We’ve launched Secrets of Success, a new weekly interview series here at Web.com’s Small Business Forum. I’ve asked some of the smartest, most innovative, most successful people I know to share their insights and success secrets.
Meet: Carol Roth. Carol is an investor, speaker, author of the New York Times bestselling book The Entrepreneur Equation, an on-air contributor for CNBC and a self-proclaimed “recovering” investment banker. She’s also kind of obsessed with the Chicago Bears.
Rieva Lesonsky: What did you want to be when you grew up?
Carol Roth: I never wanted to be a princess, superhero or ballerina. I was the kid who always had an entrepreneurial endeavor, so I knew I would be involved in “business” in some capacity. I was always selling something or coming up with some crazy-but-lucrative idea.
I joke that I started my first business when I was 8 years old, under the guise of a game I played with my little sister called “Store.” I would take all her stuffed animals and set them up in a faux-retail shop in my bedroom. Then I would invite my sister to “come shop”– i.e., use her allowance money to buy them back from me.
It was the perfect business—no cost of goods sold, no rent and a customer who wanted all the items in the store (seeing they were hers to begin with). Unfortunately, my mother shut it down before I could expand throughout the neighborhood.
I sealed my fate when I chose to do my undergraduate studies at the Wharton School of Business at The University of Pennsylvania.
Lesonsky: Why did you start your own business?
Roth: I started my career in investment banking and worked for a young, aggressive firm called Montgomery Securities. It was a meritocracy and a fantastic environment, but once the Glass-Steagall provisions of the U.S. Banking Act were repealed, allowing commercial banks to buy investment banks, we were acquired twice in two years—first by NationsBank and then by Bank of America. The culture changed and nearly everyone left, including me.
Being in the San Francisco office, there was a lot of dotcom activity at the time. I actually raised capital for an Internet start-up, but returned it to investors as we decided not to pursue it. I then started a business with my husband advising other startups and writing business plans and the like, which morphed eventually into our own investment bank/broker dealer.
Eventually, my husband and I decided that we loved each other but didn’t want to work together. He enjoyed the investment banking work and went to work for another investment bank. I was the entrepreneur with “Focused A.D.D.”—meaning I could focus on a specific endeavor, but also needed a variety of them going on simultaneously. So, I stayed the entrepreneurial route and kept my husband in my personal vs. professional life.
Lesonsky: Did you experience a pivotal moment on your way to success?
Roth: No. Even though I have been blessed to do and accomplish many extraordinary things, I am not a big luck or major breaks kind of person. I am one who makes my own luck through a lot of hard work. I have experienced lots of setbacks personally and professionally and I am willing to keep moving. I would say that baby steps and perseverance have been my way thus far.
I did hire a business coach after my husband and I dissolved our broker-dealer business, and that gave me the idea and a mechanism to try some different things, including media.
I am completely open to having a pivotal moment in the future though!
Lesonsky: What’s the best small business advice you ever gave and/or received?
Roth: The best piece of advice I have given is the same advice I would have given myself when I was first starting out: set bigger goals. There are only 24 hours in a day and it’s often just as difficult to pursue something small as something large, so I try to push people to push their boundaries. Even if they don’t get the full way there, they are usually in a better position than had they met [only] their smaller goals.
Lesonsky: What’s one “best practice” more entrepreneurs should be embracing?
Roth: This is the ultimate in “do as I say, not as I do”, but for most entrepreneurs, success comes, in large part, from focus.
On a macro level, that means doing one or two things and doing them well consistently, instead of making some progress and then wanting to move on to the next new thing. Most entrepreneurs just scratch the surface because they get distracted by the fun, yet unproductive tasks involved in creating new things.
On a micro level, it also means keeping clear of distractions that end up being endless, unproductive time sucks, and offloading things that aren’t a great use of your time to others.
You cannot underrate the importance of focus.
Lesonsky: Do you have a 2014 small business prediction?
Roth: I predict that we will start to see some movement, probably more at the local and state levels, but eventually at a national level, for legislation (or the repeal thereof) that makes it easier for small business owners to be successful. Entrepreneurs spend far too much of their time doing administrative work that doesn’t grow their businesses. As more people realize how important small businesses are as job creators and champions of growth, I predict we will see government finding ways to make it easier for them to do both.
Lesonsky: Do you have a favorite book?
Roth: What kind of marketer would I be if I didn’t say my own book, The Entrepreneur Equation? I put a lot of love—albeit tough love—and work into those 80,000-plus words. It was a challenging book to “sell” upfront because it really is a gut-check. But, I am pleased it has convinced many unprepared people not to start businesses or to do a lot more homework before doing so.
Plus, it led to me having my own action figure, so it’s definitely my favorite.
Lesonsky: Is there a quote you find particularly inspiring?
Roth: I am the person who gets motivated when you tell me I can’t do something. That means what normally others might find inspirational doesn’t really have the same effect on me. I love how in his challenges on RuPaul’s Drag Race, RuPaul turns to the contestants and says, “Don’t f**k it up.” Truly, that’s motivating to me.