Recently I was at Harvard Business School with 144 other entrepreneurs who run very successful businesses, valued from $100 million upwards of $4 billion. When we were chatting, everyone shared their scariest moments in business.
This was something everybody had in common. Everybody had a horror story. Everybody had a story of how close they came to going out of business. And when I say everybody, I mean EVERYBODY. Every single person had a story about how at one point they had to make a comeback.
If you have aspirations of being a successful entrepreneur yourself, you need to know that it’s guaranteed that you will face some scary moments in business. The good news is, you can overcome them. And hat is when you – and everybody else – really finds out what you’re really made up of.
So, I’m going to share with you a few of my scariest moments in business, some of my horror stories. Hopefully this will shed some light and you’ll realize you’re not alone. Other business owners experience these scary moments as well.
One of the scariest moments in business is when you declare your intentions to the world that you’re starting a business and you have 100% opposition. No one believes you’ll be successful in business. Why? Because you've never ran a business before.
I call this experience the “I Told You So” nightmare.
I can’t believe how many sleepless nights I had when I had nightmares of people that told me not to do it. I pictured myself facing them with them telling me, “I told you so! I told you you should have never done this. I told you this wasn't going to work out. I told you so.”
Oh, those nightmares were unbelievably painful. Let me tell you. The “I told you so” faces were all kinds of people. Some of them were relatives. Some were friends. Some were enemies. But in my nightmares, they were all saying, “I told you so.”
I can’t tell you how many times I work up in the middle of the night with my entire shirt soaked in sweat. I’d get up, go into the bathroom, splash cold water on my face and tell myself, "It's just a nightmare. It's just a nightmare. It's okay. It's okay. Go back to sleep."
Once a startup hired me to train their salespeople. I brought 100 salespeople on board. I’ll never forget what happened one Monday morning. I went there to collect all the checks to present to the salespeople at a sales rally. When I went to the office with the president of the company to get the checks, we couldn’t open the door. The janitor came by and told us they pulled everything out over the weekend. When he opened the door for us, we saw that everything was gone. The furniture was gone. All of the checks I was supposed to give out were gone. The only thing left was the company logo.
We couldn’t get ahold of anybody with the company. Not the founder, not the investor, nobody. We went to the nearest bank and found the account had been closed.
That night I had to deliver the news in front of 100 salespeople that the company went out of business. That was not an easy meeting. But if there’s anything I learned that night it was how to toughen up and deliver bad news.
I had a difficult time sleeping that night. I felt responsible. I felt like it was my fault. But I grew from this scariest moment in business as I learned how to deliver bad news.
Another scary moment is when you run out of money.
Imagine that you start a company with every single penny you have. Everything from your insurance policies, mutual funds, stocks, cash, savings, money fund accounts. Every bit of money you can think about.
Let's just say you have a million dollars, and you start a company. Six months later you're down to half a million dollars. Nine months later you're down to $100,000. Twelve months later you're down to $13,000. You literally have nothing left. Every credit card's been maxed out, and you only have $13,000 left.
And at the end of the week, all your employees, your sales reps, your vendors - everybody expects payment from you. If you don’t pay them, they’ll leave you. And if you do pay them, you’ll be out of business.
You don't have money to pay your rent, food, anything. What do you do? Do you panic? What do you do at that moment?
See, I experienced that. I experienced that in October of 2010. Let me tell you, it was one of my scariest moments in business.
When this happens, here’s what not to do. The last thing you need to do is panic. Instead, stop and figure out the next steps on what to do.
Listen in here for how not knowing the language can be one of the most scariest moments in business.
The next scariest moment in business is what I call final straw negotiation. Let me explain to you what I mean by this. This is when you're negotiating with somebody and you do not have the leverage over the other company.
It was in August of 2011. We, PHP, were about to go out of business. We had no carriers. One of our competitors was going around, defaming our character. They did whatever they could to get every single carrier to stop representing us.
Everyone dropped. Except for one company, AIG. I met with a gentleman at AIG named Greg. We had already known each other, but I had no leverage, because we had nothing going on at the time.
He and I sat down and we had a long conversation together. I had long, long meetings with AIG. I had zero leverage in those negotiations. It was the final straw. If they said no, by the next week we’d be out of business. But by the time we were done talking, they said yes.
For the first 90 days it was absolutely terrible. Nothing went right. But eventually we ended up writing more index universal life with AIG than any other company for three or four years in a row. It turned out to be a very, very successful relationship. But I had no negotiation leverage when I was negotiating with these guys at that time.
My next scariest moment in business was when a big client changes their mind. This happens in sales a lot. For me it happened early on in my sales career. I had a sales call where I made $11,000. At that time, $11,000 was a lot of money to me, and I was counting on it to pay my rent, car payment, debt, phone, everything. I was behind in all my bills, so I was so excited and relieved to be getting this $11,000. I’d finally have breathing room again.
Then all of a sudden, I got a call from the client. He changed his mind. Why? He found out he had a cousin that did the same thing I did, with the same company. He discovered this when he called his cousin for advice. His cousin had prepped him on everything I would say so I had no comebacks.
$11,000 was a lot of money. Let me tell you. It almost put me out of business. It was definitely one of my scariest moments in business.
Another one is when a big player, an executive sales person, staff member of your company leaves. It totally disrupts your business. I've experienced that before. In the last 15 years of being in business I've experienced that a few times. And every time it's happened, it's been a disruption. And every single time it happens, you think you won't be able to handle it. But every single time it's been handled. But when it happens, in the moment, it’s never fun to experience losing a great teammate.
Another one is a lawsuit. Lawsuits happen in business. When you run a business, you do not want to experience lawsuits, but sometimes lawsuits happen. This is true, especially the bigger you get.
One time we received a lawsuit that was 400 pages long. I, the company, and seven of my team members were sued. They wanted to do whatever they could to put us out of business. That was definitely one of my scariest moments in business.
But even if someone is doing everything they can to put you out of business, they can’t stop you from working. That was our biggest edge. Anybody can sue anybody, but nobody can stop you from working.
Another one is when an investor backs out. Sometimes with startups, an investor may suddenly say, "We no longer want to participate with your company." This happens many times, and it can be very scary, especially if you have people you need to pay.
When it happens, you have to figure out a way to pivot.
Listen in here for my experience of how scary it can be when your partner changes their mind.
And last but not least, one of the scariest moments in business is when things happen that you can’t control.
I got started in the financial industry with Morgan Stanley Dean Witter the day before 9/11. I couldn’t control 9/11, but afterwards, no one wanted to invest for three years. Everybody I sat with said that they didn’t know what the market was going to do. They were afraid that war was still going on. They took every penny out of the stock market, and were sticking with cash.
I was starving for three years, because everything was cash. All this that happened was beyond my control. It was something happening in the market.
95% of my peers quit. They were probably smart at the time for doing that, but I stuck around. I didn’t want to give up. I thought something good was eventually going to happen -- and it did.
Why I'm Telling You These Stories
I’m not telling you these stories to scare you. Not at all. I just want you to know that these kinds of things are normal. And these scariest moments in business are where your defining moments happen. These are the times when you learn about yourself. These are the moments when you become the person everybody looks up to, when you become an example to everyone else.
Or, you become a statistic, another person that allowed fear to get you to quit.
You have to make that decision for yourself. The good news is, for the most part, there’s a way out, when you experience your scariest moments in business.
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