Continuing the four-part series, Ken Courtright picks up from last episode’s discussion about business struggles by reflecting on some of the ultimate payroll stories from successful people like Fred Smith and Jeff Hoffman. Learn how to embrace the struggles and see a way to get through them in this great episode.
Listen to the podcast here:
This is part three of a four-part series. It’s like an Oreo cookie. It’s a sandwich starting with purpose, dream and the why. In the middle of it, the frosting which is the struggles. Are they necessary? Who struggles? How many people struggle? What types of struggles are out there in business? On the other side of the cookie is purpose, dream, and why. We’re still in the center of this cookie. Instead of sweet stuff, we’re talking about some difficult stuff. I’m going to simply relate two stories. This will be a pretty short show. We were at the Digital Footprint in Philadelphia. We had some amazing talks. Sunday night, when it was all over we had a team of about twelve people that got together. Everybody had a drink before they went home. At the table was Brian Smith, the founder of UGG Boots, Jeff Hoffman, the Cofounder of Priceline. If you’ve ever been to an airport and you see a kiosk where you put your credit card in and it kicks out a boarding pass electronically, that was a product of one Jeffery Hoffman.
We were at the table and there are a bunch of entrepreneurs and business owners. Ron Fossum was sitting there, he’s the founder of Smart Money Financial Group and this guy is like EF Hutton. When Ron speaks, people listen. This is the man that nobody can come to the office on Friday. It’s Ron and his yellow notebook paper and he thinks all day long. It’s why he has, I don’t know how many companies and asset classes that his fund manages but Ron sitting next to Jeff Hoffman is like an expert panel. I wanted to lighten the mood a little bit because everybody was talking business. I said, “Does anybody have any good payroll stories of not meeting payroll?” I brought this up because of the episode Stack Verticals. I was telling you guys about how Brian Smith has his mantra card and how that led to a company raising $1 million the day after his talk. I wanted to pick back up on that because I had some studs at the table. We went around the table. I want to throw out a story from Jeff Hoffman and I’m going to add a story from Fred Smith’s autobiography. Fred Smith is the founder of FedEx.
I’m going to go right to Jeff. I said, “Does anybody got any good payroll stories?” He goes, “There’s no question. I’ve got a good one.” He goes, “In one of the early days of our company,” and I can’t remember if this is ColorJar, his current company at that time, the kiosk or Priceline, I don’t remember because he has started many huge companies. He says, “In the early days, we were struggling. We didn’t have funding, didn’t have any ability to pay people a solid salary and it was a bunch of great people getting together. I remember one day, I had gone by the lunchroom and I saw all of the guys and the ladies playing poker every Friday at lunch break. It would bother me because they knew I was struggling to meet payroll and yet here they are throwing 10s and 20s around playing poker. All they would do is grumble during the week under their breath. Finally, after about 6 to 8 weeks of me going to lunch, looking through the window and they’d catch me locking eyeballs. They’d all look down and pretend I didn’t see them playing poker.
Finally, my feelings were hurt and I walked into the lunchroom. Everybody quickly grabbed all the money in front of them and pushed it aside. They put a notebook over the pot in the middle. I said, ‘Guys, come on. You’ve got to know that I know you guys played poker every Friday.’” Nobody said anything. Nobody even looked at Jeff. They were saddened that they were caught playing poker and Jeff goes, “All I want to know is if you guys know you can’t afford to be going to the movies and taking your wife’s out to dinner and this and that, how do you have enough money to play poker?” Finally, the leader of the group looked up and he said, “Jeff, we’re not playing poker. You might want to pull up a seat.” Jeff pulled up a seat and he goes, “What do you mean you’re not playing poker? I see the money right there. I see quarters, pennies, and dollars.”We're either in a storm coming out of it or we're about to go into it. Click To Tweet
He goes, “Jeff, no. Every Friday is payroll day. As we all know, there’s not quite enough money for everybody’s payroll. What we all do on Fridays is we empty our wallets and purses in the middle of the table and we go around the table. We start over with Mary and we say, ‘Mary, what do you have to have this week?’ She says, ‘I need $18. I’ve got to pay my babysitter. If I don’t pay her, she’s never going to babysit again.’ Mary would take out $18. We would go to Bob and Bob would say, ‘I need $60 or they’re going to turn off my cable. If I don’t have cable, I can’t work from home.’ Bob would take $60 and it would go to this person. They need to pay their mom back $45. Most of the time, we can go all the way around the table.” Jeff goes, “All I could do was cry. I felt sad that we weren’t strong big and fast enough of a growing company for me to pay a proper payroll.” He goes, “I can tell you, me watching that and them seeing my face forged us as a team like nothing else could do.” Jeff Hoffman said, “We need those struggles to see who’s on board.”
I’m like, “That is such a moving payroll story.” I said, “I’ve got a pretty good one.” It’s not my story but it’s impactful. Anybody can go to Barnes & Noble or Amazon and go buy the book, Overnight Success: Federal Express and Fredrick Smith, It’s Renegade Creator, the Fred Smith autobiography. It’s thick and a huge book but it’s an amazing story. Fred Smith is the son of the founder of the Greyhound Bus Company. Fred Smith bankrupted the Greyhound Bus Company. The $32 million of the remaining $36 million, Jeff finagle that of Greyhound and leaving $3.5 million. At one time he had burned through all of that $32 million. He bought nine Falcon Jets and a few other things. He talked his attorney to drafting paperwork to knock on his sister’s door to get the last $3.5 million of the Greyhound Bus money.
At the time they knocked on the door in the backyard, his sister was throwing a party. There were a couple of senators there and she comes to the front door she goes, “Fred, what do you want me to sign? What is this?” Fred says, “Sign it. It’s nothing.” She goes, “Fred, tell me I’m not signing over the last $3 million we have. You’ve burned through everything else. This is all we have to run Greyhound.” He goes, “I’m not doing that.” He turns to his attorney. He had prepped his attorney to lie for him. The attorney’s like, “No,” I don’t remember her name but as the story goes, “My numbers may be off by a smidge, but not by much.” She signs a piece of paper. Sure enough, that was the last few million dollars of Greyhounds Bus.
Now, she’s worth $2 billion from that last piece of $3 million. When that book was written, she had never spoken to him again. Even though she was compensated handsomely and he won out in the end, they’ve never spoken. That’s not the payroll part. He burns through the $3 million. At the point that they were running the commercial that some of you might remember when it absolutely and positively has to be there overnight, Fred Smith at this point, I believe it’s a Tuesday, payroll’s Friday. He’s only got about $20,000 left in a bank and payroll’s $70,000. He’s got three days and no orders coming in. There’s no way he’s meeting payroll. He’s at O’Hare Airport. He looks to the left while he’s on one of those conveyor belts and he sees a sign for Las Vegas. He runs, goes quickly to a local branch of a bank, jumps and flips over to the other conveyor belt, goes up to the counter and buys a one-way ticket to Las Vegas.The struggles everybody is in right now are meant to be. Click To Tweet
He cashes in whatever remaining balance they had in the bank he goes and plays Blackjack and he wins whatever it is, $70,000, $50,000 whatever he needed to meet payroll. He won exactly that amount of money. He takes all his chips, cashes in, puts it in the bank, and he meets payroll. In two weeks, he’s got to make payroll again but he’s to the point where it’s desperate. He starts telling his friends how in bad shape they are. He goes, “We’re lying to the world. I’m running commercials that say, ‘When it absolutely, positively has to be there overnight.’” He goes to his friend and says, “I can’t do this. You need 27 Falcon Jets to do this. We have nine. This is a lie. The bottom line, if I don’t run that commercial, I won’t get a year’s worth of pre-orders from big corporations. If I get those preorders, I’ll be able to buy the rest of the jets.” That was his rationale. It doesn’t happen.
The commercial doesn’t get orders fast enough. His buddy goes, “Do you know what you might want to do Fred, you can’t meet payroll in eight days, can you?” Fred says, “No, I can’t meet payroll.” His buddy goes, “I read in one of the newspapers or magazines that there’s a billionaire that retired. He’s cleaning out his desk. Why don’t you fly up to Chicago and knock on his door and plead your story and see if he wants to help you out?” As the story goes, Fred doesn’t have an appointment. He flies to Chicago. He knocks on this guy’s door, and after 2.5 hours of him explaining every move he’s made at FedEx and the exact position he’s in, the gentleman gets out his checkbook and says, “How much do you need?” Fred gives him a number. It’s $300 million or $600 million. The guy right there writes a check to FedEx for an incredible amount of millions of dollars, which is enough money to buy all the jets and make payroll for quite some time. That check is the pivotal tipping point for FedEx as we know it.
The whole point of this show is right alongside the show where I talked about stacking verticals of your struggle on the top but how you broke through and how you need to make your own vertical. You need to go back in your life and go back 5, 10, 20 years, where did you struggle but you broke through? Put pictures up for that. This story is about how many companies are there out there? How many families and households can’t meet payroll? How many households can’t meet their mortgage? I don’t know how many times in my years in business that we’ve looked at the books and go, “If we don’t get our stuff straight in 4 to 6 months, we can’t meet payroll,” or whatever it is. Back in the early days, it’d be next week. The point is, struggling is going to happen.
We’re either in a storm coming out of it or we’re about to go into the storm. If the struggle has to happen, how do you wrap that struggle when you’re in the middle of the struggle? One of the best ways to wrap around a struggle and get your arms around a struggle is to understand that these aren’t optional. These have to happen. All the cliches about challenges build character, those aren’t cliches because they’re fancy saying. No. The true character is physically built during those times. There is no way our company could be filling out paperwork for the third time for the Inc. 5000 list, which means we’re in the top 5,000 fastest growing US companies out of 14 million again.
There is no way we could be doing this if, in the late ‘90s for those 5 to 7 years that were challenging if we didn’t go through those, it was suffocating. A couple of times I was in a fetal position in the corner bawling my eyes out as a grown adult with children because I had no idea how I was going to survive this mess and I had many employees that I was responsible to. There’s no way. If I did not figure out how to get through those times, I would never be able to navigate our company the size it is now. I’m not the only one navigating. We got a great team. My wife and our management team are incredible. I’m not saying that I’m the sole navigator.
What I’m saying is, the struggles everybody’s in right now are meant to be and I mean that. I’m going to take it sideways and people are going to get mad at me when I say that. I’m speaking like my wife spoke on stage. I mean this to be strong, “Right now, your personal checkbook and your company checkbook is exactly where you want it to be.” You’d be like, “No, of course not. I want it to be much bigger.” No. Read this carefully. Every decision you’ve made up until this point, every single financial decision, the car you drive, when you went and bought that car, you made that decision based on what you wanted to buy that day. It’s the watch you wear. You bought that watch that day based on what watch you wanted to buy that day. It’s the jeans you wear, where you get your haircut, the shirts, food, the $4.80 coffees you buy. You’re buying that $4.80 coffee every time because you want it at that time.
My point is this, your checkbook is a direct result of everything you’ve wanted to buy up until this point. You want your checkbook to be exactly where it is now. Trust me on this, I’m right. You have to start looking at different decisions that delay gratification. If you’re a business owner, you’ve got to do this on a grand scale because if you want major changes in your finances and your business finances, you have to majorly change something. If you want big changes, you need to big-time change things. One of the fastest ways to get out of a jam, it’s long-term thinking but it’s one of the fastest ways to get out of a jam is to live differently. Live the way they lived in 1958 before credit cards. If they didn’t have any money, they didn’t buy it. If they couldn’t pay cash, they didn’t buy it. They were privately held companies. They were debt-free, most of them, and try things a little bit differently. Back to this, challenges are not optional.
One of the greatest ways to wrap around a challenge is to understand that every single successful company and person that looks good and smells good, went through many traumas and challenges. That’s what caused them to get to the point of looking good and smelling good. That’s it, period. You are not going to get where you need to go or rub-a-dub your way to the top easily. You need to understand the Fred Smiths of the world and the traumatic payroll stories they went through to get there. The Brian Smiths of the world and the traumatic payroll challenges they had. The Jeff Hoffmans of the world and the trauma and the pain they went through as embryos building these big companies before anybody trusted them with their money. They were getting proof of concept down. Nobody trusted these folks in the beginning and it was painful to keep the lights on.When you're struggling, one of the coolest things you can do is to honor the struggle by not recognizing it in public. Click To Tweet
All I’m saying on this show is the struggles are not optional. Embrace them. One of the greatest ways to get through struggles is to understand, “This is my lot in life. I’ve got to go through this. I’m not going to quit and whine about it. Winners don’t whine and whiners don’t win. I can promise you that.” I’m going to go 90 degrees. Everybody go get the book Hung by the Tongue and another book Tongue the Creative Force and I dare you to read those. I went eleven years from 2000 to 2011 without one negative statement. I never raised my voice, swore, and said a negative word. The reason is, I read Rich DeVos’ biography. At the time, he was the eighth wealthiest person in North America. His 40-year executive assistant had the ability and the honor to write three pages in Rich Devos’ biography, what that gentleman wrote changed my life forever.
He said, “Rich DeVos was one of the wealthiest people walking. He’s fought the Senate, Congress, and overall the US government. He’s gotten people out of jail in the Philippines, risking his life. He has battled major companies. He runs a $12 billion company privately held in debt-free. Many people have tried to knock this guy down. He buys sports franchises by writing a check. He buys them for cash. He bought Hatteras Yachts. He wrote a check for the company.” The point is, he’s a large dreamer and a big man. The guy wrote in his three pages, “The most amazing thing about Rich DeVos is in the 40 years I’ve stood by his side where he’s been attacked from government agencies to this, to that and I have never once heard Rich DeVos raise his voice or say a negative word about another person.”
You’ve got to understand that Rich DeVos running twelve different mega-companies had hard times. He probably has hard times now, but this is a strong Christian man that understands where he’s at. I’m not preaching on this, I’m telling you about the book I read. This guy never said a negative thing. You have to remember, when you’re going through tough times, attitude is not circumstantial. When I was in my eleven years of never saying a negative word and the only reason I broke it is I fell down the stairs and said a swear word. I said a bad word and my kids ran around the corner and said, “Dad, you swore. You broke your train. Your eleven years is over.”
I’ve said a couple of swear words since, but the point is attitude is not circumstantial. Meaning, whatever you’re going through doesn’t mean you’ve got to be negative and you’ve got to be talking negative everybody and telling everybody how bad they are. No. You don’t say a negative word. You can go for a week, seven days and speak only positive. If you need to get structure and understand the power of the spoken word and how much you’re polluting your brain when you speak negative, I dare you to get Hung by the Tongue. I don’t care what your spiritual beliefs are. Read the book. Also read Tongue the Creative Force. There are dozens of other books that are similar that prove the same thing that you walk in life. You walk on your words. You speak them and it’s like little seeds in front of you and you walk all over them.
You can either speak positive and plant positive seeds or you can speak negative and plant negative seeds. It’s totally up to you. The point is, when you’re struggling, one of the coolest things you can do is to honor the struggle by not recognizing the struggle in public. Honor it to yourself. I got a challenge. That’s fine, rock and roll. Challenges happen and I’m going to boogie on down the road because I’m going to get past this challenge. How do I know? It’s because I’m staring at my wall. I had challenges in high school and guess what? I looked down. I got through them.
I had challenges in college, but I looked down lower in my wall and there are the results I got through them. I had challenges early on in the business. I look at my wall, I see the challenges and the pictures that represent it but I look below and I see the results of how I got through it. I’ve got about eleven of those verticals that I can go to when I’m feeling down, low and when I need to pick me up, I stare at the wall. That’s what I was challenged with. That’s how we got through it. Let’s rock and roll. I’m going to get through it. I’ll see you guys on the trail. Kick some butts. See you.
- Digital Footprint
- Stack Verticals – previous episode
- Overnight Success: Federal Express and Fredrick Smith, It’s Renegade Creator
- Hung by the Tongue
- Tongue the Creative Force