Second Acts: Bye-Bye, Enron
Like many of the roughly 4,500 Enron employees who got laid off as the energy giant collapsed, Eric Eden never expected to run his own business. But when his job as a computer-assisted-design administrator evaporated, becoming an entrepreneur was "the only logical choice," says Eden. He already knew exactly what his business would be. In 1999 he had invented a device that lets a homeowner attach a garden hose to a sprinkler that pops out of the lawn only when it's needed. Now Eden, with brother Robert, runs Kingwood (Tex.)-based Watering Made Easy, which sells the patent-pending device. Eric says hardware retailer Lowe's is going to carry the product nationally this year, which he expects will double his company's 2005 revenues of $300,000.
As the trials of their former bosses continue, hundreds of cast-off Enron employees are making the difficult transition from working at an entrepreneurial large company to becoming bona fide entrepreneurs. Some have decided to strike out on their own after discovering that stints at Enron made their job searches exponentially more difficult. Right after Enron collapsed, plenty of other energy companies were teetering on the edge of bankruptcy. When a job became available, there were lots of qualified folks willing to fill it who didn't have Enron on their résumé. Jeffrey A. Shankman, a former COO at Enron Global Markets who now runs a building products manufacturer, says one of the best things about being an entrepreneur is not having to apologize for having worked at Enron.
Others simply refuse to return to a giant corporation. "I'll be a bag lady before I do that," says Lois Black, a former legal secretary at Enron who started Tea Parties to Go, which organizes and hosts themed tea parties for young girls.
Fred Kiesner, Conrad Hilton professor of entrepreneurship at Loyola Marymount University, worries that some ex-Enroners might not be well-prepared for entrepreneurship. Most entrepreneurs build a cash cushion before quitting their day jobs, and not all these entrepreneurs had a chance to do so. "The failure rate may turn out to be higher than average," says Kiesner.
Some ex-Enroners stuck to the energy business, launching risk management or investment companies. One group started a retail energy company, Tara Energy, which already has $105 million in annual sales and 50 employees. Others purchased restaurants, opened shops selling interior moldings or design services, and created a line of healthy snack foods for schools.
Shankman bought his way into entrepreneurship, using his savings to purchase a stake in Houston's MMC, a 15-person specialty building products manufacturer. Shankman became its chairman. "It had no sales, no infrastructure when I arrived," he says. Today, it's thriving. Shankman estimates 2005 revenues will be about $3 million. He's already thinking about his next entrepreneurial venture.
For marketing manager Kal Shah, Enron's demise provided a chance to create his own brand. "It was a sign that I should pursue the dream," Shah says. His new company, Sugar Land (Tex.)-based Ademark Products, funded with $30,000 in savings, makes a line of mass-market fragrance oils. They're in craft stores nationwide under the name Abbey&Sullivan. Shah has already bagged $450,000 in orders this year. His next goal: persuading big retailers like Target to pick up the brand. "I know these can become a household name," he says. Just as long as it isn't well-known in the way Enron is.
By Suzanne McGee