Built, Not Born

Built, Not Born Plot Summary

Introduction

Have you ever stood at the edge of entrepreneurship, feeling that mix of excitement and terror? Perhaps you've watched others launch businesses with seemingly unlimited resources while you count every dollar in your savings account. For many aspiring entrepreneurs, the perceived risk of starting a business feels overwhelming – like standing at the edge of a cliff, unsure if you'll fly or fall. Tom Golisano wants you to know something important: starting a business isn't nearly as risky as conventional wisdom suggests. In fact, he argues that traditional employment might be riskier in today's volatile economy. Through candid stories from his journey founding Paychex with just $3,000 and building it into a multi-billion-dollar enterprise, he shares practical wisdom that cuts through the mystique of entrepreneurship. You'll discover how to evaluate business opportunities with a single-page assessment, why "hire for attitude, train for skill" produces the best teams, and how creating deals where everyone wins builds lasting success. Whether you're contemplating your first venture or seeking to grow an existing business, these battle-tested principles provide a refreshingly straightforward path to entrepreneurial success.

Chapter 1: The Entrepreneurial Mindset: Risk vs Opportunity

When Tom Golisano told people he was leaving his stable job to start a payroll processing company, they thought he was making a terrible mistake. His accountant warned him he wouldn't make it. Business leaders in the industry insisted his plan was unworkable. After all, he was risking his family's financial security on a business concept the established players had dismissed – offering payroll services to companies with fewer than 50 employees. "I went to the library," Golisano recalls, "and discovered that approximately 95 percent of businesses in America had fifty employees or fewer." This was a massive untapped market the industry leaders were ignoring. When he presented his findings to his bosses at Electronic Accounting Systems (EAS), they refused to believe these small businesses were a worthwhile market. Their reasons included: "They can't afford to outsource payroll," "The profit would be too low," and "Their accountants won't like it." Undeterred by this resistance, Golisano took his modest savings of $3,000 and launched what would become Paychex. The early days were brutal. After his first direct mail campaign targeting Rochester businesses, he had expected to acquire sixty clients—he got six. His entire investment was burned through within six weeks. For four years, he couldn't afford to take a paycheck from his own company. Yet Golisano persisted, recognizing something fundamental that others missed: traditional employment isn't risk-free. "In 1982, Eastman Kodak had about sixty thousand employees; today it has fewer than ten thousand," he notes. Cradle-to-grave job security has vanished. Even with a good job at a stable company, you remain vulnerable to bad bosses, corporate downsizing, or industry disruption. The entrepreneurial mindset isn't about reckless risk-taking but about calculated opportunity assessment. True entrepreneurs constantly question business scenarios they encounter. Golisano shares how, even on vacation in Cuba, he found himself analyzing a cigar factory's operations: "Where did they source their materials? What was their output? How many workers did they have and what did those workers get paid?" This natural curiosity about business mechanics is the foundation of entrepreneurial thinking. What separates successful entrepreneurs from dreamers isn't fearlessness but rather their ability to realistically assess risk and opportunity. As Golisano demonstrates, challenging industry assumptions and identifying underserved markets can lead to extraordinary success—even starting with just $3,000 and a credit card.

Chapter 2: Understanding Your Business on a Single Page

One evening, Golisano was sitting in his car outside a struggling video game store. Observing the minimal foot traffic and even fewer customers making purchases, he quickly assessed the fundamental problem on a mental single-page calculation. "The arithmetic wasn't complicated," he explains. "The average price of a game is not very high, and the sheer numbers required to pay for overhead (rent, utilities, inventory, etc.), let alone an income for the owner, meant there would have to be a continuous stream of people entering the store for the business to be profitable." He broke down the store's likely annual overhead: $15,000 for rent, $3,600 for utilities, $20,000 for an employee, plus various other expenses including a modest $60,000 owner's salary. Total: approximately $110,600. With video games selling at an average price of $60 and a 40% gross margin, each sale would generate about $24 in gross profit. Dividing the overhead by the per-sale profit revealed the store would need 4,608 sales annually—nearly 15 sales every day they were open. In that location, with that minimal customer flow, it simply wasn't viable. This simple analysis exemplifies Golisano's approach to business fundamentals. "Tell me about any business opportunity," he says, "and I can grab a piece of paper and outline a plan detailing how it might become profitable—on a single page." His initial business plan for Paychex was exactly that: one page calculating operating costs and determining how many clients he needed to sell to break even. Golisano has little patience for elaborate business plans. "I'm not a fan of business plans that could double as doorstops. Who's going to read a thirty-thousand-word plan?" Instead, he advocates focusing on the key financials that demonstrate business viability and eliminating the peripheral statistics and projections. "These 'by the pound' business plans are often used in an attempt to justify the author's claims," he notes. The most dangerous mistake entrepreneurs make is allowing passion to cloud judgment. When Golisano reviews business plans claiming they'll capture 10% of the market, warning bells immediately ring. He points out that today, despite decades in the market, if you combine ADP, Paychex, and Intuit (the third-largest player in payroll processing), they still only have less than 20% of the potential market. This one-page assessment approach has guided Golisano's investment decisions for decades. Whether evaluating his own business ideas or considering investments in others' ventures, this straightforward financial analysis has consistently separated viable opportunities from wishful thinking. The discipline of distilling a business concept to its essential arithmetic provides clarity that elaborate plans often obscure.

Chapter 3: Sales Problems Disguised as Cash Flow Issues

"What do I mean when I say it's a sales problem, not a cash flow problem?" Golisano asks rhetorically. "I think the biggest mistake entrepreneurs make is they have a tendency to overestimate their ability to sell their product or service. Once they open their doors or hang their shingle, they believe the world will beat a path to their door. Take it from me, that just does not happen." This reality hit Golisano hard in the early days of Paychex. His first direct mail marketing campaign targeted nearly every potential prospect in Rochester. He enlisted his nephews and nieces to help seal envelopes and apply postage stamps. The mailing went out on December 15, 1970, and the results were sobering. "I was hoping to acquire sixty clients from the mail-out—I got six," he recalls. "Three thousand direct mail pieces and all I got was a lousy 0.2 percent return on my investment. Right away I knew I was in trouble." When entrepreneurs run into financial difficulties, they often diagnose it as a cash flow problem and head to the bank seeking loans. But Golisano sees it differently: "In simple terms, there is not enough cash coming into the business to pay the company's overhead. So they go to the bank and report that they have a cash flow problem, but in reality, it's a sales problem." The solution came when Golisano made a crucial discovery about his target market. He realized that CPAs didn't actually want to process payrolls for their clients—it was too much work for too little reward. This insight allowed him to work through accountants to reach their clients. "My initial direct mail strategy may have had limited success, but working with CPAs was hugely successful," he explains. "More than forty years later, it is still the way Paychex sells many of its customers." Golisano also shares a cautionary tale about managing the sales pipeline. When his Miami franchisee Chuck Wollmer called about his first sales appointment with a promising 25-employee restaurant, Golisano flew down to accompany him. Chuck delivered a technically perfect presentation on Paychex's services but completely missed multiple buying signals from the owner. The restaurant owner had explicitly asked "What do I do to get started?" and "When could we start?" but Chuck, focused only on completing his rehearsed pitch, never asked for the order. The lesson is clear: successful selling requires truly listening to prospects and recognizing when they're ready to buy. As Golisano puts it, "Nothing happens in a company until someone sells something." This fundamental truth is why he advocates that entrepreneurs personally sell their product or service initially, to experience firsthand what motivates buyers and what objections they raise. Understanding these dynamics is essential before cash flow problems can be solved.

Chapter 4: Hiring for Attitude and Creating a Winning Culture

When Tom Golisano was almost seventeen, he witnessed something that would shape his management philosophy forever. His father, who had taken a job as a truck driver delivering macaroni products after his own business collapsed, was publicly berated by a warehouse manager. "He screamed at my father, 'You are an incompetent, inefficient idiot,'" Golisano recalls. "I was stunned. I could feel my father's humiliation radiating from him as I stood there silent, confused, embarrassed, and disgusted on his behalf." In that moment, the young Golisano made two decisions: first, he would do everything possible to avoid working for someone else, and second, if he ever supervised others, he would never treat employees with such disrespect. This foundational experience shaped his approach to building Paychex's corporate culture over the decades that followed. "I always worked on the general basis of hiring for attitude, training for skill," Golisano explains. "This may not be an original thought, but hey, if it isn't broken, don't fix it." His approach to interviewing candidates was both unconventional and revealing. During interviews, he would offer water or coffee to candidates and watch if they thanked his assistant. After the interview, he noted whether they left their cup on the table for someone else to clear away and if they pushed their chair back into place. "To me, these few gestures of basic civility and respect tell me a lot about a person," he says. His most effective interviewing technique was silence—what he calls "the pregnant pause." After a question, when candidates would stop talking, Golisano would remain silent. "What they say next may turn the whole interview into negative or positive territory, or they may simply wait for you to speak," he explains. Most people feel compelled to fill silence, often revealing more than they intended. Training became another cornerstone of Paychex's success. After a negative experience as a young trainee being housed in a converted YMCA in a dangerous neighborhood, Golisano vowed that if he ever ran a company, trainees would be treated with respect and dignity. Years later, when Paychex expanded its headquarters, Golisano made the radical decision to place the training department in the main lobby so visitors would immediately see the importance the company placed on employee development. "The new extension allowed us to demonstrate that further," he explains. "Our architect suggested that we place the training department in the main lobby so that when visitors arrived, they would be surrounded by classrooms." This physical manifestation of the company's values made a powerful statement about priorities. "Having a motivated, committed team in any department will repay any investment you might make in providing top-quality training," Golisano notes. Today, Paychex delivers over a million hours of training annually to its more than 15,500 employees and has been recognized as one of the Top 125 training organizations by Training magazine for eighteen consecutive years. This commitment to developing people while maintaining high standards of professionalism and respect has created a distinctive culture that continues long after Golisano's retirement.

Chapter 5: Creating Deals Where Everyone Wins

"I've always believed that if you can manage to negotiate a deal both sides feel good about, or at least think is reasonable under the circumstances, then it's a win-win, and win-wins can lead to long-term relationships," Golisano explains. This philosophy of creating deals where everyone benefits has been central to his approach throughout his entrepreneurial journey. This principle was dramatically tested when Golisano decided to transform Paychex from a collection of partnerships and franchises into a single corporation. The challenge was enormous: sixteen partners and franchisees, each with their own territories, achievements, and expectations, needed to agree on their respective ownership percentages in the consolidated company. "There was simply no way I could have negotiated a deal with sixteen partners and franchisees with big egos who possessed a skewed view of their actual worth," he recalls. "It would have been a moving target; as soon as I made a deal with one person, I knew details would get back to someone whom I'd already reached a deal with and then that person would want to renegotiate." Golisano developed an unconventional solution. With the help of two trusted partners, he carefully assessed each territory's accomplishments and future potential. They created a comprehensive formula determining what percentage of shares each person would receive in the new company. The key decision: this would be non-negotiable. "I handed out the offers, and the next day we gathered around a boardroom table in a private room at the hotel," he recounts. "I opened with, 'This is it, this is the deal—we're not changing it. If you don't want to join us, that's okay. We'll protect your city and we won't go into your territory. No hard feelings.'" Going around the table, Golisano asked each person whether they were in or out. To his relief, every single partner agreed to the terms. It was a watershed moment that enabled Paychex to consolidate and eventually go public. "To reemphasize what a good deal it was," Golisano adds, "if every owner still owned the share of the company they were given that day, the one who received the lowest number of shares would now own shares in Paychex worth $250 million." Golisano's approach to negotiations extends beyond business to personal matters. He's been divorced three times, yet the total legal fees for all three divorces combined was less than $6,000. His secret? "I sat down with each of my wives and worked out a reasonable settlement before the lawyers became involved and started playing us against each other and turning everything into a crusade." One of his favorite negotiation tools is what he calls "the pregnant pause"—a well-placed period of silence that encourages the other party to fill the void, often revealing more than they intended. "People often ask me how to deal with someone who is employing the pregnant pause," he notes. "You have to have the strength of character to outlast them. It's not easy to sit in silence; it's in our nature to fill the void. But if you don't and someone else does, you can learn a lot of useful information." Golisano's philosophy rejects the "win at all costs" mentality that characterizes many business interactions. "I've never agreed with business gurus who treat business like war," he says. "Win at all costs seems to be their mantra, but 'wins' like that are often short-lived. Any relationship built on someone having to be the loser can never be good for a business in the long run."

Chapter 6: Building a Public Image Through Integrity

When Tom Golisano attended a conference and took questions from the audience, a woman asked him, "How many people have you had to trample on to get to where you are today?" His answer revealed the core of his business philosophy: "None. I decided long ago that it was far better and more effective to bring people along with me." This commitment to integrity has been central to how Golisano built Paychex's public image over decades. He recognized early on that a company's reputation isn't something that just happens—it's deliberately constructed through consistent actions and behaviors at every level of the organization. "Never underestimate the power of your public profile to influence everything in your company: employee morale, motivation, retention, recruitment, customer satisfaction, sales, media attention, investor interest, and more," Golisano advises. "Your public image is based on everything you say and do and on your overall corporate culture and philosophy." This image-building begins inside the company walls. At Paychex, Golisano insisted on cleanliness and professionalism in every office. He would often walk through the company after hours and check employees' desks. "Maybe twice a year I would walk around a random department after hours and find a desk that was particularly messy. I'd throw everything on the desk into a waste basket," he recalls. "It didn't take long the next morning for word to get around that I was always watching." This attention to detail wasn't arbitrary—it reflected the level of precision customers expected from a company handling their payrolls. "Paychex clients expect the highest level of security, accuracy, and professionalism; they deserve no less when they entrust the company with their payrolls and their employees' privacy," Golisano explains. "You can't deliver that level of service consistently, or maybe at all, if professionalism at every level is not part of the organization's DNA." Golisano also established a strict policy against disparaging competitors. When discussing industry leader ADP, he would say they were "the leader in large company payroll processing and we were the leader in small business payroll processing." He would add that "without the pioneering work carried out by ADP, Paychex wouldn't even exist." This approach built credibility with prospects while maintaining industry respect. When facing media challenges, Golisano followed a simple principle: "Never argue with anyone who buys ink by the barrel." His advice for handling business problems is straightforward: immediately own your shortcomings and quickly develop a plan to fix the issues. "It's not the problem that is the main concern; it's how you respond to it. Transparency can help mitigate the hit your corporate image might take." This commitment to integrity extended to charitable giving as well. Unlike many companies that use philanthropy primarily for publicity, Golisano's approach was more authentic. Over twenty years, he has donated more than $250 million to worthy causes, including funding eight medical institutions and three children's hospitals that bear his name. "The phrase 'a good deal for everyone' encapsulates my entire corporate philosophy, which in turn formed the basis of Paychex's public profile," Golisano concludes. "Make no mistake: nothing helps you build a positive corporate image better than always being seen to focus on ensuring all your customers, vendors, and employees get a good deal that works for them and, of course, you."

Chapter 7: Planning Your Exit Before You Need One

"Nothing lasts forever, and your starring role in your business will eventually come to an end," Golisano observes. This reality prompted him to consider his exit strategy just seven years into building Paychex—nearly four decades before he would actually retire as CEO. The challenge he faced was unique. Paychex wasn't a single company but seventeen separate businesses—partnerships and franchises across the country—with Golisano owning a significant percentage of each one. "None of my partners could afford to buy me out, and I couldn't afford to buy them out," he recalls. "So I asked myself the $64-million question (which would later become a $28-billion question): 'Where's our liquidity?'" His solution was consolidation—merging all seventeen entities into a single company. Though the process took years and created significant management challenges, it positioned Paychex to eventually go public. This strategic decision created the exit path that would ultimately allow all shareholders to realize the value of their ownership stakes. "It is interesting to note," Golisano adds, "that if the two people who had the least equity at the time of consolidation had retained all their shares, their individual stock today would be worth $250 million." This foresight stands in stark contrast to many entrepreneurs who build successful businesses but fail to plan their departures. "Being company rich and cash poor is to have all the responsibility and none of the fun," Golisano notes. "Even if you enjoy running your business, you may decide it's time to retire, or there is always the possibility you might become ill and need to liquidate your assets in a hurry." When considering selling a business, timing is crucial. Golisano shares the story of Safe Site, a document storage company he invested in that encountered serious financial problems when its controller was caught kiting checks. When competitor Iron Mountain approached with a lowball offer of $14 million, Golisano refused, instead investing additional capital to turn the company around. "It's never a good time to sell when you're on the back foot," he explains. A few years later, after the company had recovered, they ultimately sold it for $63 million. For business owners considering passing their company to family members, Golisano urges honest assessment: "Do they have the skills, experience, and business acumen to keep your business growing? And how much of your time and help are you willing to give them to teach them how to be successful in the business?" When Golisano finally stepped down as CEO of Paychex after 33 years, his exit reflected his contrarian approach to business leadership. "When I finally stepped down as CEO of Paychex, I didn't have a golden parachute and I took no stock options, even though they were offered," he reveals. "My retirement package was my desk and my credenza, two items I treasured." To demonstrate his commitment to a clean break, Golisano stayed away from Paychex's offices for three months after his retirement, allowing his successor space to establish leadership. "My earlier advice about not looking back on the sale of your company, and I'll add to that not to look back at prior deals you made and wonder whether they were the right or wrong things to do," he counsels. This thoughtful approach to succession planning ensured that when Golisano did exit, both he and the company were positioned for continued success—a testament to the value of planning your departure long before you need to leave.

Summary

The entrepreneurial journey isn't about avoiding risk—it's about understanding and managing it better than others. When you distill Tom Golisano's wisdom to its essence, one truth emerges: building a successful business requires the courage to challenge conventional thinking combined with the discipline to make decisions based on solid financial fundamentals. Don't wait for perfect conditions to start your entrepreneurial journey; instead, focus on creating value through exceptional service to an underserved market. Begin by testing your business concept with a simple one-page financial assessment that honestly calculates what you'll need to break even. Hire for attitude first, as skills can be taught to those with the right mindset. And remember that long-term success comes from creating deals where everyone—employees, customers, vendors, and you—benefits. The path from startup to success isn't about trampling others but bringing them along with you on the journey.

About Author

Loading...

David Goggins

Read more

Related Books by David Goggins

Loading...

Never Finished

David Goggins

Unshackle Your Mind and Win the War Within

★★★★½4.5

Loading...

Can’t Hurt Me

David Goggins

Master Your Mind and Defy the Odds

★★★★☆4.2

Loading...

Endure

David Goggins

How to Work Hard, Outlast, and Keep Hammering

★★★★☆4.0