The Harvest And Beyond

"And don't forget: shrouds have no pockets."

- The Late Sidney Rabb, Chairman Emeritus, Stop & Shop, Boston

A Journey, Not a Destination

A common sentiment among successful entrepreneurs is that it is the challenge and exhilaration of the journey that gives them the greatest kick. Henry Ford, a driven entrepreneur, said, "If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability." It is the thrill of the chase that counts.

These entrepreneurs also talk of the venture's incredibly insatiable appetite for not only cash but also time, attention, and energy. Some say it is an addiction. Most say it is far more demanding and difficult than they ever imagined. Most, however, plan not to retire and would do it again, usually sooner. What's more, they also say it is more fun and satisfying than any other career they have had.

For the vast majority of entrepreneurs it takes ten, fifteen, even twenty years or more to build a significant net worth. According to the popular press and government statistics, there are more millionaires than ever in America. In 2002, it was estimated that as many as 3.5 mil­lion persons in the United States (or nearly 3 percent of the working population) would be millionaires - their net worth exceeding $1 mil­lion. While these numbers may be true, a million dollars, sadly, is not really all that much money today as a result of inflation; and while lot­tery and sweepstakes winners become instant millionaires, entrepre­neurs do not.

The Journey Can Be Addictive

Considering the total immersion required - the huge workload, the many sacrifices for a family, and the burnout often experienced by entre­preneurs during the journey - maintaining the energy, enthusiasm, and drive to get across the finish line, to achieve a harvest, may be excep­tionally difficult. Terri Lonier, founder of the Solo Entrepreneur's Net­work, relates that many entrepreneurs are torn between staying small and "controlling" their business or growing and losing control. Yet they sometimes feel trapped by the business. Most have never planned a har­vest strategy. It is imperative that entrepreneurs think about the endgame at the beginning of the journey. Unless we understand what success means to us in advance, we may not know if we have achieved it. We very well may be trapped!

The opening quote of the chapter is a sobering reminder that you can't take your money with you. Its message is clear: unless an entre­preneur enjoys the journey and thinks it is worthwhile, he or she may end up on the wrong train, going to the wrong destination.

First Build a Great Company

One of the simplest, but most difficult, principles for nonentrepreneurs to grasp is that wealth and liquidity are results - not causes - of build­ing a great company. They fail to recognize the difference between making money and spending money. Most successful entrepreneurs possess a clear understanding of this distinction; they are driven and fulfilled by growing their company. They know the payoff will take care of itself if they concentrate on the money-making part of the process.

Create Harvest Options

Here is yet another great paradox in the entrepreneurial process: build a great company and plan to harvest. This apparent contradiction is dif­ficult to reconcile, especially among entrepreneurs with several gener­ations in a family-owned enterprise. Perhaps a better way to frame this apparent contradiction is to keep harvest options open and to think of harvesting as a vehicle for reducing risk and for creating future entre­preneurial choices and options - not simply selling the business and heading for the golf course or the beach, although these options may appeal to a few entrepreneurs.

So many entrepreneurs erroneously assume that the business will go on forever. By stubbornly and steadfastly refusing to explore harvest options and exiting as a natural part of the entrepreneurial process, owners may actually increase their overall risk and deprive themselves of future options. Innumerable examples exist whereby entrepreneurs sold or merged their companies and then went on to acquire or to start another company and pursued new dreams:

Robin Wolaner founded Parenting magazine in the mid-1980s and sold it to Time-Life.1 Wolaner then joined Time and built a highly successful career there, and in July of 1992, she became the head of Time's Sunset Publishing Corporation.2

Securities Online was launched by Gary and George Muller while Gary was still an MBA student in the early 1990s. That company rapidly became quite successful and was sold in early 2000 for over $50 million. Gary made a significant capital gain but stayed with the new owners as president. George created ColorKinetics, Inc., in Boston. That company, by early 2004, had raised nearly $30 million of venture capital and will likely exceed $40 million in sales in 2004 as the leading firm in LED lighting technology. The company was in the registration process for an IPO in spring 2004. Harvest is a mechanism for doing more business (see also about capital management).

Craig Benson founded Cabletron in the 1980s, and it flourished. Eventually he brought in a new CEO and became involved as a trustee of Babson College, and then began teaching entrepreneur-ship classes with a focus on information technology and the Inter­net. Now, as governor of New Hampshire, he has found another way to give back to society and to pursue new dreams.

After creating and building the ninth-largest pharmaceutical com­pany in the United States, Marion Labs, Ewing Marion Kauffman led an extraordinary life as philanthropist and sportsman. His Kauff­man Foundation and its Center for Entrepreneurial Leadership have become the first and premier foundation in the nation dedicated to accelerating entrepreneurship in America. He brought major-league baseball to Kansas City and made sure it would stay there by gifting the Royals to the city and stipulating that the team not relocate when it was sold. The $75 million proceeds of the sale were also donated to charitable causes in Kansas City.

Jeff Parker built and sold two companies, including Technical Data Corporation,3 by the time he was forty. His substantial gain from these ventures has led to an entire new career as a private investor who works closely with young entrepreneurs to help them build their companies.

These are a tiny representation of the tens of thousands of entrepre­neurs that build on their platforms of entrepreneurial success to pursue highly meaningful lives in philanthropy, public service, and community leadership roles. By realizing a harvest, such options become possible, yet the vast majority of entrepreneurs make these contributions to soci­ety while continuing to build their companies. This is one of the best-kept secrets in American culture: the public has very little awareness and appreciation of just how much entrepreneurs give back to their communities through their time, their leadership, and their money. One could fill a book with numerous other examples. The entrepreneurial process is endless.

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