Me, when Cobalt got bought out by Sun
in 2000, with my employee number and a
fake bar code marked on my arm.

I grew up in a small farm town in Indiana. I first got online in 1995. My parents had given me a computer, but everything else I had to buy on my own. I got an allowance, but my parents refused to pay my burgeoning Internet connection bill (which was dialup, and since it wasn’t a local number, billed me by the minute!), so I took jobs to get by.

I worked Internet jobs all through high school, starting in 1997, when I took a job at an SEO firm, working from home, submitting sites to search engines. (Back then, SEO was all about how many search engines you could submit your site to…how things have changed!) I got paid pretty well, and learned how to fly through copy-and-paste.

My First Job and Bounced Checks

When the first check arrived in the mail from the SEO company, my mom took me to the bank to deposit it, and then gave me a lecture on bad checks and bounced checks. She had a tough time believing that I had a real job online–but I did. I continued to work for that company through high school.

All this time, I was learning how to build and fix computers. Living in a small town, we didn’t really have a computer repair shop, so I did repairs myself. Later I found I could also repair my neighbors’ and friends’ computers–which I did in exchange for small amounts of money, or sometimes just for a good home-cooked meal.

In 1998, I got a job at a web design firm for the summer. I found the job by hitting up the local Yahoo directory (for Cincinnati, Ohio–the nearest city to where I lived!) and emailing every web design firm in that directory. I had a showcase of various websites I had built.

From those “cold emails”, I got two interviews. One of the interviewers laughed at me when I came in and he found out I was a 16-year-old kid. The other firm saw potential. They gave me just above minimum wage and hired me out to their clients at $75/hour. I was their staff HTML “programmer.” I also taught myself Perl using the books they had around their office (and various websites) and built things like contact forms for their customers. I was just happy to have a job doing what I loved, which was building websites. I continued to work for other web companies throughout high school.

Off to Silicon Valley

In 1999, I graduated high school and moved to Silicon Valley. I knew Silicon Valley was where I wanted to be. I only applied to two schools–San Jose State and Santa Clara University. I was accepted to both, but Santa Clara University wouldn’t let freshman choose their course times, and I wanted a stable part-time job as well, so I went to San Jose State.

I went on craigslist and hit up companies in the Valley, looking for a job as a web designer. I didn’t find much–until I got a phone interview. I closed the deal, getting hired on as their “Marketing Manager” for the whopping sum of $15/hour, part-time. (With promises to increase that salary in the future!)

When I walked in to their office in Silicon Valley to meet them for my first day at work, they found out I was an 18-year-old college kid. They fired me pretty shortly thereafter.

I tried again, hitting up craigslist and looking for web design jobs. I didn’t find any, but I did find a job doing desktop support at a startup company called Cobalt Networks. That has, so far, been my all-time favorite job. Even though I didn’t get paid much, I thrived. I was able to use my hardware and software troubleshooting skills to help people, and I got along well with everyone in the office.

Cobalt was a shop that made Linux-based servers. I had some familiarity with Linux, but begged the engineers at the company to teach me more. I remember going up to one of the engineers after work and asking “What’s a ‘for loop’?” The engineers, most of whom were only a few years older than me, thought it was pretty neat that a young, cute girl was trying to learn bash shell programming. They brought me piles of books and gave me advice on how to code well. I spent many late nights at the company, absorbed in books and websites on programming and system administration.

At Cobalt, I learned an up-and-coming language called PHP. Cobalt engineers were fans of PHP (back then, it was either PHP or Perl, and PHP was a lot easier and more friendly to program in.) My boss, seeing my interest in programming, asked me to make an intranet for the company. I wrote it in Perl and then switched to PHP.

Cobalt Halloween party, 1999. I’m the cheerleader on the left.

Up until then, I’d never considered myself a “programmer”. Programming was uninteresting to me–the only programming class I’d ever had, in high school, taught useless, out-of-context things like how to build a fake cash register. But when I was introduced to web programming, I thrived. Now I could build interactive websites that people would actually use! I launched our intranet proudly. I’d built the whole thing myself, with self-taught knowledge.

The End of College

In 2000, Cobalt was acquired by Sun Microsystems, and I learned that Sun would only accept employees who had full-time jobs. At the time, I was still working part-time. I realized that to jump into Sun, I’d have to be a full-time employee. So I made the decision–not an easy one–to drop out of college.

My boss at Cobalt said it was the worst idea he’d ever heard.

My mom, when I told her, started crying and said it was the worst decision I’d ever made.

I went ahead with the decision, and my parents cut off all financial support. (They’d been paying for my classes, monthly cell phone bill, and dormitory housing. I was responsible for everything else.) After 1.5 years of college, I was done–and truly on my own.

Sun did hire me–because I was again aggressive about getting my foot in the door. I hit up their internal job portal, found all open jobs that had anything to do with web development, and called people until I got interviews. I got 2, and, impressed with my initiative in building the intranet, both teams offered to hire me. I took the full-time job that I felt had better resume potential (as I felt I would need a great resume with no college degree) — as one of the 6 core developers behind Sun.com.

Then, my grand plans hit a snag. I had a low salary at Cobalt because my main job was still doing desktop support. I had consistently asked for raises, and I’d gotten up to just above $22/hour. Sun inherited that salary of mine, and then–so my boss claimed–they couldn’t raise me more than 10% above my existing salary.

I was devastated. $22/hour was fine when my parents were paying my dorm rent, but now I was done with that. I had to pay my own way. This was in Silicon Valley, during the dot-com bubble. To give you a sense of how crazy rents were, I watched a new apartment complex get built near our office. I drove by it every day, and one day a sign popped up: “Waiting list now available.” I found out that not only were rents $1800+/month for a tiny apartment, but that they had an 8-week waiting list at that price.

One of our summer interns (older than me) at Cobalt moved to the Valley to take a job for the summer and ended up literally living under his desk because he couldn’t find a place to live. We had showers in the building, and he ate a lot of take-out. That’s how insane things were.

I eventually found a place–a shared bedroom in an old lady’s house–for $950/month. Even today, that number seems crazy to me. I had no kitchen privileges, but the area did have its own entrance. I set up a toaster oven and ate out a lot. My boyfriend ended up paying for a lot of my meals because he felt bad.

My friends urged me to quit and find a better job, but right around the time I got drafted on to Sun, the bottom fell out of the Valley economy. Now rents were starting to drop–but there were no jobs to be had. I clung to my Sun job for dear life.

My job moved to San Francisco, where I couldn’t afford to live. I found a tiny 1BR apartment 35 miles east of San Francisco. I took the BART (train) in to work every day. My rent went from $950/month to $1475/month. The train was about $9/day. Buying a sandwich for lunch in San Francisco was $9. (Most people have no idea how expensive San Francisco is until they live there.) I was starting to have massive credit card debt.

There was another girl, a couple years older than me, doing pretty much the same job I had. When I found out her salary was $72,000/year for the same job I was doing for $22,000/year less, I threw a fit. I took it all the way to HR, who basically said “Take it or leave it.”

I cried one day on the way home when I read the paper and realized that the person driving the BART train had a higher salary than I did.

There were pros to my job at Sun. I took a week-long Solaris system administration course, which gave me a deep insight into how UNIX servers worked. I helped build a Linux-based intranet at Sun, after one of the directors there saw what I had done at Cobalt. But mostly, for an entire year, I was miserable.

I did not stop taking action, however. Every day, I used Sun’s fax machine to fax resumes to companies that were looking for web developers. I had heard somewhere that faxes got read more than emails, so I faxed nonstop. My boss told me to stop abusing the fax machine. I didn’t. I wasn’t making ends meet, and every month I was getting deeper into debt. I didn’t have a choice. I needed a better job, and I knew Sun wasn’t going to be able to provide it.

The Big Job Interview

Finally, a breakthrough came. A friend of mine saw my PHP skills and was suitably impressed. His company (in a cheaper area of the Valley) was hiring. He invited me in for an interview.

The interview was with his boss. The guy scowled at me when I came in. “You know, from your resume alone, I would never have even given you a second look,” were the first words out of his mouth to me. “But Mike said you’re good, so I did him a favor and called you in.”

I just sat there, not really knowing what to say.

The boss ushered me into a conference room with a white board. A couple other men were sitting around a table. “Okay, show us in PHP how to make a database connection to MySQL and select rows from a table,” he said, gesturing to the pens in the whiteboard tray.

This was not an open-book test. There were no books or websites. I had to have it memorized.

Little did he know that, besides faxing resumes all over the place, I’d also been working every night on my own website–for my fledgling hosting company. And just last night, I’d written that exact code. So it was fresh in my mind.

Without hesitation, I picked up the marker and began to write. On the right side of the white board, I drew out a MySQL “users” table. And on the left side, I began to write, perfect flowing lines of PHP code.

“Do you want me to select everything from the ‘users’ table?” I asked as I wrote. I was met with shocked silence. Taking that as an affirmative, I continued to write. When I was done, I turned around. Their expressions were a mixture of grief and amusement.

It was then that it hit me–they’d set me up to fail. (I found out later that they had interviewed 12 people for that position, and every single one had completely failed that task.)

I had passed their setup with flying colors–and now they had no idea what to do with me.

The rest of the interview was a lot of paper-pushing, mumbles, and “We’ll call you.” I left with high hopes. I had aced their test!

I prayed so hard for that job. It paid $74,000/year, which might as well have been $1,000,000/year from where I was sitting. I prayed nonstop. I knew I wanted to start my own business, but wouldn’t it be so much easier with no debt hanging over my head? Without sweating how I was going to pay bills?

They called me back a few days later. Would I–the only one who had passed their test out of so many candidates–get my “dream job”?

No.

They chose not to hire me, because, as the boss man said, I had stated in the interview that I wanted to start my own business, and he didn’t think I was going to stick around the company very long. “We want someone who’s going to be here at least 4 years,” he told me.

Of course, you and I know that he never wanted to hire me to begin with. Whether it was because the company was almost entirely male, and I would have been the only female in the department, or because he just didn’t like some young kid showing him up–we’ll never know that.

(Ironically, he left to start his own business less than four years after that. Yeah, I kept tabs on him.)

I was devastated. I felt like the world was stacked against me.

Back to Sun

Sun finally got wind that I didn’t want to be there, and put me on a “performance improvement plan.” That meant I was on a 90-day watch. I had to do better, or I was out of there.

While signing the plan, I noticed a loophole. A paragraph in the long document said that if I chose not to take part in the plan, I could get paid severance to leave. Immediately, I knew that was my “out”. Total pay, including vacation time, would be about $8,000. That was enough to live on for about three months. I could make it.

I told my boss I wanted out. He said that wasn’t the intent of the plan. I told him I didn’t care; that I was done. We conferenced with HR. The HR person said I didn’t have to leave. I told HR I wanted out immediately. (They ended up paying me for 2 weeks’ severance and then asking me to hand over my keys right away, it was so clear that I didn’t want to be there any more.)

On my way out the door, my boss said the #1 most insulting thing anyone’s ever said to me: “Well, I guess when you’re gone, we’ll just replace you with an intern.”

I shut out all the noise and continued building my hosting company website. I launched my business a few months after I left Sun, in July 2001. Of course, it didn’t end up paying my bills for years. I did contract PHP programming for years, mostly finding gigs on craigslist. I built shopping carts, merchant account integrations, and even entire content management systems for my clients. (This was long before the days of WordPress.) And mostly, I scraped by, still with credit card debt, but most months coming out about even.

I took any extra money I had and and poured it into buying servers for my hosting company. And it grew, slowly but surely. (The rest of my story running my business can be found at Sharing My Journey to One Million Dollars, which was written just after I sold my business, but while I was still “embargoed” from talking about the sale, and The End of An Era, where I speak candidly about my 10-year journey through Silicon Valley.)

The Moral of the Story

The moral of this long-winded story is this: Everyone talks about (and remembers) the big moments. Like the day when I signed those papers to sell my business, on September 7, 2007, for $1,104,000. Or the day when I quit my job in 2001 and walked out of the door into the blustery winds of San Francisco, and almost cried, because for the first time in a year, I felt free.

But it’s easy to forget what it takes to make those moments. I never stopped fighting…not even for a second. And I never stopped learning. I was self-taught in everything I do. I am a graduate of the school of “Everyone said I couldn’t do it, and look, here I am.”

After my parents cut me off, I was determined to prove to them that dropping out of college wasn’t a mistake–that I could be successful anyway. And I blew them away. But I still haven’t stopped fighting. Now I’m passionate about helping others–whether that’s by hiring people or whether that’s doing cat fostering and rescue (which is one of my hobbies.) And writing this blog, which I do because I’m passionate about helping you succeed.

I said back in December 2007, when I turned my personal blog into “erica.biz”, that I started this to help figure out why I was successful when so many others aren’t. And, as the years have passed (I’ve been blogging here nearly 4 years now), I realize there’s another, deeper purpose: To give you the strength, determination, and grit you need to succeed.

This world does not hand you success. It certainly doesn’t hand you a job. I’ve had to fight for everything I’ve had in this life. I’ve taught myself what I need to know to be successful. And, if you see yourself in any of this, my message to you is: You can do it, too. Just don’t expect it to be easy.

I’ve avoided many of the “easy” routes to making money on my blog, too. I could have sold a bunch of cheap, crappy “make money now!” programs–and probably made some money. But I didn’t feel right in doing that. (If you’ve been around a while, you’re probably surprised at how few affiliate promotions I run on this blog, whereas the predominant theme in Internet marketing is to email your list a new promotion every day. Garbage, I say, garbage.)

Changes I’m Making Today

Lately, I’ve thought a lot about how to help you even more. My 30-day “no email” trial was a success in many ways, but also a failure in an important way: it cut me off from communication with you, my readers. I know many of you are looking for an honest way to succeed. And in cutting off email, I cut off your questions and a way for you to share your successes with me. That was my mistake, and I apologize.

So today, two things are happening:
One–I’m opening email back up. If you receive emails from me (as part of my email list), you can just hit “Reply”, type your response, and I’ll read it. (Note: If you’re planning to write me vitriolic hate mail, save your breath and just unsubscribe instead. That will make both of our lives better.)
Two–I’m introducing an exclusive, limited program for those of you who would like more personal access to me. Now, I’ll be upfront about this: This won’t be cheap. I’m looking for a small group of people I can help mentor.

You probably know how many people are out there teaching this “how to make money online” stuff. Chances are, you’ve even bought a program or two, and perhaps you haven’t been so happy with it. (That’s another big reason why I don’t promote that stuff much any more.) And if you know that, you know how rare it is when someone who’s actually made over $1 million online, in a legitimate business (not hawking “how to make money” crap products), opens up mentoring spots. In fact, in all the four years I’ve run this blog, I haven’t done it, either.

But I feel that now is the right time, especially with the economy the way it is. I started working from home online in 1997. I have a lot of knowledge I’d like to distill–everything from figuring out the right niche to go into to in-depth business strategy and growing your business to new heights. I even have some “ready to go” business ideas that I think can make a mint, in the hands of the right person. So if you’re not sure what you want to do online, this may very well be your chance to really “go big” with a business idea that’s already been vetted and tested by someone who’s made millions online.

As I said, this won’t be cheap. But if you think you might be interested, and want more information, just put your name and primary email address in the box below, and I’ll let you know more details. (And if you’re struggling with money, I will likely offer a scholarship to at least one person, so put your name and best email address in there as well, and I’ll let you know about that, as well.)

There’s no obligation, so go ahead now:

Building an online business isn’t easy, but it’s worthwhile. I’m ready to work with you to achieve similar heights to what I achieved. I believe you can do it. And just like I had people to ask about programming, you may just need someone to help you get clear on what to do and how to get there. I’m happy to be that person for you.

Put your name and primary email address in the box below, and I’ll follow up with you with more information about my mentoring program within the next few days (remember, there’s no obligation, so if you’re interested in finding out what I have to offer, go ahead!)

(If that form above doesn’t load, click here to subscribe.)

Let’s talk about current events. There’s a lot going on in the news right now. The 99% (aka Occupy Wall Street) movement. A backlash against big corporations, government bailouts, politicians who promise to change things and then don’t do anything, and a lack of jobs in our country.

Listen to the protests, and you will be instantly sucked in. It seems everyone has a side; a story to tell. Now, you must make choices. Are you a “liberal” or a “conservative”? A 99%er, a 53%er, or a 1%er? (No one will own up to the latter.)

I’m here to tell you: Not only does this stuff not matter, but it’s a distraction preventing you from changing the world.

In the rush to label ourselves and prove that we are “different” (or the same as!) others, we’ve forgotten one thing: We all stand here together. And if there are problems with this world–our society–then it’s up to us to go out and fix them.

Oh yes, there were things the government did wrong. And big corporations. I’m not saying to ignore it–I’m saying stop getting caught up in it.

What would happen if, instead of engaging in a debate where no one’s mind gets changed and enemy lines get drawn between your friends and you, you simply opted out?

What if, instead of watching TV and getting furious about those damn liberals or those hopeless conservatives, you spent an hour working on your business?

Jobs

Let’s talk about the lack of jobs–since that seems to be a sticking point. There are 50,000 monthly readers of this blog. What if half of you went out and said, “Today I am going to make a difference in the world by hiring someone who needs money.” And then you went out and hired someone to mow your lawn. Once. Or clean your house. Just once!

“But Erica, I don’t have the money to do that.” Then I suggest you start by ending your cable TV subscription and selling your TV. That will get you the money to hire someone. And it’s a thousand times better than a handout.

Together, just from you and others reading this post, we could create 25,000 jobs. Oh sure, they’d be temporary jobs. But instead of taking your money and handing it to a big corporation like a cable company, you’d be handing it to a real, live person–your neighbor, or someone who lives in your city. And that person would be eternally grateful for a hand up, instead of a handout.

And who knows how many of those jobs will stick around? Hey, it’d be nice to have a few extra hours a week to work on your business. So hire a babysitter for the kids and do it. Hire a house cleaner. Do you understand how grateful your babysitter or house cleaner will be for that job? Marilyn, our housekeeper, looked at me recently with almost-tears in her eyes, and told Brian and I that she loved us. That she was so grateful to be saved from a terrible desk job where she had a boss who constantly yelled at her.

You and I…we’re better bosses than that. We’re the entrepreneurs. We’re the job creators. And if there are no jobs, we’re the ones who need to step up and make those jobs happen.

So ignore the news. Ignore people posting protest photos on Facebook. Instead of getting sucked in to endless drama, and debating back and forth, go out there and figure out how to create a job instead. Get that fire in your belly. You deserve better. You need to learn how to start that business, not just for you, but for your family and your community.

The world is counting on you. And right now, we need you. We need your help to make America what we want it to be. We need your help to lower the unemployment rate, to help good, deserving people get jobs, and to make this world a better place.

Turn off the noise and start creating.

Recommended Reading:

• How To Hire An Employee. My epic step-by-step guide to finding an amazing person to help you. No more excuses.
• Find the Path Toward Your Perfect Day. What do you really want to do with your life? Follow these steps to help get clear…
• What Money Can’t Fix. It’s really eye-opening what problems money makes go away…and what problems remain, or get worse…

I’ve had three years now where I haven’t really had to worry about money, and it’s really eye-opening what problems it makes go away…and what problems remain, or get worse.

Let’s take housecleaning as an example. I am notoriously terrible at keeping my house clean. I am so focused on work that I literally don’t notice the house getting dirty around me until it’s filthy. Then I get overwhelmed and frustrated about it.

I gave up on trying to clean my house myself years ago, and hired someone–even though my company barely made enough to pay me a salary and I still had a lot of credit card debt.

In mid-2007, before I sold my business and when I was still living on next to nothing with a pile of debt, Richard and I moved in together. Richard is a clean person, and it really bothered him that I let the house fall apart (or, more commonly, adopted the attitude of “It’s only three days until the house cleaner comes…we can leave all the dirty dishes out until then, right?”) Sometimes he would clean up himself.

I thought we could solve this problem by hiring someone to clean every week. But with me getting diagnosed with Celiac disease, we cooked at home more, and that’s when it really fell apart. We had been living together 3 years when Richard finally got so upset with me about the house that he didn’t speak to me for over a day. It was one of our only huge fights.

So I used money to try to solve the problem again. Only this time, I hired a therapist.

In my first therapy session, my therapist warned me that he would say what Richard couldn’t or wouldn’t say–that I might get mad at him at first, and even be tempted to quit therapy. I told him I was pretty strong and willing to listen.

He then said something that was eye-opening. He said, “Pretend the time you have in a day is made up of 10 units. How many of those units do you devote to work?”

I said, “Eight.”

He nodded. Then, “How many on your relationship?”

I said, after a long (and humbling) pause, “One.”

He said, “I don’t think so.”

And that’s when I broke down in tears.

Money Can’t Fix This…

That’s what money doesn’t fix, you see. You can hire the housekeeper, but you’re not fixing the underlying issue. It doesn’t fix the workaholism, the need to prove yourself, or the fact that you aren’t seeing the dirty house. Those are internal issues.

Money can fix you getting late to the airport by getting you on another flight. But it doesn’t fix your poor time management skills.

Money can buy you all the food you want, but it doesn’t fix you not leaving time in your life for exercise or a healthy diet.

All of that said, I still enjoy having money–and having the freedom to spend or invest it as I choose.

However, to fix your real issues, you must look internally. Having more money will solve your immediate, pressing needs. But it won’t make you a better person. That’s a tough lesson to learn.

(Richard and I have since broken up, and I’ve been making a concerted effort to focus more of my life on growing my relationships with my friends and employees, as well as my health and fitness. But it isn’t easy!)

Recommended Reading:

• Hitting the jackpot doesn’t mean instantly becoming happy. I wrote this post in late 2007, after I sold my business. It’s when I first started to realize that my problems wouldn’t be cured by money.
• Lifestyle Design Pitfalls. Here are some of the pitfalls I’ve seen people encounter along the path of lifestyle design…which of those are you encountering?
• They’re All Going To Laugh At You. “They will leave anonymous comments on the Internet about how awful your company is, and, by extension, how awful you must be as a person.” What do you do when it happens? Read this post for my solution.

She doesn’t have to worry about money.
He has a successful business.
She’s really popular.

If you believe that, this blog post is about to flip that belief on its head.

I spent hours crying today.

My accountant tells me my company–the one that’s receiving the residuals from my former hosting business–owes the IRS another $13,000 for tax year 2009. I’ve already paid something like $70,000 in the last 6 months to various taxing authorities.

I thought I could afford to buy a house. Then I had to pay taxes. And then I found out that most banks won’t accept dividend income as “proof of income” for a mortgage. Poof–the house I saw, and liked, vanished to another bidder.

Sold my company for $1.1 million, and I don’t even have enough money for a house down payment.

I am angry.

I can’t bring myself to total up July’s income for my blog. I know it’s going to be bad. $2,000, maybe $3,000. If this sounds good to you, remember that my employee expenses right now are about that. Employees who are, of course, building the awesomeness that will be my new company, Whoosh! Traffic. I’m looking forward to it. But right now, it’s a lot of work and absolutely no money. I am drained. I think I’ve made something less than minimum wage for all the hours I’ve put in to this blog, my business, these information products I’ve created so far this year.

Remember all that income I showed you from Profit Instruments? The first check arrived. It’s gone. All to business expenses. Didn’t see a dime from it personally. The second check will arrive in a week or two. It will be enough to hold my business over for the next few months. I probably won’t take any money from it, either. I hate that.

I am frustrated.

Supposedly, I am “living the dream.” Got a blog. It’s pretty popular. Not the biggest blog in the world. But big enough that other bloggers think that I earn a fair amount of income from advertising. I don’t.

I wanted to do a sale on Guest Post Secrets this week. But I couldn’t bring myself to send the email. Every time I send a sales-y type of email to my list, I get some crazy angry response. Of course, I get more sales than angry responses. But this week, I couldn’t stomach the angry craziness that lurks out there.

I am a coward.

I don’t think this is the life you imagine I lead. Somewhere out there, there is someone who believes I live in a palace, immune to financial problems. Everything I touch turns to gold, right?

Wrong.

We (my programmer and I) stopped development on Best Blogs last week. I was so excited about that site. Still am, darn it. But it wasn’t going to immediately generate revenue. Whoosh Traffic will. Whoosh Traffic has the potential to be a 7-figure business. Bigger than my hosting company. And it has the potential to grow fast. Not so with Best Blogs. Oh, we had a monetization plan…a damn good one. But it would take 6 months to a year to really come to fruition. With Whoosh, we can be making money in a month or two at most.

So we shelved Best Blogs.

This is where I get real with you.

Blogging isn’t all it’s cracked up to be. It’s freaking hard. Whatever you do, you’re going to have some crazy people shouting at you about it. It’s kind of like performing publicly on the street. You’re always going to get someone with their own issues taking them out on you. Only with blogging, the whole Internet gets to see you duke it out. Not so pleasant. If you ever wonder why some fairly high-profile bloggers have stopped blogging, it’s because of this incessant mindf**k of crazy people who live out there on the Internet. The crazy people get in your head. You start second-guessing everything you write. And you have to have a super-strong personality to handle it.

I have a super strong personality. But I am not able to handle it 100% of the time. Today was one of those days where I could not handle it. Could not push Send on the email blast, because I didn’t want the blowback.

Instead, I write this. I break down the walls a little bit between you and me. Underneath the steel armor exterior, I am a person. And the words hurt. The refunds hurt. The refunds are the worst part. I take them very personally. If you’ve ever refunded a product you’ve bought from me for more than $100, I’ve cried about it. About you. I’ve wondered what the heck I ever did to hurt you.

One time last year I threw things against the wall after a couple customers banded together to refund a product I created. I am not sure I have ever been so angry, hurt, and upset all at once.

I am not proud of this. But it’s the way it is.

Do not give up hope. Even from this low point, I will keep going. Day by day, I will continue creating amazing content–and selling some of it to you. That’s all any of us can do. We can take it a day at a time. We can keep going. We can tell the haters to shove it, one blog post at a time, one product at a time. We can fight the only fight we have–to continue just showing up.

And one day, after having been beaten down and having many of these days like today, we will again be on top of the world.

But not right now. Right now, it just hurts.

Do entrepreneurs need to attend college?

My answer is totally different: I don’t think college is beneficial for teenagers who already have a good idea of what they want to do with their lives, especially if they want to start a business.

Here’s my story…and some tips on whether college will be right for you:

My Background

My parents both have Master’s degrees. My father runs a law firm and my mom is a former school teacher. She raised me as a stay-at-home mom and then opened a title company when I was in grade school.

My mom was mortified when I slacked off in school, but school bored me. I am an extreme visual/hands-on learner; I have difficulty picking up information when it’s delivered in auditory format. I was often bored in school because I couldn’t pick up the information when someone spoke it to me, but I could read faster than everyone else, so while most people were sounding out words, I was already finishing the book.

I hated authority and constantly challenged my teachers. In first grade, I asked my teacher at lunch, “If the universe contains everything we know, and it’s constantly expanding, what is it expanding into?” She looked at me helplessly and tried her best to explain.

It was around that time that they seriously considered advancing me a grade. Persuaded by my mom, the principal put me in the third-grade reading class. I was testing at an eighth-grade reading level, but my social skills were woefully underdeveloped. I was not well-liked by the other kids.

Mom was constantly searching for other school options. We lived in a rural part of Indiana, with only one high school for the entire county, so my local options were limited. My parents considered sending me off to boarding school.

Attending a Different School

In the meantime, the state of Indiana was using its gifted-and-talented funding to start up a residential high school for juniors and seniors: the Indiana Academy. After touring it, I decided to go.

Living with other kids was a challenge, but I identified with many of them. I found more deep friendships there than I have in any other environment. It was there that I got introduced to computers and networking. (When I first got there, I tried to plug my dial-up modem into the Ethernet jack on the wall–I had never been exposed to networks before!)

I quickly became the de facto female computer geek. I managed 14 computers on the girls’ side of the school. I set up a web hosting company by colocating my old 486 desktop computer at an ISP; one of the teachers paid me to host his personal website. I ran several websites, one of which was a shareware ranking site that received a good deal of publicity.

When summer of my junior year came up, many of my classmates got jobs at local retail stores. I did something different: I went on Yahoo! and found the listings for local web design companies in Cincinnati, Ohio. I sent all of them (I think there were 20 or 30 at the time) an email asking if they needed a web person, and showing them several websites that I had coded myself. I landed two interviews and got a paying summer job at a web design company coding HTML and Perl.

By the time I was ready to graduate high school, I knew three things:

1. I wanted to go to Silicon Valley and seek my fortune.
2. I wanted to run a web hosting company and design/develop websites–the opportunity for “passive” income (I can confirm that’s a myth after 6 years of running one, but I didn’t know that then!) was hugely appealing to me.
3. I wasn’t going to graduate from college.

Of course, I wasn’t afraid to tell everyone who would listen about these three things. I remember most clearly telling the female computer science instructor that I would go to college because my parents wanted me to, but I wouldn’t graduate.

She was devastated. Then she started yelling. “You don’t understand the opportunities you have been given!” she said. “You’re throwing it all away. The women of my generation had to work so hard to even be in college, and you just want to give it up?”

I shrugged. It was pretty normal for teachers to be upset with me.

I mostly didn’t talk about it with my parents. My mom would get angry, which would cause my dad to leave the room. It was not a pleasant experience. I would go to college, and that was that.

No one could really tell me why college would be great for me. They all assumed I had to go. That there wouldn’t be any questions. That it was necessary to “open doors” for my future.

But was it necessary for someone who wanted to start her own business and who didn’t want a job? No one could answer that question.

Applying to College

I applied to only two colleges: San Jose State and Santa Clara University. Santa Clara University required an entrance essay. My dad encouraged me to write an essay that said I would donate to their alumni association when I became a millionaire CEO. (I didn’t quite put it that way, but I dropped some broad hints about how going to SCU would help me become more successful.)

Santa Clara sent me an acceptance letter. So did San Jose State.

My parents were willing to pay for Santa Clara, but I decided I wouldn’t go there because they didn’t let freshmen choose the hours for their classes. I wanted a part-time job while I was there (this was Silicon Valley in 1999, after all!), so I opted for San Jose State. I took a small class load and applied for a job.

Finding A Job

I scored a job without going in for an interview. I cattily left out the fact that I was 18 years old in the phone interviews, and was hired as a part-time Marketing Director for a small web company. When they found out I was 18, had no marketing experience, and was a college student, they were not amused. They fired me.

I found another job “being the helpdesk” and fixing computers for a small company, Cobalt Networks, that later became one of the largest IPOs in history. Sun Microsystems bought us out in 2000 for $2 billion, then killed the product line.

In the meantime, one of my college professors told me I should drop out of school and “seek my fortune” in Silicon Valley. It took me a year to follow his advice, but after 3 semesters of college, I dropped out.

My mom said it was the worst decision I had ever made. My boss at Cobalt, who treated me like one of his kids (his oldest was only a couple years younger than me), said I would regret it.

My boyfriend at the time, a well-paid techie “whiz kid” who was a high school dropout, congratulated me. (Interesting side note: The vast majority of the guys I have dated have not graduated from college. Several were high school dropouts. This wasn’t intentional; it’s just what happened.)

You probably know the rest of my story (if not, you can read it here, where I go into details of how I created a million-dollar business at a young age.)

How Can You Tell Whether You Should Go To College?

Let’s look at some facts:

• I knew what I wanted from a young age. I knew I wanted to start a web hosting company and do Web development. I went out and got summer jobs in that area to gain experience.
• I wasn’t waiting to be taught by classes. I was a self-taught computer whiz; infinitely curious, a voracious reader, and not afraid to ask questions. I didn’t seek permission to take over those 14 computers in my high school; I simply did it.
• School didn’t suit me well. I didn’t learn well from lectures, and I didn’t enjoy school. I did most of my learning from books and the Web. The Web, being 100% visual, was a miracle for me.

When I look at most high school kids, I understand why college is necessary. They don’t know what they want. They have a vague idea of the future, and college helps them clarify what they want to do with the rest of their lives.

I was totally different. I was goal-oriented, and more importantly, I had a goal (starting a business) that didn’t require a degree.

I will concede that I was different from most teenagers, but by no means do I think I am unique. I think there’s a good percentage of teenagers out there who want to start a business but who, like me, are pressured into going to college by their parents and teachers.

And really, what is that pressure but simple fear?

My Mom Concedes

After several years of not speaking to my mom much (but before I sold my business and would be considered a success), I finally called her and told her I was really upset with her. I mentioned the comment she had made about dropping out of college being the worst decision I had ever made.

She started crying, and told me that she was proud of me for taking the path she never had the courage to take. That conversation meant a lot to me, and it helped heal our relationship. And that’s honestly when I should have written this post, but I didn’t have the courage until now.

Going on a different path takes courage, but the rewards can be huge. Whatever you think you don’t have enough of–money, time, college degrees?–to start your own business, let me tell you right now: You have everything you need to succeed.

Was It Worth It?

I started my web hosting company when I was 20 years old. I had no clue what I was doing. I made huge mistakes. I underbilled my customers, overworked my employees, and pissed off a whole lotta people.

But I also made close friends, learned a whole heck of a lot, and oh yeah, made well over a million dollars.

I had the worst day of my life and the best day of my life in my office, with my employees. And I wouldn’t trade that for anything.

The people who tell you you need to go to college–they want the best for you. They want you to have the best chance of success. But sometimes, the real path to success lies in doing what no one else is doing. While everyone else is in school, you’re out there knocking down doors and closing deals, signing contracts, and trying to figure out who’s screwing you over and who’s investing in your success.

There’s nothing like it. And if you read this post and, like me as a teenager, are a self-starter, motivated to succeed, and ready to start your business, don’t let college stand in your way. Go out there and get your hands dirty. Yep, you’ll probably fail; most businesses do. But it will all be worth it, and you’ll have learned dramatically more in the process than you ever will sitting in a lecture hall waiting for class to end.

Recommended Reading:

• Hiring is Obsolete by Paul Graham. “While I stand by our responsible advice to finish college and then go work for a while before starting a startup, I have to admit it’s one of those things the old tell the young, but don’t expect them to listen to.”
• 15 Successful Entrepreneurs Who Didn’t Need College. Includes Michael Dell, Richard Branson, and Mary Kay Ash.
• One Thing You Don’t Need to Be An Entrepreneur: A College Degree by Fred Wilson (a venture capitalist.) His point of view: “I have learned that where someone went to college (or even if they didn’t go to college) has absolutely no correlation to whether they will be a good entrepreneur or not.”

They’re laughing at you.

I mean, you’re practically doomed from the start. 90% of all businesses don’t make it five years. Even if you have successfully run a business before, you’re probably rusty at that whole “starting” thing.

You probably won’t make it.

Your customers are going to ask for refunds. They’re going to take their lack of success out on you. They’re going to tell you you didn’t perform (regardless of whether you did or not.)

They won’t pay you. Their checks will bounce. Their credit cards will get declined. They’ll promise to pay…every week, for the next month…and never pay. Suddenly, their phone number will get disconnected.

They’ll call you up and attack you personally, spewing venom you never thought you’d hear outside of an R-rated gangsta movie. They will laugh at your feeble attempts to make it right. They’ll threaten to sue you. They will get their local police department to call you.

They will leave anonymous comments on the Internet about how awful your company is, and, by extension, how awful you must be as a person.

They’ll complain that you charge them too much. They will threaten to cancel. They will cancel, and then when your broken billing system decides to bill them again, you won’t be able to refund it quickly enough to spare the hate mail, hate calls, and hate letters.

In short, they’re all going to laugh at you. In fact, they’re probably already laughing at you. I bet you can hear it right now in your head: “You’re so stupid. You’ll never be able to figure this Internet thing out. You don’t have time for this. You’re not young any more. You have mouths to feed! How could you possibly consider quitting your job?”

If you’re thinking I’m about to make it all better, I’m not. What I just listed above (including the part where the police department called me) is all real. It all happened to me in the course of running my business. I once let a customer rant on the phone for just over an hour (I timed it) while I transferred the call to my cell phone, put on my headset, and drove home. I listened to him ranting in my ear about how awful our service was the entire time.

As you’re reading this, some emotions are probably coming to the surface. At least one of them is likely to be a memory of when something like this has happened to you in the past. And maybe it’s scaring the crap out of you. You don’t want to run a business like that, you’re thinking. Who in their right mind would sign up for that?

But some of you…some of you are different. Sure, there are probably fears and doubts in there, and you may even question your own sanity. But somewhere, deep down inside, something is fighting to rise up. Something is saying, not, “It won’t happen to me,” but “I will find some way to handle this.” Because it will happen to you. Don’t kid yourself. You can run a great company, and you’re going to get shit flung at you every single day. It’s just how business works.

This post is for the fighters out there. It’s a reminder that you can do this. It’s a reminder that we all get the crap beat out of us, if not physically, then emotionally. Life isn’t always a cake walk. No matter how big or small a business you run, no matter how much money you have…this world is full of people who will want nothing more than to tear you down and see you fail. Online or in person; customer, employee, best friend or family member…they’re going to want you to fail, for reasons beyond your control.

To be okay with this, you have to first acknowledge it. Only by acknowledging that the hate is out there will you be able to get past the fear that is inside you and take the next step.

I don’t know about you, but I’d rather wake up each morning knowing that I’m bringing my absolute best to the table than wake up looking over my shoulder and asking “What if?”

The haters will be there no matter what you choose. Choose something that will make you happy.

Now go out there and change the world!

Recommended Reading:

• Download my free Blog Success Manifesto. Want to start a blog–or do you already run one? This is a must-download; I showcase how I created a successful blog without killing myself in the process. 63 pages; 30 tactical tips…and oh yeah, it’s completely free!

My Past Week

I haven’t had the easiest time of things lately. Several financial irritations hit all at once, causing me to have to dip into my savings account (some call it an “emergency fund”, but I have a distaste for that name.) I was angry not only about having to resort to my savings account, but about the circumstances that caused it. I felt like a failure; worthless. Emotions welled up inside me, and though I’ve had an acupuncture treatment and a massage, I can still feel the emotions causing tension in my body.

Being frustrated about money rolled over into several other areas of my life, and today was yet another rough day, with Richard being frustrated about me not wanting to spend money to hire someone to do handyman chores. This resurfaced the failure feelings in my head and caused a downward spiral.

I was unable to concentrate on my tasks at hand. My intention for today was to create some new videos, but my feelings of failure stopped me. Angry at myself for not being able to overcome my emotions, I finally hopped in the car and started driving.

As I was driving, I remembered something that had calmed me down from bad emotional spots in the past. I’m not sure where I picked this up, but it really works, and it’s darned simple.

The “Gratitude Countdown”

Here it is: Say out loud ten things you are grateful for.

This “gratitude countdown” works best when you are by yourself, so if you live with someone else, I recommend that you go out driving or walking to do this.

At first, you may have trouble thinking of any. You can start out with simple ones: I am grateful to be able to breathe freely. I am grateful I have food. I am grateful to have a place to live. I am grateful for the tree in my back yard that provides shade on hot, sunny days.

Count each one down. (I say the numbers out loud to help me keep track.) At some point (it usually hits me around #4), you’ll start to feel your emotions come out. Let them out! Release them. Get rid of them.

Later in the sequence, after you’ve released some emotions, you can start healing some of the wounds. Today, I posted an ad on craigslist for people to come pick up our old moving boxes. “Bring a truck, SUV, or large car,” I wrote. “Must take ALL the boxes.” Well, who shows up but a young couple in a tiny Ford Focus. They start packing the boxes in, but of course they can only take about half of them. I come outside to find they’ve picked only the best boxes, leaving the rest sitting on the driveway!

I wasn’t happy about it, but there wasn’t much I could do. So, as part of my gratitude countdown, I forgave them. I said I was grateful that I had been able to help them out by giving them free moving boxes, and that they were forgiven for only taking some of the boxes. Now someone else deserving can come pick up the rest, or we can save them for our next move. I don’t need to hold any anger about them. I can just release it and move on.

By the time you get to the end of your gratitude countdown, you will feel completely different. It probably won’t be perfect, but you will feel like you’re on the right track again.

Your Results

Some of the other things I am grateful for today: An Internet marketer who lives here in San Diego recently inviting me to his mastermind group; Erica O’Grady helping to keep me accountable in my own goals with weekly checkups; Ramit Sethi encouraging me to get stuff done; Srini Saripalli, whose conference I recently spoke at and who is now a friend and business partner.

There are lots of good things happening in your life right now. Sometimes, they just tend to get overshadowed by the drama. What are the ten things you are most grateful for? (Feel free to post them here as a comment if you wish.)

Try this now, and then try it again next time you are feeling down. Heck, try it every day for 30 days. Let me know how it works out for you!

Update: I wrote this post on Saturday night. After doing a gratitude countdown, I overcame some mental hurdles and figured out some business issues that had been bugging me for weeks. This really does work!

Recommended Reading:

• Feeling Lonely, Depressed, or Underappreciated? Read This! Another great exercise I did when I was feeling down. This one works really well, too.
• True Visionaries Think Backwards. One of my favorite posts. This one will help you if you’re feeling mopey or sad about the future, or don’t know where you want your life to go.
• How Can You Have That Perfect “Flow State” More Often? You know those amazing feelings you get when you’re in “the flow”? How can you have those more often?

The Beginning

In August, 1999, a few months after I graduated from high school and having just turned 18, I packed my car full of everything I owned and drove to the promised land — California.

I was young and naive. I moved from a small farm town in Indiana to smack in the middle of a huge, 1-million-person-plus city (San Jose) and chose to live in the dorms at San Jose State, where, needless to say, I stuck out like a sore thumb.

I found a job, and got fired in record time when they found out I was 18. (They were not happy they had just unknowingly hired a college freshman as their Marketing Director.)

I found my calling doing desktop support at Cobalt Networks, a young startup company. I made friends, had boyfriends, and watched my beloved employer rocket itself to the 4th-largest IPO in history. I used all my extra money to invest in the Cobalt employee stock purchase plan. The stock doubled; I cashed out and bought a car:

I took part-time classes at San Jose State and failed several of them. I was more interested in working in the computer industry. School bored me. Even in high school, I knew I would probably never finish college. My teachers tried to talk some sense into me…all except one. I’ll never forget what happened.

All business majors were required to take a class called Business 10. It was basically the “Do you really want to be a business major?” class. My teacher took an instant liking to me.

One of our first assignments was to get together with a few others and create a business plan for a fictitious business. Our ragtag group decided to create a plan for a nightclub. I did a website for the nightclub in HTML and presented it to the class. Everyone else was using Powerpoint, but I was more comfortable using HTML.

A Teacher Gives Me Strange Advice

My teacher pulled me aside after class and asked me what the heck I was doing. I said “What do you mean?” I thought he was angry that I had decided against Powerpoint. It turns out he was mystified as to why I was in college.

He said, “This is an unprecedented time. Kids your age are making millions.” He asked me why I had moved to the Valley. I said I wanted to be in computers. He said, “Go. Drop out. Don’t waste your time in college. This is the golden age for people like you.”

I was shocked. I spent days pondering what he had said. A teacher, telling me to drop out! I took his advice under serious consideration because I felt he was being honest and not just pushing a party line.

A year later, I dropped out of college. I was flunking accounting, and the constant push and pull between school and work was aggravating me. I had watched Cobalt IPO, but had missed out on the stock options, as I was a part-time contractor. Many of my friends within the company were now paper millionaires. I was jealous that many of them were just a few years older than me. Oh, how I longed to have been born in 1978 instead of 1981…

Cobalt was acquired by Sun Microsystems and I quickly snagged a full-time job at Sun by virtue of having dropped out of school. My boss at Cobalt, who considered me one of his surrogate kids, told me I had made a decision I would live to regret. My mom started crying when I broke the news; she told me dropping out of college was the worst decision of my life. Somewhere inside me, though, I knew I had made the right decision.

The next day, my parents cut off all of my financial support. I was truly on my own, and I had a lot of bills to pay.

Contract Work to Pay the Bills

I scraped by, working contract jobs as well as full-time at Sun. After a year of being demoralized by working at a big company, I quit. It had been my dream for years to start a web hosting business. By this time, I had moved into a 1-bedroom apartment 35 miles east of San Francisco. It was all I could afford. Soon, my boyfriend at the time would move in with me because I couldn’t pay the rent there by myself.

I found contract web design jobs to pay the bills. It was 2002; Silicon Valley was in a deep recession; I was 21 years old. When I presented invoices to my clients, I got scared. Sometimes I would talk myself out of invoicing them for weeks because I wasn’t brave enough to say they owed me more than $1,000. Often I’d throw in a discount on the invoice to make it under $1,000, because that number just seemed unjustifiably large to me.

Somewhere in there, I had started a small web hosting company, and was slowly gaining customers. I agonized over the website, wrote my own shopping cart, and had my uncle program an invoicing system in PHP. I figured I would be happy if I made enough profit to pay off my cable modem bill.

By the end of 2003, my fledgling web hosting company, Simpli Hosting, was making more than my consulting gigs. The problem was, I was spending 40+ hours a week doing web development, and maybe 5-10 hours a week on hosting. I figured I had nothing to lose. I met with all my consulting clients and arranged transitions. I would be a full-time web hosting company owner in 6 months.

7-21: Intention Becomes Reality

I had one rack of servers at the time; I spotted an empty cage near our servers with four glistening empty metal racks. Each cage had a number; this one was 7-21…the same as my birthday (July 21). I knew it was fate; it was meant to be. We were going to expand into that 4-rack cage. I told my sales rep so. He was amused, but promised to save it for us.

On October 28, 2003, I signed the contract for cage 7-21 and we moved in.

2004 came and went rapidly. I hired my first employee, an eager fresh college grad named Brandon. He was nearly a year older than I was. He wanted to work for free. I told him I’d pay $14/hour.

Brandon came on board and was an amazing worker. I hired so many other amazing people throughout the years; Mooneer, a gifted college student who worked from home in Southern California; Cal, a talented PHP programmer turned COO; Wolf, a fire-eating, spiky-haired, spirited engineer; Russ, a great friend and geek extraordinaire; Ben, an 18-year-old who was Simpli’s first intern; Seth, my best friend and Simpli’s second COO, who helped me break down so many walls; Kolya, Simpli’s first office manager; Sohrab, one of Simpli’s most gifted and treasured employees and the hardest worker I’ve ever seen. There were many other great employees, too, who came and went mostly because there was always too little money and too much work.

Mental Breakdown and Breakthrough

In August, 2006, I reached a mental boiling point and broke down in the middle of a vacation. I decided then and there I would sell my company in a year for over $1 million. There was never any question that I could do it; that I would do it. I never doubted myself in terms of my ability to set goals. But what would happen next shocked me.

It was May 9, 2007. I had just hired a new employee and agreed to pay him a large salary when our datacenter, Market Post Tower, called and said they were locking us out of the datacenter for failing to pay them over $60,000.

In total, we had something like $160,000 in debt for a company that was on target to do a little over $800,000 in revenue for 2007. It was too much. We had maxed out all of our available credit (including all my personal credit cards) already. We had nothing left.

Mortified, I realized that my failing grade in my college accounting class had come back to bite me…hard. I had no concept of the numbers. Neither did anyone else. I called Seth in and had him negotiate with Market Post Tower. We delayed a tax payment to pay them $15,000 right away so they would open our cage again and we could resume business.

I laid off over half my staff that day. It was the worst day of my life. May 9 seemed to stretch on toward infinity. The day just would not end. And my tears would not stop.

With my tears still flowing, I called another one of our upstream providers, to whom we also owed money. Since the owner was a friend, I candidly explained the situation. He made a blunt offer. He said once our customers found out that we were locked out of the datacenter, they would all leave. So he put an all-cash offer on the table; he would buy my company for $250,000 that day, as well as pay off all our debt to Market Post Tower.

I saw his objective. He wanted our equipment and cage space. Whatever customers would stay would be icing on the cake.

I Choose Hell

I chose Hell instead. I told him no. He said my company might die a painful death and someone would scoop it up in bankruptcy for pennies on the dollar. I said I would find a way to make it work.

Market Post Tower refused to hire a lawyer to write a contract for us because they didn’t want to waste the money on someone who wouldn’t pay them back. I got mad. My integrity was being called into question. My “I’m going to prove them wrong” instinct kicked in.

Four months passed like a blur. I can only explain it like this. Let’s say you’re in average shape, and you decide to run a marathon…tomorrow. Actually, now. You just get up and start running. Somehow, the miles pass, and you feel awful, like you’re going to throw up, die, or have congestive heart failure, or possibly all three at once. But still, you look down and your legs are running. Your support team is long gone. It’s just you and one other dude working together to save everything.

Some nights I got no sleep. Sometimes I broke down and cried in the office. I napped on the couch. We sold everything in the office. Whatever wasn’t nailed down went out the door. We doubled, tripled or more all of the rates of our customers — something I had been scared to do for years. I said nothing about our financial problems to our customers. I only said we needed to do this to stay in business. I figured if 50% of them left, at least our upstream provider bills would be cheaper, and we would still have the same revenue coming in.

95% of them stayed.

I was as shocked as anyone. But something changed in me when our customers pledged their continued use of our service. I started to take pride in what I had built. For the first time, I acknowledged myself and my role in building this company. I stopped believing that the web hosting industry was all about price, and I started to believe in myself.

The $100,000 Check

Things turned around. Just four months later, on September 7, 2007, I sold my company for $1.1 million to a competitor.

Before we signed, I wanted a contingency plan, so I called up the guy who had offered me $250,000 cash four months ago. He knew we were paying our bills on time now. We had signed new customers and were cash-flow positive.

I told him about the $1.1 million offer. He said stoically, “Congratulations.”

I asked him if he would match it.

He paused, considering. Then, “If it falls through with the other company, we’ll do it.”

It turns out I had a third web hosting company wanting to pay me $1.1 million, as well. But Bruce, the owner of Silicon Valley Web Hosting, was the winner and made the deal.

That day, I sat with a check for $100,000 (Bruce’s first payment) in my hands. Bruce grinned at me. “How does it feel?”

I just shook my head. What I was feeling was unreal. Unexplainable.

I paid off every penny we owed Market Post Tower. Shortly after sending the final payment, I received an email from Neil, a managing director at Market Post Tower. He wrote:

Erica,

I think I was the most outspoken cynic regarding the Simpli payment plan. My skepticism is the unfortunate result of having been in commercial real estate for more than 20 years, and in colocation management for the past five. The kind of integrity that you’ve shown in making payment is sadly uncommon.

I am at a loss, except to say “thank you.”

Neil

The End — And Now, A New Beginning

Now, I close the book on the final chapter of my life in San Jose. On July 1, Richard and I move in to our new house in Solana Beach, CA. (Of course, we are still renting.) But my move to Southern California means the era of living in fast-paced Silicon Valley and living the dream of building my own tech company is done.

Frankly, I couldn’t be happier. I proved, through sheer stamina if nothing else, that I could build a tech company from scratch and sell it successfully. Now I’m ready to prove I can build a business that doesn’t kill all my employees and that makes me a happier person. And I’m ready for new opportunities that come my way, like new friends, more public speaking opportunities, and more blog posts.

I am grateful to have lived in Silicon Valley through what was possibly one of the craziest times in history, and I am just as grateful to move on. As they say, it is time. It took 9 years and 8 months to write that chapter of my life. Now it’s time to write the next one.

The problem with trying on new attitudes and new ways of doing things is that you invariably run into those you feel should work, but they don’t for you. And, being human, instead of simply saying “This doesn’t work for me” and doing something else, you think “But everyone else is successful with this!” and continue, for months, to beat your head against the wall and try something that clearly doesn’t work.

This, for me, was working at home.

Acknowledging the Problem

For nearly a year I refused to acknowledge what was clearly obvious — that working from home not only wasn’t productive for me, but that it was actually hampering my productivity. I would spend hours upon hours surfing websites, reading books, or watching TV. All good things, but none of them were moving my business forward.

I tried everything I could think of to change this. Richard and I had long conversations with everyone from dooce’s husband Jon to many other successful bloggers and small business owners. Everything centered around “How do you work from home?”

And we got great answers. I implemented several of the solutions. I bought a better desk and hired a personal assistant to do my laundry and organize my clutter. I tried setting hours during which I would only do work. I implemented time management systems. I reduced checking my email to a few times a day.

Some of these things caused a temporary boost in productivity. With a personal assistant, for instance, I was more productive for a few hours a week while she was helping me. But eventually that fell off, too, and I was back to where I was before.

Richard suggested I look for an office. I ignored him until it became unbearable. “I really want to launch my new site,” I finally sobbed at him one night. “What is wrong with me?”

Overcoming Fear

I had a huge fear that, now that I had sold my business, I was in some sort of permanent “I have money now, so why should I work?” state of complacency. I mean, I could laze around and watch TV all day and still have all the money I needed, right? So maybe I was just lazy. That would certainly explain why all those other people could work from home.

Richard reminded me that there was nothing wrong with me. He urged me to go to San Francisco for a day and work out of Citizen Space, a local coworking space. Not knowing what to expect, I hauled my laptop the 60 miles into Citizen Space, checked in, and set up at a table they have for drop-ins.

It was the most productive day I had in months. I got many of the major kinks worked out of the Inspiring Innovators website, so it was finally nearly ready for launch. I drew out a plan (on paper!) for what the site should contain. And then I started making phone calls to lease an office.

Making the Change

Last week, I found an amazing coworking space near my house and moved in. If you are not sure what coworking is, it’s where a group of people get together to lease an office. You typically pay a flat rate per month to rent one desk, or you can choose to drop in for free or a low daily rate. Coworking is very community-centered; you need to get along with the other people in the space. This space is in Campbell, CA (an easy 15-minute drive from my house), and the other tenants are all female entrepreneurs. I pay $500/month flat to rent a desk, and I have access to all common areas and a conference room, as well as Internet access, electricity, water, a refrigerator, microwave, and toaster oven.

Better yet, I didn’t have to invest a ton of money in a desk and a bunch of furniture. (If you’ve never furnished an office before, let me just say, for 4-5 people, $10,000 is a small budget.)

I found this office space on craigslist, but there is also a huge online coworking community where you can find spaces near your house or organize one.

Stop Blaming Yourself

The thing is, we’re human. We want certain things to work. In my case, I’ve watched “working from home” being built up as a panacea. “No commute! Cheaper lunches! Work in your PJ’s!” And while all of the benefits are true, for me, the social isolation wasn’t worth it.

That’s why, when my former company cleared a $35,000 SBA loan, the first thing I did was rent an inexpensive office near the datacenter and put my one local employee and I there. Looking back, I thought that was a bad financial decision. (You’re not supposed to put debt financing toward unproductive overhead such as offices.)

Now, I know better. I was far more productive in that office than I was at home or in the datacenter. It helped us attract more clients and, once we grew, it helped us attract another few employees. Finally, we were able to sublet half the office to another tiny startup that ended up becoming our hosting customer.

What’s Not Working In Your Life?

Is there something that’s not working in your life that you’re refusing to acknowledge? It could be a tiny thing, like your old computer or an appliance that doesn’t work properly. Or it could be a huge thing, like a relationship or an office. Whatever it is — look for the three telltale signs that it isn’t working:

1. You’re beating yourself up for something that isn’t your fault. I was berating myself and calling myself “lazy”, but that wasn’t the case at all. My environment wasn’t working for me. Once I got an office, I became immensely productive again.
2. You’re hesitating because of money or other external conditions. I’ve taken to the adage, “If money is the only thing holding you back, you should live your dream anyway.” It’s true that $6000/year, plus some startup expenses for new computer equipment, is not cheap. But this office will pay itself off in spades from my higher productivity and increased business. If you find yourself thinking, “I’d definitely change this about my life if only I had an extra $x,” make it your top priority to find or create more money so you can live your dreams. Stop discounting what you want just because it costs money.
3. You’re using an excuse of “But it works for so-and-so.” Now that I have a clearer head, I can see some huge differences in those who successfully work from home and my situation. For instance, my boyfriend and I live in a duplex that has less than 1000 square feet, yet it has 3 bedrooms. My home office is in the third bedroom, which is hardly big enough to hold my desk, chair, and filing cabinet. It feels cramped and awful when I work from there. Since neither Richard nor I are neat freaks, our house is often somewhere between “disaster” and “cluttered.” The clutter spreads to my office whether I want it to or not. And even though we have made huge efforts (and spent hours! and hired people!) to get rid of stuff we don’t need, the filing cabinets are full, the closets are full, and the house, with its complete lack of built-in storage, doesn’t lend itself to easy organization.

Is something nagging at you, right now, as you read this entry? Something that’s been bothering you for months, that just isn’t working? If so, I encourage you to take the time right now to acknowledge it. Have the courage to look it in the face and say, “Even though I may not have the money to change you, and even though you work for other people, you aren’t working for me.” Then work out a plan to change it.

If you have the courage to acknowledge what isn’t working for you, you may not waste months of your life dragging your feet like I did!

Recommended Reading:

• Entrepreneurs: Is Extreme Frugality A Waste of Time? How do you figure out what projects are worth it for you to tackle as an entrepreneur?
• The Ten-Minute Budget. My first-ever videblog, posted on Get Rich Slowly, shows exactly how creating a budget saved me thousands of dollars a year…and how you can get started doing the same in just 10 minutes.
• Coworking Wiki. Find a coworking space near you, or get started setting one up, with this wiki and the associated Google group.

I’d like to encapsulate four of the effects of this recession I think we’ll see over our lifetimes. Whether you agree or disagree, please write your own blog post (and link back to this one) or comment here with your own thoughts on how our world will change.

1. America’s birth rate will continue dropping, and will eventually get below the replacement rate. A common statistic is that it takes 2 births per woman to sustain a population. America, so far, has barely managed to stay above this rate. However, with the cost of having children increasing, many parents will opt to have fewer kids. Thus, in the next 40-50 years, we may well face an odd situation: whole towns disappearing, since there won’t be enough people to keep them going.

   Whatever your personal opinion is on this situation, it will certainly make for some interesting political drama.

2. The number of houses needed for the general population will nosedive. This will puzzle and catch off-guard the real estate industry and many pundits.

   Right now, there are many huge houses on the market: 4000sq.ft.+. Their prices are coming down, but they’re still not selling. Why? Maintenance costs! Heating and cooling gigantic houses is extremely expensive. Rather than disappearing, however, I believe multiple families, or multiple generations of a single family, will buy these houses as they become dirt-cheap.

   Multiple generations in the same house is already common in many Asian, Hispanic, and Indian families. This will become a defining trend in the U.S., as minorities are having more children than whites, and whites will eventually figure it out and embrace this trend.

   Since day care may be prohibitively expensive for many lower-income families, this trend will become even more pronounced. I expect to even see homebuilders responding to this trend by creating new types of McMansions to help these multi-generational families with their needs — in 10 years or so, when they recover from the current bust.

   There is a corollary trend that goes along with this. Since it will become commonplace for families to live together, fewer houses will be needed for the general population. This may start out as a small trend — virtually unnoticeable due to birth rates. The good news is that it means that rent prices as well as home prices will drop.

   The trend of rent prices dropping may be most noticeable over the next 2-3 years as foreclosures hit the market, since by some estimates up to 50% of people being foreclosed on are not renting or buying another property, but instead moving in to an existing homestead. It may then get lost for several years as people shrug it off when the economy gets better. However, I think the resiliency of this trend (and its huge cost benefits) will be underestimated by the media, and the trend will continue to gather steam for the next few decades.

3. A backlash against expensive colleges, as well as lack of funding for state schools, may open up new entrepreneurial opportunities in higher education. Throughout the past 20-30 years, student loans were easy to get, so more people went to colleges, so colleges raised their prices, so the government and banks made student loans easier to get…repeat ad infinitum.

   The costs of college have far outpaced inflation for the past century. In the book Going Broke by Degree, economist Richard Vedder writes:

   “In 1958, it took a bit less than 57 days for a typical family to earn enough money to pay for [annual] tuition at Northwestern. As of fall 2003…instead of 57 days, the typical family would have to spend almost 195 days.” This explains the persistent rise in student loans and scholarships.

   You will, of course, see a government push to make loans easier to get, as the banks pull back. This doesn’t help anyone over the long term, however, as it simply inflates real college prices. (The economic details of this scenario are worth a blog entry of their own — one I may do later this month.) The easier government makes it to get college loans, the slower prices will drop. New parents and those planning to have a baby should consider a 529 savings plan for their kids. Saving just $100/month in a 529 (and putting it into the stock market) will turn into $40,000 or more for your cild once he or she is 18!

   If you’re in college now, simply be as frugal as possible and bear it out. Avoid taking on student loans as much as possible.

   Is college worth delaying until later simply because it will be cheaper then? I’d say no. However, if you are considering going to college in the next year or two, get as much education as you can done at a community college. Not only will that save you a lot of money up front, but you may also benefit from enrolling 2-3 years later at a more expensive college, instead of enrolling now.

   There is a prevailing mindset in our society that college is necessary. I’d expect some backlash against that in the next few years, although it will mostly take the form of “Ivy League schools aren’t necessary” and my above recommendation of attending a community college for the first few years.

   Over a longer time frame, I expect to see many college alternatives popping up. In Going Broke by Degree, Vedder cites the for-profit University of Phoenix, as well as tech certification programs, as two valid alternatives to traditional colleges. If state funding disappears and college costs continue to go up, savvy entrepreneurs will fund alternatives, and traditional college enrollment may drop for the first time in our lives.

4. Commercial office space and retail shopping centers may never recover to the square footage used in 2007. This is another one that will catch the pundits off guard. I realize this is an extreme viewpoint, but here’s my reasoning.

   I was here in San Jose in 1999, when companies like Webvan euphorically declared that the need for grocery stores was over. I agree that those companies were overly optimistic, but I also think the continued immersive experience and growth of the Web will kill many retail companies in the long term.

   Stores don’t exactly go out of their way to make the customer experience friendly. Safeway (a local grocery store chain) thought they were geniuses by firing 50% of their staff and forcing everyone to wait 15 minutes in line to check out their groceries. (They didn’t even install self-checkout machines…just closed most of their registers!) They later realized their mistake, but expect to see more asinine decisions like these by retail stores intent on cutting costs instead of building better customer relations.

   Compare this to the experience I believe we’ll see on the Web in the next 5-10 years — a virtual “personal assistant” on the store’s Web site, 24×7, to help you choose something that fits, free shipping both ways (thank Zappos for that!), and easy tools to measure yourself and ensure you are getting the right size and quantity. With people in India or Vietnam who speak excellent English and are willing to work for a few dollars a day, this sort of service will become commonplace.

   If Web 2.0 was about community, Web 3.0 will most certainly be about personalization, simplification, and ease of use. Retail will learn that, to survive, they must personalize and deliver excellent customer service. The Web, where you can hire people for a few dollars a day instead of $10/hour, will be the place to do that.

   Once the Web retailers figure out personalization, and do it right, old-school retail will never recover. It is very likely that my kids will find going to a store antiquated for anything that doesn’t need to arrive right now. And far less needs to arrive right now than you or I believe — the main reason people go to stores is customer service; the human touch. The Web will figure this out, and do it far better than the nose-picking, bored-looking 19-year-olds at Best Buy.

There you have it: four effects that will change our world as a result of the recession. What effects do you think the recession will have on our society? I welcome your comments!

Recommended Reading:

• Making Kids Worthless: Social Security’s Contribution to the Fertility Crisis. Postulates that Social Security programs are the cause of the declining birth rate in many developed countries. Interesting theory — very Malcolm Gladwell-esque.
• Going Broke by Degree. The author recommends specific policy decisions that should be made to decrease the cost of college for everyone. Worth reading if you would like to know more about the economics behind the expense of college.
• Forget Presents; We Want 529 Contributions at Frugal Dad. Giving a young family member the gift of education savings is far more important in the long term than the latest video game or another new pair of jeans.