Maybe it shouldn't come as a surprise that so many of the CEOs I interview harbored an ambition to run their own companies from a young age. You think of doctors, who want to heal people. That's very specific. Or teachers, who want to, obviously, teach. Or artists driven to paint , or even reporters like me, who always loved the craft. By contrast, some of the CEOs I met didn't particularly care what kind of business they ran, as long as they were running it, at least at first. Their passion wasn't, at least initially, for the business, but for running the business. If you compare it to marriage -- they didn't marry for love, but went searching for the right match.
That was the case with David Donald, co-founder of PeopleShare. During my interview in Sunday's Philadelphia Inquirer, I asked him to describe how he got into business.
"When I graduated college I worked for Siemens at a computer analyst," Donald said. "I always knew that I wanted to start my own business, but when I graduated college [in 1986], I probably had about ten cents to my name. I started doing research and I learned about staffing as one of the fastest growing industries. It was relatively easy to go to market. I did some research and in 1988 I opened my own staffing company.
Q: You knew you always wanted to own your own business. Why? What did you dad do, your mom?
A: So, my mom was her own business owner.
Q: What kind of business?
A: Believe it or not she was in a similar type business. She did direct placement for IT professionals.
Q: And it was her own business?
A: It was her own business. She was a single parent and raised myself and a brother and sister on her own and was just an amazing woman.
Q: Wow. So it wasn't a completely unknown business.
A: It was similar, but different. Similar that we were placing people, but one is staffing where the employees are on our payroll. Hers was one where it was direct placement and people would hire people directly.
Q: Okay. What other businesses had you considered?
A: I considered a payroll business, like an ADP or a Paychecks. It was too transactional. The margins were too thin. It wasn't a relationship business.
Q: Anything else?
A: That's a long time ago. That's all I remember
Q: Where did you set up your business?
A: The first business I set up was on the other side of Pottstown.
Q: What was it called?
A: It was called Keystone Staffing.
Q: That's mentioned in your bio.
Q: When you say it was easy to get to market, what kinds of elements of it made it so simple?
A: As far as opening a business, back in the day before personal computers were on everyone's desk. You just had that office space, a recruiter, a salesperson and you could go to market. The biggest challenge at the time is that we are a very capital intensive business, meaning that we fund our payroll for a couple of weeks before our clients ever pay us.
Q: Wow, that's a cash flow issue for sure.
A: So it's cash intensive. That really is the biggest market barrier for most people.
Q: How did you overcome that?
A: I went to the bank and they were dumb enough to give me a loan. I don't know if you want to say that, that they were dumb enough to give me a loan.
Q: Maybe, they weren't that dumb. I mean if you don't have the client, then the money isn't being spent. And if you do have the client, they are likely to get paid.
A: You're absolutely right, though, because they collateralized the loan against my receivables. So they're not going to have receivables unless [I] put people to work.
Q: Did you end up liking the business?
A: I loved it.
A: I loved how fast-paced it was, how transactional it was, and how your business was day-to-day. It wasn't one where you had a sales pipeline that was 18 months out. It was just every day something new happened.
Q: That's a good point. I'm the same way. I don't have the patience.
A: Exactly. I want something happening every day. It's funny because our customers will talk to us sometimes about their initiatives in terms of quarters. We do long-term planning here, but we think literally day-to-day and week-to-week. That's the longest time frame we think about, because that's how fast paced our business is.