Gen E: Generation Entrepreneur Is Rewriting the Rules of Business - and You Can, Too!

Overview

Part social commentary and part how-to guide, "Gen E" is the first book to explore how the Generation X entrepreneurs have shaped cultural and business trends and made millions in the process. The book also suggests ten ideal businesses for Gen X entrepreneurs the 15 coolest cities in which to start a Gen X business. 30 illustrations.
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Overview

Part social commentary and part how-to guide, "Gen E" is the first book to explore how the Generation X entrepreneurs have shaped cultural and business trends and made millions in the process. The book also suggests ten ideal businesses for Gen X entrepreneurs the 15 coolest cities in which to start a Gen X business. 30 illustrations.
Read More Show Less

Product Details

  • ISBN-13: 9781891984075
  • Publisher: Entrepreneur Press
  • Publication date: 10/1/1999
  • Edition number: 1
  • Pages: 337
  • Product dimensions: 6.06 (w) x 8.90 (h) x 0.93 (d)

Read an Excerpt




Chapter One


Who are the new entrepreneurs who are changing the face of American corporate culture? Here is a look at how three companies got started and the determined, creative young founders who gave them life.


The Birth Of A Company


    Labor Day 1994: The sidewalk shimmered from the warm morning sun outside Bloomingdale's flagship store on 59th Street in midtown Manhattan. Inside, 29-year-old Jody Kozlow Gardner (right) and her good friend and now business partner, 30-year-old Cherie Serota, exchanged nervous glances. Their store had just opened for business.

    The two women had recently formed their own company, Belly Basics, and 10 feet away in a prime aisle-front location in Bloomingdale's well-trafficked women's clothing area lay the first fruits of their entrepreneurial venture. Seventy white boxes were neatly stacked in rows of four, each stack rising 6 feet off the ground. Stenciled in bold black lettering on each box was the name of their product, The Pregnancy Survival Kit.

    Inside each kit was a little black dress, a tunic, leggings and a slim skirt, all in comfortable cotton and Lycra, all fashionably pitch black in color and available for the first time ever to the notoriously choosy maternity shopper. Dangling outside each box was the price tag for the kit—$152. In a display of good taste and crafty public relations, each Pregnancy Survival Kit also included a personal thank you from Gardner and Serota as well as an invitation to comment on the clothes.

    After Bloomingdale's had given the duo a green light to test-sell the kits, Gardner and Serota chose Labor Day as their launch date, providing the retail world a glimpse of their savvy marketing style. Both knew, however, that hip marketing could only take you so far. If the product didn't catch the eye of customers, all their hard work to get to this point would be in vain. It was no lock: Bloomingdale's had never carried women's maternity clothing before. Long minutes passed as both women smiled politely, holding hands and nervously chatting quietly with a coterie of family members and friends who had gathered in a mixture of solidarity and curiosity. Everyone waited and watched anxiously to see what would happen.

    Slowly, the friends and family members who had come to lend their support found themselves giving way to customers heading for the Belly Basics stand. A shopper took a box, poked around inside, shook it for heft and, smiling, walked away with a kit under her arm looking for a cash register. Two more shoppers, one noticeably pregnant, gasped at the boxes and elbowed each other in delight as they swooped in to pick up another kit. More followed, and the tower of boxes began to shrink to 5 feet and then to 4 feet. The kits were selling like those proverbial hotcakes. Gardner and Serota had founded Belly Basics as a maternity fashions company with an attitude, and it seemed they had struck entrepreneurial gold. "We realized at that time," recalls Gardner, "that this was the birth of something big. Our crazy idea had worked—we were a success."

    Awash with waves of emotion, the energetic young entrepreneurs stood smiling—unaware that they were about to embark on a journey that would quickly carry them to the top of the maternity fashion world. In a matter of months, their company was featured in Glamour, Vogue, Self, Fortune, Good Housekeeping, New York Magazine, American Baby and dozens of other publications. The partners soon expanded their line of maternity wear, adding a small catalog that included a twin set, bootleg pants, T-shirts, swimsuits, bike shorts, unitards, big shirts, a cardigan-and-skirt combination and a sleeveless shift in black matte jersey that delighted moms-to-be as a party dress. They eventually wrote a book, Pregnancy Chic, that was published to rave reviews from a maternity fashion-starved press and public. By mid-1998, Belly Basics had sold 100,000 Pregnancy Survival Kits, and by the end of 1998, the company had rung up $5 million in annual sales. "Soon we were selling to England, Canada, Japan and Australia," says Serota. "Our simple idea had become a phenomenon, revolutionizing the way pregnant women thought about style."


Perfect, To A Tea


    Four years ago, in a college classroom in New Haven, Connecticut, Barry Nalebuff, a professor at the Yale School of Management, led a discussion on a case study of Coke vs. Pepsi. Eventually, the talk turned to what products were missing in the beverage market. Everyone agreed that there were plenty of super-sweet drinks—from Coke and Pepsi to Snapple and Fruitopia to diet drinks containing all kinds of artificial sweeteners. At the other end of the spectrum, there were plenty of flavorless drinks, such as bottled waters and seltzers with a flavor aftertaste. But there didn't seem to be any great-tasting drinks that didn't have all the extra stuff, not just the extra calories, but all the artificial ingredients like high fructose corn syrup and sodium benzoate.

    For class member Seth Goldman, 34, the discussion really hit home. He had developed a reputation among his friends as a voracious consumer of beverages, and he was now a Snapple refugee: His infatuation with that drink had faded when he could no longer endure another lunch that left a syrupy film on his teeth. After class, Goldman and Nalebuff spoke animatedly about the kinds of beverages that might fill the void between the super-sweet and the tasteless. The discussion lingered in Goldman's mind for a long time.

    At the end of the semester, Goldman (left) graduated and moved his young family to Bethesda, Maryland, where he worked for the Calvert Group, sponsor of the nation's largest family of socially and environmentally responsible mutual funds. After two years with Calvert, Goldman began thinking about running his own company, one that was both profitable and socially responsible. "While I really enjoyed my time at Calvert—it taught me a great deal about how a business could do well by doing good—I always had it in the back of my mind that I would try to strike out on my own," says Goldman. "And the healthy drink concept was looking more and more viable for me."

    On a balmy day in the fall of 1997, Goldman met a former college track teammate for dinner at a New York City diner. The two had just gone for a run in Central Park and were parched. But when it came time to order drinks, they again encountered the void between the super-sweet and the flavorless. It was only by ordering some sweet and some flavorless beverages and combining them that the two friends managed to create palatable beverages that were both thirst-quenching and flavorful. On the shuttle back to Washington, DC, Goldman recalled the conversation he had had with Nalebuff several years before. When he returned home, he e-mailed his old professor to see if he was still interested in the idea.

    The timing of the letter couldn't have been more fortuitous. Nalebuff had just returned from a trip to India, where he had done research for a case study on the tea industry. In addition to nurturing his lifelong appreciation for tea, the trip provided him with an understanding of the tea industry. Perhaps more important, during a visit to a tea auction house in Calcutta, he came up with the name Honest Tea—the perfect moniker for a company that would sell tea that truly tastes like tea.

    "It was one of those serendipitous things," Goldman says. "[Professor Nalebuff] convinced me that we could start a business called `Honest Tea' that was all-natural and does what it says it does on the label. That fall, he and I spent a lot of time brewing up ideas and thinking about what flavors we would use, how we would package it and how I would sell it. We brought people in to taste the recipes, and they were happy with the results."

    On February 1, 1998, the duo launched Honest Tea Inc. and got busy writing their business plan. "Barry was right there with me, guiding me along the way," recalls Goldman. "At the end of February, I started making headway in getting my tea brewed." About the same time, Goldman got his tea into Fresh Fields, a popular Washington, DC, grocery store. "They said they would buy half a truck full. That was difficult because we only use high-quality tea leaves, but we managed to [make the order using] an assembly line, and we learned some lessons about the realities of deadlines and distribution. By the end of summer, we were the bestselling iced tea at Fresh Fields, outselling Snapple and others."

    And so Honest Tea began—and began to prosper. The two entrepreneurs sampled a plethora of tea recipes and exchanged hundreds of e-mail notes as they shaped their company. "Though several dozen promising teas were identified, we selected five flagship varieties that would become our initial product line," recalls Goldman. "We spent a great deal of time with our designer, Sloan Wilson, developing a label concept that effectively conveys the authentic, international aspects of our tea while also capturing the elegant simplicity that is often associated with tea rituals. So far, we have been delighted by the results." Indeed, Goldman expects sales of about $3.5 million in 1999.

    But Goldman is far from done. "Oh, no way are we satisfied. We still want to do more and help people out in the process," he says. "That's the best part of my job."


Smoothie Operators


    Eric Strauss, 30, owner and founder of Crazy Carrot Juice Bars, can remember the day 18 years ago that he opened his first lemonade stand. "I was living in Lake of the Isles, Minnesota. Believe it or not, it gets hot up there in the summer. I took advantage of that," he says. After some early trials and tribulations, Strauss soon had multiple lemonade stands strategically situated around the Minneapolis area serving up thousands of cups of cold lemonade every summer. To staff these multiple locations, Eric tapped his younger siblings and several close friends.

    Born with a business sense, Strauss had a history of entrepreneurship even before launching his lemonade empire. "I began breeding and selling gerbils to local pet stores at age 6," he recalls. "I just had an affinity for organizing and marketing, even then. I used to look forward every day to reading the business section of the local paper, and I was subscribing to The Wall Street Journal at the age of 12. I couldn't wait to put what I learned in the business news into practice." It wasn't surprising, then, when Strauss offered his mom stock in the lemonade company in exchange for the requisite lemonade stand supplies—sugar, Kool-Aid mix and cups.

    In fact, Strauss still has the penciled ledgers from the business, including sales records, inventory levels, company rules and projected profit margins. "Would you believe that our profit margins are about the same today?" he says. Sales were good—with one lemonade stand capable of bringing in up to $35 a day in revenue—and buying and selling shares in the company wasn't a bad investment, either.

    Soon after completing a fourth-grade class on finance (yep, you read that right), Strauss informed his mother that he was interested in making some real-life investments. By the age of 13, a letter he had sent to corporate raider Irwin Jacobs had already been quoted in Fortune magazine. At about the same time, Strauss began publishing a computer magazine, Compuzine, a bimonthly trade journal focused on personal computer users.

    By age 14, Strauss had become serious about investing, and along with two friends, he published the Rogers, Schalet and Strauss Investment Newsletter. The newsletter, which recommended eight to 12 stocks per month, had an impressive track record and more than 30 subscribers. Anyone who followed the recommendations would have racked up gains of 55 percent in a year—a high enough return to earn the trio of underage investment advisors billing on the cover of the Minneapolis Star and the Chicago Tribune business sections.

    It wasn't until high school that Strauss really learned how profitable the food business could be. As an ice cream salesman around the Minneapolis Chain of Lakes, he pedaled and pushed his way through thousands of Dove Bars, Bomb Pops and other assorted goodies, eventually becoming the top salesperson three years in a row for the Blue Bell Ice Cream Co. "Nobody could sell more than Eric Strauss," recalls Tom Fischer, vending truck manager for what is now the Big Bell Ice Cream Co. "He's got the knack and energy it takes to be successful."

    Strauss opened his first Crazy Carrot Juice Bar in the Macalester-Groveland neighborhood in Saint Paul in January 1998. "I had started planning the business in August 1996," Strauss recalls. "To raise capital, I sold stock to 30 investors and got a [$50,000] loan from the Small Business Administration. I sold $80,000 worth of equity interest and the city of Minneapolis kicked in $35K from a small-business loan program they had."

    The Crazy Carrot's ingredients were carefully conceived and orchestrated by members of "Team Carrot," a group of people strategically put together to create a top-flight company. The Crazy Carrot concept—which consists of everything from the distinctive logo to the one-of-a-kind smoothies to the company's focus on environmental awareness—was more than 18 months in the making.

    Beginning in 1996, Strauss and other members of "Team Carrot" began scouring the country, from California to Florida, for juice bars. Strauss himself visited more than 100 juice bars in his quest to perfect the Crazy Carrot concept. Studying every aspect of a juice bar's operation, Strauss soon honed in on the ultimate juice bar prototype. Then he selected a site, signed a lease and began construction.

    Demand was strong right off the bat. The company went through more than 3,000 pounds of oranges a week, up to 1,500 pounds of jumbo carrots, and hundreds of pounds of bananas, strawberries, raspberries and other assorted fruits and vegetables.

     In September 1998, the second Crazy Carrot Juice Bar opened in Minneapolis' Uptown neighborhood, an area Strauss describes as positively dripping with cachet. A third store opened near the University of Minnesota campus. By spring 1999, two more locations had opened for business. To lure younger juice lovers, Strauss installed personal computers in his stores with free Internet access for customers. His passion for juice drinks and flair for marketing has paid off. Revenues for 1999 are soaring past the $1 million mark.

    "I knew we'd hit it big when [actress] Bridget Fonda came in and had one of our wheatgrass juice drinks," says Strauss. "All of a sudden we were `happening.' I'd like to say that I knew it all along, but I can't It takes a lot of hard work and some luck, too We had both on our side."


Excerpted from Gen E by Brian O'Connell. Copyright © 1999 by Entrepreneur Media Inc.. Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.


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Table of Contents

Introduction vi
Chapter 1 Hard Work And A Little Luck: Postcards From The
Front Three wildly successful businesses launched by young 1
Chapter 2 What Do You Want To Be When You Grow Up? Why
you're shunning corporate America and striking out on your 11
Chapter 3 Slacker, Schmacker: How The Great Ones Got Started
Could your business be the next Amazon.com? Only if you have 27
Chapter 4 My Niche (And Welcome To It) OK, you have a great
idea, but will it fly? 45
Chapter 5 Get With The Plan How do you go from idea to
company? Write a business plan, get financing, then market 65
Chapter 6 Running With The Gazelles This is not your
father's workplace. See how Gen E companies differ from 97
Chapter 7 Deal With It: Managing Employees Your mantra
"Don't worry, be happy" goes for your employees, 119
Chapter 8 The Righteous Stuff: Gen E And Social
Responsibility It's a given: Gen E is socially conscious 145
Chapter 9 TheMillionaire Wears Tennis shoes Take a look at
how some entrepreneurs are managing—or 165
Chapter 10 What Do You Do For An Encore? Don't just stand
there! Here's how to expand or sell your business—or 185
Chapter 11 From The Frontlines: Top Tips For Aspiring
Entrepreneurs Get the inside track on building and running a 211
Chapter 12 Austin Or Bust: The Best Places To Launch A
Business From the Big Apple to the Silicon Valley, here are 243
Chapter 13 Hot Stuff: The Coolest Industries And The Boldest
Markets From specialty tours to herbal pharmacies, Gen E 285
Chapter 14 Resources? You Need These Stinkin' Resources A
guide to everything entrepreneurial: organizations, classes, 313
Index 331
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