Serdar Bankaci, founder and president of Commonwealth Computer Recycling, led his company through a dramatic market decline and emerged stronger, thanks to lessons he learned from a past failure.
Bankaci had started a data brokerage house in his parents’ basement. The company was making so much money that everything seemed so easy.
Then, in 2007, the real estate market crashed. Bankaci’s business started losing money. He tried to hang on and assumed too much bank debt. So much for his fledgling data broker.
Every serial entrepreneur has his or her own venture failure story. But like Bankaci, that’s really how you learn to be an entrepreneur.
“It’s almost like when people say, ‘You’ll never know what having a kid is like until you have one.’” Bankaci says. “That used to make me so mad when people used to say that to me, when I didn’t have kids. Now, I understand what they were talking about.”
“This is one of the things with a young entrepreneur — when I was in my 20s, I thought I knew everything. As you get older you realize how much you don’t know,” he says.
Commonwealth Computer Recycling made most of its revenue prior to 2014 by taking apart computers and selling the precious metal components. But in 2015, the precious metal market crashed, dropping about 50 percent.
This time, Bankaci adapted.
“We started refurbishing and reselling the components of the material we were getting in, versus selling into a scrap yard, which put us in a position to actually grow our business, when almost every other person in this industry had declining revenue,” he says.
Adjust to the market
The first time he experienced disastrous market conditions, Bankaci didn’t adjust to what was going on. It’s a lesson Bankaci didn’t forget. So instead of panicking, he and the company’s leadership team quickly made changes to mitigate their downside.
People were retrained. The business was re-organized. And although some employees were laid off, Bankaci says once the restructure was done, they were hired back, in addition to more people.
“The key was to identify that something was happening in the industry and make the change right at the beginning, versus waiting six months down the road and making the changes,” he says.
Unless you’re running a billion dollar company, Bankaci says you’re not going to affect your own industry. Instead, it’s going to affect you.
“The industry is what it is; you have to work with what you’re given, the cards that you’re dealt from the outside,” he says. “So, rather than spending your time trying to manipulate the outside forces, it’s much simpler and, at least in my taste, more successful to change your internal structure to fit the industry.”
To keep up on what’s going on, Bankaci says to stay in touch with your “friendly competitors.” He has a group of about 10 people that he talks to regularly.
Commonwealth Computer Recycling’s management team also talks about external factors. They review them continuously in order to constantly re-evaluate the business model and fine-tune it.
Spread the decision-making
When you’re the sole decision-maker, you can’t always see the big picture as easily as someone who’s not living in the moment. That’s why having a partner can help.
Bankaci says one of the reasons Commonwealth Computer Recycling survived the market turmoil this time around was that he had a partner to help brainstorm solutions. He believes every company should have either a board of advisers or more than one leader.
Bankaci took on a partner who was more experienced, who complemented his skills — financial knowledge versus his technical expertise and entrepreneurial mindset — and who he was already familiar with.
He quickly learned the value of long-term planning and seeing a larger vision.
“I’ve learned a lot — and that was one of the things, planning forward versus just worrying about the next 30 days,” Bankaci says.
Another advantage of partnership is that it helps Bankaci be more cautious.
“I now have two kids and a wife, which makes me have to be a little more conservative financially,” he says. “Having a partner makes you do that, because now you don’t just answer to you, you answer to somebody else. Even if you’re 50/50 partners, you still have to have two people’s interests in mind.”
As the company has grown, Bankaci has moved away from his entrepreneurial roots, even if he hasn’t forgotten them. Today, he operates the business from 8 a.m. to 5 p.m., and does his creative thinking at night from about 10 p.m. to 1 a.m.
“I like the entrepreneur part better, but this is where we’re at right now,” he says. “I’m hoping as the company gets bigger, I can go back to [being] the ideas guy more than the operations guy.”
But Bankaci has also discovered that true entrepreneurs need to fight their nature when it comes to running a business.
“You get this idea and you just want to run with it — so the entrepreneurial personality sometimes doesn’t match up with taking advice,” he says.
“It would be great if we listened to people. We just don’t generally, especially in the beginning.”