Business advice from the master | December 5, 2008 | Mountain View Voice | Mountain View Online |

Mountain View Voice

- December 5, 2008

Business advice from the master

by Angela Hey

The Computer History Museum, together with the Churchill Club, recently presented an evening with Sam Wyly, who was interviewed by venture capitalist Dixon Doll.

Sam Wyly is one of the computer industry's great entrepreneurs. Unusual for a high tech entrepreneur, he branched out beyond the computer business into steakhouse, craft shop, financial and energy businesses. As we enter an industry downturn, he has plenty of advice for the budding entrepreneur. After all, a recession can be the best time to start a business.

As a high school football player, Wyly learned that to succeed you must set goals and practice, and persist despite defeats. He observed how his father's newspaper business, in the Louisiana bayou, had purchased used equipment. He did so years later when, with a University of Michigan MBA and IBM sales experience under his belt, he purchased a used Control Data 1604 computer.

Wyly then found some space in Southern Methodist University and set up a timesharing business, University Computing Corp., in Dallas. He relentlessly focused on selling, and on understanding his customers.

All this reminded me of a talk I heard earlier in the year at Books Inc. by Rupert Hart. Hart was promoting his book, "Recession Storming." His thesis is that in a recession you need to be out there, vigorously persuading customers to spend money and working with buyers to close sales. Instead of laying off a sales force that can't close orders, companies can storm the recession by improving sales management, marketing more intensely and creating special offers to retain business.

Another lesson Wyly learned early in life was the importance of building the right team. In his autobiography, "Entrepreneur to Billionaire: 1,000 Dollars and an Idea," he writes, "Great teams do not always win, but without a great team — without synergy and oneness — winning becomes that much tougher."

Wyly choices were sometimes made for him, not by him. He loaned a friend some money who had helped him with University Computing Corp. in his early days. The friend put up a chain of restaurants as collateral. When the chain couldn't be sold, Wylie was left with Bonanza steakhouses. After some thought, he decided he couldn't let the restaurants fail, and worked over 20 years to grow Bonanza into a franchise of 600 restaurants. He sold the chain when weekly numbers started to turn down, for he had observed in prior recessions that a decline in restaurant sales were a six-month leading indicator.

Wyly showed how his optimism and long-term thinking helped him bounce back from business failures. For example, he invested $100 million for eight years in Datran, a data networking company that shut its doors in 1976. Undaunted, he went on to found more companies based on networking.

Sterling Williams, a top salesman from UCC, joined forces with Wyly to create Sterling Software, an enterprise software company. Sterling Commerce split off from Sterling Software as the businesses started to trade over computer networks. In 2000, Sterling Commerce was sold to Computer Associates for $4 billion in stock. (Not mentioned during the Dixon Doll interview was the bitter proxy fight that Wyly waged to try to oust Computer Associates' corrupt board.)

Wyly spoke of how he had diversified by investing in the Michaels chain of craft shops and hedge funds. Throughout the interview, he emphasized how passion is critical to business success. His latest passion is Green Mountain Energy. His Web site lets you offset your carbon consumption by buying energy credits and carbon offsets. And it lets you give green gifts, such as a tree for an ecosystem restoration project.

He offered plenty of wisdom for the New Year: Set goals, be optimistic, join a winning team and look forward to success in 2009.

Angela Hey can be reached at


Posted by Randall Flagg, a resident of North Whisman
on Dec 11, 2008 at 10:05 am

Heh. This "recession" is rapidly accelerating into a full-blown depression. Stock up on canned goods and ammunition. 2008 is 1929 redux, and 1933 redux is right around the corner...