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Nuts and Bolts

Nuts & Bolts: Perils of success

Steve Tripoli Jun 5, 2007
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Nuts and Bolts

Nuts & Bolts: Perils of success

Steve Tripoli Jun 5, 2007
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TEXT OF STORY

Steve Tripoli: Believe it or not, one of the toughest things for small business people to handle can be success. Especially when it comes more quicker than anticipated.

Marketplace listener Kristen Sundberg says rapid success actually killed her business. That’s right, killed it. How?

Kristen Sundberg: I realized that I couldn’t really follow through on what I’d promised.

She was making simple lavender sachets out of her home in Tampa, Fla. They’re those small linen bags stuffed with lavender that add a nice smell to closets and drawers.

It all started at her sister’s wedding shower, but took off fast. Specialty shops caught the scent. Then big department stores. That simple home business was soon out-running Kristen Sundberg’s dream of a cozy cottage industry.

Sundberg: I had, you know, hefty bags of lavender in my apartment and vintage linen hanging everywhere.

Shipping, billing and marketing chores piled up.

Sundberg: I don’t know, I guess there just wasn’t enough time in the day.

She wasn’t mentally ready to take on hired help. and hadn’t thought about finding financing.

Sundberg: So it turned into this just, you know, crazy situation of me running around doing all the work and just, you know, not feeling stable I guess.

Everything just seized up, and Sundberg’s jet-propelled startup collapsed. She was depressed about how things turned out and disappointed with her own lack of planning. But also relieved to just go and get a day job.

Out in San Rafael, Calif., Marketplace listener Mike Van Horn sees this from two angles. He runs his own successful startup and that business is advising small businesses. So with that resume, his startup must be a model, right?

Mike Van Horn: I’ve made every mistake in the book.

Including — you guessed it — not handling the growth that success brings very well. He says he failed to delegate, didn’t do enough marketing and was slow to implement new strategies.

The problem Van Horn sees in himself and many clients who are succeeding is what he calls “The Lone Ranger Complex.”

Van Horn: They think they have to do everything. They gotta wear all the hats. You know, I’m the expert, the business is moi. That’s just a habit up in your head that you’ve got to be willing to, let go of.

He says if you really want to be a Lone Ranger then do that. But know in advance if your plan is to grow or stay small. That’s where Kristin Sundberg stumbled.

So now let’s turn to our small-business expert for this series. Patti Greene is provost of Babson College. She’s written extensively about entrepreneurship.

Greene says Kristin Sundberg and Mike Van Horn both struggled with turning from the creative side of their businesses to the business side. But, she says, there are two ways to look at creativity:

Patti Greene: Creativity or innovation is actually not just in figuring out what’s the coolest lavender sachet you can possibly have, but it really is about all the other pieces of putting the business together.

And if you still don’t want to sweat details like marketing or distribution?

Greene: That’s the time to think about a partner.

Greene says lots of schools and small-business programs are great at teaching how to launch a business, but lousy at teaching entrepreneurs what to do next. She says that’s got to change.

I’m Steve Tripoli for Marketplace.

TEXT OF STORY

Steve Tripoli: Believe it or not, one of the toughest things for small business people to handle can be success. Especially when it comes more quicker than anticipated.

Marketplace listener Kristen Sundberg says rapid success actually killed her business. That’s right, killed it. How?

Kristen Sundberg: I realized that I couldn’t really follow through on what I’d promised.

She was making simple lavender sachets out of her home in Tampa, Fla. They’re those small linen bags stuffed with lavender that add a nice smell to closets and drawers.

It all started at her sister’s wedding shower, but took off fast. Specialty shops caught the scent. Then big department stores. That simple home business was soon out-running Kristen Sundberg’s dream of a cozy cottage industry.

Sundberg: I had, you know, hefty bags of lavender in my apartment and vintage linen hanging everywhere.

Shipping, billing and marketing chores piled up.

Sundberg: I don’t know, I guess there just wasn’t enough time in the day.

She wasn’t mentally ready to take on hired help. and hadn’t thought about finding financing.

Sundberg: So it turned into this just, you know, crazy situation of me running around doing all the work and just, you know, not feeling stable I guess.

Everything just seized up, and Sundberg’s jet-propelled startup collapsed. She was depressed about how things turned out and disappointed with her own lack of planning. But also relieved to just go and get a day job.

Out in San Rafael, Calif., Marketplace listener Mike Van Horn sees this from two angles. He runs his own successful startup and that business is advising small businesses. So with that resume, his startup must be a model, right?

Mike Van Horn: I’ve made every mistake in the book.

Including — you guessed it — not handling the growth that success brings very well. He says he failed to delegate, didn’t do enough marketing and was slow to implement new strategies.

The problem Van Horn sees in himself and many clients who are succeeding is what he calls “The Lone Ranger Complex.”

Van Horn: They think they have to do everything. They gotta wear all the hats. You know, I’m the expert, the business is moi. That’s just a habit up in your head that you’ve got to be willing to, let go of.

He says if you really want to be a Lone Ranger then do that. But know in advance if your plan is to grow or stay small. That’s where Kristin Sundberg stumbled.

So now let’s turn to our small-business expert for this series. Patti Greene is provost of Babson College. She’s written extensively about entrepreneurship.

Greene says Kristin Sundberg and Mike Van Horn both struggled with turning from the creative side of their businesses to the business side. But, she says, there are two ways to look at creativity:

Patti Greene: Creativity or innovation is actually not just in figuring out what’s the coolest lavender sachet you can possibly have, but it really is about all the other pieces of putting the business together.

And if you still don’t want to sweat details like marketing or distribution?

Greene: That’s the time to think about a partner.

Greene says lots of schools and small-business programs are great at teaching how to launch a business, but lousy at teaching entrepreneurs what to do next. She says that’s got to change.

I’m Steve Tripoli for Marketplace.

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