Rags to Riches: From High School (Almost) Dropout to Having $100 Million
Seven Lessons for Getting Rich and Doing Good
Most people think you need a high school diploma or a college degree to be successful. But, I’ve met outright flunk-outs who’ve become millionaires. In my first Rags to Riches column here at AOL – where we look at how ordinary people become extraordinarily wealthy -- I want you to meet one of them: My friend Bob Lorsch.
A Chicago native, Bob completed four years of high school but only pulled in the equivalent of a D average. His German teacher wasn’t about to let him get away with it, so he held him from graduation, forcing him to take summer school and boost his grades.
Bob was bored at school, but his mind was always ticking. He began to think about ways to make money. He had a knack for selling things – or coming up with ideas that would help sell other company’s products. Even if you were to meet Bob today, he’d tell you how good he is at selling himself. “When I meet someone, I’m in their face. They’ll never forget me,” he says.
That’s one reason Bob Lorsch has gone from high school almost-dropout to one of the brains behind the original launch of Microsoft’s Windows, to creator of a prepaid calling card program that built his net worth to $100 million. Today, because he can sell himself, Bob has become a fixture in Los Angeles who is often seen hanging out with the likes of Elton John, Gene Simmons and Diana Ross.
How did Bob do it? How can you? Here are seven winning lessons from Bob Lorsch:
Lesson No. 1: Don’t Let Lack of Education Hold You Back
Who said you have to be a PhD, or even a college degree, to make tons of money? It’s true that a poor academic record may make some people think you failed or didn’t take the “proper” route. But the fact is people like Bob – who either found themselves bored in school or “living in a world inside their head” – can do well if they put their unique talents to work.
“I have taken a path that is different than what my teachers and the system wanted me to do,” says Lorsch. “I wanted to go outside the system. When I was fourteen years old, I didn’t know that was going on in my head. But rather than being congratulated for thinking out of the box, I was punished for getting poor grades.”
Note to parents: even though studies show that those with college degrees overwhelmingly earn more than those without, in the business world, unorthodox thinkers often end up enjoying great financial success.
Lesson No. 2: Think Outside the Box
Truth is, Bob didn’t have the same opportunities as others who attended college. With “assistant produce manager” at a grocery store as the only job experience under his belt, Bob found interviewing tough going.
“They looked at my background, which was zero,” Lorsch painfully recalls of his meeting with a recruiting firm.
But the firm must have noted Bob’s ability to think creatively, sending him to interview with an ad agency. “The ad agency asked how I would market these rubber stamps and I came up with the idea of marketing them at retail locations throughout the country with a coupon system.”
Rubber stamps may not sound like a thrill, but they are exciting when you think of the tens of millions of dollars generated by being in every post office in the world.
Years later, after turning his ability to think outside the box into his own advertising agency for clients that ranged from Neutrogena to TV networks, Bob was asked by Microsoft to assist with the launch of Windows at the famous Las Vegas Comdex convention for technology. But Microsoft faced a tough problem: they had come to the show late and the usual advertising facilities had been booked months in advance. The software giant still wanted every convention attendee to know about Windows. What did Bob “Outside-the-Box” Lorsch do with Microsoft’s big budget? With the help of some generously tipped hotel personnel, he made sure that 70,000 pillows in 35,000 hotel rooms had a silk-screened poem right on the pillow case, inviting the guests to the Microsoft booth.
“It’s one thing to go out and buy TV commercials or signs on taxis,” says Lorsch, “But I don’t think anyone had walked down the strip and peeled $100 bills to bell captains and housekeeping managers so that in two days every pillow had the Microsoft message.”
Lesson No. 3: Don’t Censor Your Own Ideas
“Many people come up with great ideas but they are too intimidated by their surroundings to share those ideas, so they censor themselves,” Bob explains. “Don’t be your own worst enemy.”
That’s advice that applies to virtually any situation – whether you’re talking to your boss or pitching for business or trying to raise money for your own company or simply trying to connect with someone “higher up” than you.
Bob says he was able to “hit home runs consistently” by not being afraid to share his ideas in the advertising business.
“When a baseball player is standing at the plate and swings at the ball, the ones who hit the home runs are not the ones scared the ball is going to hit them in the head,” he says. “They’re the ones grabbing that bat, keeping an eye on that ball, and they dive into that ball.
And don’t think your ideas always have to be perfect. You will impress others simply because you took the time to develop some ideas – rather than do nothing at all.
“If I came up with a bad idea, it was still an idea,” says Bob. “The client would tell me if it was a bad idea; I was not going to censor my own work product.”
In fact, he did come up with an idea for one client – to develop what is now the popular prepaid calling card. When the client said they weren’t interested, Bob asked if he could execute on the idea himself. So with just $5,000 of his own money, some credit card debt and investments from friends, he turned his idea into a company worth $1 billion and later sold it to AT&T.
“I could have thought ‘Gee, my client didn’t think it was a good idea, so it must not be,’ says Lorsch. “But as a result of not censoring myself, and of believing in my idea, I went out and hit the cover off the ball and created wealth for me and a lot of people.”
Lesson No. 4: Bring the Universe to You
This is another way of saying ‘Create Demand.’ Make someone want you or your product or service so they will listen, they will come to you.
Bob recalls his earliest days selling cigarette filters to liquor stores during their business hours. “I’m there to sell the business manager something that he doesn’t want to buy, right? I’m selling out of the trunk of my car and he doesn’t know who I am. I have to collect the money before I leave or I’ll probably never get paid. And so the only way I could do it was to demonstrate demand.
So he would demonstrate the product “on a customer within ear shot of the manager,” by simply putting the filter on a customer’s cigarette and watching them take a few drags.
“You’d see all the dirt and the crap that goes into your lungs instantly and the person would turn to me and say, ‘Where can I buy these?’” Bob remembers. “The manager would be sort of obligated to put them in the store so that he can sell them to the customers on the spot.”
Lesson No. 5: Pay it Back, Pay it Forward
Bob remembers once getting advice that changed the way he looked at life. Give back to the universe, he was told, and you’ll get back in return. Today, Bob practices this every day. Nearly all businesses in which he’s been involved—from cigarette filters, to his investment in CancerVax (where he lost millions due to the FDA’s rejection of key data), to his current venture www.mymedicalrecords.com–have been about saving lives. And his philanthropic efforts are always about supporting others.
“I view every situation and every single individual who comes into my life as an important individual and someone who can affect my life in one of two ways: either improve my net worth because they can be additive to my business -- or improve my personal being.”
And it works both ways. “If I change their life and give them something they can go use somewhere else, the world’s a better place.”
Bob takes this advice a step further in the belief that doing good for someone leads to a better life for others. “If someone comes to me and they have a story or a need and I have something to empower them with, I’ll empower them,” he says. “They’ll feel fantastic, and who knows? They may be the person who invents the next cure for cancer or donates 20 hours of community service to a children’s hospital. It can be the difference between a young child walking through a science center and ultimately being the person who discovers a new technology that will change the world.”
Lesson No. 6: 72 Degrees of Separation
All successful people have good networking skills, but Bob has an almost Zen-like feel for what it takes to reach people.
“When you put out there in the universe that you want to connect with somebody on a particular project with a particular organization, it’s amazing what can come to you.”
Bob combines this innate sense with a fearless approach (see Lesson #3) to getting to the right contacts.
“When I see an individual or an organization that I want to get to know, I’m not scared to pick up the phone and call the chairman or any of the board of directors. I go to the Internet. I search out management from the CEO and the board members to senior vice presidents to vice presidents. Then I’ll send an e-mail to individuals that I know are in related industries and I’ll say (for example, right now I’m interested in meeting companies in medical technologies), ‘Who do you know at Web MD?’ I’ll send the emails to everybody I know at an information technology firm and somebody surely will know somebody on their list.”
It’s also why Lorsch has a Rolodex of almost 10,000 names, and why he returns every email and every call personally. And if he can’t do it within 24 hours, he’ll apologize.
“There’s a theory that if you make a list of the most important 72 people that you know in the world, you can reach anybody -- and I’m convinced of it,” he says.
Lesson No. 7: Set & Raise Your Financial Goals
Bob may be a creative guy, but there’s one place numbers always play a role: setting goals. For public companies reporting quarterly earnings or individuals like Bob, setting financial goals keeps you focused
“When people ask how I got started, I say by trying to create a job of $100 a day,” Bob says of his days selling cigarette filters. “That’s $3,000 a month, which afforded me the ability to live in the nicest apartments in West Los Angeles or Beverly Hills and actually dine at the better restaurants and establish myself as somebody that people wanted to hang around with -- despite the fact that I wasn’t able to graduate with my high school class.”
Bob has raised his goals with each financial success. He took the prepaid calling card company to a market value of $1 billion in less than three years. His goal now, he says, is to make MyMedicalRecords a company worth $2 billion.
And through it all, you just know Bob Lorsch will retain the drive and optimism that made him who he is.
“Every interaction can change the world, improve your well being, can make you wealthier, and can make you feel better,” he told me. “And how you feel definitely affects your success pattern in your life.”
