Entrepreneur and author Bill Murphy offers tips for success

by Thomas Heath, October 10, 2010

I was lunching the other day with a chatty Washington investor who dabbles in local startups, when he suggested I list business lessons in a Value Added column.

His timing was perfect.

Bill Murphy Jr., 39, a former Washington Post reporter and aspiring entrepreneur, has a book coming out Tuesday called The Intelligent Entrepreneur...How 3 Harvard Business School Graduates Learned the 10 rules of successful Entrepreneurship...

What I found interesting about Murphy, who lives in the Washington area with his wife, a school principal, is that he is an entrepreneur himself. The first venture was a profitable campus newspaper at the University of Connecticut law school in Hartford that he ran for two years, and then passed on to succeeding students.

The second was a magazine he ran from 1997 to 1998 called JD: The Law Student's Survival Guide. He cobbled it together with a couple thousand dollars, free office space from a Hartford area business group and free graphics help from a nearby college.

"We were scrappy as hell," Murphy said. They called their venture the Mercury American Publishing Co. to make themselves sound big. He and his business partner drove a rented Ryder truck from Boston to Washington, sneaking into law school buildings and slipping copies into student mailboxes and campus newspapers.

With Murphy writing under various pen names, the magazine published only three issues. Most of the advertising came from two companies that offered competing bar exam test prep courses. Murphy took his small profit and decamped to Hawaii, where he stayed with his brother to decompress.

The magazine taught him an important business lesson: "Think about the problem you are solving before you come up with the solution."

"We misidentified our customers," he said. "We should have designed the magazine to appeal not just to law students, but to MBA's and graduates from top schools."

Why?

"We should have known our customers were the McKinsey & Cos., the Goldman Sachses, the big consulting firms and big law firms who wanted to recruit smart, ambitious young people. That's a much larger market than the bar review companies that were our bread and butter."

Murphy is nothing if not intrepid. Like most entrepreneurs, he networks like mad. Desperate to get journalism jobs, he would hang out at the National Press Club bar, trolling for contacts. He paid $350 at a silent auction for the right to have lunch with USA Today editors, where he asked them to hire him. (They didn't.)

He went to work for Woodward in 2005, and after a short stint in Iraq for The Post, he left to write books.

The idea for the Intelligent Entrepreneur came from his brief immersion in small business. He Googled phrases such as "earned her MBA at Harvard" and "graduated from Harvard Business School," which led him to interview more than 150 people.

"I asked them to tell me who were the success stories and the most interesting people they had graduated with," Murphy said. That led him to a dozen people, which he narrowed down to three, including Beck.

To sift through the group, he established two thresholds: the first was that the company must have more than $50 million in revenue, or the entrepreneurs had to have made $20 million if they sold the firm.

The second threshold was that the company had to have created something. It could not be just an idea.

"They had to have created something of real value," Murphy said. "It had to be something real."

Beck was a perfect candidate. She built a multi-million-dollar business from nothing. "It was a real product because you could walk in the stores and see the products. It wasn't financial Jujitsu. And she knew her customers, what they needed, and focused like a laser on meeting those needs."

Here's Murphy's advice to entrepreneurs:

1. Be committed to entrepreneurship, the act of creating something, rather than a single idea. Beck threw out several ideas, including certified e-mail, before she settled on cosmetics stores.

2. Solve a problem. While at Harvard, Beck had to drive all over Boston to find various cosmetics. How about a company where they were all in one location?

3. Think big. Thing new. Think again. In other words, scale up. Beck went after an industry used by half the population and hopes to have hundreds of stores some day.

4. You can't do it alone. Have a support team of people you know and trust. Beck worked so well with her co-founder that she married him.

5. You must do it alone. Be decisive. Beck killed an idea to sign long-term leases on some stores, which turned out to be the right thing after the market crash.

6. Manage risk. It's true about everything in life. Like many entrepreneurs I have written about, Beck is fanatical about maintaining a cash reserve. She also paced herself, not going for the "get big fast and flip it for a few million bucks" mentality. That's why she has 27 stores now and her early competitors are gone.

7. Lead. Reminds me of Under Armour founder Kevin Plank: "You need to put your hands around the throat of your business, and you need to run it." Beck gets behind the cash register to ring up sales and for years insisted on interviewing every new employee.

8. Learn to sell. Bluemercury at its core relies on sales. Like my wife, Polly, told me once: if you can sell, you will always have a job.

9. Persistence is everything.

10. Time, not money, is the key resource. Have a life outside of work, and find time to give back.

It's time for Entrepreneurial Spirit...It's time to use your money to shine! It time to make some Intelligent Decisions....

Entrepreneurial Spirit