American Entrepreneurism

A couple of readers have criticized me as the rich kid with a silver spoon who was somehow handed everything, so I thought this might be a good time to use my own background as an example of American exceptionalism — of what is good about America.

Having traveled the world extensively (at my own expense with the UW Graaskamp Real Estate Center), I can testify to the uniqueness of American entrepreneurism and the ability of a young, inexperienced individual to build a business from scratch; from just an idea. America is the land of opportunity. What other country are foreigners risking their lives to “escape” to? America is their destination, their dream.

Maybe my story will inspire others to strive to succeed during these difficult times. My tale is the same as so many others; I started from scratch, working hard to build a business up over 20 years like many of you.

I started at age 11, selling, and delivering newspapers. As a teen, I worked at a bike shop and later a sports store to earn money to pay my own way through college. In college, I worked as the first computer consultant in the county, earning $55 an hour when my peers earned $3.50 an hour.

(While other kids spent their money on clothes and other consumables, I invested mine in a personal computer and a subscription to the Wall Street Journal. I actually spent one entire summer just programming on the computer.)

When changes in the tax code created a real estate recession while I was enrolled at UW-Madison in the real estate program, I knew there would be no jobs available when I would graduate. So instead of sitting around, I went out and earned my real estate broker’s license. I then literally wore out shoe leather going door-to-door asking apartment building owners if they would want to sell their buildings. I finally found one owner that wanted to sell a 48-unit apartment project. Little did I know what I was in for!

After trying to sell the place for some time, the bank approached me and asked if I would buy it. Needless to say, all I owned was a bike and a pair of skis; how could I afford to buy it? The bank then offered to finance 100% of the purchase, and so, with sweat equity and a lot of long hours, I hired a helper and began fixing up the place. But what I didn’t learn until I tried to collect rent the first month was that the place was full of pimps, prostitutes, and drug dealers!

(And yes, I was offered “services in kind” instead of cash on many occasions; and in case you were wondering, those were offers I did not accept.)

Then one evening, I met five police officers at the property in order to identify the tenants as they came and went. The police ran those names through the computer system and — voila! — one-third of my tenants were escorted away that night on outstanding warrants. After a couple of death threats, we quickly renovated and re-tenanted their apartments, and six years later I sold the property for a nice profit.

I then used all my hard-earned savings to buy a $5,000 option on some land on the Interstate, which later became High Crossing Environ, a major office park.

Later, I found out that Target was looking for an east side location, so I researched what they needed and then took out a land contract on the only parcel that they could fit on, the Lien Farm by East Towne Mall. (I literally “bought the farm!”) This development was the one in which I earned enough to provide equity for future deals.

Because I started the business from scratch and didn’t have any cash equity to put in at the start, when the time came to build City Center West (the TDS and Johnson Bank towers), instead of being greedy and holding the company all to myself, I took in 220 investors who provided $55 million of capital over about seven years to grow the company. Later, in 2007, I brought on an institutional partner who committed $110 million of additional capital for development and acquisitions.

And that’s an important lesson to keep in mind: you don’t have to have money to start a business. If you have a good idea, capital can be found through friends, family, or business associates. There’s also the Small Business Administration and angel funds that can help, too. Start with finding a mentor or advisor who can make introductions for you.

Many people falsely assume that just because I own the largest commercial development company in Wisconsin that it was handed to me on a silver platter, when the reality is that it took 30 years of hard work, starting when I was only 11. And I have a lot of partners. Fortunately in my case, I had tail winds helping push me along; President Reagan’s restructuring of the economy, falling interest rates, rising real estate values, and increasing economic activity and demand for office space helped me succeed.

Today, due to a rising tax and regulatory environment, along with tightening credit, young adults are not as fortunate, but that does not mean that you can’t succeed by venturing out on your own. Starting a new business during a recession is a terrific time to get started. If you can make it in this environment, you can make it in any environment. Costs are lower and vendors may be willing to give you a break on pricing or even defer payment (many gave me a break at the start).

But with a little hard work, risk-taking, and creativity, you can start your own business and live the American dream. And that’s what America is all about. Building your own future; building wealth and a sustainable income for you and your family. Building independence. Making it happen.

And don’t let the lack of capital stop you. Like me and many others, we all got started without anything more than a small amount of savings in our pocket. Admittedly, we put it all on the line, but then we were committed. And don’t be afraid to tap friends and family to help you get started, as well as tap into business leaders and entrepreneurs who have already obtained some success.

They remember what it was like, and they may be able to help.

America is a nation unique in history, and Americans are unique in nature. Their positive, can-do attitude is different than anywhere else in the world. We have an optimism that is unparalleled. In spite of these uncertain times, we shall succeed.

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