Vince and Linda McMahon, founders of World Wrestling Entertainment, may be worth an estimated $1.24 billion today, but early in their careers, they lost everything and had to come back from bankruptcy.
In the 70s, on the advice of an accountant, the couple invested in a construction company — an industry they knew nothing about.
"We signed personally on some loans from the bank to float that business for a while, and we didn't understand [the industry]," says Linda McMahon, head of the Small Business Administration, during a Facebook Live for Small Business Week on Tuesday. "It went belly up. … We tried for over a year to pay off the loans and we just couldn't do it anymore, so we had to declare bankruptcy."
The McMahon's house was auctioned off and Linda's car was repossessed right from her driveway while she was pregnant with their second child.
"It was tough," admits McMahon, "but you know, it's not how you fall but how you get up."
McMahon says Vince and she learned a very valuable business lesson from the experience: "We had to go right back into it, on the mission and the plan and the strategy that we knew and understood." At the time, Vince was working for his father's business, Capitol Wrestling Corporation, promoting local wrestling events; it was the business the McMahons would eventually buy and transform into World Wrestling Entertainment.
"The advice I give from all that is do something that you're passionate about and that you understand and that you know," says McMahon.
"If you're an entrepreneur and starting your own business, it's 24-7 and you're wearing every hat there is," she says. "So you have to be so committed to it and you have know it and understand it."
As your business grows, that's when you start to hire people to fill in the gaps, explains McMahon.
When hiring people while the company was still relatively small, McMahon would tell candidates, "If you're not smarter than I am about this, then I don't need you. You have to be smarter than I am when I bring you in to do this job.
"So recognize what it is you don't know, find people who can fill those gaps for you," says McMahon. "Manage them, set the strategy, hold them accountable, but continue to build that team for the different disciplines you need within your company."