James Lawrence on … Becoming an Entrepreneur
James Lawrence, 34 Years Old
Starting and running your own business is the American dream. But is the reality of founding your own company more often The Nightmare on Elm Street than a Beautiful Life? This month YEN’s Member Spotlight features James Lawrence, President & CEO of powerTV, to help answer this question. At 34, Lawrence is a grizzled veteran of the startup game, having founded and operated four performance automotive industry companies. If you think running your own business is on the horizon, you’ll want to read this interview on how to Become an Entrepreneur.
At the tender age of 19, powerTV founder James Lawrence learned quickly at the business school of hard knocks. The son of two doctors, Lawrence dropped out of UCLA to start his first automotive aftermarket company. It’s been a blur since then for the passionate entrepreneur, now 34, and at the helm of digital media company powerTV. Not just a “business” guy - Lawrence is a hardcore automotive enthusiast who enjoys both hot rod and late model vehicles.
With 15 years of experience starting and operating automotive aftermarket companies, James is uniquely qualified to help advise YEN Members on how to leverage their entrepreneurial spirit by starting their own companies.
When do you know when you are ready to strike out on your own?
“I think that it takes three things to successfully start a company. One - an idea, vision or mission. Two - a deep, stubborn streak that will not allow you to fail. And three - the ability to adapt with an approach that you are going to always keep learning, thinking, and improving. Money is not a requirement, and a great idea isn’t even totally necessary. My experience has been that my dogged determination carried me through all of those situations when it seemed hopeless, when it would have been OK to just wave the white flag and give up. If you’re ready to do whatever is necessary to be successful - to do whatever it takes, commit yourself to long hours, you name it, then you’re ready.”
OK, so let’s say I have a great idea, and I’m ready to start my new dream business. What do I do?
“I’d recommend first you read Guy Kawasaki's book ‘The Art of the Start’ and Norm Brodsky’s ‘The Knack’. Do that before you do anything. Both are great real-world books written by entrepreneurs that know what it’s like to start a business. There is a lot to do when you first want to start a business. Obviously, start up capital is important. But, if you run a lean, mean ship, you can get away with much less than you’ll imagine. I would focus less on writing 40-page business plans, and focus more on the meat of potatoes aspects of your business. Develop what you want to sell, be it parts or services, and reach out to those that you think will buy it. Test the viability of your business quickly and often. And adapt from there.”
What hurdles did you have to overcome starting your own business at such a young age?
“I was 19 when I started my first company and I had $6,000 of start up capital. Within 9 months I was doing $60,000 a month in sales. I literally learned a lesson about cash flow that I have never forgotten--cash flow is king. If you don’t have the cash, you’re done. I don’t care how many orders you have. So, I had to overcome having no capital and no access to capital. The banks laughed at me. Then when Steve Wolcott and I partnered to start my second company, ProMedia Publishing, we quickly grew to 20 employees and I was only 24. It was extremely difficult learning to be a leader, a teacher, and a mentor at that age. I made a lot of mistakes learning my way on how to treat and lead people. I learned that the ‘right answer’ doesn’t mean much. I thought I knew everything, and maybe I did. But I needed to learn how to communicate, how to inspire, and how to truly be a leader. That was a big learning curve for me.”
How do you market a new company? How do you get your name out there when you’re a new player in the marketplace?
“Every time I’ve started a new company, I did somewhat figure that I would just send out some press releases, put together mass mailings, take out some ads, make a few phone calls, and the business would roll in. And every time I’ve been too optimistic. The calls came, but the business was hard to get. Especially now. I think to market a new company, you need to be aggressive with your marketing, but do it in a guerilla fashion. Think out of the box, with new, creative, fresh and aggressive ways to get the word out about your product and services. If you do the same as everybody else in the marketplace, you will almost surely fail.”
How do you find the right people?
“I wish I could give you a formula on this. I’ll share a few things that have worked for me. Number one, I hire for passion and competitiveness. I don’t care how talented someone is, or how impressive their résumé is. If they don’t care about being the best, and if they don’t live, eat, and breathe passion, they are wrong for me at least. I’ll end up wearing them out. Second, we interview a lot. At least three to even four times, and we rotate in different employees from our company to do those interviews. Sometimes one on one, sometimes in groups of three or four. It’s grueling. Our staff knows this is their shot to really dig into someone, see what they’re made of. Finally, we do a pretty extensive background check. The basics: criminal, civil, references, and credit check. You’d be stunned at how many startups ignore doing that. I think that makes no sense. When you only have three or four employees, you need to be way more diligent about hiring another person than a bigger company. I’m proud to say that powerTV is blessed with some amazing, dedicated people that truly buy into what we are doing.”
What about money? How do you secure financial backing for a new venture?
“I am not a financial wizard. All I know is that in my experience, the banks couldn’t care less about helping a start-up, and venture capitalists want an arm and a leg, and will kick you out in a heart beat if they think you’ve taken a mis-step. It’s no way to run or operate a business. My first three companies were all funded by friends, family, and angels. And they were boot-strapped: almost every dollar we made went back into the company for growth. Finally, with powerTV, I was able to finance most of the company on my own. That was different. And even that being said, we still have to manage our cash flow. If I were starting a new company today from the ground floor, I’d take every dollar I could scrounge up, cut my personal expenses to the bone, and go to as many family and friends as I could. Then, exhausting that, I’d look for small-range investors that would buy into my vision.”
At what point do you move on? When do you sell your company and start new?
“It depends on where you are in your life and what your values are. I’m only 34 now, and being a father for the first time, I might give you a different answer in a year. When I sold my shares in my last company, I was looking for a new challenge, and I felt that traditional publishing was an industry that didn’t have as much upside as digital. But I was also bored to some degree. We’d been successful, I had three other business partners, and we had stopped taking risks. I guess at that time in my life, I was ready to move on to something different. I wake up every day passionate and interested in what I do at powerTV. I could never imagine selling this company. But maybe one day I’ll wake up, and I won’t feel so passionate about coming to work. Or maybe I’ll get an offer that I can’t refuse. We’ve had a number of companies approach us about investing or purchasing the company, but nothing that has felt right. They say when it comes to business that everybody ‘has a price’. I don’t know if that’s true. I think it’s more complicated than that. I think a business person knows - a gut instinct - when they are ready to move on.”