The American Entrepreneur

Dirty Work

A few years ago, and at the request of Renda Broadcasting, I agreed to do a daily talk radio show dealing with business and entrepreneurial-related issues.

Today, and after a few product makeovers, these radio shows are regularly heard by nearly 100,000 people --- all over the world.

As I write this, Pittsburgh Business Radio (dba “American Entrepreneur Radio) has received in excess of 800 letters and e-mails; most of them imploring us to please continue doing that which we normally do --- that is, basically help business owners and entrepreneurs start, build, and exit their enterprises.

It’s been a lot of fun doing this. It’s fun because the business is contemporary; and, because it is both “clean” and “glamorous”. Included among the people I have personally interviewed are such individuals as: Ram Charan, Steve Wozniak, Nolan Bushnell, Tony Hsieh, and Jason Fried. (The “hipsters” reading this column will no doubt recognize these last two names as perhaps the two hottest, young software entrepreneurs in America today.)

But there’s always a problem with “glamour” businesses. The problem being the fact that, everybody wants to be in them!

I learned this lesson very early in life when I was dating a woman who worked at a local television station. When she accepted her position, her salary was less than one-half of what it would have been had she worked in a regular, non-glamour company. But there were no tears on her side; she knew that this would be the case.

In essence, the management of that television station leveraged its glamour status to reduce her salary. They did this because they knew that her ultimate dream was to become a national network anchor, and so they also knew that her first step towards getting that position would be working at any job, anywhere in any television station.

It’s the same deal in the advertising industry. Advertising is a very sexy business that also offers its employees a chance to be as creative as they wish.

But, forget about making any money in the ad biz … it just ain’t gonna happen.

I’ve also seen this with people who work in sports franchises, at both the college and professional levels. The owners of these franchises know they can pay their people a fraction of what they’re really worth because they also know that at least part of the reason why they’re taking the job in the first place (at least subconsciously) is to meet (and then hopefully “consort” with) famous, professional athletes.

Most of the wisdom I gained in my youth came courtesy of my grandfather. My dad was pretty much a no-show in my life, and so other than the advice I received from a baseball coach, I would learn about life by walking across Brookline to Beechview --- to my Grandpa’s house. Once there, and so long as I did the chores he had laid out for me, I could get answers to any and all of my questions about life.

“Find a dirty, backwater business”, was probably the thing that Grandpa would most often tell me, “Do something that everyone else considers too disgusting or too hard or too dirty and you’ll end up making tons of money.”

And he was right. For example, I had a college buddy who took my grandfather’s advice almost literally. At age 22, he opened up a business that regularly cleaned the filthy restrooms in service stations.

Absolute disgusting work, but man, did he clean up! When he sold this business (in his early 30’s), he became an instant millionaire!

I’ve started many companies. But the most successful of them (from a profit perspective) have always been the ones that were: a.) decidedly unsexy, and, b.) performing work that was at least tedious; and, at most, downright boring.

But the plain and simple lesson here is that people will trade job satisfaction for cash. Both ways.

But to a business owner, the dirty/backwater businesses also have at least one other redeeming feature. And that is the fact that, and in almost all instances, there is very little competition.

I once started a business that was sold for many tens of millions of dollars less than five years later. This business employed a deadly combination of leading-edge computer technology with good old phone banging to recover the previously unbilled deductibles of property/casualty insurance customers. The work here was both tedious and painstaking. But we never had a competitor, and our EBIDA was north of 60% when we finally cashed out.

This is not to say that there cannot be category leaders at the top of the glamour business segment as well. Hell, there are always category leaders.

But the climb up that mountain is extremely arduous and the people who tend to “play” in these (glamour) niches are almost always genius-level. In other words, they’re very hard to out-think!

I say all this because I see more and more start-ups gravitating toward business models that rely upon “clean” and sanitized activities (like “tweeting” and putting applications on iPhones). The owners of these businesses clearly are more interested in glamour than grime.

And so while the world needs some of these kinds of products and tools, it needs a hell of a lot more companies that are willing to do such tasks as: monitoring security, reconstructing fragmented disks, performing financial audits, and --- just updating antiquated tax codes.

There are just two signs on the desk in my office, and one them screams out, “There are no shortcuts!”

So, and if you are now building or are about to build a “me too” product to compete with “Groupon,” I suggest that you instead stop and think about what the “Groupon Group” might need done in its back office and then go out and build that instead.

Now if I can just hire someone willing to do the painstaking edits to this article …

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