As a part 2 to "My Ultimate Blunder" I will tell you the story of my first blunder and how I overcame it in part 3. Let part 2 be a warning to all the younger Entrepreneurs and a humorous story to all the experienced Fastlaners here. I'll be making fun of myself in this one.
Once upon a time a world travelled 25 year old sailor left the U.S> Navy in 1999. He had received one of the 1st Microsoft Certified Systems Developer certificate thanks to the Navy. He was recruited for an electronic engineering job right out and proceeded to to start this $72,000 per year position. 30 days later he left for a computer job to advance his skills with computers; a $20,000 per year drop in pay! His supervisor was not happy but liked him and wished him well after trying hard to keep him.
This man became a computer consultant (fancy name for help desk in those days) for the next 90 days. He quit because hi lesbian boss hated military men (factual not a stab at her). She had fired many ex-military men shortly after his leaving. His quiting practically saved her life "because I wanted to K*&% her!" Oops sorry got out of character for a sec.
During his time as a computer consultant he often hung around a few guys at their favorite bar; one was a Solomon Smith Barney trader, the other his contact for the popular IPO's going on at the time, and a recently funded Entrepreneur. They all lived at the beach in San Diego. After this man quit his computer consulting job, his friend who repped the IPO's got really excited and asked him to go into business with him. Neither had any experience as Entrepreneurs. The IPO guy (from this point on) said many of his clients needed IT/IS departments built from the ground floor to the CTO (Chief Technology Officer) as they were called then.
The young man agreed and recruited 3 others to handle various parts of the business, an IT Recruiter, a Telecommunication expert, and a former Help Desk Manager. All inexperienced Entrepreneurs. They decided to to form a formal partnership where the ex-Navy guy would be the managing partner. This was a general partnership, not an LLC, not a corporation (experienced Entrepreneurs may begin chuckling here).
Their first contact was worth $84,000 to design and build a network for vast Internet traffic with a strong Intrnet backbone (tech stuff details not important). Their 2nd contract was worth $225,000 and they celebrated because their company, Advanced Data Display Systems was off and running in just 2 months. All their clients were Dotcoms with money to burn (more chuckling now). their 3rd contract was $431,000 in their fourth month! They celebrated for two days, mostly drunk.
Ten months later this ex-Navy guy was informed he will be receiving his proceeds totaling the entire amount from launch to be $738,000. All the partners received about this much each because the contracts kept growing in amount. They all became very arrogant and cocky. The ex-Navy guy loved his really large glass desk in his office overlooking the ocean. He loved his expensive $4,000 per week beach home where all the parties seemed to end up. He had 2 waverunners on a trailer never used and a brand new Jeep Wrangler Sahara (with tow package) he financed. Some friend told him to build his credit rather than to buy it cash, he listened, (experienced Entrepreneurs may begin laughing hysterically here). He had many other toys not used and bills totaling almost $45,000 per month.
Two months later he was informed that taxes were a big problem for their company; no one had paid any of them! Then he noticed his client list dwindle down to 2 clients. He sought out his business partner (the IPO rep guy) to see what was going on. He had been cut off by his contacts for major conflict of interests.
One more month later no clients were heard from, the IRS was knocking and his bank account was low! He couldn't figure out what happened? He moved to a smaller apartment after the IRS confiscated much of his stuff. Apparently when partners in a General Partnership don't pay taxes they go after the manager 1st. Actually when the partners move to other states the IRS gets worried and reacts fast. This ex-Navy guy retains professional legal help with the last of his money and gets the IRS bill down to $180,000 owed. The stocks he purchased to diversify his portfolio are all worth crap! You know, like Qualcom, Lucent technologies and various private preferred stocks with many Dotcoms. Another week or two go buy and talks of the Dotcom crash hit the news vigorously. He did get lucky enough to have invested $25,000 with a women he dated shortly who grew her business and bought him out for about $196,000. The IRS took it all and called it even with his attorneys.
He found himself living on the beach (homeless) with a Jeep pre-paid for another 3 months. Living homeless on the beach is not that bad to be honest, but an apartment would have been nice. His company was a bright light burning fast with the Dotcom craze, and burning out just as fast! It's easy to make money in a fast economy, try holding onto it. If you haven't guessed, this was me. I am aslo the fool who thought of the name Advanced Data Display Systems (ADDS); sounds like a mental condition now.
At least I was smart enough to buy a lot of business books (most I didn't read until homeless). 1st, General Partnerships are bad business vehicles! 2nd, the list of things I did wrong is too long, so I will only talk about the 2 things I did right:
1. I found the customer base 1st.
2. I networked with the right people (energetic and determined people) although we all lacked experience.
In Part 3, I will tell the story of how I started and built Advanced Outsource from homeless to wealthy in the success story thread. Yes both companies had "Advanced" as the first word in the name, I thought it would give an advantage in the phone book. LOL
Once upon a time a world travelled 25 year old sailor left the U.S> Navy in 1999. He had received one of the 1st Microsoft Certified Systems Developer certificate thanks to the Navy. He was recruited for an electronic engineering job right out and proceeded to to start this $72,000 per year position. 30 days later he left for a computer job to advance his skills with computers; a $20,000 per year drop in pay! His supervisor was not happy but liked him and wished him well after trying hard to keep him.
This man became a computer consultant (fancy name for help desk in those days) for the next 90 days. He quit because hi lesbian boss hated military men (factual not a stab at her). She had fired many ex-military men shortly after his leaving. His quiting practically saved her life "because I wanted to K*&% her!" Oops sorry got out of character for a sec.
During his time as a computer consultant he often hung around a few guys at their favorite bar; one was a Solomon Smith Barney trader, the other his contact for the popular IPO's going on at the time, and a recently funded Entrepreneur. They all lived at the beach in San Diego. After this man quit his computer consulting job, his friend who repped the IPO's got really excited and asked him to go into business with him. Neither had any experience as Entrepreneurs. The IPO guy (from this point on) said many of his clients needed IT/IS departments built from the ground floor to the CTO (Chief Technology Officer) as they were called then.
The young man agreed and recruited 3 others to handle various parts of the business, an IT Recruiter, a Telecommunication expert, and a former Help Desk Manager. All inexperienced Entrepreneurs. They decided to to form a formal partnership where the ex-Navy guy would be the managing partner. This was a general partnership, not an LLC, not a corporation (experienced Entrepreneurs may begin chuckling here).
Their first contact was worth $84,000 to design and build a network for vast Internet traffic with a strong Intrnet backbone (tech stuff details not important). Their 2nd contract was worth $225,000 and they celebrated because their company, Advanced Data Display Systems was off and running in just 2 months. All their clients were Dotcoms with money to burn (more chuckling now). their 3rd contract was $431,000 in their fourth month! They celebrated for two days, mostly drunk.
Ten months later this ex-Navy guy was informed he will be receiving his proceeds totaling the entire amount from launch to be $738,000. All the partners received about this much each because the contracts kept growing in amount. They all became very arrogant and cocky. The ex-Navy guy loved his really large glass desk in his office overlooking the ocean. He loved his expensive $4,000 per week beach home where all the parties seemed to end up. He had 2 waverunners on a trailer never used and a brand new Jeep Wrangler Sahara (with tow package) he financed. Some friend told him to build his credit rather than to buy it cash, he listened, (experienced Entrepreneurs may begin laughing hysterically here). He had many other toys not used and bills totaling almost $45,000 per month.
Two months later he was informed that taxes were a big problem for their company; no one had paid any of them! Then he noticed his client list dwindle down to 2 clients. He sought out his business partner (the IPO rep guy) to see what was going on. He had been cut off by his contacts for major conflict of interests.
One more month later no clients were heard from, the IRS was knocking and his bank account was low! He couldn't figure out what happened? He moved to a smaller apartment after the IRS confiscated much of his stuff. Apparently when partners in a General Partnership don't pay taxes they go after the manager 1st. Actually when the partners move to other states the IRS gets worried and reacts fast. This ex-Navy guy retains professional legal help with the last of his money and gets the IRS bill down to $180,000 owed. The stocks he purchased to diversify his portfolio are all worth crap! You know, like Qualcom, Lucent technologies and various private preferred stocks with many Dotcoms. Another week or two go buy and talks of the Dotcom crash hit the news vigorously. He did get lucky enough to have invested $25,000 with a women he dated shortly who grew her business and bought him out for about $196,000. The IRS took it all and called it even with his attorneys.
He found himself living on the beach (homeless) with a Jeep pre-paid for another 3 months. Living homeless on the beach is not that bad to be honest, but an apartment would have been nice. His company was a bright light burning fast with the Dotcom craze, and burning out just as fast! It's easy to make money in a fast economy, try holding onto it. If you haven't guessed, this was me. I am aslo the fool who thought of the name Advanced Data Display Systems (ADDS); sounds like a mental condition now.
At least I was smart enough to buy a lot of business books (most I didn't read until homeless). 1st, General Partnerships are bad business vehicles! 2nd, the list of things I did wrong is too long, so I will only talk about the 2 things I did right:
1. I found the customer base 1st.
2. I networked with the right people (energetic and determined people) although we all lacked experience.
In Part 3, I will tell the story of how I started and built Advanced Outsource from homeless to wealthy in the success story thread. Yes both companies had "Advanced" as the first word in the name, I thought it would give an advantage in the phone book. LOL
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