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Federal Government Debt Ceiling
Every day, the federal government spends more money than it takes in. It makes up the difference by borrowing money. So every day, the government's debt increases. Some time next month, total federal debt will rise above $14.3 trillion.
There's a law on the books — first passed in 1917, updated many times since — that caps the federal debt at $14.3 trillion. This is the debt ceiling.
Some time very soon, the government either has to raise the debt ceiling or stop spending more than it takes in (in other words, balance the budget).
Balancing the budget would mean cutting spending by about 40 percent, raising taxes by a comparable amount, or enacting some combination of massive spending cuts and huge tax increases. (Context: Every penny of discretionary spending, including defense, amounts to about 40 percent of the budget.)
Balancing the budget immediately bears no resemblance to the budget and tax policies passed by Congress in the past few months. It would be a much bigger, much faster spending cut and/or tax hike than leaders of either party are proposing.
Trying to stay below the ceiling could also ultimately force the government to default on its debt, which has never happened in U.S. history. Because U.S. Treasury bonds are held around the world, and are considered nearly as safe as cash, a U.S. default would create economic chaos.
Congress has raised the debt ceiling nine 10 times in the past decade, according to National Journal. And it seems likely that the current debate over the debt ceiling comes down to what sort of posturing, or negotiating, or whatever, will happen between now and whenever Congress votes to raise it again.
Source: NPR
There's a law on the books — first passed in 1917, updated many times since — that caps the federal debt at $14.3 trillion. This is the debt ceiling.
Some time very soon, the government either has to raise the debt ceiling or stop spending more than it takes in (in other words, balance the budget).
Balancing the budget would mean cutting spending by about 40 percent, raising taxes by a comparable amount, or enacting some combination of massive spending cuts and huge tax increases. (Context: Every penny of discretionary spending, including defense, amounts to about 40 percent of the budget.)
Balancing the budget immediately bears no resemblance to the budget and tax policies passed by Congress in the past few months. It would be a much bigger, much faster spending cut and/or tax hike than leaders of either party are proposing.
Trying to stay below the ceiling could also ultimately force the government to default on its debt, which has never happened in U.S. history. Because U.S. Treasury bonds are held around the world, and are considered nearly as safe as cash, a U.S. default would create economic chaos.
Congress has raised the debt ceiling nine 10 times in the past decade, according to National Journal. And it seems likely that the current debate over the debt ceiling comes down to what sort of posturing, or negotiating, or whatever, will happen between now and whenever Congress votes to raise it again.
Source: NPR
41 Things I've Learned By 40
June 8th marks my 40th Birthday. Here are 41 pieces of advice that I have learned along the way:
41. Don't worry too much about what others think about you.
40. Everyone has an ego. Tread lightly as to not bruise them.
39. Nothing produces results as much as taking action.
38. Don't gossip. What you say will always find its way back to the person.
37. People do business with people they know and like.
36. Jealous and petty people are just part of life.
35. Say "please" and "thank you". It will make you stand out from the crowd.
34. When you need help, ask someone.
33. Having written goals is an important step you achieving your dreams.
32. Over using credit cards will stall your financial future.
31. A supportive spouse is worth her weight in gold, and then some.
30. A true friend is excited for you about any event that makes you happy.
29. True friends are rare and should be cherished.
28. No job is secure. Have a "plan B"
27. Always find the best in others people. Do not focus on their flaws.
26. You are not what you drive or what you wear. Do not judge others by their cars, clothes or zip code.
25. You are a "brand". No matter what you do it effects your reputation.
24. Luck does not happen by accident.
23. Start saving money when you a young. 10% of your income should always go to your 401K.
22. Dedicate time to think about your future. Know what success looks like.
21. You cannot love your kids too much!
20. Treat everyone with respect. You never know when they might circle back into your life.
19. If you are not knowledgeable about wine...Don't fake it.
18. Be-friend your competitors.
17. Regardless of your political beliefs - attend a presidential inauguration once in your lifetime. The whole thing is very cool.
16. Find a mentor.
15. Be a mentor.
14. Staying physically fit gets harder as you get older. But do it anyway.
13. You do not have to be smart to be successful. Tenacity trumps intelligence.
12. Having a strong network of professional contacts is the best career safety net.
11. Read a lot of books, magazines, websites, blogs and newspapers. Knowledge is power.
10. Writing a book is hard work. Promoting a book is harder work.
9. Develop your public speaking skills. Join a Toastmasters group and participate actively for two years.
8. There is no substitute for integrity.
7. Have friends who challenge you to be a better person.
6. If you know someone who wrote a book, read it. The biggest compliment you can give an author is to read what they wrote.
5. Helping others always come back to benefit you.
4. Find a good lawyer, accountant and banker before you need them.
3. Learn to cook.
2. Opportunities exist. You just have to look for them.
AND THE NUMBER ONE THING I HAVE LEARNED:
#1 - Those who have achieved REAL success in life (financially, emotionally and spiritually) will never criticize your dreams and aspirations. Instead they will look for ways to share their own experiences to help lift you up to higher levels. Successful people are rarely jealous and welcome the achievements of others.
As with all free advice....remember, you get what you pay for.
Source: Thom Singer
41. Don't worry too much about what others think about you.
40. Everyone has an ego. Tread lightly as to not bruise them.
39. Nothing produces results as much as taking action.
38. Don't gossip. What you say will always find its way back to the person.
37. People do business with people they know and like.
36. Jealous and petty people are just part of life.
35. Say "please" and "thank you". It will make you stand out from the crowd.
34. When you need help, ask someone.
33. Having written goals is an important step you achieving your dreams.
32. Over using credit cards will stall your financial future.
31. A supportive spouse is worth her weight in gold, and then some.
30. A true friend is excited for you about any event that makes you happy.
29. True friends are rare and should be cherished.
28. No job is secure. Have a "plan B"
27. Always find the best in others people. Do not focus on their flaws.
26. You are not what you drive or what you wear. Do not judge others by their cars, clothes or zip code.
25. You are a "brand". No matter what you do it effects your reputation.
24. Luck does not happen by accident.
23. Start saving money when you a young. 10% of your income should always go to your 401K.
22. Dedicate time to think about your future. Know what success looks like.
21. You cannot love your kids too much!
20. Treat everyone with respect. You never know when they might circle back into your life.
19. If you are not knowledgeable about wine...Don't fake it.
18. Be-friend your competitors.
17. Regardless of your political beliefs - attend a presidential inauguration once in your lifetime. The whole thing is very cool.
16. Find a mentor.
15. Be a mentor.
14. Staying physically fit gets harder as you get older. But do it anyway.
13. You do not have to be smart to be successful. Tenacity trumps intelligence.
12. Having a strong network of professional contacts is the best career safety net.
11. Read a lot of books, magazines, websites, blogs and newspapers. Knowledge is power.
10. Writing a book is hard work. Promoting a book is harder work.
9. Develop your public speaking skills. Join a Toastmasters group and participate actively for two years.
8. There is no substitute for integrity.
7. Have friends who challenge you to be a better person.
6. If you know someone who wrote a book, read it. The biggest compliment you can give an author is to read what they wrote.
5. Helping others always come back to benefit you.
4. Find a good lawyer, accountant and banker before you need them.
3. Learn to cook.
2. Opportunities exist. You just have to look for them.
AND THE NUMBER ONE THING I HAVE LEARNED:
#1 - Those who have achieved REAL success in life (financially, emotionally and spiritually) will never criticize your dreams and aspirations. Instead they will look for ways to share their own experiences to help lift you up to higher levels. Successful people are rarely jealous and welcome the achievements of others.
As with all free advice....remember, you get what you pay for.
Source: Thom Singer
Mark Cuban - Success and Motivation Pt. 4
You never quite know in business if what you are doing is the right or wrong thing. Unfortunately, by the time you know the answer, someone has beaten you to it and you are out of business. I used to tell myself that it was ok to make little mistakes, just don’t make the big ones. I would continuously search for new ideas. I read every book and magazine I could. Heck, 3 bucks for a magazine, 20 bucks for a book. One good idea that lead to a customer or solution and it paid for itself many times over. Some of the ideas i read were good, some not. In doing all the reading I learned a valuable lesson.
Everything I read was public. Anyone could buy the same books and magazines. The same information was available to anyone who wanted it. Turns out most people didn’t want it.
I remember going into customers or talking to people in the industry and tossing out tidbits about software or hardware. Features that worked, bugs in the software. All things I had read. I expected the ongoing response of “Oh yeah, I read that too in such-and-such.” That’s not what happened. They hadn’t read it then, and they haven’t started reading yet.
Most people won’t put in the time to get a knowledge advantage. Sure, there were folks that worked hard at picking up every bit of information that they could, but we were few and far between. To this day, I feel like if I put in enough time consuming all the information available, particularly with the net making it so readily available, I can get an advantage in any technology business. Of course my wife hates that I read more than 3 hours almost every day, but it gives me a level of comfort and confidence in my businesses. AT MicroSolutions it gave me a huge advantage. A guy with little computer background could compete with far more experienced guys just because I put in the time to learn all I could.
I learned from magazines and books, but I also learned from watching what some of the up and coming technology companies of the day were doing. Its funny how the companies that I thought were brilliant then, are still racking it up today.
Every week a company called PCs Limited used to take a full-page ad in a weekly trade magazine called PC Week. The ad would feature PC peripherals that the company would sell. Hard Drives. Memory. Floppy Drives. Graphics Cards. Whatever could be added to a PC was there. What made the ad so special was that each and every week the prices got lower. If a drive was 2,000 dollars last week, it was $ 1940 this week. For the first time in any industry that I knew of, we were seeing vendors pass on price savings to customers.
The PC Limited ads became the “market price” for peripherals. I looked for the ad every week. In fact, I became a customer. I was in Dallas. They were in Austin.
I remember driving down to pick up some hard drives that I was going to put into my customers PCs. I had no idea up to that point, but it turns out that they had just moved from the owner’s dorm room into a little office/warehouse space. I was so impressed by this young kid (I was a wise old 25 at the time), that I actually wrote a letter thanking him for the great job he was doing, and…I’m embarassed to say now, I told him that if he kept up what he was doing he was destined for far bigger and better things.
I kept on doing business with PCs Limited, and Michael Dell kept on doing what he was doing. I dont think he really needed my encouragement, but i have since told him that I thought his weekly full page ads with ever declining prices, changed the PC industry and were the first of many genius moves on his part.
Michael wasn’t the only smart one in those days.
One of the PC industry’s annual rituals was the Comdex trade show in Las Vegas. Every November, it was the only 3 days I knew I would get away and get a break from the office. It was work during the day. Visiting all the new technology booths. Trying to get better pricing from vendors. Trying to find out where the best parties were. If you could believe it, back in those days, the number one party was the Microsoft party. I sold some Microsoft products, so I could get in.
One particular year, I was on my way to having a memorable night. I had met some very, very attractive women (I swear they were). Got them some tickets to come with me to the big party. All is good. I’m having fun. They are having fun. Then we see him. Bill G. As in Bill Gates dancing up a storm. I’m a Bill Gates fan, so I wont describe his dancing, but he was definitely having fun.
At that point in time, Microsoft had gone public and Bill Gates was Bill Gates. If you were in the business you knew him or knew of him. The girls I was with were in the business. Long story short, I went to the bar to get some drinks for all us, I come back, they aren’t there. Come to find out the next day, Bill stole my girls. As I would learn later in life, money does make you extremely handsome.
Bill G also taught me a few things about business. Put aside how he killed IBM at their own game by licensing PC DOS to anyone that wanted it. What MicroSoft did to knock Lotus 1-2-3 and WordPerfect off their thrones was literally business at its best.
At that point in time, software was expensive. WordPerfect and Lotus 1-2-3 both sold for $495 and their publishers were proud of that fact. In order to be able to sell Lotus 1-2-3, you had to go to special training to become authorized. How crazy does that sound now going to a special class to be able to sell a spreadsheet. WordPerfect wasn’t quite as bad, but they had their own idiosyncrasies as well. Meanwhile, Microsoft was on the outside looking in. Excel, Word, Powerpoint were all far down the list of top sellers until lightning struck.
Microsoft decided to go against industry protocol and package those 3 programs as a suite and offer them as an upgrade to competitors’ products for the low, low price of 99 dollars. Of course you needed to have and use Windows for it to work, but in a time when people were buying new PCs with every dramatic increase in power and decrease in price, it was a natural move for us at MicroSolutions to sell the bundle. It made the effective price of the PC and software together far, far lower. We loved it. It also taught me several big lessons.
Always ask yourself how someone could preempt your products or service. How can they put you out of business? Is it price? Is it service? Is it ease of use? No product is perfect and if there are good competitors in your market, they will figure out how to abuse you. It’s always better if you are honest with yourself and anticipate where the problems will come from.
The 2nd lesson is to always run your business like you are going to be competing with Microsoft. They may not be your direct competitor. They may be a vendor. They may be a direct competitor and a vendor. Whatever they may be to your business, if you are in the technology business, you have to anticipate that you will in some way have to compete with Microsoft at some point. I ask myself every week what I would do if they entered any of my businesses. If you are ready to compete with Microsoft, you are ready to compete with anyone else.
Watching the best taught me how to run my businesses. Along the way I taught myself a few things.
Source: Mark Cuban
Everything I read was public. Anyone could buy the same books and magazines. The same information was available to anyone who wanted it. Turns out most people didn’t want it.
I remember going into customers or talking to people in the industry and tossing out tidbits about software or hardware. Features that worked, bugs in the software. All things I had read. I expected the ongoing response of “Oh yeah, I read that too in such-and-such.” That’s not what happened. They hadn’t read it then, and they haven’t started reading yet.
Most people won’t put in the time to get a knowledge advantage. Sure, there were folks that worked hard at picking up every bit of information that they could, but we were few and far between. To this day, I feel like if I put in enough time consuming all the information available, particularly with the net making it so readily available, I can get an advantage in any technology business. Of course my wife hates that I read more than 3 hours almost every day, but it gives me a level of comfort and confidence in my businesses. AT MicroSolutions it gave me a huge advantage. A guy with little computer background could compete with far more experienced guys just because I put in the time to learn all I could.
I learned from magazines and books, but I also learned from watching what some of the up and coming technology companies of the day were doing. Its funny how the companies that I thought were brilliant then, are still racking it up today.
Every week a company called PCs Limited used to take a full-page ad in a weekly trade magazine called PC Week. The ad would feature PC peripherals that the company would sell. Hard Drives. Memory. Floppy Drives. Graphics Cards. Whatever could be added to a PC was there. What made the ad so special was that each and every week the prices got lower. If a drive was 2,000 dollars last week, it was $ 1940 this week. For the first time in any industry that I knew of, we were seeing vendors pass on price savings to customers.
The PC Limited ads became the “market price” for peripherals. I looked for the ad every week. In fact, I became a customer. I was in Dallas. They were in Austin.
I remember driving down to pick up some hard drives that I was going to put into my customers PCs. I had no idea up to that point, but it turns out that they had just moved from the owner’s dorm room into a little office/warehouse space. I was so impressed by this young kid (I was a wise old 25 at the time), that I actually wrote a letter thanking him for the great job he was doing, and…I’m embarassed to say now, I told him that if he kept up what he was doing he was destined for far bigger and better things.
I kept on doing business with PCs Limited, and Michael Dell kept on doing what he was doing. I dont think he really needed my encouragement, but i have since told him that I thought his weekly full page ads with ever declining prices, changed the PC industry and were the first of many genius moves on his part.
Michael wasn’t the only smart one in those days.
One of the PC industry’s annual rituals was the Comdex trade show in Las Vegas. Every November, it was the only 3 days I knew I would get away and get a break from the office. It was work during the day. Visiting all the new technology booths. Trying to get better pricing from vendors. Trying to find out where the best parties were. If you could believe it, back in those days, the number one party was the Microsoft party. I sold some Microsoft products, so I could get in.
One particular year, I was on my way to having a memorable night. I had met some very, very attractive women (I swear they were). Got them some tickets to come with me to the big party. All is good. I’m having fun. They are having fun. Then we see him. Bill G. As in Bill Gates dancing up a storm. I’m a Bill Gates fan, so I wont describe his dancing, but he was definitely having fun.
At that point in time, Microsoft had gone public and Bill Gates was Bill Gates. If you were in the business you knew him or knew of him. The girls I was with were in the business. Long story short, I went to the bar to get some drinks for all us, I come back, they aren’t there. Come to find out the next day, Bill stole my girls. As I would learn later in life, money does make you extremely handsome.
Bill G also taught me a few things about business. Put aside how he killed IBM at their own game by licensing PC DOS to anyone that wanted it. What MicroSoft did to knock Lotus 1-2-3 and WordPerfect off their thrones was literally business at its best.
At that point in time, software was expensive. WordPerfect and Lotus 1-2-3 both sold for $495 and their publishers were proud of that fact. In order to be able to sell Lotus 1-2-3, you had to go to special training to become authorized. How crazy does that sound now going to a special class to be able to sell a spreadsheet. WordPerfect wasn’t quite as bad, but they had their own idiosyncrasies as well. Meanwhile, Microsoft was on the outside looking in. Excel, Word, Powerpoint were all far down the list of top sellers until lightning struck.
Microsoft decided to go against industry protocol and package those 3 programs as a suite and offer them as an upgrade to competitors’ products for the low, low price of 99 dollars. Of course you needed to have and use Windows for it to work, but in a time when people were buying new PCs with every dramatic increase in power and decrease in price, it was a natural move for us at MicroSolutions to sell the bundle. It made the effective price of the PC and software together far, far lower. We loved it. It also taught me several big lessons.
Always ask yourself how someone could preempt your products or service. How can they put you out of business? Is it price? Is it service? Is it ease of use? No product is perfect and if there are good competitors in your market, they will figure out how to abuse you. It’s always better if you are honest with yourself and anticipate where the problems will come from.
The 2nd lesson is to always run your business like you are going to be competing with Microsoft. They may not be your direct competitor. They may be a vendor. They may be a direct competitor and a vendor. Whatever they may be to your business, if you are in the technology business, you have to anticipate that you will in some way have to compete with Microsoft at some point. I ask myself every week what I would do if they entered any of my businesses. If you are ready to compete with Microsoft, you are ready to compete with anyone else.
Watching the best taught me how to run my businesses. Along the way I taught myself a few things.
Source: Mark Cuban
Mark Cuban - Success and Motivation Pt. 3
Fired. Not the first time it’s happened, but it reinforced what I already knew; I’m a terrible employee. I just had to face facts and move on. So rather than getting back on that “how the hell am I going to find a job” train, the only right thing to do was to start my own company.
My first act of business? Pile into my buddy’s 1982 Celica, nicknamed Celly, and drive to galveston to party. Of course we stayed in only the best $19.95 a night, plug the hairdryer in the wall and the circuit blows, motel. Nothing but the best as I prepared for my journey into entrepreneurial territory again. I could say I was preocuppied with how to get my new business off the ground. That while my friends got drunk, did stupid tourist tricks and ate at greasy spoons, I sat by the pool on the 1 chaise lounge chair with rust on the clean side and wrote up my businessplan. I didn’t. I got just as drunk and ate the same disgusting food. Then we faced the road trip terror that everyone knows exists, but refuses to admit, the ride home. It wasn’t until we pulled up to the apartment that it hit me. No job. No money. No way to pay the bills. But I had nice towels.
Fortunately the hangover didn’t last too long, and I realized I had to get off my ass and make something happen. First day, first task, come up with a name. This was the start of the microcomputer revolution, and I wanted a name that said what the company was going to do, which was sell personal computers and software and help companies and individuals install them. I was going to offer microcomputer solutions. So after struggling with different names for about 30 minutes, I chose MicroSolutions Inc.
Now came the hard part. I had to call all the people I had done business with at my last company, and let them know that I had been shitcanned and ask them if they would come do business with me at MicroSolutions. I got the expected questions. No I didn’t have an office. No I didn’t have a phone yet other than my home phone. Yes it was just me. No I didn’t have any investors. The only question I dreaded was whether I had a computer to work with. I didn’t. Fortunately, no one asked.
I made a lot of calls, and got some decent response. We love you Mark, we want to give you a chance. A lot of lets stay in touch. I got two real bites. One from a company called Architectual Lighting and the other from a company called Hytec Data Systems.
Architectual Lighting was looking for a time and billing accounting system to allow them to track the work with clients. I don’t remember the name of the software package I told them about, I think it was Peachtree Accounting, but after going out to meet with them it came down to this. I offered to refund 100 pct of their money if the software didn’t work for them, and I wouldn’t charge them for my time for installing and helping them. In return, they would put up the 500 bucks it would take for me to buy the software from the publisher, and I could use them as a reference. This was my “no money down” approach to start a business. They said yes. I had a business.
My 2nd call Hytec Data, was run by Martin Woodall. I met with Martin at the S&D Oyster House on a beautiful June day, and I remember sitting there and him telling me, “I graduated in Computer Science from West Virginia University. I have 50k in the bank and I drive a brand new Cadillac. I know technology better than you. We can work together”. I had a customer, and now with Martin’s help, I had some hope. Hytec Data sold multi user systems. The old kind that used dumb terminals. He bundled it with accounting software and he and a contractor named Kevin, would make modifications to the Cobol source code. They were the hardcore geeks that could help me when I needed it. I was still just 10 months from my first introduction to PCs, and had zero clue about multi user systems. If I came across prospects that could use their system and software, I would get referrals. That was good.
Even better was Martin’s offer of office space. He and Kevin shared office space with the distributor of the computer systems he sold. They had this one office, that when the CEO of the distributors son wasn’t using it to study his spanish, I could use it to make calls, and keep my folders and paperwork. Still no computer, but hey, I had an office and phone. I was bonafide…
At some point I’m going to have to go back and look at my appointment books that I kept from those days to remind myself of who my 2nd, 3rd and on from there customers were. They were small companies that I got to know very well. People that took me under their wing and trusted me, not because I was the most knowledgeable about computers, but because they knew I would do whatever it took to get the job done. People trusted me with keys to their offices. They would find me there when they got in in the morning and I was there when they left. I made 15,000 dollars that first year. I loved every minute of it.
As time went on, my customer base grew. I got my friend and former roommate Scott Susens to help with deliveries. Scott was working as a waiter at a steakhouse at the time. I remember asking him over and over, would you please help me out. I have a customer that had bought a bunch of Epson dot matrix printers from me, and I had to sell Scott on how it wouldn’t be hard to learn how to hook a parallel cable to a pc and printer, and how learning all of this would be a career move compared to working at the steakhouse. Unfortunately, I couldn’t pay him as much as the steakhouse. My good fortune was that Scott worked nights and weekends and decided to take some time in the afternoons to help me out. Not long after that, he was working fulltime installing PCs, learning whatever he had to figure out before an install.
Martin also began to play a larger and larger role. His company was growing, and he was watching my company grow. I would get the PC based stuff, he would get the accounting system stuff. It was a nice split. The better part of the relationship was based on Martin being the most anal retentive person i had ever met in my life. While I covered my mistakes by throwing time and effort at the problem, Martin was so detail oriented, he had to make sure things were perfect so problems could never happen. We could drive each other crazy. He would give me incredible amounts of shit about how sloppy I was. I would give him the same amount back because he was so anal he was missing huge opportunities. We complemented each other perfectly. It would only be a matter of time before we both knew we had to be partners and work together instead of seperately.
That first year in business was incredible. I remember sitting in that little office till 10pm and then still being so pumped up, I would drive over to the gym I belonged to and run 5 to 10 miles on the treadmill going through that day, and the next in my head. Other days I would get so involved with learning a new piece of software that I would forget to eat and look up at the clock thinking it was 6 or 7pm and see that it was 1am or 2am. Time would fly by.
It’s crazy the things that you remember. I remember when my accounts receivable got up to 15k and telling all my friends. I remember reading the PC DOS manual (I really did), and being proud that I could figure out how to set up startup menus for my customers. I remember going to every single retail store in town, BusinessLand, NYNEX, ComputerLand,CompuShop, all those companies that are long gone, and introducing myself to every salesperson to try to get leads. I would call every single big computer company that did anything at all with small businesses, IBM, Wang, Dec, Xerox, Data General, DataPoint (remember them?), setting meetings, asking to come to their offices since I couldn’t afford to take them to lunch. I didn’t need a lot of customers, but my business grew and grew. Not too fast, but fast enough that by the time MicroSolutions had been in business about 2 years, I had 85k dollars in the bank, a receptionist/secretary, Scott helping me out, and a 4 room office that I moved into along with Martin and Hytec Data Systems.
Then I learned a very valuable lesson. Martin had done a great job of setting up our accounting software and systems. I got monthly P&L statements. I got weekly journals of everything coming in and everything going out, payables and receivables. We had a very conservative process where Martin would check the payables, authorize them and then use the software to cut the checks. I would then go through the list, sign the checks and give them to Renee our secretary/receptionist to put in the envelope and mail to our vendors.
One day, Martin comes back from Republic Bank, where we had our account. He had just gone through the drive through and one of the tellers who he would see every day dropping of our deposits asked him to wait a second. She comes back and shows him a check that had the payee of a vendor, WHITED OUT and Renee Hardy, our secretary’s name typed over it. Turns out that in the course of a single week, our secretary had pulled this same trick on 83k of our 85k in the bank. As Martin delived the news, I obviously was pissed. I was pissed at Renee, I was pissed at the bank, I was pissed at myself for letting it happen. I remember going to the bank with copies of the checks, and the manager of the bank basically laughing me out of his office telling me that I “didn’t have a pot to piss in”. That I could sue him, or whatever I wanted, but I was out the money.
I got back to the office, told Martin what happened at the bank, and then I realized what I had to do about all of this. I had to go back to work. That what was done, was done. That worrying about revenge, getting pissed at the bank, all those “I’m going to get even and kick your ass thoughts” were basically just a waste of energy. No one was going to cover my obligations but me. I had to get my ass back to work, and do so quickly. That’s exactly what I did.
Source: Mark Cuban
My first act of business? Pile into my buddy’s 1982 Celica, nicknamed Celly, and drive to galveston to party. Of course we stayed in only the best $19.95 a night, plug the hairdryer in the wall and the circuit blows, motel. Nothing but the best as I prepared for my journey into entrepreneurial territory again. I could say I was preocuppied with how to get my new business off the ground. That while my friends got drunk, did stupid tourist tricks and ate at greasy spoons, I sat by the pool on the 1 chaise lounge chair with rust on the clean side and wrote up my businessplan. I didn’t. I got just as drunk and ate the same disgusting food. Then we faced the road trip terror that everyone knows exists, but refuses to admit, the ride home. It wasn’t until we pulled up to the apartment that it hit me. No job. No money. No way to pay the bills. But I had nice towels.
Fortunately the hangover didn’t last too long, and I realized I had to get off my ass and make something happen. First day, first task, come up with a name. This was the start of the microcomputer revolution, and I wanted a name that said what the company was going to do, which was sell personal computers and software and help companies and individuals install them. I was going to offer microcomputer solutions. So after struggling with different names for about 30 minutes, I chose MicroSolutions Inc.
Now came the hard part. I had to call all the people I had done business with at my last company, and let them know that I had been shitcanned and ask them if they would come do business with me at MicroSolutions. I got the expected questions. No I didn’t have an office. No I didn’t have a phone yet other than my home phone. Yes it was just me. No I didn’t have any investors. The only question I dreaded was whether I had a computer to work with. I didn’t. Fortunately, no one asked.
I made a lot of calls, and got some decent response. We love you Mark, we want to give you a chance. A lot of lets stay in touch. I got two real bites. One from a company called Architectual Lighting and the other from a company called Hytec Data Systems.
Architectual Lighting was looking for a time and billing accounting system to allow them to track the work with clients. I don’t remember the name of the software package I told them about, I think it was Peachtree Accounting, but after going out to meet with them it came down to this. I offered to refund 100 pct of their money if the software didn’t work for them, and I wouldn’t charge them for my time for installing and helping them. In return, they would put up the 500 bucks it would take for me to buy the software from the publisher, and I could use them as a reference. This was my “no money down” approach to start a business. They said yes. I had a business.
My 2nd call Hytec Data, was run by Martin Woodall. I met with Martin at the S&D Oyster House on a beautiful June day, and I remember sitting there and him telling me, “I graduated in Computer Science from West Virginia University. I have 50k in the bank and I drive a brand new Cadillac. I know technology better than you. We can work together”. I had a customer, and now with Martin’s help, I had some hope. Hytec Data sold multi user systems. The old kind that used dumb terminals. He bundled it with accounting software and he and a contractor named Kevin, would make modifications to the Cobol source code. They were the hardcore geeks that could help me when I needed it. I was still just 10 months from my first introduction to PCs, and had zero clue about multi user systems. If I came across prospects that could use their system and software, I would get referrals. That was good.
Even better was Martin’s offer of office space. He and Kevin shared office space with the distributor of the computer systems he sold. They had this one office, that when the CEO of the distributors son wasn’t using it to study his spanish, I could use it to make calls, and keep my folders and paperwork. Still no computer, but hey, I had an office and phone. I was bonafide…
At some point I’m going to have to go back and look at my appointment books that I kept from those days to remind myself of who my 2nd, 3rd and on from there customers were. They were small companies that I got to know very well. People that took me under their wing and trusted me, not because I was the most knowledgeable about computers, but because they knew I would do whatever it took to get the job done. People trusted me with keys to their offices. They would find me there when they got in in the morning and I was there when they left. I made 15,000 dollars that first year. I loved every minute of it.
As time went on, my customer base grew. I got my friend and former roommate Scott Susens to help with deliveries. Scott was working as a waiter at a steakhouse at the time. I remember asking him over and over, would you please help me out. I have a customer that had bought a bunch of Epson dot matrix printers from me, and I had to sell Scott on how it wouldn’t be hard to learn how to hook a parallel cable to a pc and printer, and how learning all of this would be a career move compared to working at the steakhouse. Unfortunately, I couldn’t pay him as much as the steakhouse. My good fortune was that Scott worked nights and weekends and decided to take some time in the afternoons to help me out. Not long after that, he was working fulltime installing PCs, learning whatever he had to figure out before an install.
Martin also began to play a larger and larger role. His company was growing, and he was watching my company grow. I would get the PC based stuff, he would get the accounting system stuff. It was a nice split. The better part of the relationship was based on Martin being the most anal retentive person i had ever met in my life. While I covered my mistakes by throwing time and effort at the problem, Martin was so detail oriented, he had to make sure things were perfect so problems could never happen. We could drive each other crazy. He would give me incredible amounts of shit about how sloppy I was. I would give him the same amount back because he was so anal he was missing huge opportunities. We complemented each other perfectly. It would only be a matter of time before we both knew we had to be partners and work together instead of seperately.
That first year in business was incredible. I remember sitting in that little office till 10pm and then still being so pumped up, I would drive over to the gym I belonged to and run 5 to 10 miles on the treadmill going through that day, and the next in my head. Other days I would get so involved with learning a new piece of software that I would forget to eat and look up at the clock thinking it was 6 or 7pm and see that it was 1am or 2am. Time would fly by.
It’s crazy the things that you remember. I remember when my accounts receivable got up to 15k and telling all my friends. I remember reading the PC DOS manual (I really did), and being proud that I could figure out how to set up startup menus for my customers. I remember going to every single retail store in town, BusinessLand, NYNEX, ComputerLand,CompuShop, all those companies that are long gone, and introducing myself to every salesperson to try to get leads. I would call every single big computer company that did anything at all with small businesses, IBM, Wang, Dec, Xerox, Data General, DataPoint (remember them?), setting meetings, asking to come to their offices since I couldn’t afford to take them to lunch. I didn’t need a lot of customers, but my business grew and grew. Not too fast, but fast enough that by the time MicroSolutions had been in business about 2 years, I had 85k dollars in the bank, a receptionist/secretary, Scott helping me out, and a 4 room office that I moved into along with Martin and Hytec Data Systems.
Then I learned a very valuable lesson. Martin had done a great job of setting up our accounting software and systems. I got monthly P&L statements. I got weekly journals of everything coming in and everything going out, payables and receivables. We had a very conservative process where Martin would check the payables, authorize them and then use the software to cut the checks. I would then go through the list, sign the checks and give them to Renee our secretary/receptionist to put in the envelope and mail to our vendors.
One day, Martin comes back from Republic Bank, where we had our account. He had just gone through the drive through and one of the tellers who he would see every day dropping of our deposits asked him to wait a second. She comes back and shows him a check that had the payee of a vendor, WHITED OUT and Renee Hardy, our secretary’s name typed over it. Turns out that in the course of a single week, our secretary had pulled this same trick on 83k of our 85k in the bank. As Martin delived the news, I obviously was pissed. I was pissed at Renee, I was pissed at the bank, I was pissed at myself for letting it happen. I remember going to the bank with copies of the checks, and the manager of the bank basically laughing me out of his office telling me that I “didn’t have a pot to piss in”. That I could sue him, or whatever I wanted, but I was out the money.
I got back to the office, told Martin what happened at the bank, and then I realized what I had to do about all of this. I had to go back to work. That what was done, was done. That worrying about revenge, getting pissed at the bank, all those “I’m going to get even and kick your ass thoughts” were basically just a waste of energy. No one was going to cover my obligations but me. I had to get my ass back to work, and do so quickly. That’s exactly what I did.
Source: Mark Cuban
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