David Park is chairman and cofounder of Job Creators Alliance and founder and CEO and founder of Austin Capital, LLC.
"David, I really like you," my biggest client—in fact, my only client—was saying over the phone. And I remember thinking, this is going to be bad, really bad.
I had been trying to make it in the early 1990s with my own investment business, after my boss at a large established investment house threw me out of his office for saying the pension funds we managed had long-term problems about which our clients should be warned.
My own venture wasn't going well, though, something I had to admit while working one day out of what had become my new personal office—a Mrs. Fields chocolate cookie shop.
For the first time, giving up seemed a possibility. Just then I noticed a "for sale" sign at the cash register. Apparently this Mrs. Fields store wasn't making money. Paying closer attention to everyday transactions I had been watching only casually, I tried to figure out why. After a while I had a theory, so I scraped up enough money for a down payment and managed a few weeks later to start making a profit—though it did mean getting up daily at 5 a.m. to bake cookies and muffins.
No such turn-around was in sight for my investment business, however, which made that phone call from my only client even more painful. In addition to saying how much he liked me, my client was also saying he felt he had to let me go. He explained his wife had just called him from her law office.
"You know that hotshot investment advisor you're always talking about?" she had asked him. "I just saw him delivering a tray of cookies and muffins to our conference room."
I did some fast talking. He listened, thought about it, and not only stayed a client but gave me referrals. Eventually my floundering start-up became a merchant banking firm, one I've been running for 20 years.
But any start-up, any small business has such stories. Tom Stemberg, the founder of Staples, found himself fresh out of Harvard explaining to incredulous classmates that he had just gone into the grocery business because he had to learn retail. Bernie Marcus, the cofounder of Home Depot, never stopped hearing his business model couldn't work—what could he do that hardware stores couldn't? The long litany of "no's" finally ended with some believers.
Most people—our customers, our employees, or just the folks we meet in everyday life—have an implicit sense of such stories. They know trial gives meaning to work and life, and they know starting up a small business is usually about just such early struggle. Frequently they ask about it.
One group though that has never been curious about the struggles of small business owners is the political class. One of them, George McGovern, was famously honest about it after attempting to run a motor inn in Stratford, Conn.:
"I wish that during the years I was in public office, I had had firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender."
Making much the same point to another member of the political class but a more successful presidential contender, Steve Jobs warned President Obama a few years ago he was "headed for a one-term presidency" unless he began understanding government burdens on American business make it "easier to build a factory in China than it is here."
But business owners get used to politicians not understanding and so, though it set off a furor, most of us weren't surprised by President Obama's recent comments that "the private sector is doing fine," or that "if you've got a business—you didn't build that. Somebody else made that happen." Politicians are less interested in creating wealth than in redistributing it to their constituencies. They rarely get it about economics, tending to think those who make the economy go—the small business owners who create more than 65 percent of the new jobs—are just lucky or among "the fortunate." Small business success, they seem to think, is not so much about risk-taking or hard work but government and infrastructure.