Old age is the most unexpected of things that can happen to a man. – Leon Trotsky (who was felled by an ice axe at the ripe old age of 60)

Each week, as a radio talk show host, I have the opportunity to interview successful professionals and possible mentors. They share their lessons for success, surviving, and even thriving in our radically changing world.

This past weekend, I sat down with Karla Diehl, president of Edison Automation. Karla first came to Nashville in the mid-80s to study at the Vanderbilt Business School. She studied hard and also met her husband. She earned her MBA, married, and then took a job at American Financial Corporation in Cincinnati.

Over the next year or so, Karla and her husband settled into their lives. They had one son and she was pregnant with a second son when news from Nashville changed their lives. The friend of a friend told them about a business that was going into bankruptcy and they could buy from the bank.

The business was hands-on and very different from what they knew. Running it would be a challenge and an opportunity. It would be a chance to test what they had learned. So, two years later after leaving, they returned to Nashville and tried their hand at business.

They worked at home, in the office, on the floor. They worked all the time and they turned things around. Within six months, they were in the black. Within two years, they were up a million. A decade later, they made the Inc. 500 for fastest revenue growth.

When they bought their business, Karla admits, they didn’t really know much about it. What they soon realized that their business, like the technology around it, was radically changing every two or three years. They survived because they changed. They thrived because they watched technology and planned their changes in advance.

As Karla described their realization and their willingness to change, I thought about the music business. Over the past decade, has technology changed any business more than the music business?

One of Nashville’s top music lawyers recently told me how he has survived-surely, no one has thrived in-the upheaval so far. When his world started radically changing, he watched and planned carefully. He confirmed relationships with marquee clients and committed to add only two new clients per year. It takes three years to develop new talent and, with luck, they’ll have ten-year careers. You have to invest your time and resources.

But everything is changing. Everyone is gambling. Will you stand by your client? Will your client stand by you? Will the markets favor you both? Who knows? How can you tell? Ask.

Even as she described her remarkable success with Edison Automation, Karla admitted that they should have done some things differently. First, she said, they should have asked more mentors and professionals for help. They were always working and there never seemed to be enough time to really find mentors or professionals. Though they were so self-confident and enmeshed in their work, they might not have listened anyway. Recently, she has served as a mentor for other local entrepreneurs and she applauds them for their wisdom and willingness to ask for help.

The good news, of course, is that there are plenty of people and organizations out there willing to help you. Karla likes The Entrepreneur’s Organization (www.EONetwork.org). Membership is open to founders and owners under 50 years of age whose companies have $1 million or more in annual revenues. The network also offers an Accelerator Program for founders and owners whose companies have $250,000 to $999,999 in annual revenues. Every dollar counts.

You can visit www.USChamber.com and review a list of local chambers of commerce near you. Thanks to the Service Corps of Retired Executives (www.SCORE.org), you may even be able to obtain free advice from a volunteer who once had your job or something like it. You can always ask your lawyer, accountant, colleagues, friends, and family to recommend trusted mentors and professionals. They probably know you well enough to help you find someone who really works for you. Finally, if you’ve reached the point where you’re confident and comfortable giving advice, consider mentoring. As entrepreneurs, we welcome change. We can also plan to survive and thrive by helping each other.

This afternoon, I had an amazing meeting with one of Nashville’s top entertainment lawyers. His clients are well-known chart-toppers and he has an outstanding reputation around town, so I was glad to meet him and honored to bend his ear for free. We talked about being prepared, being fortunate, and making good choices. I was completely surprised to learn that, like me, he was a UK Law graduate. Lexington is in the heart of the Bluegrass but Bluegrass isn’t big business–even in Nashville–and he never set out to become an entertainment lawyer. It just kinda happened.

What do I want to be when I grow up? What kind of law do I want to practice? Do I want to practice? Or do I want to manage? Agent? Produce? He asked me those questions and I asked myself those questions. I’ve always enjoyed working with creative people and I’m a bit creative, too. Where do I want to be in ten years? In order to start now and work my way there, I need to know that now. There is much to consider.

The music business is tumultuous and the next two or three years will tell who and what will survive. Labels are changing. New artists shouldn’t sign with major labels. What’s the point? The labels can’t push much more airplay or sales. A small bump, that’s it. And, in exchange, they want a share of all income–not just music sales. Today, MySpace and Facebook are the powers that be. It takes four years for new artists to develop. And ten years is a good career. So, developing a new artist is like taking on a fourteen-year project. You pray that it pays, so you take precious few. How do you separate the good from the exceptional? That’s a matter of skill and practice, having been there, done that and seen what it takes. Who cares if you’re better than this or that signed act? Who cares? Are they selling? How good are you compared to everyone else? Who cares? How good are you compared to the top ten artists out there? They’re the real competition. They’re the ones who are selling the CDs, the tickets, the merchandise. If you’re not better than them, you can’t convince their fans to buy your CDs, tickets, and merchandise. Without them buying, you’re not a going concern. You’re losing money–and you can do that without help.

You have to prepare. Work hard. And pray that fortune finds you. The most amazing things can happen. You can head out in one direction, wind up in another, and be completely happy. Who are you? What do you want to do? How do you fit into this wild world of wonderful possibilities?

The Bush tax cuts reduced taxes for everyone. Sure, the top bracket earners got a larger break but they also pay a larger share of taxes across the board. The Democratic presidential candidates are missing the point. The real point is that the number of people at income extremes (top bracket earners and poverty-level earners) is growing and that portends greater social unrest. Sound interesting, check out this short article–The Tax Debate We Should Be Having.

Harvard Business School is celebrating its 100th anniversary. This article notes that despite the usual ups-and-downs befalling impartially ranked-schools, Harvard always manages to stay near the top–and it should because of the self-perpetuating power of reputation, check it out: Happy Birthday HBS!.

Economists usually focus on core inflation, that is, inflation not including changes in the price of food and energy. That fact puzzled me in business school: how can you discount the pricing on staples of life? I was told that since staples were, in fact, necessary items and since their prices were relatively stable, minor fluctuations could be ignored. The problem is, as the following article points out: What happens when those food and energy price fluctuations can’t be ignored? And what if there are no fluctuations, what if the prices are just going up? Check it out:The Great Inflation Cover-Up.

Vanderbilt University started with a $1 million gift from Cornelius Vanderbilt, so it’s only right that the school’s named for him. But I was shocked to see how much money the Rockefellers had given Vanderbilt without any lasting recognition in name, painting, or statute–and that’s kind of a shame: Silent Partner.

Economists talk about multiple pricing strategies. See how one enlightened entrepreneur has tackled the practice at: How Hard Could It Be: A Real Cool Customer.

Who wouldn’t like to have more free stuff for your office?

I believe in recycling–even myself. Don’t pump me full of preservatives and put me in a concrete vault. When I go, you can call me an “alternative” kind of guy–toss and rot to give new life, I say: Alternatives for the Final Disposition

My dad once said that my mother could pinch a penny until Lincoln screamed. It was a metaphor but there was more than a seed of truth in what he said. My grandparents lived in the country when I was a child. On long winter nights, they occasionally ran into their neighbors—deer, possums, skunks—and I mean that quite literally. One morning while visiting, I awoke and watched my grandfather weave a length of spindly chicken wire into the grill of his car. The hood was connected to the grill. The grill was connected to the bumper. The whole front end was held together by chicken wire and it was a sight to behold. When he finished, my grandfather stood in front of the gash and gushed. His pock-marked teen-aged Grand Marino was good as new. After all, as he was fond of saying, the purpose of any car was to get you from point-A to point-B in one piece. Speed and performance weren’t even secondary issues. He couldn’t care how it looked or even how it felt. He was a fifth-grade dropout and a welder in multi-patched pants. But he was also a self-made millionaire and man with personality. He influenced everyone that knew him—or so I thought. My family has a pervasive history of thriftiness. But, lately, my brother has made me consider Poor Richard’s old saw: penny wise, pound foolish.

I was the eldest grandchild and education was the one thing my grandfather urged us to splurge on. He regretted his early departure and always suggested that he could have done more, been more, if he’d only studied more. So, I found scholarships and spent family savings to attend a private school. After graduating from Transylvania University in Lexington, Kentucky with degrees in Finance and Psychology, I worked crappy jobs for a year and returned to school. I paid for myself and I went to a state school. After graduating from the University of Kentucky-College of Law, I worked for a corporation and a couple of law firms in Georgia. Then I started my own firm. I saved some money and returned to school once more. After graduating from the Owen Graduate School of Management at Vanderbilt University, a top-ranked and high-priced business school, I could have chased a “cush” corporate job and restocked my coffers—like my family might wish I had—but I didn’t. I stayed with my own firm and re-oriented my practice. Stick with what you know. And what feels comfortable.

Anyone who’s started a business has worried about cash on hand and, more generally, cash flow. Will there ever be enough? Rent grabs an ungodly share. The lights have to stay on. We can turn off the printers at night. But what about the fax? Alright, already. When is enough—enough? Living in Nashville, is it any wonder that I like music? My wife grew up in the radio business and together we have amassed quite a CD collection. But no one listens to CDs any more. Everything’s digital and MP3s are easier to manage and easier to play on computers and iPods (or so I hear—I still don’t have one). Rather than lug CDs to and fro the home and office, last fall, I spent odd hours over several days (weeks) slowly but surely ripping all of our CDs (turning them) into MP3 files on my desktop computer. I could only listen to the music on my PC but, hey, I could listen to any song in my collection at any time with just one flick of the wrist and one click of the mouse. It was nice. But I wanted to hear the music on my stereo, too. So, I surfed the ‘net and found a device made by Griffin Technologies that was USC-compatible and capable of broadcasting the MP3 audio from my PC to my stereo. Score! Life was perfect until I hit that “Del” key one day.

For months or maybe even years—I’m sure my wife would know, if I asked her—I’ve talked about backing up my computer data. The problem was though that there was just so much. Computer memory gets cheaper every day—and therein lays the dilemma. Why spend $100 for 100 gigabytes of storage now when I can wait 6 months, 8 months, or just a year and get 200 gigabytes for the same $100? That’s the way I thought about it. Besides, I was sure that so much of my data was redundant. Too many times, I copied files from this directory to that one and then on again somewhere else. How many backups did I need? Hell, how many could I find? Given enough time, I thought I could pull of the important information from one hard drive or another and piece it all together. I finally broke down and bought an external hard drive like those typically used for backing up files and used it. I backed up photos and videos and suddenly I was out of space. Digital photos and videos are space hogs. But I had a few old, smaller but certainly useful hard drives around. I plugged them into my desktop, played around, and shuffled data here and there. Okay, good enough. The MP3s only took up 40 gigabytes and I could have put them on any hard drive but I opted for the network drive. I wanted access. I wanted to be able to stream the audio on my laptops, too. And I did for awhile. Each time I moved large quantities of data, I consolidated and cleaned up. I thought I was doing myself a favor.

One day, in the midst of consolidating, I discovered that the network drive was behaving badly. For some reason, there were two distinct folders with copies of all of my MP3s. I didn’t need that redundancy—especially not on my network drive—I needed access and I needed capacity. So, I deleted one of the folders. It took a long time. So long, in fact, that I decided to see what was going on. When I checked I discovered that it was doing double-time. Deleting one folder, I was deleting both folders. They were linked—one and the same in two different locations—who knew? I didn’t. Oh, hell. There went my MP3s.

Six months later, I decided once again that I was tired of hauling around CDs. I wanted my music, so I started ripping CDs again. I’m still ripping CDs, in fact. But this time, I’m doing something different.

For the longest time, my parents and I secretly wondered what was wrong with my brother. We pinched pennies. He did not. Well, at least not like we did. We were amazed at his ability to break wide on the wallet and spend money. How could he? What was he thinking? Where? Why? So many questions went unanswered as we watched and waited for some great calamity to befall him. We worried that he might soon be destitute. Okay, maybe we didn’t but we worried about his sanity and our relationship. Was it possible that he had been switched at birth? No, he was the spitting image of my father. Hmm. We never understood. I never understood but I do understand—a bit more, at least—now. My brother is a successful real estate broker. He wheels and deals in large sums every day—for many of us, real estate is the most expensive investment we’ll ever make. Maybe he’s jaded then and large costs for us look like small costs for him. Maybe but that’s not all of it, I’m sure. Piece of mind counts for much and there is where my brother had—to us, unwittingly—always had the advantage.

While my parents and I worried, wondered, and wished how we could save a few more pennies, my brother spent dollars and earned hundreds of dollars for his time and trouble. But we simply didn’t see it. We couldn’t understand. Or to be polite, I should limit my words: I didn’t see it, I didn’t understand. But now I do. When I decided to rip my CDs again, I decided to spend some money and do it right. I had the same CDs, used the same ripping process, but stored differently this time. While my PC read dots and saved them as 0s and 1s, I surfed the web and found new storage. Two external hard drives with 500 gigabytes storage at a good price but more than I wanted to pay. I bit my lip then paid anyway. I lived with buyer’s regret—it’s a feeling I know well—until I held the drives in my hand. I hooked them to my PC and suddenly I was good to go. I had enough space on each of the hard drives to copy every one of my essential files, including the space-hog photos and videos! What a relief! After I backed up all of my files on one drive, I backed that drive up on the other one. My backup was one redundancy. But backing it up was a double redundancy. I wasn’t taking chances. Was I just plain crazy?

As I mentioned before, I’m still ripping the CDs. Twice is enough. I don’t plan on doing it again. And barring some ridiculously unlikely event, I won’t have to. Two hard drives have my back. Who or what has yours? Although I’d like to pretend that everyone would find the bits and pieces of my life and lessons intriguing, I understand that many won’t. The primary lesson I would offer those who have stuck with it and read this far is this: save time, spend money. A secondary lesson I would offer is this: always have a backup. Be successful and you can make more money but you cannot make more time. Don’t be afraid to spend money—just spend it wisely.  Finally, understand that you can’t mentally or physically be or hold on to all things at all times. You have to rely on other people and tools of the trade. Wise people have others who they can fall back on and tools to rely on. Good people and good tools are always a good deal.

By my second year of law school, I had learned the fine art of skimming. I could “read” several hundred pages of dense legal opinions each night and walk away with the main arguments for each side and the gist of the court’s final ruling. What all that meant was that I finally had room to breathe–well, more specifically, to blow off steam. I finally had time to watch some TV. 

One night, as my roommate and I watched the X-Files–hey, it was BIG in the late 90s, we saw a video game commercial that really threw me for a loop. Ninjas preying on their own people? I immediately belted out: “That’s a load of crap, ninjas weren’t criminals…they were assassins that rulers used to kill enemies!” As it turns out, I may have been a bit presumptuous (http://encyclopedia.thefreedictionary.com/ninja) but my point was made in many ways. As soon as I said it, I stopped, turned to my roommate and said ”What the hell’s wrong with me? I’m analyzing video game commercials?!?” My roommate–a fella I’d known since grade school–looked at me without changing his expression and said “Welcome to law school…you’ve been getting that way for some time.” It was a shocking realization–I didn’t realize how much I was always thinking analytically–like a lawyer ALL THE TIME.

More recently, during business school, I found myself doing something similar–and, after talking with classmates about it–I realized that I wasn’t alone. Have you ever stood in a long line waiting to spend $4 for a cup of coffee and wondered: How does Starbucks manage to charge so much and attract so many? How could Starbucks make their operations more efficient? How could they identify additional buyers for almond scones? And would Starbucks ever want to change anything? [In the last year or so, Starbucks has tweaked its operations so maybe that answers that--but how far did they really go?] Those are the kinds of questions that two years in business school will make you ask.

Eureka moments can occur anytime and anywhere it seems. They may be amazing society-changing discoveries–this soap floats!–or they may be simple, personal breakthroughs. Talking with others has convinced me that everyone has them and their significance varies for everyone. You may notice when your next Eureka moment in the middle of its happening or you may only notice it later. Whether or not you notice it doesn’t really matter. What matters is that when you do notice it, you understand that you’re changing and the world’s changing, too. Welcome to the circus.

Recently, a group of students in my Business Law course at Belmont University were expressing surprise at how much they were starting to “think like lawyers.” They couldn’t believe how much three classes a week for three months had changed them. When they started the course, half a dozen students said that they were interested in attending law school someday. When they ended the course, only two still expressed interest in law school. Was my course good? It turned several possible lawyers away from “dark side” and dimmed their interest in a crowded field. Was my course bad? Maybe all those with interest would have become outstanding lawyers. Whether they do or do not want to be lawyers now doesn’t really matter to me–or to them–because times and people change. Maybe someday they’ll change their minds again and decide to go to law school. What matters now, though, is the fact that many of the students experienced Eureka moments. They realized that our Business Law course was changing them. They had new perspectives–and they knew it. In the end, isn’t that really the point of education? Not just to instill this or that bit of knowledge but to teach students how to approach, adapt themselves, and continue on in the face of challenging new situations?

Back in 2003-04, I interviewed hundreds of real estate investors across America for my book, “What No One Ever Tells You about Investing in Real Estate.” I asked investors to describe their most entertaining and educational investment lessons. Once we got into them, some were real doozies. But our discussions usually started with a discussion of how they had wound up in real estate.

A large number of real estate investors started out as “accidental” investors. Time and again, they told me that they wound up investing because they had to rent out a house they couldn’t sell (because of recessions, et cetera). A large number of those investors and others had also been bitten by the investment bug. They had taken a class, bought a system like Carleton Sheets’, or simply read a book and that launched their new / alternative careers.

I like John T. Reed’s guru ratings but I have also noticed that he doesn’t sell his books on Amazon.com or any third-party site that would offer us neutral reviews of his works. He seems to be a good BS detector but who knows about his own investment prowess? Despite the fact that an inordinate number of my family members are real estate agents, investors, or professionals, just before I started investing, I took Robert Shemin’s boot camp in Nashville. Reed is neutral on Shemin. I liked Shemin so much though that I asked him to write the Foreword for my real estate book.

Shemin taught me the most important thing that I’ve ever learned about the real estate gurus and guides out there: leverage is key. Financial leverage is important for real estate, of course, but I’m talking about the leverage of knowledge. If you take a class, buy a program, or read a book that gives you just one new and useful idea, then real estate has the power to repay your investment many times. So, take the classes, buy the systems, and read on…learn, live, and prosper!

Ever feel like you’re bogged down, just trying to keep pace with your competition? Take the lessons in this article and apply them to your live(s) at work and home: http://www.inc.com/magazine/20080401/how-hard-could-it-be-fire-and-motion.html. Progress means moving forward (http://www.thefreedictionary.com/progress).  Don’t miss your chance to leap frog your competitors!!!

On last Sunday’s BusinessBooya! show, Echo co-founder and CEO Mark Montgomery (http://www.hellomark.com) talked candidly about making his way through the world of ”vulture capital” and finding a true ”angel” investor, one willing to give cash and expertise with just two slight conditions (basically, use the money and grow the company). During our conversation, I asked Mark how they had valued Echo–knowing that he wasn’t an MBA and didn’t seem to keen on in-depth numerical analyses.  He described a back-of-the-envelope process based, I believe, on earnings multiples. As an entrepreneur, I appreciate the fact that it was so easy and comfortable and, more importantly, that it worked well for him.  As an MBA who stumbled through and repeatedly applied the Black-Scholes Method in my Corporate Valuation course at Vandy, I had to wonder if maybe he missed something, if maybe his numbers were a little bit off. Did it matter? Does it matter? Not really. Mark and his investor both seem to be happy. But if they were to ask my help valuing Echo–or if you, dear reader, were to ask me for help valuing your business–I would recommend first that you consider the tools that Inc. Magazine has made available online as part of their annual “Business Valuation” issue (April 2008) at http://www.inc.com/valuation.

THE 545 PEOPLE RESPONSIBLE FOR AMERICA’S WOES
BY CHARLEY REESE

Politicians are the only people in the world who create problems and then campaign against them. Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits?

Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

You and I don’t propose a federal budget. The president does.

You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does.

You and I don’t write the tax code. Congress does.

You and I don’t set fiscal policy. Congress does.

You and I don’t control monetary policy. The Federal Reserve Bank does.

One hundred senators, 435 congressmen, one president and nine Supreme Court justices – 545 human beings out of the 300 million – are directly, legally, morally and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank.

I excluded all the special interests and lobbyists for a sound reason, they have no legal authority. They have no ability to coerce a senator, a congressman or a president to do one cotton- picking thing. I don’t care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.

A CONFIDENCE CONSPIRACY Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.

What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a SPEAKER, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.

The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? She is the leader of the majority party. She and fellow Democrats, not the president, can approve any budget they want.

If the president vetoes it, they can pass it over his veto. REPLACE THE SCOUNDRELS

It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted — by present facts – of incompetence and irresponsibility.

I can’t think of a single domestic problem, from an unfair tax code to defense overruns, that is not traceable directly to those 545 people.

When you fully grasp the plain truth that 545 people exercise power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it’s because they want it unfair. If the budget is in the red, it’s because they want it in the red.

If the Marines are in IRAQ, it’s because they want them in IRAQ.

There are no insoluble government problems.

Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power.

Above all, do not let them con you into the belief that there exist disembodied mystical forces like ‘the economy,’ ‘inflation’ or ‘politics’ that prevent them from doing what they take an oath to do. Those 545 people, and they alone, are responsible.

They, and they alone, have the power. They, and they alone, should be held accountable by the people who are their bosses – provided the voters have the gumption to manage their own employees.

We should vote all of them out of office and clean up their mess.