From time to time, we receive questions via email or posted on the TAE Blog from show listeners; the answers to which would seem to serve more than just that one individual.

One such blog comment comes to us from a gentlemen named Dwayne … in fact, as Dwayne mentions, he actually worked for me at one of my previous start-ups - JD Warren. You can read Dwayne’s posting here.

The following is my response that resulted from a conversation I had with Mr. Dave Wilke, my favorite accountant and of course the host of the extremely popular TAE show segment, “Ask the Accountant”. (Actually, Dave was lecturing my Introduction to Entrepreneurism class at Duquesne University the same day we reviewed Dwayne’s posting, so in effect three distinct groups benefitted from his question!)

Dwayne, you are one of a couple hundred guys who seem to get in touch with The American Entrepreneur each year, essentially asking the question, “What should I do vis-à-vis forming my own protective corporation? Should I go with an LLC, or maybe a subchapter-“S” type corporation? HELP!”

So, here are my thoughts.

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When I started my first business in 1972, I thought that there was but one important word in this business, and that word was profit.

Hey, profit is a pretty powerful word, I’m sure you’ll agree. But is it the most important word in a successful and growing business? I say NO!

And I mean NO --- because it is this word, NO, that most certainly is the most important word in business. And it may well be the most important word in life as well.

But man is it tough to say!

Here’s the conundrum. We all want to be successful. And, success is generally tied to people being pleased. Customers? Well, you must please customers! Employees? Well who do you think does the work around here? And don’t even get me started with family! (Try NOT giving your kid that Popsicle!)

Did you ever notice how downright impressed you are when a parent or a boss simply sits a child or an employee (and I make NO correlation here, though others are free to!) and patiently explains to him how it is that he cannot “have his way”? You think, “That was marvelous! I have to do that the next time someone imposes on me!”

And then the Board of Directors of whatever charity calls and you say, “Sure. You can count on me. I’ll be there every Tuesday and Friday for the next seven weeks as we prepare for the annual dinner gala.”

You hang up, grind your teeth, and promise that you will NEVER say, “yes” again.

But you will.

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A couple of weeks ago on The American Entrepreneur, we hosted the newest leader of the Technology Council (and not the “High Technology Council”), Ms. Audrey Russo.

Audrey is the fifth leader in the 20-plus year history of the council, an organization that has seemed to have problems first defining its mission, and then once defined, staying with that definition. As a result, the Council has had almost as many incarnations (save for its ability to purchase life insurance at a discount for the membership) as it has had leaders.

One of my start-ups was actually among the first couple dozen members of the council … this was way back in the mid-eighties … my business partner and I greatly enjoyed hearing other entrepreneurs tell their start-up stories at the “Breakfast Briefings” that so many companies of that era attended.

One of the oddest things about the council was its penchant for advisors. Recently, this has reached an incredible level, as the council lists nearly four dozen individual members on its Board of Directors. The largest board I ever had in any of my businesses was seven, and even this was a bit cumbersome.

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Well, it took about three and a half decades, but Sony has now apparently drawn even in what I like to call the “Brand Wars” - the ongoing techno-dogfight between Toshiba, JVC/Matsushita, and the aforementioned, four-letter Godzilla of the Ginza, Sony.

Those of you old enough to remember Beta versus VHS will likely also recall the incredibly expensive campaigns waged by these and other titans as each vied for commanding market share of what was to become a huge electronic battleground. Sony’s BetaCam and attendant playback hardware (taken as a whole, this was known as BetaMax) was first to market, but not by much.

That market lead … as so often becomes the case, manifested as an albatross around Sony’s metaphorical neck, as it gave them a false sense of security that ultimately resulted in their losing the sense of desperation that is so critically important to both start-ups and product roll-outs in established corporations.

In the case of Beta, Sony moved much more slowly than they would have had they been operating at flank speed. The result of this complacency was a dearth of hardware manufacturing licensee deals, combined with a show-stopping scarcity of Beta format movies.

Hey, if you don’t have the hardware to play ‘em and if the software doesn’t even exist anyway, what are your chances of succeeding?

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