Monday, July 25, 2011
Back in the late 90s I was on fire. I had built my personal portfolio to 3mil+. The start up I joined, Interworld, as employee #12 went public. I snagged 15mil in VC funds to start my own company and grew it to 175 people and just shy of 50mil in revenues. I thought I was Midas, everything I touched turned to gold.
Building my personal portfolio from negative 30k to 3mil+ had nothing to do with skill in the late 90's and everything to do with greed. I found a company that was going up and bet all my money there, Cisco. I margined everything I could and turned just a little money into 3mil+ on paper. My friends and I talked about getting out of the market in '99 but I figured just one more doubling and I could retire. I never made it. I was a greedy idiot.
Joining an Internet startup in 1996 focused on ecommerce took a little vision and conviction but really not much. Interworld actually made a good product, had a good vision, and were early enough in the ecommerce trend it should have been HUGE. We were not. The CTO Michael Donohue margined his stock to the hilt to buy cars, polo teams, houses, and the like. He was the poster child of the dot bomb bubble. As for me, my password for years was Sell90. I had calculated this was the number I needed to be set for life. When 90 came I said at 120 I can move to the lake. The stock peaked at 93.50. I was a greedy idiot.
I got fired from the startup because I was being political causing dissension among the development team. It did not matter I went to customers I knew and sold them consulting services and got paid $400/hour far more than I was making before. Since I had so much work I convinced a few good friends to join on, I paid them 100/hour and billed them at 200/hour, I was making bank. I decided I needed to diversify beyond consulting to hosting and proprietary software so I snagged 15mil in VC funds and hired a bunch more friends. We had built up to 175 employes and just shy of 50mil in revenue then in 2000 the bottom fell out and we started losing money. Rather than take the fiscally responsible route I bet on my ability to sell more work. I didn't. We lost more money and I had to face reality, I laid off 15% of the work force, I needed to lay off 50% and kill our software group. More money down the drain. Then I laid off 30% of the work force when I should have cut 60% and shut down the hosting division. We lost more money and closed the doors in 2001. I was a greedy idiot.
When things started to go bad at my startup I looked around the room at my friends and rather than telling them to start looking I told them to have confidence, that I would pull us through. I am not sure why, probably did not want them to think I had failed or some other equally egomaniacal thought process. Because I failed to do the right thing for my friends, axing half and saving half, I put ALL of them out of work. I jeopardized their homes, their families, their children's educations, their lives. I did this because I was greedy.
Greed is boring. It's 2 dimensional, no 1 dimensional. 3 times in my life I had the opportunity to be set for life and all 3 times I failed. If I was set for life I would have had the freedom to become a college professor and make a difference in students lives. This type of a roller coaster, in retrospect, is not fun, it's stupid. This is not the hardship that builds character, it's the entitlement that makes you a dick. Worse yet, this entitlement encourages you put your friends lives at risk and when your greed steals college from your best friends children, they will feel like you just slipped a knife between their ribs.