My grandmother, who was once a young, well-to-do widow, lost everything in the Depression. Her stocks collapsed, the bank foreclosed on her mortgage and took away her home, and she had to work for years in an unheated newspaper stand in order to earn enough money to support herself and her son, my father, her only child. Growing up with two pesky sisters, I spent most weekends sleeping over at my grandma’s house on Bruckner Boulevard in the Bronx. She was my best friend, and she warned me against borrowing money, investing in stocks, and not preparing for a rainy day. I listened attentively. Although I’m a baby boomer, a large part of me has the values of someone who grew up in the Depression.

For this reason I have always been averse to borrowing, unnecessary risk-taking, or taking in investors. Thus, as soon as I was able to put together enough money, the first thing I did was pay off my mortgage. (Yes, I know it doesn’t make much tax sense, but I’m sure my grandmother thought I was right.) And even as my business grew from a one-man operation to a million-dollar operation, I never secured a bank credit line or sold stock. It has always seemed to me that the best, most rational way to grow is out of profits. When you’re spending your own money, you tend to make sounder decisions and take less foolish risks. You also sleep better at night.

Upon entering the highly capitalized telecommunications business, I continued my old policy. All our start-up product development sales and equipment acquisition expenses were paid for out of our publishing profits. Of course, the only equipment we needed in the beginning was one $500 callback device about the size of a pie box for each of our customers, and as I pointed out earlier, we didn’t have too many customers.

To conserve money, our offices at that time were crowded into a small converted funeral parlor in the Bronx that we shared with my father’s insurance brokerage. As there was absolutely no spare room in the office, when we finally got a couple of clients, we put their modems in the men’s bathroom, sitting on top of the toilet bowl water tank. In those early days, whenever the callback rang, we would all race into the men’s room to watch the little red lights that indicated the progress of the call. With each completed phone call we would all hug, embrace, give each other high fives, and then leave the men’s room.

By the time we had eight boxes and a half dozen phone business employees, however, three things became clear. First, we couldn’t all fit into the men’s room. Second, if we got any more clients, all the boxes would tip and fall in the toilet, destroying our business. (These days, my constant concern that everything could go down the toilet is more euphemistic in nature.) Finally, as the business grew, new boxes were going to cost a lot of money.

My concern stemmed even more from the cost of keeping the boxes in operation than from purchasing them. Each box, you see, required two telephone lines in order to work. New York Telephone was charging us about $30 per line monthly. This came to $720 per year in line fees for each box we had in operation, far more than the actual cost of the units. It wasn’t long, though, before we discovered that in New Jersey, home state of AT&T, local phone access lines only cost $12 per month. This meant we’d save over $400 per unit annually (roughly the actual cost of a box) by moving our callback units to New Jersey. Of course, our savings would be reduced by the amount of any rent we’d have to pay in Jersey. Not wanting to have this savings reduced, I tried to see if there was a way we could get free rent.