Bob Reiss grew up in
Brooklyn and attended the New York City public schools. He is a
graduate of Columbia University (where he played on an undefeated
basketball team), a U.S. Army veteran, and a Harvard Business
School graduate. He has been the subject of two Harvard Business
School cases--taught at some 80 institutions around the world--and
has been a guest speaker in entrepreneurship classes at the
undergraduate, graduate, and executive levels. He is the founder
of a number of highly successful companies, including Reiss games,
R & R, Inc. and Valdawn, Inc., a division of R & R. (R
& R / Valdawn was named to the Inc. 500 list of America's
fastest growing companies in 1992, 1993, and 1994.)
He has been involved in 14
start-ups, including a pencil company, a national sales rep
company, 3 game companies, a consulting company, a personalization
company, and a watch company. Currently, Bob is involved in
marketing Low Risk, High Reward to channels of distribution, the
publisher does not sell.
married to an entrepreneur and has five daughters. He resides in
Boca Raton, Florida.
Cruikshank is co-founder of Kohn Cruikshank Inc., a
Boston-based firm specializing in complex communications for
corporate and institutional clients. He is the author and
co-author of numerous books of interest to managers. These include
histories of the Harvard Business , New England Electric, Cummins
Engine Company, and Perdure Farms; a book on corporations and
architecture for Herman Miller, Inc.; the definitive guide to art
in public places (Going Public); and books on numerous other
subjects, ranging from logistics in the Gulf War to the inner
workings of the real estate "game."
I never consciously thought about writing a book although some professors and students whose entrepreneur classes I spoke to suggested it. The major reason I did so was The Free Press asked me to (The up front money showed me it was for real.). I thought it would be a real fun challenge and, to a great extent, a way for me to give back to a bigger audience than guest speaking at individual schools.
This is a
Perspirational book more than an inspirational book. It is practical in
that it gives you options and tells you how things work and makes
suggestions on subjects like:
In 1987, Harvard Business School wrote a case study on a company I formed in 1984 to create a TV Guide Trivia Game at the onset of the Trivial Pursuit craze. With one secretary in our company and some strong strategic alliances and lots of good relationships built up over 25 years, we sold more than $7,000,000 worth of games generating a $3,000,000 profit in one year and then disbanded the company. This case went on to be taught to Entrepreneurship classes in some 80 universities. I have spoken to these classes at 11 schools; some I've spoken to each year for over ten years, gratis. I've enjoyed my interaction with these students immensely, learned a lot, and developed some great friendships with the many outstanding teachers at these schools.
This R&R case has proven to be an excellent device for teaching the many key aspects of starting and running a small business. For this reason we decided, with the kind permission of the Harvard Business School, to include the entire case in the appendix, along with my analysis of all the obstacles faced and solutions employed.
I believe the lessons here are timeless and that the case is a practical illustration of much that the book advocates. It's part of the appendix so as not to break up the flow of the book. However, its position belies its value. I recommend you read it. A profitable idea may be waiting.
There is no one way to build a successful company. It was my intent in writing this book to expose some of the myths about Entrepreneurship and to offer lots of practical, real world ideas and options to a business owner. Ideas that could be translated into profitable action. I believe that much of this entrepreneurial thinking applies to employees of large corporations as well as small business owners and wannabe entrepreneurs. Subjects like risk management, salesmanship, trust building, and positive thinking cut across all businesses.
I tried to give more emphasis to things not taught at schools, to shy away from too many stories, and to shed some light on the problems you may face at various stages of the life cycle of your business. I am sure not everything applies to everyone. However, it is my hope that there are enough goodies for every reader to make this read worthwhile.
- How to do a Cash Flow
- How to Mitigate Risk
- How Factors work
- How to Price a Product
- How Licensing works
- Raising Money
- Importance of Selling
and how to improve
- Increasing your
- How to do a Break-even
- Characteristics of
- How to get that Idea
- Pro's and Cons of the
Various Business Forms
- How Sales Reps work
- Gaining Credibility
- Getting Orders
- Getting Reorders
- Working with Suppliers
- Dealing with Knockoffs
- Managing Inventory
- How to build trust
- Why Buyers Buy
- Building Products
- Getting Free Advice
An Entrepreneur's Secret: Take No
By Jeffrey A. Tannenbaum
Many people shun becoming
entrepreneurs because they dread the essence of the game: taking risks.
Robert S. Reiss says he owes his success as a business owner to avoiding
Bob Reiss, 63 years old, has started 16 small-business ventures in his
career, shunning risks all the way. His counterintuitive strategy
regularly astonishes business-school students assigned to study it.
Paradoxically, Mr. Reiss specializes in a high-risk field, selling vogue
items whose time quickly comes and goes. "You try lots and lots of
things, because you don't know what going to work," he says.
Mr. Reiss usually sells or phases out his companies when their fad
products stop selling. Today he owns mainly Valdawn Inc., a
four-year-old watch marketer here. Valdawn's sales of Asian-made novelty
watches more than doubled to $7.2 million last year from $3.3 million in
1992, Mr. Reiss says.
At all his ventures, Mr. Reiss says he keeps overhead to a bare minimum,
avoids owning factories or warehouses and brings in partners to share
the investment. "My energies are spent on laying off risk -
dividing it up with other people," Mr. Reiss says.
It's an approach many long-surviving business owners take, says Howard
H. Stevenson, a professor at Harvard Business School. "Many people
think of entrepreneurs as plungers and gamblers," Prof. Stevenson
says. "But most successful entrepreneurs, if they take any risk at
all, are very calculating about it." Among entrepreneurial
successes, cautious souls are far more common than people like Donald
Trump, he adds. One of the case studies assigned to entrepreneurship
students at Harvard's business school involves Mr. Reiss's low-risk
trivia game venture from the early 1980's.
When Mr. Reiss noted the success (in Canada, initially) of Trivia
Pursuit 11 years ago, he shot off a letter to TV Guide magazine,
proposing the creation of a rival TV Guide Television Trivia Game. Mr.
Reiss says he turned to TV Guide because it established name would
reduce the risk involved in a game venture. Also, the magazine could
provide advertising space seen by millions. When the publisher agreed,
Mr. Reiss called a wealth friend in Chicago; the two men formed Trivia
Inc. to create and market the game.
Mr. Reiss had no funds of his own at risk. The venture used his Chicago
partner's line of credit to arrange for manufacturing. Instead of paying
a fee in advance to the specialist hired to design the game, Mr. Reiss
offered a royalty on future sales. That was much more costly in the long
run, but it reduced the venture's risk, Mr. reiss says.
The venture fared very well indeed: about $7 million in sales on a
$50,000 investment, according to Mr. Reiss. Of course, he had to split
the profits with his partner - but he says it was worth it to reduce his
Minimizing risks also lets Mr. Reiss focus on unglamorous
fundamentals-such as sales. Though he is a Harvard M.B.B. himself, Mr.
Reiss rates selling techniques - largely neglected in business schools -
as more important anything elase.
Instead of making feverish sales pitches, more salespeople should sit
patiently while customers talk about their needs, Mr. Reiss says.
"The most effective thing is learning how to listen," he says.
For instance, Mr. Reiss chose a cat design for his first novelty watch
after one buyer told him that such designs were in strong demand. (The
watch, the first of about 180 styles, sold well.) Besides listening, Mr.
Reiss says he also explicitly asks for orders-a routine step that many
salespeople neglect to take.
Although caution isn't always enough to ensure success, it does allow
Mr. Reiss to avoid losing much money even when his ideas flop-as he says
they often have. In 1988, for instance, Mr. Reiss's R & R Recreation
Products, Inc. introduced a line of novelty picture frames that made
portraits resemble magazine, such as "Man of the Year" issues
of Time. The entrepreneur persuaded Time and other magazines to go
along-and he won about $3 million in orders from retailers.
But the frames failed with consumers, and there were almost no reorders.
In less than two years, the product died.
Still, Mr. Reiss says he lost only time and effort, not money: indeed,
he says the business turned a slight profit while it lasted. he says he
had spent more than half his time for a year setting up the business.
But he paid nothing in advance to Time and the other, promising only
royalties. He built no factory to make picture frames. Instead, he
brought in a frame company in Chelsea, Mass., as his partner. R&R,
which is still extant, moved on to other projects. "All I could
lose on a deal like the picture frames is time," Mr. Reiss says.
Mr. Reiss started his career as a sales executive for a pencil company
in the 1950s. He went into business for himself in 1959, starting a tiny
New York company that earned sales commissions from manufacturers for
getting their products into stores. "I wanted to be my own
boss," he says.
Except for a period in the 1970s after a larger company bought out his
first venture, Mr. Reiss has been his own boss ever since. "Making
things happen-not talking about it-gives me a big kick," he says.
"I have no idea what people at big companies do in meetings all
day. They talk things to death."
Today, Mr. Reiss is building one of his biggest ventures ever. Promising
faster delivery than the biggest watch makers, Valdawn aims to hit $20
million in sales for 1994, and $50 million within a few years, he says.
The company has five employees including the boss, and plans to hire one
or two more this year. Valdawn, Mr. Reiss says, "is my first chance
to build a long-term, large-volume company, something that isn't just a
But Mr. Reiss, as usual, says he doesn't stand to lose much if his projections
are wrong. He still owns no warehouse or manufacturing facility. Valdawn
increases watch orders from its suppliers only when it has firm orders
in hand from its own customers, he says.
Mr. Reiss says that for now, he will concentrate on building Valdawn,
but further ventures are always possible. "There are always huge
opportunities," he says, "if you just sit back and keep