Josh Padnick’s Blog

The movie says it all. That is really cool!

Maybe it’s bad form to take business inspiration from a movie about the rise of a drug lord, but, bear with me for a minute here.

I just finished watching American Gangster, which depicts the true story of New York super drug dealer Frank Lucas who — and this is not a typo — amassed over $250 million in wealth from the sale of heroin. I thought the movie was very well done anyway, but they also did a good job of showcasing Frank Lucas’s talents as businessman, even in the world of drugs and organized crime. Some of the business higlights:

• Before Lucas, heroin was imported by a single supplier, diluted to allow for more distribution and resold to a number of dealer-organizations. Essentially, heroin was a commodity.
• Lucas found a way to import directly from his supplier. By controlling the supply, he avoided the dilution and also avoided paying the middle man. He could therefore offer a “better” product at a cheaper price.
• Lucas actually branded his product by stamping every packet of it “Blue Magic”
• The movie even shows Lucas taking charge when he felt that one of his distributors was committing “trademark infringement” by buying the pure heroin wholesale from Lucas, diluting it, and then reselling it in diluted form under the same brand name.

I have a few thoughts from the movie, but before I share those, let’s travel to another “strange place” where you would probably never expect entrepreneurship. I give you For Those I Loved by Martin Gray.

What’s that book about? It’s the memoir of a Holocaust survivor. The book was absolutely fascinating, but what made it even more engrossing for me personally was that Martin — the autobiographer and protagonist — was an entrepreneur at heart. And what was really cool was that I realized he had an entrepreneurial instinct early on in the book, and he later went on to found his own antiques importing company and did quite well.

So what gave away Martin’s entrepreneurial instincts early on? In 1942, Martin and his family were forced to enter the Jewish Ghetto in Warsaw Poland. Among the many reprehensible acts of the Nazis there was to restrict the intake of goods to the Ghetto. Only so many loaves of bread, so much water, so much meat, etc. was allowed into the Ghetto each day. Considering there were 500,000 people, the goods imported were far less than what was needed. Martin and his family were beginning to starve, so Martin innovated.

The Waraw Ghetto was in a central part of Warsaw, and many of the locals living outside needed to pass from one side of the Ghetto to the other. So the Nazis operated a streetcar that passed through multiple times per day. The streetcar was patrolled by both Nazi soldiers and local Polish policemen, known as “The Blues” because of their blue uniforms.

Martin found a way to jump on the streetcar as it passed through the Ghetto in a way that avoided detection. He was then taken straight to the outside, and was free to buy as much food as he could pay for. His next problem was to get back in, and here’s how he describes his solution:

…I waited for the streetcar at the stop before Teatralny Square. I was going back [to the ghetto], willingly, and full of vigor, air, and white bread. At the last stop before the ghetto, the Blue jumped on the platform of the second car. I was there, close by him. He was a plump man, he took no notice of me. I barely glanced at him but I stayed by him: I still had some money. It was a gamble. He tugged at the leather bellpull: the streetcar moved off again. It was a gamble. I touched his hand and without a word slipped him some notes. He crumpled them up and pocketed them, without looking around.

Martin now had a product — food — and plenty of buyers. The rest seems to take care of itself for him:

I went down Gesia Street, clutching my bread, holding my cakes. People were looking at me.

“How much?”

The man placed his hand on my sleeve. He was elderly, wearing a smart hat and coat.

“Don’t stay here, come with me.”

He nudged me into a porch. I was on my guard; a few stairs to the right, up which I could escape, reassured me.

“I’m buying,” he said. “How much?”

“I’m only selling the bread.”

“How much?”

I named a figure which seemed enormous.

“They each weigh two pounds.”

He wasn’t even listening, he pulled out his wallet. Outside was the grayish-black crowd, outside was the sound of footsteps and voices.

“I’m a buyer,” he said. “Every day, if you can.”

So Martin had actually sold his goods for a profit. Here’s Martin’s own summary of his morbidly exhilarating day:

I looked in my hand: it was full of zlotys [the local currency], my zlotys. I’d gambled on the streetcar, gambled on the German, gambled on the Blue, gambled with my life, and I’d won; here were my winnings.

Now, what’s so interesting about that little vignette is that Martin didn’t stop there. He then found a buyer on the outside so that he didn’t have to go to shops and buy the food himself (and risk detection). He paid the buyer a small fee, and simply rode the streetcar in and out to pick up and deliver. He had to pay off the Blue to avoid detection, but that seemed to be okay. And once he had the goods, selling them was a non-issue.

Fascinatingly enough, he scaled his “business”, employed other resources, developed a steady stream of buyers, and actually amassed a decent amount of wealth in this otherwise starving prison.

Now THAT is entrepreneurship.

What do I take away from drug lords and the oppressed? I take away that “business” as we have all become so accustomed to it today is just a modern platform for deeper entrepreneurial instincts. Frank Lucas (the druglord) had a horrific childhood and grew up surrounded by drugs, but he was also enterprising. He applied his business skills in the only forum available to him. Martin did the same.

Richard Branson’s first undertaking was the founding of Student magazine in the 60’s or 70’s. It was the first magazine of its kind and distributed throughout the country. It sure sounds pretty cool, but he actually started that because he had dropped out of secondary school and had nothing else to do.

Before Mark Cuban started his first company — a computer consulting company for small businesses called MicroSolutions — he was working at the equivalent of CompUSA in the 80’s. He became knowledgeable about computers and software and started become a great resource for customers. One day a customer asked him to meet onsite to discuss a large purchase. Cuban chose to show up late at the office so that he could meet with his customer. He was fired on the spot, and then went on to start his own company.

For myself, I think what I’ve always wanted more than anything else is the feeling that I’ve become successful on my own, without handouts or “advantage” or “connections”. I could have gotten higher-paying and more prestigious jobs out of college than hunting for work as an amateur web designer who sucked at graphic design, but in my world with the impulses I had, that was the only real “forum” available to me.

The other takeaway for me from all of this is that there ARE in fact fundamentals of business. Obviously, Frank Lucas never got an MBA. Obviously, Martin Gray, never had formal training in “supply chain management”. But their instincts gravitated to the same principles:

• Determine what service you’re going to offer
• Determine a consistent, scalable way to deliver it
• Sell it at a profit
• Establish a brand name and customer loyalty
• Keep growing

I don’t presume to capture all of business knowledge into 5 little bullet points, but this post is not about the fundamentals, per se, but about the fact that they exist at all…and sometimes in the strangest of places.

My sister recently forwarded me information on Kiva.org. Kiva identifies people in third-world countries who are struggling to make ends meet, but have endeavored to better their situation not through charity but entrepreneurship. It arranges “micro loans” to basic small businesses so that they can get off the ground.

Muhammad Yunus actually won a Nobel Peace Prize in 2006 for pioneering the idea of micro loans and in my opinion it’s the best kind of charity because I’m not putting money toward short-term alleviation but a person’s long-term “personal infrastructure” on top of which they will become self-sufficient and, one by one, make the world a better place.

I selected “Keo V” from Cambodia as my micro loan recipient since she’s a mother of 4 and already has a business. She just needs a little capital to buy a van and then she’ll have a growing enterprise!

Update: I received this email from Kiva on 12/13/07:

This is an update on Keo Vannak:

Thank you for your loan. It has been disbursed to Keo Vannak by CREDIT MFI — World Relief in Cambodia. We are excited to watch this business grow. Over the next 12 months, CREDIT MFI — World Relief will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.

I have to admit, it’s pretty amazing to think that a few trips to Starbucks for me constitute a life-changing loan for a whole family halfway across the world. I think I might make some more microloans. This is really fun!

Meet my new Chumby. What the hell is a Chumby? Well, you can see for yourself at http://www.chumby.com. Basically, though, it’s a cushy little household device that has a built-in wifi adapter and can use any of hundreds of Chumby Widgets. That means I can be hanging out on my couch and glance over to see the weather, or, the reason I could justify buying this, maybe even get them for clients so they know if they have pending appointment requests.

I can’t wait to load flickr pictures on this puppy, though, and tell my friends they need to upload them to flickr so that I have a web-fed dynamic picture frame. Now *that* would be cool.

So, I’m in Park City, UT for a conference right now. I was working on my laptop where I have a “Call Controller” installed (see screenshot at right). I got a call in to my office line, chose to have it instantly forwarded to my cell, took the call and now that’s one less phonecall I’ll have to catch up on when I get back.

Suppose I had missed the call. If the caller had left a voicemail I would have received an email with an attachment of the voice message and the caller ID information, so now I don’t have to “call in to check voicemail” anymore; I can just check my email, which I can do on my cell phone anyway.

For support calls, multiple people at our company receive the same voice message, and that voice message can be easily passed around from one person to the next since it’s a WAV file. Finally, I can login and check our company call log for the day to see if anyone else called and maybe didn’t leave a message.

I know some people think technology makes their life more complicated, and I can see that, but for me, technology is like a little assistant who does a bunch of little helpful tasks for me that just make life marginally easier and more enjoyable. My props go to VOIP, for making telecom so easy today.

I’ve been putting a lot of thought in the last few months into “learning how to learn.”

Given enough time, is it not true that anyone could learn practically anything? Also, to what extent should learning be “painful” versus purely enjoyable? When do we learn the quickest? When the slowest?

I realized that one of the best ways to answer these questions was to try my hand at something I don’t think I’m particularly gifted at naturally. Enter salsa dancing! I’ll be honest. I’m very thankful for the genes I inherited from my parents, but I’m pretty sure virtually none of my ancestors was seen anywhere near a Latin dance floor. I just noticed also that some people just have a natural knack for learning how to dance whereas for me, it was just…hard.

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Okay, so geography quiz: how many oceans does the world have?

Well, we’ve got:

• Atlantic Ocean
• Indian Ocean
• Pacific Ocean
• Arctic Ocean

…and, well someone recently told me with confidence that the world does in fact have five oceans, but he didn’t know the fifth one either. I could have looked the answer up on my cell phone in seconds, but I decided to have some fun with it, so I just asked friends and random people what the fifth ocean was.

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That’s what Seth Godin asks in his new book The Dip. It’s a question my sister got me thinking about not so much in relation to what I do, but about people in general.

And got me thinking it has. How many times do we engage a professional and really feel that this person is one of the TOP professionals in what they do? How inspired do we feel when we encounter such a person?

This idea got reinforced in the most unexpected of places recently. It takes a man to admit it, but someone recently gave me a gift to get a massage at Massage Envy. I was a bit trepidacious about it, but I figure I work hard, and it couldn’t be that bad, so maybe it’s okay to indulge.

Embarrassed as I am to admit it, I realize now I had some unconscious prejudices about a masseuse. I assumed that if they were highly ambitious they would have undertaken a more “clinically significant” field like becoming a nurse or doctor. I assumed that it wasn’t that hard to become a masseuse. I assumed the massage field was mostly for people who weren’t sure what they wanted to do, but thought they could make some money doing this.

I knew very little about the whole idea of massage so I found myself asking the masseuse a lot of questions. It quickly became apparent that she took an enormous amount of pride in her work. She worked out 5 days a week to stay in good shape since she felt it allowed her to have increased strength. She closely watched her diet and water intake to ensure she was always well-nourished and well-hydrated. She studied up on various schools of thought in massage. She explained that she felt all these things made her clients that much more likely to choose her.

I’ve encountered $300/hour attorneys who don’t take that kind of pride in their profession. It dawned on me that it kind of doesn’t really matter WHAT you do, but something truly magical happens when, for whatever it is that you do, you resolve to be the BEST at it.

It started making me sensitive to how much of the “I want to be the best” factor different people have at different jobs. If the masseuse was a 10, I rate most professionals I encounter a 6. They work, it pays the bills, they enjoy it, and then they go home and live their lives. I suppose there’s nothing wrong with that approach, but, well, that’s what will give you a 6. I think the 9’s and 10’s internalize their work so much that how good they are at it becomes a point of personal pride. Going physically home doesn’t always mean going mentally home.

I think “liking what you do” has an enormous amount to do with it. Even though my company provides numerous visual design services by employing some very talented visual designers, I myself HATE doing visual design (mostly because I’m so bad at it). If I endeavored to be the best visual designer around, I could only tolerate it for so long. But being the best, say ASP.net 2.0 programmer I know, would be very challenging, but an exciting challenge.

I guess in the end, it makes me think about what I want for myself. When people ask me what I do, when I ask myself about what I do, how do I feel about the quality of what I produce? How proud am I of my skill at my profession, vs complacent that I’m “doing pretty well”? It made me realize that for me personally, the desire to create the best company in our industry, to offer the best service, to offer the best value, to provide the best product, those are things that would make me feel great.

I’ll be honest. We’re not there yet. I personally am not there yet. But it’s a goal that’s starting to overtake my mindset…we’ll see what happens.

I just read a great article on FoundRead:

Check it out

I could not agree more with this, and major props go to Chris Michel for admitting it took him years to fully absorb a seemingly simple lesson.  There’s a certain angst we all have when we first start and aren’t sure what to do with ourselves.  I like how Chris points out that activity in the absence of defined, measurable outcomes is just haphazard random motion.

Cool stuff.

3 years of hard work to figure it out, and 10 minutes to summarize it all. There’s something sobering about that.

I finally wrote out my very own guide to entrepreneurship. I don’t think there’s anything groundbreaking in it, but considering that there are so many books out there, hopefully the shortness and simplicity of this will be its appeal.

Check out the Guide

Enjoy!