I was in Denver recently and started chatting with people at the bar (as I am apt to do, from time to time). Regardless of what it might sound like, I meet some rather interesting folks (who are fellow road-warriors like me) and I strike-up some even more interesting conversations.
On this particular occasion, I met someone and we were exchanging experiences and stories. She works for an upstart pharmaceutical company and my project is working with a mature and profitable company that has room to become a much better organization than they already are.
While sharing stories about how our organizations wanted to be more or better than their present selves, she shared a quote “Hunger makes a good cook”. I thought, “Yeah, I understand that.” Further, I could relate to it.
The notion intrigued me enough to contemplate it long after the conversation ended and found me wanting to explore it a bit further. I discovered it is a quote attributed to Carlo Collodi, the author of “Pinocchio”. Of course, there are other competing attributions.
What did it mean? What did it mean to me?
When hungry; Doing the best with what you got
There is the tale (or is it) of people making “stone soup”; that is, soup made from stones. There are some variations on the theme (such as soup made from other inedible objects), but they all boil down (pun intended) to making a meal from nothing when you have nothing with which to make a meal. There is even a recipe for stone soup for the more adventurous. Hopefully, nobody needs to resort to having to try the recipe.
We all know companies (and people) who find themselves in dire situations and are doing their best to muster the strength and resources to press forward. To quote Teddy Roosevelt, they are; “doing the best, with what they got, from where they are”. These are the those who are doing what they can to avoid sinking further and to be successful (whatever success might mean to them).
Those companies and people who are successful under such circumstances will be the MacGyvers of the world; the ones who can figure out a way make a helicopter out of the materials they found on an average utility repair vehicle (including using the vehicle itself) to escape some peril.
Or they are the companies and people who win in an unwinnable situation by changing the circumstances (and the rules) in which they find themselves; like Captain Kirk did when tested by the Kobayashi Maru.
Sure, I know those two examples are fiction. But they are easier to relate to than some real-life examples that exist.
American Express shares “Four Gigantic Companies that Started from Nothing” which calls out; Hewlett-Packard (1939), Starbucks (1971), Subway (1965), and Mattel (1945). And there are other stories such as Dell, Google, and Amazon. The list goes on…
But we live in the 21st Century. Can giants not be built in this century?
TechCrunch shares an article (from 2017) that lists 35 big companies that started with little or no money, some of which were founded since 2000 including; MailChimp, Shopify, GoFundMe, and a great many others. Many of these companies have since been acquired in the years following their founding; and some have since floundered or are out of business. But each has done what they could, with what they had, from where they were.
Of course, many companies have gone bust. This article from CBInsights lists “240 of the biggest, costliest startup failures of all time” and a further “433 startup failure post-mortems”, which are sobering reads for any entrepreneur.
Being hungry; my story (abbreviated), which I rarely share
We started XONITEK in 1985. After raising money from the 3-F’s (Family, Friends, and Fools), our total capitalization was $3,000. We had about $500 left after start-up costs. Our “founding dinner” to celebrate the founding of our company was at a Chinese restaurant. In attendance were my two partners and our our lawyer. During dinner, one of my partners asked; “So, how much is my weekly pay?” I just looked at him in disbelief and said, “We have $500 left. What do you want it to be?”
The three of us gave it a go together for a spell. But it was not too long until I bought-out both of their stakes for a couple-hundred dollars. For me and from then on, having a formal equity partner in a business was never going to be in the cards.
The company (and I) struggled for several years living hand-to-mouth; certainly for much longer than others would have endured. I couldn’t get an SBA Loan because I didn’t qualify (a rather irritating reality). So, like many entrepreneurs in my circumstances, I relied on credit-cards.
In 1991, I received a call from one of our technology vendors. There was a prospect in Philadelphia (a three-hour drive away from our offices) that was interested in one of the computer-based accounting systems we represented and they wanted us to go down to pitch it.
I had serious doubts that we could win. The prospect was a multi-billion-dollar reinsurance company and we were a systems integrator that didn’t have a pot to piss in. We were so poor; we would squeeze a nickel hard enough that the Indian ended-up sitting on the back of the buffalo.
But, what the heck… I setup the meeting.
The attendees for the presentation from my side were; me for the solution’s finance features and capabilities, and a colleague for the technical aspects. From their side it was going to be all the Vice Presidents of the various business functions involved; headed by finance.
On the morning of game-day, my colleague and I made sure to have a good breakfast before we left our homes because it was going to be a long day. We met at a gas station and added-up the cash we would need that day for; gas, tolls, and a snack on the way back. No kidding. Budgeting was down to the cents.
We had enough; just barely.
On the way to Philadelphia, we were going over the game-plan for the presentation and putting on our game-face. This was a biggie and we didn’t, we couldn’t, blow it.
When we got to Philadelphia, we were faced with a challenge for which we did not plan; parking. In Binghamton, parking was free just about everywhere. In Philadelphia, it was going to cost us $18 to park our car for the day. It was $18 for which we didn’t plan. It was $18 which we didn’t have.
And when I say; “We didn’t have $18” I mean we didn’t have $18! All of my credit cards were already over their limits, the company and my bank accounts were in overdraft. We didn’t have $18, ANYWHERE!
Oh well, we will have to fight that fight later, it was game time.
The presentation was going super. We were hitting it out of the ballpark. Every question asked was answered in the affirmative. Any request to see a function was satisfied. Everyone was smiling.
It came time for lunch and another curve-ball was thrown at us; “Let’s go out for lunch” was suggested by the Vice President of Finance. Remember, we didn’t have any money. And it’s customary that the vendor would take the prospect or client out to lunch.
So naturally, my response was, “Things are going well. Let’s work through lunch.” But the Vice President of Finance would hear none of that. His response was, “Nonsense, let us take you guys out – our treat.” I don’t think he saw the panic on my face. But maybe? Just a little?
During lunch, I gave my colleague all of my bank and credit cards and access codes and asked him to find an ATM someplace. Maybe one of the bank or credit cards had $25 that could be squeezed out of it. Otherwise, I don’t know what we will do.
When we returned to the meeting, the Vice President of Finance asked where my colleague had gone. My response was “He is checking in on another client of ours located nearby.” We had no client. It was a bold-faced lie. And I prayed to God that the Vice President of Finance wasn’t going to ask “Who is the client?” And he didn’t.
I am starting to believe the Vice President of Finance “gets us”.
When my colleague returned an hour later to the meeting, all I asked was, “So, how is it over there?” And my colleague responded, “Everything is fine.” I knew then we had the cash to get our car out of the parking garage and return home. We were going to be okay.
The day ended on a high-note. They were very happy with how the day went and wanted a proposal. We were able to get our car out of the parking garage and even had enough money for each of us to have a cheeseburger, small fry, and free water at the rest area on I-476.
We delivered our proposal via fax a couple days later and it was accepted within a few hours. And the project was giganourmously successful. We delivered as we promised we would.
It was 1991. This was the turning-point. This was the moment in my business when more business would come. This was the point when I knew, no matter what else might happen in my career, I would figure out a way; to MacGyver and Captain Kirk my way out of future challenges (and there have been several since).
XONITEK has grown and evolved over time. And since then I have founded several other companies and platforms; as well as other interests.
But no matter what wins I might have, or how clever I think I might be, I always remember what the slave would whisper in the Roman General’s ear during his Triumph in Rome and best recounted by George S. Patton;
“For over a thousand years Roman conquerors returning from the wars enjoyed the honor of triumph, a tumultuous parade. In the procession came trumpeteers, musicians and strange animals from conquered territories, together with carts laden with treasure and captured armaments. The conquerors rode in a triumphal chariot, the dazed prisoners walking in chains before him. Sometimes his children robed in white stood with him in the chariot or rode the trace horses. A slave stood behind the conqueror holding a golden crown and whispering in his ear a warning: that all glory is fleeting.” ― George S. Patton
It takes a special kind of person to be an entrepreneur. Most of the time, we are ducks on the water; looking calm on the surface while paddling furiously below.
There are times when we are hungry. We are hungry for sales, we are hungry for talent, we are hungry for recognition, we are hungry for acceptance. But we are at our hungriest when we are out of cash; then we are willing to eat stone soup.
All successful business owners have their own personal recipe for Stone Soup. It is formed over the existential challenges they have faced. Refined over the times they woke up in the middle of the night with dry-heaves and times when they were so overwhelmed they didn’t know what to do or where to start. Stressful times. Dark times.
Mine has a bit of grit, a pinch of gumption, a few grains of salt, and some gigantic stones.
About the Author
Paris is an international expert in the field of Operational Excellence, organizational design, strategy design and deployment, and helping companies become high-performance organizations. His vehicles for change include being the Founder of; the XONITEK Group of Companies; the Operational Excellence Society; and the Readiness Institute.