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..."