Rags to Riches…Anecdotally Speaking

I love listening to a good story...especially ones about entrepreneurs and their path to eventual success.    The woman or man who turned nothing into something, who did it quickly, and without the help of others, AKA the "rags to riches" story.

I think there is a yearning in every entrepreneur who hears these stories to identify with the subject and imagine how it could happen to them.  Like there is some magic formula to success, and if we could just do this one or two things...our business would take off, our work load would ease up and we would start living the good life we deserve.

There is a video on YouTube of famed story teller Ira Glass, host of This American Life, explaining what makes a good story.  According to Glass the first characteristic is (paraphrasing here) an anecdotal storyline; a sequence of events that leads to a destination, creating questions and suspense along the way.  The second characteristic is a moment of reflection or "ah ha" moment. 

This formula, or at least the first characteristic is used in most "rags to riches" story.  The second characteristic is usually more illusive.  For example, in the August issue of Inc. Magazine the cover story proclaims "Think Rich and Never Give Up"  subtitled "How Joe Cirulli turned his last 12 cents into a $17 million company". 

Clearly this cover blurb is targeted at selling magazines.  But, one could imagine an enterprising entrepreneur walking by a newsstand, catching a glimpse of the title accompanied by a cover shot of an average looking Joe Cirulli and thinking: "Hey!  I can do that...I have 12 cents in my pocket and I certainly know how to think rich.  Where do I sign up?" 

Unfortunately, unless you are at Barnes & Noble where freeloaders religiously read books and other publications free of charge in the store, you may have to spend you last 12 cents and beg for another $4.87 to find out.  But I digress...the article entitled "The Believer", also points to the books "The Power of Positive Thinking" by Norman Vincent Peale and "Think and Grow Rich" by Napoleon Hill as a contributing factor of his success.

As it turns out, (and as you might suspect) the 12 cents and the books were inconsequential to the success of Joe Cirulli and his Gainesville fitness center.  According to the article, it was a few years after he was down to his last 12 cents that he happened upon on opportunity to purchase a local health club, who's alcoholic owner was getting divorced and facing bankruptcy.  Then, only through the power of persuasion he convinced gun shy bankers not to foreclose on the business (and I guess assume the loan being foreclosed on although it is not expressly stated in the article), finds a new location on a deadline, begs people for personal loans, only partially completes fit-up on a property that fails inspection, opens anyway and finishes it over the next six months without incident or interference from the local city inspector.  Once up and running, his passion for fitness and customer service grows the business into a successful operation...over years.

But I guess the subtitle "How Joe Cirulli used perseverance and persuasion to build a $17 Million Company over several years" doesn't sound as captivating because it sounds like work.  My hunch is if you asked Joe...hard work would be on the top of his list of what made him and his company's successful.

I am not picking on Inc magazine.  They are no better or worse in this regard than any other publication on entrepreneurship.  In fact, just months before I remember reading an article on the true costs of building a multi-million dollar company, like lack of social life, free time, not seeing your kids grow up, poor marital relationships, etc. etc.

I am, however picking on entrepreneurs who are looking for something for nothing.  So, lately I have been wondering: Do anecdotes help others become successful?  Or, are they just entertainment and should be taken as such?  Are they good for people or do they build false hope?  I would like to know your thoughts.

In the mean time I have another anecdote for you:  A local entrepreneur has a great idea for a new business she is passionate about.  After learning the bank won't lend her the money to get it started, she cashes out her retirement and hits up friends and family for money.  Starting the business on a shoe string she runs out of cash after about 12 months.  Because she has not received a paycheck to date, her personal credit suffers but she scrapes it together and pays bills when she can (mostly out of the business account).  After two years she scratches out a living that when calculated per hour amounts to slightly over minimum wage.  After five years that living grows to a comfortable level.  She never makes millions but she is proud of having built a business that provides for her family and puts equity on her personal balance sheet.

Good Luck
Mr. BizPlan