Good as gold: bestselling author proves nice guys can finish first - Milton Gralla and Adrian G. Berg - Interview

Entrepreneur, Sept, 1996 by Robert McGravey

FORTY-ONE years ago when Milton Gralla was a young free-lance writer, he and his brother Larry hatched an idea for a new magazine called Kitchen Business. As Milton envisioned it, the magazine would cover the kitchen design and remodeling business, a trade the two were sure would boom in the postwar era. They lacked the money to start the magazine, however, so they pounded on publishers' doors looking for financing. They couldn't find any takers, so the Grallas shrugged and went back to their writing jobs--until the day they looked at each other and realized they never wanted to think, "What if we had taken the chance? What if we had started that magazine?"

So they put together $20,000--from savings and relatives--and launched Kitchen Business. Their instincts were right: The magazine found an audience almost instantly, and the two started more trade magazines until, by 1983, Gralla Publications had 20 titles and a trade-show division. That year they sold out to a big publishing outfit for $73 million.

It's a terrific success story, and it gets sweeter. In a tough business, Milton and Larry Gralla thrived by being nice. They kept their word when they gave a promise and always tried to do the right thing by customers, vendors and employees. "Bad guys get all the press. But being a good guy is the real way to get wealthy," Milton says. "Live on the give, not on the take, and you will get rich and stay rich."

After selling the company, Milton went on to become a prolific speaker, making appearances at industry conventions, conferences and colleges. When lawyer Adriane G. Berg heard Milton's message in 1992, something clicked, and she decided to start practicing the "good guy" philosophy herself. Today, she's too busy to practice law. She hosts a popular talk show called The Money Show on WABC radio in New York City, recently launched a financial newsletter that already has 15,000 paid subscribers, and has a thriving career as a speaker. "Being a good guy definitely has gotten results for me," Berg says.

Together Berg and Milton have put their philosophy on paper in a how-to book--How Good Guys Grow Rich (Dearborn)--for "living on the give, not on the take." Here, they give us a taste of that approach--and a persuasive argument that being a good guy can work for all of us.

Entrepreneur: We're used to hearing "Nice guys finish last." Why do you say that isn't so?

Adriane G. Berg: Face it: Bad news sells. Whenever there's an Ivan Boesky or a Leona Helmsley, their stories hit the front page. And good news is no news. But I can tell you--there are many quiet, decent and very rich people out there.

It's a myth that only people who lie, steal and cheat make a lot of money. Those are just the people you hear about--which is a shame because the average person winds up believing he'd be better off it only he would be bad. That's just not true.

Milton Gralla: I was unaware being a good guy worked until I had been in business for a number of years. In fact, I first thought we were succeeding because both my brother and I had been working journalists and having journalists at the top made us unique among media companies. Eventually, I realized our success had a lot to do with the reputation we had built with advertisers, printers, ad agencies and our own staff.

I'll give you an example: A distributor in St. Louis met me at a convention and later called up, wanting to buy full-page ads in one of my magazines. He did business in just three states, but the magazine was national. Our rates were based on total circulation, but probably only 5 percent of those readers were potential customers of his.

I told him, "Don't throw away money. I'll put together a more effective, cheaper direct-mail program." Why? I believe you cannot go wrong doing the right thing. Telling him this was doing the right thing, and even if it cost me money, I didn't care.

Do the right thing, and the world gets to know it. It happened in this case. That distributor told all his suppliers about us, and several became regular advertisers.

Entrepreneur: Is reputation an entrepreneurs most vital asset?

Gralla: A great pitfall on the path to wealth is the early sacrifice of ideals and reputation. It's the idea that "it's OK to do this because everybody does it." It's making phony promises, delivering substandard products, and lying about everyday business practices. I have seen people spend 1 15years getting prepared to start their own businesses, then the business goes down the drain in six months because they gave up their most precious possession--their credibility.

Entrepreneur: Didn't the reputation you had built let you? buy a magazine at a price you named?

Gralla: Long before we became a large publisher, we found out about a magazine we wanted to buy, National jeweler. The publisher had died. I went to see the lawyer handling the estate and offered him a price; he said he didn't have time to check it out and couldn't tell if it was a fair offer. It would be months before he could get around to making a decision. I told him, "This magazine is like an ice cube in the desert. It won't be there long. It's running last in its field, and if you don't act fast, it will die." So the lawyer decided to do a smart thing: He checked out my background, discovered my reputation as a good guy, and sold me the magazine at the price I offered.