When I was bankrupt (some twenty-plus years ago), I had plenty of time to just think. After all, I had no customers other than the court-appointed receiver, and I certainly had no employees, either.

And yes, these non-existent employees were the very same people who, and without even a “thanks”, gladly took bonuses, cars, meals, time off, and all-expense-paid trips from me during our bankrupt company’s “good times”.

That’s just the way it works.

All of you whom have filed bankruptcy (or, been driven into it) or even whom have experienced tough, bankrupt-LIKE times, know exactly what I’m talking about.

Entrepreneurs are nothing if not resilient and strong. You knock us down, we get back up. You knock us down again, we get back up again. In point of fact, to keep us down, you really have to just about cut off our legs and our heads.

And even then, watch out --- because we’re likely to rise once more.

Many people have asked me over the years, “How is it that you went bankrupt? You seem so damned sure of yourself. And you are cynical and wary. How does such a battle-tested guy like this fail?”

Well, and for one thing, none of us are as tough as we seem. Moreover, we all have weak spots. Remember, we’re not machines. We DO make mistakes.

Also, so many of us have hearts of gold. We’re the same people who brought home stray cats and dogs when we were young. A lot of us seem to have a talent for generating revenue, but almost no talent for keeping and protecting it.

Speaking only for myself, I’d say that there were three major reasons why I rolled a Chapter Seven. They are:

One: I stopped doing many of the things that got me there in the first place.

A LOT, and I mean A WHOLE LOT of people make this same mistake. Cautious people become less cautious as the zeros begin to pile up. Checklists, processes, and good old systems and procedures begin to get overlooked in favor of “gut decisions”. (See if this sounds familiar … “Hell, by now I know this business --- and I’m tired of spending time and money on research.”)

You also begin to hire less hungry and less-capable people. Why? Because these types of workers are both cheaper and easier to hire. You then begin to hire friends and relatives … people who make it next-to-impossible for you to manage them objectively.

You yourself may become less hungry. Here is an oft-stated quote … “Hell, I’ve worked my butt off for ten YEARS! It’s high time that I get a break. I’m taking six months off.”

This may be a terrific idea … for your wife and kids. But once you start living the “easy life”, it is VERY hard to restart your feathered engines again. In fact, more often than not those engines CANNOT be re-started.

Better to simply sell out and then take a couple of YEARS off. Use this time to see if you really can live without the “action” --- without the JUICE that running a fast-growing business brings. At least this way, you’ve got your nest egg, your health, and your family. (Though I warn you … your wife ain’t gonna like having a control-freak entrepreneur under her feet day in and day out. At least get a hobby. Like fishing in the Aleutians!)

Two: I stopped “Running Scared”

 Oh YES. This does happen.

When I started my first business in 1972/73 (I was 22/23), I was scared out of my wits. I often say that I would wake up each morning with the psychic equivalent of defibrillators blowing up my chest. Why? Well, for one thing, I graduated college with a pretty darned low QPA. (This is when I thought that such things were really important.) The thought often followed me … “What if I’m not smart enough?”

Secondly, I had never even BEEN in a small business before. Unless you call working for NASA and a worldwide graphic arts company “small”. So, I had no idea whatsoever what it meant to “see the whole picture”. At best, I was seeing maybe 1/5^th of the picture. This did very little to sharpen my “CEO” skills.

And third? I’m sure you’ve guessed by now --- I had almost NO money. I had built up a decent nest egg while working for NASA, but I had also gone two YEARS before drawing a check from my first entrepreneurial venture (software). Everything I made, I plowed back in to the business.

How did I eat? Well, I did such things as: a.) officiate high school baseball, football, and basketball ($12-$16 per game --- usually three or more games a night ); b.) teach at a local college (LaRoche) for a whopping fee of $900.00 per semester; and, c.) park cars in my apartment’s parking lot (Hotel Webster Hall). This in turn reduced my rent to $137.50/month, including utilities.

It was the best thing that ever happened to me. Because every day, my “constitution” became stronger and I became more confident. I used to think. “Hell, if I can get through THIS, I can do ANYTHING.”

And usually, I DID.

But success in business came. And, it eventually came WAY too easy. I had made nearly two million bucks by the end of that first decade. Which is when I really started enjoying my “fruits de travaille”.

Truth be told, I started enjoying those fruits WAY too much!

Three: I caught a Vortex.

Vortexes, or as I like to call them, “Vortex Markets”, are one of my favorite subjects. You see, when I started my very first company, I used to think --- “It’s all about PRODUCT. ‘Build it and they will come’ I used to think.” (And this was WAAAY before the movie.) If you have a new “way”, you simply cannot lose. Heck, the product, and so long as it addresses a niche, really doesn’t even have to be THAT good.

Time changed that thinking. I next went through a phase wherein I thought, “To heck with products. It’s all about PEOPLE. Have great people and you can conquer the world. Hire crazy people, too. Guys (and ladies) who simply will work 7X24X365 days a year.

This state of mind lasted even a shorter while. So next, I went through my “know your costs” phase. “Keep reducing costs to the point where you are profitable”, was my mantra. This is also a great way to go, but still it was just a part of the picture.

I was learning, but I was still not “there”.

Then one day it dawned on me. The REAL key to business success was ALL of the above PLUS the most important “condition” of all; “HOT MARKETS”. Yes, you read that right. Markets are the KEY. Find a “hot” market, and you can drag your dead-butt average products, made by average people, with average cost-management right across the finish line.

This all became clear when I happened upon a vortex market. And, in a very short while, this particular vortex market had lifted me to heights previously unimagined.

Even though I had very little to do with the success that having this market niche was bringing.

The “trick”, of course, is to be able to either:

• Know when you are in a vortex … and then adjust your fuel mix accordingly, OR,

• Know how to FIND vortex markets. And to this I say, “good luck”. For I have yet to discern any rational formula that makes this possible. It’s kind of like the Potter Stewart definition of pornography, “I can’t define it, but I know it when I see it.”

Because a vortex can LOOK like a vortex but yet still BE just a burst of hot desert air.

May you soon find yours.