Zero to Tesla Read online

  I hadn’t thought anyone was paying attention to me—the news that he considered me important was actually quite a surprise and ran counter to the notion that I was just a display ornament. Perry wasn’t finished laying into me. He asked, “Are you going to say anything? If you don’t clean up your act, I’m going to give you a zero on your performance appraisal and ship you back to Canada. You’ll never get a job at Nortel after that high-falutin’ MBA.”

  “Ye-yes, sir, I’m sorry,” I stammered out. “I don’t know what’s wrong with me, but I’ll fix it.” Then I hurried out of his office and went to hide in the lab as everyone in the main office tried to pretend they hadn’t heard me being chewed out.

  As I sat in a corner of the lab typing in the commands to restart the VPN network, Gord walked in. “You heard?”

  Gord laughed and said, “Sanjay, everybody heard.”

  I groaned. “What do I do, Gord?”

  He sat down beside me, pointed to the screen, and said, “Hit enter.”

  With Gord’s help and an attitude adjustment from Perry, I got a lot better—fast. It wasn’t hard once I knew I made a difference. Soon I was one of the first people to arrive in the morning, and I waited until after Perry left to go home. I sought out the Telecom Australia engineers instead of waiting for them to find me. And, dammit, I even learned a bit about VPNs. Six weeks later, as I prepared to head back to Canada, Perry called me into his office. “Singhal, you really turned it around. I’ve given you a four out of four for exceeding my expectations, and I recommended you for the company’s Key Resource Development program—KRD.”

  I was taken aback. To junior engineers, KRD was just a rumor—you weren’t supposed to know you were on the list. But I did know that if it was real, it was a guarantee to promotions and opportunities when I got back to the company after my MBA. Apparently, yelling at employees and telling them to get better works sometimes.

  DON’T BE SUCH A SHOW-OFF

  The first year of my MBA was unremarkable except for a note I received.

  I had arrived on campus a week late because the Australia trip kept me a bit longer than expected. As a result, I missed attending orientation and meeting my fellow students. Before going to Australia, I had also gotten engaged, and as a result, I was spending most weekends back in Toronto with my friends and fiancée.

  In short, my fellow students didn’t know me and didn’t care. I got a sense of community by joining a few clubs, most notably the staff of the business school newspaper. I also thought it would help me make friends if I proved to everyone how smart I was, and in each class, I used every opportunity to ask questions designed to demonstrate that I knew more than the professor. I made sure my hand was up every time the professor asked a question, and I interrupted other students when they were giving incorrect answers. Then one day I received an anonymous note in my mailbox.

  “You think you’re making yourself look smart, but you’re really just making everyone hate you.”

  I was devastated. Not only was my strategy not working, but it was having the exact opposite effect from what I was expecting. I sniffled a little and then walked to my dorm room and cried for real. I was lonely. I had made a huge mistake leaving my job and friends in Toronto. I wasn’t ever going to belong. I decided to quit business school at the end of the semester.

  But the next day I read the note again and wondered, if everyone hated me, why had anyone bothered writing the note? I had read once that the opposite of love isn’t hate—it’s apathy. And getting that note was perhaps a sign of hope, not hopelessness.

  I stopped raising my hand in class and sat at the back of the room. I focused on my work and my main extracurricular activity: the school paper. I must have stopped coming across as a complete ass, because people started saying hi to me in the hallways.

  By the end of the year, I was enjoying the program and looking forward to second year. A classmate taking the introductory course in entrepreneurship had showed me a quiz the professor handed out on day one. As he handed it to me, he said, “It’s typical stuff, like whether you can handle risk and if you’re creative, but there’s this funny one at the top about your dad being an entrepreneur. What difference would that make? Like, is your dad an entrepreneur?”

  By then my father was a successful entrepreneur, having parlayed renting out a basement apartment into a small manufacturing business and that into developing and owning several apartment buildings. So apparently I had one of the minor qualities required for success in entrepreneurship. I replied, “Yeah, my dad’s an entrepreneur,” and I mimed checking off the first box on the questionnaire. Then the classmate delivered the kicker. He said, “Well, I guess you’re going to be an entrepreneur. Prof says that question’s worth 80 percent of the total.”

  YOU’RE NOT AS SMART AS YOU THINK YOU ARE

  In the summer of 1991, I was between the first and second year of the MBA and on top of the world as I looked around the crowd at a cocktail party thrown by a friend. My company was paying for my education, I had just gotten married, and I was on my third vodka tonic. Life was good.

  My friend Monty wandered over, rubbed my stomach, and asked me, “Hey, have you put on a little weight?” He did this whenever he saw me. I don’t know why he thought it was funny. As I flinched and started to deny having just been to the hors d'oeuvres table, he interrupted me and said, “Hey, I have an idea for you. Why do you have to go to a video rental place to get a movie? Why can’t someone just deliver it to your door? You know, just call a number and get a videotape half an hour later, like it was pizza. In fact, the guy should bring pizza, too!”

  I was getting half-witted ideas thrown at me all the time, but this one didn’t strike me as immediately silly. Because my dad was a successful entrepreneur, everyone expected me to start something someday. We tossed it around a bit, and I said I’d do some research. His parting comment was, “If this thing works out, you owe me 1 percent!”

  ---

  I started my second year of the MBA with a bounce in my step that hadn’t been there before. Everything I did was focused around that video delivery idea, and having a central theme for all my projects made everything more meaningful and more fun.

  In operations class, I wrote software to tell delivery people in what order to deliver videos to optimize efficiency. In consumer behavior, I went to a video store and watched people come in to rent videos. So it went in strategy, marketing, statistics, and, of course, entrepreneurship.

  My entrepreneurship professor, David BenDaniel, was skeptical. “Do you think you’re the only one who’s ever had this idea?” he asked. It hadn’t occurred to me that I wasn’t. He saw the look on my face, handed me back my draft, and said, “Go find out who’s done this before and why they failed.” Much to my chagrin, I found a trail of seven companies that had previously tried to deliver videos to the home “like pizza,” including one in Toronto: Video Van Go. I returned and reported my findings to Professor BenDaniel.

  “Do you have a new idea, then?” he asked.

  “Now, I know my idea’s not new,” I said, “but I think I’m going to be able to make it work.”

  “And why do you think you’ll succeed when they all failed?”

  My answer, ironically enough, was, “Because I’m smarter than they were.”

  ---

  Video delivery wasn’t the only thing on my mind in the spring of 1992. I was also graduating, and I had a promise to keep: returning to Nortel. When I started my MBA, I intended to use it as a springboard to move from engineering into marketing, and true to his word, my boss from Australia, Perry, had put me on Nortel’s Key Resource Development list. When I interviewed in the spring of my graduating year, I had my pick of departments to work in, and I accepted an offer of a promotion and a job in marketing while I continued to do research on home video delivery. But graduation was looming, and I had to decide between starting a job and starting a company.

  I had spoken with another Nortel MBA scholarship
recipient, Victor*, while doing research on MBA programs, and he and I had kept in touch. Victor went to Harvard and had ended up taking a consulting job at McKinsey & Company when he had graduated a year earlier. I was talking about my possible entrepreneurial venture with everyone I knew, and when I mentioned it to Victor, he said he might be interested in partnering with me.

  So on a trip home to Toronto in the spring, Victor and I decided to do a little research, and we tracked down the entrepreneur behind Video Van Go. We found Scott behind his desk running Kernel’s Popcorn, a franchised chain of mall-based specialty popcorn stores.

  After opening pleasantries, I got to the point. “Scott, why didn’t Video Van Go work out?”

  “Why do you want to be an entrepreneur?” he asked.

  Victor and I looked at each other like Scott was asking a really stupid question. “Because we want to make it big!”

  “Do you have jobs?” Scott asked, looking between the two of us. We both answered that, yes, we had jobs, but we wanted to be entrepreneurs.

  Scott said, “Take my advice. You’re young, you have your whole lives in front of you, and you have great jobs. Entrepreneurship is tough, and most of us are forced into it if there’s no other way to make it.”

  Geez. He was making it sound like we wanted to be prostitutes.

  Scott sighed, seeing that I didn’t want to hear his advice, and repeated, “Don’t quit your jobs to be entrepreneurs.”

  Scott seemed to be a successful entrepreneur now, though, so I had difficulty understanding why he thought it was a bad idea. At any rate, we weren’t there to get a lecture on life strategy. “Okay, we’ll think about it,” Victor said. “But in the meantime, what went wrong with Video Van Go?”

  “What didn’t go wrong? There wasn’t enough demand—or at least we couldn’t advertise effectively. It was more expensive than we thought it was going to be, and we ran out of cash. It was just a bad idea.”

  Victor and I looked at each other again and exchanged a silent message. Scott hadn’t been smart enough. Leaving the building, I still wanted to create my own video delivery business, but Scott’s message had left an emotional footprint. Maybe a corporate job wasn’t such a bad thing? Did I have what it took to be an entrepreneur? I already knew I was pretty good at the corporate game. But it seemed like it would take a long time to make it big that way, where with entrepreneurship I could be rich in just a year or two.

  In the end, I decided to hedge my bet: at graduation I would take the Nortel job and start the company on the side. I was going to have it all.

  There was one more requirement, though, before I could become an entrepreneur. Companies take money to start, and I had precious little. Victor and I could each get a new business loan for $15,000, but I thought we’d need $100,000. Where was the other $70,000 going to come from?

  ---

  When I met him in the hall, Earl* was wearing tight, black, leather pants with a large gold belt. Hardly the image of a wealthy British scion, but perhaps exactly the image of someone who has so much money he doesn’t give a damn. Other than having an unsuccessful skit in the school variety show he had orchestrated the previous fall, I hadn’t really talked to Earl in a year and a half at Cornell. He hadn’t liked my skit either. “Hey, Earl, nice, um, pants! Can I borrow $70,000?” probably wasn’t going to fly, but I did go up and say, “Hey, you’ve probably heard I’m starting a business?”

  He replied in an accent that I had been assured was upper class (very upper class) Brit, “Mmm?”

  I dived into this clear expression of interest. “So, uh, would you like to invest?”

  “Send me a business plan, old chap, and we’ll see.”

  Actually, he didn’t say “old chap,” but I could hear it in my head. I gave him my business plan, asking for $70,000. A few days later, he handed it back to me, saying, “Sorry, old chap, but I can’t do it.”

  I was disappointed and started to say, “Well thanks for—” when he interrupted.

  “I can’t do $70,000, but I can help you out with $20,000.”

  I had been hitting up all my professors and many of my classmates to invest in the new company. Earl’s was the largest commitment, and there were other pledges for anywhere from $1,000 to $10,000. I had my $70,000 within weeks after graduation. I had a business plan, I had cash, and I had a partner. What could go wrong?

  WHAT, NO PIZZA?

  “Hey, Monty, what do you think of this name?” I proudly showed Monty the sketch I’d made of my new company logo.

  “Hey, cool, vi-dayo-drive!”

  “No, dumbass,” I said. “Not like Rodeo Drive. It’s the company you and I talked about last summer. VideoDrive. Get it? Driving videos. To your door.”

  Monty had already forgotten the conversation we’d had a year earlier, but his name was at the bottom of the list of shareholders I showed him next. One percent, just like he’d asked for. “Hey, thanks buddy,” he said. “You didn’t have to do that!”

  “Just keeping my promise,” I said. “I’m going to make you rich!”

  Noticeably absent from the list of investors, though, was Professor BenDaniel. He had given me an A minus on my business plan, which was apparently below his threshold for investing.

  ---

  I was admiring the view out of the seventh floor of Nortel Canadian headquarters when my boss, Ralph*, stormed into my cubicle to ask me, “What’s a good way to describe three of something?”

  “Three,” I said. He glowered at me, so I tried again. “Hat trick?”

  “Yes!” he said, and he disappeared. I didn’t know if he was doing a crossword or preparing a speech, and I didn’t care. Victor had just called to tell me he’d found a potential location for VideoDrive, and I was counting the minutes until I could head downtown and check it out with him.

  As soon as we had our funding, I had begun getting my friends involved in starting the business. We hired Jerry*, from my tight circle of pre-MBA friends, who was now a corporate lawyer in downtown Toronto, to do our incorporation and investment documents.

  Since Victor and I had both decided to keep our day jobs, we hired Jerry’s brother, Rich*, to run the store and operations. Among my friends, Rich was the consummate social planner, putting together many group events and generally displaying the networking and organizational skills that I was sure would translate well from personal to professional spheres.

  Another friend had gone over our marketing plan and given it a thumbs-up. All the doctors in my friend circle were useless unless somebody tripped coming into the office, but I was able to hire a couple of other friends to handle phone calls. Victor’s wife was handling payroll and HR.

  Victor’s judgment on the space was bang on, and a few days later we moved into a small retail/office location adjacent to the core of downtown Toronto. It was a challenge keeping a full-time job and getting the operation going, but I was sure the safety net was worth working sixteen hours a day.

  Now we had a space, we’d managed to stock up inventory, we had staff, and we had a plan to get customers. We were going to spend $20,000 on a direct mail campaign in downtown Toronto. I had been conservative in our business plan and assumed only half of the recipients would respond to the direct mail piece. I knew that I threw out 90 percent of what I got in the mail, myself, but we were executing a clever two-step campaign with great graphics. It was going to stand out!

  The big day came, and ten thousand cards went out in the mail. We had staffed up our phone lines by noon, even though nobody rented videos in the middle of the day. I called the store every thirty minutes. “Rich! How many orders?”

  The answer was always some variation of the following:

  “Zero.”

  “Other than you? Zero.”

  “Fifty! Oops, I mean zero.”

  By 5:00 p.m. there were no phone calls, but I reasoned that people wouldn’t even get the piece until after work, and then they wouldn’t want a video until later that evening. We couldn’t have just
blown our entire marketing budget and gotten zero calls. Or maybe the post office was off by a day and was going to deliver the cards tomorrow.

  I drove home from Nortel that evening feeling nervous with anticipation. I lived in a condo that was in the mailing’s target zone, and I was anxious to see if the card had arrived in the mail. I arrived in my condo mailroom and saw a sight that made me want to throw up. A resident came in, checked her mail, and threw the VideoDrive flyer in the general direction of the trash, where it bounced off the edge and landed in a growing pile on the floor. I wanted to grab the piece, block her route to the elevator, and force her to read it. In my mind, I screamed in her general direction. “Do you have any idea how much effort I put into getting this to you?” In reality, I leaned against the mailbox wall, slid down to the floor, and tried to remember how much money was left in our bank account for the next try.

  We did get a few inquiries over the next few days, but nothing like the five thousand that we had forecast. More like five hundred. It was a spectacular result for direct mail, where the normal response rate is one to three percent, but it was abysmal for us. And of the five hundred, only a couple hundred ever tried the service. At only a two-dollar margin per order and no critical mass for word of mouth, the wind was out of our sails and the Hindenburg’s engineers were working on solving the problem.

  The marketing failure demoralized all of us, but operationally, it took the largest toll on our store manager, Rich. Expecting thousands of calls and orders and instead getting a few dozen a day, his job became door-to-door marketing, handing out flyers at street corners, and dealing with a dejected delivery and call center staff.

  The next Thursday I was out for a drink with a mutual friend, Kabir*, and he mentioned playing a round of golf with Rich a couple of days earlier. “Are you sure it was on Tuesday?” I asked, since Rich had said he was out of the office on Tuesday because he was renegotiating some contracts.