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Felix Dennis says you'll never get rich working for somebody. Not rich-rich like he is, to the point where he can only estimate that he's worth somewhere between $400 million and $900 million.
Dennis is the chairman and founder of Dennis Publishing, a privately owned London company that publishes dozens of magazines, including The Week, and which last year sold Maxim, Blender and Stuff to a private-equity firm for about $240 million.
His journey as an entrepreneur began shortly after he was briefly imprisoned in England in 1971 for editing a humor magazine that the government deemed obscene. Upon his release, determined not to become "the token hippie in some record company," Dennis began pestering acquaintances for capital and publishing small magazines such as Cozmic Comics and Kung Fu Monthly, patching together financing and good will from friends, printers and distributors.
His book "How to Get Rich: One of the World's Greatest Entrepreneurs Shares His Secrets," published last spring in the U.S., mostly skips the braggadocio and platitudes typical of self-made-millionaire memoirs. There's entertaining and practical advice for early-stage and growing businesses about raising capital, hiring talent and negotiating, with particular focus on the necessity of maintaining ownership -- the key to eventual riches. There's a lot about his mistakes, too, including an admission that in the late 1980s and early 1990s, Dennis blew through $100 million "on drinking, taking drugs and running around with (prostitutes)" before landing in a hospital.
Driven by desire
A published poet, Dennis wrote the book without a ghostwriter. He spoke with Inc.com from his New York office.For a book called "How to Get Rich," you spend a lot of time dissuading potential entrepreneurs from trying. You say I'll need to get used to groveling and failing, and I'll need to be so driven, that it may put my marriage at risk or hurt my relationships with my kids.
It's kind of a crazy thing to decide that you're going to be worth tens and tens and tens of millions of dollars and set out to do that. It doesn't suit everybody. I warn people throughout the book that if you're not driven by this desire, you really shouldn't try. It will lead to a lot of heartache and a lot of sacrifice, and not just you doing the sacrificing.
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OK, so say I'm ready. I have a great idea. Now what?
I think having a great idea is vastly overrated. I know it sounds kind of crazy and counterintuitive. I don't think it matters what the idea is almost. You need great execution. A lot of people say they've got this great idea, and "if only I had the capital" they'd go out and do it. Usually this is a fantasy. It's just an excuse for not confronting their fear of failing.
How does fear of failure come into it?
You're bound to fail sometimes. It's a 100% certainty. You've just got to ignore the fact that some people will laugh at you. It makes them feel better that they haven't even tried.
But a great idea can't hurt, can it?
As long as you do not become more interested in proving to others that your idea was right. I made this mistake with Blender, which in its original form was a magazine on CD-ROM. It wouldn't sell, but I became seduced by the technology instead of listening to what the numbers were telling me and what wiser heads in business were telling me.
I was just so in love with the idea -- and proving that I'd been right to back it -- that I kept pouring good money after bad. I wasted 4, 5, 6 million bucks.
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You advise borrowing capital from friends and family and suppliers -- anything to avoid trading a piece of the company for venture capital. Why?
I've seen so many young women, young men who use the shares in their companies as an incentive to employees and to people who are loaning them capital. They should not do that. It's a cardinal error for which you will pay and pay and pay.
Getting rich all comes down to ownership. Every single percentage point counts. You don't need to start handing out shares like sweeties, because it will come back to haunt you. In the end, you're going to get your money from the sale of an asset. The less of that asset you own, the less money you will get. It is as brutal and as simple as that.
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It can't be fun putting your friends' and relatives' money at risk.
You should tell them you are going to risk losing their money. But if you haven't got the (nerve) to ask people for money because you're going to lose it, then you're certainly never going to get rich.
People will surprise themselves at how much money they can raise. There are a lot of vendors who are willing to take a risk on you -- if you are totally upfront with them and as long as they don't risk too much. That's the way I did it. There was a printer that I stuck with for 25 years because he was the only guy that would print for me when, in the early years, he was not entirely certain he would get all his money.
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