Friday, July 31, 2009
It's an interesting life, trying to submit one's self to living beneath others. It's important to me to try to hide my own value and power in any relationship, be it family, friends, business or love.
I do the opposite of what others do, and it works. Whereas other men in dating try to show their power and financial strength with expensive cars, expensive watches, expensive homes and expensive spending, I do the opposite: I drive old, used cars, I wear a watch from 1984, I have a tiny apartment in a low-income neighborhood, and I tend to not spend a lot of money when I am with people or on a date.
Those who see through the charade are keepers for life, and I have a few of those that would consider me their equal in many ways. I even try to keep my mental strengths lower than those I deal with. When you play poker, you never want to show your cards, and in life's poker game, I don't even want people knowing I'm in the game.
The businesses I am a part owner in rarely have my name associated with them. I don't want employees or managers knowing I'm involved; I can stop by and judge their service without getting a fake response. I don't tell friends or family what I am involved in as I don't like to discount my own value by giving freebies to those who don't really deserve them.
There comes a time, though, when the cover needs to be blown. For me, especially in business, I find that the mindfuck is the absolute greatest talent a strong entrepreneur can have. I've used it against lifelong clients, I've used it during the negotiation process in bidding, and I've used it against my enemies and my colleagues when the time comes that I need to defend my own status, profit or investment.
Recently, I had to put the hammer to the anvil in a harsh way, due to what a subordinate involved in one of my business ventures did. The best part of the mindfuck is the long term oppression that comes of doing it correctly.
In a new business venture I started early last year, I aided 4 very-excited peers in starting a business venture. They're all college bred with tons of paper knowledge, but zero business strength. One of them has an MBA that is more useless than the paper I wipe my ass with, but they like to tell people about it. Wasted effort, I would never personally hire an MBA, and I tend not to do business with them, either.
Still, they had a decent idea for a new market that was completely untapped, and I had capital sitting on the sidelines, plus inside connections in a sister industry that I had favors waiting to be paid to me. Of course, the peers I was investing in didn't know much about my history, and they solely looked to me like an angel investor. They didn't know where the money came from, and all I told them was that I would be a middle-man for finding OPM (Other People's Money) and take on those debt notes under my name while funneling the capital to their business.
By using inside connections discretely, I was able to afford their business some interesting value that others would never be able to touch. It's amazing what a few favors pulled from a warehouse manager or a distribution sales representative or even just having helped out a guy who installs PBX systems can do for a fledgling business.
Within 6 months, they were profitable. The profit was so strong that they wanted to take on debt themselves to buy me out, but I warned them about it: I don't want my money back, I want the profit over many years to make it worth my time (and favors) invested. A clause in our agreement said I could dispel any offers for buy-out at less than par plus 40% per annum over 5 years. They weren't going to give me 3X my money back, so they accepted the fact that I was going to be a part-owner until 2013.
Then it happened: I asked the managing partner for a favor, a simple favor. It would take him 1 hour of his time, wouldn't take him out of his way, and would cost him zero, other than the 1 hour and maybe $2 in gas. No big deal.
I reiterated the importance of this simple favor. Imagine if I asked you, on your way to or from work, to stop by ANY store and buy me ANYTHING worth $2. I don't care what it is, just can you please do it for me? That's how simple it is. Now imagine that I came up with $100,000 a year earlier to help you start a business that is making you $60,000 a year in profit. Would you go barely out of your way and spend $2 in exchange for what I had done for you? Sure, you would.
But this managing partner had decided that my favor payment was not worthy of his time. I texted him the day of in the morning and he said "Sure, sure." I followed up 9 hours later and he said "Oh, I am so busy, maybe tomorrow." Maybe? The next day, I waited until 5pm and he said "Oh, I just can't get around to it, it's no big deal. Can't you do it yourself?"
No. I can't. But I didn't tell him that. In fact, I didn't reply.
Weeks passed and I felt a need to go visit the campus of the business, look through some of the books, and pick up a check for my share of the recently acquired booty. I never warn people when I stop by, I just go.
Everyone was happy to see me, there were smiles on their faces, we all shook hands, hugged, shared some cups of coffee, broke bread in the virtual sense. We sat down for a good hour, and I listened to their tales of new contracts, higher-than-expected earnings, and smooth acquisitions of needed assets and tools through suppliers that I secretly opened the door for. It was good to see them flourish, and better to know that my favors pulled would mean an extra 5-10% profit for yours truly.
All was kosher, but Mr. Managing Partner didn't take me aside and apologize for his inept management of the little favor I had asked. In fact, never once did he apologize, or even address it after the second day he blew it off. I hold grudges, but I don't mention them.
The next day, he had the opportunity to buy out a competitor's failed inventory of office equipment: $250,000 worth of assets and tools for under $20,000. Mr. MP called me up on my personal cell and told me about it. I told him it sounded like a fantastic idea. He asked if I could drum up the cash capital to make the acquisition, and I told him surely I could. He asked when I could get him the money, and I told him: Oh, I didn't want to extend myself for his hobbies. "Hobbies?" You know, the little side hobby you 4 have running in my shop. "Your shop?" Well, I do own the building. "WHAT? I thought you negotiated a lease with the landlord." Of course I did, I am the landlord. He was flabbergasted. I told him I had to run, that I was busy playing a game on Facebook and hung up the phone before he could answer.
A few weeks passed, and Mr. MP called me again. This time, he wanted some advice on a possible bid package they had received. It was 50 pages of disclosures that normally I would spend the time reading and approving. "I think this is a huge project." It probably is. "We really want to get it." I hope you do, it'll be a great lesson in getting to the next level of the market. "Do you want to look it over?" Not really, I'm not interested. "It'll be huge profits for you, too." I'm fine with what I'm earning. I told him that my cat needed to be fed and hung up the phone again without waiting for a response.
More time passed, and I collected my checks regularly until they had a problem on a job that I decided not to get involved in. Pressure was building, and things were slipping because I wasn't pulling the puppet strings anymore. At this point in time I had made back almost 70% of my investment, and the asset value of the company was significant enough that I could liquidate it at 30% of par and come out well ahead for the year. A 20% gain isn't much, but it means I'm ahead with very little time invested. I lost my heart for the business, over that 1 hour favor dropped.
Mr. MP called me again, begging for help on fixing the failures of their contract negotiation. "I think we underbid on the labor side." Fire people. "Well, we need those people for the next project." Cancel that contract. "There's a 25% neglect stipulation we'd have to pay." I guess pay it. "We can make this job profitable." All jobs are profitable, it's the management that dropped the ball.
They didn't make the job's end point, again because they had no insiders in the acquisition process. My own insiders called me personally to ask if I wanted them to help the company, and I told them hell no. In the end, the firm lost close to $20,000 in negligence fees for dropping the ball and harming other contractors on the job. No big deal, they had the money in the bank. Barely.
Other projects brought in nice profits, though, so by year's end I had profited enough to cover my own investment fully, plus I was making an excellent return on the lease rate they were paying. I calculated my hours worked total on my time with them, and I divided them into the profit I made. It wasn't a good profit, but it was profitable nonetheless. Plus, their net asset had risen, so liquidating the firm would mean a great profit on investment: over 35% for the year.
Then the shit hit the fan. They came in low on some bids that I knew were too low, they hadn't read the contract documents clearly enough, and they never negotiated a list of concerns about various schedule conflicts with other trades. I could have looked at the bid documents for 10 minutes and made a list of 30 conflicts immediately, but I didn't. Again, my heart was gone.
Mr. MP asked me to attend a meeting, so I decided to go. They all aired their grievances with their mistakes at each other, and I decided to stand up and walk out. "Why are you leaving, we need your advice." I'm leaving because your little hobby is boring to me. Don't be late with rent. "You're going to lose a fortune!" I've made a fortune, I'm done playing games. Go and have your MBA and your college degrees printed on big banner material so that you can brag to the world how smart you are. "What should we do?" Retire. Get jobs at Wal*Mart. Move in with mommy and daddy, or whatever it is that people do when they fuck up so much. I left.
It was at this time that I took a hiatus from life, just before December of 2008. I had ZERO contact with them other than casually reading their emails pleading with me for more capital infusion. I emailed them and said "Ask mommy and daddy, or contact some alumni from whatever school you think taught you business." Mr. MP was not happy, and I heard through the grapevine that he was blaming me solely for the mess. My insiders would always laugh for a good 2 minutes after getting off the phone with him.
When I returned in March of 2009 from my 4 month break, the company was disheveled. I arrived one day when they were slow, looked over the books, and sat them down in a meeting. I told 3 of the partners that they were exceptional workers, but all their problems came because Mr. MP had no clue what he was doing. They all stared at him, then asked me what to do. "Buy him out. Let's put in someone better, someone who didn't waste 6 years of their lives sitting in classrooms with 3 fingers rubbing their prostates." They all nodded. Mr. MP stared at the red-heavy P&L report on the conference room table below him.
After the meeting, Mr. MP asked me why I blamed him. I told him it was because he was clueless, useless, and had no virtue or sense for business. "But I went by the book on everything." Exactly. There is no book on business, there is no school or training that explains the intricacies of the 5000 decisions you SHOULD have made but didn't. "So what will happen to us?" You will be fired with a buy-out that should leave you with a few grand after paying your corporate share of the outstanding accounts payables. "And the rest?" I'll help them find someone who can run things in better shape.
Two weeks later, he cleaned out his desk and his closet. The partners and I all countersigned a check for $7334 in his name, and he turned over his stock share in the firm. I looked over his paychecks for the 14 months he worked there, and he ended up making about $40,000. If I was involved, his second year could have been three times that, but I stayed hands off.
Once he was out the door, I introduced the staff to a bright kid, about 24 years old, who failed out of high school. I told them that he bought Mr. MP's shares from me, and would be an equal party in the firm's rebirth. The bright kid, who I had known for 8 years, was a strong earner, and he also knew how to play the game. He had zero education, but his business sense was second only to me.
In 4 weeks, he recovered 3 lost clients by placing the blame fully on Mr. Ex-MP, explaining exactly what Mr. Ex-MP failed to do. The clients bought it hook, line and sinker. He acquired new projects and paid off past suppliers, plus interest, to re-open a few accounts. He turned the business around by month #2 (May, 2009) and by the end of June, he was earning a decent bounty for the other partners and myself.
I saw Mr. Ex-MP in the middle of July. He didn't have a job, and his $7334 check wasn't going to last long. Due to the stress of losing his position and shares, his relationship with his girlfriend imploded. He was couch-surfing with a buddy from college (who was also out of work, but was lucky to have parents footing his rent). I heard he applied at a video game store and was turned down.
We didn't talk long, but he did ask me a question: "Why did you drop the ball on the company?" I didn't, I dropped the ball on you. "It wasn't over that little project you asked me to do, was it?" Of course it was. "You could have paid someone $50 to do it." I asked you to do it. "I was too busy." You're not busy now, are you? "No. But it seems senseless to throw away tens of thousands of dollars over a simple favor." No favor is simple. The money you burned running things badly will be recovered in no time. "They're doing well?" Better than you ever did. Profits are skyrocketing, and I am letting them buy me out this year with no fee. "Why?" Because I wanted to pass on a lesson to you.
He nodded, and again looked down, his confidence blown. For the next few years, I will happily badmouth his degree and his MBA and his inability to understand business. Hopefully he makes the right decision and moves to another city, because I don't want to cross paths with him again. He's useless, and worthless and doesn't have a name for himself. I needed him to do a simple thing for me, and he failed. Now he's a failure.
And so, the Mindfuck happens. If you're walking down the street, basking in the sun, smiling at how life is going well, and you step on a colony of ants crossing the curb to get to their destination, you think nothing of squishing them. For me, Mr. Ex-MP is the same. He's vermin, thinking he's the top of the world when in fact he's squished under my shoe.
What will happen to him? He'll get a job in a lonely cubicle, with maybe his degree and MBA plastered on the wall, earning huge profits for a boss he never sees, for managing partners he rarely gets to meet. He'll never work in the industry I put him into again, because he fucked the wrong person over.
And I'm glad this is the way it is to be. He isn't the first person who crossed me that I crushed, and he won't be the last. People need harsh lessons to pass on to their kids. We'll call it a blood war, lasting the generations. Maybe my own son or daughter will get to a point in life where they pass his offspring in the business world, and you better believe I will remind them to never do business with anyone related to him. Why?
Because I can. Because I myself have been crushed, many years ago, by fucking over someone who I owed a small favor to. Because I appreciate THAT person more than anything, and now they know I have changed my act, apologized, made amends above and beyond the value of what I failed to do. Mr. Ex-MP won't do that. He's too proud. He doesn't understand business. Business is not a set of rules and regulations to be followed, there is no ISO stamp to tell people what to do and when.
Business is one thing: relationships. Not the ones you fulfill through phone calls or emails or orders or sales; relationships made through bribery and blackmail, pushing people as high up on the ladder you both climb as possible so when they hit their own ceiling, they'll pull you up after years of you pushing them up. That's how you climb, how you profit, how you win the game: by paying out favors done for you with favors others should do for you.
We're not talking big favors. We're talking the little ones. And when the sun is out, and there's a person walking down the street of life, and a shoe meets the curb and a colony of ants is wandering around, remember one thing: be the person wearing the shoe.