The economic news is relentless. Home foreclosures. Teetering mortgage companies. Tottering airlines. Brands that once rode high are going bankrupt. Job losses. Dangerous levels of public and private debt.
If we’re not in a recession, there’s no denying that our economy does not feel good, which means this is not the time to be paralyzed in front of the TV. Look at the world in a new way, and build value for the future.
Which, the way I see it, means it’s a great time to be an entrepreneur.
One of the best moments in my career as an entrepreneur was meeting the singer Tony Bennett. This was a few years ago when my partner, Tim Poster, and I owned the Golden Nugget. Over lunch one day, Tony passed on a bit of wisdom that will never leave me.
Tony said he saw entrepreneurs as the artists of the future.
When he said it I was sort of stunned. I’d never really thought of myself as an artist. Yet here was one of America’s greatest recording talents — a man who has paintings hanging in galleries around the world — calling me an artist.
Over time, I’ve come to understand what Tony was pointing out. Entrepreneurs are always thinking creatively. The difference is we’re not working on a canvas that will express an intriguing idea or evoke a deep feeling as it hangs on a wall. We’re looking for a new way to solve problems and finding ways to make a business better and deliver a product or service that was previously unavailable.
The bottom line, in art or in business, always comes down to seeing the world in a new light.
Which brings me back to my point about its being a great time to be an entrepreneur.
Entrepreneurial minds don’t stop thinking creatively just because the economy is hurting. This is when creative minds focus. When better to solve problems than when they’re big and staring you in the face? As the saying goes: Without a problem, there is no solution.
The news never tells the complete story. Opportunities exist. Let me give you an example that starts in the tech stock boom during the late ’90s and comes out on the other side of the Nasdaq meltdown of 2001-02.
My partner and I ran a hotel reservation business in Las Vegas that started in the early ’90s with a desk, a phone and a chair. Our timing was ripe. We were selling discounted hotel rooms in Las Vegas right after Steve Wynn produced an erupting volcano in front of the Mirage, the first major property built in Las Vegas in 16 years.
The crowds flocked to see the Mirage and it launched a new era for the city. Imaginative developers built other themed hotels and vacationers stormed the city, using our company to book rooms at discounted rates. We became an innovator in online sales. Our online reservation system sent our business — Travelscape — soaring and enabled us to expand worldwide. Then Expedia came calling.
Travelscape was focused on hotel and vacation package reservations in Las Vegas and around the world. Expedia was selling airline tickets via the Internet. Combining the two was like putting hamburgers and french fries together on a plate for the first time in history. We eventually sold Travelscape to Expedia for $105 million in Expedia stock. It was a great deal for both parties.
Unfortunately, the tech meltdown hit. The bottom dropped out of the entire stock market because many of the tech companies being trumpeted were not really viable. Fear gripped investors, much as it does now because of the mortgage mess. Our Expedia stock plummeted from $34 to $7 a share. We couldn’t sell our shares because of the nature of the deal. Our $105 million profit lost roughly 80 percent of its value.
But here’s the thing. I was still working with Expedia during this period, and I saw that the hamburger and french fries model was working. Expedia’s numbers were shooting through the roof. Its stock was being punished simply because investors were panicking and associating it with failing tech companies.
After the initial upheaval, investors took a careful look at Expedia and saw its growth. The stock recovered, and then soared from $7 to $150 (split adjusted) by the summer of 2003. It was a great company that was moving forward in a creative way, just as inventive minds in the mortgage world are right now assessing the damage and figuring out how to navigate past the current dislocation. When they do, profitability will return. Nobody should lose sight of the fact that lending money to people to buy homes is a very lucrative enterprise. Always has been. Always will be.
The creative minds will always come through. Those who are overcome by fear and who can’t see past the muck are never going to step out of it.
It’s all about thinking creatively — seeing business as art.
I recently wrote a book about the experiences my partner and I had at Travelscape and subsequently as owners of the Golden Nugget. While doing a signing at a local Las Vegas bookstore, a little boy and his mom came to the table and asked what the book was about.
When I told him, the boy’s eyes grew wide and he beamed: “I want to own a hotel and casino when I grow up!”
A spirit like that is never going to be deterred by bad economic times.
There is never a lousy time to dream big. This is an opportune moment; great products and services will come out of our current disruption. In a difficult economy and a tension-filled election year, America remains the land of opportunity.
My business partner and best friend and I come from humble backgrounds, and we didn’t go to Ivy League schools or get MBAs. We made it by creating and growing our own business and then living and breathing that business.
It is tough to be optimistic when people are losing their jobs and companies are downsizing, but the right idea, the right business and the right partnerships can survive the down cycles. There are emerging prospects to bet big on in the future.
The creativity and imagination of up-and-coming entrepreneurs will drive the economy forward. I believe this because right now my partner and I are spending a lot of time thinking about our next work of art.
Tom Breitling is president of Breitling Ventures and author of “Double or Nothing: How Two Friends Risked It All to Buy One of Las Vegas’ Legendary Casinos.”