Early business memory: I was a young pup in the ad game, visiting a Silicon Valley client. A thrilling day, as this company looked like it would go to the moon. Its founder had invented a fingerprint scanner to identify people, fast and accurately. Press your finger here, open the secure door and bingo! Security improves even as the cost for security guards goes way down. A winner.
The little company was growing and had patent protection. Wall Street bankers were sniffing around; talk of an IPO was in the air. That was the background when I visited with the chief marketing officer to talk about ads and brochures. (Remember brochures? No Web then.)
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But the marketing guy was in no mood to do business. Anticipating the IPO, he was too giddy for that. Drumming his fingers on his desk and gazing at the ceiling, he dreamily said, "Hot damn, the day after the IPO the parking lot here is going to look like Stuttgart!" He meant that employees had already picked out their shiny new BMWs.
I had a hunch this company would disappoint. And it did. After the IPO the stock failed to launch. It bobbled, slid and more or less froze below $10 for a decade and a half, imprisoned in microcap hell. Eventually the company merged with another company. Last I read it was embroiled in lawsuits over the efficacy of its technology.
As for wealth, only the founder became a multimillionaire--though well short of billionaire status. One or two of his colleagues may have touched the millionaire mark at the stock's peak. But in the Valley, after taxes, that's a house down payment and little else. The founder bought a Mercedes and a country club membership and added to his collection of single malt whiskey. He can buy a ticket to sit in the plush seats of commercial jets anytime he wants, but he missed the chance to have his own jet. The company parking lot remains stocked with Toyotas.
This is not a sad story, by any means. It's heroic in its own modest way, with the typical mix of success and frustration. Fact is, it's darn hard to land on the FORBES billionaires list. Starting your own company is still the best path to becoming a billionaire, but the hill steepens for each additional zero of net worth.
Are there easier ways to accumulate eight figures? Maybe not easier in work hours, but there are ways with less risk. Partners of big-city law firms will blast into eight-figure wealth in their 40s. Partners at top investment banks can manage the trick in their 30s. The rub is that you'd better have 99.9th percentile SATs and a stellar college record to qualify for these jobs. In the prerecession days commercial real estate brokerage was the scrappy person's route to eight-figure wealth. CEOs of publicly traded companies will get to eight figures easily.
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