Take two

The bulk of our professional lives consists of the proverbial climb up the corporate ladder.

It takes considerable time and effort to reach the top, often requiring those who attempt it to forgo family vacations, children’s Little League games and that all-too-precious commodity, sleep.

And what awaits those who reach the summit?

Often, it’s prestige, compensation and stability. For most, this is enough. After several years at the top, it’s on to retirement and enjoying the fruits of one’s labors. But there are always those who buck the trend.

Call it an entrepreneurial spirit. Label it tenacity. Simply put, there are some business leaders who are not satisfied with standing still or even running in the same direction. For them, there is no greater challenge than starting over.

“If you’re a born entrepreneurial spirit, you are in a hurry,” explains Don Heestand, senior managing partner and chairman of E-merging Technologies Group. “You have to get it done. You have to get it out there before someone else does. It is a race and it’s a rush.”

Even so, why leave the prestige and stability associated with leading a large, successful business? For some, it’s as simple as a much-needed change. For others, it’s as important as a revolution.

New ventures are fraught with unexpected challenges and, of course, risks. Those who choose to take the gamble and start anew welcome the challenges and view the risks as extremely personal.

SBN sought out four entrepreneurs who made it to the top, then left their perches to sow the seeds of business again. We posed one simple question to each: “Why?”

Bureaucratic cholesterol

Don Heestand was one of the founding partners and CTO of Realogic, a Cleveland-based computer software company that was sold to Computer Associates in 1996. He can talk for hours about numbers-driven businesses that grow too fast and develop what he calls “bureaucratic cholesterol.”

“(Realogic) just grew so fast,” he says. “I became disenchanted when I took an elevator to the 23rd floor and there were two strangers that got off (the elevator). One was a Realogic employee and was interviewing the second person. I didn’t know either one of them.”

Given the opportunity to chat with the energetic Heestand, it becomes vividly clear why bureaucratic cholesterol — or any amount of slowing down — would be unacceptable. His new venture, E-merging Technologies Group, is a professional services firm that specializes in advanced and emerging technology development and deployment. He is involved with everything from computers to welfare recipients to stage-three cancer treatment.

With capital in hand and notebooks filled with ideas, Heestand is a modern day Don Quixote. But instead of windmills, he tilts at conventional corporate structure. Heestand has tackled every issue of the traditional service structure with generous compensation packages, shares in the company and liberal time-off policies. The partners, or punks as he affectionately refers to them, are paid what they are contracted out for and return a percentage in the form of administrative costs or, if they choose, stock options.

What drove Heestand to start over and reinvent the wheel is a love of what he calls “bleeding edge technology.” It is the fast and ever-changing world of technology that he could not always pursue at Realogic.

“At Realogic, we called them fastballs. You would chase so many fastballs, and after a while, you would realize that they weren’t going to generate any revenue,” he recalls. “What I’m allowed to do and what we do here is chase fastballs.”

And Heestand chases fastballs with all the passion and urgency of a slugger looking to knock one out of the park.

Smaller is not always easier

Monotony can be mind-numbing, and sometimes it is just time for a change.

“I figured that I had had enough five years ago,” explains Jack Bares, founder and CEO of Meritool. “It was getting very repetitive, and I thought it would be smart to have someone running the company that had a lot more energy than I did.”

Back then, Bares was CEO of Milbar, a hand-tool manufacturer he founded in 1945. By the time he decided to sell the company, he had been manufacturing tools for companies around the world for half a century. One of the pioneers of successful succession planning, Bares eventually sold his company to one of his four children. The plan was simple and succinct: The company was for sale to any of his children who could buy it from him and the other three.

With his business sold and Bares “well past the age of retirement,” as he puts it, the situation was perfect for spending a lot of time on his golf game. But, as he soon found out, people who are high energy and entrepreneurial have a difficult time standing still.

I don’t know how to retire,” he says.

Bares immediately founded a smaller hand-tool manufacturer, Meritool, which didn’t compete with Milbar. Meritool, he says, was just “something to keep him busy.”

His plan was to produce a few simple hand tools that met the specific needs of some former clients. Bares says he thought that by making a product similar to what he was familiar with that running the company would be easy.

“I thought smaller meant simpler,” he says. “It turned out to be the opposite.”

Simplicity went out the door when a former client requested he work on a power tool that other manufacturers claimed could not be made.

“I didn’t know it couldn’t be made,” Bares says, “so I made it.”

Soon he found his small company staffed mostly with former Milbar employees, churning out complex tools for Fortune 500 clients. And, for one of the first times in years, he found himself losing sleep and money.

To boldly go where no one has gone before

Business can be exciting. But there are those who seek change because they find they have an overwhelming desire to do things right.

John Gorman was the program director for WMMS and the station’s all-around visionary when the Buzzard was Rolling Stone‘s sweetheart and Cleveland was playing and bringing to town some of the biggest names in rock ‘n’ roll — even before they were the biggest names. Gorman arrived at WMMS when the FM in radio stood for “find me.”

But even as one of its foremost innovators, Gorman talks about the day when the FM he worked so hard to build may become obsolete or will at least have to share its now consolidated and commercial market with the up-and-coming — and more independent — Internet radio format. And like he was years before, Gorman will be there to help shape the industry. This time, however, it’s with his own company, Radio Crow, an Internet radio portal.

By the 1980s, WMMS was the top-billing station in the market. But it wasn’t easy. When he took over programming, Gorman had five months to turn the station around. And he had no budget to do so.

“You had to go to the 16th largest market to find a radio station that was billing more than we were (Cleveland was the 21st largest market),” Gorman says. “We were overachieving (in comparison to) our market size.”

It was in 1986, when radio was being taken over by large corporations and multimergers. Like any good visionary who sees the end of an era, Gorman took his leave.

But while he was with WMMS, there wasn’t an alliance that Gorman didn’t make nor an opportunity he didn’t take advantage of, and that is what made the station successful.

“It was always struggling,” he recalls. “I thought that one of the keys to success was the fact that we had a young staff. For most of them, it was their first job in radio. We all had something to prove.”

To Gorman, business, like music, should be progressive, always changing and ever evolving. That’s why he took on FM in 1973, when you could only get AM in your car or on a transistor radio, and that’s why he decided to leave radio as we know it and jump ship to the Internet.

Quality control

It has been more than 10 years since Jim Biggar was the CEO of Stouffer’s-Nestle, and he can still recite the ingredients and thought process that went into Stouffer’s macaroni and cheese.

“The secret to mac and cheese is that the cheese we used was between 11 and 13 months aged,” he says. “You don’t get the full flavor before (that) and too much after. We specified the inside and the outside diameter of the macaroni, its length, the wheat germ that it was made from, and even the percentage of broken pieces.”

Biggar retired from Stouffer’s after 20 years of overseeing the quality of everything from macaroni and cheese to chocolate. Today, he is the founder and president of Glencairn Development, a small company taking on the rather large task of developing 390 acres of land bordering the Cuyahoga Valley. His development combines retail and residential homes marketed to empty nesters or anyone interested in smaller homes with a lot of detail.

One could argue there is a big difference between making French bread pizzas and developing 390 acres, but for Biggar — who earned an engineering degree from Case Western Reserve University before taking a marketing job at Stouffer’s — it is all about the product.

“To be successful, I have to have a high quality product,” he says. “I’ve changed businesses, but that fact hasn’t changed. I’m a builder and I like to build things.”

One walk through the Renaissance Hotel downtown and you begin to experience some of what Stouffer’s, under the leadership of Biggar, did for a city that, at the time, was more interested in parking lots than renovation.

But what about the prestige of working for a large well-known company — sitting on prestigious boards, flying aboard private planes, and knowing that every person you meet knows who you are and where you work?

“There is more imagined prestige than there is prestige,” explains Biggar. “And if you think it is there, it really isn’t.”

In fact, he says, there is often a downside.

“If I would go to dinner in a Stouffer’s hotel, the waitress would suddenly know that she was serving the CEO and she is more likely to spill soup on you than any other person,” Biggar recalls.

Beyond that, success often carries a price. In Gorman’s case, his once scrappy little station that catered to the baby boomers’ demand for new music began dominating one of the most advantageous demographics. Because of that, the station was slowly becoming exactly what it was designed to compete with.

“The turning point was 1978,” he says. “It was rapidly turning into a big business, with more responsibilities and more employees … and it became a very different station. We were becoming all things to all people. Looking at it from a business perspective, we were too big. I told them (station executives) we were going to collapse under our own weight.”

But while leaving a large and stable company may be cathartic and challenging, it is also fraught with risk, especially when the new venture involves the business owner and the business owner’s family savings. One big loss during the start-up phase can be a devastating blow to the company and its owner.

“You do that one more check to make sure,” says Bigger. “When you are 60 or older, you can’t afford to make a big mistake in your career and recover from it.”

Indeed, those chasing after a second career later in life often find themselves taking bigger risks with less of a margin for error. In most cases, these businesspeople aren’t risking company money but rather family money. And when you are 30 or 40 years old, it’s possible to absorb big mistakes. One simply changes jobs, suffers through a few lean years, then spends the next 20 to 30 years earning the money back.

“I have a much greater appreciation as to what is coming into today’s mail,” admits Heestand. “A greater appreciation of the collections process and the client management process. If people are unhappy, they don’t send the checks,”

Such matters constituted a process of adjustment for Bares, who hasn’t taken out a loan since the 1950s and for the first time experienced what it was like for a company to actually lose money.

“It wasn’t fun, I can tell you that,” he says.

In Biggar’s mind, the risk was more substantial at his previous company because losses affected all 30,000 of his employees. He says that in a larger company, one false move or premature expansion can spell the end of thousands of jobs.

“Now, if you make (a mistake), then it’s our family that feels it, and that’s it.”

One staggering difference between large, established firms and start-ups is the abundance of late hours and a lack of infrastructure.

“If something comes up, you are used to saying, ‘Hey Joe, fix it.’ Well, Joe is not there (in a small start-up),” Biggar says. “In fact, there is no Joe.”

Bares says nearly every part of the business that he thought would be less hectic became more complicated with Meritool. But he likes that challenge.

“It refreshed my mind to see the tremendous amount of different things that happen in a company when it is very small,” Bares says. “They all get up to the chairman. I find myself dealing with problems that I always had others take care of.”

Still, it requires a lot of time to take care of the details, and Bares jokes with his friends that he will one day pare down to a 50-hour work week.

The reality of financial accountability can also be a real eye opener. For some, there is a whole new world of 401(k)s, profit sharing and accounts receivable that “Joe” is not around to deal with. As CTO of Realogic, Heestand didn’t even know the company was $16 million in debt when negotiations with Computer Associates were underway.

“The big difference is that I actually understand the numbers,” he says. “I’m actually very close to the checkbook, even though I’m not the CFO. But I’m very close … and it is really exciting.”

Then there is the learning curve.

“It is a different business, and obviously I had to learn the business from the bottom up again,” Biggar admits. “I felt like a dummy in the beginning. But I’ve been a dummy before. Your ego gets shot regularly — I have kids who can do that.”

So why do it? Why climb to the top, then leap voluntarily to the bottom to start again?

“It is suddenly like I’m 23 all over again,” Gorman says. “Everything that I’m doing today makes me feel like I’m reliving my early 20s.”

The perceived challenge is even greater, Gorman says, as he tackles a new and untested industry.

It is a wing and a prayer,” he admits. “I’m also older and there is no guarantee of success. But there is a greater guarantee if you hire the right people and surround yourself with the right people and talent.”

“I think the real difference between now and then is that I control my calendar,” Biggar explains. “Before, somebody else controlled it. Now, I really do. It doesn’t matter as much if I do it on Tuesday or Wednesday.”

All four men agree on one issue — the same traditional business practices they used to make them successful once still work today.

Granted, not all the aches and pains of a new company can be overcome with experience, but as Bares puts it, “a person who has been in business 50 years sees a company completely different. Those starting one for the first time don’t know all the problems involved with raising money and financing the company, as well as being able to hire the proper people in the areas that they are not as talented in.

“If you’ve been in the business world, you came with all that knowledge.”

Some of it may be the inherent optimism of knowing you’re able to overcome any challenge — you made it work before so you’ll do it again.

“When you first become an entrepreneur, you expect all of the challenges and you know that it is going to be tough,” Bares says. “But when you have done it for a while, it is not quite as difficult. You normally take on bigger challenges.”

Then there is control. The larger a company, the less you control it. In reality, its infrastructure takes over. Smaller companies allow for a level of creativity and informality that largers ones don’t.

“We take pride in the fact that our company has no policies, except for being honest,” Biggar says. “Other than that, if we want to have a holiday, we have a holiday.”

Biggar agrees and says he doesn’t miss the policies and formality that go along with a large corporation.

“I would go stark raving mad if I had to write a manual,” he says.

And with innovation comes creation. Gorman and Heestand are drawn to that.

“I’m stimulated by this and it reminds me so much of those old days — the creative juices are constantly flowing,” Gorman says.

The same lack of infrastructure provides Heestand with a sense of control.

“I fly the kite and actually feel the kite,” he says. “That is exciting. Maybe the others at Realogic had that feeling, but I never had that feeling that I was actually flying the kite. I’m flying the kite now. It goes up and it goes down, and you have to put more tail on it. But I enjoy it.”

In the end, it comes down to a specific type of personality that’s needed to launch successful career after successful career. For those people, the game never stops.

“I think it is very important to have things to do to keep using your mind and have a reason to get up each morning,” Biggar says. “I’m not patient enough for fishing and my golf is not that good. So I keep working.”

Heestand admits he’s never been a destination sort of person.

“I’ve always been a journey guy,” he says. “The journey is what I cherish — the excitement and the game itself.”

For Heestand, the big issue is the pace of technology. And while he readily admits he is more driven at ETG than he was at Realogic, he realizes the clock is, indeed, ticking.

For Gorman, the question isn’t why stay with what you know but why not find what’s going to be in the future.

“If someone would ask me who would I want to align myself with — the blacksmith or the combustible engine, even though there were a lot more horses back then, I’m going to say combustible engine. Ten years from now it may be a lot different.”

Bares still wakes up thinking of business challenges and Biggar still sits on a few boards around the city, although not as many as he used to.

“As you get older, you get away from the strongest heartbeats of the city,” he says.

But he has no regrets.

“Now, I don’t get the soup spilled on me.” Kim Palmer ([email protected]) is managing editor of SBN Magazine.