Jim Morrison,freelance writer,magazine,American Society of Journalists and Authors,journalist,author Help Them Help You
 
 
 
   
 

           One majored in Asian history major, the other in English. Neither has taken a business course. Not applied microeconomics or corporate strategy or marketing management. Neither has pulled all-nighters memorizing case studies.

            That's because Jeff and Rich Sloan are old-fashioned entrepreneurs. They learned by doing, by following their passions, by taking some improbable ideas and nurturing them into one successful business after another.

            "No doubt there's a degree of natural entrepreneurship going on here," says Jeff during a tag-team conversation including his brother. "It's in the genes."

            In the genes and in their passion for whatever product, invention or company they are starting, whether it's renovating and reselling a HUD house, managing rock and roll bands, building an internationally-known Arabian horse breeding operation or creating software and biotechnology companies.

            "Nothing necessarily follows in what seems to be a logical progression, but there is a thread running through and that is our passion," adds Jeff, 43, who majored in English at the University of Michigan. "That stuff is all stuff we're passionate about."

            Their latest passion is a logical progression. 

            It's StartupNation, a multi-media company with 17 employees devoted to helping dreamers like them succeed at creating and building companies. They have a radio show syndicated in 53 markets, a web site, www.startupnation.com, and a book, "StartupNation: America's Leading Entrepreneurial Experts Reveal the Secrets to Building a Blockbuster Business." Fast Company magazine named StartupNation one of the top ten brands of 2005.

Evangelizing about entrepreneurship means they spend a chunk of each week flying to events and book signings to help others pursue their dreams. Think of them doing for developing businesses what Martha Stewart did for homemaking (though not stock trading) and what National Public Radio's Click and Clack did for automobile repairs.

"Two thirds of Americans dream of starting up a business, but dreaming isn't getting it done," says Rich, 35. "Only a fraction of those will actually take action."

"We really get a charge out of being among our fellow entrepreneurs and would-be entrepreneurs. We get a chance to inspire and motivate and give them confidence," adds Jeff. "In a way, I feel like a modern-day Johnny Appleseed. Instead of apple trees, we're planting little businesses all over country that we feel directly a part of creating. We’re getting people from the stage of dreaming to a stage of doing."

"Did Johnny Appleseed have a partner?" Rich asks.

"He was the guy who carried the bag of apple seeds," replies Jeff and the brothers laugh.

It's a cliche, but these guys really do finish each other's sentences. While they no longer sit on either side of the same desk, rotating a computer screen back and forth, they do face the other across their office. Whatever sibling rivalry once existed -- and Rich says their seven-year age difference is a blessing -- they're equal partners after 15 years working together.

They once lived together. They don't now. But one of the fundamentals of their "life plan" -- the plan they encourage would-be entrepreneurs to make before thinking about start a business -- is figuring out business activities they can do together. "We're brothers, but we're best friends also," Rich says.

They set down their guiding principles in a "manifesto." Work, it says, is the freedom to pursue their dreams. Work is a family with a common purpose. And work is fulfillment.

"We've never sat down and said to each other I think we can make a million dollars with this," Jeff says. "Or I think we cam make $20 million with that or $100 million with this. We sit down and say 'Here's something we're really interested in or stimulated by and it makes business or commercial sense."

The "life plan" is the first thing they tell would-be entrepreneurs to create, before they start thinking about businesses and business plans. Plan your life, they say, then play your business. Develop a business that fits the lifestyle of your dreams.

On the radio, in their books and in interview after interview they preach business as a passion, not a strait jacket. Do they work long hours? Yes. Do they toe the line of some corporate mold? No way. They once put up a wall separating their offices from their employees'. It came down within days.

"As an entrepreneur, business is very unbuttoned and it is out of the box," Rich says. "There is no such think as a cube farm in my frame of reference. To the contrary, business is an extremely creative process, creative in strategy, creative in marketing, creative in how to formulate relationships on every level."

For the Sloan brothers, the drive to be their own bosses was born growing up in a Flint, Michigan subdivision in the 1970s, the sons of a physician and a homemaker. There, they had front row seats for the collapse of the U.S. auto industry. No place was harder hit than Flint, home to fifteen General Motors' plants and the setting for Michael Moore's "Roger and Me." Long lines outside unemployment offices became the city's signature image.

"We learned a lot from that," Rich says. "We learned we don't ever want to get stuck working for the man. Moreover, we want to do it our way. And we want to do things that bring us a sense of satisfaction and gratification."

Their grandfather was a role model for them, emigrating from Poland to open a scrap yard in Flint and put his kids through college. "To him, it was about the basics, making a living, taking pride in what he was doing and truly it's similar for us," Jeff says. Their father, though a physician, is also a role model. Even though Flint was suffering, his business thrived.

They grew up as the guys who were individual thinkers and organizers. They created a neighborhood football league with Jeff as a coach. They organized very complex tomato wars, raiding gardens, painting family crests on garbage can lids used as shields and then firing tomatoes from rooftops and go-carts throughout the subdivision.

Over the past 15 years they have created or help create one company after another. Jeff started young. At 17, he and a friend put up $1,500 each and got $1,500 loans from each of their parents to buy a Housing and Urban Development house in downtown Flint for $6,000. They spent the summer renovating it and then flipped it for $24,000.

Jeff's passion for Arabian horses led to the creation and eventual sale of an Arabian-horse breeding operation in Michigan. Recently, they started a new breeding consortium with horses in ten states.

One night in 1987, Jeff was in his car outside a Flint restaurant when he watched a man turn the key in his ignition and nothing happened. In the cold January rain, the guy asked people, including Jeff, for jumper cables. No one had any. As the tow truck pulled in, Jeff wondered if he could invent something that would prevent car batteries from going dead. Of course, as he details the story in "StartUp Nation:" "There was just one big problem with me being the one to solve the problem of dead batteries -- I didn't know the first thing about how car batteries worked."

Rich, who was at the University of Colorado, decided this idea, which they'd dubbed the Battery Buddy, would bring him home to Michigan to work with his older brother. "We were two inventors risking everything, but in a sense not risking much," Rich says. Their first patent was not successful. They ate every variation of PB&J known to man. Finally, on Feb. 20, 1990, Rich's birthday, they got their patent and soon licensed the device to Masco, a Michigan auto parts firm. It's earned more than $1 million in royalties.

They describe their company, Sloan Ventures, as a venture development firm instead of a venture capital firm because it helps people craft businesses. Rather than investing in 20 or 30 companies a year, they focus on building just one or two.

They've raised about $70 million since 1995 to help start 15 companies. "There is a phenomenon that occurs when we do this successfully, the feeling that you cannot stand going to sleep and you cannot wait to wake up," Rich says.

When one of their golden retrievers succumbed to genetic lymphoma, they used their knowledge of genetics and breeding from the horse farm and to hook up with a University of Michigan researcher and create VetGen, a firm that identifies whether dogs or horses are carriers or victims of some genetic diseases. They say VetGen has saved the lives of countless animals.

While looking for researchers making significant strides without outside funding, they discovered Gale Erten, who had created software that would eliminate background noise during cell phone conversations, among other things. Her research was the foundation for the Clarity, a company recently sold for $17.5 million, the biggest return on their time and money of any of their ventures.

Rich describes himself as Robin to Jeff's more experienced Batman when they began. Both point to a meeting with Masco during the Battery Buddy courtship that made them equals. Jeff got stuck in New York and was unable to get back because of a snowstorm. "I was literally having to take smelling salts at the notion I was going to miss that meeting and Richard was going alone."

After, Jeff got a call from the Masco representative saying how much had been accomplished and how phenomenal Rich had been. Jeff is the vision guy. Rich is the operations man. "There's no doubt that either one of us would be doing something different and to a degree be successful," Jeff says. "But there's no doubt that our business careers, our endeavors and our lifestyle in business would just not be near the same, not at the level of quality it is. We are true partners."

Not everything the Sloans have touched has turned green. They spent six months and probably $40,000 or $50,000, they say, developing a new foundation system for mobile homes. The one mobile home developer they spoke with about the project, one of the top five in the country, was enthusiastic. But he was the only one they spoke with in the industry. When the idea was presented to contractors who would build the system, they rebelled.

"We went running off with excitement based on one data point," Rich says. "That's really dangerous."

The good news is because they believe in developing a portfolio of companies, they were also working on Clarity and two other companies when the mobile home foundation deal fell through. As a rough rule, they take a one third stake in a company for their sweat equity and expertise, the innovator takes a third and a third goes to the investors.

Though they've focused on getting Startup Nation started up, they've also created three other companies recently. Smart Collector is a web site that links to eBay sales data on auctions of collectibles to give sellers an advantage. Frosting Fashions is an online business selling high-end women's clothes. And Intersight is a company that provides analysis of web traffic and customers to ecommerce sites, providing extensive behavioral and attitudinal information to its clients.

"Our biggest winners," Rich says, pausing.

"Our biggest winners, we believe, are yet to come," Jeff adds. "We believe Smart Collector will be a home run. We believe Startup Nation will be a home run. We believe..."

 

 

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