Recently when I was at Harvard Business School with 144 other entrepreneurs who ran very
successful businesses, valued from $100 million upwards of $4 billion, there was one thing
everybody had in common.
When we were off and talking and were just chatting with each other, everyone had a horror
story.
Everybody had a story of how close they were of going out of business.
When I tell you everybody, I mean everybody had a horror story or at one point they did,
and they had to make a comeback.
Every single person.
I will tell you here for you watching, if you have any aspirations for running a very
successful business one day or being very successful as an entrepreneur yourself, you
need to know that it is guaranteed you will face some scary moments in business.
And you can overcome them, and that is when we really find out what you're really made
up of.
That's when everybody finds out what's you're made up of.
Just so you know that.
Anybody that you meet that's successful is able to face those horror stories and overcome
them.
So, I'm going to share with you a few of my horror stories and hopefully this will shed
some light to you to realize you're not alone by yourself and other people go through this
as well.
Most of them are going to be a few experiences I've had.
I think there's like 11 or 12 of them that I personally experienced.
One of them will be this.
One of the scariest things, one of the scariest things in business is when you declare your
intentions to the world that you're starting a business and you have opposition 100%.
No one believes you're going to be successful in business.
Why?
Because you've never ran a business before.
Why would they believe you're going to be successful in business.
And what I call this experience is, The I Told You So Nightmare.
Let me tell you what's the I Told You So Nightmare.
I cannot tell you how many nights I went to sleep, sleepless nights, I would have nightmares
about those people that told me not to do it, and I'm facing them and they're 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.
And these I told you so faces, some of them were relatives, some of them were friends,
some of them were enemies, who said, "I told you so."
And I'd wake up in the middle of the night - I can't tell you how many times - my entire
shirt was wet.
I'm in bed, and had to go to the bathroom and splash some cold water on my face and
I'm like, "It's just a nightmare.
It's just a nightmare.
It's okay.
Go back to sleep."
Tried going back to sleep, and I couldn't do that.
I had to get back to work, because I'm thinking I'm about to go out of business, because someone's
going to tell me "I told you so."
It's a very scary moment in business.
You will experience many of that.
It's gonna happen.
But it's just a part of imagination.
It's not a reality.
But it's going to mess with you.
Another one is this.
Here's another one.
Another one is, when you actually start partnering up with a company.
I remember one time they hired me, a startup hired me.
They did technology products, which was like the next up and coming Yahoo! and they were
based out of Santa Ana.
They hired me to train their salespeople and I came through and I brought on board 100
sales people that was training in the Southern California marketplace.
And I'll never forget on a Monday morning, I'm going there to collect all the checks
to come and do a sales rally and give these checks away to the salespeople, and Monday
morning I'm going up the elevator with the president, a guy named Ray.
At that time I'm going up stairs.
We knock on the door, he puts the key in to open the headquarters.
He can't open it.
Janitor comes and said they pulled everything out over the weekend.
He was like, what are you talking about?
We opened it, it was as if everything was slow motion.
The door opened like a movie dah dah dah dah dah.
Everything was pulled out, except the logo.
I said, wait a minute.
Why's the logo - everything was pulled out.
Every check that was uncashed.
Every check that was sitting on the table to deliver to our salesforce.
We went to the nearest bank.
Nothing could be cashed.
They closed down the checking account.
It was done.
We couldn't get ahold of the investor.
We couldn't get ahold of the founder.
We couldn't get ahold of nobody with that company.
Six months, went out of business.
That night, I had to go to Conrad's in La Crescenta Valley and I had to deliver the
fact that that company went out of business in front of 100 people.
Let me tell you.
That drive back from Santa Ana to La Crescenta Valley with traffic, was about a two and a
half to three hour drive was a very difficult Monday night drive.
And I met with them, some of you may even watch this, may share it with somebody who
was part of that meeting.
That was not an easy meeting.
But that night, if there's anything I learned that night is, I learned how to toughen up
and learned to deliver bad news.
And I had to make myself.
You think this is bad news, what's bad news compared to this is if you're in the military
and if you have to go tell somebody's wife with two kids saying their husband just passed
away, that's bad news.
Your's isn't that bad of news.
I had to go and deliver that news and had a difficult time sleeping that night.
I felt responsibility.
I felt it was my fault, etc. etc.
But I grew from that moment, delivering bad news to a company that went out of business.
Another scary moment is when you run out of money.
I want you to think about this here.
Imagine you start a company with every single penny you have.
Everything from your insurance policies, from mutual funds, stocks, cash, savings, money
fund accounts - any money market accounts.
Anything you can think about.
Let's just say you have a million dollars, and you start this 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 by the end of the week, all your employees, your sales reps, your vendors, everybody expects
a payment from you.
And if you don't pay them, they're going to leave you and if you do pay them, you're 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 very scary.
Very, very scary.
And you realize what things you need to do at the moment.
Like the last thing you need to do is panic.
You need to figure out the next steps on what to do.
But that is a very scary moment in business that could happen.
And you have to still figure out a way to get out of a situation like that, which we
ended up getting out of it, and good things started happening.
Another scary moment is when you start a company.
It's a startup.
And you don't speak the language of the company.
You don't speak the language of a startup.
So I remember the first time we started our insurance company, PHP.
And I had no carriers.
I had no insurance company to write their paperwork up.
None.
None of them have said yes to me.
Every one of them I met with said no to me.
They said, "How long have you been around?"
I said, "One week."
They said, NO!
So one guy I got on a call with, he finally said, Yeah, who are you with?
Let's meet in the next two months.
I said, "No, no, no.
I'd like to meet with you today or tomorrow."
I'm in L.A. He's in Chicago.
He said, "Oh, you're in town?"
I said, "Oh yeah."
He said, "Okay.
If you're around tomorrow, why don't we do lunch tomorrow at 12:00?"
I said, "No problem."
I get a flight that night, a $1200 flight to go to Chicago from L.A. I go to Chicago,
12:00, I go to meet him.
This man, his name was Garth.
I shake his hand.
We go upstairs.
One hour we speak.
One hour later, I'm leaving.
I have no idea what he's talking about, the words he's asking me.
I don't know a lot of the language that he's asking me these questions of.
I'm just having a very sincere meeting with him.
Here's what we're going to do, here's what's happening with our business.
He shakes my hand.
This was a multi-billion dollar company.
He said, "We'll give you the contract.
Let's get the paperwork started."
Right there.
I'm, like, wait a minute, this is really happening.
Yes it is.
I left trying to control my emotions on how excited I was, as if everything was expected,
and I go down and said, "Oh my gosh.
I cannot believe I was able to get this appointment and close it, without knowing half the words
he asked me on what it is to run a startup.
Do you have this?
Do you have that?
Who is your general counsel, legal counsel, accountant?
Are you accrued?
Are you this, are you that?
What's your.
. . everything, I had no idea.
So sometimes a scary thing is you go to a meeting and the meeting is bigger than you.
How do you handle a meeting like that.
You're going to experience some of those as well.
Next one.
The next one was 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.
So it is August of 2011.
We're about to go out of business, PHP.
We're about to go out of business.
August of 2011.
Nobody knows this.
I have no carriers.
No carriers.
One of our competitors was going around, you know, defamation of character, whatever you
want to call it.
They were trying to do whatever they can for every single carrier to stop representing
us.
Everyone dropped.
Everyone said, "Okay, we're not doing business with them."
Except for one company.
And it was AIG.
It was a gentleman named Greg.
I met together with Greg.
We had already known each other and we started talking.
I had no leverage.
We had nothing going on at that time.
And He and I sat down and we had a long conversation together and then the next level and the next
level and I flew in and we had meetings, long meetings, long meetings with AIG.
And then by the time we were done, they said yes.
I had zero leverage in that negotiation.
It was the final straw.
If they say no, next week we're out of business.
Next week we're out of business.
They said yes.
I went back.
I announced it, for the first 90 days it was absolutely terrible.
Nothing went the right way.
And eventually, we ended up writing more index universal life with AIG three, four years
in a row, than any other company in the world, and it turned into a very, very successful
relationship.
But I had no negotiation leverage when I was negotiating with these guys at that time.
Next one is, when a big client changes their mind.
This happens in sales a lot.
For me it happened early on in my sales career, when I quit my job and I went in, I remember
I had a sales that I made, the sales call I made, the commission was $11,000.
And $11,000 at that time was a lot of money.
$11,000 was a lot of money to me, because that $11,000, I was already counting my rent,
my car payment, my debt, my phone, every single thing.
It was back in the day with Nextel, the way Nextel worked I was $890, I had to pay that
off.
Everything, I was behind.
So I'm counting on this $11,000 check.
I leave the house, I'm so excited, I'm relieved.
I got breathing room again.
I go in, excited that next day, and then all of a sudden, I got a call from the client.
And you know you don't want to pick up that call.
Because you know exactly who it is.
I pick up the client's call.
They want to change their mind.
What happened?
We just want to change our mind.
What happened?
My cousin who does the same thing you do, he's with the same company you're with.
We didn't know he was with the same company.
We called him for advice because we know he was in the insurance business, and we've chosen
to go with him.
But, but.
. . we totally understand, we know what you're going to say, and his cousin prepped him on
everything I was going to say, so I had no comeback.
$11,000 was a lot of money.
Let me tell you.
It almost put me out of business.
It was a very, very scary moment that day as well.
Another one is when a big player executive sales person staff member of your company
leaves.
And 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 it has happened, and when it does and you're in the moment, it's never fun to experience
when you lose 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, especially the bigger you get.
And one time we experienced a lawsuit that was a 400-page lawsuit.
I will never forget this 400 page lawsuit that came in.
And they sued me, the company, seven of my team members.
They wanted to do whatever they could to put us out of business.
And that was a scary moment.
When FedEx brings you a box this big and you open it up and it's a lawsuit from a 400 billion
dollar company, let me tell you.
You need to realize at that moment they can do every single thing they want to put you
out of business, but they can't do anything to stop you from working.
And that was the biggest edge.
Anybody can sue anybody, but nobody can stop you from working.
Especially in our country.
Maybe in some other countries they can, but you cannot stop a person from working, so
you need to get back to work.
Another one is when an investor backs out.
Some people have a startup company, and [snap], an investor one day says, "We no longer want
to participate with your company."
That happens many times to many people, where the investor pulls out.
When it happens, you've got to pivot.
And it can be scary sometimes, especially if you have some money you need to be paying
people.
It can be scary things that can happen at times, but you've got to figure out a way
to pivot with that.
Another one is when your partner changes their mind.
I had this experience with me seven years ago I want to say and this was actually a
good friend at that time.
And we were starting a business, and we started off and I'll never forget we were at a house,
4:00, six months we've been talking about this, he's excited, in the basement, he's
shaking my hand, "I give you my word.
We're going to do this and.
. . " No problem.
Wake up, fired up!
Everywhere we go, he's excited.
The night before, the night before, when I talked to him, he had a change of heart.
And it threw me off tremendously.
The night before.
And it was one of the best things that happened, because I learned that at that moment, you
don't necessarily know if everybody has the courage to go and do something like this,
and this person did not have the courage to go do something like this.
And a big part of the funds is that at that time we were counting on was going to be a
50/50 opportunity for both.
When he pulled out, it threw me off tremendously.
It threw me off tremendously.
And I almost didn't make the decision because my decision was almost controlled by his fear
and if I would have said no, that means I made my decision based on him, and I can't
control his fears.
He has to live with his fears.
When he's 80 years old, you know, for the next 30, 40, 50, 60 years, he has to live
with the decision that he made.
And even though maybe the decision publicly, where people say you made the right decision,
deep down inside, you know, he has to know with having access to all the information,
no matter how much he convinces himself, he knows what type of decision he made.
I moved on.
But that is not an easy decision when that happens.
But it will happen in business.
You can't take it personally.
You've got to move on in business.
These types of things will happen in business.
You still need to move on.
It happens in sports all the time.
Westbrook Durant.
It happens in sports all the time with Shaq and Kobe.
It's happened in so many different platforms.
You've got to be able to stand up and still go out there and win, regardless of what takes
place.
And last but not least, when things happen that you can't control.
I got started in the financial industry with Morgan Stanley Dean Witter on 9/10.
Excited!
The next day's 9/11.
I can't control 9/11 from happening.
No one wanted to invest for three years.
No one.
Everybody I sat with, oh we don't know how the market's going to do.
Because we're afraid that war is still going on.
Oh, we don't know what's going to happen to the market.
We've taken every single penny out of the stock market.
We're not going to know what's going to happen with it.
Oh, we're not going.
. . oh, we're not investing, oh, we're not.
. . we're staying cash.
Everything was cash.
And I'm starving for three years.
Everything was cash.
And try to figure it out during that time.
It's not something I control.
It's something that was happening in the market.
I still stuck around.
And I saw 95% of my peers who got licensed their series 7 during that time.
They quit.
They were probably smart at that time for doing that, but I had the courage to stick
around and I didn't want to give up.
Because eventually I thought something good was going to happen and it ended up happening.
So every one of these stories I'm telling you, I'm not telling you these stories with
the intention of scaring you.
This is not an intention for me to scare you or tell you for you to oh my gosh, I don't
know if I can handle going and becoming a sales guy for a company or an executive or
partner or an equity owner or an entrepreneur or whatever it is.
Not at all.
I just want you to know, that this is normal.
I know this sounds crazy.
But this is normal.
And this is where your defining moment happens.
This is when you learn about yourself.
This is when you go home at night and you kind of experience what cold feet is all about.
This is when you go home at night and you tell yourself, "I made the wrong decision.
I should have never done it.
That person was right.
That I told you so was right.
These are the moments where you become the person that everybody looks up, and you become
the example to everybody else.
Or, you become a statistic, that allowed fear and any of these horror type of situations
that are temporary gets you to go out there and quit and not become an entrepreneur.
You're going to have to make that decision for yourself.
I won't have to.
You're going to have to do it.
The good news is, for the most part, there's a way out.
For the most part, there's a way out, when you're experiencing these types of things
that happen in business.
So anyways, with that being said, Paul, go grab my pillow for me buddy.
I know you got, Paul is sitting there comfortably.
We've got an exciting project that's coming up for Paul.
Okay, here we go.
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And if you've got any questions, or any stories about the scariest moment you ever had in
your career, please comment on the bottom.
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