Phd in Bacardi - sm

When I first starting writing my blog, I was a pretty bad at it.  Actually, not just bad, I was god awful.  I was focused more on quantity than I was quality.  I had heard stories of bloggers who could churn over a dozen articles a day and I thought I could do that.

Most of the posts are nearly unreadable, but there were a few that stuck out as potentially something that had some strong value and are worth revisiting.  I’m reposting one of them today, exactly a year after the initial post.   To be more precise, I’m consolidating and reworking a three post series of articles about a PhD who had to sell travel to help pay for her Doctorate.  The story really touches on many of the ongoing topics in this blog.  For example, a major point of my writing is that education includes debt but does not necessarily get you a job commensurate with the education. So here is the story, I hope you enjoy it.

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It was a very big and very formal event.  All the company Exec’s were there.

Part I: Back Story

I’ve recently written about the dangers of selling someone else’s product.  I know these dangers first hand because I have been involved in reseller channels from both the product side (regional channel manager) and as an actual reseller.  No matter the product or the industry there are some commonalities, specifically the systems are not designed to support lower volume resellers.  Bottom line is the companies that create the product or service only want to work with higher volume resellers.  That’s not necessarily a problem, the challenge comes when the corporations actively try to harm the smaller resellers.

First a little back story:

I talked about seasons of life and business.  There was a season of my life that I’ll always think fondly of, it was before my wife and I had kids.  Cue *sigh* here.  I was still very focused on achieving the brass ring, the big win. I had realized at this point that it wasn’t going to come from climbing the ladder in Corporate America.    I didn’t quite see the burn and churn hamster wheel that I was on, but I absolutely knew I didn’t have that ‘thing’ that was required to be successful in the corporate environment.  So when the opportunity presented itself, I decided to go into business for myself.  Like many others I had always wanted to be in business for myself.  I didn’t comprehend the importance of benefits associated with a traditional job like retirement savings, health care, product lock-in, and all the other bigger picture items. Things you have to provide for yourself or just do without when trying to be in business for yourself as your primary full time job.  I don’t think many entrepreneurs do that, think of the benefits of the traditional corporate job when they start out.  There is just a frustration at the system and a desire to make money without someone else telling you what to do.

For the record, I’m not jaded on this concept of being in business for myself.  My writing projects and other projects such as my podcast are ultimately another stab at going into business for myself.  It’s just if my risk tolerance was low before, it’s non-existent now.  I had considered several options.. slumlord (not kidding), used car dealer, and a few others.   Remember at the time I wasn’t married and I hadn’t had anyone as a role model who can teach me how to be in business for myself successfully.  A huge chunk of being in business for yourself is capitalization and I was absolutely not in any sort of position where I could financially support the thousands, tens of thousands, or hundreds of thousands of dollars it would take to get started into a self sustaining full time business.  When I went to get capitalized by banks they turned me down flat.  At the time I was so frustrated that they didn’t believe in my vision and my passion.  Money lenders would not loan any small business money unless they were guaranteed a payback.  They were not in the business of accepting risk. Hint: it’s why their buildings are bigger than yours.    I think the banks were smarter than me because looking back on the business I wanted to start I definitely dodged a few life bullets by not leveraging myself into it.  It was going to be much more difficult than I thought to get to a any level of success and the banks saw it more clearly than I did at the time. Passion for an idea can blind you to the realities of implementing the idea.

I was dating my wife at the time and was looking for an inexpensive vacation where we could get away.  I don’t know why I was looking at cruises.  I had looked online and was enticed by the prospect of traveling on the world’s largest cruise ship (at the time.)  I found an amazing deal, which turned out to be a total screwup on the part of Yahoo.com. – It was still early days in online retailing.   I was fortunate enough and computer savy enough to print out some screenshots of the deal.  I think it was something like $150 a person for the week.    Yahoo of course didn’t give me the deal when I tried to book it so I brought my case right to Royal Caribbean figuring there was a chance they would honor the deal.  I would think that they would usually just brush me off, but since I emailed in my screenshots the rep knew I was sincere in just trying to get a deal.  After several conversations and negotiations and Michele and I got a week on Voyager of the seas for under $1000.  (We spent over $1500 on board but i’m sure I’ll write more on that later).  I was so impressed with the experience I thought I could sell that product.  Who couldn’t sell a luxury vacation, I was also amazingly impressed with the fact that Royal Caribbean always tried to push me to a travel agent rather than book direct through them.  I felt that this is an industry that really supports their channel.  Enter North Carolina’s newest and best travel agency with a specialty on cruise lines and all-inclusive vacations: Piedmont Cruises.

Fast Forward several years and I exited the travel business older and much wiser.  I still like the industry products and I see the cruise ships to the world’s largest gadgets, something I have a strong affinity for but I have no illusions about getting wealthy as an individual travel agent.  It is this familiarity for the industry that has me keeping a single toe in the water of travel.  An opportunity crossed my desk related to the industry that I decided to take advantage of.. and that’s when I met the person who taught me how to get a $30,000 PhD in Bacardi.

In many instances when you are an independent sales rep or channel “partner” (Travel Agent, Retailer, Manufacturers Rep) for a product line you are getting wined and dined.  There are lunch and learns, there is the factory rep visit, there is sales meetings, etc.. Generally the food is good and the drinks flow.  Showing independent reps a good time is way more cost effective than having a large directly employed sales force.  It’s also a great carrot in getting people to come here your latest sales pitch or product roll out.  Usually this type of experience in the travel world is a lunch and learn at Maggiano’s.   You hear the pitch, get a free meal, and get some face time with the company rep who is only in your area a few times a year.

PhD - Bacardi - Beach

PART II: Good Food, but a Bad Deal

In part one I talked about how I started a small travel agency.  I’m still very much on the radar of some vendors.  Specifically there is one All-Inclusive resort chain that was having a series of large promotional events.  Generally, I would stay away these events as it’s not worth my time anymore to hear about the latest and greatest wiz-bang feature on the latest cruise ship or resort.  But I was thinking about ways I could leverage this blog to generate some revenue and I thought my experience in the travel world may be something to explore.  I was also getting inundated with daily emails by the new company rep.  (Whenever a new rep comes on board there is always a flurry of activity and engagement, most likely because of the “this territory hasn’t been worked” burn and churn process. which eventually peters off when they learn I’m not one of the people they need to spend time engaging).  So I decided to go.  Worst case scenario, I’d get a good meal.

I was right about one thing, the food was very good.  Grilled Chicken, Grilled Shrimp, non-stop wine and Red Velvet Cake for dessert that looked so good I still don’t know how I had the ability to say no thank you to it.   What was most interesting was the woman who sat down next to me.  She was a well-dressed, very well spoken African American woman.

The presentation was pretty long, it had pulled agents in from all over the region, there were literally hundreds of us in the room.  In between the breaks in the meal and the speakers I got to know my table mate.  I told her that I was mostly out of the travel agent game and I was just there trying to decide if I wanted to engage this one particular vendor again.  I told her now that I am a full time employee of a community college and that I felt this could be a way to potentially earn a little income on the side for one of my other projects (this blog or one like it focused on travel).  She then confided in me that she was also a full time community college employee who worked for the community college one service area over from mine.  She was a teacher and she was also in the travel agent game on the side.  We discussed our options for growth at the community college and I explained that I considered getting a doctorate but I didn’t see the ROI on the $30,000 in debt I’d have if I went through with the doctoral program.  Her response was something akin to “Like Me”.  I went on to confirm she does have a doctorate.

I don’t know if she has $30,000 in student loan debts from a Ph.D. program, or an Ed.D. program or whatever her doctoral credential is, but she was clearly there for the financial opportunity to help manage that debt.  She was not there for the shrimp, not for the chicken, and not even for the red velvet cake;  She was there for the green.   Why would she do this?  The debt I mean for an relatively low paid position?  Well it’s common for individuals in any education system to be encouraged to get advanced degrees.  The culture is similar to the automotive industry where people who work at an automotive plant being expected to drive a vehicle from that company.  I was actually told once “It doesn’t matter what your degree is in but you need to get one if you want to climb up the ladder” which, TBH as the kids say, is true.

I was struck with the concept that I was sitting next to a college educator, who has gone tens of thousands of dollars in debt to get an advanced degree.  A credential that’s not needed for her current job (community college teachers can teach with a Masters) or for anything other than perception.  It was not about the reality of the skill, it was massive debt in hopes that there would be a chance that she may be promoted if an opportunity presents itself and the stars align, and the promoting manager feels that the doctorate is important (which is probable but not guaranteed).

To help pay off that debt she has to learn about what premium spirits are offered by a travel supplier. This vendor is systematically going to work her to death and squeeze every single penny out of her they can with only a small chance of true financial success.

Summary: She’s borrowed lots of money to work obscenely hard at obtaining a credential that MAY help her with her regular career.  Since the career advancement isn’t immediate or guaranteed she has to work hard at something completely unrelated to her chosen career to maybe.. possibly.. if she’s both good and lucky… to earn enough to pay off the money she borrowed in the first place to get a credential that may help with a promotion (and she’d have to work extra hard at work to get considered for the promotion, and then work extra hard if she did get it to ‘prove herself’.

Let me say that again, because it’s a bit confusing.  So she had to borrow lots of money to work hard (get Doctorate), and work harder (Current Day Job), to get the opportunity to work extra hard (Possible Promotion), all the while she has to work extra hard in her off hours (Travel Sales Job) to pay off the debt she acquired so she could get the doctorate.  No guarantee’s, no payouts, just long hours and promises.    Admittedly I wanted a drink after coming to that conclusion.  Thankfully it was free.

PhD - Bacardi - bottles rum

Part III: Lessons Learned

So let’s take a look at some of the lessons and takeaways:

Lesson 1: any investment, especially one in education can be a big Risk.  The Risk is exponentially larger if you have to borrow to get it.  Be very careful about moving forward in any effort without some sort of guarantee that you’re going to get something for your time/effort.

There we were, the two of us sitting together. One holding a doctoral certificate and tens of thousands in non-bankruptable debt and someone not. We were both employed by community colleges at roughly the same salary.  We were both considering the same options to earn a little extra money.  I guess you could say Dr. Bacardi has more upward potential, but the key there is potential.  She may get the promotion, she may not.  There were no guarantees.  I take that back, in the instances where you have a certificate or a license to do something that’s in high demand (license to practice medicine or to teach elementary school for example), then that’s as close as you can come to a guarantee.  But nearly all advanced degrees do not come with that type of guarantee, in truth it’s not the degree at all, it’s the license that is the guarantee.

Lesson 2:  Although I’ve said it before, be very careful about selling someone else’s product as a means to an end. Don’t forget equal partnerships doesn’t really exist when you are reselling a large company’s product.  They are always in control and will always skew the elements of the partnership in their favor.  If the product line is offered by a large conglomerate then you are more than likely going to be behind the ball before you even start, no matter what the promises are.

In this situation The presentation was good, but the product offered was a difficult sell mostly because it was in the higher end of the market and there simply aren’t that many people who have 5K or 10K to spend on a vacation.  The commission rates seem to have changed and gone down considerably from the last time I was engaged as a vendor for this company.  My guess, and it’s just a guess, is that they are only paying decent commissions for their top ‘partners’.  This means the barrier to entry into a successful business is higher because you have to build up a massive clientele of people who like very high end vacations.

Lesson 3:  Be careful with debt. Not all debt is good debt, even the debt that’s considered to be ‘good debt’ like education or a mortgage.  I didn’t get deep enough into it but I wonder if Dr. Bacardi would be selling travel if she didn’t have student loans to pay down?  I ultimately decided not to finish my doctorate for the very reason that I didn’t want to go into debt without the right mix of quality of life while in the program and ROI.  The commitment in time and effort in any PhD program is challenging, add in 30-100K in debt without a guarantee of return on that investment and it makes it a non-starter, or in my case a non-finisher.

I’m reposting this article because I think about this person often and because so few people read it the first time around.  The concept that a PhD has to learn about what rums are free at an All-inclusive to pay their student loans still has an effect on me today.  This educator come travel agent encapsulates a lot of what I’m writing about.  This idea that if you are intelligent, do what your told, go to school, get a good job that there will be a payout.  But the payout isn’t there and then you have to jump through hoops to just keep your head above water at the level you are at, let alone meet the goals and the lifestyle you were promised growing up.   Dr. Bacardi is the personification of the professional individual contributor in the education space.  I hope she’s doing well, I really do.  If I ever have enough cash to go on one of these high end vacations I’m going to see if I can find her again.

There is one interesting note that I didn’t mention in the initial posting but I want to bring up here.  I think it speaks to the perception of an advanced degree and why so many people still to this day encourage those in their sphere of influence(kids) to pursue one.  She told me that she promotes the fact that she has a doctorate. She does this even though the doctorate was in something like social studies or philosophy.  I don’t recall the exact subject, just that it was an academic discipline and It wasn’t in any way related to travel.  She plays it up and keeps it on all her travel business cards because she says she found it much easier to convince people to buy things because there is a “Dr.” in front of her name.  The perception is that she knows more than anything.  If that’s not a tell sign that we are in an education bubble, I don’t know is.

I’m keeping the original parts to this story up on this blog.  I’ve made some modifications, but mostly it’s the same.  You can see the original parts here: 1, 2, 3.

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Posted by Mike Peluso

Mike Peluso writes is about the collision between between the business / professional world and life. He also writes about the journey involved with the Peluso Presents efforts including the Blog, Books, and Podcast so that others may benefit from his efforts. Read the Blog: www.PelusoPresents.com/ Listen to the Podcast: http://pelusopresents.libsyn.com/ Support the Effort: https://www.patreon.com/pelusopresents

2 Comments

  1. Enjoyed this post Mike.

    Sent on a Sprint Samsung Galaxy Note® 3

    Liked by 1 person

    Reply

    1. Thank you! Please share as often as you can. The audio version is available in the podcast: http://pelusopresents.libsyn.com/episode-11-jonsin-for-a-dmd

      Like

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