This post comes courtesy of Barry Moltz, small business expert and host of the Small Business Radio Show.
I read a lot of entrepreneur success stories, but none of them are as compelling as the story of Tomas Gorny, a Polish immigrant who started a company on a credit card and sold it for almost $1 billion.
Things weren’t always so rosy for Gorny. When he was just 20 years old, Gorny dropped out of school in Poland and came to America. He joined a company called Internet Communication as a sweat equity partner in the early 90s. To make ends meet, he had several odd jobs like valet parking attendant and survived on a mere $3 a day. Two years later, the company was acquired and Gorny became a millionaire.
After this first major success came an unexpected setback. Gorny used his earnings from the sale to invest in other tech companies, but the entrepreneur suddenly lost his fortune in the dotcom crash. Gorny was broke when the bubble burst, yet he never lost his drive to succeed.
In late 2001, post-9/11, he launched a web-hosting startup called IPOWER with just his credit card. A decade later, Gorny and his partners sold the company for nearly $1 billion.
Today, he runs Nextiva, the largest privately held telecom company in the US. Here is Tomas Gorny’s advice for growing your business.
A business ultimately succeeds because of its culture, not because of the collective skills of the team. Gorny believes that if a potential hire can’t thrive in your culture, they can’t work at the company.
“The key to having the best team is having people in your crew who are ethical and share your vision, mission, and mindset. They will help you overcome a lot of things because you know you’re ultimately going in the same direction,” says Gorny.
It makes sense to hire talented people, but it’s also essential that everyone gets along. Your team must be aligned on values. Running a business is stressful work, and you don’t want to add managing difficult relationships to your long to-do list.
Gorny says that “when (Nextiva) was small, it was easy to walk around, chat, get everybody in the same room, and have a pulse on the business.” This may change as your company grows; the management team will become leaders and it may become challenging to check in with every employee.
That’s why hiring is so important. You want to build a unified team that will excel even when you’re not in the office that day.
Gorny encourages people to embrace failure. No one “will do anything epic if we are afraid to take risks,” he explains.
“The most successful companies are those that give their teams the freedom to not only innovate but also to fail in the process. I’m not afraid to screw up, and I don’t want my team members to be afraid, either. Companies can’t encourage innovation without also accepting and celebrating failure,” says Gorny.
You don’t learn very much from success, but you can learn a lot from failure. Gorny is a great example of how failure can improve your future. The serial entrepreneur may have lost his first fortune in the dotcom crash, but he learned from the experience and earned even more with his next major endeavor.
If your only focus is making money, then you might miss opportunities to improve your offering for your customers. Gorny says that if you create value for the customer, then the financial rewards will follow.
After the crash, Gorny switched his focus from making money to helping his customers. “I’m going to work with good people. I’m not going to have an exit strategy. That doesn’t mean that I’m not willing to sell, buy a business, or go public. It just means that I’m going back to my core values, which is building the business for the customer – not for my personal gain – and then good things will happen,” Gorny said in an interview with Sramana Mitra. This is the approach he used with IPOWER and that he continues to use with his current company Nextiva.
Gorny believes the best way to serve customers is to accelerate innovation: “We have to move much quicker than our competitors...If we are launching a new product or service to our customers, I expect that we are looking for improvements that require us to rethink problems entirely and explore the edge of what’s technically possible.”
Let the customer lead you and you could see some surprising results. "If you are solely focused on your exit strategy, you may forget to build your business. If you focus on building your business, the outcome is often much better than you could have envisioned it,” says Gorny.
Gorny gets his financial outlook from his early life in Europe. “I have the upbringing of living within my own means. All the way from when I was in Poland, watching my parents,” says Gorny. That’s why he doesn’t operate like many entrepreneurs in Silicon Valley who prioritize raising capital before starting their company.
Gorny believes that relying on investors can slow you down. Instead, Gorny advocates self-funding your startup.
Self-funded companies have an edge on the competition because they can make quick decisions to innovate and push forward products with a strategic vision. By self-funding, you’ll also stay in the position of power because you won’t have to get signoff from investors. You may not have the same resources as bigger companies, but you’ll be able to think creatively and take more risks.
Another advantage of self-funding your business is that it makes you financially aware. You’ll consider every cent. When it’s your own money, you’ll be smarter about how you spend it.
Gorny self-funded Nextiva, which he says “practically embodies the little engine [that could]. We take on big technological challenges and try to solve them. We do not give up. We keep positively telling ourselves that, regardless of how large the mountain is, we will conquer.”
Gorny says people underestimated him when he was starting out because he had an accent. He believes, however, that this actually gave him an advantage in business because it allowed him to fly under the radar. Ultimately, you have to have a strong belief that this is what you’re really supposed to be doing.
“Being an entrepreneur is hard, so you better enjoy it and you better have a lot of passion around the things you are doing. You will have ups and downs… When you truly believe in your vision and your mission, you can accomplish great things, but if you start doubting yourself, it’s tougher to do,” says Gorny.
“At Nextiva we like to live by a very few simple rules around innovation, business guidelines, and our culture. Most importantly, we believe in doing epic stuff,” he adds.
If you’re starting out as an entrepreneur, consider self-funding your business so you can maintain control over your development. Build a team of people that you really want to work with and focus on creating an exceptional experience for your customers.
When you encounter failure, as Gorny did after the bubble burst, use that experience as an opportunity to grow and learn. Ultimately, if you want it to succeed you’ll have to believe wholeheartedly in yourself and your mission.