Family Business Alan Weiss's The Uncomfortable Truth®

The old apothegm is that the first generation starts it, the second expands it, and the third ruins it. Probably not so true any more.

It’s not about a mandatory spendthrift or wasteful generation. It’s more about hunger.

I don’t know about you, but I grew up poor, and when I was fired as president of a consulting firm, we had relatively little money in the bank and two small kids with private schools and a wedding ahead of them. We also had elderly parents who needed our support.

So I did whatever was necessary to make money. I would charge $25 for resume reviews for people looking for work. I charged $750 to speak, though I often did it for free to get in front of potential clients.

That hunger subsided when I had “made it,” but it has never really left. I don’t work hard, but I work very smart. I pursued success and create tougher goals and higher standards for myself.

I think the metaphorical third generation I mentioned may just be bored. They don’t want to expand the business further, the don’t want to start another, and they have no hunger. Their education and living standard have been taken care of.

You can’t make your kids poor. The second generation might have experienced a period of your hunger, but not the grandchildren. They assume you were always well off. They think that’s what life provides.

My son would respond, when I was making a case about “the old days,” that “I know, Dad, you were barefoot, wrote on a shovel with charcoal, and walked to school three miles in the snow.”

“Yeah,” I said, “and it was uphill in both directions.”