I’m an entrepreneur in my 60s, and there’s a 21-year span between my first venture and latest startup, which is the third successful business I’ve launched. What I learned in my 40s and 50s helped me become a successful innovator, so like judgment and wine, entrepreneurship gets better with age. Here are my five hard-earned lessons, which apply to every entrepreneur and work across all industries.
1. Seek out investors who know your industry.
All three of my startups have been in retail propane, a low growth industry where we created high growth companies by investing in the local brands we acquired. The latest was started five years ago and doubled in size over the past year. The first two companies also grew successfully, but were sold by investors just as we started to realize the benefits of scale. I felt undercut, but those investors and I had different time horizons for developing those companies. Learning that was central to financing my latest startup, Energy Distribution Partners (EDP). We looked for partners who would make their investment decisions based on industry drivers and our longer-term growth prospects, and not the short-term pressures of a VC or PE fund investment cycle.
2. Embrace the nuance of your company’s finances.
I learned this as a result of what happened with my first two companies, and from having worked as an investment banker between my stints as an entrepreneur. Without finance, nothing else matters because the resources won’t be there to make it happen. Having spent meaningful time on the investment side, I was able to create a unique financing structure for EDP where we have more than 40 investors in a limited partnership.
3. Learn everything about your sales operations.
Everything that happens in a company depends on someone selling something. And in an acquisition-based company, you have to be particularly careful not to disrupt the existing sales cycle. Before becoming an entrepreneur, I held senior leadership positions at top propane companies. I saw how they acquired local propane dealerships and promptly lost 20 percent of their business because they moved quickly to rebrand the local company with the national name. All this does is upset customers whose purchase decision is largely based on doing business with someone they consider to be their neighbor. I avoided that mistake at EDP. We understand the key sales drivers and work to bolster our local brands while keeping EDP out of the spotlight.
4. Do something that reflects your personal values and motivations.
My hometown in Kansas had Main Street merchants with local brand equity preferred by their customers. All of them were wiped out by the discount chains — and that stuck with me. Now many of those chains are pulling back and leaving local towns without any retail presence. While keeping EDP’s acquired companies local is smart business, it also reflects my values. Deep commitments can keep you going during the toughest days. We have a chain of retail propane dealers that doesn’t look or feel like a chain. We keep the local name and our local managers make the decisions about customer service and pricing. We sponsor the same local ball teams, put our best truck in the July 4th parade and stay involved in the local community.
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5. Become a student of the organizational dynamic, that is, how people behave and react to one another.
These days you read a lot about tech companies and their troubled cultures, including misogyny, sexism and struggles with leading a millennial workforce. The organizational dynamic is pivotal to the success of every entrepreneurial venture; many leaders cast it aside as something to attend to later (when the company is rolling), and most investors think it’s fluff because they can’t calculate its value relative to EBITDA. That’s why the problems persist. My organization has multiple locations spread over a wide geography. We succeed because we know how to apply authority and teamwork in this type of structure.
Advice for younger and older entrepreneurs
For young entrepreneurs, don’t spend too much time industry shopping for your career. There are no bad industries because there’s money and success in everything. Don’t feel compelled to join a “hot” industry; in fact, there may be greater opportunities in less known niche industries.
For older entrepreneurs, you’ve got to stay fresh and energetic. No one gets a pass for being low energy in entrepreneurism, and being older invites scrutiny. Also, you don’t have a 30-year runway to make or repeat mistakes, so leverage your experience to make the best decisions.
Finally, for all entrepreneurs, you’re probably finished when you’re jealous of the time you’re not at work. Then it’s time to not be at work.