The Dream: How I Learned the Risks and Rewards of Entrepreneurship and Made Millions (4 page)

In my eagerness to escape, I applied to an accelerated program at Accel Middle College, which had a program that offered college classes in a college setting and could lead to early graduation. The students were focused on academics, and nobody made fun of my turban or asked silly questions about “my people.” Still, I didn’t find it exactly inspiring. If school was supposed to prepare one for life, it didn’t seem to
be working for me. I wanted to start living, not endlessly preparing. What’s more, all that preparation seemed like a waste of time. I am impatient by nature, and I wanted to make myself useful to my family. I was tired of watching my parents struggle. They were putting in fourteen-hour days just to get by—my father at the post office, my mother as an RN—and they hardly had time to enjoy the family. That, too, made me think: I had been taught that life was about balance, but their lives were completely without balance. They worked so hard that there was little time for anything else. It took me several years to learn that happiness is elusive without balance.

In the early evening, exhausted, my father would come home from his job at the post office, sit at the kitchen table, and—after perusing the business sections of various newspapers—park himself in front of the computer to study the stock market. Before long, he was actually making more money as a day trader than he was at his job. What’s more, there was so much easy money around that he was buying stock on margin, which meant he was gambling with funds he didn’t have. If he had $5,000 to invest, for example, he could buy $15,000 worth of stock. If the stock went up, he would make money on the full $15,000, turning a profit on shares he hadn’t paid
for. He thought this was wonderful and miraculous. It was what America was all about.

This is when I first heard about DoubleClick, a company that provided advertising services on the Internet. In the company’s initial public offering (IPO), it was valued at $300 million, but at its peak, it was said to be worth $15
billion
dollars. It was insane, but it was also very appealing, and the more closely I looked at DoubleClick’s world—advertising—the more fascinating I found it.

I began to see that perception was reality. Many of the most successful companies were making no money whatsoever, but everyone assumed that the Internet was on the verge of exploding and that before long everyone would be rolling in cash. Some of these companies didn’t even have rudimentary business plans, but they didn’t seem to need them: They were successful simply because they were part of the dot-com boom, which in many respects was still largely illusory. Everyone was saying that the Internet was going to revolutionize the world—and, indeed, they were right—but many of those so-called cutting-edge companies had no idea what to do with themselves when the revolution finally came.

As any business person will tell you, the value of a traditional company is based on thirty times its EBITDA (earnings before income and tax depreciation of assets). If the company makes $1 million a year, it is said to be worth $30 million. But
the Internet wasn’t measured in those terms because most people weren’t making any money. Instead, Internet companies were evaluated on the
perception
that someday, in the not-too-distant future, simply because of their connection to the Internet, they would be rolling in huge amounts of cash. It wasn’t about their ideas. Or about the people who ran the companies. Or even about a vague business plan that might have sounded a little smarter than the next guy’s business plan. It was all based on their association with a world no one fully understood but one that was poised to explode. That was the level of craziness back then. All you had to do was
look
like you knew something about the Internet, perhaps something other people might not know, and investors figured you would soon be rocking their world.

There was a lesson here, and it’s an old one: If it’s too good to be true, it probably is. Such a simple lesson, and yet so hard for so many of us to learn. And people
still
don’t learn. Take the subprime mortgage mess. For three, four, maybe five years, borrowing money beyond our means seemed like a good deal, but if anyone had taken the time to think beyond that, they would have seen disaster looming. You didn’t have to be a genius to figure that out; it boiled down to simple, common sense.

Every morning, early, my father and I would be parked in front of the television, bonding over the business news on
CNBC. The world seemed full of possibilities. I began to think about launching a venture of my own, of becoming a businessman. I watched the transformation in my father as he picked one winner after another, and I liked what I saw. As he watched the stock climb, he would break into a big, broad smile, until he was literally beaming. He was having a very good time. He was loosening up. He finally felt that he was getting ahead.
This
was why he had come to America, to make a life for his family.

Often I would help him with his decisions. If he was interested in a particular company, I would research it for him, and we would discuss the possibility of buying a few shares. He treated me like an equal, like his partner. Together we learned about buying on margin, about options trading, about puts and calls. Before long I found myself leaping out of bed at the crack of dawn, pouring myself a bowl of cereal, and parking myself in front of the television. I had the morning newspaper to my left and a pad and pencil to my right. The fact is, anyone can do this. It’s just like homework, except it’s the real world. It takes time and effort to get an A, and the same rules apply here, but the difference is that this is worth taking very, very seriously. After all, we’re not talking about grades—we’re talking about serious money.

When my father finally emerged from his bedroom, eyes still heavy with sleep, he would plunge in without small talk. “What’s new this morning? What looks good?”

We studied charts together. Looked over annual reports. Discussed a company’s earnings. I began to understand all the critical elements on which a company’s performance was based, the same elements on which my debut company would soon be judged. It was strange. In ten years, I had gone from watching
Barney
to watching the business news, and I found the business news a lot more compelling.

As I’ve said, we are not overtly emotional men, my father and I, and we don’t go in for that touchy-feely stuff, but this joint experience—the daily business talk, the morning briefings—created an atmosphere in which we could really bond.

“I like DoubleClick,” I remember saying.

“What do they do?”

“Advertising,” I said. “On the Internet.”

But we didn’t invest in DoubleClick. There were too many other options, and at times it seemed as if all of them were profitable—as if we could do no wrong.

At one point, emboldened by his modest successes, my father began to think about moving the family out of the ’hood. On weekends, he took us house hunting, until at long last we stumbled across a new development in a nice section of San Jose. At that point, the thirty houses hadn’t progressed beyond the foundations, but five hundred people were already lined up to buy. The developer, clearly overwhelmed, resorted to a
lottery system, and we were among the lucky ones. (Not the first time the Chahal family had struck gold with a lottery!) We were ecstatic. My father immediately wrote a check for the down payment, and on the ride home we talked about the size of the big-screen TV we’d be putting in the family room.

A few days later, my father got a call from a complete stranger. The man offered him $50,000 for the lot, but my father wouldn’t sell. The home was more important to him. It was why he had come to America. “I’m not interested,” he said. “This isn’t about money. This is for my family.”

On October 27, 1997, with our dream home already half completed, the market crashed. My father, never an emotional guy, fell apart completely. He had bought a lot of stock on margin and lost everything, plus he was about to lose money he didn’t have.

That night, at the dinner table, he told us that the dream was no longer viable. We would not be moving into our new home. Worse, it looked as if the market was going to keep sliding. It had dropped 500 points, and he suspected there was worse to come. “In the morning, as soon as the market opens, I will sell everything,” he said. “We will end up with nothing, but at least we won’t be in debt.”

The following morning, the minute the market opened, he sold everything. Half an hour later, the Dow climbed 324 points. My father was doubly crushed. If he had held on for
another hour, he would have recouped most of his losses, and we would have been able to move into our new home. Now we would lose even the down payment.

That was the first time I had ever seen my father cry. Here was a man who always played his cards close to the vest, and he was sobbing in front of the entire family. He was defeated, and I was terrified for him.

“I am a complete failure,” he said, tears streaming down his cheeks. “I have failed my family. I owe all of you an apology.”

He left for work before any of us had a chance to comfort him.

A few days later, with no explanation whatsoever, my father snapped out of his depression. “One way or another, we are going to move into that new house,” he said, and I remember being powerfully affected by the sudden change in attitude. That resilience and determination would forever be ingrained in my thinking, and the lesson was clear:
Never give up.

In the weeks ahead, we did everything we could to raise money. Dad sold Mom’s car and began chauffeuring her to and from work. Mom began taking double shifts at the hospital. Dad volunteered for overtime. We kept clipping coupons. We even sold the TV.

“We will go back to the way it used to be,” my father said. “There will be belt-tightening for us all. Sacrifices must be made.”

I had learned many lessons from this experience—all important. Specifically, I’d seen firsthand that moving on is often one of the hardest things to do in life. But it’s critical. You will make mistakes, and you will get hurt, but you have better things to do than to wallow in self-pity. This is a very important lesson for anyone in business, so try to remember it when you get knocked down (because you
will
get knocked down).

All of us did what we could to help. I remember seeing a NOW HIRING sign at a local McDonald’s, which was right across the street from the high school, and—because I loved their burgers and fries—I thought I’d be a perfect salesman: I really believed in the product.

School got out at three-thirty, and I figured I could work from four to eight, five days a week, and still get back to the house in time for dinner and homework. One day after school I went inside and filled out an application. The manager was there, so I asked if he would review it then. He emerged from the back office and took one look at me, and I knew immediately that a job wasn’t in the cards. He couldn’t stop staring at my turban, but he humored me and went through the motions. We sat in one of the empty booths. “What do you do?” he said, glancing at the application with little interest.

“I’m a student,” I said. “I go to school across the street.”

“How old are you?”

“Fifteen.” In California, you can work at age fifteen if you get permission from your parents, and I knew that wasn’t going to be a problem.

“What kind of work have you done in the past?”

“I haven’t worked,” I said. “But I help at home in the kitchen, and I can do anything. I’m a very fast learner.” His eyes kept drifting to my turban. “Just give me a chance,” I pleaded. “You won’t regret it. I am doing this to help my family. I’m very responsible for a kid my age.”

I couldn’t sell myself, though. “I’m sorry,” he said. “I just hired a bunch of people, but I have your number and I’ll call if there’s another opening.”

For the rest of the year, I passed that McDonald’s every day after school, and the NOW HIRING sign never came down. But I didn’t go back in to reapply. I knew I could say “Would you like fries with that?” just as brightly and convincingly as the next person, but that’s not what it was about. I was convinced it was about my appearance. It was about the turban. Maybe the manager didn’t have an issue with it, but he probably assumed it would bother the customers, and he must have felt it wasn’t worth the risk. Plus, where would I put my cute little McDonald’s cap? Seriously, though, the rejection bothered me. I didn’t want to be at the mercy of other people. I knew that someday I would be my own man, run my own show.

Meanwhile, both my sisters got part-time jobs and my brother found a cheap used bike and landed a newspaper delivery route. The family was in survival mode.

“Sacrifices must be made,” my father kept saying, and he never got tired of showing us how it was done. This also proved to be a valuable lesson. I learned perseverance from him. I learned that the road to success is paved with failures. Most of all, as I’ve said, I learned that one should never, ever give up. Tough as things were, my father had pulled himself together. And he never got tired of reassuring us that we were going to be all right.

A month after the stock market crash, when the housing market began to pick up, we put a FOR SALE sign in front of our modest Gridley Street home. That was the only equity we had, and we needed it—badly.

In mid-January, we got a decent offer, and a month later we moved into our new digs. We rented a U-Haul truck and spent the entire weekend making trips to and from the house, and when we finally unloaded the last of the boxes I could see joy and victory in my father’s eyes. He had managed to keep his word to his family. Despite the setbacks, he had given us a new home. It wasn’t a palace by any stretch of the imagination, but it was a huge step up from the ’hood. There were five small bedrooms. I shared one of them with my brother, and my sisters took the one next door. My parents were in the
room across the hall, my grandmother slept at the end of the corridor, in a small room that had its own bathroom, and the fifth room was our prayer room (Baba Ji’s room). There was no fighting over this room: We all understood that under our father’s roof, a space would always be set aside for worship.