You Gotta Want to Be an Entrepreneur

A challenge from a successful entrepreneur — my dad.

Everyone has a choice to make. You can work for somebody else or you can work for yourself. Per my dad, if you choose the latter, after working for somebody you may think you can do it better — but it doesn’t always work out that way…

As I enter the world of venture capitalism, every day I am privileged to meet outstanding and courageous entrepreneurs that make the choice to work for themselves. I also have the responsibility to help decide which ones we will join on their journey to impact billions. Thus, I had a renewed interest to understand the beginnings and learnings of my own dad, a successful entrepreneur who retired at the age of 50. In celebration of Father’s Day, I thought I’d share.

Mike Schroeder was the CEO, President and co-founder of Consumer Satellite Systems. Their principal business from 1981 through 1986 was the sale of C Band satellite systems to some 5,000 dealers east of the Mississippi. They had 10 distribution locations from Wisconsin to Florida. In 1986, they developed an internet-capable billing, receivable and activation software system for C Band programming that served about 400,000 customers across the United States. In 1998, the company merged with DSI Distributing, west of the Mississippi. They had annual sales of $120mm a year.

But of course, it didn’t start out that way…

Growing up in Indianapolis, my dad always had the vision to be a millionaire. How was not as clear. He skipped the college path because he hated school. He always liked electronics but didn’t consider making a business out of it. Eventually, he would use his passion to drive his success — but he didn’t recognize this yet.

Instead, he moved to Texas and started companies with partners in rice-oil-based cosmetics and then insurance. Neither did very well but he had a lot of fun (maybe too much?) and learned. Hard knocks are the best teachers and motivators. With a wife and his first kid (me!), his van got repossessed and we were living in a trailer. We had a huge garden and made an equally “huge” investment in a tiller because we needed to eat.

He decided to move back to Indiana to work for somebody else. He used his knowledge and interests in electronics and got a position at Graham Electronics and then the Warren Radio Company. However, in the back of his mind, he was always thinking, “is there something I can do that’s not this.”

He used this time to learn. He learned about direct sales, retail, wholesale, bookkeeping, installations, distribution, and margins for distribution. He also became very interested in computers and their untapped potential. It was 1978 and they were struggling to control inventory. He recognized the opportunity for computers to help — and do more. This would percolate in the back of his mind.

Around 1980 the satellite business came along. Big eleven-foot dishes rolled into front yards, communicating with space! My dad viewed these as “great toys.” Rural areas had poor TV reception or no access to broadcast television signals at all. Expensive 60–70 foot towers were installed with a rotor for pointing antennas in the direction of a source. Point it south to pick up stations in Louisville KY or southwest to get Evansville IN. Point it north and you might get Indianapolis. The quality was variable with “snow” and ghosting. My dad loaded up a large satellite dish on a trailer and began giving demos. He gave people broadcast quality and live events. They’d never seen that before!

Consumer Satellite Systems was born. He started in retail, and personally installed systems. He would work long hours and over weekends, once to the point of dehydration. Given his experience working for somebody else, he made getting a computer system and finding a programmer a priority. He recognized he needed to start putting the organization together because doing it by hand while growing the business “ain’t gonna happen”. He was able to move to distribution which multiplied his efforts. Eventually, he added higher profit items and the items the dealers needed to get the jobs done (connectors, cable, pipes, etc.). He was successful in doing these things quickly because he learned so much in his previous two jobs.

So remember that observation he made in 1978 about computers, and his first priority to set up the organizational structure? He developed better inventory control system software than what he used at his other jobs working for somebody else.

This software diversification paid off, coupled with good financial management resulting in positive net worth. In 1986, HBO scrambled their signals such that the big yard-dishes couldn’t receive them. Soon other cable networks followed. 70% of the dish distributors went out of business because they didn’t have any savings. My dad’s business lost about half their net worth — but they didn’t go out of business.

He then capitalized on an opportunity to do more with computers and programming. Cable companies were limited to their existing cable billing software. Dad was able to develop a software service that addressed the specific needs of the customer. He created the National Programming Service to sell satellite programming. He provided specific part numbers for unique packages that targeted content clients wanted. Dad was also the first to offer online Internet access to turn on and off programming. Nobody else was doing this stuff. He had created something unique that people wanted. The tools also made his business more efficient than “the people down the street.” These in turn then enabled lower prices.

Increasing sales volume was a great outcome of the unique offering at more efficient operations. However, growing fast made it difficult to stay ahead of the game. Many businesses fail when they don’t have the infrastructure to support the growth. Infrastructure isn’t limited to buildings and tools but also includes people. My dad realized he needed the help of advisors (shameless plug for my new partner who targets growth!) and to hire people that were smarter than he. He also needed to hire people with the ability and purpose to manage his people for him. Some are afraid that opening themselves up like this puts them in vulnerable positions. In his experience, when managed well it is an opportunity to learn.

Good management of your people builds lasting relationships and dedication. My dad was humbled by this responsibility. He felt he was responsible for their rent, their cars, putting food on the table, their kids’ education. He recalls a Christmas party for his 400 plus Indianapolis employees. He made sure the families were invited. Looking across the crowd of now a thousand people is really cool but also a good reminder, “[bleep] I’m responsible for all that!”

Of course, success is not based solely on calculations, hard-earned experiences, and market intelligence. Observing those you admire around you and being humble to try to emulate their strengths are gifts. Dad received and acted on many such gifts.

Hard work and Family Values. Without hesitation my dad cites his mom and dad as mentors, reflecting on observations made over a lifetime. They demonstrated a strong work ethic and family values. His mother ran the home and ensured they sat down together at dinner as a family. Afterward, his father, a broker at Merrill Lynch, would be preparing for the next day, reading the Wall Street Journal, and researching companies. His grandfather was another hard-working individual. A successful CFO and a scrappy handyman, he bought 30 rental houses which he personally maintained on the weekends.

We share our groundbreaking achievements with our community and together enjoy the fruits of our labors. We endlessly pursue the better while flourishing in each step of our path.

My dad created a business that supported hundreds of people and delighted customers with things never before experienced in their home. In his retirement, he continues to create experiences and opportunities for others through his volunteer work. He has been blessed to pursue the most fun thing in life — creating something.

But to be successful, you gotta want it.

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