and it helped them get to the NCAA tournament.

Applying it to work: Goals help you stay motivated. You should have a goal for everything, from a project due next week to a promotion a year down the road. There's only one catch when it comes to setting a goal: It needs to be attainable.

Put Your Game Face On

There's probably more of a connection between sports and work than you think. Many pro athletes make big money after they retire by lecturing corporate types on things like teamwork, discipline and leadership. Yes, sports are still a blast to watch, but we can learn a lot from competition at a high level.

Who Are the Real Entrepreneurs?

Who Are the Real Entrepreneurs?

A noted entrepreneur explains why many people who share that lable are not really entrepreneurs.

From: Inc. Magazine, Dec 1996 | By: Norm Brodsky

Street Smarts

Pioneers, innovators, and 'one-ers' all build businesses, but a real entrepreneur is something else

Everybody wants to be an entrepreneur these days, and--judging by the way the word is thrown around--you might think that everybody is one. For all kinds of people, from the guys who play three-card monte in Times Square to the heads of giant corporations, "entrepreneur" is the job designation of choice. It's applied to politicians and college presidents, cabdrivers and bookies. People like Donald Trump, a real estate developer, and USA Today's Al Neuharth, a big-company executive, are held up as models of entrepreneurship. Meanwhile, newspapers routinely refer to inner-city drug dealers as entrepreneurs, presumably because they're trying to sell something at a profit.

This is nuts. Entrepreneur is not a meaningless word, and we shouldn't let it become one. It's the only word we have to describe a person who performs a particular function that's critical to our economic well-being. I'm talking about the conversion of ideas into viable businesses by means of ingenuity, hard work, resilience, imagination, luck, and all the other ingredients that go into a successful start-up. That process is not the only way to create wealth in a capitalist economy, and the people who do it aren't members of some sort of business elite. But they do something that's important and different from what other businesspeople do, and they deserve to have a name.

So what is the definition of an entrepreneur? I have a very simple one. In my book, entrepreneurs are people who, starting with nothing more than an idea for a new venture, have the ability to take it to the point at which the business can sustain itself on its own internally generated cash flow.

Notice I said "ability." I'm not talking about people who happen to be in the right place at the right time. Luck is a factor in every start-up, but I don't count people who start one company and then can't do it again to save their souls. I call them "one-ers." They're entrepreneurs by accident. The example I usually give is Eugene Ferkauf, who founded the E. J. Korvette retail chain in the 1950s and failed at numerous attempts to repeat his success.

I also rule out people who build on existing businesses. My friend Jack Stack, for example, is a great businessman and one of the best managers I know, but I don't consider him an entrepreneur. The business that became Springfield Remanufacturing Corp. was already in operation when he and his cofounders bought it. They started out with a factory, equipment, cash flow, inventory, employees, customers, you name it. Granted, Jack had to be very creative to survive, but what he did was different from what entrepreneurs do.

The same goes for Ray Kroc, who built McDonald's from a successful hamburger stand into one of the greatest companies in the world. He was without doubt a pioneer and a business giant, but the people who got the company up and running were the McDonald brothers, who turned out to be one-ers.

By the same token, I would exclude people who inherit a business, no matter what they do with it afterward. Ned Johnson of Fidelity Investments, for example, has revolutionized the financial-services industry, but his father, who started the business, was the entrepreneur. Ditto for Donald Trump.

As for Al Neuharth, he did a great thing when he launched USA Today for the Gannett Co. I'm sure he is a fine businessman and an innovator. I don't think you qualify as an entrepreneur, however, if you go into business with all the resources of a giant corporation at your disposal.

Nor do you qualify if you do nothing more than acquire existing businesses, like most of the people doing so-called industry roll-ups. They go around the country, buying up local businesses--say, ambulance services or delivery companies--which they then bundle together to create a new national entity. To be sure, they call themselves entrepreneurs. A couple of them have even been designated "Entrepreneurs of the Year," which is a joke. By and large, they're just smart accountants. The exceptions are people like Patrick Kelly of Physician Sales & Service, the national supplier of doctors' offices, and Ken Hendricks of ABC Supply, the largest wholesale distributor of roofing supplies, both of whom built their own businesses before starting to acquire others.

The point is that entrepreneurs, real entrepreneurs, are people who create companies from scratch. They start with nothing except what they themselves bring to the party--a concept, a few contacts, maybe some capital, plus all of those intangible qualities that are important to success in any new venture. And that's about it. There are no salespeople, no offices, no telephones or computers, no accounting system, no operations, no customers or suppliers. The entrepreneurs' job is to put everything together, wearing 10 different hats, juggling 20 different balls, relying on their own knowledge and instincts and creativity to get them to positive cash flow.

And the best entrepreneurs are masters of the process, which is not to say that they're necessarily the greatest businesspeople in the world. Very few of them are industry pioneers. Many of them have a hard time managing the companies they create. They may even fail in a new business venture now and then. But they know how to bounce back from failure, and they keep on trying until they succeed. What they're good at is starting businesses. They can do it again and again.

So who are the real entrepreneurs? Ross Perot is certainly one of them. So is Steven Jobs. I myself would also include Microsoft founder Bill Gates and Federal Express founder Fred Smith, although I'd have to admit that, technically, the jury is still out on them. They could be one-ers.

But most real entrepreneurs are people you've never heard of. There are thousands and thousands of them--men and women of every race and nationality, in every industry and every corner of the globe. They're starting businesses every day, and the world is a better place because of it.

For their sake, I'd like to propose a New Year's resolution. Let's agree that, in 1997 at least, we'll reserve the title of entrepreneur for a particular group of people--the ones who've earned it.

Norm Brodsky is a veteran entrepreneur whose six businesses include a former Inc. 100 company, a three-time Inc. 500 company, and a start-up that he hopes will become eligible for the list in 1996. His column, Street Smarts, will appear every other month. Readers are encouraged to send him questions care of Inc.

Quotations

"There are no menial jobs, only menial attitudes."
William H. Bennett

"Entrepreneurs are visual artists. The economy is their canvas."
-Adeola

"Sculpting an idea into a profitable company requires creative vision, couragous action, improvisational planning, indomitable will and objective reason."
-Adeola

Liberals and Class

Liberals and Class: Part III
by Thomas Sowell

Sometimes it seems as if liberals have a genius for producing an unending stream of ideas that are counterproductive for the poor, whom they claim to be helping. Few of these notions are more counterproductive than the idea of "menial work" or "dead-end jobs."

Think about it: Why do employers pay people to do "menial" work? Because the work has to be done. What useful purpose is served by stigmatizing work that someone is going to have to do anyway?

Is emptying bed pans in a hospital menial work? What would happen if bed pans didn't get emptied? Let people stop emptying bed pans for a month and there would be bigger problems than if sociologists stopped working for a year.

Having someone who can come into a home to clean and cook and do minor chores around the house can be a godsend to someone who is an invalid or who is suffering the infirmities of age — and who does not want to be put into an institution. Someone who can be trusted to take care of small children is likewise a treasure.

Many people who do these kinds of jobs do not have the education, skills or experience to do more complex kinds of work. Yet they can make a real contribution to society while earning money that keeps them off welfare.

Many low-level jobs are called "dead-end jobs" by liberal intellectuals because these jobs have no promotions ladder. But it is superficial beyond words to say that this means that people in such jobs have no prospect of rising economically.

Many people at all levels of society, including the richest, have at some point or other worked at jobs that had no promotions ladder, so-called "dead-end jobs." The founder of the NBC network began work as a teenager hawking newspapers on the streets. Billionaire Ross Perot began with a paper route.

You don't get promoted from such jobs. You use the experience, initiative, and discipline that you develop in such work to move on to something else that may be wholly different. People who start out flipping hamburgers at McDonald's seldom stay there for a full year, much less for life.

Dead-end jobs are the kinds of jobs I have had all my life. But, even though I started out delivering groceries in Harlem, I don't deliver groceries there any more. I moved on to other jobs — most of which have not had any promotions ladders.

My only official promotion in more than half a century of working was from associate professor to full professor at UCLA. But that was really just a pay increase, rather than a real promotion, because associate professors and full professors do the same work.

Notions of menial jobs and dead-end jobs may be just shallow misconceptions among the intelligentsia but they are a deadly counterproductive message to the poor. Refusing to get on the bottom rung of the ladder usually means losing your chance to move up the ladder.

Welfare can give you money but it cannot give you job experience that will move you ahead economically. Selling drugs on the streets can get you more money than welfare but it cannot give you experience that you can put on a job application. And if you decide to sell drugs all your life, that life can be very short.


Back around the time of the First World War, a young black man named Paul Williams studied architecture and then accepted a job as an office boy at an architectural firm. He agreed to work for no pay, though after he showed up the company decided to pay him something, after all.

What they paid him would probably be dismissed today as "chump change." But what Paul Williams wanted from that company was knowledge and experience, more so than money.

He went on to create his own architectural company, designing everything from churches and banks to mansions for movie stars — and contributing to the design of the theme building at Los Angeles International Airport.

The real chumps are those who refuse to start at the bottom for "chump change." Liberals who encourage such attitudes may think of themselves as friends of the poor but they do more harm than enemies.

Menial Jobs

Menial jobs can teach important life lessons
Washington Business Journal - November 21, 1997
by Jeffrey Gitomer

Where did you develop your character? Where did you get your life skills? How have you become successful at what you do? Where did you get your experience?

Julio Melara, author of "Do You Have Time For Success?" and president of the Baton Rouge Report, is a master salesman.

I asked Julio about his secret of sales success. His answer will help you.

Julio said, "I decided to make a list of all the jobs I ever had as a youth. It shocked me to see the number of them I held before I reached age 21. As I made at the list, I realized that most of them were menial jobs, but I also realized that each one provided some positive influence toward my success.

"I decided to write the lesson of life I got from each job," he said. "The results stunned me, and I wanted to share them with everyone so that they could make their own list. Here is a list of jobs you won't find on my resume, but lessons that have lasted a lifetime and crafted a salesman."

• Started cutting grass for profit at age 11.

Life lesson learned: It's important to give things a clean, professional look.

• Sold newspaper subscriptions door-to-door.

Life lesson learned: The joy of rejection. You may have to knock on at least 30 doors before you sell one item.

• Stock clerk at a food store.

Life lesson learned: If you want to sell something, have the merchandise in stock.

Also indicated what effect running out of something as trivial as Cornflakes had on a customer. You'd think the world had come to an end.

• Janitor in an office building.

Life lesson learned: The importance of cleanliness as it relates to image.

• Porter at a used-car lot.

Life lesson learned: Serving is the gateway to selling. Make the car sparkle, and people are more attracted to it.

• Dishwasher at a restaurant.

Life lesson learned: There are lots of jobs that no one wants to do. Bigger lesson: Most people leave a lot of food on their plates (they don't finish what they start).

• Fry and prep cook at a steak house.

Life lesson learned: The importance of preparation and the impact of the right presentation.

• Merchandiser of wine in food and liquor stores.

Life lesson learned: How to arrange and position things so people will have a greater desire to buy.

• Shipping clerk at a plumbing supply house.

Life lesson learned: Delivering your product on time is just as important as selling it.

• Breakfast cook at a hotel.

Life lesson learned: How to do 15 things at once. (And people like weird things on their eggs.)

• Cleaned cars at detailing shop.

Life lesson learned: The importance of details. There's a big difference between washing a car and detailing a car.

You can pay $15 to wash the outside of the car, or $150 to clean the car inside and out and cover all the details. Details are a pain, but details are valuable.

• Retail shoe salesman.

Life lesson learned: If you find what the customer likes, they'll buy more. Sell customers what they want and like. Complement people and be sincere.

• Busboy at a diner.

Life lesson learned: People enjoy being served with a smile.

People hate a dirty table. People love a clean table.

• Courier for business newspaper.

Life lesson learned: Even though it was the lowest job in the company, the organization could not function without deliveries.

The messenger is just as important as the message.

"In every one of these jobs I can remember experiencing some type of failure and some type of frustration, but it never stopped me from trying to do my best," Julio said.

"Most of these jobs I quit to get a better job -- one I got fired from because I wasn't doing a good job. Once fired is enough.

"The biggest lesson I learned came from setbacks. They gave me determination.

Stupid jobs made me smart," reflected Julio.

"The biggest secret to get to the top is: You have a better chance if you start at the bottom.

And when you start at the bottom, in order to get to the top it only takes everything you've got."

What dumb jobs made you smart? And what sacrifice did it take to get your experience?

Beware: Experience has no value unless you apply it in new ways. And are you willing to give it everything you've got?

So You Want to Be an Entrepreneur?

Interview with Allen Andersson, a serial entrepreneur
Ali Ashurov (OG), Co-Editor, News & Campus Affairs
Posted: 10/27/03

Mr. Andersson's first entrepreneurial experience came when he was 16 years old. With savings from the stock market, he acquired an ice cream shop in his neighborhood, hired his siblings and his father (without pay), and made it a successful business which put him and his siblings through college. His most recent success was LightSpeed International, a telecom software company which he sold to Cisco Systems for $160 million in 1998. Prior to that, Mr. Andersson developed the first what-you-see-is-what-you-get word processing software when he founded Interleaf in 1981. In between, he started and ran numerous other businesses. With a masterful brand of self-depreciating humor, Mr. Andersson readily admits that most of those businesses failed.

Today, Mr. Andersson is busy investing his fortune in new promising ventures. He likes what he calls "underappreciated sciences." He is also president of the Frances and Henry Riecken Foundation, which he created to build libraries and communication centers in the farm villages of Central America. I invite you to join me for my conversation with Mr. Andersson as he shares with us what it is like to be an entrepreneur.

Harbus: Please briefly tell me about yourself.

Andersson: I grew up on Cape Cod. Half a century ago it was like growing up in a different country - Cape Cod was an island economically, culturally, and even politically. I grew up in carpenter's family, the poorest family in the richest village. I was really good at math which I learned in the early age. I grew up with an idea that I would have to work really hard and get things done to earn some money. Even today when my friends invite me to play golf, I say "I won't play golf but I can carry your bags. I am a really good caddy." I enjoy doing my job well more than simply putting a small ball in a tiny hole. I went to Phillips Academy on full scholarship, but then I was expelled when they went out looking for someone who cut the bell ropes.

Harbus: That someone was you, I presume.

Andersson: Yes, yes. I ended up going to MIT instead of Harvard, because MIT didn't require people to have high school diplomas. So, I studied math, because I've always liked theoretical things. I've never been interested in facts and still don't have good factual memory. I would rather think than remember. That means I have a short attention span and have trouble following discussions in class and board meetings. So, I went to MIT. Then I was an active draft dodger and joined the Peace Corps.

Harbus: Where did you go?

Andresson: I went to Honduras and taught math at a university there. Then I became a computer programmer, almost by accident. I really liked it and I was really good at it. I became a computer software development manager, but I did something that no other computer programmer does - I followed a carpenter's work ethic. That meant finishing your work on time, completing it on budget and remembering that you're working for a customer. Surprisingly, nobody does that. Creative people don't like to earn their pay. They like to be subsidized.

Harbus: Is it because they are doing things for the sake of their passion?

Andresson: Well, I have a passion for computer programming, too, but I also feel responsible for results. None of the major software projects were ever completed on time, but all of mine were. That's the only thing I'll brag about. What I realized over time though is that this specialty of mine wasn't really appreciated at places I worked. I was never a conventional person. I never followed cars and baseball and, as a result, had nothing to talk about with my co-workers. I was unhappy everywhere I worked. I would get fired more often than not. And so at the age of 36 in 1980, I quite my last job, threw a champaign party for my colleagues and decided to become an entrepreneur. I decided to become an entrepreneur for the reason so many of us do - we couldn't think of anything else to do. We had no other prospects. Nobody wanted to hire us and we didn't want to work for them anyway. We had to go through pain and serial failure of being entrepreneurs because it's the only thing in life that we can even stand. That's my story and a story of many of my friends. None of them went into it boldly saying "this is what I always wanted to do."

Harbus: Interesting, because I think that's different from what you might find here in the business school. People usually have a plan. Many of us spend quite a bit of time on the fence, pondering our next move. Most end up taking regular jobs.

Andersson: A lot of entrepreneurs are people who got bad grades at school and have trouble getting along with others. You've seen enough of me to say that I am a nice guy, but at the same time I am not somebody who goes out of my way to be affable, or conventional, or follow rules, or look like the rest of the crowd. A lot of people like me never had a promotion in their lives.

Harbus: Was that a deciding factor in your success? Sounds like you didn't have any other options, but to become an entrepreneur.

Andersson: It was because I didn't have other options, but it was also because there was something entrepreneurial about me. Many terrible things happen to you if you pursue entrepreneurship. But many good things happen to you, too. It's like climbing a mountain. You know that you have a high probability of frostbite and being crippled, that you'll be in pain on the way up and down, and that you have a considerable possibility of losing your life. But people volunteer for that, because it's such a rush!

Several years ago I decided to retire with a small fortune that I made to write my novels. But then opportunities came along and I just had to do it again! Everything is a combination. Most of the things we choose in life we do because we partly have to and partly want to - and neither of those would be quite sufficient. A lot of happiness depends on deciding to enjoy the things that you have no choice about anyway. It's like being placed in an arranged marriage where you made a spouse to a stranger. Well, you can make that work if you want to. I got myself pushed out of the corporate world in which I didn't fit, but I decided to have a good attitude about it. Many of these things are inborn. A friend of mine told me that entrepreneurs are typified by their ability to get from one failure to another to another with undiminished enthusiasm. You either have that or you don't. It's not something that you choose to have.

Harbus: So can entrepreneurs be made?

Andersson: Like almost all of our identities, entrepreneurs are partly born and partly made. Say, you had a conventional career all your life and suddenly you decide to become an entrepreneur. What you'll probably end up having is a more sober business, where you will apply lessons that you learned in more sober ways. Your business plan will be more complete, your upfront financing will be more solid, and your percentage ownership in the company will be smaller.

Harbus: Smaller?

Andersson: Yes, smaller. If you line up everything that you ought to do instead of jumping into it half baked, if you have everything planned in advance instead of taking a flyer, if you involve other people and pay them salaries instead of maxing out your credit cards, then obviously other people are going to own a lot more of your equity. Other people will also have more control of your situation. That means that if you are not entrepreneurial by nature and you're going into this, you will eventually recreate for yourself a more conventional type of business. The outcomes of such a business will also be more conventional - you will have a lower risk and lower reward. And that's fine, I applaud that, it's just not for me.

Harbus: What you're saying is that there are shades of gray of
entrepreneurship.

Andersson: Yes, there are shades of gray of everything.

Harbus: What is your definition of entrepreneurship then?

Andersson: Entrepreneurship, as I know it, is when people, or entrepreneurs, invent their way of living, they invent their way of working, and they invent their own types of companies and projects. It's not a pattern. Each situation is a reflection of a unique personality. Nothing that I will tell you is necessarily going to apply to any another person.

Not to any other inborn entrepreneur, not to someone who is not an entrepreneur, or not to someone who wants to become one. I almost have a bad conscience about teaching to people. What I want to tell is my story. It's just what one guy did.

Harbus: My observation here in the business school is that many aspiring entrepreneurs end up not pursuing their passions because they have so much already invested in their lives. They are afraid to risk and lose what they have. What would you tell those people?

Andersson: Again, you imply that there are objective sorts of analysis of motivations and risks. But these things are not objective at all. These are all essentially matters of personality. When you talk about risk - well, what is risk? If you talk about losing all your money, and getting a bad credit rating, and getting a bad reputation, and having to start over from scratch - is that a risk? I don't think of it that way. Most people would, but I've actually gone that cycle many times over. I think of it as a learning experience. We live in a country where no person of sound mind is going to starve on the streets. I can fail at business any number of times, but I can still make a living and feed my children and get emergency medical care. I don't think of it as a major risk. Here's what I think of as a risk that maybe you don't. I worked for a year as an actuary to pay some bills. My idea of a risk is that I become comfortable with that, that I earn some salary, that I rotate and climb a corporate ladder, that I wind up with an office on the 40th floor, that a lot of people work for me, that I make a six figure salary and have several million dollars in stock options. To me- that's a risk! It sounds like the most miserable life I could lead. These are not questions you analyze, this is about what you are. I will not say to anyone "be an entrepreneur, be like me." I think that's wrong. Try to be honest with yourself and you will be happier.

Harbus: Thank you, Mr. Andersson.

Andersson: My pleasure.

How to Bootstrap

Think Cheap

We asked some successful bootstrappers how they were able to build their companies on a shoestring budget, with no outside start-up money. Here are some of their tips:

• Train employees to be experts - don't buy outside expertise unless you have no other option.

• Entice potential employees with performance-based compensation plans and bonuses rather than high salaries.

• When at all possible, don't outsource what you can do yourself, even if it means jumping on your bike rather than calling a courier service.

• Tap into the mom-dad market. Stay-at-home parents are a great part-time labor pool.

• Give the company checkbook to the tightwad.

• Don't buy for the future. Buy only what you need right now.

• Tell your customers that your policy is to collect at least partial payment up front and that you will give them below-market prices because of this policy.

• Sell yourself to your vendors as you would to your customers - convince them they will be thankful they did business with you (and allowed you to pay in 60 days, rather than 30) because you'll remember them when you make it big. Pay early when you can.

Start-Up Sizzled Without Venture Capital

By Sarah Schafer
Washington Post Staff Writer
Sunday, June 27, 1999; Page H7

During his first two years in business, Mark Nelson, founder of Ovid Technologies, had a simple morning routine: Wake up at 7 a.m. Wake up sister sleeping in next (and only other) room in the apartment. Push mattresses up against the wall. Begin manning phones.

Nelson, whose company electronically catalogues vast amounts of medical data, would have preferred a more glamorous first office. Problem was, he said, "there wasn't really any start-up money."

So he forewent a fancy office for his apartment in Manhattan's Spanish Harlem, where drive-by shootings were a weekly occurrence. As his business grew, Nelson simply rented more apartments in his building, until computer network wires snaked in and out of windows and through the halls. To make up for low salaries, Nelson allowed employees to live in their offices rent-free.

Nelson, who sold his business in October for $200 million, is what the entrepreneurial world considers a bootstrapper -- someone who builds a company almost from nothing, taking no outside start-up money. These gritty entrepreneurs shun venture capital, which might force them to give up too much control of their companies, takes too long to secure or simply can't be had due to their inexperience.

The concept is quite simple -- "maximizing cash in, and minimizing cash out," said Brad Dawson, founder of Dawson Associates, a consulting firm in Reston that teaches entrepreneurs how to fund their company's growth internally.

Successful bootstrappers, he noted, carefully weigh return on investment before making even the smallest purchases. And, most important, they do not fall into the trap of "cozy comforts," he said, a common mistake made especially by those who have fled large corporations but seem to want to replicate their former environment by purchasing thinks like artwork and plush furniture.

Nelson endured summers with no air conditioning, even though leaving the windows open meant he and his sister would often have to hole up in the bathroom with the phone so customers on the other end of the line would not hear the constant whine of police sirens. (He did spend money on tipping the building superintendent -- especially after his computer network sapped the building's power -- to keep him from complaining to local authorities.)

Instead of borrowing to buy the computers on which he loaded his custom software (in 1987, few of the libraries he served had their own), he collected partial payment from his customers up front. He took that cash to buy computer parts and worked into the wee hours to build the PCs. That saved nearly $2,500 per computer, he figures.

By 1994, Ovid had 150 employees and, for the first time, Nelson sought outside investment. He took the firm public that year, raising about $10 million. By then he had moved out of Spanish Harlem, where, he bragged, "people said we were the fastest-growing business in the neighborhood besides the crack dealers."

Shortly before the initial public offering, Ovid moved into a converted fur vault, formerly owned by a company called Fred the Furrier. "Very cheap," Nelson is quick to point out. Ovid still rents space in the neighborhood, alongside several other software companies.

© 1999 The Washington Post Company

Failure Is Not an Option

Failure is not an option
31/08/2005. Source: IVCJ. Dr. Arielle Lehrmann

What makes the entrepreneurs backed by venture capital firms believe that they will be the one to beat the statistics? What traits, value system or faith is necessary in order to think a portfolio company will make it despite the sometimes-gloomy numbers? Dr. Arielle Lehrmann looks at the delicate dynamics between entrepreneurs and their private equity backers.
Organisational psychologist and former high-tech entrepreneur Dr. Arielle Lehrmann delves into the mindset of the entrepreneur and finds a highly motivated person committed to succeed and much more.

Statistics on successful start-ups imply that a high-tech entrepreneur works hard and dedicates years of his or her life "against the odds." What makes an entrepreneur believe that he or she will be the one to beat the statistics? What traits, value system or faith is necessary in order to think one's business "will make it" despite the gloomy numbers?

As an organizational psychologist as well as a former high-tech entrepreneur, I've long been interested in the "entrepreneurial spirit." Is it a spirit that sees a learning opportunity where most people see a dead-end, or is it the spirit of megalomania, of a certain detachment from reality?

The psychological study of entrepreneurship is not a start-up. It began long before many of today's active entrepreneurs were born. As early as the 1950s, researchers tried to map the personality factors that determine who is - and who is not - likely to become an "entrepreneur".

In the 1960s, it was found that entrepreneurs had a higher need for achievement than non-entrepreneurs and were, contrary to popular opinion, only moderate risk takers. A great deal of research on the personality characteristics and socio-cultural background of successful entrepreneurs was conducted in the 1980s and 1990s.

In an analysis of more than 50 studies, there was a consensus around six general characteristics of entrepreneurs: (1) determination; (2) leadership; (3) opportunity pursuit; (4) tolerance of uncertainty; (5) creativity; and (6) motivation to excel.

It is agreed then that entrepreneurs are "determined". But what is the state of mind, which underlies their determination? In other words, what kind of thoughts and beliefs enable an entrepreneur to carry on when others burn out? Do entrepreneurs have a special relationship with what we call "reality"?

This is quite a tricky point as studies indicate that the vast majority of people have a special relationship with "reality". In fact, intriguing psychological data suggest that the people who are the most precise and realistic in their judgment are those who have been diagnosed as clinically depressed. In particular, studies found that depressed people are realistic as to whether they can control uncontrollable events, while non-depressed people exhibit an illusion of control over the same events.

This phenomenon, known as "depressive realism", means that being realistic about your capabilities is actually not a very healthy thing. Apparently, in order to function well, we need to believe we are capable and in control even when we are not. So it seems that a certain detachment from reality is necessary for normal functioning. May a further detachment from reality be required in order to become an entrepreneur?

"An entrepreneur must have an absolute trust in himself and in his ability to change the world around him. He is very high in what we call in psychology self-efficacy", says Amir Rubin, partner and chief psychologist at Tema, a recruitment and placement firm. "Optimism is a must for entrepreneurship, but optimism is just the external manifestation of an exceptionally high self-confidence. Such a confidence is very appealing, but it comes at a cost. The costs may be megalomania and losing touch with reality", Rubin warns.

"Entrepreneurs have the energy of creating a breakthrough. The challenge is to think beyond the breakthrough - on the day after the 'big bang' - how to channel the energy into a useful and profitable business?"

For VCs who interview entrepreneurs, Rubin has a word of advice - "make sure the entrepreneur is listening, open for discussion, interacting with his environment. See if the charisma is balanced with some humility and readiness to learn. Check whether the entrepreneur is exchanging views with you or only seeks to impose his own point of view. If he is open to learning, he's not only an entrepreneur but also a manager - which is, of course, what VCs are looking for."

A learning curve, the accumulative result of years of experience, is incompatible with the culture of most Israeli start-ups, says Yifat Reuveni, a researcher at McGill University, whose doctorate examines the organizational culture of high-tech industry in Canada and Israel.

Reuveni recalls a huge sign welcoming the visitors in one of the start-up companies she studied: "Failure is Not an Option". "Most high-tech entrepreneurs are probably more optimistic than the average man", says Reuveni, "but it is easy to be optimistic when you come from a favorable socio-economic background and do not risk your own money."

Reuveni notes that frequent job changes in the high-tech industry make it easier to deal with failures. "These days when a start-up company shuts down, the entrepreneur will seldom have the patience to explore what went wrong. Instead he is more likely to say 'next please'."

Reuveni clarifies that optimism and determination are not synonymous: "Israeli entrepreneurs may be optimistic and keep high spirits, but they seldom need to show determination and persistence in the long term. In North America, entrepreneurs aim at building solid, lasting businesses. In Israel, the dream is the exit - the sooner the better".

Rony Ross, executive chairman and founder of Panorama, should know something about determination and persistence. When she started her high-tech career more than 25 years ago, there were hardly any role models around, let alone female role models. For Ross, the creation of some-thing out of nothing defines the entrepreneurial experience.

"When you're making the first steps, " she says, "you're alone. You come to investors on your own. You give all those presentations on your own. Ninety-nine percent of the people around you don't know what you're talking about and can't understand why the hell it's important. You have to generate an extraordinary amount of energy to make it happen. Risking other people's money is far from easy. They risk money, but you risk something much more fragile, because your honor and ego are at stake".

When Rony Ross started her entrepreneurial journey she was aware of the difficulty. What came as a surprise to her was the elation brought by success: "An entrepreneur's life is extreme - very long hours, crazy travels, extraordinary efforts. But when you actually make it, the satisfaction is huge. I didn't know a professional achievement could be so uplifting, so fulfilling… I didn't realize how it was going to affect me. Like extreme sport, it's addictive, which is why entrepreneurs tend to become serial entrepreneurs."

But what if you don't make it after all? What crosses your mind when things go wrong? "It's the other way around. I fear the easy way. Because when it gets hard, this is exactly when you find your strength. It's almost like an instinct. The need to fight sharpens your view. You see things more clearly. You become focused. I discovered I'm at my best at tough times. A business partner used to say, 'I see we're in trouble' whenever he saw a really big smile on my face!"

"Entrepreneurs focus on the next steps instead of falling down", agrees Gil Hecht, founder and CEO of Novus Interactive, a provider of business continuity testing and monitoring solutions.

"The real world is bound to put obstacles in your way, but you believe in your idea, in your business, in your team, and you just keep on. Entrepreneurs know the statistics about start-up successes, but they put them aside the same way we put aside statistics on car accidents when we're on the road." Hecht emphasises that in our volatile business world, no one is immune.

"Companies shut down all the time - not only start-ups, big corporates too - but this fact does not stop people from building, creating and making business, does it?"

Hecht indicates that there is a well-known duality between vision and realism in companies, typically represented by the CEO and the CFO. "The CEO wants to fly, while the CFO has to remain grounded. The CEO is a doer who wants to do this and that, while the CFO will explain why this and that are not currently possible." Hecht points out that the management role shapes the perception and behavior of the entrepreneur.

"You can be sober and disillusioned in the middle of the night when you're on your own or perhaps with your spouse," he says, "but during the day, when you're surrounded by business colleagues as well as competitors, you have to express hopefulness, you have to sell. With time, these selling skills become part of you - you need to be optimistic, so you become an optimist."

Shay Ben-Asulin, co-founder and chairman of m-Wise, a wireless middleware technology provider that recently completed the listing of its shares in the US, says real entrepreneurs realize the way to success is hard and long. "At m-Wise we say half jokingly, 'if it was easy, everyone would be doing it'", he says. Ben-Asulin thinks the vast majority of start-up failures in recent years are due to "people who were not really entrepreneurial, but got somehow tempted to start their own high-tech business, fantasizing it would rapidly make them rich."

Ben-Asulin comments that "being an entrepreneur sounds appealing and sexy, especially as people believe they are going to risk other people's money rather than their own. In reality, entrepreneurial life is much more challenging than the common perception. You have neither job security nor fixed income. You may live without a salary for a significant period of time. On rainy days you may need to use your own pocket and sustain your business. People should take this into account when they consider becoming entrepreneurs."

Ben-Asulin believes the compensation is more in ego than in financial terms. "Entrepreneurs," he maintains, "do what they do because they're in love with the idea. Usually they're in love with their own idea, but at times they fall in love with an idea that originated from someone else, but they were the ones to recognize its business potential. The gloomy statistics seem irrelevant for them. They think that their idea is so wonderful that it must work out."

Failure is therefore not an option. And optimism is a must. On an optimism scale of one to ten, entrepreneurs would probably score not less than nine. At the same time venture capitalists would probably score not more than seven. Contemplate this difference, and you will under-stand something about the delicate dynamics between entrepreneurs and their investors.

Dr. Arielle Lehrmann

Dr. Lehmann is affiliated with the Zofnat Institute for Organizational Research and Consultancy - www.zofnat.co.il