In this talk, originally titled Every problem is an opportunity, every mistake an idea, I gave three examples of situations where overcoming a problem led to better results than were anticipated before the problem arose. I also described some of the emotional turmoil that can come about in running a small business. I concluded with some of the payoffs of surviving the turmoil.

     I originally had intended to give you kind of a dry talk about some of my advertising and record keeping and that sort of thing, but I decided instead to talk on this theme, which is something I learned from a graphics arts teacher several years ago:

These words of Ross Mendes have come back to inspire me time and time again in my business and other activities. I am going to give you three examples of how they turned out to be true in the case of Marshall Burns Computer Sales.

     I started Marshall Burns Computer Sales in 1982 for the purpose of raising enough money to get myself started in graduate school. I already had an IBM PC and some knowledge about how to buy them wholesale, which was very valuable knowledge in those days. I invested $1,500 in a booth in a trade show as my initial promotion, and sold $298,000 worth of computers in the next eight months. I did get enough money to go to graduate school.

     I was working from late 1981 until early 1982 at ComputerLand of Pasadena selling IBM Personal Computers. In about mid-April of 1982, I was fired over a misunderstanding with the owner of the store. He called me into his office one day and handed me my paycheck and told me I was free to leave. I was pretty concerned about this because I had just sent out my applications for graduate school, and I already didn’t know how on my commissions at ComputerLand I was going to raise enough money to go. Certainly without a job, it seemed that it would be even harder.

     I got depressed for a while and walked around thinking about what to do. I was walking through Beverly Center, a beautiful shopping center on the outskirts of Beverly Hills, when I sat down with a piece of paper and calculated what I knew about the prices of IBM Personal Computers. Here is what I wrote down:

     The middle column contains the prices that I knew were available to me for the components that went to make up that original model PC. The right hand column has the retail prices. There are a couple of interesting things about this table. If you look at the last two rows, you see that these items are the same price, retail and my cost. I knew that there was no way that I could buy those pieces wholesale. The only way to get them was directly from IBM at retail. However I could buy the basic computer at roughly $1000 off list and the other components also at very nice wholesale prices. It turned out, actually, that the numbers shown in the middle column were over-estimates. Once I got into the market and started buying the stuff, I was able to find better prices. Anyway, it looked to me like I had about an $870 margin on an individual computer and I asked myself, “Why don’t I go into business?” And that’s what I did.

     That is Example #1 of how a problem can become an opportunity. I lost my job, didn’t know how I was going to get the money to go to graduate school, and ended up making ten times as much as I would have made in the next few months at ComputerLand, by going into business for myself.

	My first ad drew one call and no sales, a disappointing start.

     But I’m jumping ahead of the story. One would not have guessed that I would be successful from the results of the first advertisement I placed. I paid $300 for an ad in the Los Angeles Times and I got one call. That was from a man who picked my brain about computers for two hours before he finally left my apartment/office filled with a cloud of smoke from his cigar.

     After that experience, I decided to do some research, determined that I was not going to fail again at advertising. I went to the Pasadena Public Library and got down past issues of several local and national newspapers. I knew that the major market for the computer I had for sale was business people. I also knew that other people were paying a lot of money to find out when is the right time and what are the right places to advertise to reach these business people. Here is a sample of my notes from that afternoon of marketing research:

	My ad in the Wall Street Journal did much better, drawing $30,000 in sales from two placements costing only $400 each.

     This data lists advertisements for technological products in the several thousand dollar range in the Wall Street Journal during May of 1982. Based on this and other information I collected, I placed an ad on page 2 of the Journal on Monday, June 14. I also paid a premium to ensure that my little ad would run at the top of its column. Finally, I worked with a typesetter and designed the ad myself instead of letting the paper design it for me, as I had done with the Times. The placement cost was $400 and this ad pulled $30,000 in sales the first two times I ran it.

     I don’t know whether to call this an example of a problem becoming an opportunity or a mistake giving birth to a valuable idea. I had made several mistakes on the Los Angeles Times ad. I let them design it. I let them put it wherever they wanted to. I let them run it on Sunday. Maybe even running it in the Times was a mistake. The correction of those mistakes yielded a fantastic idea, judging by the results.

     Here is my last example of a problem becoming an opportunity This goes back to the trade show that I first told you about, where I spent the $1,500 that got me started. I walked into the Anaheim Convention Center and every booth had a sign over it with the name of the company represented there. I knew that I had the hottest product in the whole show, the IBM PC, but the name of my company was Marshall Burns Computer Sales. How was anyone going to know what I was doing there? So I asked the people in the show office, that when they made up the sign for my booth, would they please print “Marshall Burns Computer Sales / IBM Personal Computers.” They said, “No, we are only allowed to put the name of your company on the sign.” I thought about that for a while, probably walked around the complex a little bit wondering what I was going to do. Then I went back and asked them, “Well, how do you decide what the name of my company is?” And they said, “Well, whatever you say the name of your company is.” So for that weekend my company became “Marshall Burns-IBM Personal Computer Sales,” and the resulting sign:

     Those are my examples of problems and mistakes becoming opportunities and ideas. Now I’d like to inject some realism into this discussion and warn you that everything is not beautiful when you go into business, even if you take advantage of every opportunity and realize and learn from all your mistakes. I can best express this by sharing with you some rather personal moments that I recorded in my diary for the month of May 1982, the first month of operation of this business.

     May 5: “I’m tired and high strung. I’m excited and scared. Tomorrow I will pay over $1,000 to get into the computer show. … God, please help me soar.”

     Frlday, May 7, the night of the first day of the show: “… I gave out about 8-900 fliers, talked to one or two hundred people. …”

     Saturday night: “Lots of interest and no sales. … I feel lost in the uncertainty of the crap-shoot I am in.”

     Sunday, after the last night of the show: “I am depressed. It has finally hit me that I failed. I FAILED! I did not sell any computers this weekend. That’s it. The weekend is over. I have blown over $2,000 and I have a big $200 in sales. OUCH!! Help. … I feel totally unconfident, helpless, lost. …”

     Now actually, as you know, I had not failed. I just did not understand the dynamics of this kind of trade show. I did not understand that some of the thousands of people who had taken my fliers would take them home and read them. So what looked like defeat and failure was actually something else.

     Monday, May 10, next day after the show: “… I took ten calls and some said they were sending orders. …”

     Two days later, Wednesday: “I took an order!”

     Skipping to the end of the month, May 30: “ A very hectic week, excellent sales volume. Today I fasted … to express thanks. Then set up and did set of books to find how successful I’ve been: over $4,000 net profit in May!”

     So there can be some pretty wild emotional swings when you are in business. And you have to be ready for some pretty upsetting lessons.

     The payoffs, however, can be very rewarding. I’ll just close with a couple of examples of what the payoffs can be. First of all, it’s nice to look at your bank account and see lots of digits. Everyone understands the advantages of money. But there is a more subtle pleasure that comes from managing that money, such as when you sign a check with lots of digits on it. That is a feeling of powerful responsibility. Beyond that is the feeling that comes from authorizing someone else to exercise that power on your behalf.

     The most amazing payoff of all though is that after talking to a person on the telephone and agreeing to a deal that will give them a valuable tool and put several hundred dollars in your pocket, sometimes they will enclose a little note like this one with their cashier’s check:

     That you can make people happy, and make a lot of money in the process is the ultimate combined payoff of running a business. Just remember that your greatest opportunities lie in your problems, and your brightest ideas may grow out of your own mistakes.

	Marshall (“Roc”) Burns Physicist, Entrepreneur, Philosopher, Explorer Los Angeles Phone: Mobile (805) 451-4507 E-mail: , Web site: www.MBurns.com	Home	Physicist	Entrepreneur
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