The Wu-Tang Clan, Hitler, and surviving your first year of being an entrepreneur

The first day I became an entrepreneur I cried. I had already been running a company, Reset, on the side while I worked at HBO fulltime. Our clients at Reset included American Express, Con Edison, various divisions within Time Warner, BMG, Universal, and of course, HBO. I couldn’t keep conducting business from my cubicle. My boss, his boss, his boss, his boss, and his boss, were already suspicious of me. I had a cubicle in the HBO building and it was crowded with contracts from their competitors.

When I arrived at Reset fulltime the first call I made was to Steve. He had told me two weeks earlier the Wu-tang-clan wanted us to do websites for all of their back CDs. And we’d do websites for every other group that Loud Records had. I ran the numbers in my head. Maybe it would be $900,000 worth of work. The Wu-tang-clan was into chess and boxing and they wanted me specifically to help them. They had an album called “The Mystery of Chess-boxing”. It was my favorite album at the time because what did I care.

“Forget the wu-tang-clan,” he told me on the phone that first day. “They are scumbags. Why would you want to do business with them?”  Suddenly it was my fault for wanting something. Just the other  day it was a done deal. I was practically in the Wu-tang-clan. They “loved” me.  A year later Ol Dirty Bastard was telling me the best thing he had ever done at 3 in the morning was sit in the mountains listening to owls go “ooo….ooo”. But that was ancient history that hadn’t yet happened.  And now he’s dead.

Something had gone horribly wrong. In the music business, person A pays person B who pays person C. who then somehow returns the favor. But it’s a game of operator where money is whispered into everyone’s ear before being passed along. By the end of the telephone chain, someone’s out of business, everyone’s paid money, and everyone is angry at everyone else. The deal was over.

I made a few more calls but nobody would take my call. I wasn’t at HBO anymore. I went out for a pizza on 17th St and 7th Avenue. It was summer and hot. I had thought it would make sense to wear a jacket and tie but that was like a joke. Who wears a tie to call the wu-tang clan? It was the best pizza I had ever tasted. But I cried a bit when I realized how radically I had changed my life without having any idea of what I was doing.

This was in a world before venture capitalists. If you had a business, you needed to make money. You needed to call people and sell them all day long. At night you needed to lay awake figuring out how you were going to pay the people you promised the world to. Because business is religion and your employees are your followers. There were no parties or “summits”, then, for founders. You trashed your competitors to everyone you could. Nobody was your friend and we all worked within a five block radius of each other centering around 6th Avenue and 17th street.

Several survival techniques I learned:

 

  • Hire freelancers so you could always fire them when the revenues invariably dip.
  • Your old customers are your best new customers. Offer more and more services to them. Its hard for them to say no.
  • Say “yes” to everything when you are selling. Do anything to add to your client list. The services business for a service that nobody understands (web development back then) is enormously profitable but you need your foot in the door.  Then you figure out the profit.
  • Corollary to above: Make it as easy as possible for them to say yes. Offer to do stuff for free until they say yes.
  • Do favors for as many people as you can. You can’t give bribes but if you spend your entire life doing favors for clients then eventually someone will repay the favor.  Give clients advice on their business. Advise clients how to get promoted. Find people jobs, girlfriends, send enormous gift packages at Christmas (or birthdays, Valentine’s Day, or just for the heck of it), do things for their charities,
  • Fire any employee instantly who has a negative attitude. Negativity is a cancer. It can’t be cured (by you) and it spreads quickly through the rest of your company.
  • Ask clients for advice about your business. Make them feel involved, almost like owners, without giving them equity. New clients are your best salespeople because they want their peers to help them feel justified in their decisions.
  • Look for the half-chewed leftovers from your competitors that are growing faster than you. Their older clients will begin to hate them.
  • Bring in a professional masseuse one day a week for your employees. It costs nothing and when they are working for you at 1 in the morning on a Saturday night they’ll be thankful they work in such a great work environment.
  • Never do a deal where someone else is re-selling your services. Nobody else cares about selling your product/services.
  • Follow up with potential clients by asking them to dinner or breakfast. Pick the nicest place. Pick up the tab.  Ask them about their love life.
  • Never listen to anyone who says, “I want to make you rich”. They don’t.
  • If someone steers you the wrong way once, never listen to them again. It’s a waste of time.
  • Over promise and over-deliver. But only the first time.
  • If someone says, “I’m taking a big chance by hiring you,” assume that you’ll never do business with them again and get paid as quickly as possible.
  • If a client says, “I’d rather have this conversation in our offices”, don’t go there. Never go there again.
  • If someone wants to buy your company, immediately look for a better offer. Don’t accept the bulk of pay in earn-outs,

 

 

“Power”, who claimed he was representing the Wu Tang Clan, said to me, “you’re one of us now.”  A year later, to the day, the son of the German doctor who killed Hitler bought my company. But that’s another story.

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