The Purpose is Profit

The Purpose Is Profit: Becoming an Entrepreneur [Book & Audio Excerpt]

If you have the dream to become an entrepreneur and start your own business, “The Purpose Is Profit” was written for you. It gives you the inside story from the entrepreneur’s perspective. “The Purpose Is Profit” covers the full arc—from the struggle to conceive the right idea, to funding the startup, to scaling the business, to executing the strategy behind the exit. Finally, the book discusses life after the sale to a Fortune 100 company—the good, the bad, and the ugly.

“The Purpose Is Profit” delivers direct insight about the startup process and how business really works. Each chapter tells a part of the story interwoven with the tools you need to build your own business. As a special feature, the appendix includes two essential manuals: The Startup Roadmap and The Startup Funding Guide.

The excerpt from “The Purpose is Profit” below was selected exclusively for StartupNation readers, and introduces the emotional struggle the author faced when deciding to become an entrepreneur:

People told me I was crazy. “You are going to fail!”

I can’t blame my colleagues for saying that. I was setting out to start not one but two real-estate-related businesses in the midst of the major 1991 commercial real estate slump, brought on by the sweeping failures of savings and loans across the country. But I just had to do it. My heart told me the restrictions of a large corporation posed greater risk to my well-being than the uncertainty of starting my own venture. As it turned out, one of my businesses did fail. But the other one took off, generating a profit in its fourth month. My partners and I never looked back.

My purpose in writing this book is to eliminate the mystery of becoming an entrepreneur by sharing my experience and the principles I’ve learned from both failure and success. You, too, can conquer the fears holding you captive, preventing you from starting your own business. I hope my story will motivate those of you who are asking, “Should I look for a job or create my own job? Should I stay in the confines of my corporate position, or should I start a business of my own? Do I have what it takes to blast through the obstacles and risk it all?”

I was on the fast track, working for some of America’s best-managed corporations, including IBM, Hewlett-Packard and Trammell Crow Company. Still, something was missing. I was selling their products and services when I really wanted to create and sell my own. I was hungry for independent success and control. I yearned to hold out my ideas for the world to validate. I know these sentiments are not unique.

I resolved not to go to my grave without first starting my own business. But I had questions. What type of business would it be? What would be my product? How would I make money? Who would be my customer? I thought up different business models and new ideas every week for years. But when was it going to happen? I finally documented my commitment to start my own business by writing out a promise to myself, signing it in front of a witness, and carrying it in my wallet for years. I knew if I wrote down my desire as a covenant, I would make it happen.

Even while rising through the ranks of some of the nation’s most respected corporations, I was growing tired of being told what to do, when to do it, and how to do it—especially when I knew there was a better way. Conforming to individual decisions driven by politics and having others decide where I fit in the pay-grade hierarchy was not my idea of the best way to make a living. Would my life just go on and on, tied to an income stream driven by the motivations of others? No. I wanted to take control of the mission for my life.

This book is all about that alternative path. If you do not like the choice of working for BigCo, then start NewCo. You will set the pace, the tone, and the direction. You will make the decisions, and you will be responsible for the outcomes. Yes, there is the risk of failure—but that is precisely why I have written this book. If you can understand the levers and gears within the startup machine, you can dramatically increase your probability of success.

Rather than a textbook approach, I want to share my startup experience by telling you the story of my journey, enumerating the principles of success and the hard lessons learned along the way.

I bootstrapped two companies at the same time. One startup was a passion project filled with promise that ended in commercial failure. The other startup not only thrived, it became an Inc. 500 Company and went on to be sold to a Fortune 100 Company. I want you to learn from both of these stories.

The essential difference between the two businesses was my distinctive competence. Distinctive competence is an exceptional skill or talent, specialized knowledge, and a record of achievement you’ve acquired through your unique experience. Having distinctive competence is lesson number one: a venture filled with passion is not enough; you will substantially increase your probability of startup success if you build a business that leverages your distinctive competence.

Let me set the stage for my liftoff as an entrepreneur. It was 1990. I was 36 years old, married with two young children, and working for Trammell Crow Company (TCC), the largest U.S. real estate developer. Trammell Crow paid me a good salary, but the industry was in turmoil. The traditional real estate development side of TCC was struggling for survival, and heads were starting to roll. On the other hand, our new service business was making money. Since the development side controlled the service side, there was tremendous political and performance pressure within TCC. This created trust issues around career, compensation and control. My solution to this problem was always the same: outperform my goals.

By the summer of 1990, I became the top producer for the service business by landing what was lauded as the mother lode within the commercial real estate industry. It was the first comprehensive outsourcing contract for all corporate real estate service lines for a Fortune 100 company called Baxter International. Even though it was a time to celebrate the Baxter victory, economic and internal political pressures were bearing down. TCC wanted to change my compensation package. Under duress, I agreed to accept a cut in compensation, with the understanding that I would be promoted to partner. My boss toasted my promotion with champagne at the holiday party in December—but the other shoe was about to drop.

Fast-forward three months to one fateful Saturday morning in March of 1991. I had been out of town all week, so I went into the office that weekend to clean up some paperwork. When I walked into the copy room, a spreadsheet sat on top of the copy machine. Not meant for my eyes, it outlined three go-forward scenarios for our business unit. Two of the three scenarios had me cut from staff.

That defining moment pushed me with two hands to take the leap to start my own business. It was the best decision I ever made.

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“The Purpose Is Profit” is currently available for pre-order at Amazon, Barnes & Noble, IndieBound, 800CEOread and Books-a-Million. The book will be released as a hardback and an eBook on August 2, 2016 by Greenleaf Book Group.

About the Authors: Ed “Skip” McLaughlin, Wyn Lydecker, and Paul McLaughlin

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