Failing in math is something I never did. Failing as a math business entrepreneur is something I know well.
This story isn’t one of those, “I failed, now I’m uber successful, this is what I know now and here’s how you do it.” This one is about how it was, what happened and how it is today.
A Man with a Gift for Math and a Love of Teaching Using Games
In December of 2004, my dad, brother, sister and I acquired a small math game and activity publishing company called White Bear Publishing. We purchased the business, and it came with a bunch of inventory, a list of distributors, no historical financial data, old printing methods and content that was in need of updating.
Charles Lund is the former Director of Math Curriculum for the St. Paul Public Schools; he formed and built White Bear Publishing. Charles developed all of the math games and activities contained in his publications with the goal to help kids like math and teachers teach math concepts with fun, engaging math games and activities.
Mr. Lund had a gift for developing these math games, began publishing his growing collections and sold the books via workshops at teacher related events. Charles convinced educational distributors to sell his products to their clients, and then he donated the profits from his efforts to the St. Paul Public Schools Foundation.
Tragically, Mr. Lund died unexpectedly in 2001, and the duties of the running the viable enterprise passed to his wife, Sharon. Sharon also worked in the St. Paul public school system and successfully continued Charles’ pursuit as a means to keep his legacy alive. Soon, the burden became too much for her.
A Reluctant Math Evangelist and Entrepreneur
What does all of this have to do with my story of failure in the math business? A good question, indeed!
My dad holds a Ph.D. in mathematics education and throughout his career enjoyed helping kids learn to love math as much as he does. He instilled in his children a foundational appreciation of the power of mathematics with subtle reminders like, “When you distil anything down, it is just math.” Or, “If you understand the theory, you can solve the problem. Quit wasting your time just doing problems and looking at the answers. Understand the theory!”
A meta-story about how my dad thinks – As I was planning for college at the University of Minnesota in the Spring of 1984, my father and I began discussing majors.
Bill: “Joel, you may major in anything you want….as long as it’s math or science.”
Me: “What gives? What if I want to go into business or something like that?”
Bill: “That’s okay. Math and science teach you how to think. You’ll learn to look at a problem to isolate variables, develop hypotheses and then creatively explore solutions. See, a platform for anything.”
I earned a degree in Biochemistry from the University of Minnesota in 1989, and I am grateful for my dad’s advice because he’s right, math and science taught me how to think. I don’t know that I’ve ever properly thanked my dad for that advice, and since he’s still alive, I am doing that now, “thanks, Bill!” (And, yes, for those of you keeping track, I managed to squeeze four years into five at the University as I worked my way towards my degree. My routes in life are rarely linear.)
Failing in the Math Business
My brother, Marty, followed in our dad’s footsteps, got a bunch of math education degrees from the University of Minnesota and is a successful High School math teacher in St. Paul public schools. He worked with both Charles and Sharon Lund in various roles over the years in the district.
After Charles had died, and Sharon was ready to move on from running the business he so dearly loved, she asked Marty if he was interested in buying the business. Here’s where I come in, and the story starts picking up some steam.
Marty called my dad and me and asked us to meet him for lunch in St. Paul to talk about a business opportunity. At this time, my dad had retired, and I was enjoying a successful career in the Medical Device industry in various selling and marketing roles. (See, I ended up in business after all!)
The three of us talked about buying White Bear Publishing from Sharon Lund. There was not a prospectus or “book” on what the business did, financials or anything one could use to perform even basic due diligence. Sharon proposed a price for the business and planned for the proceeds to go to the St. Paul Public Schools Foundation in Charles’s name.
Given the lack of available data, I refused to fund the buyout. I suggested there may be another way we may enter into a transaction, what if Sharon financed the amount over five years and required an annual payment per year funded by profits? This way, if there’s nothing there, no one is at risk.
Sharon agreed to serve as the bank, we drew up a simple transaction terms sheet, set-up an LLC called, “The Gaslin Group dba White Bear Publishing” and all were excited.
If you like Sophoclean tragedies, now is the point where you’re looking for the ceiling to cave in, right? Everyone’s happy; things seem Daisy and what could go wrong? Well, lots.
If you’re the horror movie genre type, this is where you say, “Don’t go into the barn, it’s dark in there you idiot, and the guy with the mask just went in there!” Yes, we got into business with family, in an industry none of us knew anything about, and none of us had put up any money to fund the transaction.
Our actions were the business equivalent of opening the proverbial door in the movie, and everyone knows you’re in for the unexpected.
With all of my gray hair, I’ve learned when I get into things without all of the facts, hope as the strategy and “We’ll figure it out” as the plan, all isn’t well that ends well. So it was with The Gaslin Group, LLC dba White Bear Publishing.
As I look back, the first thing that happened was my dad suggesting that we let our sister, Patty, in on the deal, too. At the time, my dad had his heart in the right place and wanted to create something all his kids could work on together and build for future generations. We all were filled with thoughts of easy money and discussed how big the business could get. My Dad is a “glass half full” devotee; I love him for thinking as he does and for passing that trait on to me.
At the time all of this was taking place, I was 38, Marty was 39 and Patty was 24. Bill said it was the right thing to let her into the group, Marty and I agreed and all of a sudden we were one, big happy family business.
In reality, the business wasn’t that big which was another problem you’ll read more about soon.
As I wrote earlier, none of us knew anything about the publishing business. We all had careers that were more than full-time jobs and believed we could do this “on-the-side.”
You read a lot about “side-gigs” these days. I believe they’re an excellent way to scratch an entrepreneurial itch before you take the leap, yet I recommend a more simple business than we bit off and stick with something in alignment with what you do for your career.
Running a Math Business is Work
Ok, so what happened next? Remember, this is a book business. We suddenly owned cases and cases of math game and activity books, stored them in a garage and shipped them to distributors around the US. The orders we received from the merchants were not significant but were steady and received by fax.
Since the first step to solving a word problem is to read it entirely, we faced trouble. The primary variables we discovered were: Where do the faxes come in, where will the books be stored and who is going to handle all of the shipments?
Initially, Marty was going to the current storage site, shipping the books and doing all of the work. Understandably, he didn’t feel that was fair. Bill stepped in and did it some days, and I think Patty may have helped out a bit, too. I, on the other hand, refused to ship books.
We set-up a fax line in our mom and dad’s house so the orders would come in, Bill would fill them, invoice the distributor, Marty would ship them out and we’d all collect the proceeds. Remember, I was too proud to send books…..
That worked pretty well until summer, and our folks went to their lake cabin, and no one was at their house to collect the faxes. Orders began to pile-up, distributors got a little frustrated, and it was evident we needed a better way.
Running a Business Where No One is Responsible
Around this same time, several other things were going on, too. As we received orders, cash was coming in, and Bill and Marty decided they needed Laptops to do their work for the company. We were flush with cash so we bought them what they needed and they believed we could just “write it off.”
It was here I pointed out to Bill and Marty that “writing off” in your company meant you were paying for it yourself, one way or another at some point. It was okay, they were doing the work and needed the devices for reasons that seemed important to them. It was, however, indicative of a lack of resource allocation discipline.
Meanwhile, back at Gaslin Group dba White Bear Publishing, inventory was running low, and no one was informed enough to care much about it. The business was wildly profitable up to this point because we had no cost of goods sold!
You may recall, the transaction included a warehouse full of books, most of which were worthless because, as it turns out, Mr. Lund subscribed to the theory of buying ten year’s inventory of a product to get a lower per unit printing charge. I am not, however, casting aspersions because our group later fell victim to the same mistake because it just made so much sense. After all, it was in the math!
When the inventory situation became acute, I enlisted the services of a friend of mine, Bob, from my golf club who was a printing broker because none of us had a clue how to get these books reprinted. Bob agreed to negotiate our printing for us and, because of the method we use to print off of films, determined our best option was the printer Mr. Lund had employed in Chicago.
“What does that mean,” I asked? Bob explained to us how the printing business worked and gave us ideas of how we might drive cost out of the printing. Also, he suggested updating some of the book covers, using his team to fill orders and agreed to ship books from his warehouse.
Contract Fulfillment Services Becomes a Bone of Contention
We knew nothing about how all of this worked and when we started using Bob’s services in late 2004, I thought it was a great solution to our problems. Unbeknownst to me, my lack of book shipping efforts was a tempest-in-the-making and was gathering steam amongst the other three partners.
With the benefit of hindsight, there were a lot of mistakes made in these early days of our venture. Bob’s company wasn’t a fulfillment company, his warehouse was the parking garage in his office building, our orders were not being shipped or invoiced promptly, and the whole situation was a powder keg for everyone involved.
Bob was my friend, trying to do me a favor, my partners resented the mistakes, and the effect they were having on our business. As a group, we decided a change was necessary, and I agreed to be the one to figure things out since I had created the situation.
I talked to Bob, and I’ll never forget the look on his face when I delivered the news that we were taking our business elsewhere. It was a look that said, “I am doing all of this as a favor to you, and now you’re firing me?” He didn’t deserve that, and I am grateful we are still friends to this day.
Market Trends We Could Not Ignore
Unfortunately for all of us, there were some trends in the printing business that had the potential to impact our little enterprise. Digital printing and the rise of free content on the internet were gaining momentum.
My solution to leaving Bob’s services was to rent a warehouse in Eden Prairie, Minnesota near the homes of our mom and dad and me. Patty lived about 10 miles away in another suburb of Minneapolis and Marty lived about 35 miles away in a suburb of St. Paul. He had done his time on book shipping, so I hired my high school aged kids to help us do the shipping.
Throughout my career and life, I remain curious, forward-thinking and willing to take risks. Admittedly, I’ve crashed and burned more than a few times.
Once, I curiously explored investing in a political t-shirt business. At the time, my kids were little; I was a young medical device product manager and my family needed the money that I invested in the venture – it failed.
I wrote earlier about trends in the publishing business. I was studying our business, talking with people in the industry and looking to build to the next level. I had a vision for the future of our business, and it required a significant investment. An investment I could make but knew no one else would, or could.
One of the Greatest Mistakes of my Life
In a meeting, I outlined my vision of a website selling pdf’s of math games like iTunes and developing interactive games, too. The group seemed excited by the prospects for the growth of our family enterprise, and we all agreed that the strategy was sound.
Next, I outlined what I believed to be the investment required and suggested I will put up the capital in exchange for an increase in equity. The responses from my father, brother, and sister were incredulous looks and stone silence.
Some of you who are reading this story, understand that what I describe is a fork-in-the-road faced by many small businesses. Growth requires fuel and if the company isn’t producing the profits to fund a strategy or initiative, you input capital, borrow money or accept an equity dilution in some way, shape or form.
What happened next drove a wedge into my family that still separates us to this day. Not overtly, but it’s always there.
Remember, my dad and brother dedicated their careers to helping kids get better at math and believed, “this business was supposed to be a fun venture for us all to work on together and maybe make a little money.” At least, that’s what Marty said to me as things were unwinding and he said it with such anguish that it stopped me in my tracks. He is the most kind-hearted person I know, and I knew the whole ordeal hurt him. Lucky for me, he’s a forgiving sort, too.
A Hole I Continued to Dig
My response to the group’s spurning of my offer was to suggest that I will put up the money to transition all of our content to PDF’s, build a website (iplaymathgames.com) and pay the company a license fee for the content sold. It was a small license fee…
It was a colossal blunder to make that suggestion to my family and if I there were a way to pull it back in, offer to put up the capital to execute the strategy and keep us all at 25% partners I’d do it in a heartbeat. Alas, I was blinded by greed, full of pride because I was earning a lot of money in my “other” career, had the available capital to invest and thought I was a pretty big deal.
In reality, I acted like a jerk. Sometimes, I wonder if I didn’t curse this business with my actions on that day?
iplaymathgames.com Comes to Life
One of the first things I did as embarked on my lonely journey to build this Internet-based math games business was to get a logo and brand standards developed by a local agency, MJ Kretsinger. Because, after all, a good name and logo are what you need to have to succeed with any venture, right?
In their defense, they did a great job and here’s what they produced for me:
My vision for iPlayMathGames.com was to create an iTunes for teachers and parents to come and download individual games for $.99 instead of having to buy complete books, make copies of pages to use and then store a bunch of books.
MJ Kretsinger had a sister company, Atomic Playpen, that was a web development company, and I hired them to explore the strategy and tell me what they thought about my prospects for success. This experience was my first real exposure to working with an agency where I was paying the bill, and the experience was an expensive lesson. Interestingly, I’ve purchased a lot of invaluable lessons while failing in the math game business.
MJ Kretsinger/Atomic Playpen came back with the recommendation that what I wanted to do probably would not drive a lot of revenue from game sales but may still make for a good website because I had so much content. They cited a research paper from Juniper Research group that said iTunes would never make money and was destined for failure.
Remember, this was 2007, the iPod wasn’t very old, the iPhone was only introduced a month or so before this project and iTunes was still new.
Suffice it to say, I fundamentally disagreed with their logic and thought they were wrong. Also, while Atomic Playpen didn’t believe anyone would download $.99 math games, they did think I should build a $350k website with them so that people could download my games for free.
That day was the first and only time I “lost it” in a meeting.
In hindsight, they were right. I paid Atomic Playpen $15k to do the research for me, they did it, and I chose to disregard what they were telling me. Interestingly, I think the confluence of my obstinance to accepting the research findings and their arrogance in proposing $350k for a website to give away products created a no-win situation for me.
Time For a New, Website Designer
After that, my sister helped my find a sleepy little agency in St. Paul to build me a website. And, again, in hindsight, they saw me coming, told me what I wanted to hear, walked off with a lot of my money, wasted a lot of time, and I learned from them, too.
As a result, on May 17, 2008, iplaymathgames.com went live. The guy who owned U4ea Design (Yes, that was the name) told me now I could sit back and wait for the cash to roll in. He looked like a guy who would say that, and I probably seemed like a man who believed it, because I did.
There’s a clear pattern that wasn’t always so obvious to me and is likely to be true for many of us, I learn best by experiencing things myself. Some of these lessons, though, are painfully expensive.
Needless to say, the money didn’t roll in, but continued invoices for updates, shopping cart fees, designer time and other oddities sure did. By Christmas time, I was pretty fed-up with it, was telling a friend of mine about my struggles and, of course, he “knew a guy.” His neighbor.
What hooked me about this guy was, if you Googled, “The Smartest Man in the World,” he popped up! Mic Tienken was an SEO expert, we went to lunch, I told him much of the story you’ve just read and he looked at me and said, “My philosophy is that if you spend $10 with me, I should make you $100.”
Considering the road I’d traveled for the last 18 months, this was music to my ears, and I immediately agreed to let him take over my site. We formed a fast friendship, and I am grateful for what Mic taught me about the web, Internet Marketing, SEO and dealing with “techies.”
Mic never fulfilled his 10x promise to me, and that’s okay because, near the end of my time working closely with him, he gave me a heartfelt piece of advice that still hangs with me today.
One day as Mic and I sat around my kitchen table discussing yet another strategy I had to “turn the corner” on my business, he looked at me and said, “You know what, Joel, I am not going to help you do this project anymore. You can’t just keep throwing money at things and think it’s going to make everything work. You need to do something, complete it, measure it, adjust and then move on to the next thing only when you know that one isn’t working. You have so many variables going on we can’t figure out what is working, what is not and I won’t take your money anymore.”
Going All-In
Shortly after I began working with Uber Web Services (Mic’s company) my career in the Medical Device business began to change. I wrote about that painful experience in an article titled, “Ten Things I Learned When I was Knocked From my White Horse,” it was published on Success.com and shared more than 27,000 times. I won’t go into it here.
During the summer of 2009 is when my dad, brother, and sister decided that they had no more interest in being a partner with me in The Gaslin Group. The business was not making any money, and distributor sales had nearly dried up. No one wanted to ship books, and I had control of the digital part of the business because I had selfishly not agreed to front the capital for the company without an increase in my equity position. So, I did it myself.
From a business standpoint, at least on paper or in a spreadsheet, what I did was the “right decision.” It was not, however, in practice. In hindsight, my partners were my family and sharing good fortune is the “best decision.”
As a result, I acquired their equity, Jean and I became the sole owners of the Gaslin Group, LLC, and I changed the name to IPMG (IPlayMathGames) Publishing, LLC.
Entering the App Economy
In October of 2009, I began exploring the development of an “App.” Interestingly, I am an Apple lover, bought an iPhone when it first came out, had to abandon it because the AT&T service I used wouldn’t receive an email in South Dakota (That was part of my sales territory). As a result, I wasn’t much into Apps in late 2009. Really, not too many other people were, either.
Clockwork is an interactive agency run by some folks that were friends of Mic’s, he connected me with them, and we embarked on a project to make iplaymathgames.com part of a software company. We began by combing through the 17 publications we owned that contained more than 600 math games to find the one to start the transition.
Our strategy was to develop games that will be fun to play, require little explanation and have good educational value. Also, we wanted games that could be easily expanded to create a constant stream of new apps and developed in Flash to use on the website.
Tic Tac Math Gets Started
The first game we decided to form is called Tic Tac Math. It is from a simple book we have that uses the time-tested game of tic tac toe where kids solve an equation to win a square and play the game. While we were in development and planning for an April 2010 launch, I made the decision to leave the company I worked for, negotiated an exit deal and entered the business of math full time.
At the time, I had money in the bank and was going to pursue “my deal.” What I didn’t know was how much I was going to miss dealing with doctors and that I had a gaping hole filled with anger and resentment from the events leading up to my exit from my previous job. And when I quickly tried to start a medical website to feed my yearning to be back in the medical business I was attempting to serve two masters.
I know that doesn’t work and, yet, I did it anyway. Commitment is everything, and I was terrified of committing to something that just didn’t feel like my passion.
In hindsight, that’s the fatal flaw of what happened here.
Core Stories, PR Firms, and iPad
In January of 2010, while collaborating with the Clockwork team and working to understand how to build something like this from the ground up, I came across the concept of the “Core Story” as put forth by the now deceased Chet Holmes. I spent $30k on developing two “Core Stories” that I would use to convince companies to use math games as a means for promotional products and teachers why they should use iplaymathgames.com.
Neither story was particularly good, and this was another expensive lesson in how not to grow a business. A core story solves a problem someone has and, the ones written for me didn’t do that at all. Also, the person assigned to me by the Chet Holmes organization was unprepared and unprofessional.
While I blame the Chet Holmes group for my failure with their Core Story strategy because of a bad product and poor training, I assume my responsibility, too. After all, it takes two to tango.
As my friend Mic Tienken observed, I was looking for a quick way to grow and thought this “Core Story” thing seemed like just the ticket. For me, it wasn’t because I didn’t do the work; I was on to the next thing because I believed I paid my Ante. Wrong.
In mid-January, one of the owners of Clockwork called me to say he had heard about this new device Apple was planning to introduce. It was like a giant iPhone, and he wondered if I wanted to spend the extra money to be one of the first games available on the device? Of course, I said!
Since I knew I’d be one of the first to have a math iPad app available, I paid $5k to PR Newswire to write me a fancy press release and place a picture of my app on an electronic billboard in Times Square in New York City for a short period.
What a moron I was. In retrospect, a better use of this money would have been to pay 50 people $100 each to write a review in the App Store. Again, an expensive lesson. Find this picture if you can.
Tic Tac Math and the iPad Commercial we Almost Made
On April 6 of 2010, Tic Tac Math (TTM) hit the App Store on iTunes. The day TTM launched was one of the happiest days of my life! I believed with all of my heart that app downloads would pour in because this little game was cool. They didn’t.
Well, some came in, but not what I expected. About two weeks later, we introduced the Universal version that worked on all Apple devices, and that was another exciting day for me, and I still am delighted with the coup we pulled off getting that app to market when we did.
In late April of 2016, we exhibited at our one and only NCTM (National Council for Teachers of Mathematics) Meeting in San Diego. This event was a little strange for me because, in my medical career, I traveled to San Diego for a semi-annual tradeshow held at the same location on many occasions. Being in San Diego and not working an ophthalmology meeting felt strange.
We were the only company with an iPad on display and our app for people to try. Not surprisingly, most people had no idea what an iPad was and were impressed by the novelty of the device and that this little no-name company had a game for it. In fact, the EVP of McGraw-Hill came over and looked at it, asked if he could play around with it and then asked me, “How did you do this so fast?”
Apple, is that You?
In early June of 2010, we launched Tic Tac Math Fractions. In late June, Universal and Fractions were both chosen by Apple as both “New and Noteworthy” and “What’s Hot” for a couple of weeks. We sold a lot of apps during that period, but nothing like you would today because there were only about one million iPads sold in the entire world than compared to more than 300 million now. http://www.prnewswire.com/news-releases/tic-tac-math-ipad-apps-from-ipmg-publishing-featured-by-apple-98374469.html
Next, I received a cryptic message from Apple requesting very specific artwork for a potential “project.” This email was so out-of-the-blue that I figured I was being Punked and responded with “Ha-ha.” I almost immediately received the response, “No, seriously, please send the art within the next five days.” I did, was convinced we were going to be on TV and I was finally going to get that “sit back on my boat and count the money” experience the goofy web developer told me a couple of years earlier!
Well, suffice it to say, they chose a clever little app called “Chalkboard” and you may recall if from one of the early iPad commercials. We had excellent sales jump in June and July, but nothing that was enough to sustain a family of six with three kids in Catholic High School and one in a private university.
Wow, I own a software company, and I’m an App Developer!
It’s true, the CEO of Clockwork, Nancy Lyons, the day my app went into the App Store texted me and wrote, “Welcome to the Software Business.” I didn’t realize the significance of the message at that time or how quickly the turbulence was approaching for me.
Meanwhile, Back on the Website……iplaymathgames.com and Social Media
While all of this App-fever was going on, I was also working on getting the website transitioned from giving away games to an evolution of my original vision to one where people could buy games for $.99 and also download digital books, too. Also, we were selling quite a few books on Amazon while the Distributor sales had all but dried-up.
I hired the Clockwork Team to help me with a Social Media plan, this was way back in 2010, and Social Media was something that was still relatively new to me. They wrote me a good plan; I remember that I worked with a young lady named Whitney Shaw and I learned a lot from her about how things were “supposed to work.”
Again, I paid a lot of money for a plan and didn’t do a lot of things they suggested. Another expensive lesson, are you sensing a theme?
In August of 2010 a Reality Check with an Old Friend
When I made the decision to go all-in, I believe I had five years of living expenses quarantined and a solid plan to seek my fortune in the math business.
Unfortunately, two insidious forces were at work: First, my inability to separate myself from the Medical Device industry and the oft-cited, seldom understood or heeded law of building anything – it costs at least twice as much and takes twice as long as planned.
These two nagging truisms caused me to call an old friend of mine to seek advice. Michael Gorman is a successful Venture Capitalist here in the Twin Cities, and we grew up together in Rochester, Minnesota. We weren’t close friends, but whenever I saw an article about him I always sent a note, congratulated him on his latest home run investment, and we’d gotten together socially over the years a few times.
When I called him to ask for advice, he probably assumed I was planning to hit him up for investment because he’s a VC guy and that’s what they do. I told him about what I was doing, how it was going, about my cash burn rate, and that it felt like I needed to hit the pause button. We talked further about that I wanted to re-enter the medical device business and try to keep this math thing going on the side while taking care of my family’s needs.
I remember what he said like it was yesterday. Mike said, “Joel, I admire the entrepreneurial discipline you’re showing not to burn everything to pursue something that’s not growing at the rate you expected. My advice to you is to do just what you’re suggesting, keep at the math games on the side and see how things turn out.”
In September of 2010, I began to plan my strategy for how I would get back into the Medical Device business and still keep my little math business buzzing along. Do you remember what I wrote early on this long story about serving two masters? Well, here it is again.
I didn’t do either one of these well. Plus, IPMG was now burning cash pretty fast. Once I shut all of that off, started to reconnect with people I knew in the Ophthalmology business and put my resume’ out with a few recruiters I figured everything would work out.
A Banker Friend Becomes Not So Friendly
One project that I worked on during my all-in year was with the Community Bank of Chanhassen. I got to know the president of the bank because our kids went to school together. Not long after we met, he convinced me to move all of my banking relationships to his bank to “bank with a friend.”
A year or so after I began banking there, my wife and I purchased a second home situated on a lake north of the Twin Cities, and Bill presented a creative way for us to finance the property and have it paid off in seven years. My income was high, I could easily afford the payments, and all was well.
Back to the project, while sitting at youth basketball game, I noticed that there were six banks with signs hanging up around the gym. I asked the Principal of the school how those got there and how much people paid to have them placed? She told me the school sold them and she didn’t know exactly how much they cost. It didn’t matter; I had my idea.
I went to this Banker friend of mine who had my five years of living expenses sitting on deposit in his bank, and a couple of mortgages, to pitch a promotional strategy to him. The idea was simple; teachers struggle with getting materials together for family math nights for kids because it’s expensive and a fair amount of work.
My suggestion was that I would create a math game book customized for the bank with various ads throughout and they can give them away to the three elementary schools surrounding his bank.
He loved the idea, I went to work on it and it was a big hit with the three schools. What happened next was a surreal experience I will never forget.
While working on the project, I made regular trips to the bank to visit with the Marketing Director and to deposit the few checks we had every week coming in from distributors of our publications. On most visits, I saw Bill, too.
One day, in the late Fall, after I had completed the project, it was a smashing success, and I was in the bank doing some business, Bill invited me into his office. We exchanged pleasantries, and after that, it was evident to me Bill had something on his mind.
“How Can You Take My Money?”
Bill asked me to provide him a current personal financial statement by the close of business the next day. I asked him why and he said that they routinely require that from all clients who hold mortgages with the bank. When asked why he hadn’t he hadn’t asked for one last year, or why I had never been asked for one by any other mortgage company after closing, he said, “I’d just like to see it, please.”
Remember, this was late November of 2010, just after the housing crises and early in the great recession recovery. Bankers were still a bit jittery.
I figured something was up, so I went home and immediately initiated two wire transfers out of this bank and into my Fidelity Brokerage Account. One transfer went through the next morning, and the Bank stopped the other one. Also, they placed an administrative hold on all my accounts. What stunned me was that this was my money, I was not behind on anything or had ever missed a payment to this bank.
The next day I went to the bank to learn that they were seizing my account, using the proceeds to satisfy the mortgage and leaving my family and me with almost nothing on which to live. Luckily, the one transfer had gone through, and we had enough to get by for a few months.
What had happened? Well, my regular visits to the bank to work on the math game book project with the schools intended to help the bank market themselves caused my friend Bill to wonder how I had so much time to work on this “hobby business.”
After he had seized my money, Bill asked me why my regular deposits from my employer were no longer arriving at the bank? I told him that I had left my other job to focus on this business full time and had enough money in the bank to cover at least five years of payments and living expenses.
Bill said we may be in a different place than we are now if I’d have consulted with him along the way. I’m not sure why the bank just seized all of my cash to pay down a mortgage on an asset that was sure to produce more money than debt on it. But they did, and there was nothing I could do about it.
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