Risk

My friend is very proud of this lovely bon mot, “Nothing has killed more businesses than ill-considered expansions.” Let’s make it sound more impressive, “Rien n’a tué plus d’entreprises que des expansions irréfléchies” or “Occidit Nihil amplius, quam ill-elit considerari expansiones“. He is sure that my best path forward is to heed his advice about risk.

My friend used to be a regional jet pilot. He hates risk. Which is good. The last thing we need is a pilot who decides that his passengers don’t have enough fun in their lives so what they really need is a vomit-comet flight plan.

I ain’t mad at his hatred of risk. We all have to decide for ourselves how much vomit-comet we want in our lives. Where he steps over the line for me is proselytizing. I am worthy of shade because I won’t comply with his implied dictate to avoid ill-considered expansions.

This is the End

In August of 2018 my boss came to my desk and asked me to walk out of the building with him. I knew what was coming. Once outside the door he asked for my badge. Yep. This ended my days as a Deskside Support Technician for Altria.

The usual thing is to start another job search. I’m done with usual things. Time to do the other thing I do—drive. I’d been doing that part time to make extra money. I also had registered Baugh Holding Company with the State Corporation Commission. So I had a company. Moribund but it was extant. I didn’t need to look for a job.

I walked to my car, drove home and within hours I was driving for Uber. This ill considered risk became my job. It’s May 2020 as I type this. My ICR has a 20 month gross income of $70,000.00. It operates a new Ford Flex for its customers. We’ve survived COVID-19, the loss of our rental car, the loss of our Subaru that we started with, months of slow sales, and working out of our normal RVA service area in South Jersey and Philadelphia.

RUN?

We are not all the same. Some, like my friend, perceive an ICR and run from it. Others like myself decide it’s an awesome idea. The world needs both of us. Repeating, a pilot who thinks ICR’s are a plan shouldn’t be flying. A small business owner who won’t take even well considered risks should get a day job.

Failure is an always an option. Great reward has great risk. Folk hear your plan and passionately say that the idea is incredibly ill-considered, stupid even. That said, you can’t succeed without taking on ICR and failing a lot.

Failure is more frequent than success. Successful people had to slog through years, decades maybe of miserable failure. NPR’s, “How I Built This” features an entrepreneur who built a company that has national notoriety. All the shows I’ve listened to come around to a point in the story where the entrepreneur reaches a desperation point. His endeavor is failing. He can’t pay the bills, both personal and business. Instead of folding up his tent, he finds a way to keep going. That low moment becomes the beginning of new success.

Better Rocket Fuel

My granddad Wells wanted to end world hunger. So he created a way to vacuum fry fruit. Puffed apples would do it. He just needed to figure out a way to get rid of the oil impregnated in the apples by vacuum frying. In the 1930’s we needed a better rocket fuel for our RPG’s. My granddad suggested a formula that was very ICR. In spite of skepticism the DOD tested his formula and it was better. A third idea of his was to put huge vacuum cooling tanks in the lettuce fields so that the lettuce could be cut and cooled quickly. All three of these ideas are ICRs.

The rocket fuel helped us beat the Nazis. The lettuce growers got annoyed with my granddad’s fiddling with a design for mechanized lettuce picking. So they hired a consulting engineering company to design equipment that got around his patent and made it possible to vacuum cool produce in the fields. Vacuum cooling is still widely used. Puffed and dried apples can be bought today. My granddad never gave up the idea of puffing apples in oil. His vacuum frying method had that failing–the oil turns rancid and limits shelf life. These days, the vacuum cooking method uses microwaves so there is no problem with rancid oil.

Then there is my Dad. His life is full of ICR’s. Driving a logging truck in Humboldt Count, CA. Pumping gas at the gas station down the street from where he grew up. Majoring in Electrical Engineering against the wishes of his Mom. She knew that in the Cold War 1950’s that degree was in high demand by the military. She feared he would end up building missile guidance systems. Her fears were realized.

She is Right

He started at RCA’s Camden, NJ plant. Along with pressing vinyl records, RCA made commercial radio transmitters, radar systems and mainframe computers. My Dad began his career building power supplies for commercial radio transmitters. Then RCA asked him to build power supplies for their mainframe computers.

Then my Dad didn’t have a job because RCA closed the Camden plant. The months while my Dad looked for a job were full of arguments with my Mom over my Dad’s numerous ICR’s. Yet he landed on his feet with a job at RCA’s Defense and Missile Systems division in Moorestown, NJ. One problem. For my grandma, this was a very, very bad ICR.

My Dad settled in to his job at Moorestown. Fast forward to RCA’s work to build the first generation of the AEGIS weapons system. There was talk of building three generators for each type of electricity needed on board the ship. One key requirement the Navy had was to build smaller, faster, more maneuverable ships. A boatload of generators would obviate small and fast.

From my Dad’s experience building commercial radio transmitters he was sure he could design a device that would take one power source and convert it to whatever the ship needed. From established knowledge such a device would not be smaller or lighter than a boatload of generators. Such a device would be an ill-conceived risk. So my Dad, on his own time, sat down with a slide rule and a drafting board and designed a “static generator”.

Chicken Dinner at Risk?

Win? Hardly. He was shot down by his bosses and fellow engineers at RCA. So he stepped outside the chain of command and pitched his design to one of the admirals responsible for paying RCA for their work. That’s a hell of a play. It’s a move that should have gotten him fired. It is absolutely an ICR. The admiral liked the idea and asked RCA to build a prototype of my Dad’s static generator.

Suddenly, my Dad is the most brilliant engineer on the team. He’s untouchable when layoff announcements come around. RCA patented my Dad’s design and gave him a plaque honoring him for his innovation. Job security.

Last item with my Dad. In 1986 GE acquired RCA. By then my Dad was a senior managing engineer. He was expensive and very much part of the old boys. So GE wrote a layoff list. Because of his seniority he had the option of staying on. He declined to stay, an ICR according to my Mom and many others. For the next thirty years he lived on his savings and a small severance package offered by GE.

You LOSER!

Then there is me. My life since 1979 has been a string of ill-conceived risks. I never stopped bumbling along the bottom of the pit over which the outhouse sits. I should not be doing this well. Yet I am. I own a transportation company in spite of so much failure and bad choices. I experience that rock bottom moment spoken of on “How I Built This” many times.

Nothing has killed more businesses than ill-considered expansions. Nothing generates more innovation and wealth than ill-considered expansion/risk taken by someone who bet everything on an idea and won. Tesla is entirely a company of ill-considered expansions/risks. We wouldn’t have social media or search engines or even the Internet if the people who built these things worried about whether their idea was an overly ill-conceived expansion.

I get to be that guy. The one who takes a phone call on a Monday afternoon and spends the next day driving with a customer from Long Island to Cincinnati. The driver who responds to the loss of his rented Chevy Equinox by going to Richmond Ford Lincoln and signing a finance agreement for a 2019 Ford Flex. The guy who lost his job at Altria and decides to start a business with no cash on hand.

Risk the Thistle at the Bottom

I’ve done this so much over sixty years that it’s become routine: I see something I want to do. I don’t have the resources I need or the knowledge necessary. Friends and family warn me that it’s a really, really bad ICR. I start anyway. Then I accomplish what everyone said I’d fail at. I win.

Last thing. Baugh Holding Company is my latest ill-conceived expansion. It has no money, no plan, no revenue outside of my money doing rideshare. I’ve said I want to build it into a 5 million dollar company in five years. Year one is done, I’m in the middle of year two. It’s not looking good. It never looks good. Most of the time it looks like I fucked up again.

In the queue for this year are a couple things. The first is to follow through on this guy’s program to build $300,000 of Federal contracting money in nine months. The next is a really bad idea—Homemade hand sanitizer. Bringing a product to market is very tough and expensive. It is absolutely an ICR. So, for my buddy who thinks I am about to screw up again I have this, “hold my beer.”